Citation: Action Press v. PEITF Date: PESCTD 02 Docket: GSC Registry: Charlottetown

Transcription

1 Citation: Action Press v. PEITF Date: PESCTD 02 Docket: GSC Registry: Charlottetown PROVINCE OF PRINCE EDWARD ISLAND IN THE SUPREME COURT - TRIAL DIVISION BETWEEN: AND: CARRUTHERS ENTERPRISES LTD. carrying on business under the firm name and style of ACTION PRESS PLAINTIFF PRINCE EDWARD ISLAND TEACHERS FEDERATION DEFENDANT BEFORE: The Honourable Justice Wayne D. Cheverie James W. Macnutt, Q.C. - Solicitor for the plaintiff Paul J.D. Mullin, Q.C. - Solicitor for the defendant Place and dates of hearing - Charlottetown, Prince Edward Island December 6, 7, and 18, 2001

2 Place and date of judgment - Charlottetown, Prince Edward Island January 14, 2002

3 Citation: Action Press v. PEITF 2002 PESCTD 02 GSC BETWEEN: CARRUTHERS ENTERPRISES LTD. carrying on business under the firm name and style of ACTION PRESS PLAINTIFF AND: PRINCE EDWARD ISLAND TEACHERS FEDERATION DEFENDANT Prince Edward Island Supreme Court - Trial Division Before: Cheverie J. Heard: December 6, 7 and 18, 2001 Judgment: January 14, 2002 [9 pages] Contract - alleged oral agreement for services - agency - estoppel. Practice - solicitor-client costs. CASES CONSIDERED: Baynes v. Vancouver Bd. of School Trustees, [1927] 2 D.L.R. 698 at 700 (B.C.S.C.); Fobasco Ltd. v. Cogan (1990), 72 O.R. (2d) 254 (Ont. H.C.), p. 260; Isaacs v. MHG International Ltd. (1984), 7 D.L.R. (4th) 570 (Ont. C.A.); Foulis v. Robinson (1978), 92 D.L.R. (3d) 134; Shier v. Fiume (1991), 6 O.R. (3d) 759 at p. 762; Wallace Sign-Crafters West Ltd. v Ontario Ltd. (1994), 28 C.P.C. (3rd) 75, 72 O.A.C TEXTS CONSIDERED: The Law of Contract in Canada, G.H.L. Fridman, 4th ed. (Carswell,1999); Fridman, The Law of Agency, London, Butterworth s 1960 ed.. RULE CONSIDERED: Rules of Court; Rule (5), 57. STATUTE CONSIDERED: Supreme Court Act, R.S.P.E.I. 1988, Cap. S-10, s.

4 53(1). James W. Macnutt, Q.C. - Solicitor for the plaintiff Paul J.D. Mullin, Q.C. - Solicitor for the defendant

5 Cheverie J.: Introduction [1] The plaintiff, Carruthers Enterprises Ltd., carries on business in Charlottetown under the firm name and style of Action Press. It provides printing supplies and services to the public. The defendant, the Prince Edward Island Teachers Federation, is a body corporate, duly incorporated under the laws of the province of Prince Edward Island, and is the corporate entity which officially represents approximately 1,500 teachers in this province. [2] In late April, 2000, the plaintiff was contacted by Ron MacLeod inquiring as to whether or not the plaintiff could provide copying and related services for a conference which was to be held shortly thereafter. As it turned out, the conference was the annual gathering of a national organization known as the Canadian Association for the Practical Study of Law in Education (CAPSLE). The plaintiff, through its principal officer and manager, Richard Carruthers, indicated that it was capable of providing the services. MacLeod and Carruthers met some time later and confirmed certain aspects of the arrangement. The job was massive and the time frame in which it was to be performed was short. MacLeod indicated Jim Blanchard of the Prince Edward Island Teachers Federation would be in contact with the plaintiff shortly thereafter and the process was begun. [3] As a result of the contact and meeting between MacLeod and Carruthers, the plaintiff alleges a contract was entered into between the plaintiff and the defendant. The defendant acknowledges that the contact and meeting, as alleged, was held, but denies it entered into any contract with the plaintiff. Rather, the defendant maintains it was only acting on behalf of CAPSLE and it is CAPSLE which is responsible for the arrangements with the plaintiff. [4] The question to be decided is: did the plaintiff and defendant enter into a legally binding contract? Discussion [5] The position of the plaintiff as indicated through its principal witness, Richard Carruthers, is that Ron MacLeod was acting on behalf of the defendant when he contacted the plaintiff concerning the job in question. Carruthers

6 Page: 2 knewmacleod who had been a customer of his on a previous occasion, and he understood MacLeod was a volunteer with the CAPSLE conference. Once Carruthers indicated the plaintiff could take on the job, MacLeod advised that Blanchard, who happened to be the general secretary of the defendant organization at the time, would be in contact with him shortly thereafter. It is Carruthers evidence that MacLeod did not indicate the defendant was to be the payor. Carruthers testified that MacLeod instructed him to send the bill to the PEITF - attention Jim Blanchard. [6] Several days later, Blanchard did attend at the plaintiff s place of business and provided the initial amount of work to be done. As it turned out, the job was, if not the largest, then certainly one of the largest undertakings the plaintiff had ever entered upon involving 274,400 copies of speeches which had to be copied on both sides, bound, tabbed, sorted and inserted into binders. Notwithstanding the size of the project, Carruthers admits, and this is confirmed by MacLeod, that no specific terms of payment were discussed or agreed upon. Further, no hourly rate for labour was discussed. [7] The plaintiff then embarked upon the project and worked diligently to complete the task. At all times, Carruthers thought he was providing the service pursuant to a contract entered into with the defendant. He stated he was not familiar with the organization known as CAPSLE, but detailed the process he would ordinarily follow if his company s services were engaged by an out-of-province client. If that were the case, he would have gotten his money up front, but since he thought he was dealing with a local organization in the person of the defendant, he did not do so. [8] The project was completed on time and by all accounts the quality of the finished product was first rate. The plaintiff rendered an invoice on May 1, 2000 to the PEI Teachers Federation (Exhibit P-5) in the total amount of $35, On May 31, 2000, the plaintiff sent its account, (Exhibit P-6) to CAPSLE 2000 CONFERENCE P.E.I. TEACHERS FEDERATION. This statement of account refers back to Exhibit P-5. On June 5, 2000, the plaintiff sent a further statement showing additional interest charge of $ (Exhibit P-7). This statement was sent to LORI POLLOCK CAPSLE 2000 CONFERENCE. The plaintiff did this on the instruction of Blanchard who informed the plaintiff that Ms. Pollock was the volunteer with the conference who was responsible for paying the bills, and the account should be sent to

7 Page: 3 her. Notwithstanding this, the plaintiff still believed the defendant had been the customer. [9] Between June 5, 2000 and July 31, 2000, Carruthers spoke to Ms. Pollock on the phone concerning the plaintiff s account, and was reassured by her it simply took time to process because several signatures were required on the cheque. By letter dated August 4, 2000, the plaintiff received a cheque from CAPSLE in the amount of $20,829 payable to Action Press and bearing date August 4, 2000 (Exhibit P-9). In spite of this and the other dealings the plaintiff had, Carruthers still believed the defendant was the client and he offered the following reasons for his belief: 1. Jim Blanchard identified himself as being with the Teachers Federation. 2. The documents to be photocopied were delivered in a P.E.I. Teachers Federation envelope. 3. MacLeod told him to send the bill to the Teachers Federation. 4. The binders he was to use had been delivered to him with a packing slip (Exhibit P-4) that indicated they had been billed to the defendant. [10] One crucial fact in dispute between the plaintiff and the defendant arises out of the first face to face meeting between Carruthers and MacLeod. It is the defendant s position that MacLeod clearly indicated to Carruthers that the job being undertaken was for the organization known as CAPSLE. The evidence of MacLeod is that he wrote the name down on a piece of paper and gave it to Carruthers. For his part, Carruthers denies any such paper was given to him and no such paper was produced in evidence at trial. [11] Linda Carruthers, wife of Richard Carruthers, also gave evidence on behalf of the plaintiff. She is the main job co-ordinator for the plaintiff. She confirms the business practice of the plaintiff that no out of province accounts are accepted without a credit check. Her evidence supports that of her husband with respect to the missing slip of paper. Her evidence is that the job docket envelope (Exhibit P-2) contains every bit of information concerning a job project. She says there was no slip of paper referencing CAPSLE in Exhibit P- 2.

8 Page: 4 [12] The defendant s position throughout is that it did not contract with the plaintiff. The defendant produced Ron MacLeod as a witness on its behalf. MacLeod is a partner in the firm HR Associates and has been since He is involved in labour relations and Human Resource issues. He is a lawyer, and he is aware of the organization known as CAPSLE. In fact, it is his evidence that he was a member of the organizing committee for the CAPSLE 2000 conference which was held in Charlottetown. Blanchard was the chair of that organizing committee which involved a number of other volunteers. [13] It was MacLeod who was authorized by the committee to contact the defendant with a view to retaining their services for printing and copying requirements of the conference. MacLeod confirms he did in fact meet Carruthers, but there was no discussion of an hourly rate for the binding, nor did they discuss the price per page for the copying service. However, MacLeod indicates his contact with the plaintiff was on behalf of CAPSLE, and at no time did he hold himself out as an agent for the defendant. It is MacLeod s evidence that he wrote down on a piece of paper during his meeting with Carruthers at the plaintiff s place of business that the bill for the services he was requesting was to be sent to CAPSLE care of Jim Blanchard at the P.E.I. Teachers Federation. In his testimony, MacLeod indicated on more than one occasion that he very much regretted not having worked out the exact details with Carruthers concerning the terms of the contract and he was remiss in not getting those terms specified, but throughout his direct and crossexamination he is adamant about the fact he wrote the note indicating the bill was to be sent to CAPSLE care of Jim Blanchard at the P.E.I. Teachers Federation. His recollection in this regard is clear and specific. Findings [14] Was there a contract entered into between the plaintiff and defendant in late April, 2000? I think not. In this case, there is no single document that can be referred to in order to decide whether the contract existed between the parties. Instead, what we have is a series of events involving a number of oral exchanges. That being the case, I must consider everything that occurred between the parties relevant to the alleged contract in order to decide the issue: Baynes v. Vancouver Bd. of School Trustees, [1927] 2 D.L.R. 698 at 700 (B.C.S.C.).

9 Page: 5 [15] The approach I must take in reviewing all of the evidence in order to determine whether or not a contract exists is an objective approach. In his text, The Law of Contract in Canada by G.H.L. Fridman, 4th ed. (Carswell,1999), the author puts it this way at pp : Constantly reiterated in the judgments is the idea that the test of agreement for legal purposes is whether parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract. The law is concerned not with the parties intentions but with their manifested intentions. It is not what an individual party believed or understood was the meaning of what the other party said or did that is the criterion of agreement; it is whether a reasonable man in the situation of that party would have believed and understood that the other party was consenting to the identical terms. It is therefore on the basis of an objective review of all of the exchanges between the parties that I have concluded no contract existed. [16] In reaching my conclusion, I have carefully reviewed the evidence of Carruthers and MacLeod. They are the key witnesses involved in the formation of the alleged contract. Their evidence is consistent in many respects. They agree, for example, it was MacLeod who contacted Carruthers to see if his company could perform the printing and copying tasks that were required for the conference. They also agree that, unfortunately, neither one raised with the other what the cost of these services would be. That, in itself, is an important omission in these negotiations. Where they differ sharply is with respect to whether or not MacLeod wrote down for Carruthers the bill for the services he was requesting was to be sent to CAPSLE care of Jim Blanchard at the P.E.I. Teachers Federation. Carruthers says it didn t happen. MacLeod said it did. [17] A careful review of Carruthers evidence in direct and cross-examination indicates clearly what he thought, understood, or assumed to be the state of affairs with respect to the piece of work in question. He thought he was dealing with the Teachers Federation for the several reasons cited earlier. He was confused with some of the dates on which certain events happened, but in fairness, there were a considerable number of documents involved in this case. However, I cannot accept his understanding or belief in a state of affairs without other objective supporting evidence. Unfortunately, much of the other

10 Page: 6 documentary evidence which was presented would indicate if there was a contract at all, it was not with the defendant, but with CAPSLE. A number of the plaintiff s documents show CAPSLE as the client, as well as the P.E.I. Teachers Federation, so one might objectively conclude there was more to this than Carruthers simple assertion and belief that he was dealing with the Teachers Federation and the Teachers Federation only. In fact, the culmination of documentation, I believe, occurs by letter dated August 4, 2000 to Action Press from Sandra M. Anderson, President of CAPSLE, which document appears in Exhibit P-10 at tab 6. In that letter, Ms. Anderson states in the opening paragraph as follows: We refer to your statement of account. Please find attached our cheque for $20, This represents our payment for photocopying services your firm provided for our recent conference in Charlottetown. [18] She then goes on to take issue with the amount of the account as rendered, but in my view, clearly accepts responsibility for the account. This information was communicated to the plaintiff well in advance of the commencement of the present action. [19] The fact that on August 4, 2000, the President of CAPSLE was indicating responsibility for the plaintiff s account, is consistent with the evidence of MacLeod with respect to his assertion that he indicated the bill was to be sent to CAPSLE care of the P.E.I. Teachers Federation when he first met with Carruthers. The evidence of MacLeod was thoroughly tested on crossexamination, and I accept his statement in this regard. He has no vested interest in these proceedings. He was not a paid employee for the CAPSLE conference; he was a volunteer. As for the evidence of Carruthers on this point, I can only conclude he is mistaken. This was, after all, a massive undertaking for his business which was done in a short period of time and done well. By his own admission, there was a lot of paper being moved around during that last week of April, It may be MacLeod s note was misplaced, or lost in the shuffle, but I find it did exist. [20] The evidence of Ms. Lori Pollock is also credible and supports the defendant s position. She freely admits in her direct examination that her interpretation of the events led her to believe CAPSLE was responsible for the bill. It should be remembered that she is not an employee of CAPSLE, but rather her firm provides services to CAPSLE and has done so since It

11 Page: 7 may be that the plaintiff has some legal recourse against CAPSLE since they are the obvious beneficiaries of the considerable work that was done in late April, 2000, but I do not have to deal with that. [21] As mentioned earlier, an important element in any contract is the price. There is no evidence before the Court to indicate what the price was to be for the services rendered by the plaintiff. Clearly, MacLeod and Carruthers both indicated they did not discuss the price. However, the plaintiff s position is it has a printed tariff and the onus is on the defendant to inquire as to the cost of the service. I think the law is clear that a court cannot make a bargain for parties which they themselves did not make in proper time. If a contract is not clearly created by the language the parties use, or the conduct of the parties, the court can t construct one. Further, without certainty and clarity, the courts generally will not declare a contract exists: Fridman, Law of Contract in Canada, (supra), pp. 19 and 20. [22] It is important to note the plaintiff has framed the present action in contract and specifically has not pleaded quantum meruit. It is the prerogative of the plaintiff to frame the action and pursue it. I have no problem with that approach. However, even if the plaintiff had proven on the balance of probabilities a contract existed between him and the defendant, which I have found not to be the case, then one of the elements he would have to establish would be the price or cost for the services rendered. The plaintiff has not done so, therefore the case fails on that point as well. [23] The plaintiff argues that a contract was created by estoppel. The plaintiff states both Ron MacLeod and Jim Blanchard were agents of the defendant and held themselves out as such. The plaintiff alleges reliance on those representations and argues the defendant is now estopped from pleading a different version of the facts. I find neither MacLeod nor Blanchard held themselves out as agents for the defendant for the purpose of entering into a contract with the plaintiff. The plaintiff made certain assumptions as to who these individuals were acting for, but on my review of the evidence, no such relationship was established. [24] The plaintiff referred the court, in its pre-trial brief, to the text by Fridman entitled The Law of Agency, London, Butterworth s 1960 edition. In particular, counsel for the plaintiff quotes from p. 96 of that text as follows:

12 Page: 8...to prove apparent authority, it is necessary to show that the principal s conduct was such as to mislead the third party, and to induce him to rely upon the existence of the agency to his detriment. In applying this quotation to the present case, the principal referred to must be the defendant. It is, after all, the plaintiff s position that MacLeod and Blanchard were agents of the defendant. The question then becomes: what conduct of the P.E.I. Teachers Federation misled the plaintiff? The answer is there was none because I have found that MacLeod did not hold himself out as an agent for the defendant, but rather indicated to the plaintiff that CAPSLE was to be the payor. [25] The plaintiff quotes further from the Fridman text on Agency at p. 55 as follows: Estoppel means that a person who has allowed another to believe that a certain state of affairs exists with the result that there is reliance upon such belief, cannot afterwards be heard to say that the true state of affairs was far different. If to do so, would involve the other person in suffering some kind of detriment. Applied to agency this means that a person who by words or conduct has allowed another to appear to the outside world to be his agent, with the result that third parties deal with him as his agent, cannot afterwards repudiate this apparent agency if to do so would cause injury to third parties: he is treated as being in the same position as if he had in fact authorized the agent to act in the way he has done. The suggestion by the plaintiff must be that the defendant allowed the plaintiff to rely on the belief it was the Teachers Federation who were contracting for the plaintiff s services. As I have said, the plaintiff has failed to prove that on the balance of probabilities, and in fact the defendant has gone further by establishing the arrangement was to be with CAPSLE. These quotations do not support a contract in the manner in which the plaintiff alleges. I think this issue is succinctly dealt with by Rutherford J. in Fobasco Ltd. v. Cogan (1990), 72 O.R. (2d) 254 (Ont. H.C.), p. 260: In the absence of a contract, the plaintiff s assertion of a promissory estoppel must, in my view, also fail. As I understand the law, a cause of action cannot be founded upon estoppel: Canadian Superior Oil Ltd. v. Paddon-Hughes Development Co. (1970), 12 D.L.R. (3d) 247 at p. 251, [1970] S.C.R. 932, 74 W.W.R. 356 sub nom. Canadian Superior Oil

13 Page: 9 Ltd. v. Hambly. Moreover, the principle of estoppel is predicated on there being a legal relationship in existence between the parties when one of them represents to the other that he will not enforce his strict legal rights thereunder. In such circumstances, the representation will alter the legal relations between the parties and the party who made it will be estopped from demanding that the contract be enforced according to its original terms. In the absence of a pre-existing legal relationship, as in this instance, the doctrine of promissory estoppel will not come into play. Costs [26] The only question remaining for determination is the matter of costs. In this regard, the defendant seeks costs pursuant to rule (5) of the Rules of Court. In short, the defendant seeks its costs on a solicitor-client basis. In summation, the defendant s solicitor indicated that the facts of this case would warrant the court granting the costs pursuant to rule 75 as set out above, but asked to be at liberty to speak to this matter in more detail if the disposition of the case were appropriate to do so. For his part, the solicitor for the plaintiff clearly indicated solicitor-client costs are not warranted in the event his client was unsuccessful. I don t believe further representations from counsel are necessary in order for me to dispose of this issue. [27] Defendant s counsel made it clear throughout the proceedings that, if successful, he intended to seek costs on a solicitor and client basis. He refers to the fact the plaintiff was advised prior to the commencement of this action that the wrong defendant was being pursued. While I have found that no contract existed between the plaintiff and defendant, that is not to say the plaintiff, through Carruthers, did not have an honest belief in the facts as he understood them. [28] The awarding of costs is always in the discretion of the court: Supreme Court Act, R.S.P.E.I. 1988, Cap. S-10, s. 53(1); rule 57, Rules of Court. I believe that an award of costs on a solicitor and client basis is ordered in only those rare and exceptional cases where the court disapproves of the parties conduct in litigation: Isaacs v. MHG International Ltd. (1984), 7 D.L.R. (4th) 570 at p. 572 (Ont. C.A.). The issue of solicitor-client costs was fully canvassed in the case of Foulis v. Robinson (1978), 92 D.L.R. (3d) 134. In that case, the Ontario Court of Appeal indicated the expense of litigation is a matter of concern for all those interested in the administration of justice, and generally speaking, an

14 Page: 10 award of costs on a party and party basis to the successful party strikes a proper balance. If a party does not have an arguable case, then solicitor and client costs may be appropriate: Shier v. Fiume (1991), 6 O.R. (3d) 759 at p While the plaintiff has not been successful, I do find the plaintiff had an arguable case. [29] Finally, it has been said that costs on a solicitor and client basis should not be awarded unless special grounds exist to justify a departure from the usual party and party costs. It has been stated that the principle guiding the decision to award solicitor and client costs is as follows: Solicitor and client costs should not be awarded unless there is some form of reprehensible conduct, either in the circumstances giving rise to the cause of action, or in the proceedings which make such costs desirable as the form of chastisement: Wallace Sign-Crafters West Ltd. v Ontario Ltd. (1994), 28 C.P.C. (3rd) 75, 72 O.A.C [30] In considering the foregoing, the defendant will have its costs on a party and party basis. Disposition [31] In summary, on the balance of probabilities, I find the plaintiff has failed to prove a contract existed with the defendant. Therefore, the plaintiff s claim is dismissed with costs. January 14, 2002 J.