Date Issued: May 16, 2018

File: SC-2017-004302

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Magoo’s Child Care Center LTD v. Ward, 2018 BCCRT 188

Between:

Magoo’s Child Care Center LTD

 

Applicant

And:

Matthew Ward

Respondent

And:

Magoo’s Child Care Center LTD

 

Respondent BY COUNTERCLAIM

REASONS FOR DECISION
Tribunal Member:	Eric Regehr

INTRODUCTION

1.         The applicant Magoo’s Child Care Center LTD is a corporation providing daycare services (daycare). The respondent Matthew Ward (parent) is the parent of a child who attended the daycare until July 11, 2017. On July 5, 2017, the parent dropped their child off late and had a discussion with one of the daycare’s staff members regarding the late drop-off policy.

2.         This dispute arises because the daycare sent an email on July 11, 2017 to the parent stating that the parent’s behaviour towards the staff member was inappropriate and disrespectful (email). The parent strongly denied the daycare’s characterization of the interaction. The parent immediately stopped taking their child to the daycare, stating that it was impossible to continue to trust the daycare.

3.         The daycare claims $895.00 because the contract between the daycare and the parent (contract) required one month’s notice of termination. The parent counterclaims for a refund of $638.28 for July 11-31 because they say that the daycare’s behaviour voided the contract.

4.         The daycare is represented by one of its employees. The parent is self-represented.

JURISDICTION AND PROCEDURE

5.         These are the formal written reasons of the Civil Resolution Tribunal (tribunal). The tribunal has jurisdiction over small claims brought under section 3.1 of the Civil Resolution Tribunal Act (Act). The tribunal’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the tribunal must apply principles of law and fairness, and recognize any relationships between parties to a dispute that will likely continue after the dispute resolution process has ended.

 

6.         The tribunal has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. Even though there is a conflict in the parties’ evidence about what happened on the morning of July 5, 2017, I decided to hear this dispute through written submissions, because I find that there are no significant issues of credibility or other reasons that might require an oral hearing.

7.         The tribunal may accept as evidence information that it considers relevant, necessary and appropriate, whether or not the information would be admissible in a court of law. The tribunal may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

8.         Under section 61 of the Act and tribunal rule 126, in resolving this dispute the tribunal may make one or more of the following orders:

a.     order a party to do or stop doing something;

b.     order a party to pay money;

c.      order any other terms or conditions the tribunal considers appropriate.

ISSUES

9.         The issue in this dispute are:

a.     Did the email frustrate the contract?

b.     Did the daycare breach the contract?

c.      Depending on the answers to (a) and (b), does either party owe the other any money arising out of the contract?

d.     Is either party entitled to reimbursement of their tribunal filing fees?

EVIDENCE AND ANALYSIS

10.      The parties entered into the contract on March 10, 2016, for the parent’s child to attend the daycare.

11.      As part of the contract, the parent agreed to give one full month’s notice to terminate the contract. The parent paid $895.00 per month for daycare, in advance. The parent paid $895.00 for July 2017.

12.      On July 5, 2017, the parent telephoned the daycare to advise that they would be dropping their child off late. When they arrived, the parent informed a staff member of the daycare that they thought that the daycare should be more flexible with respect to drop off times.

13.      The parties dispute the tone of the exchange on the morning of July 5, 2017. The daycare states that the parent was aggressive and that the staff member felt intimidated. The parent states that the discussion was even-tempered and respectful, and that they both agreed to raise the issue further with daycare management.

14.      According to the parent, the relationship continued as normal and the parent took their child to daycare on July 6, 7 and 10 without incident.

15.      On the morning of July 11, 2017, the daycare sent the email relating its concerns over the parent’s behaviour on the morning of July 5, 2017. The daycare expressed that it would not tolerate further aggressive or disrespectful conduct. The daycare also expressed hope that the parent’s child would stay at the daycare and looked forward to the parent’s second child joining the daycare later in 2017.

16.      The parent was insulted and shocked by the contents of the email and did not drop off their child at daycare on July 11, 2017. The parent removed their second child from the waitlist, demanded an apology from the daycare, and demanded a refund for the rest of July 2017. The parent did not pay for August 2017.

17.      Ultimately, the parent’s decision to withdraw their child from the daycare arises from the daycare’s response to the July 5 incident, not from the July 5 incident itself. Therefore, I do not need to decide what happened on July 5. Indeed, it may be that both parties are telling the truth, as the parent perceived the conversation to be respectful while the staff member subjectively felt intimidated.

18.      The parent says that the accusations in the email were serious enough that they warranted a full investigation. The parent states that the daycare never contacted them for their side of the story prior to making up its mind about what had happened. The parent says that the conclusions in the email were false and potentially damaging to their reputation. The parent says that the email was so outrageous that it was impossible for them to continue to trust the daycare to care for their children.

19.      Therefore, the parent’s position is that they were entitled to treat the contract as void as of July 11, 2017, and therefore that they are entitled to a refund for July 11-31, 2017.

20.      The daycare’s position is that the contract remained valid and enforceable after July 11, 2017. The contract requires one full month’s notice. Therefore, the daycare says that the parent must pay for August 2017.

21.      The parent raises two legal arguments in support of their position. First, the parent says that the email frustrated the contract. Second, the parent says that the daycare breached the contract by failing to act in good faith.

Did the email frustrate the contract?

22.      The parent says that the email frustrated the contract.

23.      A contract is frustrated when an unforeseeable event occurs that makes it impossible for the parties to fulfill the contract’s terms. For a contract to be frustrated, it must be truly impossible to continue to perform the terms of the contract, not just inconvenient, undesirable or uncomfortable. The event must be so fundamental to the contract that it completely changes the nature of the contract to something that the parties did not contemplate.

24.      If a contract is frustrated, neither party is obligated to continue to carry out the terms of the contract.

25.      Therefore, if the contract was frustrated on July 11, 2017, the daycare no longer had to care for the parent’s child and the parent no longer had to pay the daycare.

26.      I find that the email did not frustrate the contract. While I accept that it greatly upset the parent, I am not satisfied that it made it impossible for the parent to continue to fulfill the terms of the contract. The parent’s evidence is that the daycare continued to treat them and their child normally between July 5 and 10, 2017. The daycare did not prohibit the parent from dropping off their child or otherwise change the conditions of their child’s attendance. The daycare was prepared to accept the parent’s second child into its program.

27.      I do not accept the parent’s argument that the email shows a lack of judgment that made it impossible for the parent to continue to trust the daycare to care for their child. The email did not have any consequences for the parent or their child. The email did not touch on the core of the contract, which was for the daycare to provide childcare services to the parent. Therefore, the email did not change the nature of the contract.  

28.      Therefore, I reject the parent’s argument that the contract was frustrated.

Did the daycare breach the contract?

29.      The parent submits that the daycare breached the contract when it sent the email. The parent submits that the contract required the daycare to act in good faith in its investigation of the July 5 incident.

 

30.      There is no term in the contract that places an obligation on the parties to act in good faith. However, in general, the law expects that parties will discharge their obligations under a contract in good faith. In particular, there is a duty on all contracting parties to perform contractual terms honestly. This duty requires parties to a contract not to lie or mislead in the performance of their obligations under the contract.

31.      I recognize that the parent disagreed with the daycare’s characterization of the July 5 incident. The parent felt that the daycare should have spoken to them before making up its mind about their behaviour. The daycare relied its staff member’s report to warn the parent about their behaviour. I see nothing dishonest in the daycare’s course of action that would constitute a breach of the duty of honest dealing.

32.      The contract does not place any specific duties on the daycare that are relevant to this dispute. The parent does not allege that the daycare breached any other term of the contract that would permit them to treat the contract as void as of July 11, 2017.

33.      Therefore, I reject the parent’s argument that the daycare breached the contract or that it failed to act honestly.

Depending on the answers to (a) and (b), does either party owe the other any money?

34.      Because I have rejected both of the parent’s arguments, I find that the contract continued to be in force after the daycare sent the email. Therefore, the parent failed to provide one month’s notice prior to terminating the contract.

35.      The parent does not dispute that if the contract continued to be in force, they would owe the daycare $895.00 for August 2017. Therefore, I find that the parent owes the daycare $895.00.

36.      It follows that I dismiss the parent’s counterclaim for a refund of the daycare fees they paid for July 11-31, 2017.

Is either party entitled to reimbursement of their tribunal filing fees?

37.      Under section 49 of the Act, and tribunal rules, the tribunal will generally order an unsuccessful party to reimburse a successful party for tribunal fees and reasonable dispute-related expenses. I see no reason in this case not to follow that general rule. I find the daycare is entitled to reimbursement of $125.00 in tribunal fees. The daycare has not identified any dispute-related expenses. Given that I have dismissed the parent’s counterclaim, I find that they are not entitled to reimbursement of tribunal fees paid.

ORDERS

38.      Within 14 days of the date of this order, I order the parent to pay the daycare a total of $1,026.60, broken down as follows:

a.     $895.00 in damages for breach of contract.

b.     $6.60 in pre-judgment interest under the Court Order Interest Act, and

c.      $125.00 in tribunal fees.

39.      I dismiss the parent’s counterclaim.

40.      The daycare is entitled to post-judgment interest, as applicable.

41.      Under section 48 of the Act, the tribunal will not provide the parties with the Order giving final effect to this decision until the time for making a notice of objection under section 56.1(2) has expired and no notice of objection has been made. The time for filing a notice of objection is 28 days after the party receives notice of the tribunal’s final decision.

42.     Under section 58.1 of the Act, a validated copy of the tribunal’s order can be enforced through the Provincial Court of British Columbia. A tribunal order can only be enforced if it is an approved consent resolution order, or, if no objection has been made and the time for filing a notice of objection has passed. Once filed, a tribunal order has the same force and effect as an order of the Provincial Court of British Columbia.