A trucking company that provided delivery services exclusively to a B.C. lumber distributor for 14 years was a dependent contractor and entitled to reasonable notice of termination, the B.C. Supreme Court has ruled.
The court found that Borly Holdings Ltd. (Borly), a company solely owned by 61-year-old truck driver B.U., had a longstanding, exclusive, and economically dependent relationship with Country Lumber Ltd. That made it more akin to an employment arrangement than a traditional commercial contract.
Country Lumber terminated the oral agreement with Borly without notice in March 2024. The court awarded Borly $82,953.91 in damages for the lack of notice, after applying a 10-month reasonable notice period and accounting for post-termination mitigation earnings.
Fourteen years of exclusive service
B.U., through his corporation Borly, operated three trucks that performed delivery services solely for Country Lumber starting in 2010. While the parties never formalized their arrangement in writing, Borly provided steady full-time work throughout the week, including weekends, and bore the cost of maintaining the trucks.
Despite the absence of an exclusivity clause, the court found the nature of the work effectively prohibited Borly from seeking other clients.
“Borly and, in particular, Mr. Ursic worked a regular Monday to Friday shift for Country Lumber, as well as occasional, but consistent, weekend work,” the court wrote. Country Lumber’s expectations and branding demands, including decals on the trucks, made it “very difficult for Borly to take on any additional external work.”
Control and integration weighed heavily
The court examined several factors to determine whether the relationship qualified as a dependent contractor arrangement. These included the degree of control Country Lumber exercised over Borly, its economic dependence, and whether Borly’s work was integrated into the lumber company’s operations.
Country Lumber set Borly’s schedules, assigned delivery tasks, and required adherence to company procedures, including safety meetings, GPS tracking, and check-in systems. The company also expected drivers to report absences and submit vacation requests. Borly’s drivers, while technically employed by B.U., were subject to oversight and, at times, discipline from Country Lumber managers.
“Overall, the evidence demonstrates that while Borly maintained some independence regarding its drivers, their operations were largely dictated by Country Lumber,” the court found.
Borly’s services were also deemed “integral” to the lumber business. “Delivery is an essential element of the business,” the court noted. Borly’s trucks bore the company’s logos, and its drivers were treated as part of the broader delivery team.
Independent features didn’t override dependence
The court acknowledged several factors favouring an independent contractor classification. Borly owned its trucks, paid its own expenses, and hired its own drivers. The company filed taxes as a corporate entity and benefitted from that structure.
However, those factors did not outweigh the economic reliance, long-term exclusivity, and operational control Country Lumber had over Borly. “The presence of other contractors does not change the nature of the relationship between the employer and any one contractor,” the court said.
It concluded that Borly occupied a middle ground between a traditional employee and a truly independent business, placing it in the category of “dependent contractor.”
Reasonable notice set at 10 months
In assessing damages, the court rejected both parties’ proposals for notice length—16 months from the plaintiffs and one month from the defendant—and instead applied a 10-month notice period.
While the court acknowledged Borly’s commercial structure and tax advantages, it said those did not disqualify the company from fair notice. “Ten months reflects the length of the relationship, the control that Country Lumber exercised over Borly, the commercial nature of Borly, and the tax benefits Borly received as a result of not being a direct employee,” the decision read.
The court accepted the methodology of the plaintiffs’ expert witness, who calculated Borly’s projected income based on recent invoices and historical expense ratios. Adjusting for the downturn in the housing market and reduced revenues leading up to termination, the court determined that Borly would have earned $96,594 during the notice period.
After subtracting post-termination net income of $13,640.09—earned by Borly through other trucking contracts—the court awarded $82,953.91 in damages.
Court rejects mitigation arguments
Country Lumber argued that damages should be based on B.U.’s personal income from Borly or the company’s gross revenue rather than its net income. The court disagreed, holding that net income was the appropriate measure of loss, particularly given the nature of Borly’s business expenses and the downturn it faced after losing its only client.
“There was no allegation that any of the actual expenses incurred by Borly after termination were unreasonable,” the court said, adding that the company had made appropriate efforts to mitigate.
While the court noted Borly’s reduced post-termination earnings, it accepted the plaintiffs’ approach to calculating mitigation and found no basis to penalize the company further.
For more information, see Ursic v Country Lumber Ltd., 2025 BCSC 970 (CanLII).
