COURT FILE NO.: CV-12-110604
DATE: 20150716
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
R & G Draper Farms (Keswick) Ltd.
Plaintiff
– and –
Nature’s Finest Produce Ltd., Kejay Farms, Kejay Investments Inc., Jason Raymond Stallaert, Kevin Cornelius Stallaert, Campbell Soup Company and Campbell Soup Company Canada
Defendants
Morris Manning , Q.C. and Theresa R. Simone, for the Plaintiff
Raymond G. Colautti and Anita Landry, for the Defendants Nature’s Finest Produce Ltd., Kejay Investments Inc., Jason Raymond Stallaert and Kevin Cornelius Stallaert
BETWEEN:
Nature’s Finest Produce Ltd., Kejay Farms, Kejay Investments Inc., Jason Raymond Stallaert, Kevin Cornelius Stallaert
Plaintiffs by Counterclaim
R & G Draper Farms (Keswick) Ltd.
- and -
Raymond G. Colautti and Anita Landry, for the Plaintiffs by Counterclaim
Morris Manning, Q.C. and Theresa R. Simone, for the Defendant by Counterclaim
2077583 Ontario Ltd., 1318910 Ontario Ltd., Daniel Ubald Bigras, 1099039 Ontario Ltd., 2123979 Ontario Ltd., C.H. Robinson, A.C. Schmieding Product Co. Inc. and Nicole Shannon Marie Verhey-Stallaert
Raymond G. Colautti and Anita Landry, for the Third Parties 2077583 Ontario Ltd., 1318910 Ontario Limited (incorrectly named as 1318910 Ontario Ltd.) and Nicole Shannon Marie Verhey-Stallaert
HEARD: June 17, 2015
REASONS
EDWARDS J.:
Overview
[1] The plaintiff seeks summary judgment against the responding parties on the basis of an agreed upon settlement. The responding parties take the position that the terms of settlement were never agreed to, and as such summary judgement should not issue.
The Facts
[2] The plaintiff, R & G Draper Farms (Keswick) Ltd. (“Draper”), carries on business growing and selling carrots and other produce.
[3] The defendant Nature’s Finest Produce Ltd. (“Nature’s Finest) is in the business of purchasing, processing and the sale of vegetable produce. The defendant, Kejay Investments Inc. (“Kejay”), owns property municipally known as 6874 Pain Court Line, R.R. #1, Pain Court, Ontario. The owners, officers and directors of Kejay are the defendants Kevin Stallaert and Jason Stallaert.
[4] Jason Stallaert resides in the City of Chatham, Ontario, and is also an owner and operator of Nature’s Finest. The defendant Kevin Stallaert also resides in the City of Chatham, and also is an owner and operator of Nature’s Finest and Kejay.
[5] In October 2010, the defendant Jason Stallaert contacted the plaintiff in regards to the purchase of the plaintiff’s carrot harvest for the year 2010. The plaintiff had under cultivation seven fields, or 350 acres of carrots.
[6] Beginning in early November 2010, purchase orders were submitted by Kejay to Draper for the purchase and delivery of what are described as field-run carrots. Invoices for the purchase of the field-run carrots were submitted by Draper to Nature’s Finest. The total purchase orders and invoices for the field-run carrots resulted in a purchase of and delivery to Nature’s Finest and Kejay totalling approximately 4.5 million pounds of carrots. There was no further invoicing or delivery of carrots after the end of November 2010. The total invoice cost for the carrots came to approximately $231,204.68.
[7] The purchase orders submitted by Nature’s Finest and the receiving tickets for the plaintiff’s carrots describe Jason Stallaert as the buyer. The payment terms were net 30 days.
[8] Subsequent to the delivery of the carrots, the defendants took issue with respect to the quality and type of carrots that had been delivered. This court does not need to get into the issue of the quality or type of carrot that was delivered. It is argued by counsel for the plaintiff that this becomes a non-issue if this court determines that the parties entered into a settlement in April 2011.
The Facts Regarding Settlement
[9] On April 12, 2011 the controller of Kejay, Jan Taylor (“Taylor”), sent an email to the representative of Draper, Dinesh Ohri (“Ohri”). The email was initially not received but was re-sent and actually received by Ohri on April 19, 2011. The email from Taylor to Ohri reads as follows:
Hi Dinesh
I spoke to Ross on Friday April 8th and have proposed the following;
The total account balance for Kejay/Natures is acknowledged to be $189,603. A cheque in the amount of $7219. will be mailed today, April 12th. We will issue a cheque in the amount of $12,781.00 on April 25th. We will issue a cheque in the amount of $20,000. on the 25th of each month, beginning with May 2011 until such time as the account is paid in full.
In the event that we can pay additional funds to the outstanding balance, we will issue cheques on an interim basis.
Please acknowledge your acceptance by return e-mail.
Jan Taylor
Nature’s Finest Produce
[10] When the email of Taylor was received by Ohri on April 19, 2011, it was responded to almost immediately by Ohri as follows:
Hi Jan
I was talking to Ross (Mr. Draper) he said that he was expecting $40000 per month in place of $20000 so could you make the necessary change and email me so that he can sign send it back.
Thx & rgds.
Dinesh Ohri
[11] The evidence filed in support of the motion for summary judgment consisted of the aforementioned emails, as well as an email dated May 23, 2011 from Ohri to Taylor which reads:
Hi Jan
Ross wanted me to send a quick reminder about the cheque on 25th May.
Thx & rgds.
Dinesh Ohri
[12] There is nothing in the evidence to suggest that the aforesaid email of May 23, 2011 was ever responded to. In fact, there was no further email communication between the parties after the email of April 19, 2011 from Ohri to Taylor. Put differently, Taylor nor anyone else on behalf of the defendants disagreed either orally or in writing with the monthly repayment amount of $40,000.
[13] The only other evidence filed in support of the summary judgment motion, based on the suggested terms of settlement, were two cheques from Nature’s Finest payable to R & G Draper Farms. The first cheque is dated April 12, 2011 and bears cheque number 002883 in the amount of $7,219.28. The second cheque, also dated April 12, 2011, bears cheque number 011991 and was in the amount of $13,626.40 also payable to R & G Draper Farms. The court was not provided with any evidence as to when these cheques were actually negotiated and deposited by Draper Farms, but it is not disputed that they were cashed by Draper.
[14] Counsel for the defendants suggested in argument that the aforementioned cheques were for payment of what were described as “good” carrots. In point of fact, the document attached to each of the cheques suggests that they were made payable for specific unpaid invoices. The cheque in the amount of $7,219.28 was in connection with two invoices dated November 26, 2010. The cheque in the amount of $13,626.40 was paid in reference to four invoices totaling $13, 626.40, which invoices were dated November 1, 2010.
[15] The only conclusion that this court can reach with respect to the cheques, which were drawn on the account of Kejay Investments and paid to the order of Draper, is that they were paid in contemplation of the terms of settlement set forth in the email of April 12, 2011 from Taylor to Ohri. This email reflects that two cheques would in fact be mailed; one of which was in the amount of $7,219.28 and the second was going to be in the amount of $12,781.00. Cheque 002883 in the amount of $7,219.28 is the same amount as suggested in the email of April 12, 2011. The second cheque, 011991 in the amount of $13,626.40, while not in the same amount as suggested in the email ($12,781.00), nonetheless was an amount very close to that suggested and in any event, is reflective of the fact that Taylor had suggested in her email of April 12, 2011 that the defendants would pay additional funds to the outstanding balance if they could do so on an interim basis.
Position of the Plaintiff
[16] Mr. Manning argues that the parties entered into a binding settlement. The terms of the settlement, according to Mr. Manning, were as follows:
(a) the defendants would pay the plaintiff the sum of $189,603.00 as a compromise resolution of the outstanding debt, then said to be $231,204.68.
(b) the defendants would pay the plaintiff the $189,603.00 as follows:
(i) $7,219.00 on April 12, 2011
(ii) $12,781.00 on April 25, 2011
(iii) $40,000.00 each month thereafter until fully paid
(c) if the defendants could pay off the $189,603.00 earlier they would.
[17] Mr. Manning further argues that the terms of settlement were evidenced not only by the exchange of emails referenced in paragraphs 10 and 11 above, but also by the cheques paid to the plaintiff by the defendants, also referenced in paragraphs 10 and 11 above.
[18] With the settlement concluded, it is argued there is no genuine issue requiring a trial and that the court should award judgment in the amount of $189,603.00 less the negotiated cheques, for a total of $168,757.32.
Position of the Defendants
[19] Fundamentally, counsel for the defendants argue that there was no meeting of the minds with respect to the fundamental terms of the settlement, and therefore no settlement was reached between the parties.
[20] It is argued that in the initial email from Taylor, actually received by Ohri on April 19, 2011, Taylor merely “proposed” settlement terms and asked for the plaintiff to acknowledge acceptance. It is argued that there was no acceptance of the terms of settlement set forth in the email of April 19, 2011, and that the two cheques totaling $20,845.68 were merely sent to the plaintiff “in good faith” as evidence of the defendants good faith desire to seek to achieve an overall resolution of the issues between the parties.
[21] It is argued on behalf of the defendants that one of the essential terms proposed in the email of Taylor dated April 19, 2011 were the terms of payment. Taylor’s terms suggested $20,000.00 per month. It is argued in favour of the defendants’ position there was no settlement, that the plaintiff countered with a counter-offer of $40,000.00 per month as reflected in Ohri’s responding email of April 19, 2011. The counter-offer of $40,000.00 was never accepted nor was it ever responded to and, as such, it is argued that there was no meeting of the minds with respect to a fundamental term of the settlement and, therefore, no settlement.
[22] As to the email of May 23, 2011 from Ohri to Taylor reminding Taylor about the cheque on May 25th, 2011, it is acknowledged that Taylor did receive the aforesaid email from Ohri reminding her about the cheque, but she did not respond by saying there was no agreement because according to her evidence in her cross examination “I had no intention of responding to any of that”. It is further argued that the absence of any reply to the email of May 23, 2011 is further evidence of the lack of any meeting of the minds with respect to a fundamental term of the settlement.
[23] Dealing with the negotiation of the two cheques totaling $20,845.68, it is acknowledged that these cheques were issued by the defendants and that no stop-payment was made on the cheques. It is the position of the defendants that the defendants allowed the plaintiff to negotiate the cheques in an effort to show the defendants good faith. In cross examination when asked “If you, i.e. the defendants, didn’t owe him any money, why did you pay the two cheques?” Ms. Taylor answered to the effect that they were “negotiating”.
[24] In essence, the position of the defendants comes down to whether or not there was any agreement with respect to a fundamental term of the settlement, i.e. the timing of the payment of the proposed amount of $189,603.00, and if there was not such an agreement then the court cannot enforce a settlement by essentially rewriting a fundamental term.
Analysis
[25] The Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, has made it abundantly clear that Rule 20, governing motions for summary judgment, is to be interpreted broadly, favouring proportionality and fair access to affordable, timely and a just adjudication of claims.
[26] The parties have placed before this court an extensive record, both in the form of affidavit evidence and transcripts of cross examinations. It is fair to assume, as Corbett J. did in Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, at paragraphs 26 through 27, that the parties have placed before it, in some form, all of the evidence that will be available for trial. I make that assumption, in ultimately coming to the decision that I do, with respect to the plaintiffs’ motion for summary judgment as it relates to the proposed terms of settlement set forth in Taylor’s email of April 19, 2011.
[27] I am satisfied that on the basis of the evidence that I have, that this court can make the necessary findings of fact, apply the law to the facts and thus achieve a fair and just adjudication of the case on the merits without the necessity for a full-blown trial as it relates to the question of the terms of settlement.
[28] I am satisfied that one of the fundamental terms evidencing an agreement between the parties, on which there is no dispute, is that there was a compromise reached between the outstanding invoice cost for the carrots of $231,204.68. There was an agreement reached between the parties that the outstanding invoice cost of $231,204.68 would be compromised by way of a negotiated figure of $189,603.00. I come to this conclusion for two reasons. First, while Taylor’s email of April 19, 2011 “proposes” terms of settlement, one of which is that the account balance would be acknowledged to be $189,603.00, that amount was not in any way disputed when Ohri responded on April 19, 2011. I infer from Ohri’s silence in his April 19, 2011 email, as it relates to the question of the quantum of the principle amount, that that amount was agreed to. The only item in Ohri’s email of April 19, 2011 that in any way alters the proposed terms set forth in Taylor’s earlier email of April 19, 2011 relates to the method of payment, i.e. whether it would be $20,000.00 per month or $40,000.00 per month. As such, in my view there is no doubt that there was a meeting of the minds as between Ohri and Taylor that the outstanding debt of $231,204.68 would be compromised downwards to a figure of $189,603.00.
[29] As further evidence that there was a meeting of the minds with respect to the fundamental term of the settlement, i.e. the principle amount of $189,603.00, I am satisfied that the fact that the defendants did not put a stop-payment on the two cheques totaling $20,845.68 was more than a good faith attempt on the part of the defendants to continue negotiations. Rather, I am satisfied that the defendants fully intended that those cheques would be cashed by the plaintiff as evidence that there was a binding settlement between the parties. The fact that Taylor did not respond to Ohri’s email of April 19, 2011 in any way, shape or form, in my view demonstrates that the defendants intended to be bound by the proposed counter-offer of $40,000.00 per month when it allowed the cheques to be cashed. My view in that regard is further reinforced by reason of the fact that Taylor never responded to Ohri’s email of May 25, 2011 with any email denying that there was any agreement with respect to the proposed terms of settlement, or any denial with respect to the settlement itself. This, in my view, points strongly towards the conclusion that there was an agreement reached between the parties not only with respect to the principle amount but also the other terms of settlement.
[30] In Shoom Acktion Corp. v. Mark Shoom in Trust et al., 2003 O.J. No. 6180, Pitt J. had to deal with a somewhat analogous situation where the dispute was about what the terms of payment where, if any agreed upon, as evidenced in an exchange of correspondence documenting terms of settlement. In Shoom, the parties had agreed on the price with respect to certain chairs. The only question was whether or not they agreed on the terms of payment.
[31] Fundamentally, the issue before Pitt J. was whether or not he could imply terms of payment. Relying on a decision of the Ontario Court of Appeal in Kay Corporation v. Dekeyser (1977), 1977 1809 (ON CA), 76 D.L.R. (3d) 588, Pitt J. came to the conclusion in Shoom that where a contract was silent on the terms of payment the parties had negotiated and failed to agree on, the court could imply a reasonable term when the contract is silent.
[32] In all of the circumstances before him, Pitt J. came to the conclusion that there was an agreement reached between the parties and that the agreement was enforceable. The decision of Pitt J. went to the Ontario Court of Appeal which came to the following conclusion:
Putting the appellant’s position at its best, Mr. Sahi left the meeting on December 6th believing that the method of satisfying the settlement price had yet to be agreed upon, even though he never expressly raised that matter in the settlement meeting on December 6th. Despite this belief, neither Mr. Sahi nor his counsel, acting upon Mr. Sahi’s instructions, made any response to the December 9th letter. As the motions judge noted, Mr. Davis would have had every reason to treat the lack of response as demonstrating an endorsement of his interpretation of the agreement into which he understood they had entered. The argument that the parties had not agreed upon all essential terms of the agreement cannot succeed on the facts of this case.
[33] Applying a similar line of analysis from Shoom to the facts before me, Ohri’s responding email of April 19, 2011 leaves the court with no doubt that the most fundamental term of the settlement between the parties was that there was an agreement with respect to the principle amount of $189,603.00. Ohri’s responding email in no way calls that figure into dispute. The only issue raised in Ohri’s email to Taylor was the terms of payment, i.e. $20,000.00 per month versus $40,000.00 per month. Ohri’s email of April 19, 2011 was never responded to by Taylor. Using the same line of analysis that the Court of Appeal did in Shoom, it is not unreasonable for this court to come to the conclusion that the silence on the part of Taylor to the proposed terms of $40,000.00 per month implicitly acknowledges an agreement on that amount and it is not, in my view, unfair to infer such an agreement. This is further reinforced by reason of the fact that the defendants did not take steps to stop payment of the two cheques totaling $20,845.68. Allowing those cheques to proceed to be negotiated by the plaintiff, in my view, reinforces the conclusion that there was in fact an agreement reached, not only with respect to the principle amount but also the terms of payment.
[34] Under the circumstances, the plaintiffs’ motion for summary judgment as it relates to the settlement is granted. The plaintiffs shall have judgment against Nature’s Finest, Kejay Farms and Kejay Investments Inc. in the amount of $168,757.32. I am not satisfied, based on the evidence before me, that there is any basis to conclude that the settlement was in any way binding on Jason Stallaert or Kevin Stallaert.
[35] If the parties cannot agree upon the costs of this motion they may make written submissions to the court limited to five pages in length, to be received within 10 days from the date of receipt of these reasons.
[36] If the balance of the issues that were not addressed during the course of the summary judgment motion before me need to be further addressed by the court, a conference call can be arranged through my assistant to discuss how those issues might be best resolved.
Justice M.L. Edwards
Released: July 16, 2015