DIVISIONAL COURT FILE NO.: 226/17 DATE: 20180405
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
OCEAN PACKERS INC.
Michael Weissenborn, for the Plaintiff/Appellant in Appeal
Plaintiff/Appellant in Appeal
– and –
RUBY SEAS INTERNATIONAL INC.
Charles Wagman, for the Defendant/ Respondent in Appeal
Defendant/Respondent in Appeal
– and –
RUBY SEAS INTERNATIONAL INC.
Plaintiff by Defendant’s Claim/Respondent
– and –
OCEAN PACKERS INC.
Defendant by Plaintiff’s Claim/Appellant
HEARD at Toronto: April 5, 2018
CONWAY J. (Orally)
Oral Reasons for Judgment
[1]
Introduction
Ocean Packers Inc. appeals from the judgment of Deputy Judge Hunt dated April 13, 2017 in which he found Ocean Packers liable to Ruby Seas International Inc. for breach of contract.
[2]
Background
Ocean Packers is a wholesale supplier of imported seafood products in Canada. In September 2014, Ocean Packers was looking to import shrimp from South America: Ecuador, Peru, Honduras or Panama. It arranged to do so through Ruby Seas, an importer of seafood into the United States. Ruby Seas also exports seafood to importers in various countries, including Canada, such as Ocean Packers.
3Ruby Seas identified Grupo Panalang Union Inc. (“Panalang”), a supplier in Panama, for the shrimp order. Ocean Packers had not imported seafood from Panama before. Ruby Seas provided a pro forma invoice to Ocean Packers, who confirmed the order on October 8, 2014. Ruby Seas then purchased the shrimp from Panalang for USD $128,778.40 and Ruby Seas issued an invoice to Ocean Packers for USD $133,253.56.
4Ocean Packers applied for an import permit for the shrimp from the Canadian Food and Inspection Agency (“CFIA”) on the day Ocean Packers confirmed the order, October 8, 2014. Ruby Seas provided Ocean Packers with various documents from Panalang for the permit application. CFIA ultimately denied the permit application because there is no export certificate between Canada and Panama for the type of shrimp in question. The shipment, which by then had arrived in the United States, could not be imported into Canada. Ocean Packers refused to pay for the shipment. Ruby Seas mitigated its damages by reselling the shrimp in the U.S.
[5]
The Issue
The issue before the trial judge was which party was responsible for the loss incurred as a result of the shrimp being denied entry into Canada. He determined that Ocean Packers was responsible and awarded $25,000 to Ruby Seas to compensate it for its costs of reselling the shrimp.
6In so doing, the trial judge made numerous factual findings, including that Ocean Packers was licensed to deal with and make enquiries of CFIA and Ruby Seas was not; that Ruby Seas did what it was asked to do in sourcing the shrimp from Panama; that Ocean Packers was the importer and was responsible for obtaining CFIA approval; that Ocean Packers knew that the product was coming from Panama; that Ocean Packers had the requisite skill and ability to assure itself that the sale would finalize; and that Ocean Packers could and should have made inquiries with the CFIA in a timely manner (i.e. before placing the order) to determine if the shrimp could be legally imported into Canada. While Ocean Packers took issue with the trial judge’s findings in its factum, it conceded in oral argument that it no longer challenges these factual findings.
[7]
Analysis
Ocean Packers’ sole argument on appeal is that the trial judge erred in rejecting its argument that the doctrine of force majeure or frustration applied to discharge the parties from their obligations under the contract. As stated in Fishman v. Wilderness Ridge at Stewart Creek Inc., 2010 ABCA 345, at para. 4, “the doctrine of frustration…essentially involves an unforeseen change to the circumstances underlying the contract, through no fault of the parties, that renders the contract incapable of performance.” The trial judge rejected the frustration argument and concluded that the required approval of CFIA for the shrimp shipment was not an unforeseen event. He stated that “the exercise of statutory and regulatory duties by a duly appointed body, CFIA, was not only foreseeable, but in terms of public policy, laudable”. In light of his factual findings that Ocean Packers was the importer, was responsible for obtaining CFIA approval, and had the ability to determine whether CFIA would approve the import of shrimp from Panama before, not after, it placed the order and made a contractual commitment to Ruby Seas, the trial judge made no error of law or fact in reaching this conclusion.
[8]
Conclusion and Costs
The appeal is dismissed. On agreement of counsel, costs of $5,000 are payable by Ocean Packers to Ruby Seas within 30 days.
9I have endorsed the Appeal Book and Compendium as follows: “For oral reasons given in court today, the appeal is dismissed. Costs as per oral reasons.”
___________________________ CONWAY J.
Date of Reasons for Judgment: April 5, 2018
Date of Release: April 6, 2018
CITATION: Ocean Packers Inc. v. Ruby Seas International Inc., 2018 ONSC 2218
DIVISIONAL COURT FILE NO.: 226/17 DATE: 20180405
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
OCEAN PACKERS INC.
Plaintiff/Appellant in Appeal
– and –
RUBY SEAS INTERNATIONAL INC.
Defendant/Respondent in Appeal
– and –
RUBY SEAS INTERNATIONAL INC.
Plaintiff by Defendant’s Claim/Respondent
– and –
OCEAN PACKERS INC.
Defendant by Plaintiff’s Claim/Appellant
ORAL REASONS FOR JUDGMENT
CONWAY J.
Date of Reasons for Judgment: April 5, 2018
Date of Release: April 6, 2018