CBC Investigates

Former suppliers allege Smiling Goat owes them thousands in unpaid bills

Coffee suppliers, bakeries, landlords, lawyers and several former employees have pursued the café company for unpaid bills, according to court documents and interviews with CBC News.

Halifax business owner Kit Singh named in 7 lawsuits as half of his cafés have closed

In the last month, half of Smiling Goat's coffee shop locations have closed. (Marina von Stackelberg/CBC)

Coffee suppliers, bakeries, landlords, lawyers and several former employees have pursued the owner of Smiling Goat Organic Espresso Bar for unpaid bills amounting to tens of thousands of dollars, according to court documents and interviews with CBC News.

A number of businesses in Nova Scotia are also refusing to sell to the Halifax café company.

Smiling Goat came under fire earlier this year when baristas at its Halifax coffee shops spoke out publicly against owner Kit (Jagpreet) Singh, saying he hadn't paid them in months.

Some former employees say Singh threatened to fire them for speaking out about unpaid wages. (Paul Palmeter/CBC)

A pattern has emerged in court documents that reflects a similar experience among others who have dealt with Singh.

There are seven previous and current lawsuits filed against Singh, Smiling Goat, or his incorporated business Hebron Hospitality Group.

Some cases are still unresolved. But in the last year, an adjudicator has ruled in three cases against Singh or his company, ordering him to pay a total of more than $20,000.

Documents in court detail how Singh failed to pay his bills or wrote cheques that bounced. When he did pay, in some cases he would offer partial payment or argue that he was being overcharged.

Although Singh did not initially respond to multiple emails and phone calls requesting an interview, he wrote in an email to CBC News after this story's publication that his company "has never refused to pay any legitimate account."

Roasters refusing to supply company

Two of Nova Scotia's major coffee roasters are refusing to supply Smiling Goat, saying the company has outstanding bills.

Coffee company Just Us announced earlier this month it was cutting ties with the beleaguered business, saying Smiling Goat had "abused their extension of credit and refused to take responsibility for the situation."

Until now, Just Us was the exclusive coffee supplier for Smiling Goat after Singh purchased the roaster's two cafés in August 2017.

"It's a little bit baffling to me," Just Us manager Joey Pittoello said.

"We put in a lot of other efforts, beyond simply financial resources, to help support [that] business. And in the end, we were disappointed."

Kit (Jagpreet) Singh is the owner of Smiling Goat Organic Espresso Bar. (Southwest Property)

Pittoello said Just Us is owed money for coffee, equipment and rent for its Carleton Street location, which the company was subleasing to Smiling Goat. He called the amount "significant" but wouldn't say exactly how much he alleges Just Us is owed.

On Thursday, Just Us secured a court order to retrieve nearly $24,000 in equipment from Smiling Goat.

Documents show Smiling Goat's previous coffee supplier, Java Blend, has also pursued Singh and his company for an unpaid bill of more than $9,000 in coffee and coffee-related products bought between April and August 2017.

An adjudicator has ordered Singh to pay, but Java Blend owner Jim Dikaios said he's still waiting.

'Our attempts and offers were disregarded and our extension of credit and supply chain services were abused,' a statement from Just Us reads. (Pat Callaghan/CBC)

Winning a small claims court decision doesn't guarantee that an employee or supplier will get paid, according to Peter Moorhouse, president of Atlantic Canada's Better Business Bureau.

That's because even if an adjudicator rules in a claimant's favour, it's up to the claimant to collect the money from the person who owes it.

'Emergency' coffee and baked goods

Smiling Goat has turned to new suppliers, including an "emergency" request to bring in coffee from Alberta roaster, Rave, according to staff there.

It's been getting some of its treats from Mrs. P's Homestyle Bakery in Halifax. The bakery's owner says she'll provide a small quantity of baked goods to Smiling Goat, but only if she's paid for her pastries on delivery.

"The first couple of payments came in on time, and then after that they started missing and missing and missing," Marilyn Royston said. "The last two or three times we didn't get paid.… I just decided if they weren't going to pay on time, I wasn't interested."

Bakery owner Marilyn Royston says she has been supplying baked goods to Smiling Goat since May, but now will only do it on a pay-on-delivery basis. (Eric Wooliscroft/CBC)

The Bread Lounge, another local business, is supplying the Smiling Goat with $50 worth of sandwiches and pastries a day, provided they also get paid on delivery.

"I think they are trying their best," said Bread Lounge owner Rami Issa.

In legal trouble from the beginning

In 2017, Halifax's 24 Carrots Bakery took Singh's company to court for $4,461.21 in unpaid bills for muffins, squares and croissants bought for the Smiling Goat locations between March and June 2016.

Although the judge ruled in the Halifax bakery's favour, it still had to hire a collections service to recover the money, court documents show.

In 2017, 24 Carrots Bakery took Singh's company to court for $4,461.21 in unpaid bills. (Pat Callaghan/CBC)

The documents detail months of communication, in which Singh promises to drop off cheques, but doesn't show up.

At one point, Singh accuses the bakery of "overbilling" him.

Lawyers owed $6,000 for Smiling Goat purchase

It isn't just suppliers that are after Smiling Goat.

Singh was sued by the law firm that helped him purchase Smiling Goat for $75,000 between December 2015 and June 2016, court documents show. 

An adjudicator ruled in January 2018 that Singh owed Boyne Clarke more than $6,000.

In one email exchange on Jan. 6, 2016, Singh asks the lawyers to decrease the amount he owes them: "We are out by $1,300, I say can we split the difference."

'Never in my career have I discussed and explained fees so much with any client,' says the lawyer suing Singh for more than $6,000 in unpaid bills. (Pat Callaghan/CBC)

Court documents show Boyne Clarke partner Robert Miedema's feelings about the Smiling Goat owner.

"Never in my career have I discussed and explained fees so much with any client … You bartered with me when we started for aggressive pricing, and then you argued for a further discount after the first bill," Miedema wrote.

"The value of the time we have lost with your discounts and our collection efforts might now actually exceed the value of our efforts that were charged to you."

Accountant quits after 3 weeks

Halifax accountant Sasa Misic has also filed a lawsuit against Singh and his company, saying he was never paid for his time as general and financial manager. He quit after working less than three weeks.

In his statement of claim, Misic said he's owed more than $1,600.

Accountant Sasa Misic says he is owed $1,600. (Steve Lawrence/CBC)

"I feel like I've been taken advantage of," Misic said. "From my conversations with Mr. Singh, my perception is that he believes that he can postpone this indefinitely, until I get tired of chasing the payment."

In a counterclaim, Singh alleges Misic resigned without reasonable notice and owes the company $3,840, plus $100 in general damages for "pain and suffering endured by Kit."

Difficult to pursue legal action

Individuals and businesses might be reluctant to take legal action if they think they might get paid, according to the Better Business Bureau.

"If you have a reasonable belief that you will get paid in full, it's probably best to exercise some flexibility," Moorhouse said.

The Better Business Bureau says individuals and businesses might be reluctant to take legal action if they think they might get paid. (Pat Callaghan/CBC)

"Because if you drive that business into bankruptcy, your debt will become one of several debts that is then sort of piecemeal, and you'll get pennies on the dollar."

He noted some businesses may give those they owe money false hope of payment — and "string people along" to prevent them from taking legal action.

Smiling Goat still hiring

In an email to CBC News, Singh wrote, "Please tell me one business in [the] world which does not owe money to any body or any supplier.… As many small businesses, our business has bills to pay." 

He wrote that all issues regarding allegations of unpaid wages are proceeding through arbitration, in the case of unionized employees, and the Labour Board, in the case of non-unionized employees.

"The company has suffered considerable reputation and financial losses due to the conduct of certain former employees," he wrote.

"My family has invested tremendous sweat equity and personal money in efforts to establish and grow as a viable Nova Scotia business and employer."​

Court documents also detail email exchanges in which Singh contends he's been unfairly billed or suggests delays in payment are due to family matters.

Despite recent Smiling Goat closures, the company's website says the business welcomes job applications. (Steve Berry/CBC)

Although Singh began expanding the Smiling Goat after buying it in 2016, half of its six locations closed in the last month. A sign outside one of the Spring Garden Road cafes says that it's been shut down for renovations, but will reopen.

Despite the recent closures, the business's website is still welcoming job applications.

"We are a rapidly growing company with potential to offer interested candidates experience and possible future full-time employment," the website reads.

About the Author

Marina von Stackelberg

Journalist

Marina von Stackelberg is a CBC journalist based in Halifax. She previously worked for CBC Sudbury. Connect with her @CBCMarina or marina.von.stackelberg@cbc.ca