New Discovery Lines Canada Ltd. - v. -, 2019 SKPC 20

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2019 SKPC 20 Date: March 29, 2019 File: 431 of 2018 Location: Regina _____________________________________________________________________________ Between: New Discovery Lines Canada Ltd. - and - Hopkins Transportation Inc. Kolade Oladokun For the Plaintiff Doug Snider For the Defendant _____________________________________________________________________________ JUDGMENT P. DEMONG , J _____________________________________________________________________________ Introduction [ 1 ] The plaintiff (hereafter “New Discovery”) is a corporation registered to carry on business in the province of Saskatchewan. It

provides trucking services throughout North America. It brings this action against the defendant, (hereafter “Hopkins”) a corporation registered in the province of Ontario. It seeks to recover the sum of $6,800.00 which it says is due for trucking services it provided to Hopkins on or about June 14, 2018. It seeks prejudgment interest on that sum together with its costs of this action. [ 2 ] Hopkins has filed a Reply to the claim. It asserts that New Discovery breached two essential terms of the contract.

First, it says that New Discovery failed to attend at the loading destination at the time and on the date contracted for. Second, it says that New Discovery failed to tarp the entirety of the load while in transit. In consequence, Hopkins alleges that its customer, Newco Industrial, incurred costs in relation to the delay and the lack of tarping. Hopkins alleges that Newco then charged those costs back to Hopkins, and that it subsequently refused to pay Hopkins for brokerage services in relation to the transport of this equipment.

In consequence, Hopkins alleges that it lost the sum of the $7,910.00, which sum is inclusive of HST. Hopkins seeks to set-off this sum against New Discovery’s claim. Although it has not sought recovery for any balance that might accrue to it following set-off, in its final argument, it asks this Court to dismiss the plaintiff’s claim and grant costs to Hopkins. Preliminary Matters [ 3 ] Following Case Management Conference, Hopkins had requested that the Court allow it and its legal counsel the opportunity to attend the trial of this action by telephone, something rarely granted by this Court.

As an incentive to obtaining opposing counsel’s consent, it had offered to waive any legal argument challenging this Court’s jurisdiction to deal with this interprovincial contract. It further offered to defer in asserting an additional counterclaim for future loss of profits, loss of reputation and loss of future business. The Court granted the request on the terms suggested by Hopkins notwithstanding that the plaintiff objected.

That objection appeared to be based, not on any particular concern that the trial would become more complicated, but rather, on the argument that Hopkins should be forced to incur travel time and expenses to answer the claim. The nature of the evidence - contracts defined in a series of e-mails - militated in favour of telephone attendance. Evidence, Analysis and Finding of Facts [ 4 ] The essential facts upon which this decision is based are not in dispute in any meaningful way. That stated, where the evidence of Solomon Nhah, the President of New Discovery, and Mr.

Hopkins, the President of Hopkins vary, I prefer the evidence of Mr. Hopkins. He presented at trial as thoughtful and articulate. He answered questions put to him directly and without prevarication. His evidence was consistent and believable. Comparatively speaking, on several occasions Mr. Nhah had to be directed by the Court to answer the questions put to him in cross-examination meaningfully.

His combative approach when giving evidence, and his bald assertions as to how he felt the freighting business is supposed to work did him very little service. [ 5 ] Before analyzing the facts I wish to make a preliminary point. While Hopkins has asserted that a failure to tarp the entire load constituted a breach of the contract, there was no evidence led to suggest that this failure was significant. Mr. Nhah suggested that the load was partially tarped and in accordance with the instructions given to him when the freight was being loaded. Mr.

Hopkins did not deny this, nor did he lead any evidence to suggest that Hopkins losses arose because of this fact.

I place little weight on this apparent failure. [ 6 ] I find the following facts to be either undisputed, or as more likely than not to have occurred: - Hopkins is in the business of brokering the transportation of goods. - To that end, it sought out a freight hauling company to attend at Airdrie, Alberta in order to load equipment onto a flatbed trailer for transport to Milton, Ontario. - It accessed what is known in the industry as ‘Loadlink’, which is an online service which connects carriers to shippers and which posts transportation and freight jobs. - An employee of New Discovery responded to Hopkin’s posting, and contacted Mr.

Hopkins by telephone to quote the job. - During the course of that discussion, the parties agreed upon the essential terms of the contract. In that discussion Mr. Hopkins made it known to New Discovery that, because of the weight and size of the shipment, special loading arrangements were required to be made and that these costs included both the cost of hiring a crane and loading crew. I am satisfied that New Discovery knew, or certainly ought to have known, that if it did not comply with the express terms of the agreement, then Hopkins was at risk of breaching

its own agreement with its client and that costs would be incurred by virtue of any delay. - Pick up arrangements were specific. Hopkins requested, and New Discovery agreed, that a tractor and flatbed trailer would be onsite to have the equipment loaded in Airdrie on Wednesday, June 13 th , 2018 at 8:00 a.m.

These particulars were confirmed by e-mail from Hopkins to New Discovery on Tuesday, June 12 th , 2018. - Hopkins reiterated the terms of this agreement by a further e-mail on that same date. - On the morning of the agreed upon pick up date, New Discovery informed Hopkins by e-mail that its driver would not arrive until 12 noon due to ‘his logbook’.

Specifically, it asserted that the driver engaged by New Discovery could not start at the required time because to do so would, contrary to trucking laws, compel him to put in more hours in a twenty-four hour period than he was legally entitled to log. - The loading crew and the crane were instructed to wait for this late arrival. The work could still have been completed by the end of the day. - The loading crew and crane waited until noon but New discovery’s driver did not arrive at the noon hour. - Mr.

Hopkins then called and spoke with Soloman Nhah, who then promised that the driver would arrive between 3:00 p.m. and 3:30 p.m. When the driver did not attend by that time, Mr. Hopkins again contacted Mr. Nhah and was told that the driver was still two and one half hours from the loading site. The crane and loading crew were advised and they subsequently left for the day. Loading the machinery after 6:00 p.m. was not an option. - New Discovery’s driver did not show up at the worksite until sometime after 6:00 p.m. - Mr. Nhah and Mr. Hopkins had a further discussion.

They agreed that the driver would overnight at the loading site for loading the next morning in exchange for an additional payment of $300.00 to compensate the driver for his time. The total fee to be charged by New Discovery would be increased from $6,500.00 to $6,800.00. While Mr. Nhah has stated that this additional sum was offered to New Discovery by Hopkins as an inducement to have the driver stay, I prefer Mr. Hopkin’s evidence to the effect that Mr. Nhah demanded this additional amount upon threat of directing his driver to leave the loading site. I accept Mr.

Hopkin’s testimony that Hopkins was ‘over a barrel’ and that, therefore, he relented. - The next day the crane and the loading crew re-attended the work site and the machinery was loaded and subsequently delivered to Milton, Ontario. - There was no evidence tendered by either party to the effect that Hopkins, at any time prior to New Discovery’s completion of the contract, expressly waived any legal right it may have had in relation to an original breach of the condition that time was of the essence in this contract. - New Discovery rendered its invoice on June 18, 2018, in the sum of $6,800.00. - Hopkins delivered its invoice for brokerage fees to its client on June 14, 2018, in the sum of $8,644.50, inclusive of tax. - Hopkin’s client expressed displeasure with the additional cost that it had to incur for waiting time for its crane and loading crew, and it passed those costs on to Hopkins, in the sum of $7,910.00. - On June 19, 2018, Hopkins sent an e-mail to New Discovery indicating that because it was not being paid its fee (due to its client’s attendant waiting costs attributable to New Discovery’s failure to have a driver on site at the date and time promised), it was not prepared to honour New Discovery’s invoice. - On June 21 st , Soloman Nhah sent a rather nasty e-mail in reply, calling Mr.

Hopkin’s message ‘insane’; advising him to ‘change

the manner in which he conducts his business’; calling his message ‘nonsense’; indicating that he would be glad to ‘help take your broker bond away … if you actually have one’; and, to ‘stop playing stupid pranks’. - Mr. Hopkins replied by e-mail on June 25 th , explaining that he had relied on New Discovery’s continuing, but false, assertions regarding the time that its driver would be on location to his detriment and reiterated that New Discovery’s invoice would not be paid because of the charge back from his client. - Mr. Nhah replied by e-mail on July 3 rd , 2018 calling Mr.

Hopkins ‘delusional’; advising him that ‘all of his cries about time and all what not was bullshit’; advising him that ‘the norm is, if there are any delays from a carrier, cancel and give your freight to another carrier; ‘not to be stupid’; and, that Mr.

Hopkins ‘sounded like a little child learning trade’. - On August 24 th , 2018, counsel for New Discovery made a formal written demand for payment which was ignored by Hopkins. - This action was commenced shortly thereafter. [ 7 ] I take note of the fact that New Discovery did not take issue with the evidence that the charge-back had been made, or that these costs, in the amount asserted, were actually incurred by Hopkin’s client, or that Hopkins had those charges passed on to it.

Nor was there any allegation that Hopkins had failed to mitigate this loss, the proof of which would fall upon the party alleging a failure to mitigate. Issues [ 8 ] New Discovery’s action is founded on a simple debt. Having provided the services, it alleges that it should be paid the amount owing under the contract. [ 9 ] Hopkins is alleging that under the express terms of the contract, time was of the essence.

It argues that New Discovery, having previously been made aware of the fact that costs would accrue in the course of loading this equipment knew, or certainly should have known that losses would occur if the this term of the agreement was not complied with.

As New Discovery breached the terms of the agreement, not only once, not only a second time, but then a third time, Hopkins argues that it was free to attempt to mitigate its damages by entering into a fourth agreement with New Discovery in which loading would occur on the next day, and thereafter sue for the damages that it incurred by virtue of New Discovery’s breach. [ 10 ] New Discovery has assumed that if it did not comply with the original terms or the agreement, then the law would follow what Mr. Nhah has described in his e-mail to Mr.

Hopkins as the norm …. that Hopkins could simply cancel the contract and look for another carrier. New Discovery is mistaken. Absent impossibility, or frustration of the contract by an outside force, New Discovery would, in law, be bound by its agreement, and if it failed to meet the essential terms of the contract, it would be liable for any damages occasioned by that breach. That is the very nature of the law of contract and the law of damages where, as in the instant case, the contract incorporated a ‘time is of the essence’ condition.

In my view, New Discovery could not avoid the contractual term by simply concluding that it need not have a driver and tractor/trailer unit available if this was not expedient. It was incumbent on New discovery to ensure that it had a driver and a unit available at the required time to meet the terms of the agreement.

This, unless Hopkins can be said to have waived its right to later claim that New Discovery was in breach of the agreement, and forego any damages that might have arisen thereby. [ 11 ] The law is reasonably clear, as noted by Fridman, in his text, The Law of Contract ,4 th Ed., 1999, Thomson Canada Limited, at page 559, that: Even where time is of the essence, the requirement that performance be completed within or at the stipulated time may be waived by the party for whose benefit that requirement has been included in the contract.

Where such waiver has occurred, the party who would have been in breach for late performance is not liable unless his conduct amounts to a further breach of contract. The party who has waived the importance of time will be estopped from later arguing that the contract should have been performed by the other party at the originally agreed upon date.

[12] This aspect of the law is further articulated by Cheshire and Fifoot, in their text Law of Contract 7th ed. (1969) p 502, cited by thetrial judge in Condev Project Planning Ltd. et al. v Thunderbird Electric and Plumbing Supply Ltd., (BC CA), [1979]2 WWR 389 (BCCA) (reversed on other grounds), which puts it this way: In short, a voluntary concession granted by one party, upon the faith of which the other may have shaped its conduct, remains effectiveuntil it is made clear by notice or otherwise that it is to be withdrawn and the strict position under the contract restored.

The concessionraises an equity against the party who consented to it.

If, for instance, in the case of a written contract for the sale of goods, the buyer atthe request of the sellers orally consents to the postponement of delivery, he cannot peremptorily hold the sellers to the original contract.No repudiation of his waiver will be effective except a clear intimation to them that he proposes to resume his strict legal rights.Normally he will do this by giving express notice of his intention, but this method is not essential and anything will suffice which makesit abundantly clear that the concession is withdrawn.

Within a reasonable time thereafter, the original position will be restored. ToolMetal Mfg. Co. Ltd. v Tungsten Elec. Co. Ltd. [1955] 1 W.L.R. 761, [1955] 2 All E.R. 657 (H.L.). The rights of the seller under such awaiver have been stated by DENNING, L.J.: ̶ If the defendant as he did, led the plaintiffs to believe that he would not insist on the stipulation as to time and that if they carried out thework he would accept it, and they did it, he could not afterwards set up the stipulation as to time against them.

Whether it be calledwaiver or forbearance on his part, or an agreed variation or substituted performance, does not matter. It is a kind of estoppel. By hisconduct he evinced an intention to affect their legal relations. … That promise was intended to be acted on, and was in fact acted on.

Hecannot afterwards go back on it. [Citations Omitted] [13] The central issue for determination is whether or not Hopkins did in fact waive the requirement that performance be completedwithin or at the original stipulated time … or to put it another way, as was noted by Cheshire and Fifoot, it made ‘ a voluntaryconcession, upon the faith of which [New Discovery] may have shaped its conduct’. [14] New Discovery suggests that Hopkins did waive its strict legal rights to subsequently rely on the contractual term that time wasof the essence.

It asks this Court to infer that Hopkin’s forbearance, in allowing loading to start at the noon hour, then later revised to2:30 p.m., and then later to the following morning constitutes a waiver of any legal right that Hopkins may have had surrounding theearlier breach. [15] In support of its position it has referred the Court to, among other cases, the decision in Dufferin Construction Co. v Thorold, (BC SC), [1929] 4 DLR 132 (SCC) [Dufferin]. In that case a construction contract required that the work be completedby a specified date, with penalties for delay in completion.

The work was not completed within the time contemplated and the plaintiffsued for damages.

In his three paragraph decision, Anglin C.J.C. specifically noted that the defendant had been precluded from timelycompletion by virtue of its obligation to harmonize its work with a corresponding delay by another contractor; unfortunate weatherconditions; the stopping of some of the work by the honest exercise of one of the defendant’s engineers who had concluded that it wasdangerous to continue with the work owing to those weather conditions; and, a finding that there was in fact a waiver by both parties inrelation to the timing for performance. [16] The facts in Dufferin are significantly different than the case before me, and I note in any event that Anglin C.J.C. specificallypointed to the existence of a waiver.

He did not articulate the reasons why that conclusion had been made. He simply concluded thatbecause of the waiver, the action had to be dismissed. [17] On the facts before me there is no evidence that external forces made it impossible to perform the contractual term that timewould be of the essence. A simple assertion that the driver would be delayed, without more, is not impossibility driven by an externalforce.

In addition, the assertion that New Discovery could not perform the contract at the time and on the date agreed upon, due to itsdriver having previously accumulated too many driving hours in the previous 24 hours, does not assist New Discovery. An argument tothe effect that – ‘my driver was busy doing other stuff and so I can no longer meet my contractual commitment’ – is not an answer. Itwas incumbent on New Discovery to ensure that his driver was ready willing and able to fulfill the terms of the contract. [18] Hopkins has referred the Court to a much more recent decision of the Supreme Court of Canada.

In Saskatchewan RiverBungalows Ltd. v Maritime Life Assurance Co., (SCC), [1994] 2 SCR 490 [Sask. River Bungalows], the Court wasdealing with an appeal from a decision dealing with a policy lapse under a contract of insurance and relief from forfeiture. Major J,speaking for the majority was required to deal with the issue of waiver. After having noted the similarities between waiver and bothpromissory and equitable estoppel, he dealt only the doctrine of waiver. At pp 499 – 500 he cited legal authority for the followingproposition:

The essentials of waiver are thus full knowledge of the deficiency which might be relied upon and the unequivocal intention to relinquish the right to rely on it. That intention may be expressed in formal legal document, it may be expressed in some informal fashion or it may be inferred from conduct.

In whatever fashion the intention to relinquish the right is communicated, however, the conscious intention to do so must be ascertained. [ 19 ] Major J then proceeded to state that: Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them. The creation of such a stringent test is justified since no consideration moves from the party in whose favour a waiver operates. An overly broad

interpretation of waiver could undermine the requirement of contractual consideration. [ 20 ] As I look to the evidence I note that there is nothing before me to suggest that Hopkins ever waived the ‘time of the essence’ provision of the contract expressly, formally, or even informally.

In order to infer that it was waived by conduct, I have to conclude, on the evidence, that it could be said that Hopkins had full knowledge of rights, and an unequivocal and conscious intention to abandon them, both in light of the stricture that do otherwise would undermine the requirement of contractual consideration. [ 21 ] I note in passing that there was no consideration passing from New Discovery to Hopkins that would abate the stricture that I just referred to. In fact, it is quite the opposite.

New Discovery did not offer an abatement to the contract price (which might offset this stricture), but rather it demanded an increase in the contract price. While I may infer that Mr. Hopkins, who presented as a professional broker and well familiar with the law as it applies to hauling, either knew or ought to have known of his legal right to seek damages in the event of delay, I draw the reasonable conclusion that he would not have, until a later date, understood the full extent of his rights - that being the potential quantum of any ensuing loss.

Arguably that militates against concluding that he had ‘full knowledge of his rights’. Whether or not Hopkin’s set-off fails on this point only, is, arguably, equivocal, but it is not conclusive. What I find to be conclusive is that the evidence falls short on the second point articulated in Sask. River Bungalows .

I simply cannot conclude, from a review of the evidence as a whole, that Hopkins had evinced an unequivocal and conscious intention to abandon those rights when he simply sought, without more, to continue to engage New Discovery to complete the contract. [ 22 ] For the foregoing reasons, I find that Hopkins has been successful in its claim for set-off, and as that amount exceeds the claim brought by New Discovery, I grant Hopkins its requested relief and I dismiss New Discovery’s claim. I also award Hopkins its costs.

Were I to be found wrong in my analysis and conclusion, I would have granted New Discovery judgment in the sum of $6,800.00, founded, as it is, on a simple debt, due and owing. [ 23 ] On the issue of costs, Hopkins had invited this Court to consider an award for increased costs owing to what it described as the unreasonable, accusatory, and threatening manner of New Discovery’s communications with it, which are articulated at page 5 of this decision.

While those communications are unprofessional and petty, and while they may reasonably have acted as a brake on what may otherwise have been any attempt to resolve this matter by voluntary settlement negotiations, I cannot conclude that they adversely impacted the conduct of this trial. Hopkins is entitled to the costs of filing its defence in the sum of $100.00. In addition, under section 36(3) of The Small Claims Act, 2016 , SS 2016, c. S-50.12 and its regulations, I have the discretion to award costs in an amount not exceeding 10% of the value of the amount claimed.

I normally reserve full costs to those situations where an unexpired offer of settlement has been filed with the Court and the successful party meets or exceeds that offer. This factor does not apply in this case, and none of the other factors set forth in that

section have any particular significance. I award 7.5% of the amount that had been claimed in this action as costs to Hopkins, in the further sum of $510.00. [ 24 ] Hopkins shall have judgment against New Discovery in the sum of $610.00. ___________________ P. Demong, J