Northwest Waste v. Manzyuk et al Date:, 2014 BCPC 305

Citation: Northwest Waste v. Manzyuk et al Date: 20141216 2014 BCPC 0305 File No: S72346 Registry: Surrey IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Small Claims BETWEEN: NORTHWEST WASTE SOLUTIONS INC. CLAIMANT AND: VASILIU MANZYUK dba WASYL AUTO BODY LTD. AND NSD DISPOSAL LIMITED DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE P.D. GULBRANSEN Appearing for the Claimant: Mr. M. O'Hara, Mr. J Jachimowicz

Appearing in person: Mr. V. Manzyuk Appearing for NSD Disposal : Ms. T. Kaczmarczyk Place of Hearing: Surrey , B.C. Dates of Hearing: October 27, November 17, 2014 Date of Judgment: December 16, 2014 INTRODUCTION [ 1 ] Mr. Manzyuk, owner/operator of Wasyl Auto Body Ltd., had a five-year contract with the claimant for waste removal services. The contract provided that it renewed automatically unless it was cancelled by the defendant within a 30-day time frame in the fifth year of the contract term. Mr. Manzyuk gave notice of cancellation on a date which he believed fell within that time frame.

He also signed a new contract with NSD Disposal Ltd. (NSD) for future waste removal services. [ 2 ] The claimant says that the defendant gave the notice at least two months too late and that therefore the Northwest contract was automatically renewed for another five years. Thus, the claimant seeks damages for breach of contract amounting to five years’ worth of payments that it would have received if the defendant had honoured the renewal. The claimant also seeks damages from NSD for inducing a breach of contract. [ 3 ] The defendants reply that the claimant’s own employee told Mr.

Manzyuk in 2009 that the contract commenced on July 12, 2006. He therefore gave notice of cancellation in April 2011, within the time frame required by the contract. [ 4 ] The dispute in this case centres on the issues of when the contract term started and whether I should grant a remedy for the misrepresentation by Northwest’s employee about the contract's commencement date. [ 5 ] Northwest did not start providing service on the date when the contract was signed, because Mr. Manzyuk had a contract with another company which still had two years or so to run.

The Northwest contract's language is somewhat ambiguous about when the term starts in these circumstances. It contains a clause which states that its term commences when service begins, but also states that if there is a pre-existing contract, the term begins one day after the prior contract expires. [ 6 ] In this case, Northwest started providing service to the defendant about 3 months before the prior contract would have expired. Its claim is therefore based on the argument that the term of the contract began when service began.

Furthermore, the claimant says that defendant must have known when service began because he paid the invoices sent to him by the claimant for that service. It also argues that it is irrelevant what its employee told Mr. Manzyuk about the expiry date because he must have known that this information was wrong. [ 7 ] The defendants disagree and argue that the court should interpret the contract language to mean that the term expired one day after the pre-existing contract ended, which would mean that Mr. Manzyuk gave notice of cancellation within the time prescribed by the contract.

RELEVANT LEGAL PRINCIPLES Interpreting Contract Language [ 8 ] Where a court is asked to interpret a specific condition of a contract which has been reduced to writing, the inquiry is essentially restricted to a consideration of the actual words used, and their literal meaning. The whole point of putting something into writing is to be precise. As Professor Fridman states in The Law of Contract, Fourth Edition, at page 477: …The reason for this is clear.

If the parties have seen fit to put their contractual intentions into writing, it must be because they wanted their meaning to be clearly and unequivocally established. There should be no room for argument about what has been agreed. The written word should make plain beyond doubt or question what were the requirements of the contract that was entered into by the parties. Rescission [ 9 ] A court may order rescission of a contract where one party has induced the other to enter into a contract by an innocent or non- fraudulent misrepresentation.

The circumstances in which a court may grant this remedy are set out in Kingu v. Walmar Ventures Ltd., [1986] (B.C.C.A.) B.C.J. No. 597. At paragraph 15 where McLachlin JA (as she then was), writing for the court, stated: Rescission may always be obtained for fraudulent misrepresentation which induced the plaintiff to enter into the contract. But it may be obtained for innocent (non-fraudulent) misrepresentation only in cases where the plaintiff establishes the following requirements. (

a) A positive misrepresentation must have been made by the defendant. (

b) The representation must have been of an existing fact. (

c) The representation must have been made with the intention that the plaintiff should act on it. (

d) The representation must have induced the plaintiff to enter into the contract. (

e) The plaintiff must have acted promptly after learning of the misrepresentation to disaffirm the contract.

(

f) No innocent third parties must have acquired rights for value with respect to the contract property. (

g) It must be possible to restore the parties substantially to their pre-contract position. (

h) An executed contract for the sale of an interest in land will not be rescinded unless fraud is shown. Inducing Breach of Contract [10] The claimant’s cause of action against NSD has been described as: “…inducing or procuring breach of contract, interfering withcontractual relations, and interfering with economic relations.” Verchere v. Greenpeace Canada, [2004] B.C.J. No. 364 at paragraph 28,per Southin J.A. [11] The New Brunswick Court of Appeal provided a thorough analysis of this tort and of its development, in SAR Petroleum Inc. v.Peace Hills Trust Co., 2010 NBCA 22 , [2010] N.B.J. No. 104.

Robertson JA, writing for the court, set out the essentialelements of the tort at paragraph 40, stating: On reflection and out of an abundance of caution, I have settled on eight elements: (1) there must have been a valid and subsistingcontract between the plaintiff and a third party; (2) the third party must have breached its contract with the plaintiff; (3) the defendant’sacts must have caused that breach; (4) the defendant must have been aware of the contract; (5) the defendant must have known it wasinducing a breach of contract; (6) the defendant must have intended to procure a breach of contract in the sense that the breach was adesired end in itself or a means to an end; (7) the plaintiff must establish it suffered damage as a result of the breach; and (8) if theseelements are satisfied, the defendant is entitled to raise the defence of “justification.” CIRCUMSTANCES [12] There were three witnesses called at the trial.

Mark O’Hara, Director of Sales for Northwest, Mr. Manzyuk, and RuslanBorysenko, who negotiated the new contract for NSD. [13] The claimant and Mr. Manzyuk entered into the contract on February 2, 2004. It is a one-page document signed by both parties. The front of the contract describes the type and level of service to be delivered at a total monthly charge of $41. On the bottom left ofthe front page, there is a heading entitled: “Service Commencement” and beside which is written, the date March 2, 2004. There is anadditional date written directly underneath the March 2 entry.

That date is July 27, 2006, which has been highlighted in yellow. [14] The rear of the contract sets out all of the detailed conditions.

The condition at issue in this case appears under the heading“Term” which states: This agreement is for a term commencing on the date hereof and continuing until five years after service begins (the “RenewalDate”) and will be renewed for successive five-year terms, without further action by the parties, unless terminated by Northwestupon 30 days written notice to the customer or by the customer upon providing to Northwest written notice by registered mailnot more than 120 days, and not less than 90 days prior to any Renewal Date.

If after entering into the agreement, it isdetermined that the customer is a party to a legally binding contract with a third party for provision of the same or similarservices provided hereunder, such contract pre-dates the agreement and its current term extends beyond the ServiceCommencement date of the agreement (the Prior Contract), the customer agrees to forthwith deliver a full and complete copy ofthe Prior Contract to Northwest and the customer agrees to forthwith take all steps legally necessary to terminate the PriorContract at the earliest possible date and the Service Commencement date of the agreement will be extended to the date after thePrior Contract terminates and all other terms of the agreement will apply from that later date forward.

The customer andNorthwest agree that any time during the Term they may renegotiate any part of the Service Agreement, even if the effect of suchrenegotiation is to extend the “Term.” [15] When Mr. Manzyuk signed the contract, he had a pre-existing waste removal contract with another company, WM CanadianWaste. He had originally signed that contract on January 27, 2000. It was for a three-year, automatically renewing term. Thus, it wouldappear that when Mr. Manzyuk signed the contract with Northwest, the prior contract expired on January 27, 2006. [16] Mr.

Manzyuk had no recollection of how he was able to terminate the WM Canadian Waste contract. He said that therepresentative from Northwest took care of all those details. All that really mattered to him was that, Northwest had offered him a veryfavourable rate for the first year of the contract. [17] There was no formal addition made to the contract to state specifically what the Service Commencement date was. There wasno correspondence from Northwest to the defendant, telling him what it was. However, the claimant filed a copy of the first invoice tothe defendant, which was dated May 1, 2006.

It sets out a charge of $28.30 for “First Month's Service.” The total with theenvironmental surcharge and GST came to $32.70. On July 1, 2006, the claimant sent another bill for services done in May and June, aswell as for the future services to be done in July 2006. With surcharges and GST, that totalled $140.87. Mr. Manzyuk paid the invoiceslater that month. [18] The claimant continued to provide services and Mr. Manzyuk continued to pay for them. By 2009, he had become a littleunhappy with the increases in price that the claimant had imposed pursuant to the contract. He was approached by Mr.

Borysenko, onbehalf of NSD who offered him the services of his company, presumably at a lower price. Mr. Manzyuk agreed. Mr. Manzyuk thensent two letters on September 8, and September 30, 2009, demanding that Northwest, among other things, send him a copy of thecontract. [19] In fact, these were form letters provided by NSD and filled in by Mr. Borysenko and signed by Mr. Manzyuk. Mr. Manzyuksaid that all he wanted to do was give proper notice on his contract with Northwest so that he could engage the services of NSD when theNorthwest contract expired. However, he no longer had a copy of that contract.

[ 20 ] At first, he did not receive any reply to his letters, but, Mr. Manzyuk said that eventually a representative from Northwest - Marni Bodnarchuk, Retention Manager - came to see him. He said that she tried to convince him to stay with Northwest and offered to meet or better the offer made by NSD. Mr. Manzyuk was not open to this offer and told her that he was determined to cancel his contract with the claimant and just wanted to know when it expired. He said that Ms. Bodnarchuk told him that she would determine what the date was.

He said that she returned a few days later and gave him a copy of the contract. [ 21 ] What she gave him was obviously a photocopy of the contract. It is identical to the contract filed by the claimant, except that under the heading “Service Commencement Date” of March 2, 2004, is written the date “July 12, 2006.” It is highlighted in yellow. Mr. Manzyuk said it had already been highlighted when Ms. Bodnarchuk gave this copy to him. [ 22 ] It seems that this was a photocopy of a duplicate of the original contract. Mr.

Borysenko, who used to work for Northwest, said that typically there were three copies made at the time of signing. One went to the customer, two went to the company. [ 23 ] Mr. Manzyuk said that Ms. Bodnarchuk told him that the proper commencement date was July 12, 2006, as written on the copy of the contract and highlighted in yellow. He gave a copy of this document to Mr. Borysenko. They now believed that they knew when a proper notice of cancellation had to be given. [ 24 ] In April 2011, Mr. Borysenko prepared a letter for Mr. Manzyuk to sign, dated April 1, 2011. It stated that Mr.

Manzyuk wished to cancel his contract on the specified expiry date and that Northwest was to remove its equipment from his property on July 12, 2011. Mr. Borysenko mailed the letter on behalf of Mr. Manzyuk by registered mail to the claimant. There is no dispute that if July 12, 2011, was the actual termination date, that Mr. Manzyuk gave notice of cancellation within the required time frame. [ 25 ] Mr. Manzyuk signed a “Service Commitment” contract with NSD on September 8, 2009.

It does not contain a specific Service Start Date, but beside that heading are the letters “TBO” and what looks to be “Nov.” There is no date written beside the heading “Bin Delivery Date.” [ 26 ] NSD did not place its equipment at Mr. Manzyuk’s business premises until after July 12, 2011. The claimant left its bins on the property for several months, taking the position that the contract had not been properly cancelled and that therefore there was still a valid and subsisting contract between the claimant and Mr. Manzyuk. Nonetheless, Mr. Manzyuk opted to start using the services of NSD. [ 27 ] Mr.

Manzyuk sent letters to the claimant on November 4 and November 24, 2011, reminding the claimant that he had cancelled his contract with them, and requesting that the claimant remove its bins from his business premises. In those letters he expressed his belief that he had cancelled the contract properly on the basis that it expired on July 12, 2011. [ 28 ] Mr. O’Hara, for the claimant, indicated that the entry of July 27, 2006, on the copy of the contract filed by the claimant, was his own note. He said that he had written that date to record that the defendant had paid the first set of invoices sent to him.

He did not know anything about the entry of July 12, 2011, on the copy of the contract that Ms. Bodnarchuk gave to Mr. Manzyuk. [ 29 ] Mr. Borysenko confirmed that he and Mr. Manzyuk believed that the expiry date of the contract with Northwest was July 12, 2011, based on what was written on the copy of the contract provided by Ms. Bodnarchuk. ANALYSIS [ 30 ] For the purpose of deciding this case, I will assume that the contract expired sometime in early April 2011. The question, nonetheless, arises whether the claimant is responsible for misrepresenting the true commencement date to Mr. Manzyuk.

At trial, the claimant did not dispute Mr. Manzyuk’s testimony that Ms. Bodnarchuk told him that the contract commencement date was July 12, 2006, and which was also written on a copy of the contract that she gave him. The claimant did not call Ms. Bodnarchuk as a witness to explain that entry on the copy of the contract or to otherwise contest Mr. Manzyuk’s testimony about his communications with her. That is, his testimony was not disputed on this point. [ 31 ] Mr. Manzyuk’s evidence that he did not have a copy of the contract and that he did not know the precise date when the contract terminated, is credible.

He needed waste removal from his premises at a reasonable cost. The contract price initially was not particularly high. The contract is not the sort of document a busy small business operator would see as being particularly important, and could easily get lost especially over a number of years. As well, the claimant did not begin providing services to the defendant for at least two years after the contract had been signed.

It is believable that the defendant would have a less than precise memory of the date when service actually started. [ 32 ] The argument that the defendant should have known when service started because he paid for the invoices is not persuasive. By 2009, when he decided he wanted to switch companies, he had dutifully paid monthly fees for about three years. The issue of determining the commencement date of the contract would hardly have been on his mind during those three years. None of the invoices filed by the claimant state when the contract expires.

There is no correspondence from the claimant reminding the defendant when the contract expires. Even if the defendant had retained a copy of the contract, the commencement date stated on the front of the contract was not, of course, the actual commencement date. Even reading the complex language of the condition relating to the term would not have given him a clear idea of when the contract commenced, and thus, when it expired. [ 33 ] It was therefore reasonable for him to rely upon the representations made by an employee of Northwest because it was Northwest's business to administer its own contracts.

If anyone would know when the contract commenced, it would be Northwest. [ 34 ] This misrepresentation did not literally cause Mr. Manzyuk to decide to enter a new contract with the claimant, but it effectively stopped him from cancelling the contract within the required time frame, thereby causing the contract to be renewed against his wishes.

SHOULD THE CONTRACT BE RESCINDED? [ 35 ] The grounds for granting rescission of this contract have been established, according to the criteria set out in Kingu , supra . 1) The claimant, through its employee, made a positive misrepresentation to the defendant. 2) The misrepresentation was of an existing fact - that is, that the contract commenced on July 12, 2006. 3) The representation was made with the intention that the defendant should act on it. (Of course, the claimant did not want the defendant to cancel the contract, but told him that this was the commencement date after he had specifically asked for it and made it known that he did not want to renew with Northwest.

Thus, the claimant must have intended that the defendant would act on this representation, if he so wished, as was his right under the contract.) 4) The representation did not directly induce Mr. Manzyuk into entering a contract. However, it had the same effect because it caused him to give notice of cancellation at a time which rendered his notice of cancellation ineffective, thus ensuring that the contract would be automatically renewed. 5) Mr.

Manzyuk acted promptly to disaffirm the contract in that he persisted in using the services of NSD, made no further payments to the claimant, and wrote them two letters clearly stating his position that the contract with Northwest had not been renewed. 6) No rights of innocent third parties were affected. 7) It is possible to restore the parties substantially to their pre-contract position. 8) This case does not involve a contract for the sale of land. [ 36 ] I therefore grant rescission of the renewed contract between Northwest and the defendant and his company.

Having rescinded the contract, the defendant NSD cannot be said to have induced any breach of contract. In any event, the claimant has failed to prove that NSD induced the breach of any contract. NSD’s acts did not cause a breach of contract; NSD did not believe that it was inducing a breach of contract, and did not intend to procure a breach of contract. In fact, the evidence shows clearly that NSD made every effort to respect the pre-existing contract between Northwest and Mr. Manzyuk.

It was only because of the misrepresentation by the employee of the claimant, that NSD began providing service when it did. [ 37 ] I therefore dismiss the claims against all the defendants. [ 38 ] In these circumstances, it is not necessary for me to deal with the defendants’ alternative argument that the correct expiry date was July 27, 2011. The Honourable Judge P.D. Gulbransen Provincial Court of British Columbia