Date Issued: October 29, 2020

File: SC-2020-004218

Type: Small Claims

Civil Resolution Tribunal

Indexed as: L.A.C. Public Accountants Inc. v. Modena Tiling Inc., 2020 BCCRT 1219

Between:

L.A.C. PUBLIC ACCOUNTANTS INC.

Applicant

And:

MODENA TILING INC.

Respondent

And:

L.A.C. PUBLIC ACCOUNTANTS INC.

Respondent by counterclaim

INTRODUCTION

1.      This dispute is about payment for accounting services.

2.      The applicant L.A.C. Public Accountants Inc. (LAC) says the respondent Modena Tiling Inc. (Modena) failed to pay for accounting services provided from December 2019 to March 2020. LAC claims $3,887.51 for the unpaid services plus 36% contractual interest.

3.      Modena says LAC’s work was substandard and that LAC performed work after their services were terminated. It asks me to dismiss LAC’s claims.

4.      Modena also counterclaims, saying LAC’s accounting service and work incorporating a holding company was negligent and unsatisfactory. Modena says it had to pay a law firm and an accounting firm over $5,000 to fix LAC’s negligent work. Modena seeks an order that LAC pay $5,000, for fees Modena incurred to fix LAC’s work.

5.      LAC is represented by principal Leonard Achter. Modena is represented by principal Dejan Nesic.

JURISDICTION AND PROCEDURE

6.      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.

7.      The CRT has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. 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.

8.      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.

9.      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 CRT considers appropriate.

ISSUES

10.   The issues in this dispute are:

a.    Must Modena pay LAC the claimed $3,887.51 for accounting services rendered plus 36% contractual interest?

b.    In the counterclaim, was LAC’s work defective, such that LAC must reimburse Modena $5,000 for other firms’ corrections?

EVIDENCE AND ANALYSIS

11.   In this civil claim, LAC as the applicant bears the burden of proof on a balance of probabilities. Modena bears this same burden in its counterclaim. I have reviewed the evidence and submissions but refer to them only as I find necessary to explain my decision.

12.   Apart from brief written submissions, LAC provided no supporting evidence, despite being contacted by CRT staff with opportunities to do so.

13.   On February 4, 2020, Mr. Achter of LAC wrote to Mr. Nesic at Modena asking that Modena sign a retainer agreement including an agreement to pay retainers up front. Mr. Nesic refused, writing that LAC seemed too busy to attend to Modena’s work. Mr. Nesic wrote that he would call LA the following day to discuss the transfer of Modena’s work to another firm.

14.   On February 6, 2020, Mr. Achter emailed Mr. Nesic to say that LAC had set up a new registered company for Modena.

15.   On March 3, 2020, Mr. Nesic emailed Mr. Achter to say that Modena was concerned about LAC’s service and lack of communication.

16.   On March 9, 2020, Mr. Nesic wrote to Mr. Achter that he had been trying to contact them for the past few weeks, over email and by phone, with no response. Mr. Nesic wrote that the tax filing deadline was imminent, but that LAC had not provided Modena with any information or update. As a result, Mr. Nesic advised that Modena had hired another accountant to complete its taxes for 2019, effective March 9, 2020.

LAC’s Claim for Payment for Accounting Services Rendered

17.   To prove its claim for payment for accounting services rendered to Modena, LAC must prove that it reasonably provided those services and that Modena agreed to pay the claimed amount for them. LAC did not provide an invoice itemizing the work done, its cost, or any other evidence.  Modena provided evidence that LAC created a holding company for Modena. Modena says it paid $1,000 to LAC for this service but did not provide an invoice or proof of payment.

18.   Due to the absence of evidence from LAC, I am unable to determine if the holding company’s creation even forms part of LAC’s claim. I find LAC has not proven its claim, on a balance of probabilities. For these reasons, I dismiss LAC’s claim for $3,887.51 in unpaid accounting services.

19.   I also dismiss LAC’s claim for 36% contractual interest because it has not proven the unpaid services, nor that the parties agreed to any contractual interest applying to overdue payments. In submissions, LAC concedes there was no agreement about contractual interest.

Modena’s Counterclaim for $5,000

20.   In the counterclaim Modena says it paid $4,000 to an accounting firm, NSN, to re-reconcile financial statements from 2017 and 2018 and correct errors in Modena's tax filing documents.  

21.   However, Modena did not provide any evidence from NSN or any other source, such as an invoice, a letter, or documents NSN prepared, to prove that LAC’s work was defective, the services were necessary to fix LAC’s defective work, or that Modena paid NSN $4,000.

22.   Modena also says it paid $1,615.20 to a law firm, BTM, to fix negligent work by LAC. Again, Modena filed no independent evidence, to prove that BTM worked for it, that the work was necessary owing to negligence by LAC, or that Modena paid BTM $1,615.20.

23.   For these reasons, I dismiss Modena’s counterclaim for $5,000.

CRT Fees

24.   Under section 49 of the CRTA and CRT rules, the CRT will generally order an unsuccessful party to reimburse a successful party for CRT fees and reasonable dispute-related expenses. Because neither party was successful here, I find that each party should bear its own CRT fees. The parties did not claim dispute-related expenses.

ORDER

25.   I dismiss the claims and counterclaims, and this dispute.