Court File and Parties

COURT FILE NO.: CV-17-574419 DATE: 2018/12/06 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Third World Broadcasting Inc. Plaintiff – and – Pakistan International Airlines aka Pakistan International Airlines Corporation aka PIA Defendant

COUNSEL: Matthew R. Harris for the Plaintiff Muhammad Zafar for the Defendant

HEARD: November 30, 2018

PERELL, J.

REASONS FOR DECISION

A. Introduction and Overview

[1] For almost four decades, Third World Broadcasting Inc. had yearly renewable written contracts to broadcast television advertisements of the flights of Pakistan International Airlines (“PIA”). The last written contract expired on December 31, 2012, but Third World continued to air the advertisements in 2013, 2014, 2015, and 2016. Third World was not paid for the broadcasts, and on May 3, 2017, it sued for $124,800 plus HST ($16,224) for breach of contract or in the alternative on the basis of quantum meruit.

[2] PIA brings a motion for summary judgment dismissing Third World’s claim. If PIA succeeds on its motion, it will abandon its counterclaim for defamation.

[3] PIA submits that Third World’s claim is statute-barred under the Limitations Act, 2002. Further, PIA submits that Third World’s claims in contract or for quantum meruit are without merit.

[4] Third World resists the summary judgment motion, and it submits that there are genuine issues requiring a trial and that the case is not an appropriate one for a summary judgment.

[5] For the reasons that follow, I grant PIA’s summary judgment motion. (Its alternative motion for security for costs is therefore moot.)

[6] In the result, I dismiss Third World’s action with costs on a partial indemnity basis fixed at $5,500 and I dismiss PIA’s counterclaim without costs.

[7] By way of overview, with the abandonment of the counterclaim, the immediate case is an appropriate case for a summary judgment, and while there are genuine issues in the main action, they do not require a trial and a summary judgment is both appropriate and in the interests of justice.

[8] I shall not decide the case based on the Limitations Act, 2002, which defence, if any, would not have barred the claims for 2015 and 2016. Rather, I conclude that there is no genuine issue requiring a trial; on the merits, Third World has failed to prove its claim in contract or in quantum meruit.

B. Jurisdiction to Grant Summary Judgment

[9] 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.” With amendments to Rule 20 introduced in 2010, the powers of the court to grant summary judgment have been enhanced. Rule 20.04 (2.1) states:

20.04 (2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

[10] In Hryniak v. Mauldin, 2014 SCC 7 and Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, the Supreme Court of Canada held that on a motion for summary judgment under Rule 20, the court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers introduced when Rule 20 was amended in 2010. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.

[11] If, however, there appears to be a genuine issue requiring a trial, then the court should determine if the need for a trial can be avoided by using the powers under rules 20.04 (2.1) and (2.2). As a matter of discretion, the motions judge may use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if their use will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole. To grant summary judgment, on a review of the record, the motions judge must be of the view that sufficient evidence has been presented on all relevant points to allow him or her to draw the inferences necessary to make dispositive findings and to fairly and justly adjudicate the issues in the case. [Campana v. The City of Mississauga, 2016 ONSC 3421]; [Ghaeinizadeh (Litigation guardian of) v. Garfinkle Biderman LLP, 2014 ONSC 4994], leave to appeal to Div. Ct. refused, [2015 ONSC 1953 (Div. Ct.)]; [Lavergne v. Dominion Citrus Ltd., 2014 ONSC 1836, at para. 38]; [George Weston Ltd. v. Domtar Inc., 2012 ONSC 5001].

[12] Hryniak v. Mauldin does not alter the principle that the court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial. The court is entitled to assume that the parties have advanced their best case and that the record contains all the evidence that the parties will present at trial. [Dawson v. Rexcraft Storage & Warehouse Inc.]; [Bluestone v. Enroute Restaurants Inc. (1994)]; [Canada (Attorney General) v. Lameman, 2008 SCC 14, at para. 11]. Thus, if the moving party meets the evidentiary burden of producing evidence on which the court could conclude that there is no genuine issue of material fact requiring a trial, the responding party must either refute or counter the moving party’s evidence or risk a summary judgment. [Toronto-Dominion Bank v. 466888 Ontario Ltd., 2010 ONSC 3798].

[13] In my opinion, in the immediate case, the review of the evidence, described in the next section of these Reasons for Decision, reveals that while there are genuine issues of controversy between the parties, their determination can be made summarily and a trial is not required. With the withdrawal of the counterclaim, the case at bar is an appropriate case for a summary judgment. There is a more than an adequate evidentiary record to decide the genuine issues and it would be in the interests of justice to do so.

C. Facts

[14] The evidence for the summary judgment record was provided by affidavits from Bashir Kahn for Third World and from Neelam Raza for PIA. Mr. Bashir and Ms. Raza were cross-examined.

[15] Based on the factual record for this summary judgment motion, I make the following findings of fact.

[16] PIA is Pakistan’s national airline. Its head office is in Karachi, Pakistan. It has a branch office in Toronto.

[17] Beginning around 1982, PIA purchased advertising from Third World, which broadcast the advertisements on a television program in Toronto on what is now YES TV.

[18] Bashir Khan is the owner and director of Third World, and with the exception of 2011, his evidence was that from around 1982 to 2012, the parties signed a contract in which Third World agreed to broadcast PIA’s video advertisements. The video advertisements were prepared by PIA, which provided copies of the video clips to Third World. In the more recent years, it was Ms. Neelam Raza who was PIA’s marketing analyst in Toronto who provided the video clips to Mr. Khan.

[19] PIA has a small office in Toronto, and Ms. Raza, who joined PIA in 2004, typically assisted the sales manager in any dealings with Mr. Kahn. She was familiar with all of Mr. Khan’s dealings with PIA. From time to time, Ms. Raza would take on the sales manager’s role, and after the sales manager retired, Ms. Raza took on that role too, but without a change of designation as a marketing analyst.

[20] Ms. Raza would receive communications from Mr. Kahn and forward them to the head office in Pakistan. It was always the case that authorizations for any contracting with Mr. Khan’s company had to come from head office.

[21] Ms. Raza testified that she discussed with Mr. Khan that all dealings had to be done by contract with head office, and his conduct throughout reveals that he understood that the local office had little authority to make contracts with Third World.

[22] It is notable that the contracts were in writing and the contracts were barter contracts in which PIA would provide a small number (between three or to eight) of return-trip airline tickets, worth approximately $1,500 each. The 2012 contract was for three tickets. One of the prior contracts provided by Mr. Khan as evidence was a barter arrangement for six airline tickets.

[23] The written contracts expressly provided that they were for a one-year term and each contract required the approval of the airline’s head office in Karachi. The contract stated: “Renewal of this contract for a similar term on same conditions as above shall be subject to approval by PIA Head Office on year-to-year basis.”

[24] Head office approvals were given from 1982 to 2012 with the exception of 2011, in which there was no contract and no advertising done by Third World. The 2012 contract expired on December 31, 2012.

[25] After the 2012 advertisement contract expired, Third World sought to obtain a renewal contract from PIA, and it is at this point in the history of the business relationship that the evidence and the position of the parties diverts. It is at this point in the history that there are genuine issues of controversy between the parties, but I have sufficient evidence to resolve these issues.

[26] The major point of departure is whether the officials in PIA’s head office assured Mr. Khan that his company would obtain a renewal of its annual contracts.

[27] Ms. Raza’s evidence is that she was dealing with Mr. Khan who was attempting to obtain a renewal of the barter contract from PIA’s head office in Pakistan. Ms. Raza knew that it was a head office decision about whether PIA would enter into advertising contracts, and she knew that after 2012 there were no such contracts with Third World or with any other contractor for that matter. Ms. Raza knew that Mr. Khan was making numerous requests to renew the contract but his requests were being ignored by head office. For her part, Ms. Raza gave Mr. Khan no assurances or promises that Third World would be paid for running any commercials without a contract, and she was unaware of any assurances given by senior officials in Pakistan. She deposed that Mr. Khan was informed that there was no renewal and that she asked him to stop broadcasting the advertisements without receiving an approval.

[28] It is clear that in 2013 and thereafter that Mr. Khan was communicating with the airline’s head office in Karachi to obtain another barter contract. As he deposed in his affidavit, the branch employees had “no power to approve anything.” It is also clear that he had meetings with airline officers in Karachi in December 2015 and January 2016 because his efforts between 2013 and 2015 to obtain a renewal had been futile.

[29] Throughout Mr. Khan knew that head office approval was the key to any contracting for a barter contract. Mr. Khan says that he was assured that a contract would be approved and be sent to the local office in Toronto. There is, however, no corroboration of these assurances and no new contract was ever signed. Further, the airline never provided Third World with a new video clip for any new contract.

[30] Notwithstanding the absence of any written contract, Third World continued to use the old video clips and continued to broadcast advertisements.

[31] Third World sent no invoices for this continuing service in 2013, 2014, and the first indication that Third World would charge for running the advertisements was its letter to PIA in September 2015.

[32] The letter was not a formal invoice. That came in 2016, when Third World sent PIA a letter with a single invoice claiming $98,000 for the years 2013-2016.

[33] PIA’s response to this demand was to refuse to pay and to tell Mr. Khan to stop broadcasting any advertisements.

[34] Mr. Khan’s evidence is that after 2012 he continued to run the advertisements because he had been assured by PIA’s head office that Third World would be paid for the broadcasts. However, Mr. Khan had four decades of experience knowing that a written contract approved by head office was a necessity and he knew that an annual renewal was required. He knew that the contracts were one year in duration.

[35] During his cross-examination, Mr. Khan admitted that he was unilaterally asking for approval for a new contract and that he knew that renewals had to come from head office. The fact that after 2012 Mr. Khan was so persistent in attempting to obtain a written contract for a barter arrangement in and of itself is evidence that he was not relying on assurances from head office. The fact that he delayed until late 2015-2016 before he made any demand for payment also belies his evidence that he was given any assurances that his company would be given a contract extension.

[36] Mr. Khan also knew that he had not received any new video clips, which historically had accompanied a contract renewal. Nevertheless, he altered the 2012 video with a graphic that indicated that the airline was now offering four rather than three flights out of Toronto. However, the dialogue of the video did not match the graphic. This sloppy approach to advertising was never authorized by PIA. Had PIA agreed to advertise after 2012, it would have provided Third World with a new video clip, which it never did.

[37] The evidence suggests that Mr. Khan’s expectation of a renewal of a barter contract was a matter of his personal belief. It appears that he misunderstood anything said to him by anyone at PIA. Throughout the four decades there were barter contracts for a few tickets. There is no evidence that PIA had ever agreed or would have agreed to pay $124,800 plus HST ($16,224) for advertising. At best, PIA would have agreed to exchange a few airline tickets for the advertising airtime.

D. Discussion

[38] The onus of proving that there was a contract, be it oral or in writing, between Third World and PIA is on Third World, and it has not met that onus on a balance of probabilities. There is no genuine issue requiring a trial about whether there was a contract between Third World and PIA. I find as a fact that there was no contract after the 2012 contract came to an end.

[39] Further, Third World has also not met the onus that it qualifies for payment based on a quantum meruit.

[40] Quantum meruit is a discrete cause of action, a form of restitutionary relief that does not depend upon the existence of a valid contract. [Consulate Ventures Inc. v. Amico Contracting & Engineering (1992) Inc., 2007 ONCA 324, at para. 95]. In [Consulate Ventures Inc. v. Amico Contracting & Engineering (1992) Inc., 2007 ONCA 324, at paras. 98-99] Justice Cronk described one of the circumstances, where a quantum meruit claim may arise, as follows:

98. […] First, the authorities make clear that services provided in reliance on "some underlying measure of agreement" and at the request, or with the acquiescence, of the beneficiary of the services are compensable, although a valid enforceable contract between the parties may not exist. Services provided in these circumstances are not viewed as having been given gratuitously, based on speculation. G.H.L. Fridman, in his leading text Restitution, 2d ed. (Toronto: Carswell, 1992), put it this way at 301-02:

The decided cases reveal a sharp contrast between situations in which what the plaintiff did was done at the defendant's request or with the knowledge and acquiescence of the defendant and those in which the plaintiff acted in his own supposed interests. In the latter instances, the plaintiff may have believed that ultimately he would profit from some contract that he hoped or expected would emerge from what was done. In the event, however, no such contract materialised. The plaintiff's behaviour could be characterised as being tantamount to speculation. Such cases differ from those in which there is some underlying measure of agreement, although not sufficient to constitute a valid, enforceable contract, in virtue of which the plaintiff performs the work or provides the services that are at issue. There must be established some express, or sometimes implied, request to do the work or some encouragement on the part of the defendant of the plaintiff that may be said to have misled the plaintiff into the belief that a contract would result. At the same time, what the plaintiff does must be a reasonable and foreseeable response to the behaviour of the defendant. Furthermore, the consequence of what the plaintiff has done would seem to be that the defendant obtains a benefit of some kind. In other words, the defendant must be enriched by the plaintiff's acts. [Footnotes omitted]

99 Thus, where the claim for restitutionary relief is based on quantum meruit, as in this case, an explicit mutual agreement to compensate for services tendered is not a prerequisite to recovery. It suffices if the services in question 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 conferred by the provision of the services. See Fridman, supra at pp. 290-92; [Nicholson v. St. Denis (1957)], 57 D.L.R. (3d) 699 (Ont. C.A.), leave to appeal to S.C.C. refused, [1975] 1 S.C.R. x (S.C.C.).

[41] In the immediate case, PIA did not request, invite or encourage Third World to provide its services after 2012. PIA did not acquiesce to the broadcasts; rather, Third World provided its services gratuitously in speculation and in aspiration that the contract would be renewed. The circumstances of the immediate case do not support a cause of action for quantum meruit.

E. Conclusion

[42] For the above reasons, I grant PIA’s summary judgment motion. I dismiss the claim and the counterclaim.

[43] Having heard the parties’ costs submissions at the hearing of the motion, I award PIA costs of $5,500, all inclusive, on a partial indemnity basis reducing its costs claim from $11,033 on a full indemnity basis. The reductions take into account that there are no grounds for a punitive costs award and that there were wasted costs associated with PIA’s abandonment of its counterclaim and by its failure to properly set down its summary judgment motion on two occasions.

Perell, J. Released: December 6, 2018