Date Issued: December 5, 2019

File: SC-2019-005831

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Super Save Disposal Inc. v. Fire Productions Ltd., 2019 BCCRT 1368

Between:

SUPER SAVE DISPOSAL INC.

Applicant

And:

FIRE PRODUCTIONS LTD.

Respondent

INTRODUCTION

1.      The applicant Super Save Disposal Inc. says the respondent Fire Productions Ltd. breached the parties’ waste disposal agreement. The applicant claims $3,257.48 in liquidated damages.

2.      The respondent says it not enter into the waste disposal agreement with the applicant. The respondent also says that because its prior waste hauler had a right of first refusal and right to renegotiate in a separate contract, the agreement with the applicant was not valid.

3.      The applicant is represented by business contact Marli Griesel. The respondent is represented by business contact Federico Fuoco.

JURISDICTION AND PROCEDURE

4.      These are the formal written reasons of the Civil Resolution Tribunal (tribunal). The tribunal has jurisdiction over small claims brought under section 118 of the Civil Resolution Tribunal Act (CRTA). The tribunal’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the tribunal must apply principles of law and fairness, and recognize any relationships between parties to a dispute that will likely continue after the dispute resolution process has ended.

5.      The tribunal has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. I decided to hear this dispute through written submissions, because I find that there are no significant issues of credibility or other reasons that might require an oral hearing.

6.      The tribunal may accept as evidence information that it considers relevant, necessary and appropriate, whether or not the information would be admissible in a court of law. The tribunal may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

7.      Under tribunal rule 9.3(2), in resolving this dispute the tribunal may make one or more of the following orders, where permitted under section 118 of the CRTA:

a.    order a party to do or stop doing something;

b.    order a party to pay money;

c.    order any other terms or conditions the tribunal considers appropriate.

ISSUE

8.      The issue in this dispute is whether the respondent breached the parties’ waste disposal contract and, if so, whether it owes the applicant the claimed $3,257.48 in liquidated damages.

EVIDENCE AND ANALYSIS

9.      In this civil claim, the applicant bears the burden of proof on a balance of probabilities. I have reviewed all of the evidence but only refer to the evidence and submissions as I find necessary to provide context for my decision.

10.   On January 29, 2018, the applicant entered into a waste disposal services agreement (Agreement) with the respondent. Mr. Fuoco signed the Agreement.

11.   The effective date of the Agreement was initially March 1, 2018.

12.   However, the parties agreed to postpone the effective date until February 1, 2019, because the respondent was under contract to a third party waste hauler, RR, until that date.

13.   The Agreement was for a 1-year term with an end date of January 31, 2020.

14.   Clause 1 of the Agreement gives the applicant the exclusive right to provide non-hazardous solid waste disposal and recyclable collection services to the respondent during the term of the Agreement or renewal. The respondent provided a negative covenant that it would not, for any reason, enter into another service agreement with any third party for those services, during the term of the Agreement or renewal.

15.   Clause 2 says that the customer may only terminate the Agreement on written notice delivered by registered mail between 120 and 90 days from the end of the Agreement’s term. Here, this would be between early October and early November 2019 (cancellation window).

16.   Clause 11 says that if the customer tries to terminate the Agreement before the term’s end, the customer agrees to pay a sum equal to any amounts owing for services and equipment rendered up to the repudiation date, plus an amount equal to monthly charges that would become due for the balance of the term calculated from the repudiation date.

17.   It is uncontested, and I find, that it tried to deliver its bins to the respondent’s premises on February 1, 2019. This conclusion is consistent with the delivery receipt for February 1, 2019 filed in evidence by the respondent. The delivery receipt proves that the respondent refused to accept delivery.

18.   The applicant treated the Agreement as repudiated and asked to be paid liquidated damages under clause 11 of the Agreement.

19.   Under the Agreement, I find that the respondent was obliged to cancel in the cancellation window. The respondent did not do so.

20.   I have considered the respondent’s submission that because he had a separate agreement with RR including a right of first refusal and a right to renegotiate, his breach of the Agreement with the applicant is somehow excused. I disagree. The applicant’s claim is governed by the Agreement, not by whatever terms were agreed between the respondent and RR. On this point, the applicant wrote to the respondent on November 8, 2018 to tell it, in part, “Please be aware that your other hauler may present you with a new offer to retain your business. Do not sign a new agreement with your previous hauler; this will result in you being “double contracted.” (emphasis reproduced as it appears in original)

21.   The respondent also points to the Provincial Court decision in 0955824 B.C. LTD. dba VAN PRO DISPOSAL v. TAK FUN ENTERPRISES CO. LTD., June 26, 2019, Vancouver Registry File No. 1863006. The respondent says that Tak Fun applies to this dispute to render the Agreement unenforceable. I disagree. In Tak Fun, there was evidence that the respondent did not understand the written agreement, in part due to language issues. There is no such evidence here. I have found that the respondent understood the Agreement and was warned of the possibility of being “double contracted”. For these reasons, I find the Agreement is enforceable.

22.   I acknowledge prior decisions that found disposal service contracts are onerous. However, the court in Tristar Cap & Garment Ltd. v. Super Save Disposal Inc., 2014 BCSC 690 considered virtually identical language involving the applicant and found the contract enforceable. The Provincial Court has also noted that Tristar was binding, in Northwest Waste v. Andreas Restaurant Ltd., 2016 BCPC 395.

23.   While the Agreement’s terms are onerous, they are enforceable. Liquidated damages are a contractual pre-estimate of the damages suffered by a party in the event of a breach of contract. The Agreement states that if the service agreement is improperly terminated by the respondent, the applicant is entitled to liquidated damages, in the amount of the remaining monthly payments. The respondent did not terminate the Agreement in the manner required under its terms.

24.   I find that the respondent must pay liquidated damages under Clause 11. This means the applicant is entitled to liquidated damages, at the rates of $124.75, $58.00 and $75.78 per month x 12 months, for a total of $3,102.36. I also find that the applicant is entitled to the claimed $155.12 GST on the liquidated damages, based on section 182(1) of the federal Excise Tax Act and the tribunal’s analysis in Super Save Disposal Inc. v. New Generation Concrete Ltd. 2019 BCCRT 319, which I find helpful though non-binding. Therefore, I award the applicant $3,257.48.

25.   The Court Order Interest Act applies to the tribunal. The applicant is entitled to pre-judgement interest on the $3,257.48 from February 1, 2019, the date of the breach to the date of this decision. This equals $53.60.

26.   Under section 49 of the CRTA and tribunal rules, the tribunal will generally order an unsuccessful party to reimburse a successful party for tribunal fees and reasonable dispute-related expenses. I see no reason in this case not to follow that general rule. I find the applicant is entitled to reimbursement of $175 in tribunal fees. The applicant did not claim dispute-related expenses.

ORDERS

27.   Within 30 days of the date of this order, I order the respondent to pay the applicant a total of $3,486.08, broken down as follows:

a.    $3,257.48 as required under Clause 11 of the contract,

b.    $53.60 in pre-judgment interest under the Court Order Interest Act, and

c.    $175 in tribunal fees.

28.   The applicant is entitled to post-judgment interest, as applicable.

29.   Under section 48 of the CRTA, the tribunal will not provide the parties with the Order giving final effect to this decision until the time for making a notice of objection under section 56.1(2) has expired and no notice of objection has been made. The time for filing a notice of objection is 28 days after the party receives notice of the tribunal’s final decision.

30.   Under section 58.1 of the CRTA, a validated copy of the tribunal’s order can be enforced through the Provincial Court of British Columbia. A tribunal order can only be enforced if it is an approved consent resolution order, or, if no objection has been made and the time for filing a notice of objection has passed. Once filed, a tribunal order has the same force and effect as an order of the Provincial Court of British Columbia.