ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-14-0503-00
DATE: 20150918
B E T W E E N:
ACCUWORX INC.
W. Chalmers, Counsel for the plaintiff
Plaintiff
- and -
ENROUTE IMPORTS INC., SUNORA FOODS LTD., VINCENT P. PILEGGI, PYDEL PROPERTIES INC., THE SOVEREIGN GENERAL INSURANCE COMPANY and GRANITE CLAIMS SOLUTIONS INC.
Defendants
A. White, counsel for the defendants, Vincent P. Pileggi and Pydel Properties Inc.
HEARD: September 2, 2015
ENDORSEMENT
Seppi J.
[1] On February 1, 2013 there was a spill of a large quantity of canola oil at 1186 Cardiff Boulevard in Mississauga (“the premises”) owned by the defendant, Pydel Properties Inc. (“Pydel”). Enroute Imports Inc. (“Enroute”) leased the premises from Pydel for its manufacturing of hydrogenated oils. The spill quickly spread from inside the premises, into the parking lot, through a catch basin into Etobicoke Creek.
[2] Accuworx Inc. (“Accuworx”) attended to the clean-up, arriving the same date. It provided various clean up materials, equipment and services from February 1, 2013 to March 12, 2013 at the request of the defendant Vincent P. Pileggi, a director of both Pydel and Enroute.
[3] This motion is for summary judgment against Pydel for $328,067.96. The plaintiff Accuworx claims it is entitled to this amount in compensation for the materials, equipment and services provided, on the basis of unjust enrichment and quantum meruit. The amount claimed reflects unpaid invoices rendered by Accuworx for the clean-up. The action as against Enroute has been stayed on account of its filing a Notice of Intent to make a proposal under the Bankruptcy and Insolvency Act (“BIA”). The plaintiff submits it is entitled to be paid by Pydel for the services rendered to its benefit, which were requested and encouraged by Mr. Pileggi as its officer and director.
[4] The defendant Pydel opposes the plaintiff’s claim for payment, and states the work was not requested by Pydel and did not benefit Pydel. At Mr. Pileggi’s direction to the plaintiff invoices were sent to Enroute and later, at his request, to the defendant Sunora Foods Ltd. (“Sunora”). The defendant argues there was no contract between the plaintiff and Pydel. The defendant Pydel also argues that Mr. Pileggi executed work orders as an agent of Sunora and never on behalf of Pydel.
[5] The work orders show that Accuworx was on the Pydel premises for clean-up for only part of a day, and the rest of the work over a period of about two kilometeres away. The defendant also notes there was never an order made by MOE to Enroute or Pydel as a result of this spill, nor was any order ever threatened. No invoice was ever rendered to Pydel.
[6] In summary, the defendant argues: Pydel had no involvement in retaining Accuworx, no oversight of work performed by Accuworx, derived no benefit from the work performed by Accuworx and was never invoiced by Accuworx. No neighbor ever threatened to sue Pydel in relation to this spill and the Ministry never threated to make an order against Pydel.
[7] The defendant Pydel also submits the motion for summary judgment must fail as the motion is premature given that all documentation has not yet been produced by the other parties in relation to the spill which “may impede the responding party putting its best foot forward”. However, as is noted by the plaintiff, the defendant was served with this motion on December 30, 2014, a timetable was set on January 20, 2015, and at no time did the defendant request time to seek information from the other parties. This court in these circumstances assumes the defendant has put its best foot forward.
[8] Pydel also argues the plaintiff does not meet the test for proving unjust enrichment because Pydel did not derive a benefit which corresponds with the plaintiff’s loss. It disputes the plaintiff is able to demonstrate the services provided were at the request, encouragement or acquiescence of Pydel.
ISSUES
[9] The issues on this motion are whether Pydel was unjustly enriched by the clean-up services provided, whether it is entitled to compensation on the remedy of quantum meruit, and whether this is an appropriate case for summary judgment.
THE ACTION
[10] Other defendants in this litigation are Sunora Foods Ltd. (“Sunora”), The Sovereign General Insurance Company (“Sovereign”) and Granite Claims Solutions Inc. (“Granite”). Khan Trading Corporation and Mushtag Khan (“Khan”) are third parties. Sunora owned the oil which was being transferred to a flexi tank for transport at the time of the spill. The flexi tank, which ruptured as it was being filled, was provided by Khan. Sovereign is Sunora’s insurer and Granite is the insurance adjuster on behalf of Sovereign. Statements of defence have been filed by all defendants, with cross-claims by all except Granite.
[11] On July 23, 2015, while this motion was pending, the defendant Pydel sought an order before Baltman J. for its intended cross-motion for judgment against Sunora and Granite for contribution and indemnity to be heard at the same time as this motion. The defendant claims Sunora assumed liability for the spill and all consequent damages. The request to have the matters heard together was denied on the basis that if all the motions were to be heard together, the entire matter would be delayed to March 2016. The plaintiff’s motion has already experienced delays due to several adjournments. In January, 2015 Bielby J. adjourned it to September 2, 2015, peremptory to all parties. At that time both parties consented to a timetable for the motion to proceed accordingly.
[12] Baltman J. held there was no prejudce to Pydel if its cross-claim proceeds at a later date. She also notes it is the sole defendant against whom the plaintiff seeks summary judgment.
FACTS
[13] There is no dispute about the circumstances of the spill. It involved a large quantity of canola oil and occurred while the oil was being transferred to a flexi tank for transport. The flexi tank ruptured as it was being filled at the premises owned by Pydel on February 1, 2014.
[14] Immediately following the spill, Mr. Pileggi contacted Accuworx by telephone requesting it to respond to this major spill. There was an oral agreement that Accuworx would provide the emergency response and environmental services necessary to clean up the spill, in exchange for a prompt payment from Enroute of the invoices rendered by Accuworx on account of services and materials that were provided. Mr. Pileggi further signed an Emergency Authorization Form expressly authorizing Accuworx to provide the necessary services and materials and acknowledged the obligation of Enroute to pay for the services and materials.
[15] On February 5, 2013 Accuworx sent Mr. Pileggi a credit card charge authorization form for Enroute to provide a $5,000 credit card deposit to be applied to the charges. Mr. Pileggi then provided his American Express credit card number and expiry date and signed the authorization form, following which a charge of $5,000 was applied by Accuworx to the credit card.
[16] The services and materials provided included the utilisation of vacuum trucks and hot wash trucks to collect oil and clean the parking lot and catch basins. Accuworx also employed a sub-contractor Centennial Construction Equipment Rentals to sand and sweep the contaminated area at the premises. It employed booms to contain the oil in the creek. It removed solid oil that was freezing in the creek by excavator and bobcat. Solid oil was placed in drums and, thawed, vacuumed and disposed.
[17] As further authorization of this ongoing work Mr. Pileggi signed three work orders approving the provision of the services and materials by Accuworx. The customer noted on the work orders is Enroute Imports. Further work orders were signed by him including three emergency services work orders on Feb 13, 2013. Some of the work orders show Enroute crossed out and Sunora inserted in place as the customer, which was done by Mr. Pileggi. In total, Mr. Pileggi signed 18 work orders in connection with the services and materials which were provided by Accuworx.
[18] On February 20, 2013 and March 12, 2013 Accuworx rendered invoices respectively in the amounts of $326,319.83 and $6,748.13 for the services and materials provided. These invoices have not been paid.
[19] There is no dispute Mr. Pileggi is the president, secretary treasurer and a director of Enroute. He is also the sole officer and one of two directors of Pydel. On his own evidence he reported the spill in accordance with what he noted as his “duty that anybody would have to report any major spill on public lands”. Throughout the clean-up process and investigation by the Region of Peel Spills Action Centre and the Ministry of the Environment (“MOE”) Spills Action Centre Mr. Pileggi attended with the officials to walk the affected area, apprising them of the clean-up process that was undertaken. He admitted he knew that it was a possibility that MOE could make an order in connection with the spill and he was concerned about that. Based on his evidence on examination the steps taken by him for clean-up were to minimize or eliminate the risk that MOE would make an order against his property in connection with the spill. His position on examination was that these precautionary steps were taken by him to comply with the law and show willingness to do their utmost best to clean up and contain the spill.
[20] The Environmental and Protection Act (“EPA” or “the Act”) imposes duties to mitigate and restore not only on the owner of a pollutant but also on persons having control of the pollutant (section 93). Section 97 of the Act grants MOE the power to make orders regarding spills, inter alia directed to the person having control of the pollutant and the “owner or person having charge, maintenance or control of any real property or personal property that is affected or that may reasonably be expected to be affected by the pollutant.” The legislation imposes a duty on the owner of property, in this case Pydel, to mitigate the damage from a pollutant emanating from its property such as the oil, and to restore the natural environment that is affected. It empowers MOE to make an order against the owner of the affected property.
[21] The defendant’s argument that most of the oil escaped required the main clean-up efforts to be conducted off Pydel’s property does not eliminate Pydel’s potential liability had the oil not been promptly cleaned up and all affected property restored by Accuworx. It is apparent from the evidence that Mr. Pileggi was aware of his duty and the likelihood of an order being made by MOE against Pydel, the owner of the premises where this spill occurred and escaped. He was in control of the pollutant after it spilled on his property, and he was mindful of Pydel’s potential liability, which explains his decision to immediately contact Accuworx for the clean-up. He signed the Emergency Authorization Form to have Accuworx begin the clean-up without delay.
[22] The Environmental Protection Act (section 99) also provides for Her Majesty in right of Ontario or Canada, or any other person, which would include the Municipality and neighboring property owners, to compensation for loss or damage incurred as a direct result of the spill of a pollutant that causes or is likely to cause an adverse effect or, as a result of neglect in carrying out a duty imposed under the EPA. It also allows a right to compensation for all reasonable cost and expense incurred in respect of carrying out an order or direction under the Act. There is an exception to the person having control of the pollutant being liable if “they establish that they took all reasonable steps to prevent the spill of the pollutant…” (Section 99 (3)). Mr. Pileggi took those reasonable steps by forthwith contacting Accuworx and having the clean-up attended to.
[23] There is no dispute that the work performed by Accuworx was effective to clean-up the spill as requested and authorized by Mr. Pileggi.
ANALYSIS
[24] Pursuant to Rule 20.04 (2) summary judgment must be granted where the court is satisfied there is no genuine issue requiring a trial. In determining whether there is a genuine issue requiring a trial the court is required to first consider the evidence submitted by the parties. As stated in paragraph 50 of Hyrniak v. Mauldin, 2014 SCC 7 there will be no genuine issue requiring a trial when the motion judge is able to reach a fair and just determination on the merits from the evidence filed. The process: (1) allows the judge to make necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
[25] The process must be proportionate to the nature of the dispute and the interests involved to achieve a fair and just result (paragraph 29 of Hyrniak). Summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims. (Paragraph 5). The standard for fairness on a motion for summary judgment is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles to resolve the dispute (paragraph 50).
[26] Applying these principles to the case at hand I find there is no genuine issue requiring a trial in respect of the plaintiff’s claim on the basis of unjust enrichment and quantum meruit. In Pettkus v. Becker (1980), 1980 22 (SCC), 117 D.L.R. (3d) 257, [1980] 2 S.C.R.834, the court references the three conditions that must be met for a finding of unjust enrichment:
an enrichment of the defendant;
a corresponding deprivation for the plaintiff, and
the absence of any juristic reason in the enrichment.
[27] Quantum meruit is a cause of action, whereby the claimant seeks restitution or damages for services rendered in circumstances where there is no contract between the parties, but the evidence shows there was an expectation of compensation when the services were performed. It is a discrete cause of action, separate and apart from claims grounded in contract or tort, which contemplates a remedy for unjust enrichment or unjust benefit. (Consulate Ventures Inc. v. Amico Contracting & Engineering (1992) Inc., 2007 ONCA 324, at para 95).
[28] Where the claim is based on quantum meruit, an explicit mutual agreement to compensate for services is not required. It suffices if the services were furnished at the request, or with the encouragement or acquiescence, of the opposing party in circumstances that render it unjust for the opposing party to retain the benefit received by the provision of the services (ibid., para 99).
[29] There is no question the premises owned by the defendant Pydel were at serious risk of damage from the oil that was spilled if left without the immediate mitigation of damage and restoration, as was the property to which the oil escaped. The services were provided by Accuworx at the request of the principal and director of Pydel, owner of the premises. The oil was quickly emanating from the premises to the parking lot and beyond. It was clearly a pollutant. The owner of the premises was in control of the oil from the spill that was quickly escaping off the premises to various neighboring properties and environment. Pydel was therefore at serious risk of an order being made against it by MOE and claims for damages, if immediate steps to mitigate and restore were not taken as required by the EPA.
[30] The fact that an order was not made by MOE against Pydel does not support the absence of a benefit to Pydel. It is clear from the evidence about the spill that there was a likelihood of substantial damage to property and the environment if there had been a failure to mitigate and restore the area affected. Mr. Pileggi was fully aware of this duty and the need to comply with the law in this regard, as he himself admitted on examination.
[31] The entitlement of compensation for the work performed is clear on the evidence filed. The work was performed and services provided pursuant to the request and instructions of Mr. Pileggi. The benefit received by Pydel from the services performed is demonstrably apparent and not subject to debate in these circumstances. The benefit which accrued to Pydel at the plaintiff’s deprivation and expense is obvious from the detail of work performed by Accuworx to effect the clean-up, as shown on the documentary evidence of numerous work orders and invoices filed. There is no juristic reason for Pydel to be enriched to the detriment of the plaintiff who performed the services in good faith. It would be demonstrably unjust to allow Pydel to retain the benefit of the work performed for its benefit by Accuworx without compensation.
[32] The fact that request for services was made in the name of Enroute by Mr. Pileggi, and invoices were rendered accordingly, and later rendered to Sunora, does not detract from the fact that the benefit was conferred on Pydel with the clear encouragement and acquiescence of Mr. Pileggi, an officer and director of the company that owned the premises to which the benefit accrued. A review of the documentation filed shows the clean-up by Accuworx was not in the portion of the Pydel premises where Enroute carried on business. It was mainly in regard to the outside parking lot in the back of the building owned by Pydel. From there it flowed to the neighbor’s property, the catch basin and downstream to the Etobicoke Creek.
DECISION
[33] The defendant Pydel has been enriched to the detriment of the plaintiff, Accuworx, which to its detriment performed the services with the encouragement and acquiescence of Mr. Pileggi, Pydel’s officer and director. There was an expectation of payment. The plaintiff is entitled to quantum meruit compensation for these services from Pydel.
[34] In the result summary judgment shall issue in favour of the plaintiff as against the defendant Pydel in the sum of $328,067.96
[35] As the plaintiff has been successful on this summary judgment motion it is entitled to costs. In the event that the parties are unable to settle the quantum of the costs, brief written submissions may be filed by no later than Wednesday, October 1, 2015 from the plaintiff, October 8, 2015 from the defendant, reply submissions, by October 15, 2015.
Seppi J.
Released: September 18, 2015
COURT FILE NO.: CV-14-0503-00
DATE: 20150918
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
ACCUWORX INC
Plaintiff
– and –
ENROUTE IMPORTS INC., SUNORA FOODS LTD., VINCENT P. PILEGGI, PYDEL PROPERTIES INC., THE SOVEREIGN GENERAL INSURANCE COMPANY and GRANITE CLAIMS SOLUTIONS INC.
Defendants
ENDORSEMENT
Seppi J.
Released: September 18, 2015