Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Gergley Jakab and Ontario Heavy Xpress Ltd., Plaintiffs
AND:
Clean Harbors Canada, Inc., Defendant
BEFORE: MacNeil J.
COUNSEL: C. Wahlman – Lawyer for the Plaintiffs
K. Kernick – Lawyer for the Defendant
HEARD: November 23, 24 and 29, 2021 (via Zoom videoconference)
REASONS FOR JUDGMENT
Overview
1This action was brought for recovery of the value of a 2007 Volvo transport truck (“the Volvo Truck”) that was damaged by a fire that occurred on July 5, 2018. The Volvo Truck was owned by the Plaintiff, Ontario Heavy Xpress Ltd. (“OHX”), which operates as a transport truck service provider. The Plaintiff, Gergley Jakab (“Mr. Jakab”) is the sole director and shareholder of OHX and was the driver of the Volvo Truck.
2The primary issue for determination is whether the Defendant, Clean Harbors Canada, Inc. (“Clean Harbors”), was contractually obligated to purchase insurance that would have covered the fire damage to the Volvo Truck.
Background
3On January 23, 2017, the Plaintiffs and the Defendant entered into a written services contract, titled a National Transportation Lease Agreement (Cdn.), whereby the Plaintiffs agreed to provide freight haulage services for Clean Harbors and to furnish Clean Harbors with the trucking equipment owned by the Plaintiffs (“the NTLA”).
4Mr. Jakab began earning a living in Canada as a transport truck driver in 2014. In March 2015, he purchased the Volvo Truck and incorporated OHX through which he operated the Volvo Truck and received income.
5Mr. Jakab testified that he received the NTLA contract by email from Lisa I. who worked in the Burlington office of Clean Harbors. He believes he signed the contract at home. He states that no wording was brought to his attention and nothing was discussed with him before he signed. He also testified that he was not told to get legal advice or to get advice from an insurance broker before signing. Mr. Jakab stated that he was not 100% clear what was in the NTLA contract since English is his second language, although it looked similar to other contracts he had signed before with other companies. He stated that he read the contract through before signing it and that he knew it was a standard form and he could not change the terms. He admitted that he was not required to enter into the contract and that he had agreed to its terms but he explained that he is not an insurance expert or a legal expert.
6Mr. Jakab’s evidence was that, before he signed the contract, he was not aware of Section 13 of the NTLA regarding damage to equipment, or of clause 2 in Schedule 2 regarding Clean Harbors not making any representations or warranty with respect to the extent or adequacy of insurance.
7Mr. Jakab admitted that he did not ask Clean Harbors if he could maintain his own insurance on the Volvo Truck and that, before signing the NTLA, he did not discuss insurance with anyone at Clean Harbors. However, his evidence is that sometime after signing, he asked either Lisa I. or Kim S., who also worked in Clean Harbors’ Burlington office, if he was “fully covered” because he needed to provide information to CLE Leasing Enterprise Ltd. (“CLE Leasing”), the company from which he was leasing the Volvo Truck, and they told him that he was “fully covered”. (He thinks he had this conversation with Lisa I.) Mr. Jakab admitted that this was not a detailed discussion and that he did not ask whether there was first party property damage or fire coverage. He also did not ask to see the insurance policies. He stated that he had been satisfied with receiving the pink insurance slip and the certificate of liability coverage and being told that he was “fully covered”.
8As support for his understanding that he was fully covered, Mr. Jakab also pointed to clause 3 of Schedule 2 of the NTLA where it provides for a deductible of $2000 for “Damage to Tractor forming part of the equipment”. He stated that he understood this to mean that, if there was any damage to his truck, he would be liable to pay $2000 and the insurance company would cover the rest.
9Mr. Jakab further gave evidence that, after signing the NTLA, he heard that Clean Harbors self-insured its vehicles and that it would pay up to $250,000 for any damage. While he initially stated that he believes it was Lisa I. who told him this, on cross-examination, he acknowledged that he might have heard it from another truck driver.
10Mr. Jakab testified that it is standard practice in the transport business that the plate owner obtains full insurance and that he relied upon his past business experiences. Mr. Jakab’s evidence was that he had sub-contracted work with approximately four companies as an owner-operator and that each of those companies provided the licence plates and took out the insurance for the vehicle. Those policies were not in evidence before me, however.
11Mr. Jakab testified that he did not take out a separate insurance policy on the Volvo Truck because, according to his knowledge, it was not possible to double-insure a vehicle in Ontario. He further testified that if Clean Harbors had made it known to him that it had not taken out full insurance, he would not have worked for Clean Harbors and he would not have signed the NTLA.
12On July 5, 2018, the Volvo Truck had an electrical fire and sustained damage. Mr. Jakab testified that, at the time of the fire, he was cleaning and servicing the Volvo Truck to get ready to pick up a load. He stated that he kept the truck in good mechanical condition and it was regularly serviced over the years; this was not disputed by Clean Harbors.
13After the fire, Mr. Jakab communicated with Jim Stull (“Mr. Stull”), the former Director of National Transportation at Clean Harbors, by telephone and text. Their discussions went on over the course of approximately two months. Mr. Stull looked into paying the Plaintiffs for the loss of the Volvo Truck and an amount of $18,000 - $20,000 (US) was floated. In August 2018, Mr. Jakab also inquired of Mr. Stull about renting or driving another truck for Clean Harbors but was told there were no internal trucks available. Mr. Jakab’s evidence was that, during this time, he was led to believe Clean Harbors was going to pay for the Volvo Truck but that, in late September 2018, Mr. Stull informed him that Clean Harbors would not cover it because a trailer had not been hooked on the back at the time of the fire and because Clean Harbors did not have insurance for the fire damage. After hearing this, on September 19, 2018, the Plaintiffs sold the Volvo Truck for salvage to stop incurring storage fees.
14In October 2018, the Plaintiffs retained a lawyer to assist in recovering from Clean Harbors or its insurer the value of the Volvo Truck and related losses. After receiving a demand letter from then Plaintiffs’ counsel, on or about November 15, 2018, Clean Harbors reported the incident to its insurer for the loss. By correspondence dated February 5, 2019, however, then counsel for the Plaintiffs was informed that the policy underwriter, Chubb Insurance Company of Canada, had determined that “there is no comprehensive or All Perils coverage under Clean Harbors policy CAC330021” to cover the damage to the Volvo Truck.
15As a result, the Plaintiffs commenced the within action. They argue that Clean Harbors is liable since: (i) it had control over the NTLA and it ought to have obtained “all insurance” to insure the Volvo Truck; (ii) it should have made it clear to Mr. Jakab that there was no property damage coverage to enable him to choose not to drive the Volvo Truck and to work elsewhere; or (iii) it should have covered the damage to the Volvo Truck itself, as a business expense, consistent with how it self-insures its own vehicles. The Plaintiffs seek damages for the value of the Volvo Truck. Mr. Jakab’s evidence was that his capital investment in the truck was just under $54,000.00. The Plaintiffs also called an expert witness who gave an opinion that the value of the Volvo Truck at the time of the fire was $30,000.00 (Cdn) plus taxes. The Plaintiffs further claim damages for the towing and storage fees incurred and the cost of obtaining a repair estimate. Finally, they seek damages for loss of income as Mr. Jakab had no ability to work during the months that he had no truck to drive. He states that it took him a year to find new stable employment.
The Issues
16The primary issues to be determined are as follows:
a. Did Clean Harbors breach the NTLA by not obtaining first party property damage insurance coverage for the Volvo Truck?
b. Did Clean Harbors make misrepresentations regarding the insurance coverage available to the Plaintiffs?
c. Was Clean Harbors negligent in its dealings with the Plaintiffs?
Relevant Provisions of the NTLA
17The relevant provisions of the NTLA are Sections 13 and 18 which read:
DAMAGE TO EQUIPMENT – The Contractor shall be solely responsible for loss or damage to the Equipment however caused and the Contractor agrees to indemnify and save harmless each of Clean Harbors’ clients and Clean Harbors in respect of any claim for any loss or damage to the Equipment. Any insurance maintained by the Contractor in respect of damage to the Equipment shall contain a waiver by the insurer of any right of subrogation as against each of Clean Harbors and Clean Harbors’ clients and their respective employees, agents, officers and directors. The foregoing paragraph shall not apply to damage caused solely by willful misconduct or the direct negligence of Clean Harbors or its employees.
ENTIRE CONTRACT – This Contract including the schedules attached hereto form the entire Contract between the parties and cancels and supersedes any and all previous written or oral Contracts between the Contractor and Clean Harbors; however, it may be modified or amended from time to time provided such changes are agreed to in writing between Clean Harbors and the Contractor.
18Schedule 1 to the NTLA identifies the “Equipment” as being the Volvo Truck, sets out the compensation to be paid, and lists the required safety-related equipment to be supplied by the Plaintiffs.
19Schedule 2 – Insurance contains the following relevant provisions:
Clean Harbors will make all insurance, except non-owned trailer legal liability coverage, available to the Contractor for the purpose of insuring the Equipment and the Contractor under policies of insurance obtained and maintained by Clean Harbors. The insurance made available to the Contractor by Clean Harbors shall only provide coverage for claims or losses arising while the Contractor is performing obligations or services under this Contract.
The insurance coverage made available by Clean Harbors to the Contractor shall be subject to (a) a limit of coverage not exceeding $5,000,000, and (b) the terms and conditions of the policies of insurance from time to time obtained by Clean Harbors, including without limitation, all exclusions of liability contained in such policies. Clean Harbors makes no representation or warranty with respect to the extent or adequacy of the insurance coverage made available by it and assumes no responsibility for the adequacy of such insurance. The Contractor shall be solely responsible to satisfy himself as to the adequacy of the coverage afforded by such insurance.
Analysis
(i) Did Clean Harbors breach the NTLA by not obtaining first party property damage insurance coverage for the Volvo Truck?
20It is the Plaintiffs’ position that the NTLA required Clean Harbors to provide full insurance for the Volvo Truck, including first party property damage insurance, and that, in reliance on this requirement, the Plaintiffs did not obtain their own “duplicate insurance”. The Plaintiffs allege that since the Defendant failed to obtain the required insurance, it breached the parties’ contract. The Plaintiffs submit that Sections 6 and 7 of the Ontario Automobile Policy (OAP 1), the standard policy, address what would have been covered had Clean Harbors obtained property damage coverage. Under section 6.2, there would have been payment for the cost of damage to the vehicle, its equipment, contents and for loss of use. They note that fire damage is specifically referred to in s. 7.1.1 of the OAP 1. And, under section 7.7, an insurer would have paid either the cost to repair or the actual cash value of the vehicle at the time it was damaged less the deductible.
21It is Clean Harbors’ position that, by the terms of the NTLA, it only agreed to make available to the Plaintiffs the insurance coverage that it obtained and maintained under its policies, and that the contract made clear that such insurance was limited in scope and subject to the terms, conditions and exclusions of those policies. Clean Harbors disputes that the NTLA required it to place first party property damage insurance on the Volvo Truck.
22When interpreting a contract, a decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, at para. 47.
23The words of one provision must be considered in harmony with the rest of the contract and in light of its purposes and commercial context: Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, at para 64.
24The Plaintiffs rely on Sander Holdings Ltd. v. McDiarmid Lumber Ltd., 2012 SKPC 19 (Sask. Prov. Ct.). As the court in that case held, at para. 145, determining the terms of a contract requires an assessment of the evidence, including the oral testimony and documents filed, and some construction on the part of the court. The court cited §553 of the Canadian Encyclopedic Digest – Contracts – IX – Interpretation of Contract – 1 – General Principles which includes:
… The scope of the surrounding circumstances to be considered will vary from case to case, but should encompass those factors which assist the court in searching for an interpretation that promotes the true intent of the parties. At the same time, the words of the contract must not be overwhelmed by a contextual analysis, since the court’s task is not to make a new contract for the parties. The intention of the parties is determined in the objective sense of a reasonable person by reference to the surrounding circumstances at the time of signing of the contract.
And §557:
Where possible, effect must be given to all terms of the contract and none are to be rejected as surplusage or as having no meaning. The absence of words may be considered. Similarly, a court must strive to harmonize apparently conflicting terms by attempting to reasonably give meaning to each of the terms in question; one clause or the other will be ruled ineffective only if such an interpretation cannot be found. … Conflicting provisions will not be considered meaningless and unenforceable unless they are so clearly repugnant that the effect of one clause virtually destroys that of another. …
25Where a plaintiff seeks to have a contract interpreted in a particular manner, it bears the burden of establishing with reasonable clarity the correctness of such an interpretation: see Sander Holdings Ltd., at para. 152, citing §631 of Canadian Encyclopedic Digest – Contracts – IX – Interpretation of Contract – 13 – Burden of Proof.
26The NTLA must be considered as a whole. No one paragraph can be read and interpreted in isolation, let alone one sentence or one phrase. The NTLA is not a long or complicated contract. In reviewing and considering the entire document, I find that the language in the NTLA obligated Clean Harbors to make available to the Plaintiffs only that coverage found in the policies of insurance that Clean Harbors obtained and maintained. Based on the evidence before me, I am satisfied that it did that. The problem for the Plaintiffs is that that insurance coverage did not include first party property damage coverage.
27By virtue of clause 2 of Schedule 2, the Plaintiffs were solely responsible for satisfying themselves as to the adequacy of the insurance coverage provided by Clean Harbors. Here, the Plaintiffs made no inquiries of Clean Harbors respecting the insurance coverage in place before or at the time of entering into the NTLA. They did so at their own peril. If the Plaintiffs had made the appropriate inquiries, they would have discovered the gap in fire coverage and could have taken out additional insurance.
28When asked by the Defendant’s counsel if the NTLA imposed a positive duty on him to satisfy himself as to the adequacy of insurance coverage, Mr. Jakab denied that he had such a duty because he had been told that he was covered wholly by insurance. At his examination for discovery, Mr. Jakab agreed that there were different kinds of insurance coverage available. I am of the view that it was not reasonable for Mr. Jakab to have assumed that all losses would be covered and then not make the appropriate inquiries in order to satisfy himself that that was indeed the case, as the NTLA obligated him to do.
29The Plaintiffs submit that nowhere in the list of covenants set out in Section 1 of the NTLA does it state that the contractor is required to obtain insurance or provide proof of insurance. I agree. However, Section 13 and the entirety of Schedule 2 of the NTLA deal with the parties’ obligations as it relates to insurance. I do not accept that Mr. Jakab read the NTLA but was not aware of Section 13 or clause 2 of Schedule 2. These two provisions are in the same font and type as the other sections, and clause 2 is located just below clause 1 of Schedule 2 which Mr. Jakab must have read since he relies on the term “all insurance” found therein.
30With respect to the Plaintiffs’ contention that Section 6 of the OAP 1 would have applied, the OAP 1 itself states that this insurance is required by law. The evidence before me indicates that Clean Harbors did have Direct Compensation – Property Damage Coverage in place for the Volvo Truck. There was no breach of the NTLA in this regard. Since Clean Harbors’ policy included this coverage, it was for the insurer to determine that it did or did not apply in respect of the fire damage to the Volvo Truck.
31I find that the Plaintiffs have not met their onus of establishing with reasonable clarity that the NTLA obligated Clean Harbors to purchase first party property damage insurance coverage for the Volvo Truck.
Conflicting Clauses
32The Plaintiffs contend that the following clauses found in the NTLA are conflicting:
(i) Clause 13 of the NTLA that says the contractor is responsible for damage to the equipment and to indemnify Clean Harbors and its clients for claims for loss or damage to the equipment. The Plaintiffs argue this is inconsistent with Clean Harbors’ obligation to obtain “all insurance” for the purpose of insuring the Volvo Truck and that it is completely contradictory to the fact that Clean Harbors did get liability insurance. They take the position that Section 13 should be disregarded as it renders Schedule 2 repugnant.
(ii) The first sentence of clause 2 of Schedule 2 regarding limits of $5 million and being subject to the terms of the policies including exclusions of liability. The Plaintiffs submit that this is unclear and could refer to statutory conditions such as driving without a valid licence. They argue this language would not cause a contractor to think that something was missing.
(iii) The third sentence of clause 2 of Schedule 2 requiring the contractor to satisfy himself as to the adequacy of insurance. The Plaintiffs submit that this is also in direct conflict with Clean Harbors’ obligation to get all insurance.
(iv) Clause 3 of Schedule 2 that outlines deductibles including for damage to or theft of a tractor. The Plaintiffs argue that this clause is in direct contradiction to the requirement for Clean Harbors to provide all insurance to cover the equipment, and that it is inconsistent with having no property damage coverage and could easily mislead a reader.
33I am not persuaded that any of these clauses are conflicting. The Plaintiffs’ argument in this regard is premised on Clean Harbors being obligated to get “all insurance” meaning every available coverage, even optional coverage. Such an interpretation may have been available if the first sentence of clause 1 of Schedule 2 had read simply: “Clean Harbors will make all insurance, except non-owned trailer legal liability coverage, available to the Contractor for the purpose of insuring the Equipment and the Contractor.” But the first sentence does not read that way since, after the word “Contractor”, it continues on with the words: “under the policies of insurance obtained and maintained by Clean Harbors.” In addition, there are other pertinent clauses that cannot be ignored, including especially clause 2 of Schedule 2. All of the provisions regarding insurance must be read in conjunction with each other.
34I am of the view that to adopt the Plaintiffs’ interpretation of clause 1 of Schedule 2 would be to effectively make a new contract for the parties, which is something the court is not to do.
35When read and considered together, I find that the impugned provisions can co-exist. Section 13 of the NTLA provides that the Plaintiffs are responsible for damage to the equipment and must indemnify Clean Harbors and its clients for loss or damage to the equipment. This provision can be understood in harmony with Schedule 2 and the third party liability insurance that Clean Harbors had in place in the event of a motor vehicle accident. I am of the view that Section 13 supports the Defendant’s position that it only intended to provide third party liability insurance coverage under its policies. Section 13 specifically refers to “insurance maintained by the Contractor” which contemplates the Plaintiffs being able to obtain their own first party property damage insurance for the Volvo Truck. With respect to the first sentence of clause 2 of Schedule 2, it is quite clear in stating the limit of coverage and the fact that the coverage is subject to the terms and conditions of the policies obtained by Clean Harbors. This language serves to identify the extent of insurance being made available to a contractor by Clean Harbors. Regarding the third sentence of clause 2 of Schedule 2, this does not conflict with Clean Harbors’ obligation to make insurance available since the phrase “all insurance” is qualified by the words “obtained and maintained by Clean Harbors”. Finally, regarding clause 3 of Schedule 2, I find that this language is not inconsistent with the third party liability coverage provided by Clean Harbors since, if there was a motor vehicle accident involving a third party, a contractor could be required to pay a deductible with the rest of the loss or damage covered by the insurer.
36I am of the view that the language used in Section 13 and in Schedule 2 is clear, unambiguous and understandable to a reasonable and objective person. It places the obligation squarely on the Plaintiffs to confirm that the insurance coverage was appropriate to their needs and for their purposes. The Plaintiffs were in the best position to know what those needs were, especially in light of their leasing agreement with CLE Leasing which contained the following insurance requirement:
- INSURANCE. Upon delivery, the Lessee bears total responsibility for the Equipment and accepts the risk of loss or damage to the Equipment. The Lessee shall obtain and maintain an insurance policy for liability against all loss of or damage to the Equipment according to the value and the terms and conditions which shall be satisfactory to the Lessor. The insurance policy shall name the Lessor and the Lessee as insured and shall name the Lessor as sole beneficiary of the indemnity provisions in case of loss or damage. …
Unconscionability
37The Plaintiffs submit that the NTLA should be considered in light of unconscionability and the court’s equitable power to set aside unfair agreements resulting from unequal bargaining power. They argue that Clean Harbors is a large, sophisticated corporation and one of the largest hazardous waste haulers in North America while Mr. Jakab is the sole shareholder of OHX, speaks English as a second language, was dependent on Clean Harbors since he drove exclusively for it, and was not permitted to negotiate the terms of the NTLA. While they acknowledge the clause in the NTLA that required the Plaintiffs to satisfy themselves about the adequacy of insurance, they argue that Clean Harbors did not provide all insurance documents and did not tell the Plaintiffs to get advice or that there was no property damage coverage. They identify specifically Section 13 and clause 2 of Schedule 2 as provisions that should be set aside, and rely on the case Uber Technologies Inc. v. Heller, 2020 SCC 16, in support of their arguments in this regard.
38There are two elements that need to be proved by a party claiming unconscionability: (i) proof of inequality in the bargaining positions of the parties; and (ii) proof of an improvident or unfair transaction: Uber Technologies, at paras. 62 and 64. An inequality of bargaining power exists when one party cannot adequately protect their interests in the contracting process: Uber Technologies, at para. 66. A bargain is improvident if it unduly advantages the stronger party or unduly disadvantages the more vulnerable; improvidence is measured at the time the contract is formed: Uber Technologies, at para. 74.
39In this case, I am not persuaded that the Plaintiffs were unable to adequately protect their interests since there is no evidence that they could not have sought advice and information on the adequacy of the insurance coverage being provided to them under the Clean Harbors policies before signing the NTLA or afterwards, and no evidence that they could not have obtained additional insurance coverage for the Volvo Truck as required.
40Nor am I persuaded that the NTLA is improvident. There was no evidence establishing that Clean Harbors benefited or was unfairly enriched by the insurance coverage provisions set out in the contract or that the Plaintiffs were unduly disadvantaged by those terms. The Plaintiffs did not establish that fire loss coverage was a standard term in service contracts like the one at issue here or that it was reasonable for the Plaintiffs to have expected that fire loss coverage would be provided. In the OAP 1 terms, “All Perils” which includes loss due to fire is an optional coverage which has to be specially contracted for. It is not required by law in Ontario. I am of the view that it was not unfair or improvident for the NTLA to obligate the Plaintiffs to be responsible for ensuring that the insurance coverage in place for the Volvo Truck was adequate for their needs.
Contra Proferentum
41Counsel for the Plaintiffs submits that the NTLA is unclear or contradictory and, therefore, the contra proferentum doctrine should apply and the contract interpreted against Clean Harbors’ interests as the party that drafted it. The Plaintiffs contend that Clean Harbors was obligated to get “all” insurance to insure the Volvo Truck but that it obtained none for the truck itself.
42For the reasons set out above, I do not find the NTLA to be ambiguous or conflicting such that two or more interpretations are reasonably available. Accordingly, there is no need to apply contra proferentum in these circumstances: Sander Holdings Ltd., at para. 153.
Exclusionary Clause
43Counsel for the Plaintiffs submits that the exclusionary clause found in clause 2 of Schedule 2 ought to have been specifically brought to Mr. Jakab’s attention by Clean Harbors and/or bolded, highlighted, underlined or in larger font. They rely on Tilden Rent-A-Car Co. v. Clendenning (1978), 1978 CanLII 1446 (ON CA), 18 O.R. (2d) 601, 83 D.L.R. (3d) 400 (Ont. C.A.), and Apps v. Grouse Mountain Resorts Ltd., 2020 BCCA 78, in support of their argument that this clause is an onerous exclusionary clause that should be strictly construed and any ambiguity resolved against Clean Harbors who seeks to rely on it. They submit that the onus rests on Clean Harbors to establish that the exclusion of liability clause for insurance was brought to the attention of and made clear to the Plaintiffs. They argue that Clean Harbors did not do anything to bring this exclusion of liability to the Plaintiffs’ attention and the clause should be disregarded.
44I find that the cases Tilden Rent-A-Car Co. and Apps are clearly distinguishable. The instant situation did not involve a consumer transaction where there was unequal bargaining power or little opportunity to get informed about the terms of the applicable contract. Further, the exclusionary clause was not set out in fine print on the back of the document. I am of the view that, in reviewing the NTLA, a reasonable and objective person would have seen clause 2 of Schedule 2 and understood it to mean that Clean Harbors was not guaranteeing the adequacy of insurance coverage being provided and that the contractor was responsible for ensuring that the insurance in place was appropriate for his needs. I see no reason to disregard this clause in the circumstances.
Dependent Contractor Relationship
45Counsel for the Plaintiffs submits that there is a good argument to be made that Mr. Jakab was a dependent contractor with Clean Harbors such that an employment relationship could be found. They argue that if such a finding was made, then Clean Harbors could be held liable to pay for the Volvo Truck since it self-insures for property damage to the trucks it owns or leases that are driven by its employees.
46The testimony of John Ross (“Mr. Ross”), Senior Vice-President of national logistics at Clean Harbors, was that Clean Harbors self-insures for vehicles it directly owns or leases and then claims those damage payments as a business expense. Based on this evidence, I am of the view that it is not necessary for me to determine whether Mr. Jakab could be considered a dependent contractor since it is the fact that Clean Harbors owns or leases a vehicle in its own name that is the relevant factor, and not that the vehicle is being driven by an employee. Here, the Volvo Truck was not owned or directly leased by Clean Harbors so Clean Harbors would have no obligation to self-insure it.
47The Plaintiffs also point to communications, including texts between Mr. Jakab and Mr. Stull, that led the Plaintiffs to believe the damage to the Volvo Truck would be covered by Clean Harbors or its insurer. I acknowledge that it would have been confusing and disappointing for the Plaintiffs to have initially been told by text from Mr. Stull that “Insurance group approved this” only to subsequently be told that there was, in fact, no coverage. However, the evidence was not clear regarding exactly what had been “approved” by the insurance group. Further, the relationship between the parties was governed by the NTLA and it does not oblige Clean Harbors to pay for such damage or loss.
Entire Agreement Clause
48The NTLA contains an “entire agreement” clause. As held in Houle v. Knelsen Sand and Gravel Ltd., 2016 ABCA 247, at para. 23, the point of such a clause is “that the obligations of the parties will be determined in accordance with the written terms of the contract, not extraneous negotiations and discussions that have not been reduced to writing, and thus formally acknowledged by the contracting parties”.
49I find that the NTLA’s entire agreement clause applies and, to the extent there was any representation made by Clean Harbors staff about the Volvo Truck being covered for fire loss after the contract’s execution, it does not form part of the NTLA as it was not agreed to by the parties in writing. There was no evidence before me to support interpreting the entire agreement clause to mean something different than what it says it means.
(ii) Did Clean Harbors misrepresent the insurance coverage available to the Plaintiffs?
50The Plaintiffs argue that Clean Harbors “caused” two misrepresentations. The first, in writing, by virtue of clause 1 of Schedule 2 stating that Clean Harbors would provide “all insurance” for the “purpose of insuring the Equipment”. And the second, verbally, when Mr. Jakab asked and was told that he was “fully covered” by either Lisa S. or Kim I. (The Plaintiffs note that it was Kim I., terminal manager, who signed the NTLA on behalf of Clean Harbors.) The Plaintiffs submit that this was a clear misrepresentation by Clean Harbors to the Plaintiffs to the detriment of the Plaintiffs since the Defendant’s witnesses, Mr. Ross and Lou Pransky (“Mr. Pransky”), Vice-President of Risk Management at Clean Harbors, both admitted that Clean Harbors never had property damage insurance to cover the Volvo Truck.
51It is the position of Clean Harbors that it did not make any misrepresentation about insurance coverage before or at the time Mr. Jakab signed the NTLA or thereafter. The evidence of Mr. Pransky was that the pink card (proof of insurance) given to Mr. Jakab confirms coverage for only third party liability coverage and no first party coverage at all. He stated that Clean Harbors does not offer first party coverage of the sort that would cover the Plaintiffs’ fire loss. Clean Harbors does not provide any other or different coverage to any of its independent contractors and all coverage that is made available under Clean Harbors’ insurance policies deals only with third party liability. Counsel for Clean Harbors also argues that, with respect to Mr. Jakab’s discussions with Kim S. or Lisa I., the NTLA was already signed so any subsequent conversation could not form part of the contract. There is also no evidence what this person meant if they did tell Mr. Jakab that the truck was “insured fully” or “fully covered” or that they knew that Mr. Jakab was taking their response to mean that first party property damage insurance was included. Counsel contends that saying that the vehicle was “fully covered” could have meant fully insured for the purposes of being able to drive on Ontario’s roadways, which the Volvo Truck was because there was third party liability coverage in the event of a motor vehicle accident. Counsel for the Defendant notes that the Plaintiffs did not call any of these other witnesses to testify as to what statements were made or what was meant by them.
52I find that, aside from the terms of the NTLA itself, there is no evidence before me of any representations being made by Clean Harbors prior to or at the time of signing of the contract about the extent of insurance coverage. The evidence of Mr. Jakab himself is that he did not discuss insurance with Clean Harbors before or at the time of executing the contract. I am satisfied that the NTLA was clear that the Plaintiffs were to be solely responsible for any loss or damage to the Volvo Truck; that the insurance available to the Plaintiffs was as found in the policies obtained and maintained by Clean Harbors; and that the NTLA obligated the Plaintiffs to satisfy themselves as to the adequacy of the insurance coverage provided. In the circumstances, I find that Clean Harbors did not misrepresent the insurance coverage available to the Plaintiffs pursuant to the NTLA.
53With respect to what, if any, representation was made to Mr. Jakab by Lisa I. or Kim S. about being fully covered, I find that the Plaintiffs have not met their burden of proof in establishing on a balance of probabilities who told him this and that their statement was intended to convey that “fully covered” included first party property damage insurance for the Volvo Truck.
54I also agree with the contention of counsel for the Defendant that, even if someone told Mr. Jakab that the Volvo Truck was “fully insured”, this statement could be considered true in the sense that the Volvo Truck was insured to the full extent required by Ontario law respecting third party liability insurance.
(iii) Was Clean Harbors negligent in its dealings with the Plaintiffs?
55The Plaintiffs argue that Clean Harbors was negligent by failing to properly consider the wording of the NTLA, by failing to obtain property damage insurance for the Volvo Truck, and by making representations to the Plaintiffs both in writing and verbally that they were fully covered. It is the position of the Plaintiffs that finding a duty of care owed by Clean Harbors should not be a hurdle since there was a contract and direct communication between the parties for over one-and-a-half years up to the date of the fire. The Plaintiffs argue that they relied upon the representations that the Volvo Truck was fully covered and Mr. Jakab continued to drive the truck under the NTLA. The Plaintiffs submit that the uncontradicted evidence of Mr. Jakab was that the usual practice for leasing was that the provider of the licence plates would get all insurance. They argue that this is supported by Clean Harbors transferring the licence plates using Clean Harbors’ insurance and by the first sentence of clause 1 of Schedule 2. Given Mr. Jakab’s past experience of entering into similar lease agreements with other companies, it was reasonable for him to infer that Clean Harbors’ covenant to provide all insurance included damage to the truck from fire. Mr. Jakab had a financial interest in signing and performing under the NTLA. After signing, Mr. Jakab specifically inquired about the insurance to which Clean Harbors’ management employees stated the equipment was fully insured. Damages resulted from these misrepresentations and his reliance on same. The Volvo Truck has not been paid for nor have any of the other losses and expenses been covered that would typically be paid for by insurance.
56Clean Harbors denies that it owed a duty of care to the Plaintiffs or was negligent. It argues that the Plaintiffs have failed to prove the existence of an established category of duty of care whereby a commercial entity owes a duty of care to insure the assets of another commercial entity. Clean Harbors submits that, to the extent the Plaintiffs argue that a duty of care arises because Clean Harbors was contractually obligated to insure the Volvo Truck for first party property damage, this conflates the Defendant’s contractual duties with a duty of care. It is also Clean Harbors’ position that the insurance required to operate a vehicle on Ontario roadways was liability insurance for third parties’ damages and injuries which is the insurance coverage that it had obtained. There is no evidence that Mr. Jakab asked anyone specifically about first party property damage or fire damage insurance coverage or that he asked what fully covered meant.
57The parties agree that to be successful in a claim for negligent misrepresentation a plaintiff must prove the following matters:
a) there must be a duty of care based upon a special relationship;
b) the representations are inaccurate and misleading;
c) the representations were made negligently;
d) the plaintiff relied upon the representations; and
e) reliance was detrimental in the sense that damages resulted.
See Doumouras v. Chander, 2019 ONSC 6056, at para. 25; and Queen v. Cognos Inc., 1993 CanLII 146 (SCC), [1993] 1 S.C.R. 87, 45 C.C.E.L. 153 (S.C.C.), at para. 34.
58I am not convinced that Clean Harbors owed a duty of care based on any sort of special relationship here. This was an ordinary commercial transaction between two businesses for the purpose of entering into a provision of services relationship. Both parties had the opportunity to review the terms of the contract and seek advice as to those terms before signing. Mr. Jakab admitted that he could have chosen not to sign the NTLA and not work for Clean Harbors. I find that there were no representations made by Clean Harbors that, to its knowledge, were inaccurate or misleading. I do not find the representations made by Clean Harbors to have been made negligently. To the extent Mr. Jakab may have been told that he was “fully covered” by the Burlington office, there is no evidence as to what the speaker actually meant. Further, this exchange occurred after the NTLA was signed and so such statement was not relied upon in the making of the contract and did not induce the Plaintiffs to enter into the contract. Accordingly, looking at the whole of the relationship between the parties, I find that there is no evidence of a negligent misrepresentation or any type of negligence on the part of Clean Harbors as it relates to the Plaintiffs.
59If I am wrong in this regard, I find that any duty of care that Clean Harbors owed was discharged by its inclusion of clause 2 of Schedule 2 which put the Plaintiffs on notice that they shall satisfy themselves as to the adequacy of the insurance coverage provided by Clean Harbors. By this provision, Clean Harbors made it clear to the Plaintiffs that it was making no representation regarding the extent or adequacy of the available insurance coverage and that it was assuming no responsibility for the adequacy of that coverage.
Disposition
60For the foregoing reasons, the action is dismissed.
Assessment of Damages
61While I have dismissed the Plaintiffs’ action, in the event that I am subsequently held to be wrong in the result, I will assess their damages.
62At trial, each of the parties called expert evidence regarding the value of the Volvo Truck. I prefer the expert opinion of Kevin Sheehan, who was called as a witness on behalf of the Plaintiffs, over the evidence of the Defendant’s expert, Rocky Loomis. Mr. Sheehan is an employee of Sheehan’s Truck Centre Inc., Sheehan’s Leasing Ltd., and Sheehan’s Appraisal Services. I find Mr. Sheehan to have expertise with Volvo trucks and with the Ontario market and market rates. In addition, the Defendant sent the Plaintiffs to Sheehan’s Truck Centre Inc. to get a repair estimate and inspect the Volvo Truck for the cause of the fire. I infer from this that Clean Harbors acknowledges that Sheehan’s Truck Centre Inc. has the appropriate experience to provide an estimation of value. Mr. Loomis works at Ballard Mack Sales and Services Inc. in Avon, Massachusetts. While I find that he has expertise in the American truck market, in his evidence, he admitted that in providing his opinion about the worth of the Volvo Truck, he did not know the truck was in Canada. As well, I find that his expertise is primarily with Mack trucks, not Volvo trucks. His experience in selling Volvo trucks was limited to having sold five trucks during the period 2001-2008. He further acknowledged that he had no experience in selling trucks in Ontario.
63Mr. Sheehan testified that, in his opinion, the fair market value of the Volvo Truck at the time of the fire was $33,900.00, inclusive of HST. I would accept this value and award $33,900.00 in damages minus the $3,955.00 salvage amount the Plaintiffs received.
64I would award the storage fees in the amount of $3,661.20, the towing costs in the amount of $1,178.03, and the cost of the damage repair estimate in the amount of $490.99.
65With respect to the claim for loss of income, I have considered the following factors: the Plaintiffs had a duty to mitigate; Mr. Jakab was told in late August 2018 there were no alternate driving opportunities available with Clean Harbors; Mr. Jakab began other employment in September 2018; and there was no evidence establishing that other driving positions were not available to Mr. Jakab at other companies. In all of these circumstances, I would assess reasonable damages at $28,500.00, representing three months’ income at $9,500.00 per month.
Costs
66I would urge the parties to agree on costs. If they are unable to do so, then costs submissions may be made as follows:
a. By June 20th, 2022, the Defendant shall serve and file its written costs submissions, not to exceed three pages, double-spaced, together with a draft bill of costs and copies of any pertinent offers; and
b. The Plaintiffs shall serve and file their responding costs submissions of no more than three pages, double-spaced, together with a draft bill of costs and copies of any pertinent offers, by July 5th, 2022; and
c. The Defendant’s reply submissions, if any, are to be served and filed by July 12th, 2022 and are not to exceed two pages.
d. If no submissions are received by July 12th, 2022, the parties will be deemed to have resolved the issue of the costs and costs will not be determined by me.
B. MacNeil J.
MacNEIL J.
Released: May 31, 2022