Date Issued: November 26, 2019

File: SC-2019-005902

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Boyko v. Pavlis, 2019 BCCRT 1323

Between:

BEN BOYKO

Applicant

And:

SAM PAVLIS

Respondent

INTRODUCTION

1.      This dispute is over money owed between business partners.

2.      The parties were both franchisees of Jim’s Mowing. On June 25, 2019 the franchisor directed the respondent, Sam Pavlis, to pay the applicant, Ben Boyko, $2,087.50 for his labour on a landscape project. The applicant says the respondent failed to pay the debt. The applicant claims $2,087.50, plus $974.07 for dispute-related expenses and tribunal fees.

3.      The respondent agrees that the franchisor required him to pay the applicant $2,087.50, but says the franchisor later reversed that decision. The respondent denies that he owes the applicant any money.

4.      The parties are each self-represented.

5.      I dismiss the applicant’s claims for the reason set out below.

JURISDICTION AND PROCEDURE

6.      These are the formal written reasons of the Civil Resolution Tribunal (tribunal). The tribunal has jurisdiction over small claims brought under section 118 of the Civil Resolution Tribunal Act (CRTA). 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.

7.      The tribunal has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. Some of the evidence in this dispute amounts to a “he said, he said” scenario and some is intended to allege bad character. Credibility of interested witnesses, particularly where there is conflict, cannot be determined solely by the test of whose personal demeanour in a courtroom or tribunal proceeding appears to be the most truthful. The assessment of what is the most likely account depends on its harmony with the rest of the evidence. In the circumstances here, I find that I am properly able to assess and weigh the documentary evidence and submissions before me.

8.      Further, bearing in mind the tribunal’s mandate that includes proportionality and a speedy resolution of disputes and that neither party requested an oral hearing, I find that an oral hearing is not necessary. I also note that in Yas v. Pope, 2018 BCSC 282 at paragraphs 32 to 38, the BC Supreme Court recognized the tribunal’s process and found that oral hearings are not necessarily required where credibility is in issue.

9.      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.

10.   Under tribunal rule 9.3(2), in resolving this dispute the tribunal may make one or more of the following orders, where permitted under section 118 of the CRTA:

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

11.   The issues in this dispute are:

a.    Was the franchisor’s decision about the debt reversed, and either way, does the respondent owe the applicant the alleged $2,087.50?

b.    To what extent if any, does the respondent owe the applicant $974.07 in dispute-related expenses and fees?

EVIDENCE AND ANALYSIS

12.   In a civil claim such as this, the applicant bears the burden of proving his claims on a balance of probabilities. This means that I must find the applicant’s position is more likely than not correct. I have only addressed the evidence and arguments to the extent necessary to explain my decision.

13.   In May 2019, the parties entered into a partnership for a landscape project operated through Jim’s Mowing franchise. The respondent was responsible for collecting the deposit and purchasing materials and the applicant provided the manual labour. The landscape contract, the parties’ partnership contract, and the franchise agreement are not in evidence.

14.   The parties’ partnership dissolved at some point in May or June 2019, and on June 19, 2019 the franchisor terminated its franchise agreement with the applicant. The landscape project was also terminated at that time.

15.   The applicant alleges that the landscape project customer complained to the franchisor that the respondent committed fraud. He says the respondent’s $2,087.50 debt arises out of the franchisor’s June 25, 2019 decision after it investigated the customer’s complaint.

16.   Specifically, the applicant alleges that the respondent falsified an invoice on the landscape project and improperly took money from the customer. He says the invoice was four times higher than the supplier’s invoice for the same product. However, I find there are many reasons apart from document falsification that could explain the price difference, such as a different quantity of product, plus some mark-up. I find the evidence does not establish that the invoice was falsified, nor does it show the respondent improperly took money. The records show that the respondent took a total of $12,500 from the customer but only as a deposit and that this money was initialed and accounted for in writing.

17.   As for the nature of the customer’s complaint, the applicant provided no copy of the customer’s actual complaint or her statement to corroborate his allegations. The evidence shows only that the customer made some sort of complaint directly to the franchisor and that the franchisor became involved in resolving it. I infer the franchisor’s involvement related to its “rule” on dealing with “customer complaints”. The rule in evidence says that if the franchisee cannot satisfy the customer, the franchisor will arrange an inspection and the franchisee will do, or pay for, whatever the franchisor decides. The parties do not dispute that they were bound by this rule.

18.   According to the franchisor’s June 25, 2019 email decision, the franchisor investigated the customer’s complaint and directed the respondent to reimburse the customer $2,136.49 from her $12,500 deposit within 5 business days. The franchisor also directed the respondent to pay the applicant $2,087.50 from the remainder of the deposit within 10 business days. The franchisor required the respondent to provide proof of both payments.

19.   Immediately following the franchisor’s decision, the respondent acknowledged he would pay the applicant the debt. However, the respondent did not pay the applicant because he says the franchisor subsequently reversed its decision and no longer required him to pay the applicant directly. The respondent says the franchisor reversed its decision because it discovered the applicant owed the franchisor a debt. The respondent says therefore, instead of paying the applicant directly, the franchisor required him to pay the franchisor so it could apply the money toward the applicant’s franchise debt. The respondent does not explain why the franchisor had not accounted for the applicant’s alleged franchise debt when it made its original decision. The applicant denies owing any franchise debt.

20.   The respondent submitted an email from the franchisor dated July 25, 2019 concerning a negotiated settlement on the landscape project. He also submitted a July 10, 2019 cheque for $7,191.87 he paid to the franchisor. The franchisor’s email says it processed the respondent’s $7,191.87 cheque, refunded the customer $5,000, and applied $2,191.87 to the respondent’s “outstanding balance” with the franchisor. Although the July 25, 2019 email do not explicitly say that the franchisor changed its original decision, the respondent submits that it did, and that this email represents its revised payment decision. I discuss this more below.

21.   The applicant alleges that the respondent’s evidence is “most likely fake” because the respondent has a “history of falsely created evidence”. However, I find his allegation is not supported on the evidence and therefore, is without merit.

22.   The applicant says the franchisor had “full oversight from head office management” over its requirement that the respondent pay him $2,087.50 and so I should find the respondent is required to pay him that amount. It is common knowledge that franchisors often receive a percentage of the franchisee’s profits and maintain some control over the franchisees of its business product. Therefore, I accept that the franchisor had “full oversight” over the project funds as the applicant submits. However, I find this does not assist the applicant’s claim. If the $2,087.50 remained outstanding, I would have expected the franchisor to mention it in its later emails where it dealt with the distribution of funds on the same landscape project and it did not. Considering the franchisor’s requirement for proof of payment and its general oversight of project funds, I infer the omission was because the franchisor no longer required the respondent to pay the applicant the $2,087.50.

23.   While I find there are some gaps in the respondent’s evidence as to why he no longer owes the $2,087.50, it is the applicant who has the burden of proof that he is entitled to the money. I find I have insufficient information about the project accounting, franchisor’s settlement process with the customer, and the contract terms to determine with any certainty what money was owing to any party. I find overall, there is insufficient evidence to establish that the respondent owes the applicant $2,087.50 or anything on the landscape project. Therefore, I dismiss the applicant’s debt claim.

24.   Under section 49 of the CRTA 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. As the unsuccessful party, I find the applicant is not entitled to reimbursement of his claimed tribunal fees or dispute-related expenses.

ORDER

25.  I dismiss the applicant’s claims and this dispute.