Court File and Parties
Court of Appeal for Ontario
Before: Laskin, Simmons & Juriansz JJ.A.
Between:
Personal Service Coffee Corp. Plaintiff (Appellant)
and
Stanley Beer and Isabel Beer carrying on business as Elite Coffee Service Newcastle, Elite Coffee Service Newcastle and Personal Service Coffee of Durham Defendants (Respondents)
Counsel: James F. Diamond for the appellant Ian A. Johncox and Paul M. Chornobay (student) for the respondents
Heard & released orally: April 28, 2008
On appeal from the order of Justice Alfred J. Stong of the Superior Court of Justice dated October 24, 2006.
Endorsement
1We would allow this appeal.
2In our view, the letter to the customers dated September 27, 2004, indicates that Elite Coffee Service was essentially a name change of the existing business carried forward, continuing to provide the same services. It follows that the trial judge’s finding that Mrs. Beer was a partner of that business continues to apply after the name change to the same extent as before.
3The trial judge considered the terms of the rescinded franchise agreement in determining the extent of the respondent’s entitlement to compete. In our view, that approach is inconsistent with the earlier judgment of this court in this case: Personal Service Coffee v. Beer, [2006] O.J. 4932.
4The trial judge found that Elite Coffee Service converted Personal Service’s customer lists. We would say that Elite Coffee Service converted the customer relationships of Personal Service that depended in large measure on the placement of coffee equipment with the customers on the lists.
5Having found conversion, the trial judge ruled that Personal Service had failed to mitigate its damages. In doing so the trial judge misplaced the onus regarding mitigation and failed to consider if the steps taken by Personal Service were reasonable. In our view, it was reasonable for Personal Service to bring an application for interim relief and to avoid involving its customers in its dispute with Elite Coffee Service.
6Damages are difficult to precisely quantify in this case. In our view, a reasonable estimate of damages is $40,000. We arrive at this figure taking into account the value of the business as a whole that was derived from Personal Service, Elite Coffee Service’s gross sales between October 2004 and September 2005, and the fact that Personal Service’s equipment was used to sustain ongoing business relationships.
7The appeal is allowed. We set aside the trial judgment and replace it with a judgment in favour of the appellant against Elite Coffee Service and both individual respondents in the amount of $40,000 plus interest in accordance with the Courts of Justice Act.
8The appellant is entitled to its costs of the appeal in the amount of $11,000 all inclusive. The appellant is also entitled to its costs of the trial (from the date the application was converted to an action) in the amount of $16,800 all inclusive.
“J.I. Laskin J.A.”
“J.M. Simmons J.A.”
“R.G. Juriansz J.A.”