2015 QCCQ 10484, 2015 QCCQ 10484

Industrial Textile Salvage Co. Ltd./Recyclage de textile industriel ltée c. North American Wool Stock Inc./Laine Amérique du Nord (Québec) inc. 2015 QCCQ 10484 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-22-191655-128 DATE: October 16, 2015 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ INDUSTRIAL TEXTILE SALVAGE CO. LTD/ Recyclage de Textile Industriel Ltée 5648 Melling Côte-St-Luc, Quebec H4W 2C2 Plaintiff v.

NORTH AMERICAN WOOL STOCK INC./ Laine Amérique du Nord (Québec) Inc. 61 Hymus Blvd. Pointe-Claire, Quebec H9R 1E2 Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] This is a case that grew out of five cases in the Small Claims division between the same parties that were joined for common hearing: 500-32-115431-092 500-32-125519-100 500-32-127282-111 500-32-127459-115 500-32-129104-115 [ 2 ] In each case, Industrial Textile Salvage Co.

Ltd. ("Industrial Textile Salvage") was suing North American Wool Stock Inc. ("North American") for arrears of $1,500 per month allegedly owed in connection with textile clippings that Industrial Textile Salvage allowed North American to pick up at the premises of a third party, Jack Victor Ltd. [ 3 ] The Court began hearing evidence in the first case (500-32-115431-092) on February 21 st , 2011.

The case was continued to permit the production of further evidence and, in the meantime, before the continuation of the hearing could take place, the undersigned was advised by the Clerk of the existence of four additional files alleging substantially the same facts with respect to different time periods. [ 4 ] The four new cases were joined to the existing one and a second hearing took place on November 14, 2011.

This hearing was adjourned to permit the serving of a subpoena on Mr Vince D'Agostino, the general manager and VP operation of Jack Victor Ltd. and the case was continued to complete the hearing with Mr D'Agostino's presence on January 23, 2012. He failed to appear, however, despite being served with a subpoena. [ 5 ] At the hearing of November 14th, 2011, the Court ascertained the time periods relating to the various invoices that are the subject matter of the five files.

Based on this evidence and upon reflection, the Court decided to raise, of its own motion, the issue whether the Plaintiff had divided a claim exceeding $7,000 into several claims not exceeding that amount in order to avail itself of the small-claims procedure, contrary to

article 955

c) of the Code of civil procedure .

[ 6 ] The first action was initiated on February 26, 2009, at a time when all of the amounts claimed in all five actions, which span the period from August 2007 to December 2008, were already due and owing. [ 7 ] According to the reasoning of the Court of Appeal in SSQ, société d'assurances-vie inc. c. Coallier [1] , the Plaintiff should have included in his claim all amounts that were due and payable at that time. [ 8 ] The Plaintiff should have brought the matter in the Civil Division, as a global claim of $31,581.35.

It was not possible to break it up into several actions for amounts within the limits of the Small Claims Division, at the time, $ 7,000. [ 9 ] The Plaintiff could have had the option of bringing a series of $7,000 claims, so long as he had done so as the amounts became due. [ 10 ] Because it waited and instituted its proceeding only after all of the monthly amounts were due and owing, it was forced to choose between reducing the claim to $7,000 for Small-Claims purposes or bringing the claim in the Civil Division for the full amount. [ 11 ] After the Court rendered its interlocutory judgment on this point [2] the Plaintiff opted to have the entire matter dealt with as a single action before the Civil Division.

The five matters were joined under the present file.

Background [ 12 ] At the time of the events that led to this litigation, a business relationship had existed between the parties whereby North American, a business run by Charles Rozansky, would, every Thursday, pick up clippings at the premises of a garment manufacturer known as Jack Victor Ltd. (Jack Victor) on Saint Alexander Street in Montreal. [ 13 ] The clippings, essentially waste, from the point of view of Jack Victor, were actually valuable, because they could be recycled profitably. [ 14 ] Industrial Textile Salvage, operated by Leonard Frisch, had the practice of acquiring the material from Jack Victor, according to a practice whereby North American would go each week to the premises of Jack Victor to pick it up. [ 15 ] Jack Victor invoiced Industrial Textile Salvage for the material picked up, and Industrial Textile Salvage billed a higher amount to North American.

The mark up made the procedure profitable for Industrial Textile Salvage and North American could dispose of the product gainfully as well, while Jack Victor had the benefit of a remunerated disposal of its recyclable waste. [ 16 ] Jack Victor produced accounting records showing its statement of account with Industrial Textile Salvage from December 1, 2006 until January 18, 2010 (P-4, statement of account, P-5 Invoices and cheques). Jack Victor was billing Industrial Textile Salvage $ 474.60 per month until January 2008 when the price was reduced slightly to $ 470.14.

There are some months were there is also a charge of $ 911.60. In 2008 this amount went down to $ 903.00. The last entry was a credit note to Industrial Textile Salvage of an amount of $ 1,671.51 issued on January 16, 2010. [ 17 ] The invoices on which the action is based were issued by to North American for the periods beginning August 2007 to December 2008. Typically, the invoice covers several months at $ 1,500 per month for "cutting and recycling pickups". On some invoices, there is an additional charge of $ 800 with reference to Jack Victor invoices for corresponding amounts (plus tax).

These charges related to a different type of material, referred to by Mr Frisch as "remnants". [ 18 ] Mr Rozansky, signing as Managing Director of North American allegedly wrote to Mr Frisch on September 1, 2004 to confirm a telephone conversation during which Mr Rozansky informed Mr Frisch that the amount to be paid for the monthly pick ups would be reduced to $ 1,500. [ 19 ] There is no issue between the parties that $ 1,500 was in fact the price. It is the price reflected in the bills that were paid, of which the Court was given a copy of a July 2007 invoice for the months of February through July 2007.

The Issue [ 20 ] The issue is whether the obligation to pay this amount, as well as the amounts relating to the "remnants" continued in the disputed period, beginning August 2007 until February 2008. [ 21 ] During that period, the Defendant continued to pick up the remnants, but that it no longer had any duty to pay for them. Mr Rozansky produces a photocopy of a letter (D-1) addressed to Industrial Textile Salvage dated August 2, 2007. It reads: ... Please find attached our cheque number 009612 in the amount of $10 255.50 for final payment on waste clippings from Jack Victor up to July 31, 2007.

As per our telephone conversation of last week, due to reduced quality and quantity, North American Wool Stock will no longer be able to pay for the textile waste clippings that we are getting from Jack Victor. However, as a disposal service to you, we will continue to pickup at no charge. ... [ 22 ] Mr Rozansky explained to the Court that the value of these recyclable materials in the market had substantially decreased such that it was no longer feasible to pay the rates he had been paying, or, for that matter, any amount.

[ 23 ] Mr Frisch denies having discussed this with Mr Rozansky and denies having received the letter. He typically would go to the premises of North American to pick up the payment after enquiring as to its availability. There was no practice of sending cheques by mail. [ 24 ] He recalls having gone to pick up a cheque for the payment of the invoice of July 7, 2007, $ 10,255.50. [ 25 ] Mr Frisch made no change to his practice with Jack Victor whose duplicate invoices show that the pickups were being billed and paid up to July 2009. [ 26 ] He also testifies that he asked Mr Rozansky for payment.

At first he was stalled, then, told that there would be no payment. [ 27 ] Around the time of commencing the first small-claims action, Mr Frisch asked Mr Rozansky to stop the pickups, and when the latter refused, he asked Jack Victor to advise North American stop them. [ 28 ] In March 2009, Jack Victor's VP, Vince D'Agostino, sent by registered mail a letter confirming that he had advised North American in January 2009, verbally we infer, to cease the pick ups. [ 29 ] Mr Rozansky testifies that he continued the pick ups until the end of December 2008. [ 30 ] Mr Frisch found another company to continue the pick ups, but ceased the business relationship with Jack Victor later in the year 2009.

Analysis [ 31 ] North American alleges that the contract changed as of August 2007. The fact that the pick ups continued and Jack Victor continued to charge Industrial Textile Salvage leads to the inference that it was business as usual. Contracts are presumed to remain stable, under the general presumption of stability of legal relations, which is reflected in

article 2803 Civil Code of Quebec . The burden of proving the change to the contract therefore lies on North American. [ 32 ] It does not have proof of the reception of its letter, D-1. The copy of the letter and Mr Rozansky's testimony does not have a higher probative value than that of the contrary testimony of Mr Frisch.

Mr Rozansky's testimony did not appear to be more sincere and spontaneous than that of Mr Frisch, which was equally credible. [ 33 ] The fact pattern strongly suggests that neither Industrial Textile Salvage nor Jack Victor had any idea that North American wanted to change the deal: they continued their practices as before, allowing North American to pick up the material and billing Industrial Textile Salvage as always. [ 34 ] This continuation of the practice, an objective fact, taken together with Mr Frisch's testimony, prevents Mr Rozansky's testimony, however sincere it may be subjectively, and his copy of the letter, however credibly it may otherwise have been, to carry the day. [ 35 ] The fact that a significant time went by before Mr Frisch did anything to stop the pick ups does not weigh against Industrial Textile Salvage in the balance.

It was a fairly informal business arrangement, and payment was not necessarily expected to be made promptly on a monthly basis. Take, for example the fact of a single payment for the months of February to July 2007. In that context, it is not really surprising that it took quite a while for Mr Frisch to confront Mr Rozansky and to have Jack Victor put North American on notice to cease the pick ups. [ 36 ] In conclusion, then, the Court finds that the evidence of an extinction of the contractual obligation to pay $ 1,500 for the pick ups of the material is of insufficient weight.

When contradicted by other testimony and objective facts, it does not fulfill the Defendant's burden of proof. [ 37 ] The continuous pick ups of the material give rise to the obligation to pay the usual amounts, as established by the longstanding practice between the parties. FOR THESE REASONS, THE COURT: CONDEMNS the Defendant to pay the Plaintiff the sum of $31,581.35, together with interest at the legal rate and the additional indemnity provided for in

section 1619 of the Civil Code of Québec , calculated : - from February 28, 2008, on the amount of $6,910.10; - from October 31, 2008, on the amount of $6,772.50; - from January 9, 2009, on the amount of $6,837.00; - from October 18, 2010, on the amount of $6,772.50; - from November 7, 2010, on the amount of $4 289.25.

WITH COSTS. __________________________________ DAVID L. CAMERON, J.C.Q. Mtre Bruce Taub Plaintiff’s Attorney Mtre Iulia Cimpoiasu Defendant’s Attorney Dates of hearing: February 21, 2011, November 14, 2011 January 23, 2012 and April 17, 2015.