Date Issued: June 8, 2020

File: SC-2020-000517

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Twirling Umbrellas Ltd. v. Bradley, 2020 BCCRT 633

Between:

TWIRLING UMBRELLAS LTD.

Applicant

And:

SCOTT BRADLEY

Respondent

INTRODUCTION

1.      This dispute is about a website design agreement. The applicant, Twirling Umbrellas Ltd., says that the respondent, Scott Bradley, did not pay the entire amount for the original website design agreed to on March 22, 2019 and requests the $360 it says is outstanding. The applicant also says that the respondent later requested additional website work on July 18, 2019 and then did not pay the applicant’s $3,150 bill. The applicant asks for a total of $3,510 for amounts on outstanding invoices. The applicant is represented by a business contact.

2.      The respondent runs a comic book shop. He says that he received an invoice for $4,300, which he paid in two installments. He says he never received an invoice for additional work. He says that the additional work was necessary because the website was not functioning properly, and he was unable to order items correctly from his supplier. Therefore, he says fixing this issue was part of the original agreement. The respondent says he should not have to pay any more money under the agreement. The respondent represents himself.

JURISDICTION AND PROCEDURE

3.      These are the formal written reasons of the Civil Resolution Tribunal (CRT). The CRT has jurisdiction over small claims brought under section 118 of the Civil Resolution Tribunal Act (CRTA). The CRT’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the CRT 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.

4.      The CRT has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. In some respects, this dispute amounts to a “it said, he said” scenario with both sides calling into question the credibility of the other. In the circumstances of this dispute, I find that I am properly able to assess and weigh the evidence and submissions before me. Further, bearing in mind the CRT’s mandate that includes proportionality and a speedy resolution of disputes, I find that an oral hearing is not necessary. I also note the decision Yas v. Pope, 2018 BCSC 282 at paragraphs 32 to 38, in which the court recognized that oral hearings are not necessarily required where credibility is in issue. I therefore decided to hear this dispute through written submissions.

5.      The CRT 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 CRT may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

6.      Where permitted by section 118 of the CRTA, in resolving this dispute the CRT may order a party to do or stop doing something, pay money or make an order that includes any terms or conditions the tribunal considers appropriate.

ISSUE

7.      The issue in this dispute is whether the respondent did not fully pay the first invoices and then contracted for additional services and did not pay for them.

EVIDENCE AND ANALYSIS

8.      In a civil dispute such as this, the applicant must prove its claim on a balance of probabilities.

9.      I will not refer to all of the evidence or deal with each point raised in the parties’ submissions. I will refer only to the evidence and submissions that are relevant to my determination, or to the extent necessary to give context to these reasons.

The invoice with $360 outstanding

10.   The respondent signed a March 22, 2019 quote. The quote is broken down into two parts. One was for designing and developing the respondent’s e-commerce website to display and sell comics and other products. This design was quoted as costing $7,000 (GST not included). The second part was to develop a comic book importing tool that would allow the respondent to upload an inventory spreadsheet, which would cost $1,600 (GST not included). The quote also stated that the scope of the work was based on the applicant’s current understanding of the respondent’s requirements. It also noted that any revisions requested outside the scope of the work stated in the quote, as well as any extended functionality, was not included. The respondent signed the quote and does not dispute that it set out the terms of the agreement.

11.   The applicant submits that its developer completed the project on June 18, 2019 and sent it to the respondent for review. The applicant then sent the respondent an invoice on July 4, 2019 which it says “marked the completion of the website.”

12.   The applicant’s July 4, 2019 invoice (#2557) shows:

a.    $1,600 for web design,

b.    $800 for copywriting and copy editing,

c.    $4,000 for web development to setup e-commerce,

d.    $1,600 for web development to design and develop an import tool to retrieve product images from a supplier comic company, and

e.    $600 for revisions.

13.   This totals $8,600 and is line with the signed quote provided. The invoice also states that $430 GST is owing making the total amount $9,030. The invoice noted that the respondent previously paid a $4,300 deposit. It also stated that $4,730 had remained owing but the respondent only paid $4,370. The applicant did not provide specific information of when these payments were made. The invoice stated that $360 remained outstanding.

14.   In its submissions the applicant questions whether the respondent accidentally switched the numbers of $4,730 and paid $4,370 or whether he did not take into account the GST. In any event, the applicant says that the respondent owes $360 from this invoice. The applicant did not provide the earlier invoices. I note that not paying the GST would amount to a payment of $4,300 and not the $4,370 paid. Therefore, I find it unlikely that the respondent paid the wrong amount because he was refusing to pay the GST.

15.   In his Dispute Response, the respondent says that he received invoice #2386 saying $4,300 was outstanding and he paid that in two installments. He says that he has a printout from the applicant showing that he had a zero balance outstanding. However, the respondent did not provide the invoice or the printout. The respondent also did not provide any submissions or evidence after the Dispute Response, despite the tribunal giving him multiple opportunities to do so.

16.   By paying this invoice, I find that the respondent confirmed that he had a contract with the applicant that involved the launching of his website and covered the work done to that point.

The invoice for $3,150

17.   The applicant says that after the invoice was paid (except for the $360 outstanding) the respondent contacted it in the third week of July and said that the importing tool needed to be changed so that it could pull comics that were pre-orders as opposed to the next months’ comics the website was currently retrieving. The applicant says that it told the respondent that this was not part of the original quote and this was the first time the respondent indicated he wanted the website to be able to do this. The applicant did not provide any evidence to support that it told the respondent this.

18.   The applicant says that it called the respondent and explained that it would take additional time to rebuild the website tool to pull the pre-order comics. It says it also told the respondent that this change would require reworking of the e-commerce part of the website as well. The applicant says it informed the respondent that it did not have an estimate at that point as to how much additional time it would take but that they agreed to talk about it later when the applicant returned from holidays. The applicant says it then told the project manager and developer to modify the import tool.

19.   The applicant says that the revised website launched on approximately August 20, 2019 and the respondent left it a very favourable review on Google, which the applicant provided in evidence. The applicant then issued another invoice on August 28, 2019 for 30 hours of work for revisions, change requests, and communications that were outside the original scope of the quote. This amounted to $3,000 plus $150 in GST.

20.   The applicant says that the respondent moved the website away from its hosting service without notice on September 19, 2019. It says it emailed him, but the respondent did not reply. The applicant says that the respondent contacted it on September 27, 2019 and said that he moved the website because he was getting errors and also asked what the invoices were for. The applicant says the respondent never told it about the errors and that it explained to the respondent that the invoice for $360 was because the full amount was not paid on the previous invoices and that the last invoice was for the requested revisions outside of the scope of the project. The applicant says the respondent never communicated with it after that. The applicant says that the respondent never indicated that he disagreed with the amount charged.

21.   In his Dispute Response, the respondent denies that he received the last invoice. He says that the initial website was not functioning correctly and was not providing the correct pre-order items. He says that he was not provided with a quote or otherwise informed that fixing this problem would result in additional cost. The respondent says that he thought that since these changes were necessary for the intended functioning of the site, he thought it fell within the scope of the original proposal. However, the respondent did not provide any submissions or evidence to expand on his position.

What does the respondent owe?

22.   The courts have said that an adverse inference may be drawn against a party where, without sufficient explanation, they fail to produce evidence or call a witness expected to provide supporting evidence. An adverse inference should only be drawn after a “prima facie” case (being a case that appears on its face to have merit) has been established by the party bearing the burden of proof (see Port Coquitlam Building Supplies Ltd. v. 494743 B.C. Ltd., 2018 BCSC 2146).

23.   As noted, the respondent does not dispute that the applicant did the work for him. I find a prima facie case has been established. The respondent did not provide evidence to support his position that the first invoices were paid in full. In the circumstances of this case, I draw an adverse inference against the respondent. I find that it is more likely than not that the respondent did not pay the first invoices in full because he could have provided the printout he says shows that the applicant said he had a zero balance. Therefore, I find that the respondent owes the $360 outstanding on this invoice.

24.   However, although I have drawn an adverse inference against the respondent since he did not provide further submissions or evidence, I still find that the applicant has not proved that the work done after July 2019 was additional to the work described in the original quote. The original quote said that the custom comic import functionality was to design and develop a tool to import and create products for the respondent’s business and to retrieve product images from the larger supplier. It did not specify whether this just involved currently available items or pre-orders.

25.   The applicant has not provided an updated quote which shows that adding pre-order items to the import tool would be outside the original scope of the contract. The applicant says that it discussed it on the phone with the respondent but there is no evidence of this. There are no email follow-ups, or any formalized quote signed by the respondent, which is in contrast to the multi-paged signed original quote. In short, I find there is insufficient evidence that the respondent agreed that making the website able to access pre-orders was outside the original quote’s scope or that the respondent was informed how much it would cost to change this functionality.

26.   Therefore, based on the evidence, I find that the respondent did not pay the first invoices’ outstanding amount of $360 which was due as of the August 3, 2019 date indicated on the invoice. The applicant says that it is entitled to contractual interest at a 26.820% rate. The quote says that accounts 30 days overdue are subject to an interest rate of 2% per month. The quote does not provide an annual interest rate.

27.   Section 4 of the federal Interest Act says that when an interest rate in a contract is expressed as a rate or percentage for any period less than 1 year, and if the contract does not contain an express statement of the equivalent yearly interest rate or percentage, the maximum allowable interest rate is 5% per year. Therefore, I find the applicant is only allowed to charge 5% per year on the $360 outstanding from August 3, 2019 until the date of this decision, which is $15.34.

28.   I dismiss the applicant’s claim for the second invoice’s total of $3,150 as the applicant has not proved that the respondent agreed to pay this amount or that it was an additional cost beyond what was agreed to in the original quote.

29.   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 applicant was partially successful, I find it is entitled to reimbursement of half of its tribunal fees which is $87.50.

 ORDERS

30.   Within 30 days of the date of this decision, I order the respondent to pay the applicant a total of $462.84, broken down as follows:

a.    $360 in debt for the outstanding amount on invoice #2557,

b.    $15.34 in contractual interest, and

c.    $87.50 in tribunal fees.

31.   The applicant is entitled to post-judgement interest, as applicable.

32.   I dismiss the applicant’s other claims.

33.    Under section 48 of the CRTA, 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. The Minister of Public Safety and Solicitor General has issued a Ministerial Order under the Emergency Program Act, which says that tribunals may waive, extend or suspend a mandatory time period. The tribunal can only waive, suspend or extend mandatory time periods during the declaration of a state of emergency. After the state of emergency ends, the tribunal will not have this ability. A party should contact the tribunal as soon as possible if they want to ask the tribunal to consider waiving, suspending or extending the mandatory time to file a Notice of Objection to a small claims dispute.

34.   Under section 58.1 of the CRTA, 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.