IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]           Mr. Manzyuk, owner/operator of Wasyl Auto Body Ltd., had a five-year contract with the claimant for waste removal services.  The contract provided that it renewed automatically unless it was cancelled by the defendant within a 30-day time frame in the fifth year of the contract term.  Mr. Manzyuk gave notice of cancellation on a date which he believed fell within that time frame.  He also signed a new contract with NSD Disposal Ltd. (NSD) for future waste removal services.

[2]           The claimant says that the defendant gave the notice at least two months too late and that therefore the Northwest contract was automatically renewed for another five years.  Thus, the claimant seeks damages for breach of contract amounting to five years’ worth of payments that it would have received if the defendant had honoured the renewal.  The claimant also seeks damages from NSD for inducing a breach of contract.

[3]           The defendants reply that the claimant’s own employee told Mr. Manzyuk in 2009 that the contract commenced on July 12, 2006.  He therefore gave notice of cancellation in April 2011, within the time frame required by the contract.

[4]           The dispute in this case centres on the issues of when the contract term started and whether I should grant a remedy for the misrepresentation by Northwest’s employee about the contract's commencement date.

[5]           Northwest did not start providing service on the date when the contract was signed, because Mr. Manzyuk had a contract with another company which still had two years or so to run.  The Northwest contract's language is somewhat ambiguous about when the term starts in these circumstances.  It contains a clause which states that its term commences when service begins, but also states that if there is a pre-existing contract, the term begins one day after the prior contract expires.

[6]           In this case, Northwest started providing service to the defendant about 3 months before the prior contract would have expired.  Its claim is therefore based on the argument that the term of the contract began when service began.  Furthermore, the claimant says that defendant must have known when service began because he paid the invoices sent to him by the claimant for that service.  It also argues that it is irrelevant what its employee told Mr. Manzyuk about the expiry date because he must have known that this information was wrong.

[7]           The defendants disagree and argue that the court should interpret the contract language to mean that the term expired one day after the pre-existing contract ended, which would mean that Mr. Manzyuk gave notice of cancellation within the time prescribed by the contract.

[8]           Where a court is asked to interpret a specific condition of a contract which has been reduced to writing, the inquiry is essentially restricted to a consideration of the actual words used, and their literal meaning.  The whole point of putting something into writing is to be precise.  As Professor Fridman states in The Law of Contract, Fourth Edition, at page 477:

[9]           A court may order rescission of a contract where one party has induced the other to enter into a contract by an innocent or non-fraudulent misrepresentation.  The circumstances in which a court may grant this remedy are set out in Kingu v. Walmar Ventures Ltd., [1986] (B.C.C.A.) B.C.J. No. 597.  At paragraph 15 where McLachlin JA (as she then was), writing for the court, stated:

[10]        The claimant’s cause of action against NSD has been described as: “…inducing or procuring breach of contract, interfering with contractual relations, and interfering with economic relations.”  Verchere v. Greenpeace Canada, [2004] B.C.J. No. 364 at paragraph 28, per Southin J.A.

[11]        The New Brunswick Court of Appeal provided a thorough analysis of this tort and of its development, in SAR Petroleum Inc. v. Peace Hills Trust Co., 2010 NBCA 22 (CanLII), [2010] N.B.J. No. 104.  Robertson JA, writing for the court, set out the essential elements of the tort at paragraph 40, stating:

[12]        There were three witnesses called at the trial.  Mark O’Hara, Director of Sales for Northwest, Mr. Manzyuk, and Ruslan Borysenko, who negotiated the new contract for NSD.

[13]        The claimant and Mr. Manzyuk entered into the contract on February 2, 2004.  It is a one-page document signed by both parties.  The front of the contract describes the type and level of service to be delivered at a total monthly charge of $41.  On the bottom left of the front page, there is a heading entitled: “Service Commencement” and beside which is written, the date March 2, 2004.  There is an additional date written directly underneath the March 2 entry.  That date is July 27, 2006, which has been highlighted in yellow.

[14]        The rear of the contract sets out all of the detailed conditions.  The condition at issue in this case appears under the heading “Term” which states:

[15]        When Mr. Manzyuk signed the contract, he had a pre-existing waste removal contract with another company, WM Canadian Waste.  He had originally signed that contract on January 27, 2000.  It was for a three-year, automatically renewing term.  Thus, it would appear that when Mr. Manzyuk signed the contract with Northwest, the prior contract expired on January 27, 2006.

[16]        Mr. Manzyuk had no recollection of how he was able to terminate the WM Canadian Waste contract.  He said that the representative from Northwest took care of all those details.  All that really mattered to him was that, Northwest had offered him a very favourable rate for the first year of the contract.

[17]        There was no formal addition made to the contract to state specifically what the Service Commencement date was.  There was no correspondence from Northwest to the defendant, telling him what it was.  However, the claimant filed a copy of the first invoice to the defendant, which was dated May 1, 2006.  It sets out a charge of $28.30 for “First Month's Service.”  The total with the environmental surcharge and GST came to $32.70.  On July 1, 2006, the claimant sent another bill for services done in May and June, as well as for the future services to be done in July 2006.  With surcharges and GST, that totalled $140.87.  Mr. Manzyuk paid the invoices later that month.

[18]        The claimant continued to provide services and Mr. Manzyuk continued to pay for them.  By 2009, he had become a little unhappy with the increases in price that the claimant had imposed pursuant to the contract.  He was approached by Mr. Borysenko, on behalf of NSD who offered him the services of his company, presumably at a lower price.  Mr. Manzyuk agreed.  Mr. Manzyuk then sent two letters on September 8, and September 30, 2009, demanding that Northwest, among other things, send him a copy of the contract.

[19]        In fact, these were form letters provided by NSD and filled in by Mr. Borysenko and signed by Mr. Manzyuk.  Mr. Manzyuk said that all he wanted to do was give proper notice on his contract with Northwest so that he could engage the services of NSD when the Northwest contract expired.  However, he no longer had a copy of that contract.

[20]        At first, he did not receive any reply to his letters, but, Mr. Manzyuk said that eventually a representative from Northwest - Marni Bodnarchuk, Retention Manager - came to see him.  He said that she tried to convince him to stay with Northwest and offered to meet or better the offer made by NSD.  Mr. Manzyuk was not open to this offer and told her that he was determined to cancel his contract with the claimant and just wanted to know when it expired.  He said that Ms. Bodnarchuk told him that she would determine what the date was.  He said that she returned a few days later and gave him a copy of the contract.

[21]        What she gave him was obviously a photocopy of the contract.  It is identical to the contract filed by the claimant, except that under the heading “Service Commencement Date” of March 2, 2004, is written the date “July 12, 2006.”  It is highlighted in yellow.  Mr. Manzyuk said it had already been highlighted when Ms. Bodnarchuk gave this copy to him.

[22]        It seems that this was a photocopy of a duplicate of the original contract.  Mr. Borysenko, who used to work for Northwest, said that typically there were three copies made at the time of signing.  One went to the customer, two went to the company.

[23]        Mr. Manzyuk said that Ms. Bodnarchuk told him that the proper commencement date was July 12, 2006, as written on the copy of the contract and highlighted in yellow.  He gave a copy of this document to Mr. Borysenko.  They now believed that they knew when a proper notice of cancellation had to be given.

[24]        In April 2011, Mr. Borysenko prepared a letter for Mr. Manzyuk to sign, dated April 1, 2011.  It stated that Mr. Manzyuk wished to cancel his contract on the specified expiry date and that Northwest was to remove its equipment from his property on July 12, 2011.  Mr. Borysenko mailed the letter on behalf of Mr. Manzyuk by registered mail to the claimant.  There is no dispute that if July 12, 2011, was the actual termination date, that Mr. Manzyuk gave notice of cancellation within the required time frame.

[25]        Mr. Manzyuk signed a “Service Commitment” contract with NSD on September 8, 2009.  It does not contain a specific Service Start Date, but beside that heading are the letters “TBO” and what looks to be “Nov.”  There is no date written beside the heading “Bin Delivery Date.”

[26]        NSD did not place its equipment at Mr. Manzyuk’s business premises until after July 12, 2011.  The claimant left its bins on the property for several months, taking the position that the contract had not been properly cancelled and that therefore there was still a valid and subsisting contract between the claimant and Mr. Manzyuk.  Nonetheless, Mr. Manzyuk opted to start using the services of NSD.

[27]        Mr. Manzyuk sent letters to the claimant on November 4 and November 24, 2011, reminding the claimant that he had cancelled his contract with them, and requesting that the claimant remove its bins from his business premises.  In those letters he expressed his belief that he had cancelled the contract properly on the basis that it expired on July 12, 2011.

[28]        Mr. O’Hara, for the claimant, indicated that the entry of July 27, 2006, on the copy of the contract filed by the claimant, was his own note.  He said that he had written that date to record that the defendant had paid the first set of invoices sent to him.  He did not know anything about the entry of July 12, 2011, on the copy of the contract that Ms. Bodnarchuk gave to Mr. Manzyuk.

[29]        Mr. Borysenko confirmed that he and Mr. Manzyuk believed that the expiry date of the contract with Northwest was July 12, 2011, based on what was written on the copy of the contract provided by Ms. Bodnarchuk.

[30]        For the purpose of deciding this case, I will assume that the contract expired sometime in early April 2011.  The question, nonetheless, arises whether the claimant is responsible for misrepresenting the true commencement date to Mr. Manzyuk.  At trial, the claimant did not dispute Mr. Manzyuk’s testimony that Ms. Bodnarchuk told him that the contract commencement date was July 12, 2006, and which was also written on a copy of the contract that she gave him.  The claimant did not call Ms. Bodnarchuk as a witness to explain that entry on the copy of the contract or to otherwise contest Mr. Manzyuk’s testimony about his communications with her.  That is, his testimony was not disputed on this point.

[31]        Mr. Manzyuk’s evidence that he did not have a copy of the contract and that he did not know the precise date when the contract terminated, is credible.  He needed waste removal from his premises at a reasonable cost.  The contract price initially was not particularly high.  The contract is not the sort of document a busy small business operator would see as being particularly important, and could easily get lost especially over a number of years.  As well, the claimant did not begin providing services to the defendant for at least two years after the contract had been signed.  It is believable that the defendant would have a less than precise memory of the date when service actually started.

[32]        The argument that the defendant should have known when service started because he paid for the invoices is not persuasive.  By 2009, when he decided he wanted to switch companies, he had dutifully paid monthly fees for about three years.  The issue of determining the commencement date of the contract would hardly have been on his mind during those three years.  None of the invoices filed by the claimant state when the contract expires.  There is no correspondence from the claimant reminding the defendant when the contract expires.  Even if the defendant had retained a copy of the contract, the commencement date stated on the front of the contract was not, of course, the actual commencement date.  Even reading the complex language of the condition relating to the term would not have given him a clear idea of when the contract commenced, and thus, when it expired.

[33]        It was therefore reasonable for him to rely upon the representations made by an employee of Northwest because it was Northwest's business to administer its own contracts.  If anyone would know when the contract commenced, it would be Northwest.

[34]        This misrepresentation did not literally cause Mr. Manzyuk to decide to enter a new contract with the claimant, but it effectively stopped him from cancelling the contract within the required time frame, thereby causing the contract to be renewed against his wishes.

[35]        The grounds for granting rescission of this contract have been established, according to the criteria set out in Kingu, supra.

[36]        I therefore grant rescission of the renewed contract between Northwest and the defendant and his company.  Having rescinded the contract, the defendant NSD cannot be said to have induced any breach of contract.  In any event, the claimant has failed to prove that NSD induced the breach of any contract.  NSD’s acts did not cause a breach of contract; NSD did not believe that it was inducing a breach of contract, and did not intend to procure a breach of contract.  In fact, the evidence shows clearly that NSD made every effort to respect the pre-existing contract between Northwest and Mr. Manzyuk.  It was only because of the misrepresentation by the employee of the claimant, that NSD began providing service when it did.

[37]        I therefore dismiss the claims against all the defendants.

[38]        In these circumstances, it is not necessary for me to deal with the defendants’ alternative argument that the correct expiry date was July 27, 2011.