Jo-Mar Fashions Inc. v. Giang et al., 2014 SKQB 251

• Judge: Wilkinson, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: August 12, 2014
• Jurisdiction: Saskatchewan
• Citations: 2014 SKQB 251;(2014), 453 Sask.R. 159 (QB)

Jo-Mar Fashions v. Giang (2014), 453 Sask.R. 159 (QB)

MLB headnote and full text

Temp. Cite: [2014] Sask.R. TBEd. SE.009

Jo-Mar Fashions Inc. (plaintiff) v. Vinh Giang & 101200486 Saskatchewan Ltd. (defendant)

(2013 Q.B.G. No. 686; 2014 SKQB 251)

Indexed As: Jo-Mar Fashions Inc. v. Giang et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Wilkinson, J.

August 12, 2014.

Summary:

The plaintiff sold a building and discount clothing business to the defendant. The defendant, who wanted the building for rental purposes, agreed to purchase the remaining clothing inventory at "seller's cost". Almost six months after the closing date, the plaintiff provided an itemized spreadsheet correlating the inventory to the invoiced cost. The defendant argued that as the agreement contained a clause that "time is of the essence", the agreement to purchase inventory was terminated. The plaintiff sued for $54,470.22 representing the "seller's cost". The defendant counterclaimed for the loss of rental and for water damage discovered in the building. The plaintiff applied for summary judgment.

The Saskatchewan Court of Queen's Bench dismissed the plaintiff's claim. The summary judgment procedure was appropriate in this case. It was an implied term of the agreement that the plaintiff would substantiate its inventory and associated costs by appropriate records. The plaintiff failed to perform in a timely fashion. As such, any obligation on the defendant's part to purchase the inventory was at an end.

Contracts - Topic 2065

Terms - Implied terms - To achieve business efficacy - The plaintiff sued for $54,470.22 representing the "seller's cost" of clothing inventory - The Saskatchewan Court of Queen's Bench found that it was an implied term of the agreement that the plaintiff would substantiate its inventory and associated costs by appropriate records - "A simple quotient [retail price divided by 2.3] was not what the agreement called for. ... [H]ere, the purchaser was paying $150,000 for the plaintiff's business ... to which the costs of inventory were simply an adjunct. ... A purchaser in any commercial transaction in this day and age might reasonably expect to receive digitized, computer-generated statements in relation to inventory. ... [A]ny purchaser of a commercial enterprise would reasonably expect disclosure in two parts: (1) a full record or account of what is held in the seller's current inventory, and (2) the related cost of acquisition. This 'goes without saying'" - The Court rejected the plaintiff's argument that the defendant did not require detailed inventory information because the defendant was intending to donate the clothing inventory to charity - "The Income Tax Act, by s. 118(6) states that any amount designated as a gift of property may not exceed the fair market value of the property. The defendant would need to justify his charitable donation by reference to the inventory information supplied by the plaintiff." - See paragraphs 80 to 92.

Contracts - Topic 3852

Performance or breach - Time for performance - Time of the essence - The plaintiff sued for $54,470.22 representing the "seller's cost" of clothing inventory - The defendant argued that as the agreement contained a clause stating that "time is of the essence", and as the plaintiff failed to quantify its inventory and substantiate its costs by closing date (December 1, 2012), the agreement to purchase inventory was terminated - At no time from December 1, 2012, through to the end of February 2013, did the defendant insist on the strict observance of time requirements - The Saskatchewan Court of Queen's Bench dismissed the plaintiff's claim - It was an implied term of the agreement that the plaintiff would substantiate its inventory and associated costs by appropriate records - The plaintiff failed to perform in a timely fashion - It was not until almost six months after the closing date, that the plaintiff met the conjunctive requirements in terms of substantiating the inventory - By that time, the defendant had already effectively notified the plaintiff, on several occasions, that it was reinstating time of the essence - As such, any obligation on the defendant's part to purchase the inventory was at an end - The provision of further information, specifically the spreadsheet, on May 21, 2013, was ineffective to overcome that result, as it was simply too late - The defendant was entitled to terminate the inventory agreement for the plaintiff's failure to substantiate on the closing date - See paragraphs 80 to 122.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - The Saskatchewan Court of Queen's Bench, in determining whether this was an appropriate case for summary judgment under rule 7-5, stated that "In Hryniak v. Mauldin, 2014 SCC 7 ... the Supreme Court of Canada considered the comparable rules adopted in the province of Ontario in 2010 which, for all intents and purposes are the same as the Saskatchewan Rules. The Hryniak case has been characterized as a paradigm shift, a far-reaching and fundamental alteration in the approach to summary judgment applications. Summary judgment procedures are now to be employed with the objective of fostering access to justice, providing affordable means of dispute resolution, and promoting efficiency and proportionality in litigation in an abbreviated, tailored, or customized fashion, where, in the past, a trial might have been deemed necessary in order to obtain a full appreciation of the issues and evidence." - See paragraphs 70 and 71.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - The plaintiff sued for $54,470.22 representing the "seller's cost" of clothing inventory - The defendant contended that it was an implied term of the agreement that, on closing date, the plaintiff would quantify and substantiate its cost of inventory by copies of purchase invoices and other records - The defendant counter-claimed for the loss of rental under the lease, and for water damage discovered in the building which cost the defendant in excess of $16,000 to repair - The plaintiff applied for summary judgment on the basis that all the required information was before the Court with respect to the inventory dispute - The defendant also agreed that the summary judgment procedure was appropriate - The Saskatchewan Court of Queen's Bench stated that "Rule 7-5(1)(b) provides that where the parties agree all or part of a claim may be determined by way of summary judgment, the Court must still be satisfied the procedure is appropriate. ... While there were minor conflicts in the evidence, they did not preclude a cohesive narrative from emerging in relation to the principle issue regarding the inventory. Accordingly, I am satisfied the summary judgment procedure is appropriate in this case." - See paragraphs 69 to 79.

Cases Noticed:

Hryniak v. Mauldin, [2014] 1 S.C.R. 87; 453 N.R. 51; 314 O.A.C. 1; 2014 SCC 7, consd. [para. 70].

Tchozewski v. Lamontagne, [2014] 7 W.W.R. 397; 440 Sask.R. 34; 2014 SKQB 71, refd to. [parra. 73].

Peace Hills Trust Co. v. Saulteaux First Nation et al. (2005), 257 Sask.R. 115; 342 W.A.C. 115; 2005 SKCA 32, refd to. [para. 78].

Luxor (Eastbourne) Ltd. v. Cooper, [1941] A.C. 108; [1941] 1 All E.R. 33 (H.L.), refd to. [para. 83].

Friesen v. Minister of National Revenue, [1995] 3 S.C.R. 103; 186 N.R. 243; 127 D.L.R.(4th) 193, refd to. [para. 85].

Lauzon v. There It Was Gone Inc. et al., [2012] O.T.C. Uned. 3583; 2012 ONSC 3583, refd to. [para. 88].

Aqua Terra Pets and Supplies Ltd. (c.o.b. Pet Habitat) v. Shin, 2002 BCPC 359, refd to. [para. 89].

Soleil Hospitality Inc. v. Louie et al., [2010] B.C.T.C. Uned. 1183; 2010 BCSC 1183, affd. (2011), 308 B.C.A.C. 122; 521 W.A.C. 122; 2011 BCCA 305, leave to appeal dismissed (2012), 433 N.R. 398; 433 N.R. 399; 2012 CanLII 12781 (S.C.C.), refd to. [para. 97].

1159465 Alberta Ltd. v. Adwood Manufacturing Ltd. et al., [2011] A.R. Uned. 347; [2012] 2 W.W.R. 83; 2011 ABCA 259, refd to. [para. 102].

Salama Enterprises (1988) Inc. v. Grewal, [1992] 4 W.W.R. 126; 12 B.C.A.C. 96; 23 W.A.C. 96; 90 D.L.R.(4th) 146 (C.A.), refd to. [para. 107].

Landbank Minerals Ltd. v. Mesgeo Enterprises Ltd. and Tri-Link Resources Ltd., [1981] 5 W.W.R. 524; 30 A.R. 300 (Q.B.), refd to. [para. 107].

Rickards Ltd. v. Oppenheim, [1950] 1 K.B. 616 (C.A.), refd to. [para. 108].

2329131 Ontario Inc. et al. v. Carlyle Development Corp. et al., [2013] O.T.C. Uned. 4876; 34 R.P.R.(5th) 161; 2013 ONSC 4876, refd to. [para. 109].

Domicile Developments Inc. v. MacTavish (1999), 120 O.A.C. 375; 45 O.R.(3d) 302; 175 D.L.R.(4th) 334 (C.A.), refd to. [para. 110].

Statutes Noticed:

Rules of Court (Sask.), Queen's Bench Rules, rule 7-5 [para. 69].

Counsel:

George A. Green, for the plaintiff;

Richard T. Carlson, for the defendant.

This summary judgment application was heard before Wilkinson, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon. The Court delivered the following judgment, dated August 12, 2014.