Court of Appeal for Ontario

CITATION: TFS RT Inc. v. Shoppers Drug Mart Inc., 2015 ONCA 85

DATE: 20150205

DOCKET: C59085 and C59086

Doherty, Gillese and Lauwers JJ.A.

BETWEEN

TFS RT Inc.

Applicant

(Appellant)

and

Shoppers Drug Mart Inc.

Respondent

(Respondent in Appeal)

David P. Preger and Mordy Mednick, for the appellant

Craig Colraine and Debbie Jorgensen, for the respondent

Heard and released orally: February 2, 2015

On appeal from the order of Justice Edward Belobaba of the Superior Court of Justice, dated June 17, 2014.

ENDORSEMENT

[1] This appeal turns on a reading of the document entitled “Acceptance of Goods”. Counsel for the appellant submits that fairly read, the document, in paragraph 3, contains a promise by Shoppers to pay TFS the amounts in the invoices specifically referenced in the document. Counsel for TFS characterizes the document as an estoppel certificate.

[2] With respect to counsel’s able argument, we do not read the document as he does. We are inclined to agree with counsel for Shoppers that the document properly read, was only an acknowledgement by Shoppers that when it made payments to its supplier SBL, to which SBL was entitled under the terms of the agreement with Shoppers, that Shoppers would on SBL’s request direct those payments to TFS without “set off or deduction”. In our view, the document does not constitute a promise by Shoppers to pay the face amount of the invoices regardless of the amount actually owing by Shoppers to SBL under the terms of their agreement.

[3] The document is at best, from TFS’ perspective, ambiguous and incapable of constituting a representation to pay the amounts set out in the invoices. More precise language is required. We would adopt the following comment in the reasons of the application judge:

To Mr. Preger’s policy question as to what more should a factor such as TFS be expected to do, I would say the following: do what they did in Pacific Sunset – get the Debtor to acknowledge the amount that is actually owing and the Factor’s reliance, and to promise to pay this amount to the Factor – this can be done by calling the Debtor directly or getting its signature on a document with the prescribed acknowledgements that ideally and more appropriately is titled Estoppel and Acknowledgement Agreement rather than just Acceptance of Goods.

[4] We need not address the other issues raised on the appeal.

[5] The appeal is dismissed. Costs are awarded to the respondent in the amount of $17,500 inclusive of disbursements and relevant taxes.

“Doherty J.A.”

“E.E. Gillese J.A.”

“P. Lauwers J.A.”