Veens v. Edgewater Construction, 2017 ONSC 6832

CITATION: Veens v. Edgewater Construction, 2017 ONSC 6832

COURT FILE NO.: 5075/11

DATE: 2017 11 30

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Hendrikus Wilhelmus Veens and Mary Veens

Plaintiffs

– and –

Edgewater Construction Co. Limited, carrying on business as K&E Sand Gravel; Odille J. Deleersnyder, also known as OJ and also known as OJ Deleersnyder; and 1031030 Ontario Inc., carrying on business as O.J.’s Sand & Gravel

Defendants

COUNSEL:

Ian Wright, for the plaintiffs

David Sanders, for the defendants

HEARD: October 30, 31, November 1, 2 and 3, 2017

REASONS FOR JUDGMENT

MORISSETTE J.

[1] This action is for damages for breach of contract for moneys owing under an agreement between the parties for the extraction of aggregates of gravel from the plaintiffs’ gravel pit.

[2] The defendants have pled and rely on the Limitations Act, 2002 and the doctrines of laches and acquiescence. The defendants further counterclaim for work done on the plaintiffs’ property.

Background of uncontested facts:

[3] The plaintiffs purchased the property known as the gravel pit from Dale Cable (“the vendor”) on May 1, 1998.

[4] Shortly after the purchase of the pit, the vendor arranged a meeting between the plaintiff, Mr. Veens (”Hank”), and the defendant Mr. Deleersnyder (“OJ”). OJ is the principal and director of his corporation, known as OJ’s Sand & Gravel or 1031030 Ontario Inc. (“103”).

[5] The first time aggregate was removed from the pit by the defendants after the purchase by the plaintiffs was some time in 2002. The last time aggregate was removed from the pit by the defendants was in July 2008.

[6] The last payment received by the plaintiffs from the defendants was November 28, 2008.

[7] The statement of claim was issued on November 22, 2010.

The initial meeting between OJ and Hank:

[8] According to Hank, the meeting took place in the spring of 1998 shortly after the purchase of the pit, in front of the entrance to the pit. The vendor introduced OJ to Hank. OJ talked about his Ministry of Natural Resources and Forestry licence and was not happy with the Ministry because he wanted authority to extract a higher volume.

[9] Hank had received from his solicitor the purchase documents between the vendor & Edgewater[^1] showing an agreement to a price of 80 cents per imperial ton. OJ and Hank agreed that the 80 cents/ton would be the price. Hank remembers OJ mentioning that he would not likely take any gravel out for a few years, while working out his licence with the Ministry. Hank was fine with that.

[10] According to Hank, no other terms were discussed. Hank only remembers OJ saying that he would not extract for a few more years. There was no discussion about a written contract. OJ never mentioned his company 103.

[11] OJ testified that he met Hank at Mr. Cable’s house (the vendor), when the “Edgewater” contract was discussed. OJ wanted the terms of this contract to apply to the plaintiffs and 103, which meant that 103 had to pay the plaintiffs on a monthly basis for the extracted aggregate of the previous month.

[12] No documents were ever produced by either party following this meeting to confirm the terms of any agreement.

Review of evidence:

[13] In the summer of 2003, Hank remembers hearing activity in the pit and drove over to the pit to see what was going on. Hank asked him when he would get paid. OJ had not advised the plaintiff of his intent to commence extraction. That evidence is admitted by OJ.

[14] OJ said “I don’t get paid in 30, 60 or 90 days. So when I get paid, you will get paid”. Hank said “OK I will wait until you get paid”. Hank understood that he would get paid when OJ got paid.

[15] According to OJ, 103’s bookkeeper, namely Shirley (who passed away in the summer of 2017), would send monthly bills to the plaintiffs indicating the monthly extractions. There is no evidence of these monthly invoices. In fact, the evidence obtained through the request to admit from Shirley in the fall of 2011, admits that “the bill would not be sent to the Veens unless they asked for information, in which case a summary would be provided. There were also phone calls between the plaintiffs and 103 addressing outstanding accounts.”[^2]

[16] According to Hank, there was never any discussion about a previous contract or that OJ would pay Hank within 30 days after the extraction.

[17] Between 2002 and 2006, the defendants have admitted to a value of $139,101.20 in aggregate extracted from the gravel pit.

[18] As of February 2007, a total of $93,136.64 was paid to the plaintiffs.

[19] Mrs. Veens testified that she had to call continuously to ask when they would get paid. This again is consistent with Shirley’s admissions of no less than 17 calls made by Mrs. Veens to Shirley between 2009 and 2010.

[20] Hank testified that OJ kept promising him that he would get his money. These promises were either in person while in the pit or on the phone.

[21] The last meeting was at the Tim Horton’s in Reeces Corners a couple of months before the statement of claim was issued when Hank was worried he was not going to get paid. Hank had in his possession a statement printed out by Shirley faxed to the plaintiffs on March 25, 2010[^3], which indicated that the plaintiffs were owed $108,738.33 for extractions made up until 2010.

[22] Hank wanted to know from OJ why he had not received any further payments. The explanation by OJ, according to Hank, was that his money was tied up in the courts but that he would pay Hank when his money was cleared from the courts. According to Hank, OJ said: “Don’t worry you will get your money”. That evidence was not challenged by the defence.

[23] In cross-examination, OJ did accept that, as an illiterate, he relied heavily on Shirley as his bookkeeper. He further admitted that she knew best how much was owed to the plaintiffs. Finally he further agreed that Shirley’s answers in the request to admit are more reliable than his answers when it comes to how his company billed and paid its customers.

Analysis of the evidence and the law:

[24] The defendant’s submit that the limitation period had expired, because the parties had agreed that the plaintiffs would be paid in 30 days and therefore the plaintiffs knew about the cause of action after those 30 days had passed and that date of discovery therefore falls outside the limitation period. Similarly, the defendants argue that the doctrine of laches applies because the plaintiffs delayed too long in bringing the action after the expiry of the 30 days.

[25] Based on the overwhelming reliable evidence that this court accepts as fact, the plaintiffs and the defendants entered into a verbal agreement of 80 cents per/ton for extraction of aggregate from the plaintiffs’ gravel pit. Even if OJ contemplated that Hank agreed to be bound by the terms of the Edgewater contract, there is insufficient evidence to support this notion. OJ’s evidence is inconsistent with his own actions and that of his company 103 as to the terms of the agreement.

[26] This Court prefers the evidence from the plaintiffs, which is far more consistent with the actions of the defendants and the documentary evidence from 103.

[27] There has never been any discussion about the terms of the Edgewater contract between Hank and OJ and no discussion of getting paid 30 days following extractions. The overwhelming evidence is that the plaintiffs had to exercise patience and diligence in seeking payment.

[28] The plaintiffs had to rely on the good bookkeeping records by 103. Mrs. Veens testified that she and Hank never received monthly records of how much was extracted, nor have they received payments on a monthly basis. In fact, the lack of documentary evidence of monthly invoices supports the plaintiffs’ evidence.

[29] This Court finds that the terms of the verbal agreement was that OJ was extracting from the plaintiffs’ gravel pit for a price of 80 cents/ton and that OJ or his company 103 would pay the plaintiffs when he got paid. This is consistent with exhibit 9, meaning that there was a running balance.

[30] Accordingly, the defence under the Limitations Act and the doctrine of laches are defeated.

Judgment against OJ personally or not:

[31] Plaintiffs’ counsel asks this court to pierce the corporate veil and order the amount owing against OJ personally.

[32] Plaintiffs’ counsel suggests that the corporate entity is a shield that ought to be pierced, given the improper conduct of the corporation in providing an inaccurate amount owing and that but for this litigation the plaintiffs would have never known how much they were owed.

[33] The provided amount owed by 103 to the plaintiffs before this litigation commenced was $108,738.33. Only as a result of the litigation, the admitted amount owing by 103 is $148,339.89, subject to the limitations defence.

[34] As the corporate law established in Saloman v. A Salomon & Co., [1897] AC 22 many years ago, each corporation has a separate legal personality that will only be disregarded in exceptional circumstances.

[35] The undisputed evidence is that 103 was the company that had the licence to extract and the obligation to pay the plaintiffs. Verbal agreements can be entered into between corporations and individuals. Though OJ never mentioned his company, it was clear from the conduct of OJ that Shirley, 103’s bookkeeper, was in charge of making the payments and that all payments were made from cheques drawn from 103’s account.

[36] The fact that Shirley, the bookkeeper for 103, provided an inaccurate amount owing prior to the litigation, does not mean that 103 conducted itself in a fraudulent manner as suggested by the case law in order to pierce the corporate veil.

[37] For these reasons, a judgment in the amount of $148,339.89 is granted as against the defendant 103 only, plus pre-judgment interest pursuant to the Courts of Justice Act.

Counterclaim

[38] The counterclaim seeks $2,475. However, OJ testified that the value of the work done for the plaintiffs was somewhere in the range of $15,000 to $20,000.

[39] Hank testified that he indeed asked OJ to clear out a few trees and a fence. An employee of 103, namely Calvin, did the work over a weekend. No contract price was agreed to and no invoice was produced by the defendant to the plaintiffs. Further, no one remembers when that work was done.

[40] Based on the evidence before this Court, I grant a set off of $2000.00 in favour of defendant 103 without pre-judgment interest.

Disposition:

[41] This Court grants a judgment of $146,339.89 plus pre-judgment interest pursuant to the Courts of Justice Act.

Costs:

[42] Should the parties be unable to agree on the issue of costs, I may review brief written submissions on costs, within 30 days hereof from the plaintiffs, 30 days later for the defendants, and 15 days later for a reply, if any.

“Justice J.N. Morissette”

Justice J. N. Morissette

Released: November 30, 2017

[^1]: The previous entity licensed to extract from the pit. [^2]: Read-ins from response to request to admit at Pg. 7 of 21 at item (d). [^3]: Exhibit 21.