1999 SKQB 140 Q.B. A.D. 1994 No. 2177 J.C. R. IN THE QUEEN’S BENCH JUDICIAL CENTRE OF REGINA BETWEEN: REDHEAD EQUIPMENT LTD. and STANDARD TRANSPORTATION SERVICES INC. and HYNDMAN TRANSPORT (1972) LIMITED DEFENDANTS David E. Thera for Redhead Equipment Ltd. Murray W. Douglas for Hyndman Transport (1972) Limited JUDGMENT MacDONALD J. October 20, 1999 [1] This is an action by Redhead Equipment Ltd. ("Redhead") against Standard Transportation Services Inc. ("Standard") and Hyndman Transport (1972) Limited ("Hyndman") with respect to amounts owing for payments on vehicles leased by Standard from Redhead and for parts and labour supplied by Redhead to these leased vehicles. [2] The trial of the matter lasted one day. Standard did not appear at the trial nor did it at any time throughout the action enter defence to the allegations contained in the statement of claim. [3] The only witnesses called at the trial were Ron Duda and John Cox. The evidence was not complicated and do not intend to repeat it here. At issue was whether the defendant, Hyndman, had an obligation to the plaintiff, Redhead, either in contract or equity for the lease payments on the vehicles and for the repairs to them for the period from September 1, 1993, until February 11, 1994. [4] The main basis for the allegations contained in the statement of claim against Hyndman were centred on discussions which took place at meeting in Regina on October 12, 1993, at the office of Redhead Equipment. [5] Present at that meeting were Ron Duda ("Duda"), sales manager for Redhead, Robert Bennett ("Bennett"), president of Standard, and John Cox ("Cox"), comptroller and partner of Hyndman. At the trial, both Ron Duda and John Cox gave evidence as to what was discussed at the meeting. Both witnesses were agreed that the discussions at the meeting covered the following points: That Standard was not solvent corporation as of that date, That Hyndman had entered into an arrangement with Standard to have them operate under Hyndman's authority, That Hyndman would not agree to have the contracts for the leased vehicles assigned to them, but that they would make payments. [6] The point at issue between the parties is for how long were the lease payments to continue and on what conditions? [7] The evidence of the parties varies on this issue. Cox's evidence is that during the meeting it was understood by the parties that Hyndman's obligation to make the lease payments would be contingent on Standard's ability to make money on its trucking contracts. Duda’s evidence is that he believed Hyndman's obligation for the lease payments would continue for as long as the trucks were in the possession of Standard or operating under the authority of Hyndman. [8] The only notes of the meeting were made by Cox in his day planner, where he states, “Met with Ron Duda—about leases—Hyn. make payments, won’t take over leases”. [9] Exactly how long the lease payments would continue and under what circumstances is not elaborated in those notes. There was no correspondence between the parties confirming the terms of the agreement. [10] It is clear, however, from Cox’s notes and Duda’s evidence at the trial that, (a) Hyndman would not assume the obligations on the Redhead and Standard leases, and (b) that Redhead knew at that meeting that there was a risk to the arrangement because of Standard’s insolvency and that Redhead might not be paid on the leases. It is also clear from Duda’s evidence that Redhead was prepared to assume that risk. [11] At the October 12 meeting there was no discussion as to who would be responsible for payment on work orders for repairs to the leased vehicles. There had, however, been some payment since September by Hyndman to Redhead for repairs to the vehicles. Contract [12] On the evidence as a whole it is apparent that there was no contractual relationship between the parties, Redhead and Hyndman, with respect to the lease payments. [13] Although, there may have been some verbal arrangement with Hyndman to make payments, the terms of such arrangement were never verified by Redhead and it is clear from the evidence that Redhead understood that they continued to carry the risk associated with any breach by Standard of its contractual obligations under the leases. [14] The plaintiff’s claim against the defendant, Hyndman, with respect to the leases is therefore dismissed. 2. Quasi-contractual remedies—quantum meruit or unjust enrichment [15] The plaintiff, Redhead, has argued that if the claim does not succeed in contract, that they should still be entitled to receive compensation for the outstanding lease payments during the September to February period based on the quasi-contractual or equitable remedies of quantum meruit or unjust enrichment. [16] These principles of restitution have developed over time, to allow the courts to make awards to plaintiff in circumstances where, although there may not be strict legal obligation by the defendant to the plaintiff to pay monies, it would be unjust not to make an award. [17] The facts of this case, however, do not satisfy me on a balance of probabilities that this is an appropriate circumstance for an award in favour of the plaintiff based on either quantum meruit or unjust enrichment. [18] The actions taken by both Redhead and Hyndman were taken for the benefit of Standard in an attempt to keep it operational. As it turned out, neither Redhead nor Hyndman benefited from this arrangement for very long and both lost money. [19] The plaintiff’s claim on this ground is also dismissed. Repairs [20] Although there was no specific contract with respect to the repair of the leased vehicles, it is clear that Hyndman did make some payments on behalf of Standard with respect to some work orders that were issued by Redhead. On the evidence of Cox and on review of the documents themselves it appears that the payments by Hyndman for work on the vehicles were made either under the direction of Bennett or for work that was done where specific purchase order number was supplied by Hyndman. On the issue of the unpaid invoices, the plaintiff\'s evidence does not establish that Hyndman had notice of the invoices, or that there was a purchase order number obtained from Hyndman authorizing the repairs. In fact the evidence indicates that Hyndman gave notice to Redhead that they would not be obligated for repairs without a purchase order number once they realized there may have been a misapprehension by Standard’s creditors with respect to the payment of these accounts. [21] The evidence of Duda is that he did not know how the repairs were authorized for Standard. In addition, all of the invoices marked unpaid and claimed at trial continued to be sent to the address for Standard at 417 Maxwell Crescent in Regina and there was no evidence that these accounts were forwarded to Hyndman. [22] I therefore find that the plaintiff\'s claim with respect to the unpaid repairs against Hyndman has not been proven and that portion of the claim is also dismissed. [23] The defendant, Hyndman Transport (1972) Limited, shall have its taxable costs. D. Claim Against Standard Transportation Services Inc. [24] There being no defence entered to the claim by Redhead against Standard and the defendant, Standard, having been noted for default, judgment is therefore given against them in the amount of the plaintiff\'s claim for:(a) damages for breach of contract for the outstanding lease payments and the outstanding parts and service account in the total amount of $63,267.49;(b) pre-judgment interest to be calculated from March 28, 1994, to the date of judgment pursuant to The Pre-Judgment Interest Act, S.S. 1984-85-86, c. P-22.2;(c) costs of this action.
An action for payments owing on vehicles leased by Standard from Redhead and for parts and labour supplied by Redhead to the leased vehicles. At issue was whether Hyndman had an obligation in contract or equity for the lease payments and repairs from September 1993 until February 1994 based on discussions in 1993. There was no correspondence between the parties confirming the terms of the agreement. It was agreed that the discussions concerned the fact that Standard was not solvent at that date and that Hyndman entered an arrangement with Standard to operate under Hyndman's authority; Hyndman would make payments but would not agree to having the leases assigned to them. In issue was for how long the lease payments were to continue and on what conditions. HELD: The action against Hyndman was dismissed with taxable costs. Standard did not enter a defence to Redhead's claim and had been noted in default. Judgment was entered against Standard for $63,267.49 for the outstanding lease payments and parts and service account plus pre-judgment interest calculated from March 1994 to the date of judgment pursuant to the Pre-judgment Interest Act. 1)Redhead's claim against Hyndman was dismissed as there was no contractual relationship between the companies respecting the lease payments. Any verbal arrangement was never verified. It was clear that Hyndman refused to assume the obligations on the leases; that Redhead knew of the risk because of Standard's insolvency and was prepared to take that risk. 2)The facts did not establish appropriate circumstances for an award based on either quantum meruit or unjust enrichment. The actions taken were for the benefit of Standard in an attempt to keep it operational.  3)The claim against Hyndman for unpaid repairs was not proven. Hyndman did make some payments on behalf of Standard for repairs although there was no specific contract to do so.  It was not established that the accounts were forwarded, that Hyndman had notice of the unpaid invoices or issued a purchase order number authorizing the repairs. Hyndman gave notice to Redhead that they would not be obligated for repairs without a purchase order number.