Nisar Akbar Khan v. Akbar-Niazi Corporation, 2014 SKPC 183

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Date: October 23, 2014 Citation: 2014 SKPC 183 File: File # 59/14 Location: Regina, Saskatchewan Between: Nisar Akbar Khan and Akbar-Niazi Corporation - and - K.Z.M. Logistics Inc. Nisar Akbar For the Plaintiff (Defendant by counterclaim) Rana Qamar For the Defendants (Plaintiff by counterclaim) JUDGMENT P. DEMONG , J Introduction [ 1 ] This is a claim and counterclaim relating to monies allegedly due and owing under a trucking services agreement.

The plaintiffs allege that they are owed, either by virtue of an employee/employer relationship, or by virtue of an independent contractor arrangement, the sum of $4,307.00 for services rendered but for which they were not paid.

[ 2 ] The defendant does not dispute that this money is owing, but, by way of counterclaim, seeks the sum of $21,432.00 alleging that the corporate plaintiff entered into a written agreement under which it agreed to be responsible for all damage that may have been caused to the truck that the plaintiff was operating, howsoever that damage may have arose. [ 3 ] The plaintiffs steadfastly deny that they entered into any kind of written agreement whatsoever, either as alleged by the defendant or at all and therefore deny that any money is due and owing to the defendant. [ 4 ] Nisar Akbar Khan (Mr.

Khan) is a truck driver of Pashtun ancestry who speaks predominantly Urdu. He understands English to some extent but required an interpreter for this trial. Mr. Khan is the president and primary shareholder of the co-plaintiff, Akbar-Niazi Corporation (Akbar). [ 5 ] Hafiz Omar Farooq (Mr. Farooq) is the principal shareholder of K.Z.M. Logistics Ltd. (K.Z.M.) which operates a trucking services company. He was represented at this trial by his friend and business colleague Rana Qamar (Mr. Qamar). [ 6 ] Mr.

Khan originally took the position that he was an employee of K.Z.M. who had been hired by K.Z.M. to drive one of K.Z.M. ’ s trucks. He argued that he was owed money for services rendered after he gave notice of his intention to terminate his alleged employment. Because K.Z.M. was engaged in inter-provincial transport, Mr. Khan lodged a complaint under the Labour Standards provisions of the Canada Labour Code,

Part III. [ 7 ] Mr. Khan was not successful and appealed the decision. A Referee was appointed to hear the appeal but then Mr. Khan brought this action and so advised the Referee, who in turn notified each of the parties that the appeal was discontinued. [ 8 ] During the course of this trial it became apparent to the Court that in fact K.Z.M. had entered into an independent contractor agreement with the corporate plaintiff, Akbar, as opposed to an employee/employer arrangement with Mr. Khan personally.

All monies paid by K.Z.M. under the agreement were paid to Akbar, and in fact, Akbar recorded those payments in its income tax returns for the year 2012. [ 9 ] In the result, there is no question that money is owed to Akbar, as opposed to Mr. Khan, for services rendered under the trucking services arrangement. The only issues left for the determination of this Court is to determine whether or not Akbar entered into a written agreement as alleged by K.Z.M. and if so, whether or not Akbar is obligated to pay K.Z.M. monies under that agreement. Evidence [ 10 ] Mr. Farooq states that he first met Mr.

Khan in Saskatoon in about 2009 and worked with him in the trucking industry working for a cartage company. He maintains that over the years they developed what he described as a close friendship talking with each other a couple of times per week. Mr. Farooq left Saskatoon and moved to Regina where he started work through his own trucking company (K.Z.M.). He said that Mr. Khan started to complain about the hours he was working in Saskatoon, and was looking for a new job which might allow him to be home more often to attend on his wife who had health problems. [ 11 ] Mr.

Farooq says that he eventually acceded to Mr. Khan ’ s requests to find him a different type of trucking contract that might accommodate him and suggested that Mr. Khan move to Regina and sub-contract through his corporation, Akbar, to take over a route that Mr. Farooq was currently running to Manitoba and back at a flat rate of $200.00 per trip. The run would be about 308 miles, several times per week. [ 12 ] Mr. Farooq indicated that he had an older semi-tractor (variously described in the exhibits as a 2006 or 2007 Volvo) that Mr. Khan could use. Mr.

Farooq indicated that it was getting old and that he was eventually looking to buy a newer tractor unit to replace it. Mr. Farooq indicated that if Mr. Khan was prepared to take on other routes he could do so on the understanding that he would be paid a flat

rate of 50 cents per mile. [ 13 ] Mr. Farooq indicated that Mr. Khan said he would think about it and in or about February of 2012, he says Mr. Khan stated that he would come to Regina to take a look at things and decide if he wanted the job. [ 14 ] Mr. Farooq says that he received a call from Mr. Khan on March 9 of 2012 at about 10:00 a.m. indicating that he would come down to Regina that day and that Mr. Farooq “ should make the paperwork ” . Mr. Farooq states that he asked Mr. Khan to bring some paperwork with him but the nature of what he sought from Mr. Khan was not made clear to the Court. Mr.

Farooq says that between 10:00 a.m. and 1:00 p.m. he prepared a contract from existing precedents he had and then called Rana Qamar to come over for lunch with them and to help explain the contract to Mr. Khan. [ 15 ] Mr. Farooq says that Mr. Khan showed up around 1:00 p.m. and reviewed the contract with Mr. Qamar and duly signed it and had lunch. In casual conversation following the endorsement of the agreement Mr. Farooq says that Mr. Khan asked for his assistance in locating an apartment because he had nowhere to stay. Mr. Farooq then indicated that he would help Mr.

Khan locate an apartment and that in the interim, his wife could stay at the Farooq residence for a few days. [ 16 ] The written contract is reproduced in its entirety and attached as

Schedule A to this judgment. [ 17 ] Following lunch, Mr. Khan presumably left the meeting and showed up for work on March 19 th . He began to use the 2006/2007 Volvo semi-tractor which has been referred to earlier and he continued to use that vehicle almost exclusively until he gave notice of termination at the end of February of 2013. [ 18 ] Rana Qamar attended the trial and sat beside Mr. Farooq throughout the trial. He indicated, and Mr. Farooq confirmed, that he would be running the trial for K.Z.M. Mr. Qamar is a friend and business colleague of Mr. Farooq.

The precise details of their working relationship was not made known to the Court. [ 19 ] Mr. Qamar took the stand and explained to the Court that on the 9 th day of March 2012 he was at a meeting with Mr. Farooq and Mr. Khan at Mr. Farooq ’ s home in Regina. He says that Mr. Farooq had asked him to attend because Mr. Farooq wanted him to explain and witness the written agreement he had prepared for Mr. Khan ’ s endorsement .... this because while Mr. Khan could read and speak some English, his understanding of the language was nominal. Mr. Qamar was there to translate into a language Mr.

Khan could understand. [ 20 ] Mr. Qamar indicated that he went through the agreement with Mr. Khan and in particular discussed the covenants in Schedules A and B. He says that Mr. Khan understood the agreement and that Mr. Qamar in turn then witnessed the signature of each of Mr. Farooq and Mr. Khan for and on behalf of their respective corporations. He says this process took about 25 minutes. [ 21 ] Mr. Farooq stated that within about a month of Mr. Khan starting work the semi-tractor started to have mechanical problems.

These problems became more frequent and between June 16 th of 2012 and December 1 of 2012, there were 13 separate incidents where the semi had to be repaired. It should be noted in passing that Mr. Farooq acknowledged that this vehicle was getting old and that he had explained to Mr. Khan when his company was hired that he intended, in the near future, to get a new or newer truck.

The evidence presented in Court shows that, as at June 16 th of 2012, the tractor unit had almost 1.06 million kilometres on it. [ 22 ] The majority of these problems had to do with tires and alignments, but a couple related to motor vehicle accidents, or simply repairs that were initiated by Mr. Khan without the pre-approval of Mr. Farooq. Mr. Farooq sought to introduce evidence at trial that all of these losses and repairs were exclusively attributable to Mr. Khan ’ s careless and sometimes reckless driving habits. [ 23 ] On average, Mr. Khan earned $5,000.00 per month under this trucking services agreement.

Between June 16, 2012 and December 1 of 2012, the total costs in repairing the vehicle equated to $21,432.13. This is the amount sought by K.Z.M. in its counter claim. This works out to a repair cost of almost $3,900.00 per month on a prorated basis.

[ 24 ] Mr. Farooq is adamant that on each occasion that the tractor had to be repaired he advised Mr. Khan that he would be responsible for that loss. When questioned as to why Mr. Farooq did not, at any time during the currency of their agreement seek payment directly back from Mr. Khan or his company, either by way of payment direct or set off of any monies otherwise due and owing to Mr. Khan ’ s company, he stated that on each and every occasion Mr. Khan was able to convince him that because of either his wife ’ s illness, or his daughter ’ s problems with a difficult pregnancy, or that by reason of Mr.

Khan ’ s dire financial circumstances, or because of their close friendship, he did not seek immediate payment. [ 25 ] Presumably Mr. Farooq was going to simply carry those costs indefinitely into the future and present Mr. Khan ’ s company with a tally of all of these costs at a later date. This strikes me as most unusual, particularly when one considers the plaintiffs ’ defence and the evidence he has presented in support of that defence. [ 26 ] Mr. Khan has constantly referred to this written agreement as “ the fake contract ” . He says that he never attended on Mr.

Farooq on the 9 th day of March 2012, to sign this agreement, and only became aware of the purported existence of this agreement after filing his complaint under the Canadian Labour Code towards the end of May 2013. [ 27 ] Mr. Khan says that he did in fact contact Mr. Farooq looking for a different line of trucking work in or about February of 2012. He says that the Manitoba trucking run was discussed with him over the phone and that he accepted the job over the phone. He says that he came down for a practice run on March 18 th , and agreed to work for K.Z.M.

He says that he started work the following day and, while there is some dispute as to the amounts that he would be paid for things like waiting time, he agreed to the flat fee of $200.00 per round trip, and he further agreed to run additional routes at the stated rate of 50 cents per mile travelled. He says that he absolutely did not agree to pay for any of the things set forth in either

Schedule A or B of the written agreement, nor was he ever asked to. [ 28 ] In support of his defence to the counterclaim he points to a number of things. First, he maintains that he was in Saskatoon working on the 9 th day of March. He says that he had commenced his then existing trucking route in Saskatoon on the 9 th day of March at 1:30 a.m. He finished his route at 9:15 a.m., prepared for prayer at 10:00 a.m. and then went to his own home for lunch. He says he stayed at home until 7:00 p.m. and then went back to work at 7:15 p.m. [ 29 ] In support of his oral evidence he submitted his log book (Exhibit D-1).

His notes in that log book confirm the times that he was on and off work. The notes are in order in the sense that the March 9 record immediately follows March 8 th and in turn is followed by March 10 th . The log book is intact. The handwriting for March 9 th appears consistent with the handwriting for the entire month of March up to and until March 17 th . [ 30 ] Mr. Khan wants me to draw the inference that he could not possibly have been in Regina on that day. The evidence is not quite that strong, but it is compelling.

I believe that I can take judicial notice of the fact that Saskatoon is about 265 kilometres away from Regina, and that a person travelling at the speed limit would take about 2.5 hours to get to Regina. Following a 25 minute discussion and lunch, the travel time to get back to Saskatoon would be another 2.5 hours. To do this, Mr. Khan would have had to forgo his prayers, and take almost no rest between shifts. The combined time from Regina for a discussion and lunch and then back would equate to 6 hours, leaving him almost no time for sleep of any kind before returning to work.

It would make almost no allowance for any discussion regarding terms to be added or taken away from the agreement. [ 31 ] Mr. Khan also points out that the signature on the agreement, and on each of Schedules A and B are not his. In support of this assertion he has submitted numerous examples of his signature from both his log book and his driver ’ s licence. Those signatures show a distinct and flowing full name style which Mr. Khan says is representative of his native language Urdu.

It is clearly and distinctly different from what looks to be a hastily drawn set of initials N and K on the first page of the agreement. In addition, The initials set forth on

Schedule A and B are each in turn distinctly different from the endorsement noted on the first page of the agreement and look much more like a W and an X. [ 32 ] Mr. Khan also points out to the Court that he was obliged to file daily logs with his signature on each. Surely, he suggests, Mr. Farooq would have noticed the discrepancy and drawn his concern to Mr. Khan immediately. [ 33 ] Mr. Khan goes further. He says that he has been driving for years. Why, he asked the Court hypothetically, would he ever agree to

such arduous conditions when he had never been obliged to do so in the past? He says that he never had to be responsible for maintenance of the vehicle he was driving in other jobs, nor was he responsible for paying the deductible in the event of an accident. He says that in his experience only an owner/operator would be responsible for these kinds of things, and he only agreed to drive Mr. Farooq ’ s vehicle, not to maintain it. [ 34 ] In support of this line of reasoning he called Malik Awan. Mr. Awan is a truck driver and an owner/operator with 7 years ’ experience. He hires other drivers from time to time.

He gave some evidence in relation to his personal observation of some balding tires on the unit driven by Mr. Khan in relation to a motor vehicle accident on slippery road conditions which to some extent, lends credibility to Mr. Khan ’ s suggestion that the vehicle he was driving was in need of ongoing repairs, but more importantly he affirmed, that in his experience only owner/operators enter into agreements to be responsible for the vehicle ’ s maintenance .... not those people who are employed to drive a truck owned by another. Mr.

Awan is not an expert, but I accept his evidence as to what the normal practice in the industry is ... particularly in light of the fact that he was not challenged on this assertion in cross-examination. [ 35 ] Mr. Awan ’ s evidence also leads this Court to the following line of inquiry, something which was not addressed in Court, but which begs to be considered. Mr. Khan did not strike me to be a simple minded man. When he purportedly signed the agreement, he did not know anything about the vehicle that he was to drive other than that it was getting old and that Mr.

Farooq was looking to replace it with a new or newer model. The evidence before the Court showed that the tractor ’ s mileage sat at approximately 1.06 million kilometres. If, in fact, Mr. Khan, an experienced truck driver, had agreed to be responsible for all of the maintenance and wear and tear of the vehicle, would he not, as a reasonable person, have asked to at least inspect that vehicle prior to making such an undertaking? [ 36 ] I also note that according to Mr. Khan, Mr.

Farooq approached him in November of 2012 after a rather expensive repair bill and stated “ I will not pay for any more damage that you cause ” . Mr. Farooq acknowledges that he made that statement. Why would he have made such a statement if in fact Mr. Khan was responsible for those costs under the agreement? [ 37 ] I also find it disturbing that when Mr. Khan terminated his company ’ s arrangement with K.Z.M., Mr. Farooq sent at least two letters to Mr. Khan.

The first letter stated in part: Here are your final pay statements attached with this letter for the pay period......As per our policy, we will release your final pay cheque after 90 days from the termination date..... [ 38 ] The letter makes no reference whatsoever to the written agreement. Rather it refers to the company policy. The Court must ask itself, why, if K.Z.M. was owed in excess of $21,000.00 would Mr. Farooq not expressly refer to the contract, the amount owing, the various promises by Mr. Khan to pay and not only set off the amount due and owing to Mr.

Khan but also demand the difference? [ 39 ] The next letter was dated May 28, 2013. It states: With reference to previous letter, telephone conversation and meeting please note that we have still not received the missing documents in your file. We are legally bound to keep these documents for audits by Ministry of Transportation and Canada Revenue Agency.... [ 40 ] It makes no mention of the written agreement. It refers to documents missing from the file as opposed to Mr. Khan ’ s apparent failure to provided these documents in accordance with

Schedule A of the purported written agreement. [ 41 ] Taken together, these letters tend to affirm Mr. Khan ’ s evidence that he was not even made aware of the purported agreement until he lodged a complaint to HRSDC under the Canada Labour Code. [ 42 ] There are two other concerns that I have. First, Mr. Farooq indicated that he wrote the written agreement between 10:00 a.m. and 1:00 p.m. on March 9 th , so that it would be presented to Mr. Khan when he came for lunch. The agreement identifies the Akbar corporation ’ s address as identical to Mr.

Farooq ’ s address and highlights the following: “ Temporary Address Due to Moving From Saskatoon ” . It was only once Mr. Khan had signed the agreement that Mr. Farooq says they had a discussion about the difficulty that Mr. Khan may have in locating an apartment, and that an offer was made to allow his wife to stay at the Farooq residence for a few days. If this is the case, how could Mr. Farooq have anticipated this line of conversation and prepare an agreement before hand that indicated the Akbar corporation ’ s residence as the same as Mr. Farooq ’ s as a “ temporary address due to moving from Saskatoon ” ?

[43] Second, Mr. Khan called Syed Bukhari to give evidence in relation to a conversation he had with Mr. Farooq some time before thismatter came to trial. Mr. Bukhari testified that the cultural community in which all of the parties to this dispute participate is a close oneand one of its cultural ethos is an attempt to negotiate their respective differences rather than to proceed to trial. Mr. Bukhari knew eachof Mr. Khan and Mr. Farooq and took it upon himself to attempt to mediate this dispute.

He sought to have them come together one dayto discuss resolution of this dispute and he says that as a precursor to this attempted mediation he had asked Mr. Farooq about thisproblem. He said that Mr. Farooq confided to him that he was not owed any money, but rather, sought to obtain certain papers and thathe would then pay Mr. Khan the money that was owed, but only after 90 days. [44] The Court appreciates the hearsay nature of this testimony, but Mr. Farooq’s comments can, in my view, be accepted in Court as anexception to the hearsay rule as a declaration against interest.

People may well have a vested interest in making up a statement whichtends to favour their pecuniary interest. The converse of this, of course, is that a person is far less likely to represent something toanother person which is untrue and which is harmful to his own interest, and the law of evidence therefore recognizes that a declarationagainst interest may, under certain circumstances, constitute an exception to the hearsay rule. In addition, Mr. Farooq is the principal ofK.Z.M. He is a central figure in these proceedings and he attended this trial throughout.

He did not object to this evidence going in; hedid not cross-examine on this point in any great detail and he did not bother to take the stand in rebuttal to challenge this evidence. In myview, this evidence lends credence to Mr. Khan’s assertion that there was no written agreement, nor any oral agreement obligating him topay for costs associated with his use of the semi-tractor. [45] My concern with its introduction is the privileged nature in which the statement was made.

As noted in Milton Farms v DowChemicals (1987), (SK KB), 63 Sask R 144 (QB), as a matter of public policy, communications made with a view toreconciliation and settlement of a dispute ought to be protected from disclosure. [46] In the instant circumstances we have a cultural community ethos which is to be commended - the attempt to resolve civil disputeswithout the need to go to Court.

On the other hand, the statement that was made goes to the very heart of a claim which may bepredicated on an attempt to introduce evidence into a civil trial that has been manufactured. [47] In Sable Offshore Energy Inc. v Ameron International Corp., 2013 SCC 37 , [2013] SCJ No. 37 our Supreme Courtgrappled with settlement privilege and gave directions. Abella S.C.J. at paragraph 1 and 2 noted that: The justice system is on a constant quest for ameliorative strategies that reduce litigation’s stubbornly endemic delays, expense andstress.

In this evolving mission to confront barriers to access to justice, some strategies for resolving disputes have proven to be moreenduringly successful than others. Of these, few can claim the tradition of success rightfully attributed to settlements. The purpose of settlement privilege is to promote settlement.

The privilege wraps a protective veil around the efforts parties make tosettle their disputes by ensuring that communications made in the course of these negotiations is inadmissible. [48] The Court went on to note that the protection is for settlement negotiations, whether or not a settlement is reached, and thatsuccessful negotiations are entitled to no less protection than ones that yield no settlement. [49] There is no question in my mind that Mr. Farooq’s comments to Mr.

Bukhari were made in an effort to start settlement negotiationsand ought to be privileged as a matter of public policy unless, as Abella S.C.J. noted at paragraph 19 of the Court’s decision, “adefendant [can] show that on balance, a competing public interest outweighs the public interest in encouraging settlement”. [50] Mr.

Justice Abella then refers to Unilever Plc v Proctor & Gamble Co., [2011] 1 All ER 783 (CA) when he states that thesecountervailing interests have been found to include allegations of misrepresentation, fraud or undue influence. [51] In the instant circumstances, the defendants have attempted to wrap their counterclaim inside the purported existence of a writtenagreement. The conversation that Mr. Farooq had with Mr. Bukhari is contrary to the very covenants that the defendant insists that Mr.Khan agreed to in writing, something which Mr.

Khan hotly disputes. [52] In my view, that conversation lends credence to Mr. Khan’s suggestion that the contract has been manufactured and I am prepared

to consider evidence on the basis that there is a competing public interest at stake .... an allegation of misrepresentation to the Court. [ 53 ] At the outset of this trial I indicated to K.Z.M. that in order to succeed in its counterclaim it carried the burden of proof, on a balance of probabilities, to convince the Court that there was a binding written agreement obligating Akbar to comply with the covenants set forth in that agreement. [ 54 ] As I review the evidence, I find the temporal circumstances surrounding the endorsement of that agreement to be tenuous. [ 55 ] I find that the signature set forth on that agreement and presumably binding Akbar to the agreement is clearly not Mr.

Khan ’ s signature. [ 56 ] I find that Mr. Farooq ’ s failure to attempt to collect monies from Mr. Khan as and when Akbar presumably caused damage to the vehicle inconsistent with the existence of this agreement. [ 57 ] I accept Mr. Awan ’ s evidence that this kind of agreement, when dealing with someone other than an owner/operator, is unusual if not unheard of in the trucking community. [ 58 ] I accept Mr.

Khan ’ s evidence that he would not have signed such an agreement, particularly when it dealt with an aging vehicle with substantial mileage on it, without at least seeking to inspect its history of repair. [ 59 ] I find Mr. Farooq ’ s subsequent failure to even refer to the agreement and any amounts owing to K.Z.M. under the agreement following Mr. Khan ’ s decision to quit working with K.Z.M. inconsistent with the existence of the purported agreement. [ 60 ] On the whole of the evidence, and even without consideration of the communication between Mr. Farooq and Mr.

Bukhari, I am satisfied that the defendant has failed to persuade the Court on a balance of probabilities that Mr. Khan signed the written agreement on behalf of Akbar or agreed to the covenants set forth in that purported agreement. [ 61 ] This Court grants judgment to Akbar-Niazi Corporation in the sum of $4,302.00 together with pre-judgment interest on that sum from February 1, 2013 which is assessed in the amount of $70.63. It is granted costs in the sum of $60.00 for a total award of $4,432.63. [ 62 ] The counterclaim of K.Z.M. Logistics Ltd.

Is hereby dismissed in its entirety. [ 63 ] The Court orders that the judgment be paid immediately. P. Demong, J