Court File and Parties
COURT FILE NO.: 5685/18 DATE: August 13, 2020 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Peri Formwork Systems Inc., Plaintiff AND: Future Design Canada Inc., Jamal Abdo and Kyle Abdo, Defendants
BEFORE: Kurz J.
COUNSEL: Catherine Willson, for the Plaintiff George Corsianos, for the Defendant
HEARD: August 11, 2020 - by Zoom teleconference
Endorsement
Introduction
[1] The Plaintiff (“Peri”) moves for partial summary judgment in the amount of $52,865.75 against the corporate defendant, Future Design Canada Inc. (“Future”). Peri’s claim in this motion is based on a series of unpaid invoices for the rental of industrial construction equipment. It does not seek judgment against the individual defendant(s) (“Abdo”), who are actually the same person.
[2] The balance of the action involves a trust claim against Future and Abdo under the trust provisions of the Construction Act. Abdo is the principal of Future. Counsel for Peri states that if the court finds that there is a risk of inconsistent decisions in regard to granting partial summary judgment for breach of contract against Future, with the balance of the action proceeding to trial, I should simply dismiss the balance of the action with the consent of Peri.
Background
[3] Peri is in the business of renting industrial equipment for the construction trades. Future is a building contractor.
[4] On or about March 31, 2016, Future entered into a contract with Royal One 2225 Markham Road Med Centre Ltd. (“Royal One”) to construct a four-storey medical office on a Toronto property owned by Royal One. Abdo, Future’s principal approached Peri to obtain a quote for the rental of equipment to be used on the Royal One project.
[5] Abdo says that he had a discussion with a technical sales representative of Peri, Ingmars Ozolins, known as Oz (“Oz”), about the terms of the proposed rental arrangement. Abdo asserts that he told Oz that Future would not be able to pay Peri for the rental until it was paid by Royal One. In Abdo’s telling, Oz replied that he understood and that it would be no problem. Future says that this discussion created a “pay when paid” oral term in the ultimate rental agreement between Peri and Future. It argues that Peri is estopped from attempting to rely on this term. For its part, Peri denies that Abdo even discussed those terms with Oz. It states that he had his initial discussions with a different employee.
[6] On June 5, 2016, Oz sent Peri a quote along with its standard rental terms. On June 9, 2016, Oz emailed Future a copy of Peri’s standard credit application form, including its terms and conditions (the application”). Peri argues that the application represents the agreement between the parties.
[7] The application was eight pages in total. It called for each page but the signature page to be initialled. Later that day, a Future employee emailed the completed application back to Oz. The returned document was also eight pages. Every page but the signature page had Abdo’s initials typed in at the bottom left corner of the page, where initials are called for. Abdo signed the signature page on behalf of Future.
[8] Abdo now represents that he does not recall receiving all eight of the pages of the application. Yet Peri includes in its materials both the copy of the application emailed out to Future (without initials and signature) and the copy that was emailed back by Future (with typewritten initials and signature of Abdo). Both copies of the application are identical in length and content. The only difference between the two is the presence of Abdo’s initials and signature in the latter version returned to Peri. Abdo offers no explanation for how Peri received all eight pages with his initials and signature if he did not see all 8 pages.
[9] The key clauses of the application were the following:
a) Payments net 30 days; i.e. they are due 30 days from the date of the invoice after which, interest charges would accrue; b) Interest is payable at a rate of 18% per annum; c) The rental period commences on and includes the date of shipping of equipment from Peri’s warehouse or yard to the customer and shall end on the date of the actual delivery of equipment by the customer to Peri’s warehouse or yard or a place designed by Peri in writing designated place. d) Loss or damage howsoever caused (excluding normal wear and tear) to the rented Equipment will, without prejudice to any other remedies Peri may have, render the customer liable to a charge, details of which are available upon request. Damage shall include wear and tear going beyond normal use such as breakages, cuts or drillings. e) An “entire agreement clause”, stating that the application represents the entire agreement between the parties and that “[a]ny course of dealing, usage of trade or actual course of performance to the contrary, notwithstanding and no representations or agreements made by either party, or by any representative of either party, in the negotiations leading to the Agreement or otherwise, which are not expressly reserved herein in writing shall be binding on such party.”
[10] The application contained no “paid when paid clause” that would have allowed Future to avoid payment to Peri until it was paid by Royal One.
[11] As I set out below, I find that the application represented all of the contractual terms between the parties.
[12] Peri supplied rental equipment, as agreed. It would deliver equipment and then pick it up, as requested by Future.
[13] Peri had a sophisticated billing system that tracked the exact dates of delivery and pick-up of equipment. When equipment was delivered, Peri issued delivery tickets, which recorded the date and location of its equipment. Peri’s invoices listed the equipment for which rent was being charged, the applicable rental period, the equipment in the hands of Future at the beginning of the invoice period and again at the end of that period. In the case of returned equipment that was not used throughout a month, the invoice indicates the number of days that the equipment was rented and the pro-rata rental amount that applied. In accord with the application, Peri charged a minimum 28-day rental even when the rental period was less than 28 days.
[14] Future paid twenty of Peri’s invoices, totalling $70,347.90, without complaint. The first Peri invoice to Future was issued on June 27, 2016. Future continued paying Peri’s invoices, including the one of October 12, 2016. The first invoice that Future refused to pay was issues on November 10, 2016. Future continued to rent equipment from Peri for many months thereafter without paying Peris’ invoices, with one exception. For some reason, it paid Peri’s February 3, 2017 invoice for $673. No reason has been offered for that unusual payment pattern.
[15] The parties discussed the unpaid invoices for some time in the late winter and spring of 2017. On May 26, 2017, an employee of Future acknowledged that some of Peri’s equipment was missing. In fact, five types of equipment were missing. The Future employee stated that Future would pay the cost of that equipment, as called for in the application. On May 31, 2017, Peri issued an invoice for $2,096.16 for that missing equipment, that also was not paid.
[16] The unpaid invoices total as follows:
| Invoice No. (last 3 digits) | Date | Amount |
|---|---|---|
| 191 | 2016-11-10 | $12,109.95 |
| 795 | 2016-12-08 | $25,001.45 |
| 623 | 2017-01-16 | $12,671.76 |
| 351 | 2017-03-31 | $336.43 |
| 375 | 2017-04-05 | $325.00 |
| 769 | 2017-04-27 | $325.00 |
| 041 | 2017-05-31 | $2,096.16 |
| Total | $52,865.75 |
[17] The parties continued their discussions about the unpaid Peri invoices into July 2017. Future took the position that the invoices were excessive in that Peri was charging for rentals for periods of time after they had been returned or for which Future had requested returns. Future never proffered an alternative calculation to Peri, as it has failed to do in this motion.
[18] Rather, Future took the broad position that it had been overcharged and owed nothing further to Peri. In this motion, Future offers two arguments that support its contention that it need not pay its outstanding accounts to Peri.
- It has been overcharged for the rentals as set out above, and
- Abdo did not agree to all of the terms in the application, and in particular, the payment net 30 days clause. He asks the court to infer a verbal term from his alleged discussion with Oz to the effect that Future does not have to pay Peri’s invoices until it is paid by Royal One. It also argues that Peri is estopped form enforcing the term because he would not have signed the application term had he known that the whole agreement term would be enforced.
[19] Peri states that this motion simply concerns the nonpayment of a series of invoices, in breach of the contractual terms set out in the application. It says that no paid when paid term was agreed upon, that it is not included in the application and that in any event the whole agreement term applies.
[20] For the reasons set out above, I find that this is an appropriate case for summary judgment, grant judgment to Peri for $52,865.75 plus prejudgment interest at the rate of 18% from the date of the last invoice, May 31, 2017, and dismiss the balance of the action on the consent of Peri.
Issues:
[21] This motion raises the following issues:
- Is this a case in which the summary judgment process allows the court to reach a fair and just determination on the merits?
- Should I refuse to grant partial summary judgement because of the risk of inconsistent decisions for the balance of this action?
- Should I require a trial of this action on the issue of an oral agreement to pay Peri when Future is paid?
- Should I require a trial of this action on the issue of whether Future has been overcharged by Peri?
Issue No. 1: The summary judgment process allows the court to reach a fair and just determination on the merits
[22] This motion is brought under r. 20.01 of the Rules of Civil Procedure. The terms of r. 20.04 are mandatory: the court shall grant summary judgment if it is satisfied that there is no genuine issue for trial with respect to a claim or defence (see also Hryniak v. Mauldin, 2014 SCC 7 ("Hryniak") at para. 68 and Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429 ("Mega International") at para. 83).
[23] The principles under which the court makes the determination of a genuine issue for trial are set out by the Supreme Court of Canada in paras. 44-45, 49-50 and 66 of Hryniak.
[24] There will be no genuine issue requiring a trial if the summary judgment process allows the court to reach a fair and just determination on the merits on a motion for summary judgment. That will be the case when the process (1) provides the court with the evidence required to fairly and justly adjudicate the dispute by making the necessary findings of fact, (2) allows the judge to apply the law to those facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. (see Hryniak at para. 49 and 66).
[25] Each party to a motion for summary judgment has an obligation to "...'put its best foot forward' with respect to the existence or non-existence of material facts that have to be tried" (Ramdial v. Davis (Litigation Guardian of), 2015 ONCA 726, [2015] O.J. No. 5630 (O.C.A.) at para. 27, citing Papaschase Indian Band No. 136 v. Canada (A.G.), 2008 SCC 14, [2008] 1 S.C.R. 372, at para 11).
[26] The onus for proving that there is no genuine issue for trial rests with the moving party. However in response to the evidence of the moving party, the responding party may not rest on mere allegations or denials in the party's pleadings. That party must set out in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial. A self-serving affidavit is not sufficient itself to create a genuine issue for trial in the absence of detailed facts and supporting evidence. (see r. 20.01(2) and Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423, at para. 31).
[27] In the oft-repeated maxim of Justice Coulter Osborne, then of the Ontario Court of Appeal, the responding party to a motion for summary judgment must "lead trump or risk losing" (106150 Ontario Ltd. v. Ontario Jockey Club, [1995] O.J. No. 132 (O.C.A.), at para. 35, the principle was re affirmed in Ramdial v. Davis (Litigation Guardian of), supra, at para. 28).
[28] The court is entitled to assume that the record before it is complete, that it contains all of the evidence that a party would present if there were a trial. (Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438, at para. 8, citing Dawson v. Rexcraft Storage & Warehouse Inc., 111 O.A.C. 201, at para. 17; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, at paras. 27, 33-34, aff'd 2014 ONCA 878, leave to appeal to SCC refused, [2015] S.C.C.A. No. 97; and Tim Ludwig Professional Corporation v. BDO Canada LLP, 2017 ONCA 292, at para. 54).
[29] Once the moving party discharges the burden of showing that there is no genuine issue for trial, the onus shifts to the responding party. That party must then provide evidence of specific facts showing that there is a genuine issue requiring a trial (Ramdial v. Davis (Litigation Guardian of), at para. 30). An adverse inference may be drawn from a failure to support the allegations or denials in a party's pleadings (Pearson v. Poulin, 2016 ONSC 3707, at para. 40).
[30] Under r. 20.04(2.1) the court may exercise enhanced powers on the motion unless it is in the interest of justice to do so at trial. Those enhanced powers allow the court to weigh the evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence. As Paciocco J.A. wrote for the Ontario Court of Appeal at para. 83 of Mega International, those powers "...are presumptively available to a summary judgment motion judge to use to fairly and justly adjudicate a claim at a motion for summary judgment" (Hryniak, at para. 45). However, the court is not required to resort to those powers to make up for a party's evidentiary shortcomings (see Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438 at para. 8).
[31] Here, the issues raised in this proceeding are eminently amenable to the summary judgment process. Peri’s claims against Future arise simply on unpaid invoices. Future’s defence is in regard to whether it agreed to all of the terms of the application and whether the invoices issued to it are correct (or whether it was overcharged). As set out below, Future has offered no documentary evidence that it was unaware of any of the contents of the application. On the other hand, Peri has offered a copy of the application that was emailed to Future and the one that it received in return. It has also offered comprehensive documentary evidence in its invoices that demonstrates that it did not overcharge Future. Any issues of credibility can be resolved based on the evidence before me and any inferences that I may draw from the absence of evidence to the contrary. The same is true of the accuracy of the invoices, as set out below.
Issue No. 2: There is no need to refuse to grant partial summary judgement because of the risk of inconsistent decisions
[32] In his well-considered analysis of the issue of when partial summary judgment should be granted, Myers J. of this court stated in Mason v. Perras Mongenais, 2018 ONSC 1178 at para. 18:
... where a trial is required involving the same parties, the same witnesses providing the same evidence about the same facts in issue as are relied upon for summary judgment, the risk of duplication and inconsistent outcomes is particularly acute. In such cases, the benefits of summary judgment as a cost saving or tool for efficiency are lost since a trial is required on all the same facts among all the same parties anyway.
[33] The test, as Myers J. put it at para. 21 was whether:
... the facts and evidence in support of the summary judgment sought are so intertwined with the issues and evidence that will remain for trial so as to fail to meet the requirement of proportionality in the context of the litigation as a whole under Hryniak. By corollary, to avoid cases where the facts and evidence are intertwined with those that will remain for trial, judges have looked for issues for partial summary judgment that are "distinct" from those that will remain for trial.
[34] Myers J. was clear that the test was not designed to default to a trial. Rather the culture shift called for by Hryniak requires a case by case analysis to consider the risk of duplication and inconsistent verdicts in each specific case. There is a spectrum of cases from those in which there will clearly be no overlap or risk of inconsistent findings, to those in which there is a real risk of both results. Many cases are, of course, in the middle. As Myers J. stated, citing both Hryniak and the Ontario Court of Appeal's decision in Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450:
The Supreme Court of Canada did not impose a bright line rule to default to a trial if there is no wholly discrete or bifurcated issue. Approaching trials as the default process is not a culture shift at all. It perpetuates the practical roadblocks on access to justice that the Supreme Court of Canada identified as being the greatest challenge to the rule of law in Canada. The shift required is an understanding that judges will be deciding cases summarily as much as possible to avoid the expense and delays of the trial process that put civil justice beyond the reach of most Canadians. The shift is that, instead of defaulting to trials, judges will exercise judgment, where possible, to find proportionate processes to allow a fair and just resolution on the facts of each case that avoids the cost and delays of the trial process. If the risk of duplication and inconsistent verdicts is high, then Baywood and Hryniak dictate that a trial is required. But that is the last option not the best one. This requires buy-in to the notion that judges will exercise discretion to determine in each case the amount of process required on the facts and law to give them confidence that the case can be resolved fairly, justly, and proportionately. That is the "culture shift."
[35] Here, Future did raise the risk of duplication and inconsistent outcomes. This motion will not, as framed, determine the trust claims made against both Future and Abdo. The risk may be that in defending the trust claim, the defendants, and in particular Abdo personally, may raise the same issues as those raised in this motion. In that case, the advantages of partial summary judgment would be outweighed by the duplication of proceedings.
[36] Peri says that the risk is chimerical rather than real. Abdo and Future have the same counsel. Abdo is the principal of Future. The same evidence provided in this motion in regard to the issue of Future’s contractual obligations to Peri will be relied upon at the trial of the trust claim. Further, Peri’s counsel has undertaken that if Peri is successful in this motion, it will not pursue the balance of its claim, i.e. the trust claim, against the defendants. In fact, it consents to my dismissing the balance of that claim if I find any risk of duplicative proceedings, although it wishes me to do so without costs.
[37] While the risks of inconsistent findings in regard to the contractual obligations of Future in this motion and a trial on the trust claim is not great, it is not negligible either. While Future will be bound by the doctrine of issue estoppel at such a trial the same will not be the case for Abdo, who is a separate legal person.
[38] That being said and without deciding on the point, any such concern is overcome by the undertaking and consent offered by Peri’s counsel. Accordingly, the request for partial summary judgment does not raise the risk of duplication and inconsistent outcomes. Accordingly, I find that the partial summary judgment procedure is appropriate here in that it will determine all issues in this action.
Issue No 3: No need for a trial to determine whether there was an oral agreement to pay Peri when Future is paid
[39] Future says that it was not obliged to pay the invoices when delivered because of an alleged oral agreement between Oz and Abdo. It says that the court should ignore the clear wording of the written agreement between the parties and that only a trial will determine the credibility issues between the parties. It points out that Oz never filed an affidavit to gainsay its allegations of an oral agreement. It does not say when it should be obliged to pay Peri’s accounts.
[40] Future adds that the case law shows that:
- a party who misrepresents, albeit innocently, the contents or effect of a clause inserted by him into a contract, cannot rely on the clause in the face of his misrepresentation (Canadian Indemnity Co. v. Okanagan Mainline Real Estate Board et al., [1971] SCR 493), and
- The entire agreement clause does affect the reasonable expectations of the parties to an oral agreement. The Court has the discretion to refuse to enforce it where to do so would be unconscionable, unfair, unreasonable or otherwise contrary to public interest. (Civic Life Inc. v. Canada (Attorney General))
[41] Peri responds that any alleged oral dealings with the parties is immaterial and subsumed into a written “entire agreement” term under the application. That term reads as follows:
Entire Agreement
- This Agreement together with schedule A and C and any other schedule, addendum or amendment to this Agreement which is in writing, references this Agreement and is signed by Customer and PERI constitute the entire agreement between PERI and Customer with respect to its subject matter. Any course of dealing, usage of trade or actual course of performance to the contrary, notwithstanding and no representations or agreements made by either party, or by any representative of either party, in the negotiations leading to the Agreement or otherwise, which are not expressly reserved herein in writing shall be binding on such party. Failure of PERI to insist on any one or more instances upon strict performance of any one of the provisions of this Agreement, or to take advantages of any of its rights hereunder, shall not be construed a waiver of any such provisions or the relinquishment of any such right, but the same shall continue and remain in full force and effect.
[Emphasis added]
[42] Further, Peri points out that the application itself specifically averts to payment terms of net 30 from the date of invoice and interest at 18% on all past due rental payments.
[43] When I consider the parties’ arguments, I conclude that it is not necessary for me to consider the application of Future’s authorities to these facts. That is because, as set out below, 1) I can infer from the course of dealings between the parties that there was no oral agreement that Future would pay only when paid by Royal One, and 2) the uncontested evidence of Peri is that Royal One did pay Future for the work for which Peri’s equipment was supplied.
[44] As set out above, the course of dealings between the parties is that Future paid Peri’s rental invoices between June 27, 2016 and October 12, 2016. In all, Future paid 20 of Peri’s rental invoices, totalling $70,347.90. Future’s own conduct contradicts its assertions that it had the contractual right to withhold payment to Peri until some unspecified payment by Royal One. From that I can infer that there was no such oral agreement between the parties. Peri is not estopped from relying on the entire agreement term of the application.
[45] Further, the uncontradicted evidence of Peri is that it contacted Royal One under s. 39 the Construction Act for confirmation of the amount that it had paid Future for the project. It was informed by Royal One’s lawyer, in a letter dated May 11, 2018, that the total contract price between Royal One and Future was $7,007,020. Future had completed 20% of the work and was entitled to payment of $1,248,100. It had actually been paid $2,592,430.48, for an overpayment of $1,344,330.48. Not surprisingly, perhaps, Royal One and Future are in litigation. But in any event, Future cannot claim that it was not paid for the work it had done to date for Royal One.
[46] For all of those reasons, I find that the entire agreement term of the application forms part of the agreement between the parties for Future’s rental of Peri’s equipment. Further, the application represents all of the contractual terms between Peri and Future.
Issue No 4: A trial of this action on the issue of whether Future has been overcharged by Peri is not Necessary
[47] Future vaguely alleges that Peri overcharged it for rentals when items were picked up before the days set out in the relevant invoices. It adds that there were occasions in which Peri was dilatory in picking up items but that it charged rental for its own delays. Peri denies this allegation.
[48] During the course of argument, Ms. Willson for the Plaintiff painstakingly reviewed each outstanding invoice. What was clear was that those invoices fully set out the identity of each rented item, the date delivered and the date returned. The invoices set out the inventory in Future’s possession at both the beginning and the end of the term captured by the invoice.
[49] It is true that some items were charged for longer than they were in Future’s possession. But that was because of the term in the application that the minimal rental period was 28 days. That occurred with regard to the invoices whose last three numbers were 795 and 191.
[50] There was another occasion, with invoice no. 623, in which the request for pickup was in late December 2016 but the pickup did not occur until early January 2017. The next invoice was adjusted to reflect the late pickup and absence of a charge for that tardiness.
[51] In all, Peri explained each invoice. It also offered its tickets for pick up and delivery. It offered a monthly listing of all items in the possession of Future at the beginning and end of each rental period. In the face of such comprehensive evidence, Future was obliged to put its best evidentiary foot forward. In response, it offered email complaints from its employee and Peri’s responses. Those responses were that the invoices were accurate, that payments must be made on the invoices but that Peri hoped to negotiate a resolution. There was no admission that the invoices were incorrect and no actual evidence that they were anything but accurate. Future was unable, as set out above, to even set out a schedule of calculations of how much it should owe Peri or why it should owe nothing. In the end, all that it could offer were vague allegations of overcharging.
[52] During the course of argument, Future’s counsel complained about the 18% annual interest figure. But he could offer no reason that it should not be applied. As set out above the 18% interest term formed part of the agreement between the parties.
Conclusion
[53] In conclusion, this is an appropriate case for summary judgment. The process is fair and proportionate. I have assumed that Future has put its best foot forward. Having reviewed the documentary evidence placed before me and drawing inferences from both that evidence and Future’s failure to offer any meaningful evidence to dispute Peri’s claims and evidence, I find that a trial is not necessary to reach a fair and just determination on the merits of Peri’s claim in contract against Future. I find that Peri has proven that claim.
[54] Accordingly, I order that:
- Future shall pay Peri: a. $52,865.75 b. prejudgment interest at the rate of 18% per annum from the date of the last invoice, May 31, 2017, in accord with the agreement between the parties; c. post judgment interest at the rate under the Courts of Justice Act. The agreement between the parties does not apply the 18% interest rate to post-judgment interest.
- I suggest that the parties attempt to determine costs among themselves. If they are unable to do so, Peri may file costs submissions of up to 3 pages, double spaced, 1” margins, plus bill of costs/cost outline and dockets, within 14 days. Future may do the same within a further 14 days. If I do not hear from the parties within the time frame set out above, I will assume that they have resolved the costs issue. The parties need not file authorities as long as they properly cite them and offer the appropriate paragraph numbers.