ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-11-2356-00
DATE: 2013-09-25
B E T W E E N
Janetta Park o/a Halton Huskies Junior Hockey Club
Ethan M. Rogers, for the Plaintiff
Plaintiff
- and -
Wave Hockey Inc.
Robert W. Wilson and Ronald H. A. van der Steen, for the Defendant
Defendant
HEARD: April 23 - 26 and
August 26 - 27, 2013
REASONS FOR JUDGMENT
M. J. Donohue J.
Table of Contents
ISSUES
OVERVIEW
WAS A CONTRACT MADE?
WAS THE CONTRACT BREACHED?
WHAT DAMAGES FLOW?
MINI-CAMP
SUMMER PROGRAM
FALL EUROPEAN TRIP
WINTER LEAGUE
HOCKEY TEAM PROFITS
LAW
REMOTENESS
MITIGATION
ANALYSIS
SPECULATIVE OR FUTURE LOSS
REMOTENESS
MITIGATION
DAMAGES AWARD
CONCLUSION
COSTS
ISSUES
[1] Was a Contract made?
[2] Was the Contract breached?
[3] What Damages flow?
OVERVIEW
[4] Janetta Park decided in the fall of 2010 after the loss of her mother, her husband, her friend and her job, to start her own business. She chose to own a hockey team after some research into independent leagues where teams were less expensive to purchase.
[5] She was able to buy a team through the Greater Metropolitan Hockey League (“GMHL”), which was a league independent from the umbrella of Hockey Canada, Ontario Hockey Federation (“OHF”) and the Ontario Provincial Junior A Hockey League (“OJHL”).
[6] In February 2011, she put down a deposit of $5,000 for the league and they gave her 30 days to obtain ice time for her team. Ms. Park began contacting various arenas for ice.
[7] She found that some arenas would not rent to her because her league was not under the Hockey Canada umbrella. Her league, the GMHL was known as an “outlaw” league. The GMHL is a league that is not sanctioned by the OHF, which is the governing body for organized hockey in Ontario.
[8] Mike Hardcastle, of the Powerade Centre arena, testified that he decided not to rent ice time to Ms. Park in February 2011, as he feared reprisals from Hockey Canada for dealing with GMHL. He was concerned that a connection with the GMHL would jeopardize his ability to host Hockey Canada sanctioned events in the future.
[9] Ms. Park continued to look for ice time at other arenas. She asked the GMHL if they would extend the requirement for her to have ice time beyond the 30 days, and they agreed.
[10] Ms. Park met with the defendant, Wave Hockey Inc. (the “Wave”), on March 7, 2011, to discuss a contract for ice time. She disclosed her concerns about her “outlaw” league not being sanctioned by Hockey Canada. Despite this disclosure, the representatives of Wave assured her that they would rent ice to her for the three different sessions she required.
[11] She negotiated contracts for 1) a three-day mini-camp for the beginning of April 2011, 2) a 13-week Saturday summer camp, and 3) ice time for a winter league for her team commencing in September 2011 to March 2012. Prices and times were discussed.
[12] Ultimately, tentative contracts were drawn up for all three sessions. Ms. Park paid for the mini-camp session for the three days at the beginning of April.
[13] The Wave provided two letters in mid-March to Ms. Park, confirming she had a contract for ice time at the Wave Sports Centre for her Junior A hockey club.
[14] Ms. Park proceeded to pay the balance of the purchase price of $25,000 to the GMHL for her team.
[15] The Wave began to experience pressure from Hockey Canada in light of the initial news that they were renting ice to this “outlaw” league. The Wave had a long-term contract with the OJHL’s Burlington Cougars.
[16] The Wave had two facilities: the Wave Sports Centre arena and the Twin arena. The two sites were five kilometres apart. The Burlington Cougars played out of the Twin site.
[17] On March 29, 2011, a press release on the GMHL website announced Ms. Park’s new team, the Halton Huskies, would be playing at the Wave “Twin Rinks” alongside the Burlington Cougars.
[18] Within days, the evidence of the parties is that the Wave had a call from M.S., the Commissioner of the OJHL, indicating displeasure at news that the Cougars would be playing alongside the GMHL team.
[19] Emails within the Wave administration stated that the “phone was ringing” and “Tell her we are cancelling her ice if she doesn’t get this fixed. She MUST have it redone on GMHL website. She is creating big headaches for us. Let me know when it’s done.”
[20] The Wave contacted Ms. Park on April 1, 2011, and she had the website corrected, within minutes, to read that her team would be playing out of the Wave Sports Centre.
[21] The Wave admitted on discovery, that at that date, the parties were still proceeding with all three ice contracts.
[22] The evidence of the parties is that the Wave then received a phone call from R.S., the president of the Burlington Cougars. He asked the Wave if an “outlaw” team was going to play at the Wave facilities. He indicated to them that he was not happy that a competitor would be renting ice in the same neighbourhood as the Burlington Cougars.
[23] On April 13, 2011, Ms. Park had a meeting with the Wave at 10:00 a.m. They reviewed the summer league ice time and the winter league ice time. Some minor adjustments were made to the summer league dates. Some minor time changes were made to the winter league ice time.
[24] Her evidence is that she offered to sign the contracts and was reassured by the Wave that it was not necessary. They advised her of the dates she would need to send her deposits for the ice time.
[25] Later that day, Ms. Park received a phone call from Anthony Miele of the Wave. He advised her that they had been threatened by OHF and OJHA that the Burlington Cougars would be pulled out of the arena if the Wave rented ice to her team. He was therefore not going to rent ice to her. He confirmed this in writing on April 15, 2011.
[26] Ms. Park contacted legal counsel who wrote a letter to the Wave via regular mail on April 25, 2011. The letter requested that the Wave confirm they would proceed with the agreement by May 6, 2011, or she would proceed with legal proceedings.
[27] The letter did not come to the Wave’s attention until May 4, 2011.
[28] The Wave had their counsel respond on May 5, 2011, alleging that Ms. Park breached the two contracts, and that there was no contract for the winter league. The defence called no evidence to support these allegations. Ms. Park’s evidence is to the contrary.
[29] On May 17, 2011, David Conacher of the Wave emailed Ms. Park wishing to discuss her ice rental and saying he “may have a solution”. He did not testify as to what his solution would have been. Ms. Park testified that she did not call him as she no longer trusted him in light of what had happened and the false allegations in the lawyer’s letter.
[30] Ms. Park tried to locate ice in three other nearby locations but was not successful. At this point she felt it was too late in the season to get her team recruited and to proceed with her plans for the team. She pursued this lawsuit for her losses for her team for its first year.
[31] Shortly before trial, Dave Conacher of the Wave and the plaintiff made a deal. Ms. Park allowed the GMHL to transfer the Halton Huskies team to Mr. Conacher for a return of her $25,000 investment.
WAS A CONTRACT MADE?
[32] The evidence confirms that the parties met March 7, 2011, and discussed Ms. Park’s ice time needs, the availability of ice for those needs, and the pricing. The Wave agreed to provide ice time and Ms. Park agreed to their terms. A verbal agreement had been made to provide ice time for a mini-camp, a summer league and a winter league.
[33] The defendant confirmed in writing via email by March 15, 2011, that Ms. Park had a contract for a Junior A hockey club for the 2011/2012 season.
[34] Their conduct in emails and meetings represented to Ms. Park that she had a contract for ice time for the coming year. Before the afternoon of April 13, 2011, Ms. Park was not advised any differently.
[35] The defence did not call any witnesses.
[36] They argued that the written contracts for the summer league and the winter league were marked “tentative” in the status line at the top of each page. The contracts state at paragraph five that:
All bookings will only be considered “firm” on receipt of a non-refundable deposit as stated in the contract. Unless notification of any cancellation is received in writing from the licensee by Wave Hockey Inc. Facility Scheduler at least 30 days prior to the date of use, the Licensee must pay the full amount for the cancelled facility rental. Attendants do not accept notice of cancellation. Should Wave Hockey Inc. manage to rent cancelled ice time, Licensee will receive back balance recovered by the subsequent rental.
[37] The first deposit for the summer contract was due on May 31, 2011. The first deposit for the winter contract was due August 31, 2011.
[38] Those dates had not been reached. Although Ms. Park offered to pay the deposits, this was refused by Wave at the morning meeting on April 13, 2011. She was told it was not necessary to pay the deposits ahead of time.
[39] No one testified from Wave as to what was intended by paragraph five in the contract.
[40] A plain reading of that paragraph says that the ice must be paid for by the due date otherwise it is not available to the licencee. It is also saying that the licencee will be charged the rental cost if there is a cancellation within 30 days.
[41] I do not read this paragraph as leaving it open to the Wave to renege on the contract at any time.
[42] I find that there was a verbal contract made to provide ice to Ms. Park on March 7, 2011. It was confirmed in writing. The terms were put in to the Wave’s standard tentative contracts with the dates, times and pricing. Ms. Park was relying on the Wave’s verbal and written representations that she had a contract for ice.
WAS THE CONTRACT BREACHED?
[43] On April 13, 2011, the Wave verbally advised Ms. Park that they had changed their minds and would not provide the ice time as agreed. They followed up with an email on April 15, 2011 to confirm they would no longer rent ice to Ms. Park as they had previously agreed.
[44] On May 5, 2011, the Wave had their counsel write to say that there were written contracts and ice reserved for the mini-camp and the summer league, but that Ms. Park cancelled both of those contracts.
[45] The evidence is to the contrary.
[46] Ms. Park paid for the mini-camp scheduled for April 4, 5 and 6, 2011. She was planning and negotiating ice time for a second mini-camp for early May. There is no evidence that she had cancelled the summer league. Rather, Ms. Park had a meeting on the morning of April 13, 2011 with the Wave, where the summer camp times were adjusted. The summer league contract was emailed to her that day and she signed it.
[47] It was later that day that the Wave called her and advised her that they decided not to rent the ice to her.
[48] I find there was a breach of contract for the summer league and the winter league.
WHAT DAMAGES FLOW?
[49] The damages that reasonably flow from this breach were hotly disputed at trial.
[50] Ms. Park had only purchased the team from the GMHL as of mid-February 2011 and lost the ice contract as of mid-April 2011. In those two months she had secured a name and logo for her team, the “Halton Huskies”, and chosen team colours. She hired a coach and general manager – M.B. She retained Dan Page to be director of hockey operations. She had contacted Kerry Goulet about arranging European tours. She had just begun to make some contacts for a scout for players in Europe to join her winter league team. She had arranged for a bank loan and was approved for $25,000. She was investigating with Sports Express to do a website and marketing. She had drafted up a letter for businesses to seek sponsorships for the team.
[51] Those who met her were impressed with her passion, determination and drive to make this project a reality.
[52] Her business plan was to run the three-day mini-camp for 40 players, mostly as a promotional venture. She was planning a summer camp of 13 Saturdays for 80 players at $575/player. She planned a spring European trip for 52 players at $2,300/player, to play in perhaps four cities. She planned a September trip to Europe of 420 players at $2,300/player for the entire GMHL league. She planned a winter league of 23 players at $20,000/player. She estimated the profit margin net of expenses of these four enterprises was to be $792,533 for her first year.
[53] There are a number of concerns about this projection.
[54] Ms. Park, herself, testified that the plan may not have come through as projected but that it was her “goal”. It was clear that she was thinking “big” with this endeavour, but the underpinnings to demonstrate how realistic her goals were, were not there.
MINI-CAMP
[55] The first mini-camp that she ran April 4, 5 and 6, 2011 was not successful. She understood that her team had only signed up 27 players out of her desired 40, however, only four showed up. She had to cancel the session and return the players registration payments that had been paid. She paid for the ice and so lost money on this initial venture.
[56] She considered the failure was due to her coach/general manager and immediately let him go.
SPRING EUROPEAN TRIP
[57] She had lists of players’ numbers whom her director of operations was calling to inquire of their interest in, specifically, joining her hockey club, going on a European tour, or attending the summer program.
[58] Although her first European trip was tentatively planned for April or perhaps May, she did not have any players signed up; there was no commitment from the European league arranged; nor were there any details as to the actual price of flights, hotels, ground transportation, or insurance. Although there were to be adult chaperones, one for every ten players, there was no costing to pay for their trips made evident.
[59] She had planned for 52 players for that spring trip. Kerry Goulet, a former professional hockey player, who had arranged European tours in the past, thought that number was too ambitious. Ms. Park’s director of operations thought it was too ambitious as well. He was arranging a “Plan B” if that trip did not work out and was investigating taking players to the “Chowder Cup” in Boston. There was no costing of that trip or evidence of whether or how that trip might make a profit.
[60] Bob Russell, president of GMHL, felt 52 players was an aggressive number, but that it could happen. He then said a reasonable number might be 30. In the past he said perhaps 19 or 20 players have gone.
[61] Mr. Russell testified that most trips to Europe were to recruit players. They run a clinic or practice, but seldom have games. He agreed her plan might have been different.
[62] Mr. Goulet gave no evidence on the profit margin of such trips. He did not provide any evidence of his knowledge of how to make such trips profitable. He had been a professional hockey player in Germany for 16 years; he currently runs a non-profit organization devoted to educating players on injuries; and he has arranged European trips for players, but there was no evidence of it being done for profit.
SUMMER PROGRAM
[63] The summer program was to start at the end of June 2011, and it too had no players signed up as of the end of April. Again, there was no costing of insurance for her coaches, for the players, or for things such as jerseys.
FALL EUROPEAN TRIP
[64] The September trip to Europe of 420 players was not clearly set out. Mr. Russell said that the plan to have all teams in the whole league go on the trip would not happen, because the teams had rented ice and were just starting up at their home ice in September.
[65] Ms. Park did not allow for sharing of the profits of that trip with the other team owners in the league. Again, there was no consideration for the cost of the insurance for such a venture.
[66] Ms. Park testified that she was open to run that trip in August rather than September. There is no evidence that she had done any investigation of how such a major undertaking would be arranged within four months. There was no evidence of her contacting other teams in the GMHL to inquire of their interest in such a trip. There is no evidence of the cost and the realistic profit margin.
WINTER LEAGUE
[67] The profits for her winter league were also speculative at this point. She decided that she intended to charge $20,000 per player. The expectation was that the players would come from Europe or the United States. Mr. Russell said the usual charge was much less -- $10,000, $12,000 or $15,000 per player. He said the higher price was charged when the team was providing more service, such as housing.
[68] Ms. Park testified that the players would be billeted with families in the area. She had not costed what the billeting families would charge nor any insurance coverage for that.
[69] Mr. Russell said leagues generally charge less to a player who is billeted rather than housed by the league.
[70] Ms. Park testified that she would charge the higher than usual amount per player, as she would provide more, such as the Twist conditioning program available at Wave. She had not costed the Twist program however, and so could not say whether it would be profitable.
[71] As she was billeting her players, it appears she would likely have had to charge much less than the $20,000 she had planned on.
[72] Her evidence was vague on where she would source these players. She did not yet have a scout for locating players in Europe or in the United States. She was questioned as to why a European player would want to come to a league in Canada, and then pay to play on a trip to Europe. It was clear that the business plan was so general that those realities had not been considered.
[73] For all of the costing of expenses, there was no paperwork or evidence to support those costs from any source apart from the ice time with the defendant.
HOCKEY TEAM PROFITS
[74] Mr. Russell described his league as being unique: what makes it different is that they accept players from outside the country. He estimates that 50 per cent of their players are Canadian. The other 50 per cent are recruited from the United States and from Europe. He said they can come from all over the world to play in Ontario.
[75] He described his league as providing a strong market with lots of opportunity. He stated that globally, kids want to play hockey in Ontario and then progress to the next level in college hockey or go “Pro”. The attraction for Ontario is that recruiters and scouts for talent come to Toronto looking for talented players.
[76] He has been president of GMHL since it started in 2006. He has played hockey since he was eight years old. He has worked professionally with hockey since he was 20 and is now 58. He runs an overnight summer camp program for 150 players in a school that he bought. He has run hockey schools, leagues and managed facilities. He owns three teams in the GMHL.
[77] He did not testify what the profit margin was for his own three teams.
[78] Mr. Russell testified that generally profits for the teams in the GMHL varied between losses of up to $15,000 in a year to profits of $100,000. The latter was a team owned by a university president.
[79] In 2011 there were 13 teams in the GMHL. There are now 20 teams. There was no evidence from any of those team owners as to how profitable the teams were and what costs were involved.
[80] There was no expert opinion evidence as to the viability of this project.
[81] Ms. Park listed all the particulars of her actual out-of-pocket expenses as $246.85 in office supplies; $1,636.44 in mileage to attend meetings; $332.76 in luncheon meetings; and $1,374.07, being 25 per cent of her household bills for office space which she planned to expense. These totalled $3,590.12.
[82] She had not done research of the population in the Halton area as to what other competition was out there. There was no market analysis even on a casual basis.
[83] I am left at a loss to determine on what basis I can consider what Ms. Park has lost in profits.
[84] She has no background in marketing or the business world. Her previous work experience was eight years selling insurance renewals, and then as an administrative assistant at McMaster Hospital ultimately doing fundraising operations. (This was the job from which she was let go.) She had never before run her own business. Ms. Park had no history of being involved in hockey in any way. Her nephew was a player in the United States. She has few personal contacts or knowledge of the hockey business.
[85] Ms. Park considered that she had assets for this business as she had experience running special events, public speaking and in fundraising. She considered herself a determined, motivated person with the ability to work in a team. Witnesses were impressed with her determination.
[86] I contrast this with her activity level since April 2011. She has been on social assistance, cleaning a house one day a week, and working part-time with two cerebral palsy patients on day trips. If she was so dynamic, why not go forward on another venture, or work somewhere full-time, or make efforts to locate ice time for her team to line up going forward with the league in 2012?
[87] Mr. Russell said the range for profit on a team was a loss of $10,000-$15,000 to a high of $100,000. This was anecdotal evidence. There is insufficient evidence for me to find on what end of that spectrum Ms. Park might have found herself. There is not enough history for me to be persuaded that her profits would have exceeded $700,000 in her first year.
LAW
[88] The challenge before the court is the assessment of damages that reasonably flow from the breach.
[89] The Court of Appeal in Kienzle v. Stringer (1982), 1981 1851 (ON CA), 35 O.R. (2d) 85, at p. 89 stated:
The extent of recovery for damages from breach of contract is described in the classic words of Baron Alderson in Hadley v. Baxendale (1854), 9 Exch. 341 at 355, 156 E.R. 145 at 151:
Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.
[90] The Court of Appeal also explained the loss of what is reasonably foreseeable, at p. 90:
The governing term is reasonable and what is reasonably foreseen or reasonably contemplated is a matter to be determined by a court. These terms necessarily include more policy than fact as courts attempt to find some fair measure of compensation to be paid to those who suffer damages by those who cause them. (See Reiter & Swan, Studies in Contract Law, (1980), p. 61, study 3, Katherine Swinton, “Foreseeability: Where Should the Award of Contract Damages Cease?”).
[91] The Court of Appeal in Martin v. Goldfarb (1998), 1998 4150 (ON CA), 41 O.R. (3d) 161, at p. 186 noted the responsibility of the plaintiff to adduce evidence as to the damages suffered:
The case in appeal involves circumstances where, by the appellant’s own conduct, the court is not furnished with evidence necessary to properly dispose of the damages portion of the case. This is not the “impossibility” to which Davies. J refers. The impossibility to which the cases refer is an impossibility in precisely calculating damages due to the nature of the damages and the conduct giving rise to such losses. For example, a future contingency which can not be accurately characterized and calculated should not prevent the award of substantial damages where a breach has been made out and damages flowing from the breach have been established to the satisfaction of the court. Specifically, I do not read the cases as departing in any way from the general principle that the plaintiff carries the burden of establishing a breach and the damages, including the quantum of damages, flowing from that breach: see T.T.C. v. Aqua Taxi Ltd., 1956 443 (ON SC), [1957] O.W.N. 65 (H.C.J.). As a result, the trial judge’s reliance on guess work is not supported by the authorities to which he refers as they reflected courts’ attempts to resolve complex damages questions in the face of future contingencies which could not easily be quantified. Such is not the case in the appeal in question. The difficulty in the present case arises where evidence is available but not adduced. Seemingly, any impossibility arising on the facts could have been cured by holding the appellant to his burden of establishing the damages and the quantum of damages through sufficient evidence.
[92] In Martin v. Goldfarb, the Court of Appeal sent the matter back to trial to assess the substantial personal damages that the plaintiff had failed to prove through expert evidence.
[93] As noted by Allen J. in Canadian Faces Inc. v. Cosmetic Manufacturing Inc., 2011 ONSC 6171, at para. 49, “Courts have grappled with quantifying damages where there is no expert evidence and where limited or no historical economic data is available to the court. The Ontario Court of Justice, General Division, drawing on U.S. jurisprudence, addresses the issue of proof of loss of future profits for a new enterprise”:
In assessing the reliability of projected future profits, a record of past earnings will obviously increase the certainty of such a prediction. However, a lack of evidence of past earnings does not automatically preclude a new business from recovering for lost profits. Rather, a new business must be allowed to prove lost profits to a reasonable level of certainly by expert testimony, by evidence of actual profits of similar businesses, by evidence of proven managerial experience and expertise, and by evidence of subsequent earnings if such evidence is available. Nevertheless, damages should not be awarded for lost profits which are entirely speculative and uncertain. See Al Edwards v. Container Craft Carton and Paper Supply Company, 327 P. 2d 622 (Calif. Dist. Ctr. App. 1958) and Cooke Associates Inc. v. Warnick et al, 664 P. 2d 1161 (Utah Sup. Ct.1983). But once a defendant has been shown to have caused a loss, liability should not be escaped because the amount of the loss cannot be proven with precision. Consequently, the reasonable level of certainty required to establish ‘the amount’ of the loss is generally lower than that required to establish ‘the fact or cause of a loss’. See Cooke Associates v Warnick, supra, at p. 156 and Bradshaw Construction Ltd. v. Bank of Nova Scotia, supra, at p. 28.
[94] Further, at para. 53 of the Canadian Faces decision, Allen J. states:
Expert evidence, empirical data and industry publications forecasting industry growth and profitability during the three years might have assisted the court in arriving at a reasonable assessment of CFI’s future lost profits. Absent a supporting evidentiary basis from which to assess CFI’s lost future profits, CFI’s special damage claim is founded on not much more than conjecture. I therefore will not allow that claim.
[95] Ms. Park’s counsel urged me to treat the matter as the Court of Appeal in British Columbia did in Houweling Nurseries Ltd. v. Fisons Western Corp. (1988), 1988 186 (BC CA), 37 B.C.L.R. (2d) 2 (C.A.), at p. 8-9:
In my view, the law may be summarized as follows. The basic rule is that damages for lost profits, like all damages for breach of contract, must be proven on a balance of probabilities. Where it is shown with some degree of certainty that a specific contract was lost as a result of the breach, with a consequent loss of profit, that sum should be awarded. However, damages may also be awarded for loss of more conjectural profits, where the evidence demonstrates the possibility that contracts have been lost because of the breach, and also establishes that it is probable that some of these possible contracts would have materialized, had the breach not occurred. In such a case, the court should make a moderate award, recognizing that some of the contracts may not have materialized had there been no breach.
The matter may be put another way. Even though the plaintiff may not be able to prove with certainty that it would have obtained specific contracts but for the breach, it may be able to establish that the defendant’s breach of contract deprived it of the opportunity to obtain such business. The plaintiff is entitled to compensation for the loss of that opportunity. But it would be wrong to assess the damages for that lost opportunity as though it were a certainty.
REMOTENESS
[96] A significant part of Ms. Park’s claim for damages relates to the two European trips which she planned to organize for profit.
[97] There is no evidence that this was ever discussed with the Wave when these two contracts were made until their breach.
[98] The effect of the doctrine of remoteness is discussed in Houweling Nurseries, at p. 9, saying it “is to exclude losses which it is established were caused by the breach of contract, but which were not reasonably foreseeable when the contract was made.”
MITIGATION
[99] The Supreme Court of Canada in Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51, [2012] 2 S.C.R. 675, at para. 24 reviewed the law:
In British Columbia v. Canadian Forest Products Ltd., 2004 SCC 38, [2004] 2 S.C.R. 74, at para. 176, this Court explained that “[l]osses that could reasonably have been avoided are, in effect, caused by the plaintiff’s inaction, rather than the defendant’s wrong.” As a general rule, a plaintiff will not be able to recover for those losses which he could have been avoided by taking reasonable steps. Where it is alleged that the plaintiff has failed to mitigate, the burden of proof is on the defendant, who needs to prove both that the plaintiff has failed to make reasonable efforts to mitigate and that mitigation was possible (Red Deer College v. Michaels, 1975 15 (SCC), [1976] 2 S.C.R. 324; Asamera; Evans v. Teamsters Local Union No. 31, 2008 SCC 20, [2008] 1 S.C.R. 661, at para. 30).
ANALYSIS
SPECULATIVE OR FUTURE LOSS
[100] The evidentiary basis in this case is thin. There has been no expert evidence, empirical data, industry publications or even evidence of profits by comparable teams. The court has been given little more than guess work as to the business plan for this team. The historical data, which is simply the April mini-camp, shows a loss rather than profit. The evidence of the league president is that one team made a profit up to $100,000, and some teams lose money in a year.
[101] In light of Ms. Park’s goal to make a profit of $792,533, more than eight times what other teams appear to have been able to garner, and in light of her lack of business and hockey experience, I find it more probable that she would face large losses in her first year.
[102] At the time of the breach, in mid-April, Ms. Park had no players signed up for the European trip, the summer program, nor the winter league. She did not have a scout arranged to get European or American players. The venture was still in such infancy that it is sheer conjecture to conclude that she would have garnered sufficient players to exceed the expenses.
[103] Unlike the trial court and the Court of Appeal in Martin v. Goldfarb noted above, I do not have evidence that Ms. Park sustained substantial or significant damages. I do have evidence that by not going forward with this venture, she may have avoided significant losses.
REMOTENESS
[104] Although it is noted above that there is no evidence that Ms. Park ever discussed the European trips with the defendants, they were aware that she required the ice time to establish a team. There was certainly evidence that it is popular for teams from Canada to travel to the United States and to Europe to play. I would not consider that profits from such trips would not be reasonably foreseeable by the defendant. The more significant issue is the lack of evidence supporting Ms. Park’s ability to raise sufficient players to exceed expenses and turn a profit.
MITIGATION
[105] After May 2, 2011, Ms. Park did not attempt to proceed to operate the business. At this time she invested in retaining lawyers to pursue the lawsuit. There is evidence that the defendants offered a solution on May 17, 2011, but Ms. Park did not respond or have her lawyer respond to the proposal. This is not surprising in light of the allegations of her breach of contract set out in the letter from the defendants’ counsel.
[106] She did try to look for ice at three other arenas, but I can appreciate that at that time, it was getting late for the 2011/2012 season.
[107] Ms. Park’s losses have been lessened by the deal the parties made on their own for the GMHL to transfer the team ownership to Mr. Conacher at Wave, and Mr. Conacher’s payment of $25,000. This allowed for Ms. Park’s initial investment with GMHL to be returned to her.
[108] I find that Ms. Park did what little she could to mitigate her loss.
DAMAGES AWARD
[109] The onus is on the plaintiff to prove damages on a balance of probabilities.
[110] As for her out-of-pocket expenses, I am satisfied that the plaintiff's net loss from the start-up costs incurred for the team, is the amount of $2,216.05. The balance of the start-up costs have been recovered by the plaintiff when the team was sold to Mr. Conacher.
[111] As for the out-of-pocket claimed damages of 25 per cent of her household bills ($1,374.07) that she planned to expense, they would have been incurred in any event and, as such, are disallowed.
[112] Let me now turn to the future loss of profits claimed. I am not persuaded that the plaintiff has proven these damages on a balance of probabilities as there is considerable uncertainty as to whether the team would have made any money whatsoever. The possibility that the plaintiff would have lost money is greatly increased because of her lack of experience. Many teams, even with experienced owners, make no profits and many even lose money.
[113] This is not a proper case where this court could apply a contingency assessment for the future loss claimed, because the damages claimed are so speculative and so unlikely that there would have been future profit, at the amounts claimed or any amount. The plaintiff's evidence on damages is entirely not reliable to satisfy this court that there would likely, or even possibly, have been a profit during the period of time that the contract for the ice existed.
[114] I conclude that to assess and award damages, on the evidence before me, is impossible. As stated in Martin v. Goldfarb, at p. 187, where it is impossible to assess damages on the evidence before the court, nominal damages should be awarded:
Having considered the above cases and others, notably Williamson v. Stephenson (1903), 1903 22 (SCC), 33 S.C.R. 323 and Penvidic Contracting Co. Ltd. v. International Nickel Co. of Canada, 1975 6 (SCC), [1976] 1 S.C.R. 267, 53 D.L.R. (3d) 748, I have concluded that it is a well established principle that where damages in a particular case are by their inherent nature difficult to assess, the court must do the best it can in the circumstances. That is not to say, however, that a litigant is relieved of his or her duty to prove the facts upon which the damages are estimated. The distinction drawn in the various authorities, as I see it, is that where the assessment is difficult because of the nature of the damage proved, the difficulty of assessment is no ground for refusing substantial damages even to the point of resorting to guess work. However, where the absence of evidence makes it impossible to assess damages, the litigant is entitled to nominal damages at best. [Emphasis added.]
[115] Martin v. Goldfarb was recently followed in Rosenhek v. Windsor Regional Hospital, 2010 ONCA 13, 257 O.A.C. 283.
[116] Given that the breach has been established, I find that nominal damages be awarded to the plaintiff for $1,000.
CONCLUSION
[117] Judgment shall issue to the plaintiff wherein the defendant is ordered to pay as follows:
i. Special damages of $2,216.05;
ii. Nominal damages for future losses of $1,000; and
iii. Pre-judgment and post judgment interest in accordance with the Courts of Justice Act.
COSTS
[118] If the parties are unable to agree on costs, submissions are to be made of three pages or less, plus any bill of costs and applicable offers to settle. The submissions are to be served on the following schedule; the defendant is to serve submissions on the plaintiff by October 16, 2013. The plaintiff is to serve submissions on the defendant by October 30, 2013. The plaintiff is to serve any reply submissions by November 6, 2013.
[119] All the submissions are to be bound together and forwarded by the defendant to be filed with the court by November 8, 2013.
M. J. Donohue J.
Released: September 25, 2013
COURT FILE NO.: CV-11-2356-00
DATE: 2013-09-25
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N
Janetta Park o/a Halton Huskies Junior Hockey Club
Plaintiff
- and –
Wave Hockey Inc.
Defendant
REASONS FOR JUDGMENT
M. J. Donohue J.
Released: September 25, 2013