Date of Original Decision: October 30, 2020

Date of Amended Decision: November 20, 2020

File: SC-2019-010807

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Tutty v. Basi, 2020 BCCRT 1232

Between:

KATRINA TUTTY

Applicant

And:

KIRAN BASI

Respondent

And:

KATRINA TUTTY

Respondent by counterclaim

AMENDED REASONS FOR DECISION
Tribunal Member:	David Jiang

INTRODUCTION

1.      The respondent, Kiran Basi, hired the applicant, Katrina Tutty, to provide rental property management services for about 4 months. Ms. Tutty filed the initial claim in this dispute and Ms. Basi filed a counterclaim.

2.      Ms. Tutty says Ms. Basi breached the parties’ contract by failing to reimburse Ms. Tutty for housecleaning fees and by hiring a new property manager. She says that by doing so Ms. Basi ended the contract before its term expired. Ms. Tutty seeks $2,985 in lost commission and housecleaning fees.

3.      Ms. Basi disagrees and says Ms. Tutty breached the parties’ contract by overbilling for housecleaning. She also says Ms. Tutty initially advertised her rental property incorrectly. She claims $1,320 in lost income. She also seeks indeterminate amounts for Ms. Tutty’s alleged 1) overbilling of cleaning fees, 2) failure to provides invoices in a timely manner, 3) “sabotage” of a water heater, and 4) lack of communication. Ms. Basi also claims for declaratory relief and relief under the Business Practices and Consumer Protection Act (BPCPA), discussed below.

4.      The parties are self-represented.

JURISDICTION AND PROCEDURE

5.      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.

6.      The CRT has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. Here, I find that I am properly able to assess and weigh the documentary 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 that in Yas v. Pope, 2018 BCSC 282, at paragraphs 32 to 38, the British Columbia Supreme Court recognized the tribunal’s process and found that oral hearings are not necessarily required where credibility is an issue.

7.      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.

8.      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.

Jurisdiction over Declaratory Relief

9.      As part of her requested resolutions, Ms. Basi asked for the CRT to acknowledge that she ended the parties’ contract due to breach of contract, lack of trustworthiness on Ms. Tutty’s part, and housecleaning overbilling by Ms. Tutty. Ms. Basi also wanted confirmation that she cancelled the contract on September 19, 2019, and that Ms. Tutty breached their contract earlier on July 9, 2019.

10.   I find these requests for acknowledgement or confirmation by the CRT are claims are for declaratory relief. Declaratory relief is outside the CRT’s small claims jurisdiction, except where section 118 of the CRTA permits it. There are no CRTA provisions that would allow me to grant the declaratory relief Ms. Basi seeks. I will instead consider whether the evidence supports making findings that support Ms. Basi’s other claimed remedies.

The CRT’s Small Claims Monetary Limit

11.   I find from the parties’ submissions that the remaining claims in this dispute are for damages. The CRT’s jurisdiction over such claims is limited to $5,000 under CRTA section 118(1) and the Tribunal Small Claims Regulation.

12.   As noted above, Ms. Basi’s claims include payment for amounts to be determined. I conclude that by proceeding through the CRT, Ms. Basi has abandoned any claim she might have above $5,000, to fit within the CRT’s small claims monetary limit. In any event, nothing turns on this, as I have not ordered any amount payable to Ms. Basi.

ISSUES

13.   The issues in this dispute are:

a.    Was Ms. Basi entitled to cancel the parties’ contract under the BPCPA?

b.    Did Ms. Basi wrongfully terminate the parties’ agreement, and if so, what are the appropriate remedies?

c.    Did Ms. Tutty breach the parties’ agreement, and if so, what are the appropriate remedies?

BACKGROUND, EVIDENCE AND ANALYSIS

14.   In a civil claim such as this, each applicant must prove her case on a balance of probabilities. While I have read all of the parties’ evidence and submissions, I only refer to what is necessary to explain and give context to my decision.

15.   The parties signed a written contract. I note that the contract indicates it is between Seabird Suite Management (Seabird) and Ms. Basi. I find that Ms. Tutty does business as Seabird, as a sole proprietorship, and they are the same legal entity. There is nothing to indicate Seabird is a separate legal entity, such as a corporation.

16.   Ms. Tutty agreed to act as agent in leasing Ms. Basi’s property out as a short-term rental accommodation from June 26 to November 9, 2019. Under Articles IV(2) and V(1) of the parties’ contract, Ms. Basi agreed to pay Ms. Tutty commission equal to 20% of the rent collected each month, plus housecleaning fees paid by Ms. Tutty to a subcontractor.

17.   On September 9, 2019, Ms. Tutty provided an invoice for work done in August 2019. Ms. Basi paid the invoice in part and emailed Ms. Tutty to ask for copies of the housecleaning invoices. Ms. Basi withheld payment of the housecleaning fees while waiting for this information.

18.   Ms. Tutty shared these records with Ms. Basi through an emailed link on September 17, 2019. Ms. Basi submits she learned Ms. Tutty was overcharging for cleaning. Ms. Basi then hired a new property manager. Ms. Tutty learned of this on September 19, 2019 when she found her access to certain booking websites revoked.

19.   The parties disagree about who breached the contract first and who was entitled to terminate the contract. The parties also say the other breached various contractual terms.

Issue #1. Was Ms. Basi entitled to cancel the parties’ contract under the BPCPA?

20.   Ms. Basi says that the parties’ written agreement is a “future performance contract” under the BPCPA. Sections 19 and 23(2) require such contracts to contain certain information. Ms. Basi says the written agreement lacked this information. As such, Ms. Basi says she was entitled to cancel the contract under BPCPA section 23(5).

21.   BPCPA section 23(5) provides a consumer a limited right to cancel a future performance contract. BPCPA section 17 says a future performance contract must involve a contract between a supplier and a consumer for the supply of goods or services. BPCPA section 1 defines a consumer to mean an individual who participates in a consumer transaction and is not a guarantor. Section 1 defines a consumer transaction as:

a.    a supply of goods or services or real property by a supplier to a consumer for purposes that are primarily personal, family or household, or

b.    a solicitation, offer, advertisement or promotion by a supplier with respect to a transaction referred to in paragraph (a).

22.   I find the parties were not involved in a consumer transaction. Ms. Tutty provided her property management services primarily for Ms. Basi’s business. As noted in the parties’ emails, Ms. Basi relied on the rental property for income. As such, Ms. Basi is not a consumer under the BPCPA. It follows that the parties’ agreement is not a future performance contract. In these circumstances Ms. Basi is not entitled to cancel the parties’ contract under BPCPA section 23(5).

Issue #2. Did Ms. Basi wrongfully terminate the parties’ agreement, and if so, what are the appropriate remedies?

23.   Next, I will discuss the law of termination by repudiation. Unless the parties’ agreement is terminated, they must fulfil their express and implied obligations under it. Termination by repudiation occurs when a party shows an intention to not be bound by the agreement and the other party accepts the repudiation. See Kuo v. Kuo, 2017 BCCA 245 at paragraphs 39 to 40.

24.   A fundamental breach of a primary obligation may also constitute a repudiation. A fundamental breach substantially deprives the other party of the intended benefits of the agreement. In such circumstances, the innocent party can choose to treat the contract as being at an end and sue for damages. In contrast, a less serious breach (sometimes called a breach of warranty) allows an innocent party to sue for damages relating to the breach, but the parties are still otherwise bound by the contract. See 1061403 B.C. Ltd. v Canada Willingdon Holdings Ltd., 2018 BCSC 1067 at paragraphs 65 to 71.

25.   I will first consider Ms. Tutty’s claims before consider Ms. Basi’s counterclaims below. Ms. Tutty says Ms. Basi fundamentally breached the contract first by 1) hiring another property manager on the morning of September 19, 2019, and 2) failing to pay the September 9, 2019 invoice on time.

26.   I agree that Ms. Basi fundamentally breached the parties’ contract by hiring a new property manager. Article I of the contract says that Ms. Basi agreed to employ Seabird as the “exclusive agency for the rental and management of the property” for the term of the contract. Emails show that Ms. Basi revoked Ms. Tutty’s access to book rentals on her behalf on a website shortly before 10:00 a.m. on September 19, 2019. Ms. Basi subsequently confirmed that she had hired a new property manager in her September 19 and 20, 2019 emails to Ms. Tutty.

27.   I find that Ms. Tutty was also entitled to treat the contract as being at an end and sue for damages. Ms. Tutty did so when she emailed Ms. Basi on September 19, 2019, shortly before noon. She wrote that she was ceasing work as the property manager “effective immediately”. Given this, I need not address whether Ms. Basi fundamentally breached the parties’ contract by withholding payment of the housecleaning fees payable under the September 9, 2019 invoice.

The Appropriate Remedy

28.   Ms. Tutty seeks $2,985 in damages for Ms. Basi ending the contract early. This amount consists of $1,365 for lost future commission and $1,620 for housecleaning fees (including some not yet incurred).

29.   I find that Ms. Tutty is entitled to commission for any bookings she arranged while working as property manager. Ms. Tutty provided 3 invoices (all dated September 30, 2019) showing that she is still owed commission for 12 bookings for stays occurring from the beginning of September to the end of November 2019. The commission for the bookings totals $1,365. The invoices match the information in Ms. Basi’s own booking calendar. Given this evidence, I find that Ms. Tutty is entitled to payment of $1,365.

30.   Ms. Tutty claims $1,620 as reimbursement for 18 cleaning sessions at $90 each, occurring from August to November 2019. Article II(2) says that Ms. Tutty agreed to pay the monthly or bi-weekly invoices for subcontracted housekeeping, then “cite and recover these fees” through Seabird’s month-end invoices.

31.   Based on this term, I find that Ms. Tutty is only entitled to reimbursement of housecleaning fees she actually paid for. Ms. Tutty only paid for 8 sessions of the 18 claimed sessions. Ms. Tutty also admits the cleaner’s invoices were each only $75 - $85 before tax, though she charged Ms. Basi $90 per session.

32.   The actual invoices are not in evidence. On a judgment basis, I find that Ms. Tutty overcharged for cleaning by an average of $10 per session. I find that Ms. Tutty is entitled to reimbursement of 8 sessions at $80 each, or $640 in total.

33.   Ms. Tutty says the overcharging was justified as she used the excess to pay for certain “need to have supplies” under Article II of the contract. I disagree. I find that under the contract Ms. Tutty was obligated to pay for restocking the “need to have supplies” at no additional charge. Article II(1)(e) says Ms. Tutty agreed to restock “need to have” supplies. Page 11 says such supplies “will be included in commission fees”. Article V(7) says Ms. Tutty will “offer complimentary restocking of the NEED TO HAVE AMENITIES”. From context I find it clear the “need to have amenities” were the “need to have supplies”.

34.   I note that Ms. Tutty also objects to Ms. Basi’s continued use of her work. However, the contract says that Ms. Tutty would provide listing photography, an ad description, and consultation about staging and amenity planning on a “complimentary” basis. I do not find she is entitled to any additional compensation for this work.

35.   In summary, Ms. Tutty is entitled to payment of $2,005 ($1,365+$640). I will now consider whether this amount should be reduced by Ms. Basi’s counterclaim.

Issue #3. Did Ms. Tutty breach the parties’ agreement, and if so, what are the appropriate remedies?

The Cleaning Fees and Late Invoices

36.   In substance, Ms. Basi says Ms. Tutty fundamentally breached the contract first by providing late invoices and overcharging her for housecleaning fees from late June 2019 onwards.

37.   As stated above, I agree that Ms. Tutty overcharged for housecleaning fees by $10 per session. In June and July 2019 Ms. Tutty charged for a total of 6 housecleaning sessions at $90 each. Ms. Basi did not pay for any session from August 2019 onwards. I find that Ms. Basi reimbursed Ms. Tutty by an excess of $60 for these 6 sessions, so she is entitled to payment of $60 in damages.

38.   However, I do not find this to be a fundamental breach of the contract. Ms. Tutty overcharged her client by a small amount, relative to the commission charged and the cleaning fees collected. For example, Ms. Tutty invoiced Ms. Basi $1,988.85 for work done in August 2019. Ms. Tutty overcharged her for cleaning by $60 for that month. I find that Ms. Tutty only committed a breach of warranty.

39.   I also agree that Ms. Tutty breached article II(3) of the contract. It says Ms. Tutty agreed to forward invoices and earning statements to Ms. Basi “within the first week of every month”. Instead, Ms. Tutty provided the June, July, and August 2019 invoices about a week late. However, there is no evidence that Ms. Basi suffered any compensable loss. Payments from the renters went directly to Ms. Basi. Ms. Basi did not need to pay Ms. Tutty’s fees until invoiced. I do not find this to be a fundamental breach, even when combined with the overcharging of housecleaning fees. I dismiss this aspect of Ms. Basi’s counterclaim.

The Remaining Claims

40.   Ms. Tutty also alleged several other breaches of contract that I find are unproven.

41.   Ms. Basi says that Ms. Tutty should have provided better communication while she was away. I find there is limited merit to this claim. Ms. Basi did not complain about communication until the parties’ relationship broke down over the housecleaning invoices. Ms. Tutty continued to communicate by email thereafter. I dismiss this aspect of the counterclaim.

42.   Under Article I, the parties agreed that the minimum booking length would be 3 nights. Ms. Basi says that Ms. Tutti breached this term by renting out the property for less than 3 nights. Ms. Basi’s own booking calendars indicate that Ms. Tutty booked renters in compliance with the 3-night minimum. For clarity, Article I says Ms. Tutty would merely “start” with “3 days on launch”, and I find Ms. Tutty complied with this term.^[i] I find this allegation is baseless and dismiss this aspect of the counterclaim.

43.   Ms. Basi says that Ms. Tutty also “sabotaged” her hot water tank by turning it off on September 19, 2019. I find it more likely that the hot water tank simply malfunctioned. In a June 20, 2019 email, Ms. Tutty had advised Ms. Basi that the hot water tank regularly switched off on its own and required checking and resetting before greeting guests. I dismiss the counterclaim for $440 in connection with the hot water tank.

44.   Ms. Basi also says Ms. Tutty failed to subcontract and supervise housekeeping under article II(1)(b) of the contract. Her main argument is that Ms. Tutty did not prepare the property for new renters on the night of September 19, 2019. I find that Ms. Tutty had no obligation to ensure the property was clean enough for guests to check in that night. Ms. Tutty accepted Ms. Basi’s repudiation of the contract shortly before noon on September 19, 2019. Ms. Basi knew about this as she replied to this email shortly thereafter. There is no indication that renters were dissatisfied with the property’s cleanliness at other times. I dismiss this aspect of the counterclaim.

45.   Finally, Ms. Basi says Ms. Tutty took misleading photos that led to a poor initial online review by the first renter, RP. She says this in turn led to the property’s vacancy until July 7, 2020.

46.   RP stayed at the property from June 27 to 30, 2019. He wrote that he found the initial photos misleading because they showed 2 bedrooms, but did not show that they were on different floors and not separated by any walls. However, RP also wrote that “the error is on me for not closely reading and thinking about the description and then asking the host for clarification”. I do not find it clear from RP’s comments that Ms. Tutty breached any contractual obligation. RP appeared to blame himself to some degree for misunderstanding the property’s layout. I also do not attach great weight to a single review as evidence, since reviews are largely subjective by nature. I dismiss Ms. Basi’s claim for $1,320 as compensation for the vacancy of the property from July 1 to 6, 2019.

INTEREST, CRT FEES AND EXPENSES

47.   As noted above, I find Ms. Tutty is entitled to payment of $2,005, less $60 for overcharged cleaning fees. The Court Order Interest Act applies to the CRT. Ms. Tutty is entitled to pre-judgement interest on the damages award of $1,945 from the date of the September 30, 2019 invoices to the date of this decision. This equals $31.49.

48.   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.

49.   I see no reason in this case not to follow that general rule. Ms. Tutty was largely successful in proving her claims and defending Ms. Basi’s counterclaims. I find Ms. Tutty is entitled to reimbursement of $125 in CRT fees. Ms. Tutty also claims $16 for the cost of sending registered mailed to Ms. Basi. I find Ms. Tutty is entitled to reimbursement of this amount as a reasonable dispute-related expense.

ORDERS

50.   Within 14 days of the date of this order, I order Ms. Basi to pay Ms. Tutty a total of $2,117.49, broken down as follows:

a.    $1,945.00 in damages,

b.    $31.49 in pre-judgment interest under the Court Order Interest Act, and

c.    $141.00, for $125.00 in CRT fees and $16.00 for dispute-related expenses.

51.   Ms. Tutty is entitled to post-judgment interest, as applicable.

52.   I dismiss the parties’ remaining claims.

53.   Under section 48 of the CRTA, the CRT 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 CRT’s final decision. The Province of British Columbia has enacted a provision under the COVID-19 Related Measures Act which says that statutory decision makers, like the CRT, may waive, extend or suspend mandatory time periods. This provision is expected to be in effect until 90 days after the state of emergency declared on March 18, 2020 ends, but the Province may shorten or extend the 90-day timeline at any time. A party should contact the CRT as soon as possible if they want to ask the CRT to consider waiving, suspending or extending the mandatory time to file a Notice of Objection to a small claims dispute.

 

54.   Under section 58.1 of the CRTA, a validated copy of the CRT’s order can be enforced through the Provincial Court of British Columbia. A CRT 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 CRT order has the same force and effect as an order of the Provincial Court of British Columbia.