COURT FILE NO.: CV-16-550279

DATE: 20210930

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

2SOURCE MANUFACTURING INC.

Plaintiff

– and –

SERVICE STAR FREIGHTWAYS INC., Y7E TRANSPORT INC., ROYAL & SUN ALLIANCE INSURANCE COMPANY OF CANADA and HUB INTERNATIONAL HKMB LIMITED

Defendants

I. Kirby, for the Plaintiff

R. Fernandes and A. Fernandes, for the Defendants, Service Star Freightways Inc.

P. Monaghan, for the Defendant, Y7E Transport Inc.

HEARD: May 10-14, 2021 by videoconference

CHALMERS, J.

REASONS FOR JUDGMENT

OVERVIEW

[1] On September 9, 2015, 500 litres of a white paint like substance (white paint) escaped from the manufacturing facility of 2Source Manufacturing Inc. The white paint entered the Little Etobicoke Creek. 2Source retained Canadian Hazard & Decon Services (CHDS) to clean-up the spill. The cost of the clean-up was $206,509.01. 2Source argues that the Defendants are responsible for the spill and the cost of clean-up.

[2] 2Source retained Service Star Freightways Inc. (Service Star) as the freight broker to arrange for the shipment of materials to its facility on a “direct drive” basis. According to 2Source, delivery on a direct drive basis requires the transport company to drive directly to 2Source after picking up the load and not make any other pick-ups or deliveries. This was to ensure that the delivery was made on time and there would be no other goods in the trailer that could interfere with unloading the 2Source delivery. Service Star retained Y7E Transport Inc. (Y7E) to transport the shipment. After picking up the load for 2Source, Y7E made two additional pick-ups. Two skids containing large totes of the white paint like substance were loaded on the trailer behind the 2Source product.

[3] When the delivery was made to 2Source, the receiver for 2Source was required to move the skids of white paint to access the 2Source shipment. As he attempted to move one of the skids, the pallet broke and pierced the tote. The tote contained 500 litres of white paint. The entire contents of the tote spilled onto 2Source’s loading dock. The receiver attempted to clean-up the area by power washing the paint off the loading dock. The paint went into the storm drain and entered the Little Etobicoke Creek.

[4] The Defendants argue that the damage was caused solely as a result of the actions of the receiver. They argue he was negligent in the manner in which he attempted to unload the skid of paint and how he responded to the spill.

[5] For the reasons set out below, I find that the receiver for 2Source is solely responsible for the loss. I dismiss the Plaintiff’s action.

[6] At the beginning of the trial, I was advised that the Plaintiff had entered into a Pierringer Agreement with the Defendants, Royal & Sun Alliance Insurance Company of Canada (RSA), HUB International and HKMB Limited (HUB). The terms of the agreement were not disclosed. RSA and HUB did not participate in the trial.

THE FACTS

The Evidence

(a) Agreed Statement of Facts

[7] The Parties filed the following Agreed Statement of Facts:

a. On September 9, 2015, Service Star was retained by 2Source to arrange for the transportation of a load of metal chips (the “Cargo”) from Ohio to Ontario.

b. At all material times, Service Star was retained as a freight broker.

c. Service Star was not retained as the carrier of the Cargo.

d. At all material times, 2Source was aware that Service Star was not the carrier of the Cargo.

e. Service Star retained Y7E to perform the carriage of the Cargo.

f. The Cargo was picked up in Elmore, Ohio by Y7E and placed in Y7E’s trailer.

g. Subsequent to the pick-up of the Cargo, Y7E stopped and picked up two pallets holding containers of a white colour additive for plastic polymers (the “White Paint”).

h. Just before 11:59 p.m. on September 9, 2015, Y7E arrived at 2Source’s facility in Mississauga, Ontario.

i. The Y7E driver did not have a forklift in the trailer.

j. Mr. Ramlal, the receiver for 2Source had the authority to refuse the delivery of the Cargo.

k. Mr. Ramlal was licenced to use a forklift.

l. Mr. Ramlal had used 2Source’s forklift on prior occasions to remove 2Source’s cargo from trucks.

m. During the removal of the first pallet of White Paint by Mr. Ramlal the forklift’s prongs did not fully go through the slots of the pallet, the pallet broke and the container of White Paint was punctured.

n. The White Paint leaked onto the dock plate, the loading dock area, and the inside of the trailer.

o. Mr. Ramlal used a water-hose to clean the dock plate and the loading dock area.

p. The second pallet of White Paint and the Cargo were then removed from the trailer.

q. The White Paint entered the Etobicoke Creek through a drain near the docking area which was covered by a large blue bin.

r. On the morning of September 10, 2015, Rob Purvey, a supervisor at 2Source contacted the Ministry of the Environment.

s. No formal order was given to 2Source from the Ministry of the Environment to clean up the White Paint.

t. 2Source paid CHDS $206,509.01.

(b) The Witnesses

[8] 2Source called three witnesses: Catherine King, the VP of Operations at 2Source at the time of the incident, Avindra Ramlal, the receiver and forklift operator and Rob Purvey, the plant supervisor, who was involved in the clean-up and remedial work. Because no issue was raised by the Defendants with respect to the work performed by CHDS, the Plaintiff did not call a representative of CHDS to testify at trial.

[9] Service Star called two witnesses: Frank Malatesta, the owner of Service Star and Franca Ioannou, the dispatcher.

[10] Y7E called three witnesses: Eli Yanko, the owner of the Y7E, Alex Vaisman, the driver of the tractor-trailer and Warren Campbell. Mr. Campbell was qualified as an expert with respect to the operation of forklifts.

Background Facts

[11] 2Source was a manufacturing company located at Bradco Blvd. in Mississauga. It operated a 24-hour facility that manufactured products for use in aircraft landing gear, the oil and gas industry and for under ocean cables. 2Source went into receivership in 2017.

[12] In September 2015, 2Source received an order to supply Materion Brush with product used in under ocean photonics. To manufacture the product, 2Source required copper beryllium. The raw material was supplied by Materion Brush. Following manufacture, 2Source would send the finished product, along with the scrap metal chips back to Materion Brush.

[13] 2Source operated on a “just in time” basis. Deliveries of materials were to be made when required to meet the manufacturing schedule. 2Source’s regular freight broker was Service Star. Service Star was aware that 2Source was a “just in time” manufacturing facility.

[14] On September 9, 2015, seven packages were to be shipped from Materion Brush in Elmore, Ohio to the 2Source facility in Mississauga. There were boxes of copper beryllium on three skids, plus four skids of empty drums to be used to return the scrap metal chips to Materion Brush. 2Source required the product by 11:59 p.m. on September 9, 2015. Production was scheduled to begin at 1:30 a.m. on September 10, 2015.

[15] The Plaintiff’s regular freight broker was Service Star. On September 9, 2015, Tina Kasaboulis at 2Source contacted Service Star to arrange for the transport of the product from Materion Brush to the 2Source manufacturing facility. Ms. Kasaboulis did not testify at trial. Plaintiff’s counsel stated that she could not be located and was not served with a summons.

[16] According to Catherine King, the VP of Operations with 2Source, the standing instructions were to arrange for “direct drive” delivery. Her understanding of a direct drive delivery is that the driver will travel directly from the pick-up location to 2Source without having any picks-ups or deliveries in between. She testified that 90% of the reason for direct drive is to ensure timely delivery and 10% was to ensure nothing was in the way that would complicate unloading. Ms. King testified that there was no reason this delivery would have been any different.

[17] Ms. King testified that a direct drive delivery is more expensive. Frank Malatesta confirmed that the price charged for this particular shipment was a direct drive charge. Mr. Malatesta testified that a direct drive delivery and an expedited same day delivery means the same thing. He testified that there is “no doubt” that Service Star was to arrange a direct drive delivery.

[18] Franca Ioannou has worked at Service Star for 23 years. At the relevant time, she was the Service Star dispatcher. She was familiar with 2Source. She confirmed that Service Star arranged deliveries for 2Source on a direct drive basis. She testified that there was no misunderstanding or dispute that 2Source required this shipment to be on a direct drive basis.

[19] The Plaintiff argues that the usual practice is for all deliveries to be on a direct drive basis. The Plaintiff relies on an Order Confirmation Form No.: RO64793 with Service Star. This order confirmation was for a separate delivery on September 10, 2015. The form provides that the particulars of the shipment are: “general freight-direct drive”. According to the testimony of Ms. King, this was the standard delivery instructions to Service Star. The Plaintiff also relies on the Pickup Notification and Delivery Notification forms for the delivery RO64793 which provide that the shipment on September 10, 2015 was on a direct drive basis. No Order Confirmation, Pickup Notification or Delivery Notification for the shipment in issue were introduced into evidence.

[20] After speaking with Ms. Kasaboulis, Ms. Ioannou contacted Y7E. She spoke with Eli Yanko, the President of Y7E. Mr. Yanko testified that Y7E had worked with Service Star for about three years before the incident. The loads were typically on an LTL (less than full load) basis. He stated that he had done at least 30 trips for 2Source before the incident. The shipments usually involved pick-ups in Ohio with deliveries in Mississauga.

[21] Mr. Yanko quoted a price of $1,100. This was the same day delivery price. Mr. Yanko testified that if the product was to be delivered the next day, the price would have been less. Ms. Ioannou retained Y7E to carry out the delivery. She sent a carrier confirmation form (C029914) to Mr. Yanko. The carrier confirmation form provides that the product was ready for pick-up at Materion Brush in Elmore, Ohio on Wednesday, September 9, 2015 during the normal shipping hours of 7 a.m. to 2:30 p.m. The delivery was to be made to 2Source no later than 11:59 p.m. on September 9, 2015. The cargo description was identified as “general freight”, consisting of seven skids at a weight of 4767 pounds. The rate was $1,100. There are no other instructions on the form. Mr. Yanko confirmed that he received the first carrier confirmation form.

[22] Ms. Ioannou testified that a second carrier confirmation form was sent to Mr. Yanko. The second confirmation form provides that delivery was “general freight/expedite p/up and deliver same day.” The weight of the cargo is recorded as 4702 pounds. The form provides that delivery was scheduled for Wednesday, September 9, 2015 at 7 p.m. Mr. Yanko denies receiving the second carrier confirmation form. He noted that by the time Y7E was retained it would have been impossible to deliver the shipment by 7 p.m.

[23] According to Service Star, it retained Y7E to deliver the product on a direct drive delivery basis. There is no documentation between Service Star and Y7E that states that it was a direct drive delivery. The two carrier confirmation forms for this shipment do not state that the shipment is to be on a direct drive delivery basis. The invoice refers to expedited pick-up. Ms. Ioannou testified that she could not recall if she discussed with Mr. Yanko whether the carrier could pick up any shipments after picking up the 2Source delivery from Materion Brush.

[24] Mr. Yanko confirmed that the delivery was on a same day basis. He denied that the delivery was on a direct drive basis, or that the driver could not make any other pick-ups after picking up the 2Source product. Mr. Yanko received the carrier confirmation form which provides that the delivery was scheduled for no later than 11:59 p.m. The form does not provide that the delivery was expedited or on a direct drive basis. He denied receiving the second carrier confirmation form from Service Star that changed the delivery time to 7 p.m. In any event, the second confirmation form also does not state that the delivery was on a direct drive basis.

[25] Mr. Yanko testified that he was not aware of the term “direct drive”. In cross-examination, he was taken to his discovery transcript. On his discovery, he testified that Y7E charges about $400 for direct drive. Mr. Yanko explained that he considered direct drive the same as expedited delivery. He stated that he understood this shipment was to be on a same day-expedited basis.

[26] Mr. Yanko retained a number of owner-operator transport truck drivers, one of whom was Alex Vaisman. Mr. Vaisman has worked as a truck driver for 24 years. He began working with Y7E in 2009-2010.

[27] After speaking with Ms. Iaonnao, Mr. Yanko contacted Mr. Vaisman and confirmed that he could make the delivery. Mr. Yanko provided the pick-up and delivery instructions. He told Mr. Vaisman that the delivery was to be by 11:59 p.m. on September 9, 2015. According to Mr. Vaisman, there was no discussion about the shipment being on a direct drive basis. Mr. Vaisman testified that the usual delivery for him was “LTL” which means less than a full truck load. He would usually have loads from different companies in his trailer. Mr. Vaisman testified that he was not told by Mr. Yanko that he could not make any other pick-ups after he picked up the load for 2Source.

[28] Mr. Vaisman’s first pick-up on September 9, 2015 was the product from Materion Brush. He left Materion Brush at around 1 p.m. After picking up the shipment for 2Source, he made two other pick-ups. The first pick-up after Materion Brush was at ColorMatrix in Beria, Ohio. He picked up two totes of the white paint product and one loose pail. The totes were very heavy. Each tote had 500 litres of liquid and weighed approximately 4,000 lbs. Mr. Vaisman asked the shipper to put the totes on either side of his trailer to distribute the weight.

[29] Mr. Vaisman then drove to Metal Trelleborg in Streetsboro, Ohio. He picked up 1 long pallet which had 12 boxes of metal product. The boxes were 22 feet long. The weight of the boxes was 740 pounds. The long metal boxes were put on the left/driver’s side of the trailer.

[30] After the pick-up in Streetsboro, Ohio, Mr. Vaisman drove to the Peace Bridge border crossing at Fort Erie. He had previously contacted the customs broker, Livingstones and told them he expected to cross the border at 3 p.m. In fact, Mr. Vaisman did not leave Streetsboro until sometime after 3 p.m. Mr. Vaisman testified that he usually provided an earlier estimated time to cross the border to ensure the customs broker would have the documentation prepared by the time he arrived. Mr. Vaisman believes he was at the border at approximately 9 p.m.

[31] Mr. Vaisman drove from the Peace Bridge to the 2Source facility in Mississauga. He testified that he arrived around 11 p.m. Mr. Vaisman knew that 2Source would be his first delivery and that the paint and metal products were in the way. He knew it would be necessary for the 2Source receiver to move either the two skids of white paint or the long skid of metal before the 2Source shipment could be unloaded.

[32] Ms. King testified that Avindra Ramlal was a lead hand for 2Source and worked the afternoon shift from 3:30 p.m. to 1:30 a.m. Mr. Ramlal started at 2Source in 2007. He was responsible for offloading any shipments that came in during the afternoon shift. He had been trained on forklifts and received a certificate upon completing the course on how to operate a forklift. He had operated forklifts for more than three years before the incident. He was required to unload shipments at least two times a week.

[33] Mr. Ramlal started his shift at 3 p.m. on September 9, 2015. He was told to expect a shipment of copper material. The load was expected before midnight. Production was to begin at 1:30 a.m.

[34] Mr. Ramlal testified that the load arrived around midnight. He spoke with the driver. Mr. Vaisman explained the lay out of the loads and that it was necessary to move the two skids of paint product to access the 2Source delivery. According to Mr. Vaisman, Mr. Ramlal said, “no problem”. Mr. Ramlal signed the Bill of Lading, confirming receipt of the product. Mr. Ramlal testified that he agreed to unload the skids of paint.

[35] According to Ms. King, there were no standing instructions for Mr. Ramlal to reject shipments if the load was blocked, or to send the truck to a crossdock facility to rearrange the loads. She stated that there was no time to send the truck to a crossdock because the material was required to start production. Mr. Yanko testified that a crossdock facility was located only 15 minutes away from 2Source. There was no evidence at trial from the crossdock facility that they could have reconfigured the load that night.

[36] In cross examination, Ms. King stated that Mr. Ramlal had the authority to reject the shipment. She also stated that this was not the first time Mr. Ramlal would have had to move things out of the way to access the 2Source shipment. Mr. Ramlal testified in cross-examination that it was not unusual to remove other party’s goods to access a delivery to 2Source.

[37] Mr. Ramlal was required to move either the skids of white paint or the long metal boxes to allow him to access the delivery for 2Source. Mr. Ramlal was unable to unload the oversized boxes of metal because he did not have a special forklift or extended forks that could move the extra long skid. He was required to remove the skids that contained the white paint. The skids were heavy, and he could not use a hand pump truck. He decided to move the skids with his forklift.

[38] Mr. Ramlal testified that the two skids were wrapped in cardboard and he did not know what was contained inside them. The photographs of the boxes taken immediately after the spill, show the word “LIQUID” written in block letters on the outside of the boxes. Mr. Ramlal testified that he did not notice any labels or writing on the boxes. The label also provides that for more information, reference could be made to the Material Safety Data Sheet, (MSDS).

[39] Mr. Ramlal testified that the long boxes of metal prevented him from driving the forks directly under the pallets that had the white paint. He had to come in at an angle. Mr. Ramlal testified that he lifted the pallet slightly and brought it out a little. He intended to reposition the pallet so he could get the forks fully underneath. He testified that after he repositioned the pallet, he was able to directly enter and get the forks fully under the pallet. He lifted the load above the long skid of metal products. He stated that as he lifted the pallet, a wooden slat broke and pierced the tote, causing the white paint to escape.

[40] In cross-examination, Mr. Ramlal was taken to his statement that he gave on September 29, 2015; two weeks following the incident. He stated that he had to angle the pallet of paint so he could get his forks under. He stated that he raised the pallet 1-2 feet so he could clear the long boxes of metal. There is no reference in Mr. Ramlal’s statement that he repositioned the pallet so he could get the forks all the way under the pallet. In the statement, Mr. Ramlal states that when the wheels of the forklift went over the dock ramp, the forklift bounced, and the forks broke the pallet. The statement refreshed his memory, and Mr. Ramlal testified that the spill occurred as he was reversing the forklift out of the trailer.

[41] In cross-examination, Mr. Ramlal was also taken to an e-mail he sent on September 16, 2015. In the e-mail he states that the skid was at an angle. He tried to lift the skid but the pallet broke. Mr. Ramlal testified at trial that he could not recall stating that the pallet was at an angle. He was also taken to his discovery transcript, in which he stated that he was unable to insert the forks all the way under the pallet. In the Agreed Statement of Facts, the parties state that the forklift’s prongs did not fully go through the slots of the pallet.

[42] Mr. Vaisman was standing on the loading dock as Mr. Ramlal attempted to remove the skid of white paint. Mr. Vaisman testified that he could see inside the trailer from the headlights on the forklift. He saw Mr. Ramlal attempt to move the skid of white paint located on the left side of the trailer. Mr. Ramlal drove into the trailer to the right of the long box of metal pieces. There was not enough room to directly enter the pallet with the forks. Mr. Vaisman testified that Mr. Ramlal came into the pallet at an angle and as a result the forks were not directly under the pallet. Mr. Vaisman testified that Mr. Ramlal lifted the pallet when the forks were not fully underneath.

[43] In cross-examination, Mr. Vaisman conceded that he could not see exactly where the forks were positioned when the skid with white paint was lifted up. According to Mr. Vaisman, Mr. Ramlal lifted the load and began to reverse. As the forklift went over the dock ramp, the pallet broke and the tote was punctured. Mr. Vaisman testified that he believed Mr. Ramlal may have been going a little quickly as he went over the dock ramp. In cross examination, Mr. Vaisman conceded that in his statement provided shortly after the incident, he did not say the forklift driver was exiting quickly as he went over the dock ramp.

[44] Both Mr. Vaisman and Mr. Ramlal testified that the paint product quickly escaped from the punctured tote. Mr. Vaisman testified that the paint spilled onto the loading dock and not inside his trailer. Photographs of the trailer taken after the incident do not show a significant amount of paint on the inside of the trailer. There is only paint from the wheels of the forklift.

[45] Mr. Vaisman did not have a MSDS. He testified that he was familiar with the MSDS and knew that a person transporting a dangerous product is to have the MSDS. He testified that he did not consider the paint product to be hazardous. Mr. Yanko testified that he did not believe that a MSDS was required because the product was not hazardous. Mr. Vaisman and Mr. Yanko were clearly wrong on this point. The package provides that in case of a spill, reference is to be made to the MSDS.

[46] After the spill, Mr. Vaisman called Mr. Yanko and told him about the spill. There was a telephone number on the package that was to be called in case of a spill. Neither Mr. Ramlal nor Mr. Vaisman called the number. The Bill of Lading for the paint product also had a 24-hour emergency number. Mr. Vaisman testified that he pointed this out to Mr. Ramlal after the spill, but Mr. Ramlal did not call the number. There was no evidence at trial as to the information that would have been provided if the emergency numbers had been called.

[47] Mr. Vaisman testified that after the white paint spilled, Mr. Ramlal started washing the dock by spraying water onto the spilled paint. Mr. Ramlal testified that the chemical material was very slippery. He tried putting cardboard over the spill. It did not help. He decided to clean the area by using a power washer to spray water onto the surface. He sprayed the trailer and the loading bay and dock. The water and chemical flowed into the bottom of the loading bay. There were holes in the loading bay walls that allowed the water mixture to flow into the adjacent loading bay. At the bottom of the adjacent bay was a storm sewer. The storm sewer was under a large container. The water and paint mixture flowed into the storm sewer and eventually entered the Little Etobicoke Creek which was a short distance away.

[48] Ms. King testified that 2Source did not have a policy on how to respond to large spills. She stated that large amounts of chemicals were not stored at the 2Source facility and therefore a policy was not required. She conceded in cross-examination that following the incident they developed a policy on how to deal with spills.

[49] Mr. Ramlal refused to unload the remaining skid of white paint. Mr. Vaisman operated the forklift and removed the other pallet of paint. Mr. Vaisman testified that he ensured that the forks were fully into the pallet. He backed out of the trailer slowly. He was able to remove the skid of paint without incident. After the 2Source material was unloaded, Mr. Vaisman loaded the skid of white paint back into the trailer. Mr. Vaisman testified that he left 2Source at around 1 a.m.

[50] The next morning, Ms. King and Rob Purvey, the day shift supervisor of 2Source were advised of the spill. They could see paint on the docks and tire tracks of paint in the parking lot. Ms. King called Service Star to obtain a copy of the MSDS. It took some time for this document to be provided to her. Mr. Purvey called the Ministry of the Environment (MOE) and the Region of Peel. 2Source was told to retain a company to clean the area. After receiving a list of contractors from the MOE, 2Source retained CHDS to clean the spill.

[51] CHDC pumped the water out of an outfall and tributary area and sent it to a cleaning facility. Hay bales were used in the catchment area to reduce the amount of white paint that may flow into the creek and to soak up some of the liquid. Later, CHDS was required to go through the storm sewer to remove any residual product. Mr. Purvey testified that in May 2016 a milky substance was reported in Little Etobicoke Creek. The storm sewer drain was dug up to determine if any product remained. The total payment to CHDS was $206,509.01.

Position of the Parties

[52] 2Source takes the position that Service Star and/or Y7E are liable for the clean-up costs because one or both of them breached the agreement to provide direct drive delivery. Two loads were picked up after the 2Source product was placed in the trailer. There was no direct access to the 2Source product and as a result, Mr. Ramlal was required to unload the white paint. It was during the unloading of the chemical that the loss occurred.

[53] Service Star agrees that it was instructed by 2Source to arrange the delivery on a direct drive basis. Y7E argues that it was not retained on a direct drive delivery basis and there was no prohibition on picking up other loads after picking up the 2Source load.

[54] Both Defendants take the position that even though the white paint was in the way of the copper beryllium, Mr. Ramlal could have refused to unload the chemical product or could have sent the load to a crossdock facility to reposition the load. Instead, Mr. Ramlal decided to unload the skids. The Defendants argue that Mr. Ramlal was negligent in the manner in which he attempted to remove the pallet of white paint. The Defendants also argue that Mr. Ramlal was negligent when he washed the white paint off the loading dock and into the storm sewer and eventually into the Little Etobicoke Creek.

THE ISSUES

[55] The following issues are addressed in these reasons:

(i) Breach of Contract

• What were the contractual relationships between the parties?

• Did the contracts include a term that the delivery to 2Source was on a direct drive delivery basis? and

• Was the contract breached?

(ii) Negligence

• Was Mr. Ramlal negligent in the manner in which he unloaded the trailer and cleaned up the spill of the white paint product?

(iii) What was the cause of the Plaintiff’s damages?

(iv) What are the Plaintiff’s Damages? and

(v) Is the Defendant, Y7E entitled to judgment on its crossclaim?

ANALYSIS

i) Breach of Contract

[56] The Plaintiff states that there is no dispute in the evidence with respect to its contract with Service Star. The parties agree that there was a contract between Service Star and 2Source and that the contract included a term that there would be a direct drive delivery of the product from Materion Brush to 2Source.

[57] Ms. King testified that the standing instructions were to arrange all deliveries on a direct drive basis. This was to ensure timely delivery and to avoid any other shipments being in the way of the 2Source delivery. Ms. Ioannou and Mr. Malatesta confirmed that Service Star was retained by 2Source to provide a direct drive delivery. They also testified that they understood the term “direct drive” to mean that after the driver picked up the 2Source shipment, he would travel directly to 2Source without stopping for any other pick-ups.

[58] The Plaintiff also argues that there is no dispute that the contract was breached. Mr. Vaisman testified that after picking up the shipment from Materion Brush, he did not go directly to 2Source. Instead he made two other pick-ups. At ColorMatrix, he picked up two skids which contained totes of white paint. He then went to Metal Trelleborg where he picked up a skid with 20 boxes of long metal pieces. The additional pick-ups were placed in the back of the trailer which prevented direct access to the 2Source delivery.

[59] Service Star takes the position that it did not breach the delivery contract. Service Star argues that the reason for a direct drive delivery is to ensure delivery is made on time. Service Star provided same day delivery and the product was delivered on time; by 11:59 p.m. on September 9, 2015.

[60] I am satisfied that the contract between Service Star and 2Source included a term that the delivery was to be on a direct drive basis. The Service Star witnesses agreed that delivery was to be made on a direct drive basis. Both parties understood that a direct drive delivery did not allow for any subsequent pick-ups for other customers. Other pick-ups were made after the 2Source shipment was picked up at Materion Brush. I find that the delivery was not on a direct drive basis and that Service Star breached the contract.

[61] Service Star argues that its contract with Y7E was also on a direct drive basis. Ms. Ioannou confirmed that 2Source required a direct drive delivery. She testified at trial that she told Mr. Yanko that the delivery was on an expedited basis. She testified that she did not recall whether she specifically discussed whether the carrier could pick-up additional shipments. Mr. Yanko denies that Ms. Ioannou said the delivery was on a direct drive basis. He agrees that the delivery was for an expedited/same day delivery.

[62] The first carrier confirmation form sent to Y7E does not state that the delivery is to be on an expedited basis. The only delivery description is that the delivery is general freight. The second carrier confirmation states that the delivery is on an expedited/same day pick-up and delivery. Neither order confirmation form states that the delivery is on a direct drive basis.

[63] There is no evidence that Mr. Yanko was advised that no other pick-ups were permitted after the pick-up from Materion Brush. Ms. Ioannou testified that she could not recall whether she discussed with Mr. Yanko that there could not be any additional pick-ups after Materion Brush. Mr. Yanko testified that it is his understanding that he could pick-up other deliveries after the 2Source pick-up as long as he was able to make the delivery on a same day.

[64] I found Mr. Yanko to be a generally unreliable witness. At times he was evasive. On several occasions he was taken to his discovery transcript and successfully impeached. However, I find there is no real dispute between Mr. Yanko’s evidence and the evidence of Ms. Ioannou. Both Mr. Yanko and Ms. Ioannou understood that the delivery was on a same day expedited basis. Ms. Ioannou could not recall whether she told Mr. Yanko there could not be any additional pick-ups. The focus on their discussions was to ensure the delivery was made before midnight on September 9, 2015.

[65] I am unable to conclude that it was a term of the agreement between Service Star and Y7E that there could be no pick-ups after the 2Source product was picked up from Materion Brush. There is no documentation that provides the delivery was on a direct drive basis. The only express term in the agreement between Service Star and Y7E was that the delivery was on a same day expedited basis. In the Agreed Statement of Facts, the parties agree that the delivery was made just before 11:59 p.m. on September 9, 2015. I conclude that Y7E did not breach its agreement with Service Star.

ii) Negligence

[66] In the Statement of Claim, the Plaintiff pleads that the Defendants were negligent. In particular, the Plaintiff alleges that the Defendants were negligent as follows; in permitting the loading of chemicals behind the 2Source delivery, in permitting the chemicals to be placed on defective pallets, caused the pallets to be placed in the transport truck in such a way that they would inevitably fail, failed to warn the Plaintiff of the defects in the pallet, failed to give an adequate warning of the dangerous chemicals to be removed and hired incompetent employees for the purposes of packing and handling material to the Plaintiff’s premises.

[67] I am not satisfied that the Plaintiff established that the Defendants were negligent. There was no evidence at trial with respect to the standard of care of a freight broker or transport company. I am not prepared to find that placing loads behind the 2Source shipment is a breach of the standard of care. There was no evidence with respect to the condition of the pallet or whether it was appropriate for the load of white paint. There was no evidence with respect to how the tote of paint was loaded onto the pallet. I am satisfied that based on the information found on the outside of the package, that Mr. Ramlal knew or ought to have known the type of product that he attempted to move.

[68] I find that the loss was caused solely as a result of the negligence of the Plaintiff’s employee, Mr. Ramlal, both with respect to how he attempted to unload the skid of white paint and the steps he took to clean the spill.

[69] Counsel for the Plaintiff argues that when the shipment arrived, Mr. Ramlal was faced with a difficult choice. He could reject the delivery which would result in a delay in manufacturing, or he could attempt to move the skids of white paint which were in the way. Counsel for the Plaintiff argues that the only reasonable option for Mr. Ramlal was to unload the product. The 2Source facility is on a “just in time” basis. The shipment arrived sometime around midnight. Manufacturing was to begin at 1:30 a.m. If Mr. Ramlal had sent the truck to a crossdock facility or if he refused delivery, there would have likely been a delay in manufacturing. This may have resulted in greater damages to 2Source.

[70] I do not accept this argument. Mr. Ramlal could have rejected the load. He could have sent the driver to a local crossdock facility to rearrange the load. Instead he decided to unload the large totes of white paint product so he could access the 2Source delivery. Once Mr. Ramlal decided to unload the pallet of paint, he was required to remove the pallet without negligence.

[71] Mr. Ramlal testified that he did not know what type of product was on the skid. The package had “LIQUID” written on the outside facing the forklift operator. I am satisfied that these words would have been visible from the forklift headlights. He knew it was too heavy to be moved with a hand pump truck and that the forklift was required. I find that Mr. Ramlal knew or ought to have known that he was moving a heavy liquid product.

[72] Because of the location of the long skid of metal on the left side of the trailer, Mr. Ramlal could not directly drive the forklift prongs under the pallet. He stated that he had to bring the pallet out a little and straighten it. He testified that he could then enter the pallet directly. When he lifted the pallet, it broke and punctured the tote. Mr. Vaisman states that Mr. Ramlal came in at an angle but states that Mr. Ramlal did not set it back down and reposition the pallet so he could get the forks directly under. He states that as Mr. Ramlal was leaving the trailer, the forklift bumped on the dock plate. This caused the pallet to break which punctured the tote.

[73] I am satisfied that Mr. Ramlal attempted to remove the skid of paint product without first ensuring that the forks were fully under the pallet. Mr. Ramlal admitted that he picked up the skid on an angle. In the statement he provided two weeks following the accident, he does not state that he put the pallet down and repositioned it so he could get the forks fully under the pallet. He conceded on cross-examination that the pallet was at a “bit of an angle” at the time the pallet broke. In the Agreed Statement of Facts, the parties agree that the forklift’s prongs did not fully go through the slots of the pallet.

[74] I also find that the pallet broke as Mr. Ramlal exited the trailer. The pallet did not break where Mr. Ramlal first picked up the skid but after he picked up the skid and reversed the forklift to the loading dock. Based on the photographs, the paint product spilled on the loading dock and not inside the trailer. Mr. Vaisman testified that the break occurred as the forklift went over the dock plate. In cross-examination, Mr. Ramlal confirmed the information in his statement, in which he stated that when the wheels of the forklift went over the dock ramp, there was a bounce and the forks broke the pallet. I do not accept Mr. Vaisman’s evidence at trial that Mr. Ramlal was going quickly as he exited the trailer. However, regardless of the speed, the forklift bounced as it went onto the dock ramp causing the forks to break the pallet and puncture the tote of white paint.

[75] Warren Campbell was tendered as an expert in the field of forklift operations. He is employed at the Ontario Truck Diving school, where he instructs students in tractor-trailer, dump truck and forklift operations. He has instructed forklift operation for 12 years. Before he started teaching, he worked at General Motors for 32 years, as a lead hand and forklift operator. I was satisfied that Mr. Campbell has specialized knowledge and he was qualified as an expert in the operation of forklifts.

[76] Mr. Campbell provided his opinion that the proper procedure was to remove the long skid of metal so the forklift could directly approach the pallet of white paint. The forklift had to go straight into the pallet so the forks could go fully under the pallet. The long skid could not be removed because Mr. Ramlal did not have extra-long fork attachments. Mr. Campbell stated that if the long skid could not be moved, Mr. Ramlal ought to have picked up the pallet of white paint and maneuver it until it was positioned so that the forks could go fully under the pallet. Once the forks were fully under the pallet, the load could be lifted. The forks would then be slightly tilted back to cradle the load. At that point the forklift operator could safely back out of the trailer.

[77] I am satisfied that the manner in which Mr. Ramlal attempted to unload the pallet of paint product was negligent. He failed to maneuver the pallet so he could get the forks fully under the pallet. As a result, one of the forks was only halfway through the pallet. When the forklift went onto the dock ramp, the fork was forced upwards and broke the pallet and punctured the tote. I accept the evidence of Mr. Campbell that Mr. Ramlal failed to follow the proper procedure in the operation of a forklift.

[78] The tote contained 500 litres of white paint product. The entire contents of the tote spilled onto the loading dock. The product was slippery. Mr. Ramlal could not continue unloading the trailer until after the spill was cleaned up.

[79] Mr. Vaisman testified that after the spill, he showed Mr. Ramlal the Bill of Lading which had a telephone number to call if there was a spill. The package also had a number to call. Mr. Ramlal did not call the numbers. He did not contact his supervisor.

[80] The white paint was a hazardous product. The MSDS was not with the driver. There is a requirement that the MSDS accompany any shipment of a hazardous product. No explanation was provided at trial for the failure of Mr. Vaisman to have a MSDS. However, I am not satisfied that there is a causal connection between the failure to have a MSDS and the damage. After the spill, Mr. Ramlal did not call the number on the Bill of Lading or call for assistance or advice. I find that it is unlikely he would have acted differently if there had been a MSDS.

[81] Mr. Ramlal sprayed water on the spilled white paint to wash it off the loading dock. Instead of containing the spill, the white paint was washed into the storm sewer. From there the paint entered the Little Etobicoke Creek.

[82] I am of the view that Mr. Ramlal was negligent in the way he responded to the spill. He failed to determine what was spilled. He did not contact the authorities to determine how the spill was to be contained. Instead he used a power washer to remove the spill from the loading dock. Counsel for Y7E argues that it “boggles the mind” that the first step taken by Mr. Ramlal was to wash the paint off the loading dock and into the storm sewer. I agree.

[83] Mr. Purvey and Ms. King were required to respond to the spill when they started work the next morning. They appropriately contacted the Ministry of the Environment and the City to determine the proper procedure. They immediately took steps to clean up the spill. Unfortunately, their actions were too late to prevent the white paint from entering the Little Etobicoke Creek.

iii) Causation

[84] I find that Service Star breached its contract to provide a direct delivery of the product to 2Source. However, I am of the view that Service Star is not responsible for the damages claimed by the Plaintiff.

[85] When Mr. Vaisman delivered the load to 2Source, Mr. Ramlal could have rejected the load or send Mr. Vaisman to a crossdock facility. Instead, he decided to unload the trailer. The manner in which he unloaded the pallet of paint was negligent. His response to the spill was also negligent. As a result of Mr. Ramlal’s actions, white paint entered the Little Etobicoke Creek. I find that the escape of the white paint was not a reasonably foreseeable consequence of Service Star’s breach of contract.

[86] In Brown & Root Lt. v. Chimo Shipping Ltd., 1967 CanLII 47 (SCC), the defendant was retained to ship heavy cranes. The ship’s derrick had a capacity of 30 tons. The parties had orally agreed that each crane was to be reduced in weight so that the heaviest piece to be lifted by the derrick and boom on the ship would not weigh more than 30 tons. When the ship picked up the load, there was a 50-ton crane and a 45-ton crane to be shipped. The captain decided to use the ship’s derrick to lift the crane. The boom broke and the crane was damaged. The captain was found to have known or ought to have known, that the cranes’ weight exceeded the capacity of the ship’s loading equipment. Instead of refusing to load the crane until the crane was separated into its component parts so the weight of each component part had been reduced, the captain attempted to load the equipment. The court held that the captain’s actions were the effective cause of the damage.

[87] The plaintiff argued that the oral contract to ensure each piece of machinery did not exceed 30 tons was breached. The court held that if there was a breach of the contract, the breach did not result in liability for the damage which was solely the fault of the captain. The court stated:

It has never been seriously questioned since the case of Hadley v. Baxendale that damages for breach of contract are limited to the ordinary consequences which would follow in the usual course of things from such breach or for the consequences of the breach which might reasonably be supposed to have been in contemplation of both parties at the time they made the contract.

[88] Here, Mr. Ramlal could have refused to unload the skids of white paint. Instead he tried to move a heavy pallet of paint without ensuring that the prongs of the forklift were fully underneath. I am satisfied that it was not reasonably foreseeable that Mr. Ramlal would attempt to remove the heavy pallet of paint product in this manner. I am also of the view that it was not reasonably foreseeable that when faced with a spill of 500 litres of a paint product, Mr. Ramlal would not contain the spill, but instead use a power washer to wash the paint off the loading dock. This resulted in the paint entering a storm sewer and eventually the Little Etobicoke Creek.

[89] I find that the damages were caused solely by the negligence of Mr. Ramlal. I dismiss the Plaintiff’s action.

iv) Damages

[90] If I had found liability on the Defendants, I would have assessed the damages in the amount of $206,509.01.

[91] 2Source fully co-operated with the authorities to clean-up the damage to the Little Etobicoke Creek. After being retained, CHDS put in hay bales to prevent further escape of the paint product. The water and outfall in tributary area was pumped out and sent to a cleaning facility. It was necessary to go through the storm drain to ensure there was no residual paint product. In the spring of 2016, it was necessary to dig out the drain to make sure there was no residual paint.

[92] CHDS performed the work to clean up the spill. The cost was $206,509.01. This amount was paid by or on behalf of the Plaintiff. At trial, the Defendants did not raise any serious objection to the amount paid to clean the spill. I am satisfied that the work performed by CHDS was reasonable and necessary to respond to the spill of the paint product.

v) Y7E’s Counterclaim

[93] The Defendant, Y7E brings a Counterclaim for the damage to the tote and the loss of the paint product. The claim is in the amount of $8,800 USD.

[94] The Plaintiff is in receivership. Y7E requires leave to sue 2Source. Leave was not sought. There may be a claim in equitable set off. However, I do not award any damages to the Plaintiff and as a result there are no damages to be “set off”.

[95] I dismiss the Counterclaim.

DISPOSITION

[96] For the reasons set out above, I dismiss the Plaintiff’s action.

[97] The Defendants are successful in the action and are presumptively entitled to their costs. I encourage the parties to reach an agreement with respect to costs. If they are unable to do so, I direct the Defendants to deliver their written cost submissions of no more than 3 pages in length, excluding Bills of Cost and caselaw, within 20 days of the release of these reasons. The Plaintiff shall deliver its written submissions in reply, on the same basis, within 20 days of receiving the Defendants’ costs submissions.

[98] I dismiss the Counterclaim advanced by Y7E. I do not award costs of the Counterclaim.

DATE: SEPTEMBER 30, 2021