BARRIE COURT FILE AND PARTIES

BARRIE COURT FILE NO.: CV-12-0357OTSR

DATE: 20140821

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

THE ATLAS CORPORATION

Plaintiff/Defendant
by Counterclaim

– and –

WALKER AGGREGATES INC.

Defendant/Plaintiff
by Counterclaim

B.S. Greenberg, for the Plaintiff/Defendant by Counterclaim

V.L. Vandergust, for the Defendant/Plaintiff by Counterclaim

HEARD: April 3, 4 and June 19, 2014

REASONS FOR JUDGMENT

DiTOMASO J.

INTRODUCTION

[1] The Plaintiff, The Atlas Corporation (“Atlas”) claims payment in the amount of $34,860 from the Defendant Walker Aggregates Inc. (“Walker”) plus interest. Atlas is a corporation that carries on business, amongst other things, as a supplier of equipment with an operator. Walker is a corporation that carries on business, amongst other things, as a supplier of asphalt aggregates, stone, and road construction services.

BACKGROUND

[2] Atlas rented certain equipment with an operator to Walker to strip overburden at Walker’s Severn Pines Quarry. The work was commenced around May 4, 2009 and was completed around May 20, 2009. Atlas rendered an invoice to Walker for $34,860 which Atlas claims is due and owing.

[3] Walker denies that it is bound contractually to Atlas for the work that was done and has a counterclaim. Further, Walker contends that any work done by Atlas was to be set-off against an account receivable owing by Tectonic Infrastructures Inc. (“Tectonic”) to Walker. During the spring of 2009, Walker had an outstanding account receivable with Tectonic. Walker takes the position that no money is owed to Atlas. Rather, while there is no dispute that the work was done and the amount of the invoice is correct, Walker’s position is that Atlas’ work and invoice was to be set-off or performed as a credit against the Tectonic account. Otherwise, Walker would not have allowed the work and would have used its own equipment and labour or its usual sub-contractors. Walker contends that at no time was it obliged to pay for the work without set-off against the Tectonic account. Walker alleges that the work was a contra against the Tectonic receivable.

[4] Atlas denies that its work was to be credited as set-off against the Tectonic receivable with Walker supposedly paying Atlas in exchange for an Atlas cheque on the Tectonic account.

[5] In April of 2010, Walker settled its outstanding account with Tectonic and wrote off the balance in the amount of $6,140. Walker advances a counterclaim in part for payment of $6,140. Atlas denies that any monies are due based on the counterclaim. Further, Atlas submits Walker’s settlement of Tectonic’s account has absolutely nothing to do with Atlas.

POSITIONS OF THE PARTIES

Position of The Atlas Corporation

[6] Atlas takes the position that it had a contract with Walker to supply equipment and an operator to strip overburden from Walker’s Severn Pines Quarry site near Orillia in May of 2009. Atlas submitted an invoice in the amount of $34,860 by invoice dated May 31, 2009 after work was completed. There was no issue in respect of the amount of the invoice or the services performed. The account remained outstanding despite repeated contacts by Atlas both verbal and in writing for collection. A demand letter was sent by Atlas’ lawyers dated July 13, 2010. In response to the demand letter, Walker replied by letter dated July 20, 2010, when, for the first time according to Atlas, Walker contended that the amount was not owed to Atlas. Rather, Walker alleges that at a meeting held on April 13, 2009 at the offices of Atlas, future work was solicited by Atlas at one of Walker’s quarry locations in order to reduce the outstanding balance owed by Tectonic. Further, Walker alleges that it was agreed that Walker and Tectonic would exchange cheques in the amount of $34,860 to cover the outstanding accounts with each company. Atlas denies the agreement alleged by Walker. Atlas denies the agreement regarding the set-off to reduce the outstanding balance owed by Tectonic and the cheque exchange. Further, Atlas denies any involvement in Walker settling the Tectonic account with the result that any outstanding balance was written off.

[7] Atlas submits that it did have a contract with Walker to perform the work and there is no dispute as to the nature and quality of the work that was performed or the amount that was charged. Further, Atlas does not agree that the work it performed was to be set-off against the Tectonic account receivable with Walker. Atlas maintains that there was never any agreement regarding a set-off or cheque exchange. As for Walker’s counterclaim, Atlas denies that any such counterclaim exists. The settlement of the Tectonic account by Walker had nothing to do with Atlas and, consequently, Walker’s counterclaim ought to be dismissed with costs.

Position of Walker Aggregates Inc.

[8] Walker alleges that it did not have a contract with Atlas to perform work at the Severn Pines Quarry site. Rather, that contract was with Tectonic. Atlas and Tectonic were always viewed as one entity because the principal of Atlas, Andrew Famiglietti, also happened to be a 50 percent owner of Tectonic in the Spring of 2009. Walker maintains that there was a meeting on April 13, 2009 at Atlas’ offices. At this meeting, Walker maintains that Atlas solicited future work at one of Walker’s quarry locations in order to reduce the outstanding balance owed by Tectonic. On May 4, 2009 Atlas commenced work at Walker’s Severn Pines Quarry using Atlas equipment in stripping material for production. This work ended on May 20, 2009 and Atlas’ invoice dated May 31, 2009 was submitted to Walker. Walker further submits that it was agreed that Walker and Tectonic would exchange cheques in the amount of $34,860 to cover the outstanding accounts with each company. The cheque exchange never took place although Walker pursued the cheque exchange with Atlas.

[9] Walker takes the position that it did not have a contract to perform the work with Atlas. Rather, it perceived Atlas and Tectonic as one company. Walker was of the understanding that work performed by Atlas would be set-off against Tectonic’s account receivable with Walker. This was the understanding reached at the April 13, 2009 meeting at the offices of Atlas. There was to be a set-off or contra against Tectonic’s account receivable with Walker and the set-off would be implemented by means of an exchange of cheques in the amount of $34,860 to cover the outstanding accounts with each company.

[10] In April of 2010, Walker settled Tectonic’s outstanding accounts writing off an outstanding balance of $6,100. Walker maintains a counterclaim in the amount of $6,100, damages and further maintains that the Atlas action for the unpaid amount of $34,860 ought to be dismissed with costs.

ISSUES

[11] There are a number of issues to be determined as follows:

(1) Does Atlas have a contract with Walker?

(2) Is the Atlas invoice subject to set-off or contra against the Tectonic receivable with Walker?

(3) Does Walker have a valid counterclaim?

ANALYSIS

[12] This action was brought under the Simplified Procedure provided in Rule 76 of the Rules of Civil Procedure.

[13] At trial, the following witnesses testified for Atlas:

Andrew Famiglietti, Owner and Principal of Atlas; and
Doug Williams, Equipment Broker;
Frank Montesanti, Vice-President of Finance and Administration for Atlas.

[14] On behalf of the defence, the following witnesses testified:

Dwayne McKenzie, Manager of Walker’s Aggregate Division;
Terry Willms, Manager of Walker’s Georgian Paving Division;
Roger McGillvray, Manager of Walker’s Severn Pine Quarry; and
Vanessa Ingraham, Walker’s Credit Manager.

Admissions

[15] There were certain facts admitted by Atlas and Walker as follows:

Facts Admitted by Atlas

That Andrew Famiglietti was a director of the Plaintiff Corporation for the period January 1, 2009 through December 31, 2009.
That Andrew Famiglietti was a director of Tectonic Infrastructure Inc. (“Tectonic”) for the period January 1, 2009 through May 30, 2009.
That Andrew Famiglietti was a director of Tectonic for the period April 1, 2009 to December 31, 2009 and was no longer a director of Tectonic as of April 1, 2010. (Exhibit 1)

Facts Admitted by Walker

Between May 4, 2009 and May 20, 2009, The Atlas Corporation (“Atlas”) performed work at the Severn Pine Quarry (the “Quarry”).
Atlas’ work and materials for work at the Quarry were recorded on invoices (the “Invoices”).
The Invoices are dated between May 4, 2009 and May 20, 2009.
The Invoices are included in Atlas’ affidavit of documents at tabs 4 through 19.
Walker does not dispute the authenticity of the Invoices.
Walker does not dispute the quantum of work or materials in the Invoices.
Atlas rendered an account to Walker Aggregates Inc. (“Walker”) for the work performed, dated May 31, 2009 (the “Account”).
The Account is included at tab 20 of Atlas’ affidavit of documents.
The Account is for the work performed and materials used by Atlas at the Quarry.
Atlas performed the work listed in the account without deficiency.
Atlas performed the work listed in the account without delay.
Walker does not dispute the prices listed for the work in the Account.
Walker does not dispute the prices listed for the materials in the Account.
The Account is in the amount of $34,860.00 including GST. (Exhibit 2)

[16] The parties also agreed to file the Plaintiff’s Book of Documents at trial. (Exhibit 3) On consent, the parties agreed that Walker’s void cheque in the amount of $34,860 payable to Atlas Corporation dated July 24, 2009 was entered as Exhibit 4.

Issue #1: Does Atlas have a contract with Walker?

[17] Atlas claims payment from Walker in the sum of $34,860 being the cost of provision of equipment and services to Walker at Walker’s Severn Pine Quarry during the period May 4, 2009 – May 20, 2009, per the Atlas invoice J004820 dated May 31, 2009 plus prejudgment interest and costs.

[18] By way of Counterclaim, Walker claims from Atlas the sum of $100,000 as damages alleging that Atlas intentionally and negligently mislead Walker and as such is liable to Walker in damages for the amount written off by Walker ($6,100) in relation to the outstanding account of Tectonic and further claims exemplary damages on the basis that Atlas has attempted to dupe, swindle, mislead and misappropriate funds from Walker.[^1]

[19] Walker has admitted that between May 4, 2009 and May 20, 2009, Atlas performed work at Walker’s Severn Pine Quarry, that Atlas performed the work without deficiency and without delay, that Atlas rendered its account to Walker for the work performed by invoice dated May 31, 2009 and Walker does not dispute the price as listed for the work and materials as set out in the Atlas account. The Atlas account has not been paid. Walker disputes that it contracted with Atlas for these services.

[20] In its Amended Statement of Defence, Walker raises a number of grounds which Walker alleges relieves it of liability for payment of the invoice in question.

[21] There is no issue that for several years Walker supplied aggregate material to Tectonic, that municipal projects constituted a large portion of Tectonic’s construction work which often resulted in substantial lien and performance holdbacks from the municipalities who said holdbacks totalled approximately $94,000 in or about April 2009.[^2]

[22] It is further acknowledged that Andrew Famiglietti was a principal in both Atlas and Tectonic (as to a 50 percent equity interest in Tectonic as of April 2009).

(i) The Meeting of April 13, 2009 at Atlas’ Office

[23] In para. 5 of the Amended Statement of Defence, Walker alleges that it met with Atlas on or about April 13, 2009, in an effort to retire the Tectonic receivable in the course of which:

(a) Atlas suggested it would work off the Tectonic receivable and in this regard solicited work at one of the Walker’s quarries;

(b) that Atlas had never been a supplier to Walker and would not have been a supplier except for its offer to work off the Tectonic debt; and

(c) Walker agreed the work could be done as a credit against the Tectonic account and would not have otherwise allowed Atlas to carry out the work and would have utilized its own equipment and labour or that of its usual sub-contractors.

[24] For the following reasons, I find that none of these allegations are supported by the evidence at trial.

[25] I accept the evidence of Mr. Famiglietti. I find him to be a credible witness. He gave his evidence in a truthful and straightforward manner. His evidence was consistent at all times. I accept and prefer his evidence supported by the evidence of Mr. Montesanti over the evidence of Mr. Willms and Mr. McKenzie in respect of the arrangement and purpose of the meeting of April 13, 2009 at Atlas’ offices.

[26] There is no issue that a meeting took place at Atlas’ office on or about April 13, 2009. There is no dispute that Mr. Willms and Mr. McKenzie attended the meeting. There is some issue as to whether or not Mr. Montesanti attended. Both Mr. Famiglietti and Mr. Montesanti agreed that Mr. Montesanti was there. Mr. Willms and Mr. McKenzie dispute he was there. However, Ms. Ingraham in her evidence was taken to her letter of July 20, 2010 where she identifies Mr. Montesanti being at the meeting. According to her evidence, she was told of Mr. Montesanti’s attendance after the meeting by both Mr. McKenzie and Mr. Willms. She had made notes of Mr. Montesanti’s attendance but those notes were never produced during the course of these proceedings and never produced at trial. Later, at a mediation, Ms. Ingraham testified that Walker’s position changed to the effect that Mr. Montesanti was not in attendance at the meeting.

[27] I do not accept Walker’s inconsistent evidence in respect of Mr. Montesanti’s non-attendance at the meeting. Rather, I accept Mr. Famiglietti’s evidence and the evidence of Frank Montesanti himself as to his attendance at the meeting. I find that Mr. Montesanti did attend the meeting and his evidence was supportive of the evidence of Mr. Famiglietti.

[28] I find that Mr. Famiglietti called the meeting of April 13, 2009 because Tectonic was having financial difficulties. Atlas was not having financial difficulties. Tectonic owed Walker money in respect of a number of construction projects. Mr. Famiglietti as a 50 percent equity owner of Tectonic agreed to step in and discuss Tectonic’s financial situation with Tectonic’s suppliers. Walker was one of Tectonic’s suppliers and as of April 2009, Tectonic owed Walker approximately $94,000. This is evidenced by a number of exhibits and the testimony of various witnesses. The money was primarily owed to Georgian Paving which was the asphalt/paving division of Walker. A small amount was owed in respect of the supply of aggregate. Mr. Famiglietti testified that he wanted to keep Georgian Paving performing asphalt work and to receive a supply from Walker’s aggregate division to keep Tectonic competitive with its tenders. The aggregate would be supplied and Walker would be kept current on a go-forward basis.

[29] Walker was in agreement with the proposal and everyone was going to move forward together.

[30] I accept Mr. Famiglietti’s evidence that at the meeting there was no discussion regarding Atlas providing any work or services to Walker. The name of Atlas had not even come up in their discussions. Atlas had not agreed to do any work under any terms for Walker at that meeting. I accept the evidence of Mr. Famiglietti that the purpose of calling the meeting was to discuss Georgian Paving’s deficiencies which were holding up payment by three municipalities of not only to Georgian Paving but also to Tectonic for work performed. Mr. Famiglietti urged Mr. Willms to utilize his forces to remedy the deficiencies so that payment could be released by the municipalities (Town of Wasaga Beach, Town of Collingwood and Town of Blue Mountains).

[31] Although in her testimony, Vanessa Ingraham testified that there was no money owing regarding holdbacks to Tectonic and that all monies had been paid, she could not produce any documentation from any of the municipalities to support this claim. Her evidence was based on her telephoning someone at these municipalities. Her evidence is contradicted by a message from Laurie Wilson, Accounts Receivable, Walker Aggregates Inc. dated March 18, 2009 to Ms. Ingraham which sets out a total of $94,089.19 with holdbacks due regarding the four projects involving said municipalities.

[32] Mr. Famiglietti’s evidence is supported by the evidence of Mr. Montesanti who testified that prior to April 2009, he spoke with Ms. Ingraham about Tectonic not receiving its holdback monies because of deficiencies on both the Walker Aggregate side and the Georgian Paving side. Mr. Montesanti’s evidence was clear that once Tectonic would be paid from the holdbacks, then Walker would be paid as well. He testified as VP of Finance and Administration of Atlas that he was also familiar with Tectonic accounts. As of April 2009, Tectonic did not have money to pay the Walker accounts in the absence of the release of holdback monies. I also accept Mr. Montesanti as a credible witness who was knowledgeable about the accounts of both Atlas and Tectonic.

[33] While Tectonic was desirous of resolving outstanding accounts with Walker, Mr. Famiglietti testified that the key item on the agenda at the meeting was Georgian Paving cleaning up all the asphalt deficiencies, Walker continuing to supply Tectonic’s aggregate requirements on a current basis and working together on a go-forward basis. Mr. Famiglietti testified that Georgian Paving’s completion of the deficiencies was critical because it was holding up over $1,000,000 of holdback funds owed to Tectonic.

[34] Mr. Montesanti’s evidence is consistent with that of Mr. Famiglietti on this point. He testified that in their discussions with Mr. McKenzie and Mr. Willms, the topic of discussion was to work together on an ongoing basis, to clear deficiencies, to get holdback monies released and to have funds paid to clear Tectonic’s account with Walker. The parties had worked together for many years prior. The key was to stay current on the new supply of aggregate material, clear up deficiencies by Georgian Paving and chip away at Tectonic’s outstanding accounts.

[35] I also accept the evidence of Mr. Famiglietti and Mr. Montesanti that at the meeting of April 13, 2009 there was no discussion in the course of the meeting about Atlas providing work or services to Walker to be set-off or applied against Tectonic’s outstanding account with Walker. Atlas did not agree to do any work under any terms for Walker at that meeting. I accept Mr. Famiglietti’s evidence in this regard. I accept the evidence of Mr. Famiglietti that he never agreed on behalf of Atlas to an arrangement where Atlas would provide work to Walker and that the value of that work would be set-off against Tectonic’s obligations to Walker. Further, I accept his evidence that Atlas never did anything to lead Walker to believe that Atlas did not expect payment of its invoice.

[36] I further accept Mr. Montesanti’s evidence that at no time during the meeting was it discussed that Atlas would do work for Georgian Paving or Walker. Atlas’ business was not discussed at the meeting. Walker continued to supply Tectonic subsequent to the April 2009 meeting and Tectonic’s accounts for supplies by Walker for aggregate were paid on a current basis.

[37] Noticeably absent in the evidence of Mr. McKenzie in-chief was any reference to the important holdback issue. Mr. McKenzie did contact Roger McGillvray, Manager of the Severn Pines Quarry to see if some of “Andrew Famiglietti’s equipment” could do some work to pay off some of the outstanding debt. Mr. McKenzie “assumed” because he was dealing with Mr. Famiglietti that “it’s the same – Tectonic/Atlas”. Mr. McKenzie made no distinction between the two companies. Mr. McGillvray was given approval to get in touch with Tectonic’s office.

[38] In cross-examination, Mr. McKenzie agreed that the meeting was primarily arranged to deal with Georgian Paving’s receivables and not any aggregate receivables. He was asked to accompany Mr. Willms at the meeting. He was not familiar with the outstanding construction receivables in April of 2009. However, he was aware that there were outstanding receivables relating to Georgian Paving and that those receivables related to holdbacks on municipal jobs. He was not aware that part of Tectonic’s difficulty was that the municipalities were alleging deficiencies. He did not recall a discussion at the meeting in respect of the holdbacks. He agreed that possibly he was not listening.

[39] He then agreed in cross-examination that the discussion involved Tectonic doing what it could do to correct deficiencies and arrange for the release of holdbacks from the municipalities and that when those holdbacks were received, monies would be used to pay off Georgian Paving. Perhaps it was also discussed that Georgian Paving would have to address deficiencies. He confirmed that there were really no concerns about aggregate receivables which were virtually non-existent. He really did not have a say as to what was going on. He agreed that Mr. Famiglietti that he needed competitive pricing regarding the supply of aggregate and that aggregate supply would be paid on a current basis.

[40] Mr. McKenzie had no notes of the meeting and everything discussed was related to the Georgian Paving accounts.

[41] He testified that at the meeting nothing was agreed to, that Tectonic would do any work for Georgian Paving, Walker or anyone else. It was not agreed that Tectonic was going to do any work or that that work would be applied to Tectonic’s receivables. This was not agreed to or finalized at the meeting of April 13, 2009. The only discussion was that there was a possibility down the road for doing work to pay down debt. Roger McGillvray told Mr. McKenzie that there was work that could be done at the pit. It was Roger McGillvray that made further arrangements. Mr. McKenzie never contacted either Mr. Famiglietti or Tectonic. There was no discussion at the meeting of any services to be provided by Atlas. In fact, Atlas was never mentioned at all at the meeting. Once Mr. McGillvray was given the go-ahead to make arrangements for the stripping, Mr. McKenzie had nothing more to do with that. He directed Mr. McGillvray to use Tectonic to do the stripping. He did not know whether Mr. McGillvray did that. Nevertheless, the job was done although Mr. McKenzie did not know who did the stripping.

[42] Further, he assumed that he saw the invoice from Atlas. He could not recall what was to be done with this invoice. He never instructed anyone as to what was to be done regarding the Atlas invoice and nobody made any inquiries of him. At some time, and this would be a guess, in August/September 2009 Ms. Ingraham first brought to his attention the outstanding invoice. At that time, he confirmed that the stripping had been done by Tectonic. He remembered something about this discussion although he did not know the date. He further testified “I was under the impression that it was done by Tectonic to pay down the debt because that’s what we had discussed at the meeting with Terry and Andrew. And then I assume it was taken care of after that.”

[43] Mr. McKenzie’s evidence in respect of what happened at the meeting and afterward is vague and unreliable. His evidence regarding who was to do the work was based on an erroneous assumption that Andrew Famiglietti, Tectonic and Atlas were all one entity. His “impression” is unreliable that Tectonic was going to do the work to pay down debt because that was what was discussed at the meeting between Mr. Willms and Mr. Famiglietti. I do not accept Mr. McKenzie’s evidence on this point as I find that it was not discussed at the meeting that Tectonic would do work to pay down debt.

[44] I come to the evidence of Mr. Willms. I found Mr. Willms to be, unlike Mr. McKenzie, somewhat forceful and argumentative. In 2009, he was the general manager of Georgian Paving, a construction division of Walker Aggregates. He did not see any difference between Atlas and Tectonic. He thought it was the same company. There was, same ownership and control and he thought that Atlas owned both companies. In this regard, I find that Mr. Willms was wrong. Further, he was never led to believe by Andrew Famiglietti that they were one and the same company. The evidence is clear that Atlas and Tectonic were two separate companies. Mr. Famiglietti was a 50 percent equity owner in Tectonic as at April 2009. As at April 2010, he had sold his interest to another party.

[45] Mr. Willms’ evidence in respect of the meeting of April 2009 varies from Mr. Famiglietti’s evidence as Mr. Willms testified that he was the one who called the meeting.

[46] I accept Mr. Famiglietti’s version of what transpired at the meeting. Mr. Willms confirmed that they talked about the outstanding holdbacks at the meeting. He testified that Mr. Famiglietti offered to do some work if they had any. Mr. Willms testified: “We didn’t have that equipment so he wanted to do work for us to work off his debt”. This was to be a reciprocal arrangement. Mr. Famiglietti asked Mr. McKenzie if there was any work to be done at the Severn Pines Quarry. Mr. McKenzie indicated that he would look into it. Mr. Willms denied that there were any deficiencies to be remedied by Georgian Paving in respect of the municipal jobs. There is ample evidence to the contrary. He could not recall if he received a call from someone at Atlas/Tectonic about paying off the bill for the quarry work. He could not recall anyone from Atlas ever speaking to him about payment of money for the quarry work. This evidence is inconsistent with his evidence on cross-examination when he was taken to certain emails sent by Frank Montesanti and received by Mr. Willms in June of 2010.

[47] In cross-examination, Mr. Willms had a different version of the discussion in respect of holdbacks. Mr. Willms testified that Mr. Famiglietti was unaware if any monies had been released and that Mr. Willms would have to talk to Mr. Montesanti. I do not accept this evidence. Mr. Famiglietti and Mr. Montesanti were both painfully aware of Tectonic’s financial problems which largely stemmed from the non-release of holdback monies. Mr. Famiglietti knew exactly what the problem was regarding the lack of cash flow. This was not something that was simply passed off to Mr. Montesanti. To the contrary, it clearly motivated Mr. Famiglietti to call the meeting.

[48] When asked if there were any specific discussions regarding Atlas by name to do the work to pay down Tectonic’s receivable, Mr. Willms’ evidence was vague. He replied “it would not be outside of the realm of possibility that that was brought up at the meeting”. He confirmed that Atlas did not know owe any money to Georgian Paving or Walker. He confirmed there was never any discussion whatsoever that Atlas would do work to pay down Tectonic’s receivable. He agreed that the issue was whether there was work for Tectonic to do that could pay down the receivable, according to Mr. Willms’ evidence.

[49] He agreed that Mr. McKenzie had to see if there some work for Tectonic to pay down the receivable. He agreed that there was no commitment at the time of the meeting for Walker or Georgian Paving to provide Tectonic with any work. There was never any discussion as to the logistics of how this was going to be done. There was never any discussion about exchanging cheques to work off the receivable. Then Mr. Willms testified that it was Tectonic working off the receivable but “we will work off the receivable”.

[50] Mr. Willms disagreed that there were deficiencies that Georgian Paving needed to remedy in respect of the municipal work. No steps were taken to collect on a labour/material bond. He had good working relations with Tectonic and expected to be paid ultimately.

[51] He had no knowledge in respect of subsequent arrangements made to provide work at the Severn Pine Quarry. He was not involved with any specific arrangements.

[52] I find that all discussions at the meeting of April 13, 2009 related to Tectonic and its outstanding receivable and that “Atlas” was at no time even mentioned in the course of the meeting. Atlas owed no money to Walker. Atlas did not have the outstanding receivable but Tectonic did.

[53] Further, although both Messrs. Willms and McKenzie testified that there may have been discussions about Tectonic doing work to assist in its ability to retire its debt at the meeting, there was no acknowledgement by Walker that any such work was available and no commitment or agreement to provide any work to Tectonic in the future made by Walker. At the meeting, the question of any future work was unconfirmed.

[54] In addition, neither Mr. Willms nor Mr. McKenzie knew the true status of either Atlas or Tectonic. They were under the mistaken impression or assumption that Mr. Famiglietti, Atlas and Tectonic were all one. The evidence does not support the allegation that Mr. Famiglietti or Atlas promoted or in any way led Walker or any Walker representative to believe that Mr. Famiglietti, Atlas or Tectonic were one and the same entity.

(ii) Events After the Meeting of April 13, 2009 at Atlas’ Office

[55] The evidence is clear that after Mr. McKenzie inquired of Roger McGillvray, the manager of the Severn Quarry pit, some stripping work became available at the quarry site. Walker needed specialized equipment to do the stripping job. Mr. Doug Williams, an equipment broker, arranged with Mr. McGillvray to supply an articulated rock truck, bulldozer, and operator/operators. The equipment and operators came from Atlas. Mr. Williams testified that he had no discussions with Mr. McGillvray as to the work at the quarry being off-set in respect of outstanding accounts owed to Walker. Mr. Williams testified that this was none of his business. Brokering the deal meant that he arranged for heavy equipment to be transported to the quarry site and then removed after the job was done. He also engaged in discussions fixing a rate with Mr. McGillvray although Mr. McGillvray has a different recollection. This is of no consequence as the rate, nature of the work and amount of the invoice are not in dispute. The work was commenced on May 4, 2009 and completed on May 20, 2009. There is no dispute in this regard. Atlas’ invoice dated May 31, 2009 was then sent to Walker. (See Exhibit 3 Tab 3) The account was unpaid.

[56] I accept the evidence of Mr. Montesanti who testified that he was involved in the dealings with Mr. Williams who brokered the supply of services. Mr. Montesanti testified that he followed up with Walker trying to collect the outstanding Atlas bill commencing 90 days after the date of the invoice (end of August beginning of September 2009). The outstanding invoice was brought to the attention of Mr. Famiglietti. Mr. Montesanti spoke with Ms. Ingraham about payment of the account and there were conversations on a regular basis with her that the account was outstanding.

[57] I accept Mr. Montesanti’s evidence that every time the invoice was brought up, he was told that a cheque would be forthcoming. The evidence of Mr. Montesanti was consistent with the evidence of Mr. Famiglietti. Mr. Famiglietti spoke with Mr. Willms a few times regarding payment of the invoice. Mr. Famiglietti’s evidence was that Mr. Willms said that they (Walker) were going to get the invoice paid. Mr. Famiglietti was told this by Mr. Willms a few times. A couple of times Mr. Montesanti reported to Mr. Famiglietti that Walker had promised a cheque but the cheque was not sent. On the three or four times that Mr. Famiglietti spoke with Mr. Willms, Mr. Willms’ response was always that he would look into the matter and get the invoice paid. In any of these discussions, Mr. Willms never indicated to Mr. Famiglietti that it was Mr. Willms’ understanding that there was going to be an arrangement whereby the Atlas invoice would be a set-off or contra against Tectonic’s outstanding obligations to Walker. During the course of Mr. Famiglietti’s discussions, no-one from Walker ever disputed that the invoice was owing. There was no dispute in respect of the invoice until Atlas received the letter dated July 20, 2010 from Walker. Mr. Famiglietti was surprised to receive the letter, gave it to Mr. Montesanti who in turn referred it to Atlas’ lawyers.

[58] I accept Mr. Montesanti’s evidence as to his attempts to collect the account. Promises were made to receive payment but no payment was received. There were never any discussions with Ms. Ingraham that the Atlas invoice was not payable because it was to be set-off against Tectonic’s outstanding accounts. At no time was there any mention of set-off during his discussions with Ms. Ingraham. Further, there was no request from anybody at Walker that Atlas deliver a cheque in the amount of its invoice to Walker in exchange for a similar cheque from Walker to Atlas.

[59] Mr. Montesanti then testified about his letter of January 7, 2010 sent to Roger McGillvray regarding the outstanding amount. The invoice of May 31, 2009 was attached to the letter. Mr. McGillvray received this letter and referred it to Walker’s accounting department. He did not respond to Atlas. At no time did Mr. McGillvray have any communications or dealings with Atlas or Tectonic indicating that his understanding was that services would be provided on a contra basis regarding the Tectonic account. He had no personal knowledge of the relationship between Tectonic and Atlas only what he was told. He was under the “assumption” that Mr. Famiglietti was running Tectonic. Mr. McGillvray was also labouring under another mistaken assumption that Atlas and Tectonic were one entity. He never indicated to Mr. Famiglietti that Mr. McGillvray’s understanding was that any costs relating to supply of the equipment and labour was going to be credited against Tectonic’s outstanding receivable account. All that Mr. McGillvray was told was that there had been an agreement to try and hopefully work out the account. However, he testified that he was never told that there was an arrangement whereby the work would be done for nothing and applied against the account.

[60] Mr. McGillvray recalls further inquiring about the outstanding account and, again, indicated the matter had been forwarded to the accounting department and this was the last he heard of the matter.

[61] On June 10, 2010 Mr. Montesanti sent an email to Mr. Willms regarding the outstanding invoice. Mr. Montesanti indicated that notice was sent to Mr. McGillvray on January 7, 2010 but without success. (See Exhibit 3 Tab 9).

[62] Mr. Willms responded within five minutes to Mr. Montesanti’s email by an email of his own dated June 10, 2010. Mr. Willms indicated in his email that Dwayne McKenzie was looking after this file and that Mr. Willms would talk to Mr. McKenzie about this matter and get back to Mr. Montesanti. The evidence is that Dwayne McKenzie was not looking after the file and that Mr. Willms did not get in touch with Mr. McKenzie and that Mr. McKenzie did not get back in touch with Mr. Montesanti. Mr. Montesanti followed up by email on June 24, 2010, not having heard from anyone at Walker in respect of this matter. (See Exhibit 3 Tab 10).

[63] Having heard nothing from Walker, a demand letter was sent by counsel for Atlas. This letter is dated July 13, 2010 demanding payment of $34,860. (See Exhibit 3 Tab 11).

[64] What Atlas received in response was a letter sent to Mr. Famiglietti by Ms. Ingraham dated July 20, 2010 with a copy to Mr. Willms and Mr. McKenzie. I find this letter is the first time that Atlas was advised by anyone at Walker that at the meeting of April 13, 2009 Atlas solicited future work in one of the quarry locations to reduce the outstanding balance by Tectonic. Further, also for the first time, Atlas learned there was an agreement at the meeting that there would be a cheque exchange to cover the outstanding accounts with each company and further, for the first time, in April 2010 Walker was approached by Tectonic regarding a change of ownership. The letter stated Tectonic accounts were settled and an outstanding balance was written off. On May 3, 2010 in response to a call from Frank Montesanti requesting payment of the Atlas invoice, Walker’s position was that the payment was already made and applied to the Tectonic account “as per the original agreement”.

[65] Mr. Montesanti testified that after sending his request for payment on January 7, 2010, he never received any response from Ms. Ingraham in any of their discussions that there was an issue about set-off so the invoice was not being paid. Rather, Ms. Ingraham’s response was that a cheque would be forthcoming.

[66] Mr. Montesanti was taken through Ms. Ingram’s letter of July 20, 2010. He denied that there was an agreement at the April 13, 2009 meeting about Atlas soliciting future work in one of Walker’s quarry locations in order to reduce the outstanding balance owed by Tectonic. He denied that there was any agreement between Atlas and Walker to exchange cheques at the meeting. In fact, it was Mr. Montesanti’s evidence which I accept that there was no discussion with anybody at Walker regarding the exchange of cheques prior to the receipt of Ms. Ingraham’s letter.

[67] He further testified that he had no knowledge nor was he involved in any attempts by Walker to complete a cheque exchange. He had no knowledge in respect of the write-off of any the Tectonic’s accounts by way of later settlement. In addition, in respect of his conversation with Ms. Ingraham on May 3, 2010 he denied any mention of a set-off or a contra. His recollection is that he had a conversation with her about payment of the outstanding Atlas invoice in the amount of $34,860. In his conversation with Ms. Ingraham, she did not mention any set-off or contra or any basis upon which the Atlas invoice was not payable. His recollection is that payment was promised, payment was forthcoming and payment was never received. Mr. Montesanti was cross-examined about Ms. Ingraham’s letter and his evidence although challenged was uncontroverted. The first time Mr. Montesanti learned of Walker’s position about the set-off was in the letter of July 20, 2010. His evidence is clear that never in any conversation with Ms. Ingraham did she indicate Walker’s position that Atlas’ invoice had been applied to the Tectonic account. There were no discussions in this regard.

[68] On this issue, I find that Atlas contracted with Walker to provide heavy equipment and operators to strip overburden at the Severn Pines Quarry. At the meeting of April 13, 2009, there was a discussion involving Andrew Famiglietti, Frank Montesanti, Terry Willms and Dwayne McKenzie about the financial problems of Tectonic including approximately $94,000 owed by Tectonic to Walker. Also discussed were significant holdback monies, the release of which were dependent upon deficiency work to be done by Georgian Paving and Tectonic. There was also a general discussion about the possibility of Walker providing some work at their Severn Pines Quarry site to help reduce the debt. There was nothing specific discussed at the meeting about what company would do the work, about set-off or about cheque exchange. None of that was discussed. The matter was left on the basis that Mr. McKenzie would check with Roger McGillvray to see if there was any work available and that Walker would get back to Mr. Famiglietti. Mr. Williams entered the picture after being asked to contact Mr. McGillvray by either Mr. Famiglietti or Mr. Montesanti. He did so and brokered the arrangement between Atlas and Walker whereby equipment and manpower would be sent to the quarry site to perform the stripping. From May 4, 2009 to May 20, 2009 the work was done. There is no dispute in respect of the quality of the work or the cost or the amount of the invoice. The invoice was sent on May 31, 2009 and a cheque was issued by Walker payable to Atlas dated June 24, 2009 in the amount of Atlas’ invoice. (See Exhibit 4). This cheque was never released to Atlas by Walker.

[69] What transpires subsequent to the work being completed, are repeated attempts by Mr. Montesanti and Mr. Famiglietti on the part of Atlas to have the account paid. I accept that there is no discussion in respect of set-off or exchange of cheques until Ms. Ingraham sent her letter of July 20, 2010 to Mr. Famiglietti. This was the first time of any indication that the Atlas work was to be set-off against the Tectonic account, or that there was to have been a cheque swap or that Mr. Montesanti was advised on May 3, 2010 that Ms. Ingraham had already set off the Atlas invoice against the Tectonic account.

[70] Further, there was never any complaint by Walker that the account was not owing nor was there any suggestion by Walker that there ought to have been a set-off or cheque exchange at any between the time the invoice was rendered on May 31, 2009 and the time of Ms. Ingraham’s letter dated July 20, 2010.

[71] The evidence discloses that during this time frame there were promises of payment by Walker and in follow up to Mr. Montesanti’s inquiries, promises were made for payment but payment was never forthcoming. In fact, what ensued at Walker’s end, was Mr. McGillvray submitting the January 7, 2010 request for payment to the accounting department. No payment was forthcoming to Atlas. The June 10, 2010 inquiry by Mr. Montesanti to Mr. Willms did not produce a follow up. Mr. McGillvray was not handling this account at that time. Rather, the account was being dealt with by the accounting department. In addition, contrary to what Mr. Willms had indicated in his email, he never did communicate with Mr. McKenzie for follow up in respect of this matter. Mr. Montesanti’s email of June 24, 2010 was left unanswered by Walker. There was no communication from Walker about any problem regarding the account particularly in respect of any agreement regarding set-off or cheque exchange until July 20, 2010. All of that arose after Atlas’ lawyer delivered his demand letter of July 13, 2010.

[72] Ms. Ingraham was not at the meeting of April 13, 2009. She was only told what happened at that meeting by Mr. McKenzie and Mr. Willms. She also made notes in her file in respect of conversations with them and with Mr. Montesanti after the meeting of April 13, 2009. Although she testified that she had notes in her file upon which she based her July 20, 2010 letter, none of those notes were ever produced during the course of this litigation or at trial. She was told and it was her understanding that in the course of April 13, 2009 meeting arrangements were finalized where the Tectonic would provide services to set-off against the Tectonic account. This is what she was told by Mr. Willms and Mr. McKenzie. She agreed that if Mr. Willms and Mr. McKenzie indicated that from their recollection there was never any discussion of the exchange of cheques at the April 2009 meeting, this would be inconsistent with the information provided to her after the meeting. There was nothing in writing evidencing Walker’s position in respect of set-off. All that she understood was that the work was to reduce Tectonic’s debt.

[73] Ms. Ingraham’s evidence is not reliable in respect of either the issue of whether Atlas had a contract with Walker to do the stripping at the Severn Pine Quarry or in respect of the set-off issue. Her evidence detailed far more than was ever discussed or confirmed by Mr. Willms and Mr. McKenzie at the April 13, 2009 meeting on their own evidence. Her file notes on which she relied detailing conversations with Mr. Willms, Mr. McKenzie, Mr. Montesanti and perhaps others were never produced. Although she was initially told that there were four parties at the April 13, 2009 meeting, as set out in her letter of July 20, 2010, her evidence at trial changed. She testified that Mr. Montesanti was not at the meeting although she was told previously by Mr. Willms and Mr. McKenzie that he was. This evidence changed much later at a mediation when she was told that Mr. Montesanti was not there. Her evidence is inconsistent in this regard as well.

[74] No one from Walker challenged Atlas’ account and, in fact, a cheque had been issued by Walker dated June 24, 2009 for the payment of Atlas’ bill in the amount of $34,860. That cheque was held by Walker and never released. It was subsequently voided sometime in January of 2010. However, the Atlas account remained unpaid and no one from Atlas was ever told that Walker’s payment was the subject of the set-off against the Tectonic outstanding account . Rather, the set-off was a unilateral step taken by Walker’s accounting department.

[75] What is clear is that Walker had second thoughts about paying the Atlas account because the Tectonic account was still outstanding. It was only later, much later, that Walker took the position that Atlas’ account was to be set-off and there was to be a cheque exchange which never happened. Only after the fact was the issue raised that the work should have been done by Tectonic as opposed to Atlas. The fact is that Atlas did the work. There is no dispute in respect of the nature and quality of the work that Walker wanted done. The work was invoiced by Atlas and never paid by Walker although Walker acknowledged the invoice and promised to pay Atlas. For these reasons, I find that Atlas did have a contract with Walker to perform the stripping work at Walker’s Severn Pines quarry.

Issue #2: Is the Atlas invoice subject to set-off or contra against the Tectonic receivable with Walker?

[76] In paragraph 6 of its Amended Statement of Defence, Walker alleges an agreement between the parties to exchange or cross cheques upon completion of the work pursuant to which Walker would pay Atlas in exchange for an Atlas cheque on the Tectonic account.

[77] I find that the allegations set out in Walker’s pleadings are simply not supported by the evidence at trial.

[78] There was no agreement to provide work to Atlas or Tectonic at the meeting of April 13, 2009. The parties left the meeting on the basis that Mr. McKenzie would check with Mr. McGillvray to see if there was a possibility of any work available. There were no details or specifics dealt with beyond that. There was no discussion in respect of the exchange of cheques. The discussions were very loose at best whether any work could be done to work off the Tectonic account. The primary focus of the meeting related to release of holdback monies by the municipalities which far surpassed any amount for work that could be done in Walker’s quarry.

[79] Rather, Ms. Ingraham’s evidence confirms that the exchange of cheques originated with her after receipt of Atlas’ invoice in order to facilitate proper bookkeeping. She testified in cross-examination that it was never her understanding that there was an agreement to exchange cheques. It was something that was implemented as a procedure by Walker to facilitate Walker’s accounting. On cross-examination, she conceded that there was no agreement to exchange cheques at the April 2009 meeting. Once again, in respect of paragraph 6 of the Amended Statement of Defence, she was surprised when she saw Walker paying Atlas in exchange for an Atlas cheque. This was not her understanding. She acknowledged that after the Atlas invoice was delivered there were numerous requests by Atlas for payment.

[80] In paragraph 7 of the Amended Statement of Defence Walker alleges that it called Atlas to arrange the exchange of cheques on receipt of the Atlas invoice and that Atlas did not respond nor did it submit any further requests for payment for the work done or monthly statements. This allegation is simply not true and is not borne out by the evidence at trial. The evidence at trial clearly establishes the numerous requests for payment by Atlas which is supported by documentation tendered in evidence (see Exhibit 3 Tabs 7, 9, 10 and 11).

[81] There is also the evidence of Mr. Famiglietti and Mr. Montesanti regarding follow-ups for payment. Mr. Willms confirmed that Atlas was requesting payment by in or about August 2009 and such requests were discussed at Walker’s internal meetings. Mr. McGillvray testified that Atlas was seeking payment. There were numerous telephone conversations and communications between Mr. Montesanti and Ms. Ingraham regarding the payment with assurances that payment would be provided.

[82] I find there was no agreement regarding the exchange of cheques as pleaded. Further, in its Amended Statement of Defence at paragraphs 8 and 9, Walker submits that Atlas is estopped from seeking payment of its account by its conduct in failing to supply monthly or other statements after delivery of its initial invoice and now seeks payment. In doing so, it is alleged that Atlas has misrepresented the basis upon which the work would be performed.

[83] I find that at no time did Atlas misrepresent the basis upon which the work was to be performed.

[84] The principle of promissory estoppel (estoppel by conduct) provides that if a party by his conduct leads another to believe that strict contractual rights will not be insisted upon, intending that the other party act on that belief and the other party does in fact act on it, the first party will not thereafter be allowed to insist on its strict legal rights if it would be inequitable to do so. (See Petridis v. Shabinsky (1982), 1982 1829 (ON SC), 35 O.R. (2d) 215; and R.A. Keane Enterprises Ltd. v. Drago’s Place Ltd., [1990] O.J. No. 673).

[85] The evidence by Mr. McGillvray that he assumed the work would be done by Tectonic or the evidence of Mr. Willms, Mr. McKenzie and Mr. McGillvray that Mr. Famiglietti, Atlas and Tectonic were all one and the same is based upon the erroneous impression and erroneous assumption on the part of Walker’s representatives. Mr. McGillvray’s evidence was that when he requested the work to be done at the quarry, he did not advise Mr. Famiglietti that such work was to be provided as a set-off against Tectonic’s outstanding account or that such set-off was at any time discussed. In fact, Walker raised no objection whatsoever upon receipt of Atlas’ invoice. However, Walker then alleges an agreement with Atlas to provide the work on a set-off basis. I find Walker’s allegation is without merit posited to avoid paying Atlas’ undisputed invoice. Evidence at trial clearly establishes that Atlas continued with ongoing requests for payment of its outstanding account from and after August 2009. There is no evidence of any conduct by Atlas which could possibly lead Walker to believe that Atlas did not intend to pursue a claim for payment of its account. Walker alleges that Atlas did not deliver monthly statements following its original invoice. This was not Atlas’ practice. Neither was it the practice of Walker to send out monthly statements for outstanding accounts. Rather, both parties pursued payment by way of direct verbal communications with its customers. Further, Atlas followed-up by Mr. Montesanti’s letter and emails followed by a demand letter by Atlas’ counsel.

[86] At paragraph 10 of the Amended Statement of Defence, Walker alleges that Atlas had a vested and ownership interest in Tectonic, that Atlas volunteered its services to reduce a Tectonic receivable and that Atlas wished to clear up the Tectonic account to facilitate a sale of all or part of Mr. Famiglietti’s interest in Tectonic.

[87] These allegations are simply not supported by the evidence at trial. At no time was “Atlas” discussed in the course of the meeting of April 2009, or at the time the request for equipment and services was made by Mr. McGillvray or at any time prior to the receipt of the Atlas invoice. The evidence of Mr. Famiglietti and Mr. Montesanti, which I accept, is that they had nothing whatsoever to do in respect of settlement of the Tectonic account. Further, it is clear that the settlement of the Tectonic account was effected without resolution of Walker’s alleged claim for set-off as confirmed by Exhibit “A” appended to the Release. (Tab 8 of Exhibit 3.) In consideration of a payment of $53,000 by Tectonic to Walker, Walker released Tectonic. The Release is dated April 20, 2010. Exhibit “A” attached to the Release sets out the holdback payable by Tectonic to Walker in the amount of $93,299.29. There is no set-off reflected in of Exhibit “A” of the Atlas invoice in the amount of $34,860.

[88] The accounting set out at paragraph 12 of the Amended Statement of Defence is not in accordance with Schedule “A” appended to the Release. Exhibit “A” is in the approximate sum of $94,000 which is the same amount that was outstanding in March of 2009 and September of 2010 as reflected in Ms. Ingraham’s emails to Laurie Wilson. (See Exhibit 3 Tab 1) and in the Tectonic Statement of Account dated December 9, 2009 (see Exhibit 3 Tab 6). The sum of approximately $94,000 as an account receivable balance for Tectonic keeps surfacing without any credit against the account for work performed by Atlas. There is no evidence that Walker had at any time issued a contra credit in reduction of the Tectonic account as alleged. Walker’s belief that Atlas’ work was being done in reduction of the Tectonic account flies in the face of Atlas’ written request for payment (See Exhibit 3 Tabs 7, 9, 10 and 11) and the Release together with Exhibit “A” attached.

[89] Ms. Ingraham testified that her letter of July 20, 2010 was the first time there was any written communication to Atlas or Tectonic indicating that the amount of Atlas’ invoice was credited to Tectonic’s account. The previous documents referred to show no such credit given to Atlas. There is no evidence of any response to Atlas’ letter or emails. While she testified that Tectonic was advised that a credit was issued to its account, there is no documentary evidence to that effect. Rather, there is documentation showing no credit. She did not believe that there was ever any statement sent to Tectonic showing the application of a credit given for $34,860. The only way that Tectonic would know that the credit had been applied was when she spoke to Mr. Montesanti. When the settlement of Tectonic’s account had taken place evidenced by the Release, Ms. Ingraham never advised or sent anything to Atlas saying that the Atlas invoice had been resolved in the settlement of the Tectonic account. The first notice of the application of a credit by Ms. Ingraham was evidenced by her letter of July 20, 2010. She agreed that she had no knowledge of when Mr. Famiglietti sold his shares in Tectonic. There was nothing to support the allegation that this settlement of Tectonic’s account had any bearing on the sale of Mr. Famiglietti’s shares in Tectonic. She agreed that there was nothing to support the allegation that settlement of Tectonic’s account had any bearing on the sale of Mr. Famiglietti’s shares in that company.

[90] At paragraph 14 of the Amended Statement of Defence, Walker pleads that in the absence of Atlas’ agreement to provide work as a credit against the Tectonic account, Atlas negligently led Walker to believe such to be the case. Again, Walker alleges that it was “duped” into believing that Atlas was abiding by the credit to the Tectonic account agreement even in the absence of such agreement. This allegation is not supported by the evidence. The evidence at trial clearly indicates the repeated requests by Atlas for payment both verbally and in writing. Despite such repeated requests, Walker had delivered no written response to same indicating its position as claimed prior to the correspondence of Ms. Ingraham dated July 20, 2010. (See Exhibit 3 Tab 12).

[91] With respect to Walker’s claim for set-off pursuant to section 12 of the Construction Lien Act, the parties agree that the Act does not apply in the present case.

[92] Regarding Walker’s claim for set-off, independent of the provisions of the Construction Lien Act, I find that Walker is not entitled to legal set-off because the debts are not mutual. (See Holt v. Telford 1987 18 (SCC), [1987] 2 S.C.R. 193; Re SemCanada Crude Company (2009), ABQB 252

[93] Although equitable set-off may be available in the absence of mutuality, in order to establish entitlement to equitable set-off: (a) Walker must show some equitable ground for being protected against Atlas’ demands; (b) the equitable ground must go to the very root of Atlas’ claim; and (c) Walker’s cross-claim must be so clearly connected with Atlas’ demand that it would be manifestly unjust to allow Atlas to enforce payment without consideration of the cross-claim.[^3]

[94] I agree with the submission on behalf of Atlas that any equitable ground for set-off is dependent on Walker establishing an agreement for set-off with Atlas. I find that the outstanding Tectonic account is not “so clearly connected” or at all connected with Atlas’ demand for payment given that the Tectonic account pre-existed and was totally independent of any work performed by Atlas.

[95] I find that the evidence at trial supports the finding that Walker is not entitled to legal or equitable set-off, that the principle of promissory estoppel does not apply in the present case and that Walker has failed to establish the existence of an agreement pursuant to which Atlas was to provide the work at the Severn Pine Quarry as a credit against the Tectonic account. Clearly, there is no evidence that any agreement whatsoever existed between Atlas and Walker in the course of a meeting held on April 13, 2009. Atlas was not even mentioned in the course of the meeting and Walker provided no commitment whatsoever to provide any future work. There is no evidence of any set-off or contra discussed or mentioned at the time the work was requested by Mr. McGillvray. He acknowledged his assumption only that the work would be done by Tectonic and that Walker did not have the necessary equipment nor was its usual sub-trades available to carry out the work at the quarry at the time the request for work was made to Atlas.

The Settlement of the Tectonic Account

[96] Although Ms. Ingraham testified as to her understanding in regard to the settlement of the Tectonic account, she had no personal knowledge. No party was called with any direct involvement regarding the settlement of this account to support Walker’s position that set-off of the Atlas account was considered in final resolution. The Release and Exhibit “A at Exhibit 3 Tab 8 does not reflect any credit given or made or set-off of the Atlas invoice. In addition, the parole evidence rule prohibits evidence contradicting written terms of the Release and in particular, Tectonic’s existing liability in accordance with Exhibit “A” of the Release.[^4]

[97] For these reasons, I find that the Atlas invoice, was never subject to a set-off or contra against the Tectonic account with Walker. Further, I find that Atlas is entitled to Judgment against Walker for payment of the sum of $34,860 plus interest and costs.

Issue #3: Does Walker have a valid counterclaim?

[98] Walker has not been successful in defence of Atlas’ claim. Walker has sustained no damages as it received full credit and payment pursuant to its settlement agreement found at Exhibit 3 Tab 8 and in accordance with Walker’s accounting more particularly set out in paragraph 12 of its Amended Statement of Defence. Walker agreed to write off the balance outstanding in the amount of $6,140 in consideration of the receipt of payment of $53,000 in settlement of the Tectonic account. Atlas and Mr. Famiglietti had nothing to do whatsoever in respect of the settlement of the Tectonic account or in respect of Walker deciding to write off the outstanding balance of $6,100. Walker wrote off $6,100 entirely on its own account.

[99] Based on the finding that Atlas had a contract with Walker to provide the equipment and manpower to perform stripping of overburden at the Severn Pines Quarry and based upon the finding that there was no set-off of the Atlas invoice for this work as against the Tectonic account, there is no basis upon which the counterclaim can be allowed. Further, the allegation by Walker that this action is an abuse of process and that Atlas is attempting to dupe, swindle, mislead and misappropriate funds from Walker is entirely unsupported by the evidence. In addition, Walker’s allegation that Atlas intentionally and negligently mislead Walker causing it to believe that the Atlas work would be set-off against the Tectonic account is also not supported by the evidence. Walker is not entitled to general and exemplary damages based on all the evidence at trial. Accordingly, the counterclaim is dismissed with costs.

CONCLUSION

[100] For the foregoing reasons, the Plaintiff/Defendant by Counterclaim, The Atlas Corporation shall have judgment against the Defendant/Plaintiff by Counterclaim Walker Aggregates Inc. in the amount of $34,860 plus prejudgment interest at the applicable rate set out in the Courts of Justice Act commencing August 19, 2010 to the date of judgment together with costs. The counterclaim is dismissed with costs.

[101] If the parties cannot agree on costs, they have agreed that costs are to be dealt with by way of written submissions. Atlas shall have ten days from the date of this Judgment to serve and file a concise statement on costs no longer than two pages, Costs Outline, Bill of Costs and any relevant authorities. Thereafter, within in the next ten days, Walker shall serve and file its concise statement on costs not exceeding two pages, a Costs Outline, Bill of Costs and any relevant authorities. Within the next seven days, Atlas will serve and file any Reply materials, if necessary. All written submissions shall be filed with my Judicial Assistant at Barrie.