Angeltvedt v. Flint Field Services Ltd., (2010) 504 A.R. 265 (QB)

• Judge: Topolniski, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: November 26, 2010
• Citations: (2010), 504 A.R. 265 (QB);2010 ABQB 749

Angeltvedt v. Flint Field Services Ltd. (2010), 504 A.R. 265 (QB)

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. DE.012

Kelvin Angeltvedt (plaintiff) v. Flint Field Services Ltd. (defendant)

(0403 23112; 2010 ABQB 749)

Indexed As: Angeltvedt v. Flint Field Services Ltd.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Topolniski, J.

November 26, 2010.

Summary:

The plaintiff was the founder and principal of Angel Steam Services Ltd. Angel Steam's assets were sold to Conex Rentals Corp., a company related to the defendant. As part of the sale transaction, the plaintiff contracted to provide consulting services to the defendant for two years and agreed not to compete with Conex for the same period of time. The central issue in this dispute was whether the defendant's direction that he perform certain work, said by the plaintiff to have been a unilateral and material change to his duties and responsibilities, constituted a repudiation by the defendant of the consulting contract. Liability, damages and mitigation were in issue.

The Alberta Court of Queen's Bench awarded judgment to the plaintiff.

Contracts - Topic 3664

Performance or breach - Repudiation - What constitutes repudiation - The Alberta Court of Queen's Bench summarized the principles governing repudiation as follows: "1. Repudiation occurs where one party to a contract, either by express words or conduct, indicates to the other contracting party that he no longer wishes to be bound by the obligations under the contract. ... 2. Fundamental breach of a contract giving rise to repudiation has been described in many ways: (a) A breach which goes to the root of the contract ...; (b) A breach which frustrates the object of the contract ...; (c) A substantial failure of performance. ...; (d) A breach that deprives a party of substantially the whole benefit which it was the parties' intention that he should obtain from the contract. The foundation of the contract must be undermined or the very thing bargained for not be provided ...; and (e) In the context of employment law it is described as a unilaterally imposed fundamental or substantial change to an employee's contract of employment that results in its termination and entitles the employee to consider that he is constructively dismissed ... . 3. The conduct and circumstances of the parties must be considered as a whole to ascertain whether repudiation is established ... . Where there is no express and absolute refusal by one party to perform his obligations under the contract, the test is whether the defaulting party's actions could lead a reasonable person to conclude that he no longer intends to be bound by the provisions of the contract ... . 4. An innocent party faced with a repudiation can either affirm the contract or accept the repudiation, making it plain that he considers the contract to be at an end ... . 5. There is no distinction between the considerations in assessing if there has been repudiation of an employment contract or a commercial contract ..." - See paragraph 42.

Contracts - Topic 3664

Performance or breach - Repudiation - What constitutes repudiation - The plaintiff was the founder and principal of Angel Steam Services Ltd. - Angel Steam's assets were sold to Conex Rentals Corp., a company related to the defendant - As part of the sale transaction, the plaintiff contracted to provide consulting services to the defendant for two years and agreed not to compete with Conex for the same period of time - The central issue in this dispute was whether the defendant's direction that he perform certain work, said by the plaintiff to have been a unilateral and material change to his duties and responsibilities, constituted a repudiation by the defendant of the Consulting Agreement - The Alberta Court of Queen's Bench held that the plaintiff had established that the defendant had repudiated the Consulting Agreement - The agreement set out the parties' mutual intention that the plaintiff be responsible for managerial level duties - It was clear from the language of the Consulting Agreement that if a change to his duties was required, the new duties would be reasonably consistent with those specifically described - The plaintiff's duties were substantially altered when he was told that he would have to undertake work typically performed by non-managerial or otherwise subordinate personnel or consultants - The nature of the work alone was sufficient to constitute repudiation of the Consulting Agreement by the defendant - When coupled with the restrictions on the plaintiff as to when and where he was to perform the mandated task, repudiation was clearly established - By advising the defendant that he was refusing to conduct the requested task and by opting against invoicing, the plaintiff sufficiently signaled his acceptance of the repudiation - See paragraphs 40 to 52.

Contracts - Topic 3666

Performance or breach - Repudiation - What constitutes acceptance of repudiation - [See second Contracts - Topic 3664 ].

Contracts - Topic 4021

Remedies for breach - Damages - General - The plaintiff was the founder and principal of Angel Steam Services Ltd. - Angel Steam's assets were sold to Conex Rentals Corp., a company related to the defendant - As part of the sale transaction, the plaintiff contracted to provide consulting services to the defendant for two years and agreed not to compete with Conex for the same period of time - The court found that the defendant's direction that he perform certain work, said by the plaintiff to have been a unilateral and material change to his duties and responsibilities, constituted a repudiation by the defendant of the Consulting Agreement - The Alberta Court of Queen's Bench awarded damages for loss of base compensation (10.5 months totalling $74,374.97), benefits ($1,325.63) and retirement contributions ($3,718.75) - The court denied damages for vacation pay (included in the base compensation), bonus and vehicle allowance - See paragraphs 53 to 70.

Damage Awards - Topic 1608

Contracts - Services - Consulting - [See Contracts - Topic 4021 ].

Damages - Topic 1002

Mitigation - General principles - Duty to mitigate - The plaintiff was the founder and principal of Angel Steam Services Ltd. - Angel Steam's assets were sold to Conex Rentals Corp., a company related to the defendant - As part of the sale transaction, the plaintiff contracted to provide consulting services to the defendant for two years and agreed not to compete with Conex for the same period of time - The court found that the defendant's direction that he perform certain work, said by the plaintiff to have been a unilateral and material change to his duties and responsibilities, constituted a repudiation by the defendant of the Consulting Agreement - The defendant argued that the plaintiff failed to mitigate - The Alberta Court of Queen's Bench rejected the argument - The plaintiff was entitled to take a reasonable period of time to consider his options - The plaintiff was not obliged to leave the area nor was he required to change career paths - The Agreement limited his opportunities - He was not entitled to work in the only field that he had known for the past 23 years - Given his circumstance, he could not be criticized for having spent time doing more work than he might otherwise have done for the family ranch and upgrading his computer skills - The plaintiff acted reasonably in seeking out a new and unrelated business venture - The time it took to negotiate and close the transaction was not excessive - Indeed, it took about the same time as the Angel Steam deal - The court rejected the suggestion that the plaintiff could have found work with his brothers' land reclamation business - There was no evidence to show that his brothers had comparable or indeed any level of work available for him - The court also rejected the notion that the plaintiff was obliged to assume the new assignment as a means of mitigating his losses - The defendant did not establish that the plaintiff failed to mitigate his losses - See paragraphs 76 to 92.

Damages - Topic 1036

Mitigation - In contract - General - [See Damages - Topic 1002 ].

Master and Servant - Topic 308

Nature of relationship - Contract of service and contract for services distinguished - The plaintiff was the founder and principal of Angel Steam Services Ltd. - Angel Steam's assets were sold to Conex Rentals Corp., a company related to the defendant - As part of the sale transaction, the plaintiff contracted to provide consulting services to the defendant for two years and agreed not to compete with Conex for the same period of time - The central issue in this dispute was whether the defendant's direction that he perform certain work, said by the plaintiff to have been a unilateral and material change to his duties and responsibilities, constituted a repudiation by the defendant of the Consulting Agreement - At issue was whether the plaintiff was an employee or an independent contractor - The Alberta Court of Queen's Bench held that the plaintiff was an independent contractor - While the defendant could instruct or advise the plaintiff as to the "objectives, timing, and the results required," the plaintiff had control over the manner of achieving the objectives - The Consulting Agreement expressly referred to the possibility of the plaintiff hiring employees and agents - The plaintiff was not crucial to the defendant's overall operation - He was not a member of the defendant's executive - There was no evidence to show that he was named on any organizational chart or that the defendant ever held him out to be an employee - A consideration of these factors, not all of which merit even weight, when viewed in the context of the commercial sale transaction as a whole, tipped the balance in favour of a finding that the plaintiff was an independent contractor - See paragraphs 24 to 39.

Cases Noticed:

Pivotal Capital Advisory Group Ltd. v. NorAmera BioEnergy Corp. (2010), 487 A.R. 313; 495 W.A.C. 313; 26 Alta. L.R.(5th) 13; 2010 ABCA 199, refd to. [para. 25].

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 25].

Alberta Permit Pro et al. v. Booth et al. (2007), 442 A.R. 1; 2007 ABQB 562, affd. (2009), 460 A.R. 129; 462 W.A.C. 129; 2009 ABCA 146, consd. [para. 26].

Farber v. Compagnie Trust Royal, [1997] 1 S.C.R. 846; 210 N.R. 161; 145 D.L.R.(4th) 1, refd to. [para. 27].

Market Investigations Ltd. v. Minister of Social Security, [1968] 3 All E.R. 732 (Q.B.), refd to. [para. 29].

671122 Ontario Ltd. v. Sagaz Industries Canada Inc. et al., [2001] 2 S.C.R. 983; 274 N.R. 366; 150 O.A.C. 12; 2001 SCC 59, refd to. [para. 30].

Crowe et al. v. Saskatchewan Indian Gaming Authority Inc. (2006), 276 Sask.R. 217; 2006 SKQB 27, refd to. [para. 31].

Te'mexw Treaty Association v. Minister of National Revenue, [2000] T.C.J. No. 447 (T.C.C.), refd to. [para. 32].

Oil & Rubber Specialties Inc. v. Minister of National Revenue, [1999] T.C.J. No. 480 (T.C.C.), refd to. [para. 36].

Alberta Care-A-Child Ltd. v. Payne et al. (2005), 383 A.R. 43; 2005 ABQB 561, refd to. [para. 36].

Aqwa v. Centennial Home Renovations Ltd., [2001] O.T.C. 693; 12 C.C.E.L.(3d) 97 (Sup. Ct.), revd. (2003), 170 O.A.C. 86; 24 C.C.E.L.(3d) 16 (C.A.), refd to. [para. 38].

Keneric Tractor Sales Ltd. v. Langille, [1987] 2 S.C.R. 440; 79 N.R. 241; 82 N.S.R.(2d) 361; 207 A.P.R. 361, refd to. [para. 40].

Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423; 247 N.R. 97; 126 O.A.C. 1, refd to. [para. 42].

First City Trust Co. v. Dobler et al. (1989), 94 A.R. 106; 65 Alta. L.R.(2d) 193 (C.A.), refd to. [para. 42].

First City Trust Co. v. Triple Five Corp. - see First City Trust Co. v. Dobler et al.

Syncrude Canada Ltd. et al. v. Hunter Engineering Co. and Allis-Chalmers Canada Ltd. et al., [1989] 1 S.C.R. 426; 92 N.R. 1, refd to. [para. 42].

Delcor Painting & Flooring Ltd. v. 20/20 Properties Inc. et al. (2009), 486 A.R. 114; 2009 ABQB 670, refd to. [para. 42].

WCI Waste Conversion Inc. v. ADI International Inc. (2008), 283 Nfld. & P.E.I.R. 254; 873 A.P.R. 254; 2008 PESCTD 40, refd to. [para. 42].

McDonald v. GBC Canada Inc., [2004] B.C.T.C. 1029; 2004 BCSC 1029, refd to. [para. 59].

Chambers v. Axia Netmedia Corp. (2004), 220 N.S.R.(2d) 338; 694 A.P.R. 338; 30 C.C.E.L.(3d) 243; 2004 NSSC 24, refd to. [para. 59].

Klemeke Mining Corp. v. Shell Canada Ltd. et al., [2007] A.R. Uned. 513; 2007 ABQB 427, refd to. [para. 72].

Alberta Newspapers Group Inc. v. Peters (2004), 360 A.R. 33; 2004 ABPC 71, refd to. [para. 72].

Alberta Newspapers Group Inc. v. AVI Communications - see Alberta Newspapers Group Inc. v. Peters.

Northland Fleet Services Ltd. v. Quintette Operating Corp., [2001] B.C.T.C. 866; 16 B.L.R.(3d) 58; 2001 BCSC 866, refd to. [para. 74].

Viper Concrete 2000 Inc. v. Agon Developments Ltd. (2009), 470 A.R. 341; 2009 ABQB 91, refd to. [para. 78].

Costello and Dickhoff v. Calgary (City) (1997), 209 A.R. 1; 160 W.A.C. 1 (C.A.), refd to. [para. 78].

Eady v. Treklogic Technologies Inc. et al., [2009] O.A.C. Uned. 461; 2009 ONCA 710 affing. [2008] O.T.C. Uned. 870 (Sup. Ct.), dist. [para. 79].

Mills v. Alberta (1986), 46 Alta. L.R.(2d) 157 (C.A.), dist. [para. 80].

Henley v. Peeters Textile Mills Ltd., [1979] O.J. No. 460 (H.C.), refd to. [para. 85].

Evans v. Teamsters Union Local No. 31, [2008] 1 S.C.R. 661; 374 N.R. 1; 253 B.C.A.C. 1; 425 W.A.C. 1; 2008 SCC 20, refd to. [para. 90].

Authors and Works Noticed:

Chitty on Contracts (29th Ed. 2004), vol. 2, p. 729 [para. 42].

Waddams, Stephen M., The Law of Damages (2008 Looseleaf Ed.), para. 13.30 [para. 57].

Counsel:

Robert P. James and Lynn M. Agnotti (Parlee McLaws), for the plaintiff;

Chris Fix, for the defendant.

This action was heard on November 1 to 4, 2010, before Topolniski, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following memorandum of judgment on November 26, 2010.