Black River Contracting v., 2015 BCPC 345

Citation: Black River Contracting v. 679692 B.C. Ltd. Date: 20151201 2015 BCPC 0345 File No: 40523 Registry: Kamloops IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (Small Claims Court) BETWEEN: BLACK RIVER CONTRACTING LTD. CLAIMANT AND: 679692 B.C. LTD. doing business as ON CALL SERVICE CENTER and YVAN MARCEL ROTZETTER DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE S.D. FRAME Counsel for the Claimant: Mr. Devin Buchanan Appearing for the Defendants: Mr. Yvan Rotzetter Place of Hearing: Kamloops , B.C.

Dates of Hearing: October 8 and 9, 2015 Date of Judgment: December 1, 2015 [ 1 ] It is a common practice in this region for trades people to engage each other in services with nothing more than a verbal

[ 1 ] It is a common practice in this region for trades people to engage each other in services with nothing more than a verbal agreement and a hand shake to seal the terms of the bargain. As a result, the terms can often be uncertain leading to disputes between those trades people not only with respect to scope and quality of work but the amount to be charged. So it is with these two parties who have a long history of business between each other and a more recent, unfortunate history of non-payment on each part. [ 2 ] The claim by Black River Contracting Ltd. is in three categories:

a) the bus garage: $761.25 for grading work;

b) screener rental: $4,935 for rental of gravel processing equipment; and

c) conveyor belt claim: $4,578.83 for a broken belt during the rental period. [ 3 ] The dispute with respect to the bus garage is only about how much time was spent on the job. The rental of the screener was premised on a breach by failure to pay in full, failure to provide proof of insurance and for causing damage to a belt on the equipment after two and a half days of use. Finally, the claim for the broken belt relates to Black River Contracting Ltd. claiming that the Defendant operated the equipment below the standard of reasonable operation.

The screener was repossessed by the Claimant which is now claiming the full rental period. The Defendant has a counterclaim for losses incurred as a result of the repossession. [ 4 ] The interest claimed is not set out in any written contract and therefore any amount allowed to the Claimant will be restricted to the interest available on the rental and bus garage invoices at 5% per annum. Any claim allowed for the belt would be restricted to pre- judgment interest at the Registrar’s rates of interest.

Bus Garage [ 5 ] The grading work was contracted by the Defendant for its own contract with the school district at the bus garage. It specifically asked for and received the services of Mervin Yirkiw. Mr. Yirkiw is acknowledged to be an exceptional grader and very experienced worker who gets the job done quickly. He kept his timecards and posted three hours at $145 per hour, plus two hours for de-mobilization. The parties had agreed to the hourly rate but not to the length of time it would take to do the grading job.

Even if they could not guestimate how long the grading job would take, they at the very least ought to have decided the terms for mobilization and de-mobilization. [ 6 ] The Defendant has acknowledged that transport to site and return as well as some de-mobilization should be paid for. The only portion that is legitimately an issue after considering all of the evidence is 30 minutes of mobilization before roading the equipment to the bus garage.

I would allow the Claimant’s claim for this invoice in full except for that half hour, if it were not for an agreement made between the parties with respect to non-payment by the Claimant of an invoice rendered by the Defendant. [ 7 ] That invoice related to the deposit of several loads of silt sand in May 2013. The parties had agreed that the Claimant would pay the Defendant $100 per load plus taxes. The Defendant invoiced the Claimant for that amount plus $10 per load for use of the loader and an 11% surcharge for fuel.

This was not a term of their agreement and could not be enforced at law. [ 8 ] However, in order to receive payment upon its invoice for the bus garage grading, Kelly Sunderman testified that he agreed the Claimant would pay the Defendant’s invoice as rendered provided that the Defendant paid the Claimant’s invoice as rendered. Mr. Rotzetter denied that this agreement had been made. He was not persuasive and I am satisfied that this agreement was reached between the parties. The Claimant has paid the Defendant for the invoice rendered.

I allow the Claimant its claim for the bus garage invoice as presented in the sum of $761.25, together with interest at the rate of 5% per annum, from October 14, 2013 to the date of judgment. Screen Rental [ 9 ] The parties fared better with the terms of the screener rental. The Claimant purchased the used screener in the spring of 2014 and had been processing material successfully with it since. There were approximately 350 hours on the machine before the screener rental agreement with the Defendant.

The terms of the rental are set out in the rental agreement sent by the Claimant to the Defendant. [ 10 ] After some prevaricating by Mr. Rotzetter about what was written in the agreement, it was agreed that the terms were that the equipment was supplied in good condition with no noted damage. No damage deposit was required because payment in full was to be made in advance. The rental was based on 176 hours per month or 50 hours per week or 8 hours per day. Taxes were extra. The Defendant was responsible for maintenance and would be charged for cleaning if there was excess material build-up upon return.

In addition to the rental conditions, the Defendant was to provide a Certificate of Insurance to the Claimant within 24 hours of receiving the machine. Mr. Rotzetter provided some incredible evidence that he believed it was up to the Claimant to communicate with the Defendant’s insurance company about the particulars. This was entirely illogical evidence and I reject it in whole. [ 11 ] The rental agreement also provides that “the customer agrees to personally guarantee payment of all charges arising from the rental and usage of the above equipment”.

However, the customer is identified on the rental agreement as On-Call Service Centre, and not Mr. Rotzetter. As a result, there is no valid claim against Mr. Rotzetter personally. [ 12 ] The Defendant did not obtain the necessary insurance. This constituted a breach of the rental agreement. The Defendant did not pay the rental amount in full in advance. This also constituted a breach of the rental agreement. This comprises almost all of the terms of the rental agreement. Despite Mr. Sunderman’s attempts to contact Mr. Rotzetter in the early parts of the agreement, the Defendant did not comply with the terms.

As such, the Defendant fundamentally breached the rental agreement in full. [ 13 ] Mr. Sunderman had forgotten to include a remote device for the equipment which he delivered the second day of the term of the agreement. When he arrived on site, Mr. Rotzetter was not around, but his crew were digging out the screener machine. The screener had jammed because they had not dug out the catch pit as directed specifically by Mr. Sunderman the day before. Mr. Sunderman assisted the crew with digging out the machine and repeated the operation requirements for a catch pit.

[14] Upon having no response from the Defendant with respect to payment or insurance the following week, Mr. Sunderman foundhimself again at the Defendant’s site because the equipment had malfunctioned. It appeared that it was once again jammed but this timea conveyor belt on the equipment had broken. At this point, there were 17.3 hours remaining on the lease. Mr. Sunderman repossessedthe equipment because the terms had not been complied with and because the equipment had been damaged. [15] The Claimant is not in the business of renting its equipment.

After this experience, it decided not to rent out the equipmentagain. There was, consequently, no mitigation of the losses. The Claimant had no more processing of its own to do with the seasonbeing at an end. There is no evidence the equipment could have been rented out anyway at season’s end. As a result, there was nomitigation. I find in the circumstances that there was no duty to mitigate other than the steps the Claimant took: repossession and repairof the machine. [16] The Claimant had a specified term in the agreement for payment.

The breaches were all the Defendants including failure toprovide adequate insurance coverage, failure to pay for the lease amount in advance, and failure to operate the machine correctly,resulting in damage. The Claimant is therefore entitled to the full amount of its invoice in the sum of $4,935. Conveyor Belt [17] With respect to the conveyor belt, it broke because the Defendant was not using the equipment properly. On the advice of thecompany replacing the belt, the Claimant opted to replace rather than repair the belt. It would have cost between $2,000 to $2,500 torepair the belt.

At the time of the damage, there were 1,800 hours on the machine. Mr. Sunderman understood he should be able to get4,000 hours on the belt but could not be sure how many hours were already on the belt specifically. If one can obtain 4,000 hours from aconveyor belt on a piece of equipment of this nature, and if there are only 1,863.5 hours on the equipment, I conclude that the belt stillhad a little better than half of its life left. [18] With damages of this nature, the Claimant is not entitled to a new conveyor belt. It is entitled to a depreciated conveyor belt.

Itmay have been reasonable from a business perspective for the Claimant to replace the conveyor belt at a cost $4,360.79. However, thatis not the amount for which the Defendant is liable. I allow the Claimant $2,000 for the cost of replacement of the conveyor belt. Counterclaim [19] The Defendant counterclaimed for losses it incurred as a result of the repossession of the equipment. Given that the breacheswere entirely that of the Defendant, it cannot succeed in the counterclaim and I dismiss it. [20] I was referred to several decisions by counsel for the Claimant: Bank of America Canada v.

Mutual Trust Co., 2002 SCC 43 , [2002] S.C.J. No. 44 Nan v. Black Pine Manufacturing Ltd., (BC CA), [1991] B.C.J. No. 910 a.k.a. Cartoon Inc. v. Natterjack Animation Co., [2002] B.C.J. No. 2873 Resurfice Corp. v. Hanke, 2007 SCC 7 , [2007] S.C.J. No. 7 Snell v. Farrell, (SCC), [1990] S.C.J. No. 73 First Majestic Silver Corp. et al. v Santos et al., 2011 BCSC 362 , 2011 B.C.S.C. 362 [21] The Cartoon Inc., supra, decision found that withholding a partial payment was a fundamental breach of the contract.

I acceptthat non-payment of any portion of a contract specifically in breach of a term requiring advance payment, is a fundamental breach of thecontract. As a result of that breach, the Claimant was entitled to remove the equipment from the Defendant’s property. [22] The Bank of America Canada, supra, decision provides that the presumptive measure of damages in the case of such a breach isto put the Claimant in the place it would have been had there been no breach. In this case, that would allow the Claimant the full amountof its lease payment.

Conclusion [23] The Claimant shall have judgment against the corporate Defendant in the sum of $761.25 together with interest at 5% perannum from October 14, 2013 to the date of judgment; in the sum of $4,935 together with interest from September 24, 2014 to the dateof judgment; and in the sum of $2,000 together with court order interest from September 24, 2014 to the date of judgment. _____________________________ S.D. Frame Provincial Court Judge