2011 QCCQ 1667, 2011 QCCQ 1667

GTI Roll Transportation Services Inc. c. MRB Industries Inc. 2011 QCCQ 1667 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-22-168587-106 DATE: February 24, 2011 ______________________________________________________________________ BY THE HONOURABLE JULIE VEILLEUX, Q.C.J. ______________________________________________________________________ G.T.I. ROLL TRANSPORTATION SERVICES INC. Plaintiff v. MRB INDUSTRIES INC.

Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] G.T.I.

Roll Transportation Services Inc. ( G.T.I. ) is involved in warehousing and transportation. [ 2 ] MRB Industries Inc. ( MRB ) is involved in the distribution and packaging of products for its clients. [ 3 ] G.T.I.’s claim totals $66,844.06 and is two-fold: − $36,143.06 is claimed for services rendered and rent due as per the statement of account and invoices filed into the Court record; − $30,702.00 is claimed for loss of revenues regarding the rent from March 1, 2010 to June 30, 2010. [ 4 ] In the Fall of 2009, MRB was looking to outsource its “pick and pack department” and had obtained a quote from Simard Transport regarding the warehousing, storage and handling of products. [ 5 ] Said quote was discussed with G.T.I.’s representative, Mr.

Di Staulo, who happened to be at MRB to look for a specific product. Mr. Di Staulo and MRB’s representatives knew each other for approximately 15 years as they were involved in business relations several years earlier. [ 6 ] G.T.I. prepared its own quote: “Warehousing, storage and handling agreement” which referred to several items figuring on the Simard Transport quote. The quote was signed by its president, Mr. Dan Noseworthy, but not by MRB. [ 7 ] According to Mr. Di Staulo, when G.T.I.’s quote was presented and discussed with MRB’s president, Mrs.

Bertucci, the latter accepted the conditions and there was only a signature missing to complete the paperwork. [ 8 ] According to Mrs. Bertucci, although G.T.I.’s quote was interesting, she didn’t sign it because the man-hours of the pick and pack work were not mentioned in the quote and still had to be agreed upon by the parties. [ 9 ] Nevertheless, part of MRB’s supplies were moved into G.T.I.’s new warehouse. At the time, MRB accepted to rent 10,000 square feet at a rate of $1.00 per square foot a month. [ 10 ] According to Mrs.

Bertucci’s testimony, shortly after moving, numerous problems occurred due to different gaps on the part of G.T.I.: − G.T.I. was not familiar with the products used by MRB and its customers; − the system for the bin location was not efficient; − there were wrong orders sent to MRB’s clients; − G.T.I. had no “B plan” and when the employee, Jason, was absent, there was no one to replace him who knew MRB’s products and customers. [ 11 ] Mrs. Bertucci explained that on numerous occasions she had to leave her office in Saint-Laurent and drive to Dorval in order

to find what G.T.I.’s employees could not locate for the benefit of MRB’s customers. [ 12 ] Mrs. Bertucci filed e-mails sent to G.T.I. in November and December of 2009 and January of 2010 with respect to the mistakes and inconveniences which were noted at the time. [ 13 ] Mr. Di Staulo explained that in every business relationship there is a learning curve in the early days but with time, things fall into place. [ 14 ] From Mr.

Di Staulo’s standpoint, there were no complaints on the part of MRB until the end of January 2010 where a discussion took place regarding one specific issue: the man-hours of the pick and pack. [ 15 ] Mr. Di Staulo forwarded to MRB weekly invoices with the hours worked for the pick and pack. However, according to Mrs. Bertucci, a maximum amount of 20 hours a week (four hours a day) was acceptable and MRB did not have to pay for more. Mr. Di Staulo was well aware of MRB’s position in that respect. [ 16 ] At the beginning of February 2010, there was a meeting between G.T.I.’s president, Mr. Noseworthy, and Mrs.

Bertucci’s brother to discuss outstanding invoices. Mr. Noseworthy testified that the meeting was organized in order to find a way to settle this issue. Following said meeting, he sent to Mr. Di Staulo with c.c. to Mrs. Bertucci and her brother an e-mail which reads as follows: I have agreed with Maria to have MRB pay only 260 hours on Monday, February 8. The balance of outstanding labour costs will be discussed upon my return on February 22. At that time, we will also discuss the normal man-hours for the pick/pack of her orders. Thank you. [ 17 ] Later that day, Mrs. Bertucci answered Mr.

Noseworthy’s e-mail and insisted: … I am most certain with conviction that you will understand and accept my offer of no more than 20 hours a week regarding the labour charges, not including the weeks we had an employee there training Jason, which amounted to approximately 120 hours. I most certainly feel it is unjust to pay for G.T.I.’s training additional hours and therefore deducted from the overall amount. MRB did this because your people were struggling and not coping with day-to-day operations.

To summarize, we have a deal, if you accept no more than 20 hours a week from day 1 for labour charges less my employee’s hours. Best regards. [ 18 ] A few days later, on February 9, a demand letter was sent by G.T.I.’s attorney to MRB requesting payment of an amount of $22,464.41 for services rendered and for rent due.

It is also mentioned that MRB must vacate the premises rented on April 1, 2010 and more importantly, the demand letter ended as follows: Finally, given your refusal to pay the full cost of labour supplied by our client, be advised that, effective immediately , our client will no longer supply you with labour and you must make your own arrangements in this regard. (our underlining) [ 19 ] Upon receipt of this letter, Mrs. Bertucci decided to move right away MRB’s supplies which were at G.T.I. to another premises where labour would be provided.

From her standpoint, in order for MRB to provide services to its customers, its supplies must be stored where a skilled labour for pick and pack is available. Mrs. Bertucci describes the moving of MRB’s supplies from G.T.I.’s warehouse to another premises as being a very stressful period considering that she thought she would lose her long-time customers.

ANALYSIS [ 20 ] In order to decide on the obligations of the parties, the Court must qualify the contract which they agreed upon. [ 21 ] The quote presented by G.T.I. and accepted by MRB regards: − warehousing and storage; − handling services. [ 22 ] Said contract is mixed as it relates both to the leasing of space payable by fixed rent and to different services (pick and pack, processing orders, filling bills of lading, inventory, etc.). Some of these services are clearly indicated in the quote and the proof shows that the conditions of the quote were accepted.

However, the manpower requested for the pick and pack is not part of the quote and it is obvious that there was no agreement reached on the number of hours a week MRB would accept to pay G.T.I. for this service. [ 23 ] Considering the proof offered at the hearing by both parties, the Court finds that G.T.I. had the obligation to provide space and labour to MRB and MRB had the obligation to pay for the rent and services rendered. It seems clear that MRB would have never moved its supplies to G.T.I.’s warehouse if G.T.I. was not able to provide the labour.

The space and the labour were interrelated and constituted the object of the contract between the parties. In view of the foregoing, G.T.I. cannot rightfully expect to be paid for the rent when it stopped providing a service MRB was counting on.

In that respect, the Court must dismiss the claim in the amount of $30,702.00 for loss of revenues (rent) between March 1, 2010 and June 30, 2010. [ 24 ] As regards the claim for rent and services prior to MRB’s moving out, in the amount of $36,143.06, the Court finds that there was preponderant proof of the following: − MRB occupied G.T.I.’s premises from the beginning of November 2009 until the beginning of February 2010; − the terms of the quote presented by G.T.I. to MRB were accepted except for the manpower of pick and pack which was never agreed upon;

− the services offered by G.T.I. in its quote were rendered to MRB but there was dissatisfaction on the part of MRB with respect to the services of pick and pack which led to complaints; − there was an attempt to settle the problems between the parties but said attempt failed. [ 25 ] In view of the foregoing, the Court grants the following amounts which refer to services rendered by G.T.I. and accepted by MRB: − $6,772.50 (bill no. 4057) for charges for the rent for November and December 2009; − $2,494.54 (bill no. 3693 and its adjustments described in bill no. 4064) for van hourly work; − $4,797.19 (bills no. 4059 and 4062) for vans. [ 26 ] With respect to the remaining of G.T.I.’s claim, which represents an amount of $22,077.83 for manpower, the Court concludes as follows. [ 27 ] G.T.I. undertook to provide MRB with services regarding the pick and pack service and MRB needed said service to operate its business.

The proof offered both by Mrs. Bertucci’s testimony and the documentary proof filed into the Court record shows that the standard of services MRB was expecting was not met by Plaintiff. However, G.T.I., who was in a new relationship with MRB in the Fall of 2009, never agreed to cap to 20 hours a week the manpower requested for the pick and pack on behalf of MRB. [ 28 ] The invoices submitted relate to 521 hours plus taxes of manpower for pick and pack. The Court finds that the hours billed by G.T.I. are exaggerated considering, namely, the explanation given by Mrs. Bertucci at the hearing.

G.T.I. was offering the pick and pack service for the first time in the Fall of 2009 and Mrs. Bertucci’s dissatisfaction is directly linked to G.T.I.’s lack of experience. Considering the proof offered, the Court fixes arbitrarily to 50% of the hours claimed the amount owed to G.T.I. for the manpower, an amount of $11,040.91 including taxes. FOR THESE REASONS, THE COURT: GRANTS in part G.T.I. Roll Transportation Services Inc.’s claim; CONDEMNS MRB Industries Inc. to pay G.T.I. Roll Transportation Services Inc. an amount of $25,105.14 with interest at the legal rate, together with the additional indemnity as per

section 1619 C.c.Q. , as of March 11, 2010; THE WHOLE , with costs. __________________________________ JULIE VEILLEUX, Q.C.J. Me Stephen Ashkenazy HAMILTON COOPER ASHKENAZY Attorney for Plaintiff Me Irving Gaul Attorney for Defendant Date of hearing: February 18, 2011