ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-08-003602261-00A2
DATE: 20150817
BETWEEN:
ARIE YEHUDA KALASH,
MICHEL KALASH and AMIT KALASH, SHAY KALASH and ROMI KALASH,
Minors by their Litigation Guardian Arie Yehuda Kalash
Plaintiffs
– and –
CARRIER ONE EXPRESS INC., MARKEL INSURANCE COMPANY OF CANADA and TRAIN TRAILER RENTALS LIMITED
Defendants
– and –
NORTH AMERICAN LOGISTICS SERVICES INC.
Third Party
Navneet Jaswal and Anthony Andreopoulos, for the Plaintiffs
Hue Nguyen, for the Defendants Carrier One Express Inc. and Train Trailer Rentals Limited
No one appearing for the Third Party
HEARD: August 13, 2015
REASONS FOR DECISION
dIAMOND J.:
Overview
[1] This proceeding arises out of a single vehicle tractor-trailer rollover accident which occurred on August 8, 2006 in Toronto, Ontario. The plaintiff Arie Yehuda Kalash (“Kalash”) was the driver of the subject vehicle, and as a result of the accident alleges that he suffered permanent and serious injuries. He seeks general damages for pain and suffering and loss of income from the defendants.
[2] At the time of the accident, Kalash was working as an independent owner/operator for the defendants Carrier One Express Inc. and Train Trailer Rentals Limited (the “Defendants”). At the outset of Kalash’s relationship with the Defendants, he executed a series of agreements with them. The co-plaintiff Michel Kalash (“Michel”, Kalash’s wife) executed one of the agreements as a signatory, and witnessed her husband’s signatures on the other agreements.
[3] Kalash, Michel and their minor children have sued, inter alia, the Defendants for $l,500,000.00 in general and special damages. The Defendants bring this motion for summary judgment seeking an order dismissing the claim as against them on two grounds:
a) Kalash and Michel have contractually waived their rights to sue the Defendants, and
b) the plaintiffs have failed to provide any evidence of negligence as against the Defendants which contributed to Kalash’s alleged injuries.
[4] The motion proceeded before me on August 13, 2015. At the conclusion of argument on the first issue (i.e. whether Kalash and Michel contractually waived their rights to sue the Defendants), I released a short written endorsement granting the Defendants’ motion for summary judgment with written reasons to follow.
[5] These are those reasons.
The Facts
[6] Kalash originally resided in Israel. He testified that he learned English while in Israel between Grades 6-12, although all courses other than English were taught in the Hebrew language. He testified that he did not speak English throughout his prior employment in Israel.
[7] Kalash came to Canada in 2002. Prior to becoming an independent owner/operator with the Defendants, Kalash had signed contracts and other written agreements in a business context including exclusive supplier contracts and investor contracts.
[8] In or around 2004 Kalash worked as an independent owner/operator truck driver for Catsons Transport (“Catsons”) during which time he had access to private insurance which Catsons offered to all drivers.
[9] Kalash testified that while in Canada he had previously applied for and obtained car insurance and home insurance.
[10] While he was employed at Catsons, and with a view to earning more income, Kalash applied for a truck driver position with the Defendants. A meeting took place in mid-September 2005 between Kalash and Steven Lenard (“Lenard”, the President of Carrier), during which Kalash’s potential job opportunity with the Defendants was discussed.
[11] Kalash did not wish to become an employee of the Defendants, but rather maintain his independent owner/operator status. This was understandable as Kalash stood to earn more income this way.
[12] After communicating his request to maintain his independent owner/operator status to Lenard, Kalash was provided with a series of documents for him to review and execute in furtherance of joining the Defendants as a truck driver. For the purpose of this motion, only two of those documents are dispositive and relevant.
[13] Kalash testified that Lenard told him to simply “go home and sign the documents” and there was no need to read any of them. These documents included a Memorandum of Agreement, a Waiver Agreement and a Capital Compensation Plan Trust enrollment form. The Memorandum of Agreement set out the terms of the relationship between the parties. As Kalash did not wish to be an employee, in the event of an accident or personal injury he would not be covered nor able to file a claim with the Workplace Safety and Insurance Board (“WSIB”).
[14] Lenard testified that all independent owner/operator truck drivers were required to execute the Waiver Agreement and the Capital Compensation Form. Both documents provided that in an effort to benefit the independent owner/operator, the Defendants arranged for enrollment in a private disability insurance benefit plan (inclusive of accident benefits coverage). In exchange for enrolling in the private disability insurance plan, each independent owner/operator further agreed to waive his/her right to commence proceedings against the Defendants for loss of income, pain and suffering and other damages.
[15] In summary, the Defendants would only agree to hire an independent owner/operator on the condition that he/she agreed to enroll in the private disability insurance plan and waive his/her right to sue the Defendants in the event of injuries suffered as a result of an accident.
[16] While the Waiver Agreement is a one page, pre-printed form document, the words “waiver agreement” are set out in large, bold typeface at the top of the page. The relevant terms set out in the middle of the page are as follows:
“It is, hereby, agreed and acknowledged that the Transport Carrier, as our Trustee named above, has diligently provided Capital Compensation for our benefit, as a ‘no fault’ alternative to WS&IB. We, the parties of the FIRST PART, voluntarily choose the Weekly Accident Income of $700.00 per week for 260 weeks, thereafter a factored lump sum payment to age 65, also the $300,000 Accidently & Dismemberment including many supplementary benefits as set out in the Policy Booklet. The PARTIES OF THE FIRST PART have accepted the foregoing in lieu of all our right of action for loss of income, pain and suffering in the event of the above-named owner operators disability or accidental death, due to the fact that this insurance adequately provides for the long term financial security for our family.
It is, hereby, agreed and acknowledged that when and should an occurrence exist involving personal injury resulting in the disability or accidental death of the above-named owner operator, whether such occurrence occurs on the property of the Transport Carrier, the Shipper to the Transport Carrier’s property, the Receiver’s property receiving goods shipped by the Carrier or Consignees under contract with the Carrier or while driving his/her truck or tractor between such properties, and Optional Insurance offered by the Workplace Safety and Insurance Board (WS&IB) of Ontario is not in effect due to a previous election to voluntarily opt out of such coverage. The PARTIES OF THE FIRST PART will hold harmless the PARTIES OF THE SECOND PART AND THEIR HEIRS, ASSIGNS or SHIPPERS, RECEIVERS, LOAD BROKERS, FREIGHT FORWARDERS and CONSIGNEES to the Transport’s Carrier bound by contract with the PARTIES OF THE SECOND PART. It is further agreed that the PARTIES OF THE FIRST PART, hereby, finally and irrevocably release the PARTIES OF THE SECOND PART, as being responsible for any injuries sustained by the above-named owner operator causing his disability or accidental death, wherever, however arising, present or future, known and unknown at this time, relating to the terms of the CONTRACT FOR SERVICE between the above-named owner operator OF THE FIRST and THE PARTIES OF THE SECOND.”
[17] The Capital Compensation Form included the following clause:
“I, the undersigned applicant, understand that under WS&IB (WSIB) I lose my right to sue the employer and those contracted to the employer for compensation due to work-related injury. I’ve been given to understand that Capital Compensation Plan Trust, as the first payor of claims, is an alternative to WS&IB for the coverage that I have selected. I, the undersigned applicant, agree and acknowledge that I have waived my right to sue for loss of wages and/or other compensation when and should an occurrence exist involving personal injury in the performance of my work for the employer and those contracted to the employer including shippers of goods for the performance of my work. I also finally and irrevocably release the employer from all liability and will move to settle all actions and causes of actions against the employer for injuries sustained by me, however arising present and future, known and unknown at this time, relating to the term of the Contract for Service in place.”
[18] Lenard provided the various documents to Kalash for his review and eventual execution. There was no time limit for the return of any signed documents, although Kalash testified that he was interested in starting with the Defendants as soon as possible to earn additional income. In any event, the documents were all signed by Kalash and returned the next morning. Kalash testified that he never read any of the documents before signing them. The Waiver Agreement was also signed by Michel in her personal capacity. Michel witnessed Kalash’s signature in all other aspects.
[19] Monthly premiums for the private disability insurance plan were withdrawn from Kalash’s income, all to Kalash’s knowledge and understanding. Kalash understood that he was never hired as an employee.
[20] Within three weeks of the accident, Kalash applied for disability benefits under the Capital Compensation Plan. Kalash was paid a weekly accident indemnity benefit in the amount of $700.00 per week for 5 years, which was the maximum time period set out in the Capital Compensation Form. Apparently, a dispute subsequently arose and Kalash commenced a separate legal proceeding against the insurer seeking the $300,000.00 (a figure which was also set out in the Capital Compensation Plan Form. Counsel advised that a settlement in that proceeding was recently finalized.
Summary Judgment
[21] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the Court shall grant summary judgment if the Court is satisfied that “there is no genuine issue requiring a trial with respect to a claim or defence”. As a result of the amendments to Rule 20 introduced in 2010, the powers of the Court to grant summary judgment have been enhanced to include, inter alia, weighing the evidence, evaluating the credibility of a deponent and drawing any reasonable inference from the evidence.
[22] In 2014 SCC 7, the Supreme Court of Canada established a road map in terms of how a motions judge should approach a motion for summary judgment. The Court must first determine whether there is a genuine issue requiring a trial based only upon the evidence filed with the Court and without using the new fact finding powers set out in the 2010 amendments. Summary judgment will thus be available if there is sufficient evidence to justly and fairly adjudicate the dispute, with the motion being an affordable, timely and proportionate procedure.
[23] If the Court finds the presence of a genuine issue requiring a trial, the motions judge must then determine if the need for a trial can be avoided by using the new, enhanced powers under Rules 20.04(2.1) and (2.2).
[24] It is important to remember that the applicable evidentiary principles developed under the previous incarnation of Rule 20.04 continue to apply. The motions judge must still take a “hard look” at the evidence to determine whether it raises a genuine issue requiring a trial, and as a result each party must still put its “best foot forward” and submit cogent and compelling evidence to support or oppose the relief sought. As I stated in 2015 ONSC 2732, a moving party has both a legal and evidentiary onus to satisfy the Court that there is no genuine issue requiring a trial. It is the moving party’s obligation to present a record that can enable the Court to avail itself of the enhanced powers under Rule 20.04 if the record warrants the exercise of such discretion.
[25] I find it appropriate to determine this action by way of summary judgment. In my view, the merits of the Defendants’ argument can be assessed with resort to the uncontroverted documentation, and none of the material facts are in real dispute.
Exclusion Clauses
[26] The Defendants take the position that the terms of the Waiver Agreement, together with the Capital Compensation Form, preclude the plaintiffs from bringing this proceeding. In my view, the starting point for a determination of the enforceability of the terms relied upon by the Defendants is the Supreme Court of Canada’s decision in 2010 SCC 4, [2010] 1 S.C.R. 69.
[27] In Tercon, the Supreme Court of Canada established a three-part inquiry:
(a) As a matter of contractual interpretation, does the exclusion clause apply to the circumstances as established by the evidence in the case?
(b) If the exclusion clause applies, was the clause unconscionable at the time the contract was made, as might arise from situations of unequal bargaining power between the parties?
(c) If the exclusion clause is held to be valid and applicable, should the Court nevertheless refuse to enforce the clause because of the existence of an overriding public policy concern?
[28] In Tercon, the appellant successfully sued the Province of British Columbia for, inter alia, breach of contract arising from a request for proposals (“RFP”) for the design and construction of a highway. The following clause was contained within that contract:
“Except as expressly and specifically permitted in these Instructions to Proponents, no Proponent shall have any claim for compensation of any kind whatsoever, as a result of participating in this RFP, and by submitting a Proposal each Proponent shall be deemed to have agreed that it has no claim.”
[29] Unlike a limitation clause, which seeks to reduce or limit a contracting party’s liability to (typically) a nominal amount, the exclusion clause in Tercon sought to preclude a contracting party from initiating any claim whatsoever arising under the contract.
[30] Interestingly, in Tercon the Supreme Court was unanimous in establishing the analysis for exclusion clauses, but was divided as to whether the exclusion clause barred the appellant’s claims for compensation against the Province of British Columbia. The majority found that the exclusion clause did not apply to the circumstances established by the evidence in that proceeding. As a result, the majority’s analysis essentially concluded after the first stage of the three part test.
[31] The minority would have upheld the exclusion clause, finding that it not only applied to the circumstances established by the evidence in that proceeding, but also the clause was not unconscionable and its enforcement did not run contrary to public policy.
Do the terms of the Waiver Agreement and Capital Compensation Form apply?
[32] The Tercon decision mandates the court to assess the intention of the parties as expressed in the contract itself. The comments of Justice Firestone in 2014 ONSC 6816 (S.C.J.) provide useful guidance:
“Therefore, if the contexts of the document, in this case the agreement, are contrary to what the ordinary person would expect (for example, unusually onerous), or the circumstances are such that it should be clear that the person signing it did not know the terms (for example, it was clear the person signing it had not read the terms because they were not afforded enough time or proper conditions to do so), and the party seeking to rely on the document will have reason to know that the party signing did not intend to agree to the terms.”
[33] Kalash submits that there was a significant inequality of bargaining power between himself and the Defendants. In my view, the record confirms that both Lenard and Kalash understood that what was being presented for review and execution was the Defendants’ required standard form agreements for an independent owner/operator to join the Defendants’ workforce. Kalash and Michel could have taken as much time as needed to review the documents, inquire with third parties, or obtain independent legal advice if necessary. Kalash had applied for insurance coverage on previous occasions, and presumably executed applications and insurance policies to that end.
[34] Indeed, in the middle of the Capital Compensation Form there are a series of boxes requesting the first and last name of the beneficiary under the policy, the beneficiary’s relationship to Kalash, and the beneficiary split of any payment of benefits. Kalash completed these boxes, naming his wife and directing payment of 100% of all benefits to her. Even if English was not his first language, Kalash obviously understood the nature of the request for information relating to the beneficiary.
[35] I find that Kalash clearly understood the nature of the document. I do not find that Lenard pressured Kalash in any way, and the only evidence that Kalash was possibly in a rush to execute the documents was his self-induced desire to start working for the Defendants as soon as possible.
[36] Even accepting Kalash’s evidence that he did not read any of the relevant terms in the Waiver Agreement or Capital Compensation Form (a proposition which I find difficult to accept), the comments of the Court of Appeal for Ontario in 1997 4452 (ON CA), 34 O.R. (3d) 1 (C.A.) are apposite:
“Failure to read a contract before signing it is not a legally acceptable basis for refusing to abide by it. A business man executing an agreement on behalf of a company must be presumed to be aware of its terms and to have intended that the company would be bound by that.”
[37] As I stated in 2015 ONSC 3542 (S.C.J.), in any commercial setting it is expected that a party who executes a document will exercise reasonable care before doing so, and parties who are careless enough to execute a document without reviewing it may do so at their peril.
[38] I do not find any presence of an inequality of bargaining power. Prior to executing the documents, Kalash was an independent owner/operator with Catsons for nearly one year, and signed various agreements including applications for insurance coverage during that time.
[39] None of the relevant terms in the Waiver Agreement and the Capital Compensation Form were obscured. The terms of the clauses quoted above are drafted in a straightforward manner, employing language which is understandable to a reasonable person. The message conveyed by the Waiver Agreement and the Capital Compensation Form is clear: if Kalash wished to work for the Defendants as an independent owner/operator, he would need to enroll in the Defendants’ private disability benefits coverage, and in exchange agree to waive his right to sue the Defendants for any damages arising out of an accident or injury.
[40] As I find that the terms of those documents are valid, the Waiver Agreement and Capital Compensation Form apply and thus preclude the plaintiff from seeking compensation from the Defendants as sought in the Statement of Claim.
Are the Waiver Agreement and Capital Compensation Form unconscionable?
[41] The second part of the Tercon analysis requires me to determine whether the contents of the Waiver Agreement and Capital Compensation Form are unconscionable, and therefore unenforceable. The difference between unconscionability and unfairness is, essentially, not very large. Kalash submits that to enforce the terms of the Waiver Agreement and Capital Compensation Form would be manifestly unfair.
[42] I disagree. To begin, the Defendants were under no obligation to offer any disability coverage as a term of the agreement. Had Kalash opted to work as an employee, he would have been subject to WSIB coverage. The Defendants offered private disability coverage to all of their truck drivers. The terms of that coverage were arguably more advantageous than WSIB coverage. In exchange, the Defendants required each truck driver to waive his/her right to sue the Defendants in the event of an accident or injury on the job.
[43] It cannot be said that there was no consideration for the Waiver Agreement and Capital Compensation form. If Kalash had taken the time to read the documents, and did not want to give up his right to sue the Defendants, he would have been forced to obtain his own disability insurance coverage at his cost, or drive his truck without any disability coverage at his peril.
[44] In addition, Kalash has taken advantage of the disability coverage when he applied for and received weekly benefit payments for 5 years, and ultimately obtained a settlement of his claim for the $300,000.00 lump sum payment. Kalash cannot seek to benefit from the Waiver Agreement and Capital Compensation Form while at the same time claiming that those documents are legally invalid and unenforceable.
[45] I therefore find that the terms of the Waiver Agreement and Capital Compensation Form are not unconscionable and thus enforceable against Kalash.
Are the Waiver Agreement and Capital Compensation form unenforceable due to public policy reasons?
[46] Again, as I stated in Suhaag Jewellers, there is a strong public interest supporting the enforcements of contracts, and in particular commercial contracts. The burden of demonstrating any abuse of the freedom of contract outweighing the public interest in the contract’s enforcement lies squarely with Kalash. In my view, there is no evidence on the record before me which could disentitle the Defendants from relying upon the Waiver Agreement and Capital Compensation Form.
[47] The terms of the Waiver Agreement are enforceable against Kalash and Michel. The terms of the Capital Compensation Form are enforceable against Kalash. The remaining co-plaintiffs are the minor children of Kalash and Michel, and the claims of those minor plaintiffs are derivative in nature. As the claims of Kalash and Michel fail, the claims of their minor children are bound up in that result and must be dismissed as well.
[48] I therefore grant the Defendants’ motion for summary judgment. As per the reasons set out in my handwritten endorsement of August 13, 2015, the costs of this motion are payable by the plaintiffs to the moving Defendants in the amount of $7,000.00 all-inclusive and the costs of the action are payable by the plaintiffs to the moving Defendants in the all-inclusive amount of $10,000.00.
Diamond J.
Released: August 17, 2015
COURT FILE NO.: CV-08-003602261-00A2
DATE: 20150817
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ARIE YEHUDA KALASH,
MICHEL KALASH and AMIT KALASH, SHAY KALASH and ROMI KALASH,
Minors by their Litigation Guardian Arie Yehuda Kalash
Plaintiffs
– and –
CARRIER ONE EXPRESS INC., MARKEL INSURANCE COMPANY OF CANADA and TRAIN TRAILER RENTALS LIMITED
Defendants
– and –
NORTH AMERICAN LOGISTICS SERVICES INC.
Third Party
REASONS FOR DECISION
Diamond J.
Released: August 17, 2015