6517633 Canada Ltd. - v. -, 2013 SKPC 23

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2013 SKPC 023 Date: February 11, 2013 File: 115/12 Location: Melfort _____________________________________________________________________________ Between: 6517633 Canada Ltd. - and - Miner Creek Farms Ltd. Stanley Sheppard For the Plaintiff Todd Parlee For the Defendant _____________________________________________________________________________ JUDGMENT I. CARDINAL , J _____________________________________________________________________________ I. INTRODUCTION [ 1 ] Stanley Sheppard, as President of 6517633 Canada Ltd., operates a custom swathing and combining business in Pangman,

Saskatchewan. In July 2011, Mr. Sheppard, on behalf of the company, entered into a verbal agreement to custom swath and combine for the Defendant, Miner Creek Farms Ltd, through discussions with its President, Sam Rey. In August 2011, the harvest was undertaken, but within a few days the relationship between Mr. Sheppard and Mr. Rey became strained. Mr. Sheppard removed his equipment from Mr. Rey’s farm and has brought an action for breach of contract. [ 2 ] Mr. Sheppard is claiming total damages in the amount of $42,918.75 as a result of the Defendant’s failure to complete the verbal contract.

The Plaintiff has waived any amount over $20,000.00 in order to proceed pursuant to The Small Claims Act, 1997 . [ 3 ] Sam Rey, on behalf of Miner Creek Farms, defends the claim on the basis that it was the Plaintiff who discontinued his services and repudiated the contract. Further, he has brought a counter-claim in the amount of $20,000.00 stating that as a result of the Plaintiff’s tardy and incomplete performance of its duties he suffered yield losses. [ 4 ] For the reasons that follow I allow the Plaintiff’s claim in part, and dismiss the Defendant’s counter-claim in its entirety. II. ISSUES 1.

What was the nature of the verbal contract between the parties? 2. Who breached the contract? 3. What costs, if any, are appropriate? 4. Can the counter claim be maintained? 1. What was the nature of the verbal contract between the parties? [ 5 ] Both parties agree they entered into a verbal contract. The discussions centered around swathing, but there was also discussion regarding combining. I will turn first to the evidence concerning the agreement as to swathing and then to that concerning the combining. Swathing [ 6 ] Both parties agree the contract provided that Mr.

Sheppard would provide custom swathing for Mr. Rey at the rate of $9.75 per acre. Both agree that it was mentioned there would be between 1,500 - 2,000 acres to be custom swathed by Mr. Sheppard. [ 7 ] Where they disagree is as to whether the amount of acres to be swathed was guaranteed to Mr. Sheppard or simply an estimate of what might be available to him. Mr. Sheppard testified that he understood it was guaranteed that he would be paid to swath between 1500 - 2000 acres. Mr.

Rey testified they discussed the acreage and it was approximately 1500 - 2000 acres, but the amount of acres to be swathed was “give or take”, that it was “not marked in stone” and no amount of acres to be swathed was guaranteed. Mr. Rey also testified there was no precise date by which the acres were to be done, and if Mr. Sheppard did not do them then they would. [ 8 ] After hearing both Mr. Sheppard and Mr. Rey testify about the nature of the contract, I accept Mr.

Sheppard’s evidence that they had agreed he would be guaranteed between 1500 - 2000 acres of canola to be swathed at the agreed upon price of $9.75 per acre.

[ 9 ] The evidence confirms the agreement was for a minimum of 1500 acres of canola to be swathed by Mr. Sheppard. On July 21, 2011, in response to an newspaper advertisement placed by Mr. Rey, Mr. Sheppard drove from his residence in Pangman to Tisdale to meet with Mr. Rey to determine if he would provide custom swathing and combining services for him. They met at Mr. Rey’s farm, looked over the area, and then entered into discussions. According to Mr. Sheppard the discussion resulted in an agreement where he would bring his equipment to Mr.

Rey’s farm and swath 1,500 - 2,000 acres of canola and maybe some spring wheat. The amount of canola was specified as most farmers do swath it, however, spring wheat can be straight combined and does not require swathing, so that remained to be seen whether any spring wheat would be swathed. They agreed upon a discounted rate of $9.75 per acre (plus GST) as accommodations would be provided for Mr. Sheppard and he would be allowed to use their shop. They also agreed Mr. Rey would make progress payments at 20, 40, 60, 80 and 100 percent of the work being reached. [ 10 ] Mr. Sheppard asked Mr.

Rey to put the agreement in writing, but he declined saying that all that was required is a handshake. They shook hands and agreed to stay in touch as to when Mr. Sheppard would attend with his equipment to assist in the swathing. Mr. Rey testified he did not want to put the agreement in writing as he did not know Mr. Sheppard enough to know if he could trust him. One would think that is a reason why the agreement should have been reduced to writing. [ 11 ] After several telephone calls, Mr. Rey advised Mr. Sheppard that he would have to install roto shears on his swather due to the density of the canola crop.

Mr. Sheppard did so, and while he is not claiming that cost, it was significant being in the range of $4,000.00. The Defendant does not dispute the roto shears were installed at his request. In mid-August 2011, the parties spoke again with Mr. Rey indicating that he was ready to begin swathing the canola and that Mr. Sheppard should attend at the farm. Mr. Rey told him that they were opening the fields to get ready, which Mr. Sheppard understood meant Mr. Rey would be swathing around the fields in order that the equipment could enter without damaging the crop. [ 12 ] On August 20, 2011, Mr.

Sheppard arranged to have his swather hauled from Pangman to Tisdale at a cost of $1,944.60 (Exhibit P-2). Mr. Sheppard was responsible for the cost of moving equipment to and from the farm as part of the contract, with the contract also providing that fuel would be supplied by Mr. Rey. The movement of the equipment and the addition of the roto shears indicates that Mr. Sheppard took steps to carry out his part of the contract. [ 13 ] Mr. Sheppard arrived at the Rey farm on August 23, 2011, and with assistance from the Reys prepared the swather for service.

Between Wednesday, August 24, 2011, and Sunday August 28, 2011, he swathed 430 acres of canola. Mr. Rey does not take issue with this figure. [ 14 ] Mr. Rey initially testified their agreement was for “so much per acre but nothing regarding the number of acres” and that there was no guarantee of a certain number of acres to swath. However, throughout his cross-examination he testified there was sufficient acreage for Mr. Sheppard to swath to meet the remaining acres they had agreed upon, being 1500 - 2000. Further, he testified that while they agreed Mr.

Sheppard would do 1500 - 2000 acres, there was no precise date by which the acres were to be done. [ 15 ] I find the agreement between the parties concerning swathing was that Mr. Sheppard would be guaranteed a minimum of 1500 acres and a maximum of 2000 acres. No time limit was placed on that amount, but I infer it would be during the 2011 harvest season. [ 16 ] I find the agreement between the parties provided that Mr. Sheppard was guaranteed a minimum of 1500 acres at $9.75 per acre for swathing canola, for a total of $14,625.00. 2.

Who Breached the Contract? [ 17 ] The issue then remains as to who breached the contract, Mr. Sheppard or Mr. Rey. I find that it was Mr. Rey who breached the contract. [ 18 ] Mr. Sheppard gave his evidence in a straight forward manner both in exam in chief and cross examination. He did not appear to be exaggerating or attempting to cast Mr. Rey in a bad light. [ 19 ] Mr. Rey, however, was less than forthright in his evidence. He was evasive and argumentative in cross-examination. He usually did not answer a question directly in cross-examination but embarked on rather lengthy explanations. [ 20 ] Mr.

Rey gratuitously attempted to cast Mr. Sheppard as untrustworthy. He suggested this was not the first time Mr. Sheppard had cancelled a contract, but proffered no evidence to substantiate that statement. When asked in cross-examination why he did not want to put the contract in writing, Mr. Rey replied because he did not know Mr. Sheppard enough to trust him. As I mentioned earlier, one would think that would be a good reason to reduce the agreement to writing. I found his evidence self-serving and an attempt to put Mr. Sheppard in the worst light possible in order to bolster his own case. [ 21 ] Mr.

Rey hired Mr. Sheppard and was the person who was mainly directing Mr. Sheppard, although he agreed his son Chris Rey (“Chris”) could also provide direction. Yet during his evidence he stated a number of times that he would not tell Mr. Sheppard

what to do because he was not his employee. He gave the impression that Mr. Sheppard was free to work or not work as he saw fit. However, it is obvious that Mr. Sheppard was to swath those areas as directed, and was not free to simply start driving out and deciding which field to swath on his own accord. [ 22 ] Mr. Sheppard testified that when he first arrived on August 23, 2011, Mr. Rey told him he had already swathed 1800 acres of the total 5000 acres to be done. That would leave 3200 acres to be swathed, 1500 of which were assigned to Mr. Sheppard. This was a bit of a concern to Mr.

Sheppard, but he began swathing as directed by Mr. Rey on August 24, 2011, completing approximately 160 acres of canola. The first day of swathing was uneventful and Mr. Rey agreed in cross-examination that Mr. Sheppard did a good job. [ 23 ] On August 25, 2011, Mr. Sheppard went out to swath canola at the direction of Mr. Rey. Mr. Sheppard testified he had spoken to Mr. Rey the day before and asked if it was alright if he took power naps during the swathing as he had been working long hours. Mr. Rey denies this conversation but I accept Mr. Sheppard’s evidence. At one point during the morning, Mr.

Sheppard had the swather parked and was taking a nap when Mr. Rey attended. He was very upset and berated Mr. Sheppard for taking a nap. Mr. Rey testified he was simply concerned because he could not see Mr. Sheppard, the swather was running, and he was worried something happened to him. I accept Mr. Sheppard’s evidence Mr. Rey was upset and berated him for sleeping on the job. [ 24 ] That same day Mr. Sheppard experienced problems with one of the tires on the swather that was losing air. Chris came out and put air in it, and Mr.

Sheppard was able to complete swathing, arriving back at his residence in the early morning hours of August 26, 2011. [ 25 ] Mr. Sheppard could not swath until the tire was repaired, and I accept his evidence that that was done by mid to late morning on August 26, 2011. Mr. Rey sent him to swath in a field of canola described by Mr. Sheppard as very irregular with a lot of trees, which makes for slow work. Mr. Rey picked him up for supper and told him they only need two swathers and that his own two new swathers could each do 250 acres per day and that in 10 days they could easily swath 5000 acres. Mr.

Sheppard returned after supper to swath another field. He was upset to see both of Mr. Rey’s swathers come into the field and finished swathing it. Mr. Rey’s agreed this occurred, but testified Mr. Sheppard had at least three or four breakdowns and his swathers were done so he sent them to finish the field. He added he was always fixing Mr. Sheppard’s swather. I accept Mr. Sheppard’s evidence that he was doing slow work due to the terrain and it was for this reason that Mr. Rey sent his larger swathers in to finish the field. [ 26 ] On August 27, 2011, Mr. Rey was sent to swath another quarter

section of canola. This was not ready to be combined in the usual fashion of corner to corner as it contained low spots that Mr. Rey told him not to swath. Mr. Sheppard swathed the edge of the field and drove the swather back to the residence for supper. Mr. Rey told him that there were 1800 acres left to do, but the swathing was caught up and it would be done on an intermittent basis. Mr.

Sheppard went back to the field to get his truck but the clutch failed and it took him until the early morning of August 28, 2011, Sunday, to return to the farm with it as he had to drive very slowly. [ 27 ] On Sunday August 28, 2011, Mr. Sheppard was told by Chris that swathing would be intermittent. Chris told him to take his truck to the shop and see if it could be fixed. Mr. Sheppard took it to the Rey shop on the farm where he and one of Mr. Rey’s employees tried to fix it, but could not fix it. I accept Mr. Sheppard’s evidence that Mr. Rey drove in and out of the shop during this day, but never spoke to Mr.

Sheppard. I also accept his evidence that Mr. Rey appeared angry toward him. [ 28 ] As the days progressed and Mr. Sheppard saw that Mr. Rey’s swathers were doing a considerable amount of work, he became concerned that there would not be enough acres to fulfil Mr. Rey’s agreement with him. He was also concerned on August 28, that he had not been given any progress payments as agreed upon and had not been paid any monies. [ 29 ] Monday, August 29, 2011, was the turning point for Mr. Sheppard. Chris told him there would be no swathing that date. Mr.

Sheppard asked and was given permission to take Chris’s truck into Tisdale to arrange to have his own truck fixed. He saw Mr. Rey working on a grain dryer and also saw one of Mr. Rey’s swathers leaving the yard, apparently to go swathing. He was concerned because he believed there would not be enough acres to fulfil the agreement. Based upon the mid-range of their agreement of 1700 acres, he estimated he would have to be given 1300 acres as he had already swathed about 400 acres. [ 30 ] Mr. Sheppard approached Mr. Rey, who was working on a grain dryer, to speak to him about his concerns, but Mr.

Rey refused to speak to him and told him to “show some respect”. He left in Chris’s truck and decided that he was not going to stay when he and Mr. Rey were not on speaking terms, he had not received any form of payment, and the acres he was promised were disappearing. He attended to the radio station in Melfort and arranged for advertising of his ability to custom swath and combine, looked into having his truck towed, and spoke to a lawyer. [ 31 ] He was away all day and returned that evening around 10:30 p.m.

He moved his swather to a neighboring farm and had a tow truck attend to load and haul his own personal truck. He drove to a field where Mr. Rey was working and returned Chris’ s truck to him, filled with fuel as he had used it all day. [ 32 ] He walked over to the tractor and grain cart where Mr. Rey was working and got in when Mr. Rey stopped it. He gave him an invoice for over $45,000.00 and told him that he had broken the agreement and this was his invoice. He also told him he would use The Thresher ’s Lien Act . He testified Mr. Rey told him to get out and that he would sue him.

He got out of the tractor and returned to Tisdale with the tow truck. [ 33 ] Mr. Sheppard did move his combine and grain truck to the Tisdale area in mid-September to implement The Thresher ’s Lien Act and took some steps to do so in relation to Mr. Rey’s land, but it is not relevant to this matter as it was not successfully enforced.

[ 34 ] On the one hand, Mr. Rey testified he was pushing his men to ensure the swathing proceeded as quickly as possible. He testified that by August 26 or 27 th there was a big rush to swath as he was losing canola on the front of the swather as it was too dry, resulting in the pods splitting open and the seeds falling on to the ground. He testified he could lose up to 5 bushels per acre in this manner. On the other hand, he testified he was not concerned if Mr.

Sheppard did not swath on August 27, as there were still 1800 acres remaining to be swathed and no time had been set for the acres to be finished. [ 35 ] It is clear that Mr. Rey became frustrated with Mr. Sheppard due to a variety of little issues. This frustration was evident throughout Mr. Rey’s evidence. He testified they did much to help Mr. Sheppard with his swather, such as helping hook up the header, and lending him parts off one of theirs. While he agreed Mr. Sheppard could use their shop and tools to fix his equipment, he was upset because Mr.

Sheppard left “$500.00 of tools” on his swather and did not put them back where they belonged even though Mr. Rey told him numerous times to do so. [ 36 ] Mr. Rey testified Mr. Sheppard was his own boss and he was not going to order him around. He said a number of times that he would not tell Mr. Sheppard what to do because he was not his employee. He also complained Mr. Sheppard would start late and kept breaking down. None of this should have mattered to Mr.

Rey if things were as he stated - that is, there were sufficient acres to meet the agreement and there was no set date as to when they were to be completed. [ 37 ] Mr. Rey’s refusal to speak to Mr. Sheppard only made matters worse. When the single swather left the yard on August 29, 2011, Mr. Rey testified Mr. Sheppard came over to the dryer to speak to him and said he did not want to swath and that he had to fix his pickup truck. I do not accept this evidence. I accept Mr. Sheppard wanted to swath, but had already been advised by Chris that no swathing would be done that day.

He was upset when he went over to the dryer to ask Mr. Rey as to why the swather was going out but he was not given any swathing to do, but Mr. Rey would not speak with him and told him “to show some respect.” Mr. Rey explained that he was not going to order Mr. Sheppard, as “he was supposed to swath 1500 - 2000 acres but there was no definite date to swath it”. In other words, it mattered not if Mr. Sheppard swathed that date or not. If that was the case why didn’t Mr. Rey just tell Mr. Sheppard that, rather than refuse to speak to him? [ 38 ] Mr. Rey testified that Mr.

Sheppard “did a good job the first day and that was it.” He said he was “not impressed” with Mr. Sheppard’s work on the second day. He did not tell Mr. Sheppard he was unhappy with his work , which one would expect he would do as it is his fields being swathed and his income at risk. [ 39 ] I find Mr. Rey repudiated the contract through his actions of refusing to speak to Mr. Sheppard and not directing his work in order to ensure Mr.

Sheppard received a minimum of 1500 acres to swath. [ 40 ] I find for the Plaintiff that he was entitled to be paid for 1500 acres of swathing at a rate of $9.75 per acre for $14,625.00 plus GST (5%) of $731.25 for a total of $15,356.25. [ 41 ] Mr. Sheppard took steps to secure other custom swathing and combining with farmers and was successful in being hired by Mr. W. Meyers near Lake Lenore, Saskatchewan. Thus he was able to make use of his equipment that had already been transported to the area and reduce his transportation costs. [ 42 ] In mitigation of damages, Mr. Sheppard swathed 710 acres for Mr.

Meyers and was paid $11.00/acre, plus GST for a total of $8,200.50. Using this amount in mitigation, Mr. Rey is responsible for paying Mr. Sheppard $7,155.75 and I find in that amount for Mr. Sheppard concerning the custom swathing. Combining [ 43 ] Mr. Sheppard testified that during their meeting of July 21, 2011, he quoted a price, being $175 per hour for combining. Mr. Rey told him during their initial discussions that he had a terrible time harvesting in 2009 and he did not want that to happen again. Mr. Sheppard understood that he would be working with Mr. Rey’s three, larger combines.

This would save time and they agreed to 50 hours per week of combining for 3 weeks, for a total of 150 hours. Mr. Rey did not dispute this but testified he was not impressed with Mr. Sheppard’s combine as it was “too small” and “wouldn’t fit with his.” [ 44 ] Mr. Rey acknowledged combining was discussed, and did not dispute the evidence led by Mr. Sheppard concerning the discussion. Mr. Rey did testify that he was not happy about Mr. Sheppard’s combine as it was small and did not have the production capacity that his own combines possessed. Both agree they discussed Mr.

Sheppard would combine approximately 50 hours per week for 3 weeks for a total of 150 hours. [ 45 ] However, unlike with the swathing, Mr. Sheppard took no steps toward fulfilling the combining aspect of the agreement. He did not move his combine to the Tisdale area until September 2011, when he decided to take action under The Thresher ’s Lien Act and well after he had left Miner Creek Farms due to the difficulties between he and Mr. Rey. [ 46 ] I find on a quantum meruit basis that Mr. Sheppard could have realized 50 hrs per week of combining for $8,750.00 plus GST of $437.50 for a total of $9,187.50.

He mitigated his damages by providing combining services to Mr. Meyers, being 42 hours at $175 /hour plus GST for a total of $8,269.25. Thus, I find for the Plaintiff in the amount of $918.25 concerning the combining.

3. What costs, if any, are appropriate? [ 47 ] Concerning the swathing and combining agreement, I find for the Plaintiff in the amount of $7,155.75 and $918.25 respectively, for a total of $8,074.00. Mr. Sheppard is claiming additional costs and I will address those individually. Advertising Costs [ 48 ] The Plaintiff has claimed the cost of advertising on the Melfort radio for other custom combining to mitigate his damages from the breach of the contract with Mr. Rey in the amount of $452.03.

In evidence, he testified he had spent over $400 in advertising, but only produced receipts (Exhibit P-6) in the amount of $193.73. I find these costs were legitimately incurred to mitigate his damages and award $193.73 to the Plaintiff. Movement of Equipment [ 49 ] Once the contract with Mr. Rey ended, Mr. Sheppard, secured a contract with Mr. Meyers and moved his swathing equipment from the Tisdale area to Lake Lenore. Mr. Sheppard drove the swather to the Meyer farm and is claiming $315.00 as his cost of doing so.

I find there was no evidence to support this amount, but do award him the nominal amount of $100.00. Travel Costs [ 50 ] The Plaintiff also sought the cost of travel to attend Court and to file documents, both of which are not recoverable under the legislation, and I decline to order payment of those costs. 4. Can the counter claim be maintained? [ 51 ] I dismiss the Defendant’s counter-claim in its entirety. No evidence was provided as to any loss of yield suffered by the Defendant due to the Plaintiff’s actions or lack thereof, and he has not made out his claim. III.

CONCLUSION [ 52 ] For the above reasons I find the Plaintiff has proven there was a verbal contract between the parties, and that the Defendant breached that contract. After taking into consideration mitigation by the Plaintiff, I find for the Plaintiff in the total amount of $8,367. 73 based as follows: Swathing: $7155.75 Combining $ 918.25

Advertising $ 193.75 Moving Equipment $ 100.00 [ 53 ] I also award the Plaintiff interest pursuant to the Pre-Judgment Interest Act for the period from September 1, 2011, to December 1, 2012, and costs of these proceedings at $100.00. Dated at the City of Melfort, in the Province of Saskatchewan this 11th day of February, A.D. 2013. ___________________________________ I. Cardinal, J