Your essay should be 300 – 700 word
s, or 1 – 2.5 pages long. Bib
liographies are in addition to
these word counts. You may use APA, MLA, or
Turabian/Chicago style, as long as you are
consistent in acknowledgi
ng all of your sources.
Choose one of the following:
1.
Discuss the termination of employees and th
e notice to which they are entitled. Use
decided cases where pos
sible 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 relationshi
p exists and how such
a relationship is determined.
Case Study
Your case study report should be 500 – 1500 words, or
2 – 5 pages long. Bi
bliographies are in
addition to these word counts. You may use APA,
MLA, or Turabian/Chicago style, as long as
you are consistent in acknow
ledging all of your sources.
Black seeks to recover the unpaid balance of th
e 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 wholesal
e and retail pizza and
donair business, to the White brothers fo
r the price of $240,000.00. Th
e White went into
possession and operated for some five or six mont
hs 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 app
ear 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 corn
er grocery store selling grocer
ies and meat. He marketed his
meat in his own store, and by whol
esale to restaurants. In cutti
ng the meat he learned that the
better cuts were popular, but his
customers did not readily purchas
e the poorer cuts. He saw an
opportunity in chopping and grinding the cheaper cu
ts to make donair meat. In the late 70s he
said the donair business was picking up. At about th
at time he began selling pizzas as well. He
continued wholesaling various re
lated products that he proce
ssed and eventually Sobey’s,
Costco, Superstore, and Atlantic Wholesales al
l became customers for his sauces, donair meat,
and pizzas. As demand for his products grew
, his space requirements expanded. In 1992 he
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obtained a permit from the city to build a detached
garage to replace an ol
der 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 an
d one or more chest freezers. As the volume of
sales and wholesale customers grew he needed
greater freezer capacity so he acquired a forty-
foot shipping container with a re
frigeration 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 thes
e 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 Munici
pality, for purposes of food safety. Whatever
construction and electrical permits or licenses we
re required by his contr
actors to appropriately
equip these facilities were obtained by the
contractors without hi
s personal involvement.
This was the business that he agreed to sell, that
is to say, the wholesal
e 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 ne
gotiating 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 agreem
ent contemplated that the brothers would buy
the “business” for a total purchase pr
ice 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 w
ould 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 th
e assets being purchased including machinery and equipment and
some fixtures, arguably some of th
ose fixtures were attached to an
d 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
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is not in breach of any laws, rules or
regulations, and is duly licensed, registered
or qualified in each jurisd
iction in which the Vendor ow
ns or leases property or
carries on the Business, to enable the Bu
siness to be carried on as now conducted,
and its property and assets to be owne
d, 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 th
e 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 re
presentations and warra
nties contained in
this Agreement not misleading, or which ma
y 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 Bu
siness 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, covenant
s 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 accorde
d access to business and other records and
….free and unrestricted access….to th
e premises….operating data and other
information with respect to the
business, propertie
s 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 fo
r donairs, making ice, storing
meat and ice products in the refrigeration unit,
and dealing with customers in the shop. Black
provided his recipes and in
structed 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 5
th
of November 2008 notified Black that “spe
cifically 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) perm
anently cease commercial use of the accessory
building (garage).
As a result of receiving this “Notice to Comp
ly” the buyers contacted
a lawyer who arranged a
meeting with the officials of the City of Halif
ax to discuss this order which would “have a
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serious impact on the business operation of my cl
ients.” A meeting did in fact take place as a
result. It was attended by both Black and the brot
hers 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 sugges
tions about how the bus
iness might be re-
organized in order to carry on. He suggested th
e meat processing could be done at a facility
owned by his brother at Lake Echo,
and that the refrigeration unit co
uld be relocated there or to
some other place in Burnside wh
ere he had contacts. As well,
Black applied for a development
agreement with the city in order to permit the us
e of Duffus Street more or less as previously
used. Having been made aware of that initiativ
e, 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 Burn
side, which they arranged. They leased space on
Blue Water Road in Bedford where they c
ould continue the meat processing and ice
manufacturing.
In these circumstances they ceased making paym
ents on the promissory note thereby breaching
the Agreement of Purchase and Sale, and eventu
ally stopped paying rental on the retail premises
which they continued to occupy on Duffus Str
eet. In August 2009 Black commenced this action
by filing an originating notice.
The relationship between the part
ies went from bad to worse.
Determine the liability between the part
ies and suggest who should win and why.
See the Assignment Schedule for the due date.
Submit using the Dropbox.