Date Issued: November 27, 2020

File: SC-2020-004233

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Sequeira v. Riverside Banquet Hall Ltd., 2020 BCCRT 1346

Between:

MERWYN SEQUEIRA and SHARON SEQUEIRA

Applicants

And:

RIVERSIDE BANQUET HALL LTD. and BOBBY GHIRRA

RespondentS

INTRODUCTION

1.      This dispute is about the return of a deposit on a banquet hall rental and catering contract. The applicants, Merwyn and Sharon Sequeira, say they rented a banquet hall from the respondent, Riverside Banquet Hall Ltd. (Riverside), to host an 80^th birthday party on June 26, 2020. As a result of the COVID-19 pandemic, the Sequeiras say Riverside was unable to host the event as scheduled. The Sequeiras seek the return of the $2,000 deposit they paid to Riverside.

2.      Riverside says the deposit was non-refundable, but that it offered to re-schedule the event for a future date or apply the deposit to a different event. The Sequeiras say they do not want to re-schedule and they demand a refund of the deposit.

3.      The respondent, Bobby Ghirra, is a Riverside employee. Mr. Ghirra says that he is a Riverside employee and he has no involvement in this dispute.

4.      The Sequeiras and Mr. Ghirra are self-represented. Riverside is represented by a business representative.

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). Section 2 of the CRTA states that 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 the dispute’s parties that will likely continue after the CRT process has ended.

6.      Section 39 of the CRTA says 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 in the interests of justice.

7.      Section 42 of the CRTA says 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.

ISSUES

9.      The issues in this dispute are:

a.    Does Mr. Ghirra owe obligations to the Sequeiras under the contract?

b.    Was the parties’ contract frustrated, such that the Sequeiras are entitled to a return of their $2,000 deposit?

EVIDENCE AND ANALYSIS

10.   In a civil proceeding like this one, the applicants, the Sequeiras, must prove their claims on a balance of probabilities. I have read all the parties’ submissions but refer only to the evidence and argument that I find relevant to provide context for my decision.

11.   It is undisputed that the Sequeiras and Riverside entered into a contract for Riverside to provide a banquet hall for an 80^th birthday party on June 26, 2020 for 125 guests. The contract included a catering package and the total cost was $5,055. The contract did not require a deposit but it is undisputed that the Sequeiras paid a $1,000 deposit on November 20, 2019 and another $1,000 deposit on February 28, 2020.

12.   The contract terms say that if the contract is “null and void”, any deposits paid are non-refundable. I find that this term means that the entire paid deposit is non-refundable if the contract is cancelled.

13.   Riverside says the COVID-19 pandemic, and related legal restrictions, prevented Riverside from providing the banquet hall as scheduled. Riverside says that it is willing to host the Sequeiras’ event at a future date when it is legally able to do so. Alternatively, Riverside says it is willing to transfer the Sequeiras’ deposit to a different event. The Sequeiras refuse to re-schedule and demand a refund of the deposit.

Claim against Mr. Ghirra

14.  Based on the contract’s terms, I find that the contract is between the Sequeiras and Riverside only. The contract does not mention Mr. Ghirra and the Sequeiras have not provided any evidence showing that Mr. Ghirra intended to enter into a contract with them in his personal capacity.

15.  I also find that Mr. Ghirra is not personally bound by the contract as Riverside’s employee. As a corporation, Riverside is a separate legal entity that is distinct from its employees. As such, I find that Mr. Ghirra is not bound by the contract between the Sequeiras and Riverside.

16.  For the above reasons, I dismiss the Sequeiras’ claim against Mr. Ghirra.

Claim against Riverside

17.   It is undisputed the parties’ contract did not contain a “force majeure” clause, which is where the parties agree about what will happen in the event of unforeseen circumstances.

18.   A contract is frustrated when an unforeseeable event occurs, for which the parties made no provision, and makes performance of the contract something radically different from that which was originally agreed (see Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58 at paragraph 53). For a contract to be frustrated, it must be truly pointless to continue to perform the terms of the contract, not just inconvenient, undesirable, or because there is increased hardship or expense for one or both parties (see Wilkie v. Jeong, 2017 BCSC 2131). If frustration occurs, the parties are relieved from their future obligations under the contract.

19.   Here, it is undisputed the COVID-19 pandemic and the government imposing restrictions on gatherings was unforeseeable at the time the parties entered into the contract. Additionally, as noted above, there was no provision in the contract dealing with such a situation. The question then is if the COVID-19 pandemic changed the contract so radically from the parties’ original agreement. For the following reasons, I find it did not.

20.   COVID-19’s impact on special event contracts such as this was considered in the CRT decision in Bal v. Infinite Entertainment Sound and Lighting Inc., 2020 BCCRT 865. In Bal, a Vice Chair found that COVID-19 did not frustrate a contract to rent a facility for a wedding. The Vice Chair found that the parties’ fundamental obligations under the contract were not dependent on the originally scheduled wedding date so it was possible for the contract to be performed on a future date. So, the Vice Chair found that the contract was not frustrated by COVID-19’s impact. Although this decision is not binding, I find the Vice Chair’s reasoning persuasive.

21.   I find the Sequeiras’ event is significantly different from the wedding celebration in Bal. The Sequeiras’ event is a celebration of a specific date, which is their guest’s 80^th birthday. Further, I note that the purpose of the Sequeiras’ event was stated on the contract. However, to prove that this contract was frustrated, the Sequeiras have the burden of proving that re-scheduling to a future date is radically different than what the parties agreed to. While I accept that the event’s date is important for a milestone celebration such as the Sequeiras’ guest’s 80^th birthday, I am not satisfied that re-scheduling the event is radically different than the original agreement since the Sequeiras could still celebrate their guest’s 80^th birthday at a later date. I understand that it would be undesirable to hold a birthday celebration long after their guest’s birthday, however a contract is not frustrated merely because the performance has become undesirable. The Sequeiras must prove that it has become truly pointless to continue the contract (see Wilkie v. Jeong). I find the Sequeiras have not proved this.

22.   The Sequeiras submit that it would be unreasonable to re-schedule because of government COVID-19 restrictions, health risks and future uncertainty. The Sequeiras note that many of their guests are elderly and at high risk for COVID-19 complications. However, the Sequeiras did not explain why the birthday party could not be re-scheduled to a date after the COVID-19 related government restrictions and health risks end. I find the Sequeiras have not proved that Riverside’s fundamental contract obligations were dependent on the original event date.

23.   Riverside says it was willing to re-schedule the event or transfer the Sequeiras’ deposit to a different event. I note that in Bal, the facility offered to host a smaller event with less than 50 people to comply with COVID-19 restrictions. In this matter, there is no evidence before me whether Riverside or the Sequeiras were willing to hold the event as scheduled with a reduced number of guests. However, this matter differs from Bal since the Sequeiras’ say that a number of their guests, including the individual whose birthday was being celebrated, are elderly people in a high risk group for COVID-19. In the absence of evidence that the Sequeiras were agreeable to proceeding with the event as scheduled with a reduced number of guests, I find that Riverside was willing and able to fulfil its obligations under the contract at a future date or accommodate the Sequeiras by transferring their deposit to a different event. I find that the Sequeiras chose to cancel the contract by refusing to re-schedule their event.

24.   Given the foregoing, I find the parties’ contract was not frustrated. Therefore, the terms of the contract apply, including the term stating that deposits are non-refundable. As a result, I dismiss the Sequeiras’ claim for a refund.

25.   Under section 49 of the CRTA and CRT rules, the CRT generally will order an unsuccessful party to reimburse a successful party for CRT fees and reasonable dispute-related expenses. Since the Sequeiras were unsuccessful, I dismiss their claim for CRT fees and dispute-related expenses. Riverside and Mr. Ghirra have not claimed reimbursement of CRT fees or dispute-related expenses, so none are ordered.

ORDER

26.   I dismiss the Sequeiras’ claims and this dispute.