In December, Winnipeg Seafoods Ltd., an Ontario company ("Winnipeg Seafoods"), orally agreed to purchase from Lakehead Fish Wholesale Co., a federally incorporated company ("Lakehead Fish"), 1,000 five-kilogram boxes of frozen Lake Superior herring at $1.40per kilogram. The fish were stored in the cold storage warehouse of a third party, The Bailey Co. of Thunder Bay, another Ontario company ("Bailey"). The Bailey Co. operated as a storage company that processed and stored fresh fish. At the time, it held some 1,500 boxes of this type of fish in storage. Because Winnipeg Seafoods was short of storage space, it did not want the fish shipped to it, but preferred to have it remain in the warehouse at Thunder Bay. Lakehead Fish then arranged with Bailey to transfer the storage account to the name of Winnipeg Seafoods in respect of the 1,000 boxes, and Lakehead Fish sent an invoice for $7,000to Winnipeg Seafoods. The invoice indicated that the goods were in storage at Bailey's in Thunder Bay. Immediately afterwards, Bailey sent Winnipeg Seafoods its' storage invoice for one month's cold storage charges, payable in advance. Winnipeg Seafoods did not pay either of these accounts. The price of frozen herring started to fall in the middle of January. The fish were held in cold storage until the end of January and then processed to prevent spoilage. On February 2, Winnipeg Seafoods returned the invoice of Lakehead Fish with an accompanying letter to the effect that it had decided to "cancel the order". Lakehead Fish then sued Winnipeg Seafoods Ltd. For the price of the fish, $7,000, or in the alternative, for damages for non-acceptance. QUESTIONS In answering the following questions, assume that all facts are provable.

Does Bailey have any cause of action, why or why not? Explain the legal remedies available and any defences. (10 marks)