



COURT OF APPEAL FOR ONTARIO

CITATION: S & J Gareri Trucking Ltd. v. Onyx Corporation
    , 2016 ONCA 505 DATE: 20160624

DOCKET: C59373

Cronk, Blair and MacFarland JJ.A.

BETWEEN

S & J Gareri Trucking Ltd.

Plaintiff (Respondent)

and

Onyx Corporation

Defendant (Appellant)

Kyle Armagon, for the appellant

Ian Latimer, for the respondent

Heard and released orally: June 17, 2016

On appeal from the judgment of Justice Graeme Mew of the Superior
    Court of Justice, dated August 20, 2014.

ENDORSEMENT

[1]

The appellant, Onyx Corporation, and the respondent, S & J Gareri
    Trucking Ltd. are in the business of providing snow removal services to
    municipalities. Together with a third company, Harlow Contracting Inc., they
    competed for a contract with the City of Mississauga.

[2]

Onyx was the successful bidder and entered into a five-season contract
    with the City. Its bidder deposit of $75,002.81  representing 1% of the price
    it would receive over the five years  was retained by the City as a
    performance bond for the duration of the contract.

[3]

The contract called for twenty specialized snow-removal trucks; however,
    Onyx did not have that many trucks at the time. It therefore entered into
    subcontracts with Gareri and Harlow to supply two and five trucks,
    respectively. Gareri and Harlow each provided Onyx with a deposit in an amount
    corresponding to their proportionate share of the Onyx deposit for Onyxs fixed
    term of five seasons.

[4]

The subcontracts were made orally between the principals of the
    corporations and remained entirely oral because Onyx refused to commit them to
    writing. The primary issue at trial and on appeal is the interpretation of the
    oral subcontracts. More specifically, the issue is whether the parties agreed
    to a five-season term (the duration of the main contract) or to a
    season-by-season term subject to rights of cancellation.

[5]

Onyx terminated the subcontracts after the first season because it had
    acquired more trucks of its own. Gareri and Harlow sued in separate actions for
    wrongful termination of the subcontracts, and the actions were tried together.
    The trial judge found that the subcontracts were for a five-season term, that
    Onyx had wrongfully terminated them, and that the plaintiffs were entitled to
    damages based on the revenues they could reasonably have expected to have
    generated from them (with certain adjustments for mitigation and other
    factors).

[6]

Onyx appeals only from the judgment in favour of Gareri. We would not
    interfere with the trial judges findings or his award of damages, and dismiss
    the appeal.

[7]

The trial judge applied the correct principles applicable to the interpretation
    of contracts in general and to oral contracts in particular. He held that when
    dealing with contracts which are substantially or wholly oral: (i) it is
    necessary to distill from the words and actions of the parties what they
    intended: see G.H.L. Fridman,
The Law of Contract in Canada
, 6th ed.
    (Toronto: Carswell, 2011) at 16; (ii) evidence of the parties subjective
    intentions has no independent place in determining the terms of their bargain:
Eli
    Lilly & Co. v. Novopharm Ltd.
, [1998] 2 S.C.R. 129 at para. 54; (iii)
    the test of what the parties agreed to requires an objective determination; and
    (iv) the contract must include the requisite elements of offer, acceptance and
    consideration.

[8]

The trial judge considered the evidence, particularly the factual matrix
    surrounding the making of the Gareri subcontract. He placed considerable weight
     as he was entitled to do  on the fact that Gareri and Harlow had provided
    deposits to Onyx that exactly mirrored their proportionate share of the Onyx
    deposit with the City
for the full five-year period
.
    In addition, although he noted that the fact the written contract prepared by
    Mr. Gareri (but not accepted) proposed a five-year term would not alone have
    turned the interpretation question, the trial judge was alive to that fact. The
    trial judge made adverse credibility findings as against the principals of Onyx
    and found the plaintiffs evidence credible. He accepted the versions of Mr.
    Gareri and Mr. Madeiros (the principal of Harlow).

[9]

We see no error in his approach to the interpretation of the subcontract
    or in the interpretation he reached. His findings and conclusion were entirely
    open to him on the record. Onyx essentially seeks to re-argue the case on
    appeal. We cannot interfere on that basis.

[10]

Nor
    would we interfere with the trial judges assessment of damages. He applied the
    proper measure of damages, namely what was necessary to put Gareri in the same
    position it would have been in had the subcontract not been breached. On that
    basis, he held that Gareri was entitled to the revenue it could reasonably have
    expected to generate from the Onyx subcontract, less adjustments for some minor
    administration fees it would no longer be required to pay and any revenues
    generated through its mitigation efforts. He made no error in this respect. The
    parties had agreed on quantum.

[11]

The
    appeal is therefore dismissed.

[12]

Costs
    are awarded to the respondent in the agreed amount of $12,500 inclusive of
    disbursements and all applicable taxes.

E.A. Cronk J.A.

R.A. Blair J.A.

J. MacFarland J.A.


