LS Sluser Farms Ltd. v. Sluser Farms Ltd. operating in a Joint Venture Company described as Sluser Farms Joint Ventures, 2021 SKPC 26

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2021 SKPC 26 Date: April 5, 2021 File: 296/19 Location: Regina _____________________________________________________________________________ Between: LS Sluser Farms Ltd. and Sluser Farms Ltd. operating in a Joint Venture Company described as Sluser Farms Joint Ventures - and - Taslar Trading Corp. Rodger Linka For the Plaintiff Hasan Taslar For the Defendant _____________________________________________________________________________ JUDGMENT P.

DEMONG , J _____________________________________________________________________________ Introduction [ 1 ] The plaintiff in this action is suing to recover monies which it says are owing to it by virtue of the defendant’s failure to comply with the terms of a contract for the purchase and sale of red lentils. [ 2 ] The defendant has filed a Reply. It argues that it has complied with the terms of the contract that was entered into between the parties. In the alternative, it argues that the plaintiff’s claim is out of time because the action was brought more than two years after the

contractual obligations were to be performed. It also places into issue the quantum of damages claimed by the plaintiff. Evidence, Analysis, and Findings of Fact [ 3 ] Throughout this decision, I will refer to the plaintiff as ‘Sluser Farms’. I will refer to the defendant as ‘Taslar Trading’. I also note that most of the facts in this action are not in dispute. Where the evidence is in dispute, I will refer to that dispute and explain why I prefer one version over the other. [ 4 ] At all relevant times, Sluser Farms was engaged in the business of farming in and around the Glenavon region of Saskatchewan.

Taslar Trading was engaged in the purchase and sale of grains. Each of them had, from time to time, utilized a grain broker by the name of ‘Johnston’s’ to act as intermediary to effect sales and purchases of grain commodities. [ 5 ] Allan Johnston is the principal of Johnston’s and has acted as a grain commodities broker for the better part of 34 years. He was called as a witness at trial. He presented as thoughtful, courteous, credible, and knowledgeable. I have no hesitation in accepting, at face value, the evidence that he gave. I consider it to be reliable. [ 6 ] I accept, as Mr.

Johnston has stated, that the purpose of a grain broker is to act as an intermediary between farming operations that seek to sell the grain they produce, and organizations that seek to buy that product, and that as a broker, he acts on behalf of the grain buyer - as the buyer’s agent - and is paid by the buyer. I further accept that the process is relatively straightforward and proceeds as follows:

a) Johnston’s retains a list of potential buyers who have expressed a willingness to utilize the brokerage.

b) Sellers with grain on hand contact Johnston’s and identify the volume of grain that they would like to sell, the grade of that grain, and the price that they would like to receive.

c) Johnston’s puts out a request for bids on the seller’s grain.

d) Buyers bid on the seller’s product. Johnston’s presents these bids to the seller, and the seller decides which bid he would like to accept.

e) Once a buyer has been accepted, Johnston’s prepares a relatively simple, one-page contract.

f) That contract stipulates the date that the contract was entered into; the names of the buyer and the seller; the type of commodity in question; the grade of that commodity; the quantity to be sold; the price per pound that has been agreed to; the shipment date; the date for payment; the obligation of the seller to provide a sample to this prospective buyer for confirmation of grade; and, it offers the seller the option of either: having the buyer pick up the product at the seller’s farm (FOB or Freight On Board), or delivering the product direct to the buyer. [ 7 ] Sluser Farms entered into a purchase and sale agreement with Taslar Trading through Johnston’s with a contract date of November 16, 2016.

The contract identified the commodity as ‘small red lentils’. The grade was ‘#2 or better subject to sample acceptance’ (the sample was in fact accepted). The quantity was identified as ‘8,000 Bushel / 218 MT – 5 B’. The price was set at ‘$.33 per lb. FOB’. The shipment date was identified as ‘Dec/Jan movement, Buyer’s call’. The fee that would be paid to Johnston’s by Taslar Trading was set at $8.00 per metric tonne. Payment to Sluser Farms was to be ‘10-15 days after unload’. [ 8 ] Some of these terms need to be explained. Some of the explanations are straightforward and conceded. Some are disputed. Mr.

Johnston provided an explanation of these terms and his evidence as it related to weights and measures was not contradicted by Taslar Trading. I find that FOB is a standard shipment term meaning that the contract anticipates that the product becomes the buyer’s responsibility when it is loaded at source. A bushel is a measure of volume. A bushel of red lentils equates to 60 lbs. 8,000 bushels equates to 480,000 lbs. MT means metric tonne. A metric tonne equates to 2204.6 lbs. Therefore, 218 metric tons equates to very slightly more than 480,000 lbs.

It equates precisely to 480,602.80 lbs. ‘5 B’ refers to the estimated number of Super-B trucks that will likely be needed to move the grain from its source to the buyer’s premises. A Super-B truck is the primary means of shipping grain by road in the prairies and has an estimated capacity of 42 metric tonnes - more or less. [ 9 ] The nature of the commodity and its quality are not in dispute.

Nor is there any dispute that the contract anticipated that Taslar Trading had the obligation to hire a carrier to attend at Sluser Farms where the lentils would be loaded on Super-B trucks for delivery to Taslar Trading’s premises.

There is no dispute that the contract anticipated that the buyer would be obligated to set a date for pickup and that this date would have to be somewhere between the first day of December 2016, and the end of January, 2017. [ 10 ] What is in dispute is the price to be paid per pound, and the characterization of quantity as defined by the phrase ‘8,000 Bushel / 218 MT – 5 B’. [ 11 ] Notwithstanding that shipment was to be between December 1, 2016, and January 31, 2017, this did not occur. I accept Mr. Lee Sluser’s evidence to the effect that he had a conversation or conversations with Mr.

Taslar, in early 2017, and that Mr. Taslar had requested a deferral of the shipment date, and that Sluser Farms had acquiesced. I note in passing that this was, technically speaking, an oral variation of the written agreement, and that no new consideration passed between the parties in exchange for this variation. [ 12 ] On May 30 and May 31 of 2017, Taslar Trading sent Armor Transport to Sluser Farms to obtain the lentils. Armor Transport shipped the grain using Super-B trucks. I accept the evidence of Mr.

Johnston when he says that they have the capacity to carry up to 42 tonnes of grain and sometimes a little more can be squeezed onto a Super-B. I accept his evidence that this weight may exceed the weight allowances of secondary roads in Saskatchewan which limit loads to a maximum of 35 tonnes. [ 13 ] Armor loaded five Super-B’s at the Sluser Farm and delivered these loads to Taslar Trading’s premises on May 30, May 31, and June 1, 2017. The grain receipts that were filed in evidence show that the unloaded weight for the first two truckloads were, respectively,

38.15 tonnes and 33.66 tonnes for a total of 71.81 tonnes. The third truck unloaded 37.61 tonnes. The fourth and fifth trucks unloaded 35.93 tonnes and 35.45 tonnes respectively. In total, the unloaded weight of the trucks equated to 180.8 tonnes. [ 14 ] The grain receipts identified not only the weight of the actual grain unloaded, but also a ‘dockage’ percentage. I accept that in the normal course of grain purchase contracts, unless the contract calls for the delivery of ‘cleaned’ grain, there will be a certain amount of chaff and other undesirable materials in any given load of grain.

I also accept that upon receipt of uncleaned grain, the buyer will run a test of perhaps a kilo or so of each delivered load of grain to estimate that portion of the delivered product which is chaff, weed, or non- grain product. This non-grain product is then estimated as a net percentage of the total tonnage delivered. The net effect is that the gross weight of the delivery must be reduced by the dockage percentage in order to give a true estimate of the amount of actual ‘grain’ that was delivered and for which payment is to be made. The average dockage for these five loads equated to 4.77 %.

Therefore, while 180.8 gross tonnes were shipped, the actual amount of ‘grain’ delivered equated to approximately 172 tonnes. [ 15 ] The grain receipts priced payment based on ‘net tonnes’. That is to say, tonnage net of dockage, at the rate of $727.52 per net tonne. Payment was made for these 172 net tonnes of lentils in the sum of $122,938.00. I accept that a tonne equates to 2204.6 lbs.

Therefore, and after offsetting a tariff price that had to be borne by the seller of $8.00 per tonne, Sluser Farms received the contracted price of $.33/lb. [ 16 ] Having provided 172 tonnes of lentils, Sluser Farms notified Taslar Trading that it was still obligated to pick up the remaining 46 tonnes of lentils in order to comply with the contract. Taslar Trading failed to do so. On June 12, 2017, Sluser Farms asked, by text message, when Taslar would pick up the difference, but that text went unanswered. Two more text messages were sent in July and August.

Taslar Trading finally responded on August 15 and indicated that it would get back to Sluser Farms, but it did not. This prompted another text, and, on August 21, Taslar Trading responded: Hi Lee. I checked. Contract was for 5B-218 tons [sic]. We picked up 5 B – 180.8 tons [sic]. Please let’s close this contract. We already lost $200 per ton [sic] yet honoured our commitment. Thankfully. Sluser Farms replied immediately and indicated that it could not do that since there was still 46 tonnes remaining on the contract. It asked Taslar Trading to honour the remaining tonnage owing on the contract.

There was no further reply until November 3, 2017, at which time Sluser Farms received the following text message: Hi Lee…Hassan from Taslar trading. We would like to pick up balance of load in November. I’ll keep you posted. We are currently working on Alberta loads. Thnx. Hi Lee…Hassan from Taslar trading. We would like to pick up balance of load in November. I’ll keep you posted. We are currently working on Alberta loads. Thnx. Sluser Farms immediately replied, “OK good to hear.” [ 17 ] It should be noted that once again, this later pick up

schedule was, technically, a further variation of the original agreement relating to delivery times under the original contract. It was sought by Taslar Trading and it was accepted by Sluser Farms. I note again that there was no further consideration flowing as between the parties for this further variation. [ 18 ] Taslar Trading did not honour this subsequent agreement. On January 9, 2018, Taslar Trading sent a further text to Sluser Farms arguing that because it had already picked up five loads, the parties should consider the contract closed.

It stated that it had been a tough year for everyone, and that it had been booking losses after loss. It offered to pay $100.00 per ton [sic] for the balance owing under the contract. They hoped that the market would reverse but that it was just a ‘free fall’. [ 19 ] Taslar Trading sent a further text on April 12 of that year and reiterated that since it had picked up five loads, it considered the contract closed, but that it would still offer $5,000.00 to resolve the matter.

Sluser Farms immediately responded and indicated that in its view, the number of loads meant nothing since Taslar Trading had agreed to purchase 218 metric tonnes of red lentils. It stated that Taslar Trading could buy itself out of the contract if it agreed to pay $15,207.60. If not, it would seek legal advice. Some nominal negotiations followed by text but then contact ceased. [ 20 ] On August 28, 2018, a formal demand letter was sent to Taslar Trading by Sluser Farm’s lawyer and there was no reply.

On April 5, 2019, Sluser Farms attempted to mitigate its damages, by entering into an agreement with ILTA Grain Inc. to purchase red lentils which included the remaining shortfall of 46 tonnes under the Taslar Trading contract at a price of $396.83/MT FOB or $.18/lb. [ 21 ] On August 19, 2019 Sluser Farms brought this action for breach of contract. While the amount sought exceeded the amount claimed at trial, they now seek $18,615.88, plus pre-judgment interest, plus costs.

The claim is predicated on a loss of $.15/lb. for lentils (the original contract price less the amount that it ultimately obtained by attempting to mitigate its loss on April 5, 2019) multiplied by 46 metric tonnes (2,204.6 lbs. per metric tonne) for a total of $15,211.74. In addition, they are seeking storage costs of $3,404.00, calculated at the rate of $100.00 per month for a period of approximately 34 months. This storage cost is based on a conversation that a representative of Sluser Farms had with a storage company.

This hearsay, it argues, is some evidence of what a company would charge if Sluser Farms had to have a third party store the grain for them. In actuality, Sluser Farms did not employ a third party for this purpose. The lentils had been stored on the Sluser farm in a partially used bin. [ 22 ] Taslar Trading gave very little evidence at trial. It filed a series of quotes that Johnston’s, as broker, had circulated on previous occasions.

It did so for the purpose of showing that Johnston’s often posts trades based on a description of tonnage with the inclusion of a calculation of Super-B loads that might be necessary to deliver any given quantity of grain. It also filed information suggesting that as at July of 2020, small red lentils were trading at or about $.29/lb. I note in passing that while, in final argument, Taslar Trading suggested

that the text messages that were filed in Court may not have been the entirety of the conversations had between the two parties, it did not enter any evidence of other conversations or text messages that may have taken place. It did not dispute the accuracy of those messages, nor did it challenge their contents, nor did it lead any evidence to suggest that the texts had been manipulated in any way. [ 23 ] The question of Super-B loads is central to Taslar Trading’s defence.

It argues that the inclusion of a description in the contract that estimates the number of Super-B truck-loads that will be required to deliver the contracted tonnage is determinative of compliance with the contract. Simply put, it asserts that notwithstanding that the contract called for the purchase of 218 metric tonnes of lentils, alternatively described in bushels, then, provided that ‘5 B’-trucks are loaded, and even if they do not haul the full tonnage, compliance with the contract has been met. Taslar Trading had indicated that this is accepted industry practice.

It had originally indicated that it would be calling expert evidence to prove this industry practice, but no such expert was ever called. Sluser Farms adamantly disagrees that this is an accepted industry practice. [ 24 ] Mr. Johnston was cross-examined on this at length. He stated that this is not in fact industry practice. While he was not called as an expert, I found his evidence to be credible and trustworthy, as that phrase is identified in

section 35 of The Small Claims Act, 2016 , SS 2016, c S-50.12 [ Small Claims Act ]. He stated that it is his experience that most grain deliveries on Saskatchewan roads go by Super-B truck and that primary roads in Saskatchewan allow for a capacity of up to, but not beyond, 45 tonnes per Super-B load. While normal Super-B loads will equate to approximately 42 tonnes, he asserted that tolerances on a Super-B can allow for up to 45 tonnes.

It is his practice, he says, to try to negotiate contracts in a volume at or near a multiple of maximum Super-B loads that might be required to offset, where possible, the additional cost of having grain delivered on less than full loads. He is adamant that he does this as a service to his clients but that it is the tonnage of the contract that governs its terms, not the number of Super-B loads that might have to be hauled. In support of that he notes that oftentimes, Super-B loads are subject to certain restrictions on highways in Saskatchewan.

Inclement weather, poor physical highway conditions, and secondary highway restrictions often reduce the potential tonnage that can be carried on a road. Therefore, while he will attempt to arrange contracts in this manner, reality often rears its ugly head and the estimated number of loads will not be precise. It is dependent on the factors to which I have already alluded. I note in passing that his fee, as stipulated in the contract, is predicated on tonnage delivered, not ‘loads’ delivered. Issues [ 25 ] Taslar Trading’s defence to Sluser Farm’s claim is four-fold. I will deal with each in turn.

First, it argues that since the original contract called for delivery no later than January 31, 2017, any claim arising from breach of that contract must be commenced within two years of that date in accordance with

section 5 of The Limitations Act , SS 2004, c L-16.1 [ Act ]. That

section stipulates that unless otherwise provided for in the Act , no proceedings shall be commenced with respect to a claim after two years from the day on which the claim is discovered. It suggests that since the claim was brought on August 19, 2019, more than two years have expired from the date that the original contract had been breached, and therefore, the claim is barred by the effluxion of time. The date of discovery, it asserts, would have been on February 1, 2017. [ 26 ] With due respect, I disagree. First, that

section is subject to

section 11 of the Act .

Section 11 provides that if a person acknowledges the existence of the claim for payment of a debt, the act or omission on which the claim is based is deemed to have taken place on the day on which the acknowledgement was made, providing that the acknowledgment is in writing, and signed by the person or the person’s agent, and if that acknowledgment is made prior to the expiry of the original limitation period. [ 27 ] In the instant circumstances, Mr.

Haslan Taslar, representing Taslar Trading, did just that when he sent a text message to Sluser Farms on November 3, 2017 identifying himself as the sender and, as agent of Taslar Trading, evidenced Taslar Trading’s intention to comply with the contract in the month of November, 2017. While the acknowledgment was by text, and therefore not signed, it was clearly in writing. In that event, the analysis of Layh, J, in I.D.H. Diamonds NV v Embee Diamond Technologies Inc. , 2017 SKQB 79 [ I.D.H. ], is instructive.

In I.D.H. the Court concluded that a series of e-mails sent between the parties may meet the requirements of an ‘electronic signature’ if there is, within the body of the electronic transmission, something as simple as the affixation of the author’s name on the message. I am satisfied that Mr. Lee Sluser had entered Taslar’s cell number into his phone; that there was a continuous back and forth communication between the parties from that phone over time in relation to the contract; and that Mr. Taslar specifically identified himself in the November text message as agent for Taslar Trading.

These, taken together, met the probative requirements required to identify Taslar Trading (or in this case its agent) as the signatory of that text message. In that event, that acknowledgment would have recognized Taslar Trading’s ongoing obligation under the contract. As it acknowledged the continuing existence of Taslar Trading’s contractual obligation, the limitation period would begin to run, not from February 1 of 2017, but rather, would commence to run on December 1, 2017, when Sluser Farms would then have known, or ought to have known, that performance would not occur as promised.

In that event, any claim would be statute barred two years after that date.

Because the claim was commenced in August of 2019, Sluser Farm’s action was filed with this Court well within the limitation period. [ 28 ] If I am wrong on this point, I would nevertheless conclude that the parties had agreed to vary the terms of the contract as it relates to delivery, and in that way, contractually agreed to extend the previously-contracted delivery date. [ 29 ] The first variation occurred when Taslar Trading asked for and obtained an extension of time within which to have the grain delivered - from the end of January until the end of May, 2017; and then asked for, and again obtained, Sluser Farm’s consent to allow delivery in November, as per the November 3, 2017, text. [ 30 ] Longstanding common law had traditionally held that a contractual modification has the effect of revising the original bargain such that a new contract comes into being.

Strictly applied, this would mean that, to have binding effect, some new form of consideration would have to flow as between the parties to bind the parties to the new arrangement. The simple promise to continue to provide nothing more than what was originally anticipated under the agreement would not be ‘new consideration’, since, and in this particular case, Taslar was only offering to give Sluser Farms that which it has already promised, and nothing more.

Therefore, and absent this new consideration, this ‘promise’ lacked the requisite contractual term – an offer to give ‘something’ in return for this promise and an acceptance of that new ‘something’. [ 31 ] In the last few years, a number of Canadian courts have found this notion of ‘new consideration’ having to flow - in order to give

credence to the clear, obvious, and mutual intentions of contracting parties who freely wish to modify their contract - to be troublesome. [ 32 ] In Rosas v Toca , 2018 BCCA 191 , 9 BCLR (6 th ) 293 [ Rosas ], the British Columbia Court of Appeal dealt with precisely this issue. It noted (at para. 95), that “Canadian courts have generally adopted the rule from Stilk v.

Myrick that there must be additional consideration where the promise from one party is simply to do something they are already obligated to do under the contract.” After an exhaustive analysis of the common law, and with due consideration to its criticism by leading legal scholars, the Court concluded that there will be occasions when the rule in Stilk v Myrick should be abandoned and the common law should be changed to reflect, among other things, modern business efficacy.

The Court changed and adapted the common law so that, as noted at para. 183, “When parties to a contract agree to vary its terms, the variation should be enforceable without fresh consideration, absent duress, unconscionability, or other public policy concerns, which would render an otherwise valid term unenforceable.” [ 33 ] While decisions of an appellate court in British Columbia are not binding on this Court, they are, in law, highly persuasive.

They are all the more so when the analysis undertaken is exhaustive; when the decision is unanimous; when the decision does not conflict with a recent decision of our Court of Appeal; and when its decision has been followed by other superior courts in other provinces, which I find, has occurred. I therefore adopt that decision as the prevailing law and apply it to this case. [ 34 ] Sluser Farms and Taslar Trading are sophisticated businesses. They entered into a written agreement which stipulated a specified delivery date.

They mutually agreed, at the request of Taslar Trading on two different occasions, to modify the delivery date and therefore the time for performance of the contract, even though no fresh consideration flowed. This Court should, as noted in Rosas , give effect to their mutually-agreed upon amended bargain - without the need for fresh consideration - in the absence of unconscionability, duress, or any other public policy concern. There is nothing before me to suggest that the amendment was unconscionable, obtained by duress, or violates a public policy.

Therefore, I find that the amended contractual delivery date for the lentils was extended to the month of November, 2017, such that, if not complied with by Taslar Trading prior to December 1, 2017, it would constitute a breach of contract at any time thereafter. Therefore, the limitation period for the commencement of an action for that breach would commence as at December 1, 2017. Because Sluser Farms commenced its action prior to that time, it is not barred by the passage of time. I find that Taslar Trading’s limitation period defence fails. [ 35 ] Taslar Trading’s second defence runs as follows:

a) The contractual characterization as to the quantity to be delivered has been described as ‘8,000 Bushel / 218 MT – 5 B’.

b) Even though the amount of grain to be delivered is precisely identified as 218 metric tonnes of red lentils, and then again in an almost identical amount, 8,000 bushels, that amount must be qualified by the number of Super-B trucks which will have to be utilized to deliver the grain.

c) Therefore, the contract should be interpreted such that Taslar Trading has met its obligations under the contract if it provides five Super-B trucks to be filled, regardless of whether or not those trucks can be filled to capacity, in order to meet the contracted-for 218 tonnes of lentils.

d) Alternatively, the quantity to be delivered is at best ambiguous, and that ambiguity should be interpreted in its favour.

e) Furthermore, even if the Court finds otherwise, the total unloaded weight of the five Super-B trucks equated to 180.8 tonnes. Therefore, having received delivery of this tonnage, the outstanding tonnage that it is required to accept is not 46 tonnes (218 – 172), but rather only 37.2 tonnes (218 – 180.8). [ 36 ] With due respect, I again disagree with this line of argument.

The evidence before this Court is that Johnston’s attempts , in so far as it is able, to arrange grain contract allotments in sizes sufficient to fully load each Super-B truck, is in an effort to ensure that the buyer or seller can transport the grain in question in an economic manner. In the instant circumstances, five Super-B trucks could, with a little bit of squeezing, haul 218 metric tonnes of grain within the Saskatchewan primary road limitations of 45 tonnes per load (5 x 45 = 225).

He is adamant that this estimate is intended for the benefit of both buyers and sellers but should not be taken as qualifying the actual contracted amount. In cross-examination, he was somewhat incredulous when presented with the suggestion that it should. While Taslar Trading suggests that it does, it has also indicated that it intended to call expert evidence on industry standards to suggest that it did. However, Taslar never did call that expert evidence. [ 37 ] Were I to accept Taslar Trading’s argument - that five Super-B truck loads is the contracted amount - this would give rise to extraordinary ambiguity.

The contracted quantity would be subject to the vagaries of weather, the conditions of highways, and the efficiency of a transport company. By example, sleet or rain may compel a hauler to reduce the size of a load. Highways under construction, or repair, may again compel a lesser load. A hauler seeking to maximize the number of runs might, in order to increase its profit, or protect its machinery, purposely underload.

A seller, who contracts FOB, but who lives on a tertiary road system or a secondary road system, and which limits loads to 35 tonnes or even less, would never know, with any degree of precision, what quantity to ship.

Theoretically, a combination of these factors could exist, and in such event, a contract to deliver 218 metric tonnes could be found to be a contract for three quarters of that amount, or two thirds, or even less. [ 38 ] Furthermore, if Taslar Trading truly believed that the contract amount would be set by these fluctuating possibilities, and that the requirements of the contract had been met, why did it ask to ‘pick up balance of load’ in November of 2017? Why did Taslar offer to ‘close’ the remainder of the contract, the following April by offering $5,000.00? [ 39 ] Let me put it another way.

It is abundantly clear from the texts passing between the parties that the price of lentils was dropping between the time that the contract was entered into and the original delivery. Comments from Taslar stating “we’ve already lost over $200 per ton” and “we have been booking losses after loss” make this apparent. Can it reasonably be concluded that if the reverse occurred and prices shot through the roof, that the parties had agreed that Sluser Farms could purposely short the five loads, pocket the profits, and argue that it had met the contract requirements? I don’t think so. [ 40 ] Contractual

interpretation demands, as a fundamental precept, ‘that individual words and phrases must be read in the context of

the entire document’; and that a ‘court should strive to give meaning to the agreement and reject an

interpretation that would render one of its terms ineffective.’ [see Canadian Contractual

Interpretation Law, Geoff Hall, 1st ed LexisNexis Canada Inc. 2007 at p 11;National Trust Co. v Mead, (SCC), [1990] 2 SCR 410 at p 425]. Furthermore, the words of a contract must be analyzed‘in its factual matrix’ [Hall at p. 17].

As noted in Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53, [2014] 2 SCR 633 at p 662,that factual matrix, also referred to as ‘surrounding circumstances’ ‘will be considered in interpreting the terms of a contract, [but] theymust never be allowed to overwhelm the words of that agreement…’, and, ‘Such evidence is consistent with the objectives of finality andcertainty because it is used as an interpretive aid for determining the meaning of the written words chosen by the parties, not to change oroverrule the meaning of those words.’ [41] If Taslar Trading’s suggested

interpretation were to be accepted, the careful wording in the contract to the effect that 8,000bushels / 218 metric tonnes (which defines with precision two ways to quantify the amount of lentils under consideration) would bedefeated. It would introduce an ambiguity in the contract which would render that portion of the contract which provides clarity to thequantity to be delivered, to be ineffective. That ambiguity, I find, falls away upon consideration of Mr. Johnston’s explanation for theinclusion of the phrase ‘5B’.

For all these reasons, I am satisfied that the true intentions of the parties were to contract for the exchangeof the more precise amount, and that the phrase ‘- 5 B’ was simply an attempt to quantify the most efficacious manner of transport. [42] Furthermore, I find Taslar Trading’s suggestion that the actual amount of lentils that were outstanding to be the lesser amount of37.2 tonnes, rather than 46 tonnes, to be disingenuous. The contract was for the delivery of 218 tonnes of lentils, not 218 tonnes of lentilsand chaff.

The unloaded weight does not signify the amount of lentils delivered and I believe Taslar Trading well knows this. Its owngrain receipt forms clearly recognize and anticipate a reduction from the gross tonnage of the amount of the load that was dockage. 180.8tonnes were delivered. 172 tonnes were lentils. Taslar Trading was not paying $.33/lb. for lentils and dockage, they were paying thatamount for lentils. I simply do not accept that were the tables turned, Sluser Farms could be held to say that by supplying 180.8 tonnes ofcombined lentils and chaff, they should be paid $.33/lb. for the entire load.

It runs contrary to what each of the parties knew or ought tohave known, and what had earlier transpired under the contract. Dockage would be assessed at unloading and an adjustment madeaccordingly. [43] For all of these reasons, I find that Taslar Trading was in breach of contract when it failed to abide by the terms of the contractand purchase the remaining 46 tonnes of lentils that it was contractually obligated to pay for. [44] Finally, I would like to address Taslar Trading’s mitigation argument.

It has filed materials suggesting that as at July of 2020, theprice for lentils on the open market was equal to $.29/lb. I infer that it is attempting to argue that because Sluser Farms sold lentils inApril of 2019 at $.18/lb. in an effort to mitigate its loss, that these mitigation efforts were unreasonable, and that had it waited, it couldhave taken mitigation efforts that would have been more palatable to Taslar Trading. Once again, I disagree. The law has long-held thatthe onus is on the person arguing a failure to properly mitigate to prove that failure.

I have no evidence that Sluser Farms either knew orought to have known that lentils would increase in value on the open market, or by how much, or at what specific time. In law, Sluserfarms had the obligation to take reasonable efforts to mitigate its loss. There is no evidence before me to suggest that Sluser Farms’decision to mitigate its loss, when it did, was unreasonable.

A simple assertion that it should have waited for an unascertainable periodand gaze into a crystal ball to see if prices would rise again is not compelling. [45] I award Sluser Farms damages for its loss of opportunity to sell its lentils to Taslar Trading at the rate of $.33/lb. - less its abilityto mitigate its loss by selling them at $.18/lb. The difference is $.15/lb. multiplied by 46 tonnes (101,411.6 lbs.) which equates to$15,211.74.

While Sluser Farms seeks a further sum of money which it identifies as storage costs, the evidence reflects that it utilizedexisting grain bins and did not have to pay any monies out-of-pocket nor incur any additional associated costs in relation thereto. Thiscomponent of the claim is denied. [46] Sluser Farms is entitled to pre-judgment interest on the principal sum of $15,211.74. I conclude that this interest should run fromthe date of breach – December 1, 2017. I calculate pre-judgment to be $539.31. Costs [47] Sluser Farms has been entirely successful in this action.

As the successful party, there is no reason why costs should not followthe event. This Court is entitled to award costs of up to, but not more than, ten percent of the value of the claim, subject of course, to theconsiderations set forth in section 36(3) of the Small Claims Act. The only consideration that I find to be relevant and applicable in theinstant circumstances is section 26(3)(d) – ‘any offer to settle made by a party’. It is my practice, all other things being equal, togenerally award five percent of the value of the claim to the successful party.

However, and in accordance with the practice of The Courtof Queen’s Bench, it makes sense to double that amount where the successful party has made a written offer to accept a lesser amountthan what it could arguably obtain at trial. The premise being that, had that lesser amount have been accepted, there would have been noneed to prepare for and run a trial. During final argument, I invited both parties to forward to me, in a sealed envelope, any formal offerthat had been made. I advised that once I had concluded my decision, I would review that offer when considering costs.

Sluser Farms hasfiled a series of text messages dated November 30, 2020, passing between the parties evidencing that as of that date, Sluser Farms hadoffered to settle this action in its entirety upon payment of the sum of $10,000.00. Had Taslar Trading accepted this offer, the trial wouldhave been avoided. Since Sluser Farms was prepared to compromise its claim to facilitate resolution of this matter - and because it hasdone better than that offer - I award costs equal to ten percent of the amount obtained at trial.

I assess those costs in the amount of$1,575.05. [48] In total, judgment shall be entered in favour of Sluser Farms in the sum of $17,326.15. [49] Earlier in these proceedings, Taslar Trading had been directed to make payment into Court in the sum of $10,000.00, arising fromnon-feasance earlier in these proceedings. This was to stand to the credit of the successful party. As Sluser Farms has been successful, itmay, upon the expiry of thirty days from the date of this judgment, make written request for payment out of this amount in partialsatisfaction of its judgment.

________________________ P. Demong, J