Date Issued: December 11, 2019

File: SC-2019-003839

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Super Save Disposal Inc. v. Greenside Garden Supplies (2010) Ltd., 2019 BCCRT 1390

Between:

SUPER SAVE DISPOSAL INC.

Applicant

And:

GREENSIDE GARDEN SUPPLIES (2010) LTD.

Respondent

INTRODUCTION

1.       The applicant Super Save Disposal Inc. says the respondent Greenside Garden Supplies (2010) Ltd. breached the parties’ waste disposal agreement. The applicant claims $4,725.00 in liquidated damages.

2.      The respondent agrees that it signed a contract with the applicant on July 4, 2017. The respondent says it cancelled the contract with the applicant on July 31, 2017 when it realized that it had an existing waste disposal contract with BFI/Waste Connections. The respondent asks that the dispute be dismissed.

3.      The applicant is represented by business contact Marli Griesel. The respondent is represented by business contact Muriel Martin.

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 $4,725.00 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 July 4, 2017, the applicant entered into a waste disposal services agreement (Agreement) with the respondent. The effective date written on the Agreement was August 4, 2017.

11.   The Agreement was for a 5-year term with automatic renewals for further 5-year terms.

12.   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.

13.    However, Clause 3 provided that if the respondent was obligated under a preexisting service contract with a third party for that location, the effective date would be the first day after the expiration of termination of the preexisting third party service contract. The clause also provided that the Agreement would be binding on the parties from the date it was signed through this deferred effective date.

14.   I find the effective date of the Agreement was in fact March 8, 2019, because the respondent had an existing service contract that ended on that date.

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 December 9, 2023 and March 8, 2024 (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.   The respondent also had a waste disposal agreement with BFI/Waste Connections, signed March 8, 2013, for a 3-year term ending in 2016 if not renewed.

18.   On July 31, 2017, the respondent wrote to the applicant saying that because it had “decided to remain” with their existing waste hauler, they would not require the applicant’s services. The respondent also wrote that they were “currently party to valid and subsisting service agreements.” However, the respondent did not explain when they signed these agreements or renewals.

19.   I find that the July 31, 2017 letter was not delivered within the cancellation window. Because the Agreement expressly binds the respondent from the time it is signed up until the effective date, the deferred effective date does not allow the respondent to cancel outside the cancellation window.

20.   It is uncontested, and I find, that the applicant tried to deliver its bins to the respondent’s premises on March 8, 2019. Because the effective date of the agreement was deferred, I infer that the respondent must have had waste disposal services through another provider up to March 8, 2019.

21.   While I have considered the respondent’s submission that the person who signed the Agreement on its behalf “did not know what she was signing” nor that it was already party to another waste hauler agreement, I find this does not excuse the respondent from its obligations under the Agreement.

22.   I have considered the respondent’s submission that because it was no longer operating at the given location, it did not breach the Agreement. I disagree. The only way to cancel the Agreement, once signed, was to cancel inside the cancellation window. The respondent did not do so.

23.   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.

24.   So, 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 respondent improperly terminates the service agreement, 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.

25.   I find that the respondent must pay liquidated damages under Clause 11. This means the applicant is entitled to liquidated damages, at the rate of $75 per month x 60 months, for a total of $4,500. I also find that the applicant is entitled to the claimed $225.00 GST on the liquidated damages, based on section 182(1) of the federal Excise Tax Act and the tribunal’s non-binding but helpful analysis in Super Save Disposal Inc. v. New Generation Concrete Ltd. 2019 BCCRT 319. Therefore, I award the applicant $4,725.

26.   The Court Order Interest Act applies to the tribunal. The applicant is entitled to pre-judgement interest on the $4,725 from March 8, 2019, the date of the breach to the date of this decision. This equals $70.43.

27.   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

28.   Within 30 days of the date of this order, I order the respondent to pay the applicant a total of $4,970.43, broken down as follows:

a.    $4,725 being $4,500 in liquidated damages and $225 in GST,

b.    $70.43 in pre-judgment interest under the Court Order Interest Act, and

c.    $175 in tribunal fees.

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

30.   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.

31.   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.