CITATION: Angel v. Beepat, 2016 ONSC 4179
COURT FILE NO.: CV-09-3333-00
DATE: 2016-06-24
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Jeremy Angel and Indra Seeta Angel
A Misir, for the Plaintiffs
Plaintiffs
- and -
Monica Beepat and Royston Beepat and Giftland Office Max a company incorporated under the laws of Guyana and carrying on business in Guyana, and B. Singh, a.k.a. B. Sahadeo
K. Chatarpaul, for the Defendants
Defendants
HEARD: June 23, 24, 25, 26, 29, September 14, November 25, 26, 27, 2015, January 11, 2016
REASONS FOR JUDGMENT
M. J. Donohue, J.
OVERVIEW
[1] The plaintiff, Seeta Angel, and her niece, the defendant Monica Beepat, made an agreement to buy and sell goods in March 2007. Throughout the trial they were referred to as Seeta and Monica and I have done so as well in this judgment.
[2] The dispute is the extent to which they had an agreement.
[3] The agreement was for Seeta to purchase goods in Canada and ship them via Monica’s customs broker, B. Singh, to Guyana where Monica had a department store called Giftland. Seeta was to cover the cost of freight and Monica was to pay the customs duties to clear the goods.
[4] After the goods were purchased and shipped in nine shipments it was communicated to Seeta that Monica would pay for only the first shipment.
[5] Monica’s husband, Roy Beepat (“Roy”) arranged for all the shipments to clear customs and be delivered to the Giftland warehouse.
[6] Some goods were sold by Giftland; some goods were picked up by “Tai” (Seeta’s brother); some sample goods were picked up by Seeta and her husband Jerry Angel (“Jerry”) and the balance were sent to another store warehouse called Satro’s, owned by Monica and her siblings.
[7] No funds were paid to Seeta as Monica claimed any payments owing to cover the customs clearing charges and transport to the warehouse.
[8] Monica’s husband Roy made an offer to pay for some of the goods received. This was not accepted by Seeta and this litigation was commenced.
THE PARTIES TO THE AGREEMENT
[9] There is no suggestion that the agreement, if there was one, was formed through anything other than discussions between Seeta and Monica. Monica owned the store, ‘Giftland’, as a sole proprietorship. She was the buyer for the store. As of 2007 she had had ten years’ experience as a business woman.
[10] Monica’s husband Roy worked in the business with her and took various actions on her behalf. Similarly, her son in law, Ian Ramdeo (“Ian”), handled bookkeeping functions for Giftland and took various actions on Monica’s behalf.
[11] Her Aunt Seeta was a housewife and caregiver for four children as well as Seeta’s mother, Monica’s grandmother. Seeta’s husband, Jerry, assisted with packaging products for shipping and preparing invoices. He also was involved in other actions in 2007 when the deal turned sour. His actions were on Seeta’s behalf.
[12] Thus, the contracting parties were Seeta and Monica.
[13] The defendant, B. Singh, was never served and did not attend trial.
[14] Giftland was described in the claim as a corporation. This was an error as Monica held it as a sole proprietorship.
[15] The defendants did not pursue their counterclaim at trial.
CONTEXT FOR THE AGREEMENT
[16] It is not disputed that the idea for the agreement began in August 2006, when Monica visited her Aunt Seeta in Canada for three weeks. Monica suggested that there were goods in Canada that Seeta could source and sell to Monica for the store in Guyana. Monica’s idea was to help her aunt earn money for Seeta’s children’s university education. Monica and Seeta toured various stores together looking at various products that would be suitable.
[17] Monica’s store, Giftland, was and is a retail department store. In 2006, it had a staff of 250 and had $20 million (U.S.) gross sales per year. Ninety-nine per cent of the goods were imported. The store is still thriving.
THE LAW OF CONTRACT
[18] It is not disputed between the parties that in order to have an enforceable agreement the parties must be ad idem, of the same mind, as to the terms of the agreement.
[19] The law of contract applicable in this action was helpfully summarized by Gropper J. of the Supreme Court of British Columbia in Singh v. Nicholson, 2011 BCSC 449:
[25] The principles of contract law were canvassed extensively by Madam Justice Dickson in Le Soleil Hotel and Suites Ltd. v. Le Soleil Management Inc., 2009 BCSC 1303. Dickson J. stated at paras. 321 - 323 (citations omitted):
321 Courts strive to uphold contractual obligations solemnly and freely undertaken. They do not, however, impose them upon parties who have not reached agreement on all essential terms.
322 For parties to be bound in a contractual relationship there must be a manifest meeting of the minds. They must express themselves outwardly in a manner that indicates both an intention to be bound and reasonably certain mutually agreed terms.
323 These fundamental principles of contract law enable commercial life to operate in a fair, predictable and efficient manner. They apply whether the purported contract in question is concluded in writing, orally, by conduct, or by a combination thereof. The key question in all cases is whether an agreement has been reached on all essential terms, regardless of its form.
[26] In respect of oral contracts, Dickson J. stated at paras 328 - 330 (citations omitted):
328 The interpretation of oral contracts turns on the same essential principles. If the alleged agreement has not been reduced to writing, the Court must consider what the parties said and did and assess objectively whether, in context, their words and actions establish an intention to be bound. The genesis and aim of the transaction is an aspect of the relevant context for consideration. The credibility of witnesses will be particularly important and differing versions of events will increase the difficulty of establishing that an enforceable bargain was made.
329 When the Court considers the parties' manifest intentions, it may be required to determine whether they intended to create a binding contract or simply reached a basis for future agreement. This question often arises where... the alleged agreement contemplates the execution of a further formal contract.
330 It is not necessary for every conceivable matter to be resolved between the parties before an enforceable contract is created. The law does not, however, recognize an "agreement to agree". The question for determination is whether the parties have reached agreement on all matters that are vital or fundamental to the arrangement or whether they intended to defer legal obligation until a final agreement has been reached.
[27] In Remington Energy Ltd. v. British Columbia Hydro and Power Authority, 2005 BCCA 191, the Court of Appeal referred to and approved the trial judge’s statement of the applicable law (at para. 31):
[31] ... [The trial judge] said this about the applicable law:
[25] Certain fundamental principles of contract law are engaged in the analysis of this issue:
(a) In order to bring a contract into existence, there must be a communication of the parties’ intention by outward expression. The test is objective – have the parties indicated to the objective reasonable bystander, their intention to contract and the terms of such contract? G.H.L. Fridman, The Law of Contract in Canada 4th ed., (Toronto, Carswell, 1999) at 16 & 17;
(b) The parties must have evinced clear agreement on the essential terms of the intended contract: Fridman, supra, at 20;
(c) The conduct of a party may be considered to determine the existence of a binding contract: see J.K. Campbell & Associates Ltd. v. Lahr Construction Ltd. et al (1987), 27 CLR 220 (BCSC) at 224, Cohen J.
(d) Acceptance of an offer may be implied from conduct, the test being objective: see Saint John Tug Boat Co. Ltd. v. Irving Refinery Ltd. (1964), 1964 CanLII 88 (SCC), 46 DLR (2d) 1 at 7, [1964] S.C.R. 614 (SCC), Ritchie, J. speaking for the court.
[28] Mr. Justice Butler explained the applicable law in regard to the certainty of terms in Canadian Bedding Company Ltd. v. Western Sleep Products Ltd., 2009 BCSC 1499 at paras. 71 and 72:
[71] G.H.L. Fridman, in The Law of Contract in Canada, 5th ed. (Toronto: Thomson Carswell, 2006) summarizes the essential principles regarding certainty of terms:
The court cannot make for the parties a bargain which they themselves did not make in proper time. This means in the first instance, that if a contract is not clearly created by the parties’ language or conduct the court cannot construct one. It is for the parties to use such language or employ such conduct as will make plain that they intended to contract...
Uncertainty about some specific obligation may suffice to make impossible the conclusion that there is a contract in effect between the parties. The test would seem to be whether the term or terms in question relate to essential aspects of the alleged contract. Examples of this are the failure of parties to settle the purchase price for goods, the lack of agreement as to the date of commencement and term of a lease, or the amount of interest to be paid...
The underlying principle is that all the terms of the agreement between the parties must be settled. There must be nothing left for negotiation.
[72] Of course, when determining the intentions of the parties to a contract, a court must look at the outward expression of the parties’ intentions, not their personal knowledge or understanding which was not expressed. In other words, the question a court must ask is what a reasonable outside observer would conclude from the facts.
[20] In the present case, which involved a contract for the sale of goods, the essential terms of the contract included the identity of the parties, the property to be purchased, the quantities thereof, and the price to be paid: see e.g. Serebrennikov v. Powerup Inc. et al., 2014 ONSC 1055 (Master), at para. 23.
[21] In Ontario, the Sales of Goods Act, R.S.O. 1990, c. S.1, governs contracts for the sale of goods which fit within the statutory regime. Both parties agree that the Act applies to this action. Several provisions are relevant:
Sale and agreement to sell
- (1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a money consideration, called the price, and there may be a contract of sale between one part owner and another.
Contract, how made
- Subject to this Act and any statute in that behalf, a contract of sale may be made in writing, either with or without seal, or by word of mouth or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties, but nothing in this section affects the law relating to corporations.
What goods may be subject of contract
- (1) The goods that form the subject of a contract of sale may be either existing goods owned or possessed by the seller or goods to be manufactured or acquired by the seller after the making of the contract of sale, in this Act called “future goods”.
Price
- (1) The price in a contract of sale may be fixed by the contract or may be left to be fixed in manner thereby agreed or may be determined by the course of dealing between the parties.
Delivery by instalments
- (1) Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by instalments.
Acceptance of goods
- The buyer shall be deemed to have accepted the goods when the buyer,
(a) intimates to the seller that the goods have been accepted;
(b) after delivery, does any act in relation to them that is inconsistent with the ownership of the seller; or
(c) after the lapse of a reasonable period of time, retains the goods without intimating to the seller that they have been rejected.
[22] In Maple Flock Co. v. Universal Furniture Products (Wembley) Ltd., [1934] 1 K.B. 148 (C.A.), Lord Hewart C.J. wrote, at p. 154 “A contract for the sale of goods by instalments is a single contract, not a complex of as many contracts as there are instalments under it” (see also Cimmaster v. Piccione, 2010 ONSC 96, at para. 51).
FADED EVIDENCE
[23] The agreement that Seeta and Monica made was an oral contract through a number of telephone conversations they had between January and March 2007.
[24] Seeta made notes of what was agreed to. Monica did not. Seeta gave her notes to her husband Jerry to prepare the invoices, listing quantities and prices. Jerry prepared the invoices and discarded the original notes.
[25] Seeta’s evidence was that she had an agreement with Monica for the price and quantity for all nine shipments that were sent.
[26] Monica’s evidence was that she had an agreement with her Aunt Seeta only with respect to the first shipment. She made no notes.
[27] There are some email communications but only after the dispute arose.
[28] Examinations for discovery did not occur until almost five years after the oral agreement was discussed. The trial evidence was over eight years after the discussions.
[29] The evidence must be looked at as a whole to determine on a balance of probabilities, what agreement the parties made.
SEETA’S VERSION OF EVENTS
[30] It was Seeta’s evidence that she had a number of telephone conversations with Monica in January, February and March of 2007. Seeta went to various suppliers to “source” goods and discuss prices and quantities with Monica. Seeta took out a loan to purchase the goods discussed and to pay to freight the goods to Guyana. The goods consisted of cosmetics and clothing.
[31] No emails were exchanged except for an email from Seeta to Monica showing sample clothing. Neither party produced this email at trial.
[32] Seeta and Jerry testified that all the goods were purchased by March 2007, before any shipments left Canada. Seeta said that Monica agreed to the price and quantities and Seeta made notes of those agreements. She then gave them to Jerry to write up the invoices that were later sent.
MONICA’S VERSION OF EVENTS
[33] Monica’s evidence at trial was that she had a number of telephone conversations with Seeta in early 2007. They discussed various goods. Monica was a very busy woman and she found it difficult to deal by phone. She said it was the normal course of business to do everything by email. Her usual practice was to have discussions about price and quantity but then the seller would send a written pro forma statement of price and quantity for her to consider before an agreement was reached.
[34] Monica testified that she never received a pro forma statement from Seeta to approve and in fact did not even see the invoices prepared by Jerry until this trial. She did then agree that she received the first invoice regarding the first shipment. Her bookkeeper, “Ian”, had used this first invoice to prepare calculations of what was owed to Seeta. (This invoice was dated July 3, 2007 but was noted to be a typo and intended to be June 3, 2007. I accept this as emails in June appear to reference this invoice.)
[35] Monica’s evidence was that she did not agree to any other goods or shipments. She said she was then ”bombarded with shipments” which she was not aware of and had not approved of as she had not received any pro forma written statement.
SEETA’S REPLY
[36] Seeta testified in reply that she had never before heard the phrase “pro forma”, and that Monica had never requested such a document. Seeta said she did not even know what the word meant.
SHE SAID / SHE SAID
[37] In determining whether an oral agreement had been made the case rests, in large part, on the credibility of the two respective parties.
CREDIBILITY OF MONICA
[38] There were a great number of inconsistencies and contradictions in Monica’s evidence.
[39] At trial Monica denied that there was an initial agreement for any of the shipments, including the first shipment. This contrasts with her bookkeeper, Ian, who prepared the calculations on the first shipment stating “50% mark up as agreed” and “total (as per initial agreement)”.
[40] Monica testified that she did not order “anything” beyond the items listed in the first shipment. She said that they discussed cosmetics, “but not clothing.” Under cross-examination she admitted her statement in her own email that, “it is true that I had given you the orders for the clothes.” Her trial evidence was a complete reversal of her earlier position.
[41] Monica testified at trial that she did not order the quantities that were shipped because their store did not handle such quantities. However, within days of clearing the clothing shipment Monica had placed a Giftland advertisement to sell “10,000 swimsuits” that were contained in that shipment. Under cross-examination Monica agreed that it was a “constant in her discussions” that there was no issue with quantity as they had over $20 million in sales annually and that what Seeta was selling them was “one day’s sales in their book.”
[42] Although Monica testified at trial that she was waiting for a pro forma written documents, which was how she did business, her husband Roy stated at discovery that Giftland had deals with over 100 different suppliers with no written agreements. Under cross-examination at trial she agreed that Roy’s statement was correct. (As discussed below Roy did not testify at trial. A number of his statements on discovery were read in as part of the plaintiffs’ case.)
[43] On discovery Monica agreed that she and Seeta reached an agreement as to quantity and price and that shipping would follow. She later confined that answer to the first shipment only. It is noteworthy that no mention was made of requiring a pro forma, which she said at trial was required before any agreement was acceptable to her.
[44] Although Monica testified that she had not seen the invoices until trial, it is apparent that the defendant’s offers to purchase the merchandise in September 2007, were based on listed goods and prices that came from the invoices Jerry prepared and produced that summer. As well, Roy testified at discovery and confirmed that they received all the invoices.
[45] I found inconsistencies with Monica’s testimony that she did not have an agreement on prices with Seeta. Roy, on her behalf, wrote an email July 14, 2007 stating that, “Seeta has changed the original terms under which we agreed to purchase the goods” and the prices now were “much higher than those quoted to us.”
[46] Other emails from Roy and Monica refer to Seeta’s “new” prices. At discovery Roy said that the “agreed” prices were not written down. They were in Monica’s memory.
[47] Monica however, gave no evidence as to what prices she says they did agree to.
[48] Monica testified that Seeta’s brother, Tai, came “quite often” to the Giftland warehouse to take away goods between July and September 2007. Tai testified for the defence that he attended the warehouse on just two occasions in early July. Part way through the defendant’s case Monica produced only two receipts for attendances by Tai. The receipts matched the two dates in early July to which Tai testified.
[49] Monica testified that there was no limitation on what Tai could take of the goods at the warehouse and it was out of their control. The detailed receipts belied this testimony as did Roy’s discovery evidence that everything in their warehouse was logged in and out.
[50] She testified that B. Singh cleared the goods at customs in his name, on her behalf. Later she changed her evidence to say that B. Singh was clearing the goods on Seeta’s behalf.
[51] At one point she testified that she advertised the beachwear which Seeta had shipped, “to help Seeta”. Later Monica said that she sold the beachwear to defray their own costs of customs duties.
[52] At trial Monica admitted to advertising the beachware and selling it all (10,000 swimsuits). However, on discovery she said that when the clothing arrived they kept it in a corner and did not touch it.
[53] At trial Monica said she “only suggested” that Seeta could send the goods via B. Singh as agent which was contrary to Seeta’s evidence that Monica directed Seeta to use B. Singh. At discovery, Monica testified that she “directed” Seeta to use B. Singh as agent.
[54] The ninth shipment had been sent via Monica’s cousin “Ajay” to clear customs. Monica testified at trial that “I have nothing to do with it”; “likely customs liquidated” the goods; “we cannot clear a barrel consigned to Ajay”; and that she did not get the ninth shipment documents. When asked, she answered “none”.
[55] These answers are contradicted by Roy’s specific email reference to the barrel for Ajay “which we are endeavour to help you clear when we can” and “under no circumstances will I be clearing any more goods for you save and except the 1 barrel mentioned above.”
[56] At times, Monica conceded at trial that she did have an agreement with Seeta from their discussions in early 2007 but that it was only for the goods noted in the first shipment and not the goods in the other eight shipments.
[57] I find this evidence is contradicted in her email to Seeta, written after Tai had picked up some goods to sell, where she wrote, “Roy is very upset as we do not do this type of business as he though[t] that all the goods were intended for us” [sic]. As of this date of this email at least seven of the first eight shipments had landed in Guyana. As well, Roy in his emails was critical of the number of shipments and complained that they should have “all” been shipped together to reduce freight and duty.
CREDIBILITY OF SEETA
[58] Seeta was not a sophisticated or articulate witness but she remained consistent in her testimony. She testified that she discussed prices and quantities with Monica and had an agreement before shipping any goods.
[59] Eight shipments of goods were shipped between March 26 and June 5, 2007, before there was any discussion of a dispute. (The ninth shipment was sent July 9, 2007.)
[60] Seeta was cross-examined on her emails where she asked Monica to clear “her” goods at customs and that they would “negotiate a fair price.” Seeta explained that they were being pressured and that Monica and Roy were renegotiating the agreement that had been made. As she had no resources otherwise to sell her goods in Guyana she was “pressured” to further negotiate. She wanted payment.
[61] Jerry confirmed that all their emails after the first indication of refusing the goods (which were largely already all shipped) were under duress. He said they kept trying to be “nice to Roy” in this situation.
[62] Seeta’s email of July 9, 2007 to Monica is consistent with her evidence as she states, “at every step in my purchases, I consulted you and you gave me your okay”. I note there was never a denial email from Monica in this regard. The email was tendered into evidence. Monica gave no explanation of it.
[63] Seeta’s brother Tai picked up some goods to sell. Seeta’s husband Jerry emailed on July 14, 2007 saying, “Tai does not have the resources to sell those goods. He was only trying to help us to reduce the quantity because I gathered it was too much for you guys to handle. Seeta has an agreement with Monica, and based on that agreement. We decided to ship clothes because she guaranteed she was going to take the goods and wire us the money. Seeta has done a lot of groundwork to secure people who sell wholesale clothes for excellent prices, even Monica said our prices were good”[sic].
[64] Although theses emails are after the fact they speak to the minds of the parties and are consistent with Seeta’s version of events eight years ago.
[65] Seeta’s evidence was that the goods in all nine shipments had been agreed upon and purchased by the end of March 2007 and then she packaged and sent them. She understood they had one agreement for all the goods purchased. This is consistent with the emails sent by Roy and by Monica in July 2007 where they stated that all the goods should have been shipped in one container to reduce freight and duties.
CONCLUSION ON CREDIBILITY
[66] This trial commenced in June 2015. Roy did not attend and a doctor’s note was provided that he had pneumonia. The trial resumed again in September and in November. Roy still did not attend and no further evidence was filed regarding his non-attendance. I draw an adverse inference that he did not attend to testify despite two further opportunities to do so.
[67] Monica’s evidence as a whole was inconsistent, exaggerated and at times completely contradictory. I prefer the more consistent evidence of Seeta and Jerry as to the agreement that had been made.
[68] Their discussions of price and quantity were reduced to writing by Seeta and formed the invoices, which Jerry prepared. Monica’s evidence is either that they did not agree on prices and quantities at all or that they did agree and Seeta changed the prices. Monica had no notes of what she says the correct prices were nor did she give any evidence of what the correct prices were.
[69] The evidence as a whole presents as a private family deal in which Monica agreed to help her Aunt Seeta. When the deliveries began to arrive it was Roy who stepped in to try and say “no deal”. On June 29, 2007, he emailed Seeta saying, “It is not my intention to default you in anyway, it was I believe Monica’s intention to assist which has lead us to this present position and we need to be very clear on how we do any further business from hereon. Any further purchases from you must be cleared with me on price and quantity before proceeding.” Of course, by this time Seeta had done all the purchasing and much of shipping already, based on her agreement with Monica.
[70] Monica did not want Roy to be upset. In her July 14, 2007, email she wrote, “All the confusion and these things getting back to Roy is because you have decided to talk to everyone and ask them all about prices etc. If you had just left it to me to look after the matter then we wouldn’t be in this mess.”
[71] I find this supports Seeta’s version of events, that Monica and Seeta had one agreement on price and quantity for all shipments, which Roy reneged upon, on Monica’s behalf.
[72] Furthermore, not only do I find Seeta more credible than Monica, I also find it accords with common sense that a housewife, Seeta, would secure a firm agreement before taking out a loan, making these purchases and paying for freight. I would expect her to be risk averse. The suggestion that she was shipping all these goods to Guyana to then discuss price defies common sense.
[73] On the evidence as a whole, I conclude that it was Roy who did not like the deal that Monica made, and he caused the disruption in the transaction.
[74] I am satisfied that the parties were ad idem on the essential terms of the agreement for the sale of goods from Seeta to Monica. There is an enforceable contract. I accept Seeta’s evidence as to its terms.
DELIVERY OF THE GOODS
[75] The evidence supports that Monica took delivery of all eight shipments which were sent via her customs broker, B. Singh. They arrived packed and sealed and were intact.
[76] The ninth shipment was sent via Monica’s cousin, Ajay, Seeta’s nephew. The goods landed in Guyana on May 22, 2007. The paperwork to clear those goods was left with the defendants. Roy’s last communication was that he was going to try to clear those goods. As noted above, Roy did not attend at trial.
[77] As his last email gave the express intention of obtaining the last shipment, I conclude that he did so and that all nine shipments came in to the possession of the defendants and thereby accepted their delivery.
[78] Although Roy complained about the number of shipments, Monica’s evidence was that she did not advise Seeta on the shipping. She left it to Seeta to arrange. I conclude that they cannot later complain of the numbers of shipments.
MITIGATION: GOODS REMOVED BY SEETA AND JERRY
[79] When the dispute became apparent on the purchase and sale of these goods, in mid-July 2007, Seeta and Jerry made arrangements to travel to Guyana in August 2007, to see what could be done.
[80] They attended at the warehouse and saw the goods stored there. They attempted to do some counting but it was 50 degrees in the warehouse. They found it to be unworkable.
[81] They took three boxes of samples and went about the city to try to get sales. Jerry said they got some orders based on the samples but the goods were not released and so they did not recover any money.
[82] The boxes that Jerry and Seeta took, as well as boxes which Tai took in early July, which did not sell, ended up at the James Street house in Guyana, owned by Seeta and occupied by Tai and his extended family.
MITIGATION: GOODS REMOVED BY TAI
[83] There are clear records of the two attendances which Tai made on behalf of his sister Seeta in early July 2007. On July 5, he picked up some samples (one item each of four cosmetics) and 440 deodorants. On July 7, 2007, he picked up six different types of cosmetics in quantities of 479, 472, 92, 236, 238, 135. It is reasonable that he would have ended up with four or five boxes of products, consistent with the evidence.
[84] Tai’s evidence was that there was a lot of boxes of product in a bedroom in the James Street house. All parties agree this was a small home in which roughly twelve people lived. Some of his family occupied the bedroom in which the boxes were located. As his evidence was rather vague, I conclude that there was nothing more than the four or five boxes discussed above.
[85] Tai’s evidence was that he sold $3,000 of product for his sister. Seeta testified that she never received that money from Tai. That may well be the case but goods were taken to be sold on her behalf.
[86] I conclude that a credit needs to be given to the defendants for the product removed and sold. The best evidence the court has is Tai’s claim that he sold the product for $3,000.
[87] I find that Seeta has mitigated her loss to that extent.
[88] The evidence also disclosed a defence document entitled, “List of Goods Sold to Tai Balram August 2007”. Monica confirmed that those goods never left the warehouse. I have, therefore, not considered anything there listed as a credit to the defence.
INVOICED SHIPMENTS
[89] The goods delivered were cosmetics and clothing. The shipments invoiced as the goods were cleared as follows,
#1 July (June) 3, 2007 $10,705.00 (Cosmetics)
#2 June 9, 2007 $11,040.00 (Nailpolish)
#3June 9, 2007 $4,208.50 (Cosmetics)
#4 June 21, 2007 $11,223.50 (Cosmetics)
#5 June 21, 2007 $3,640.50 (Cosmetics)
#6&7 August 3, 2007 $124,594.00 (Clothing & Cosmetics)
#8 August 15, 2007 $9,698.60 (Clothing & Cosmetics)
#9 Sept.15, 2007 $5,334.70 (1 Barrel)
Total $180,444.80
[90] The most significant shipments were invoices #6 and #7 invoiced at $124,594 which were largely clothing. Both shipments were cleared by Monica and Roy on July 31, 2007. These contained the 10,000 swimsuits earlier referred to, which Monica admitted to advertising for sale in the paper on August 7, 2007. She also admitted that clothing and backpacks from the shipments were sold in her store and she believed the stock was now all sold.
[91] Monica conceded that the mark-up from the purchase price was generally 200 per cent. Jerry testified that the markup was as much as 264 per cent above the purchase price which Roy and Monica offered to buy the clothes at in a September offer to purchase.
[92] Monica explained that the store price for items was reduced over time if not sold.
[93] As noted, Monica testified at trial that they sold the clothes to recover their expenses for clearing customs and transport. However, Monica had no evidence or documentation to support what those costs actually were. She testified that she would have received email exchanges from B. Singh as to those charges. On the other hand I note the discovery evidence of Roy was that there was never any paperwork between them and B. Singh. B. Singh simply told them how much it would be and they would pay him.
[94] In conclusion, the bulk of the shipments went in to the hands of Monica and Roy and was either sold or stored at Monica’s other store, Satro’s.
SEPTEMBER 2007 OFFERS BY THE DEFENDANTS
[95] Roy put together two offers on some of the goods he said he was prepared to purchase. They were emailed in September 2007. Jerry testified that the offer was $52,149 which compared to the invoiced amounts of the shipments referenced of $165,412. Jerry said it was an insulting offer and that he and Seeta would have suffered considerable losses had they accepted it.
[96] Roy’s email of September 18, 2007, stated, “please understand this offer of mine is not of my making I am being pressured from Monica and the family to make this offer.”
[97] Jerry and Seeta did not respond and instead pursued this litigation seeking execution of the oral agreement, which Seeta said she had with Monica.
WHAT IS OWING
[98] As I have accepted the agreement for price and quantity on the balance of probabilities I have accepted the invoices as prepared by Jerry based on the original notes. The invoices as set out above come to $180,444.80.
[99] On the first invoice of $10,705 the defendants made calculations that the plaintiff owed them $6,252.94 for expenses and so only owed $4,200 to the plaintiff. It was confirmed at trial that the $4,200 was never paid. There was also no supporting proof of the $6,252.94 in expenses.
[100] As noted above the plaintiffs mitigated by having Tai attempt to sell some goods. The best evidence I have is that he was able to sell goods for $3,000. This is a credit for the defendants.
[101] I have found that the parties to the contract were Seeta and Monica. I find, therefore, that the defendant Monica Beepat owes the plaintiff Seeta Angel $177,444.80.
INTEREST
[102] Seeta’s evidence was that there was also agreement that interest on outstanding payments was two per cent per month.
[103] Monica gave no evidence on this.
[104] If that had been agreed to I would have expected it to be in Seeta’s notes and then properly been on each of the invoices that Jerry prepared from her notes. There is a conspicuous absence of any mention of interest charges on overdue accounts on any of the invoices.
[105] I am not satisfied on the evidence that there had been an agreement for the interest rate.
[106] I order pre-judgement interest in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43.
CLAIM FOR MENTAL DISTRESS
[107] The plaintiffs and their daughters gave evidence of how distressing financially this was to the family. Their distress was compounded by the fact that they felt a breach of their trust of a family member.
[108] The plaintiffs felt this formed the basis for a claim of mental distress.
[109] In Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30, [2006] 2 S.C.R. 3, the Supreme Court of Canada set out a two part test that the plaintiffs must satisfy to prove a loss warranting mental distress damages in in commercial contracts (at para. 47):
The court must be satisfied: (1) that an object of the contract was to secure a psychological benefit that brings mental distress upon breach within the reasonable contemplation of the parties; and (2) that the degree of mental suffering caused by the breach was of a degree sufficient to warrant compensation. These questions require sensitivity to the particular facts of each case.
[110] The Court noted, at para. 45:
In normal commercial contracts, the likelihood of a breach of contract causing mental distress is not ordinarily within the reasonable contemplation of the parties. It is not unusual that a breach of contract will leave the wronged party feeling frustrated or angry. The law does not award damages for such incidental frustration. The matter is otherwise, however, when the parties enter into a contract, an object of which is to secure a particular psychological benefit.
[111] I am not satisfied that a proper evidentiary foundation was laid by the plaintiffs to ground a claim for mental distress.
[112] Nor am I satisfied that the circumstances of this case bring it into the class of cases where mental distress damages are appropriate. While it is clear that Seeta’s objective in entering the contract was to financially secure her children’s future education, when I ask myself “what did the contract promise?” (see Fidler, at para. 44), it was fundamentally a commercial transaction for economic benefit. It was not a contract to secure a particular psychological benefit (Fidler, at para. 45), and as such the complaints of distress suffered by the plaintiffs are not compensable.
CLAIM FOR AGGRAVATED DAMAGES
[113] Similarly the plaintiffs claim aggravated damages.
[114] Unlike the claim for mental distress damages arising out of the breach of contract, true aggravated damages are not recoverable under the rule in Hadley v. Baxendale (1854), 9 Ex. 341, 156 E.R. 145. That is damages arising “from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it” (Hadley, at p. 151). The Supreme Court of Canada reviewed this principle in Fidler, at para. 52:
The first are true aggravated damages, which arise out of aggravating circumstances. They are not awarded under the general principle of Hadley v. Baxendale, but rest on a separate cause of action — usually in tort — like defamation, oppression or fraud. The idea that damages for mental distress for breach of contract may be awarded where an object of a contract was to secure a particular psychological benefit has no effect on the availability of such damages. If a plaintiff can establish mental distress as a result of the breach of an independent cause of action, then he or she may be able to recover accordingly. The award of damages in such a case arises from the separate cause of action. It does not arise out of the contractual breach itself, and it has nothing to do with contractual damages under the rule in Hadley v. Baxendale.
[115] The plaintiffs have not established, or even clearly identified, an independent cause of action for which aggravated damages could be awarded. As a result, this part of the claim is dismissed.
CLAIM FOR PUNITIVE DAMAGES
[116] In Ferme Gérald Laplante & Fils Ltée v. Grenville Patron Mutual Fire Insurance Co. (2002), 2002 CanLII 45070 (ON CA), 61 O.R. (3d) 481 (C.A.), Charron J.A. (as she then was), summarized the law of punitive damages, after the decision of the Supreme Court of Canada’s decision in Whiten v. Pilot Insurance, 2002 SCC 18, [2002] 1 S.C.R. 595, as follows:
65 The Supreme Court of Canada has provided an extensive review of the law of punitive damages in Whiten and has provided guidance on its general application and more particularly on its application in a contract case. The Supreme Court has also reiterated the applicable standard of appellate review of such awards. I will simply reiterate those principles that apply to the facts of this case.
66 The single most important feature of punitive damages that must be kept firmly in mind is that their purpose is not to compensate a plaintiff, but to punish a defendant for its misconduct, to deter the defendant and others from similar misconduct in the future, and to denounce the misconduct as meriting society's condemnation. As such, as stated in Whiten, "punitive damages straddle the frontier between civil law (compensation) and criminal law (punishment)" (para. 36). Since criminal law and quasi-criminal regulatory schemes are recognized as the primary vehicles for punishment, it is a fundamental principle of the law of punitive damages that the remedy be resorted to only in exceptional cases, and with restraint.
67 The exceptional case is usually described as one where the defendant's misconduct was "malicious", "oppressive", "high-handed", "offensive to the court's sense of decency": see for example, Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130 (S.C.C.), at para. 196. These incantations are well-known and they cannot be ignored. As stated in Whiten, they serve to limit "the award [of punitive damages] to misconduct that represents a marked departure from ordinary standards of decent behaviour" (para. 36).
68 Restraint is then exercised by limiting the award to those cases of serious misconduct where punitive damages serve a rational purpose. As stated by Cory J. in Hill (at para. 197), the question is whether "the misconduct of the defendant [was] so outrageous that punitive damages were rationally required to act as deterrence?" This rationality test must be met both with respect to the question of entitlement to the award of punitive damages, and its quantum: see Whiten at para. 101.
70 As noted by the Supreme Court of Canada in Whiten (see para. 67), it is in the nature of the remedy that punitive damages will largely be restricted to intentional torts or breaches of fiduciary duty, but they are nonetheless available in other civil cases where the circumstances warrant the addition of punishment to compensation.
71 In a contract case, the plaintiff must show more than simply a breach of the defendant's obligations under the contract. Since the parties themselves define the scope of their relationship and the nature and extent of their respective obligations, the remedy for breach of contract lies in putting the plaintiff in the same position as he or she would have been if the contract had not been breached. This is the remedy to which the parties have contractually agreed and it will generally be viewed as sufficient to remedy the wrong, no matter how egregious. The Supreme Court in Whiten confirmed its decision in Vorvis v. Insurance Corp. of British Columbia, 1989 CanLII 93 (SCC), [1989] 1 S.C.R. 1085 (S.C.C.) and held that, in order to found a claim for punitive damages in a contract case, there must be an independent actionable wrong. The wrong in question may be a tort, but need not be. It is sufficient if it can form the basis of an independent cause of action at law. [Emphasis added.]
[117] As with aggravated damages, the plaintiffs have not established an independent cause of action to ground an award of punitive damages.
[118] The plaintiffs point to the duty of honest dealings in contract which was cited by the Supreme Court of Canada in Bhasin v. Hryrew, 2014 SCC 71, [2014] 3 S.C.R. 494. In Whiten, the Supreme Court of Canada held that a “breach of the contractual duty of good faith is independent of and in addition to the breach of contractual duty to pay the loss” (at para. 79) and is an independent actionable wrong.
[119] However, the conduct in this case does not, in my view, rise to the level of malicious, oppressive, high-handed conduct that is offensive to the court's sense of decency. While the defendants’ conduct breached the terms of the agreement between the parties and was clearly a source of anxiety for the plaintiffs, I am not convinced that it amounts to a marked departure from ordinary standards of decent behaviour (Whiten, at para. 36). This is not an exceptional case which warrants an award of punitive damages.
CONCLUSION
[120] I found the contracting parties were Seeta Angel and Monica Beepat. I order the defendant Monica Beepat to pay $177,444.80 to the plaintiff, Seeta Angel. The plaintiff Seeta Angel is entitled to pre-judgment interest in accordance with the Courts of Justice Act.
[121] The claim of Jerry Angel is dismissed. The claims as against Roy Beepat, Giftland Office Max and B. Singh are dismissed. The defendants’ counterclaim is dismissed.
COSTS
[122] If the parties cannot agree on costs, the plaintiffs may make written submissions as to costs within 30 days of the release of these reasons. The defendants have 15 days after receipt of the plaintiffs’ submissions to respond. All such written submissions are to be forwarded to me at my chambers at 7755 Hurontario Street in Brampton, to the attention of Dilshad Byramji. Written submissions shall not exceed three pages, and shall append any pertinent offers, draft bills of costs or case law. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.
M. J. Donohue, J.
Released: June 24, 2016
CITATION: Angel v. Beepat, 2016 ONSC 4179
COURT FILE NO.: CV-09-3333-00
DATE: 2016-06-24
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Jeremy Angel and Indra Seeta Angel
Plaintiffs
- and –
Monica Beepat and Royston Beepat and Giftland Office Max a company incorporated under the laws of Guyana and carrying on business in Guyana, and B. Singh, a.k.a. B. Sahadeo
Defendants
REASONS FOR JUDGMENT
M. J. Donohue, J.
Released: June 24, 2016