Executive Summary: Key Legal and Evidentiary Issues

• The seller's failure to deliver used tires to Texas constituted a breach of a commercial sales contract.

• The court found that delivery was an obligation of result, not just payment for transportation.

• Force majeure was rejected as a defense since customs denial was neither unforeseeable nor irresistible.

• The seller’s counterclaim for storage and transport fees lacked contractual or legal basis.

• The court declared the counterclaim abusive due to its untimely and unsupported filing.

• Monetary sanctions were imposed for procedural misconduct and frivolous litigation behavior.

Background and breach of contractual obligations

Francisco Castillo, a tire shop owner based in Texas, entered into a contract in September 2022 with 9370-1597 Québec inc., operating under the name Expo Tire, for the purchase of 1,800 used tires. The purchase included free delivery to Texas, with Castillo making an initial payment of 50% ($11,349.99 USD), followed by full payment. The delivery was initially expected between late October and early November 2022, eventually scheduled for December 7.

The tires were never delivered. During transportation, the shipment was intercepted at the U.S. border and denied entry after a random customs inspection. The truck returned to the seller's premises in Canada, and no further delivery attempts were made. Castillo requested a refund in January 2023, but Expo Tire failed to fulfill this request. Instead, the seller proposed altering documentation and requested additional delivery payments, which Castillo refused.

Court's finding on delivery and force majeure

The court held that Expo Tire was obligated not only to pay for transportation but to ensure delivery to Texas. This obligation was found to be one of result. The seller’s claim of force majeure—based on the customs refusal—was rejected. The court emphasized that border issues are foreseeable risks in international shipping and do not meet the Civil Code’s standard for force majeure, which requires both unpredictability and irresistibility.

Rejection of the counterclaim

Expo Tire’s counterclaim, filed just two weeks before trial, sought payment for storage fees, handling charges, and transport costs. The court determined this claim was contractually unfounded, procedurally abusive, and unsupported by evidence. Notably, the contract explicitly included free delivery and did not provide for such additional charges, particularly after full payment had been received.

Procedural abuse and sanctions

The judge found Expo Tire’s litigation conduct to be abusive. The company failed to file its counterclaim within the court’s deadlines, despite knowing the basis of its alleged losses months earlier. It also reversed earlier representations that no counterclaim would be filed. The court imposed a $2,500 sanction for procedural abuse and awarded full legal costs to Castillo.

Final judgment and financial award

The court resolved the contract in favor of Castillo and ordered Expo Tire to refund $31,958.30 CAD, equivalent to the amount paid in U.S. dollars for the tires. An additional $2,500 was granted as a sanction for abuse of process. Both amounts are subject to legal interest and the usual indemnity from the specified dates.