Assignment
Essay Questions
Your essay should be 300 – 700 words, or 1 – 2.5 pages long. Bibliographies are in addition to these word counts. You may use APA, MLA, or Turabian/Chicago style, as long as you are consistent in acknowledging all of your sources.
Choose one of the following:
1. Discuss the termination of employees and the notice to which they are entitled. Use decided cases where possible in your answer.
2. Discuss the role of strikes, lockouts, and picketing, and whether or not they have any place in our present society.
3. Discuss why it is significant to find that an employment relationship exists and how such a relationship is determined.
Case Study
Your case study report should be 500 – 1500 words, or 2 – 5 pages long. Bibliographies are in addition to these word counts. You may use APA, MLA, or Turabian/Chicago style, as long as you are consistent in acknowledging all of your sources.
Black seeks to recover the unpaid balance of the purchase price together with special damages arising from a Purchase and Sale Agreement made with the White brothers in 2008. By a detailed Agreement of Purchase and Sale, Black agreed to sell a wholesale and retail pizza and donair business, to the White brothers for the price of $240,000.00. The White went into possession and operated for some five or six months when they were notified by the city that certain aspects of the business were in breach of zoning by-laws. They would not be permitted to continue to operate as they had done. As will appear below, the business faltered and then failed.
The plaintiff claims for the balance of the purchase price and other remedies. Black came to Halifax from Lebanon in 1973 as a school boy. He acquired 5553 Duffus Street about 1975 where he opened a corner grocery store selling groceries and meat. He marketed his meat in his own store, and by wholesale to restaurants. In cutting the meat he learned that the better cuts were popular, but his customers did not readily purchase the poorer cuts. He saw an opportunity in chopping and grinding the cheaper cuts to make donair meat. In the late 70s he said the donair business was picking up. At about that time he began selling pizzas as well. He continued wholesaling various related products that he processed and eventually Sobey’s, Costco, Superstore, and Atlantic Wholesales all became customers for his sauces, donair meat, and pizzas. As demand for his products grew, his space requirements expanded. In 1992 he obtained a permit from the city to build a detached garage to replace an older building at the rear of his pizza store.
The permit for the new building incorporated these words “not to be used for commercial purposes/accessory to residential only.” Black testified that the former building was used for storage as was the new one. Presently he started to use it on Saturdays to process the meat for donair “loaves” and “cones.” At a later time, it would seem around 2002, he also began to sell ice cubes in bags, both wholesale and retail, and began to use the garage for the production of ice cubes as well.
In the main store there was a walk-in cooler and one or more chest freezers. As the volume of sales and wholesale customers grew he needed greater freezer capacity so he acquired a fortyfoot shipping container with a refrigeration unit attached. He placed that adjacent to the store and from that time forward he used it for storing his frozen donair meat, his frozen ice cubes, and other supplies which he purchased in bulk. All these facilities, the pizza store, the garage, and the refrigeration unit, were inspected from time to time by the provincial Departments of Agriculture and Health, as well as Halifax Regional Municipality, for purposes of food safety. Whatever construction and electrical permits or licenses were required by his contractors to appropriately equip these facilities were obtained by the contractors without his personal involvement.
This was the business that he agreed to sell, that is to say, the wholesale and retail production and marketing of pizzas, donairs, companion sauces, and cubed ice. He had an established following of both retail and wholesale customers. In 2006 his business generated total sales of $582,000.00, slightly less in 2007. Just under fifty percent of sales were wholesale.
By 2008 Black had decided he would like to sell the business. Early that year the White brothers approached him with respect to purchasing the wholesale products they would need to open a pizza store. They were then negotiating to buy an operating store at another location.
They had each worked briefly for Black as youngsters. He offered to sell his business to them and eventually an agreement was reached. The agreement contemplated that the brothers would buy the “business” for a total purchase price of $240,000.00 plus inventory, of which sum $140,000.00 would be by promissory note to be paid over time. It is the balance payable on the note that is the main thrust of the plaintiffs’ claim.
The agreement contemplated that the business would continue to operate as it had operated, and that the new owners would continue to use Black’s recipes and service his customers. Their deal included a five-year lease of the property and the facilities used in the business. The agreement provided a detailed list of the assets being purchased including machinery and equipment and some fixtures, arguably some of those fixtures were attached to and would form part of the real property. It also excluded certain specified assets.
Of particular importance is Article 7(1) of the Agreement of Purchase and Sale where subparagraphs (t) and (y) provide: (t) The Vendor is conducting the Business in compliance with all applicable laws, rules and regulations of each jurisdiction in which the Business is carried on and is not in breach of any laws, rules or regulations, and is duly licensed, registered or qualified in each jurisdiction in which the Vendor owns or leases property or carries on the Business, to enable the Business to be carried on as now conducted, and its property and assets to be owned, leased and operated, and all licenses, registrations and qualifications are valid and subsisting and in good standing, and none of the same has or may have an adverse effect on the operation of the Business.
(y) There are no facts known to the Vendor which should be disclosed to the Purchaser in order to make any of the representations and warranties contained in this Agreement not misleading, or which may have a materially adverse effect on the Business or its operations, and no facts are known to the Vendor which may materially or adversely affect the Business or would operate to prevent the Purchaser from using the Purchased Assets to operate the Business in the manner in which the Vendor has operated the Business prior to the date of this Agreement.
Article 7, paragraph 5, later confirms:
All representations, warranties, covenants and agreements contained in this Agreement on the part of each of the Parties shall survive the Closing, … Under article 9(1) the purchaser is accorded “Access for investigation” for themselves or their representatives. They were accorded access to business and other records and ….free and unrestricted access….to the premises….operating data and other information with respect to the business, properties and assets…. The Purchasers shall also have access to the premises on a training basis up to the closing date…. After verbally committing to the deal the buyers spent six to eight weeks working in the shop with Black, performing the various functions; processing meat for donairs, making ice, storing meat and ice products in the refrigeration unit, and dealing with customers in the shop. Black provided his recipes and instructed the brothers on preparing the sauces and other products.
The parties became aware of the zoning problems as a result of a “Notice to Comply” issued over the signature of Janet Rice, a development technician with the City of Halifax. This notice dated the 5th of November 2008 notified Black that “specifically a shipping container located on site and used for commercial storage as well as the commercial use of the accessory building on site are not permitted.” These facilities did not conform to the R2 zone in which the property was located. The notice directed that the occupiers were required to (a) permanently remove the shipping container from the site, and (b) permanently cease commercial use of the accessory building (garage).
As a result of receiving this “Notice to Comply” the buyers contacted a lawyer who arranged a meeting with the officials of the City of Halifax to discuss this order which would “have a serious impact on the business operation of my clients.” A meeting did in fact take place as a result. It was attended by both Black and the brothers and by several officials for the city. As a result they were permitted to continue the use of the premises as before on a temporary basis; however, that extension was brief. By March 31, 2009, they were required to be in compliance by having the refrigeration unit removed and by having ceased the use of the garage.
In the meantime Black had made some suggestions about how the business might be reorganized in order to carry on. He suggested the meat processing could be done at a facility owned by his brother at Lake Echo, and that the refrigeration unit could be relocated there or to some other place in Burnside where he had contacts. As well, Black applied for a development agreement with the city in order to permit the use of Duffus Street more or less as previously used. Having been made aware of that initiative, the brothers followed up on this possibility.
However, based on conversations they had with city officials they concluded that such an agreement was a non-starter. With time running out they decided to comply with the order and to move the refrigeration unit to a location in Burnside, which they arranged. They leased space on Blue Water Road in Bedford where they could continue the meat processing and ice manufacturing.
In these circumstances they ceased making payments on the promissory note thereby breaching the Agreement of Purchase and Sale, and eventually stopped paying rental on the retail premises which they continued to occupy on Duffus Street. In August 2009 Black commenced this action by filing an originating notice. The relationship between the parties went from bad to worse.
Determine the liability between the parties and suggest who should win and why.
