Date Issued: December 10, 2020

File: SC-2020-004252

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Haug v. Parts Avatar Investments Inc., 2020 BCCRT 1398

Between:

THOMAS HAUG and OHLA ANNA SIRANT

Applicants

And:

PARTS AVATAR INVESTMENTS INC.

Respondent

INTRODUCTION

1.      This dispute is about the delivery of auto parts. The applicant, Thomas Haug, purchased an alternator from the respondent, Parts Avatar Investments Inc. (Parts Avatar). Mr. Haug wanted Parts Avatar to deliver the alternator to the other applicant, Ohla Anna Sirant.

2.      The applicants say Parts Avatar wrongfully cancelled Mr. Haug’s order. They say this forced Ohla Sirant to purchase the alternator, which nearly caused it to be delivered late. The applicants say Parts Avatar should reimburse them $124.40 for overnight delivery fees. They also claim $160.09 as compensation for mental distress. The applicants justify this latter figure by stating it is equal to the alternator’s cost.

3.      Parts Avatar denies it did anything wrong. It says that it reasonably cancelled Mr. Haug’s order because of suspected credit card fraud.

4.      Mr. Haug represents the applicants. A principal or employee represents Parts Avatar.

5.      For the reasons that follow, I find that Parts Avatar breached its contract with Mr. Haug when it cancelled his order. However, I find that the applicants’ claimed damages are both too remote and not within the reasonable contemplation of the parties. I dismiss the applicants’ claims.

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). 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.

7.      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.

8.      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.

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.

ISSUE

10.   The issue in this dispute is whether Parts Avatar breached its contract with Mr. Haug, and if so, whether the applicants are entitled to damages.

EVIDENCE AND ANALYSIS

11.   In a civil proceeding like this one, the applicants must prove their claims on a balance of probabilities. I have read all the evidence and submissions but only refer to them as necessary to explain my decision. Parts Avatar provided submissions but not evidence, though the CRT gave it the opportunity to do so.

12.   The facts are largely undisputed and are set out in the applicants’ emails to Parts Avatar. Mr. Haug normally resides in BC but in February 2020 he was in Costa Rica. Mr. Haug needed to purchase an alternator for his 1994 Isuzu Trooper.

13.   Mr. Haug decided to buy the alternator from Parts Avatar, and have it delivered to a friend, Ohla Sirant. Ohla Sirant had previously planned to fly to Costa Rica on the morning of February 26, 2020. Ohla Sirant agreed to bring the alternator.

14.   On February 17, 2020, Mr. Haug ordered the alternator through Parts Avatar’s website. He entered Ohla Sirant’s address for delivery. Parts Avatar charged Mr. Haug’s credit card that same day.

15.   Parts Avatar submits that it was concerned about fraud because Mr. Haug’s billing and delivery address did not match. In the event of fraud, Parts Avatar did not wish to cover the cost of a possible chargeback.

16.   At some point between February 17 and 19, 2020, Parts Avatar phoned Mr. Haug and left a voicemail message, seeking further information. On February 19, 2020, Mr. Haug emailed Parts Avatar. He said that he needed the alternator delivered by February 25, 2020 to Ohla Sirant so that it could be brought on a flight. He added that if he did not receive a call by end of day, he would call another parts dealer.

17.   Parts Avatar replied by email shortly after on the same day of February 19, 2020. It advised that it had cancelled and refunded the purchase price in full. It said that Mr. Haug’s credit card company put the order on hold due to suspected fraud. I find this was untrue, as Parts Avatar acknowledges in this dispute that it decided to cancel the purchase on its own. Parts Avatar says that Mr. Haug’s explanation did not dispel its concerns about fraud.

18.   Mr. Haug’s credit card statement shows the refund as a February 20, 2020 line item.

19.   The applicants exchanged several emails with Parts Avatar from February 21 to 24, 2020. I find from the emails the following. Parts Avatar and Mr. Haug spoke on the phone on February 21, 2020. Parts Avatar advised that it could deliver the alternator by February 25, 2020, but only if Parts Avatar received an order from Ohla Sirant before 4:00 p.m. local time that day.

20.   On February 21, 2020, Ohla Sirant placed an order for the alternator so that the billing and delivery address would match. However, the order was made late, after 4:00 p.m. Ohla Sirant emailed Mr. Haug and said that, according to the purchase receipt, the alternator would be delivered on February 26, 2020.

21.   Mr. Haug exchanged further emails with Parts Avatar. Parts Avatar emailed that it did not offer any faster delivery options. Mr. Haug submits Parts Avatar should have shipped it overnight. However, from my review of the emails and Ohla Sirant’s order receipt, I find Parts Avatar was not obligated to do this.

22.   Mr. Haug arranged and paid for a courier to pick up the alternator from Parts Avatar on February 24, 2020 and deliver it to Ohla Sirant the next day. The courier delivered the alternator to Ohla Sirant as planned. This enabled Ohla Sirant to bring it to Costa Rica on February 26, 2020.

23.   I find that Parts Avatar did not breach its February 21, 2020 purchase contract with Ohla Sirant. The applicants did not identify a breached term and the emails show Parts Avatar fulfilled the order. The applicants’ claim is mainly about the manner in which Parts Avatar cancelled Mr. Haug’s order, and whether this caused any compensable loss to the applicants. As such, I will only consider whether Parts Avatar breached its contract with Mr. Haug, below.

Did Parts Avatar breach its contract with Mr. Haug, and if so, what is the appropriate remedy?

24.   The parties’ obligations are governed by the law of contracts. The basic principles of the formation and interpretation of contracts are laid out in Shaw Production Way Holdings Inc. v. Sunvault Energy, Inc., 2018 BCSC 926 at paragraphs 138 to 152. That case says that the individual understandings or beliefs of the parties about the terms of a contract are irrelevant. Instead, what matters is whether a reasonable person in any of the parties’ situation would have believed and understood that the other party was consenting to identical terms.

25.   I find from the evidence that a reasonable person would conclude that on February 17, 2019, Mr. Haug and Parts Avatar had entered into a binding contract for the alternator. This is because Mr. Haug placed his order and Parts Avatar accepted payment by charging Mr. Haug’s credit card. There is no evidence that Parts Avatar accepted Mr. Haug’s offer subject to any conditions. Parts Avatar was therefore obligated to deliver the alternator to the provided shipping address.

26.   Parts Avatar says it was reasonable to cancel Mr. Haug’s order because his billing and shipping information did not match. I disagree. There is no indication that Parts Avatar could cancel the order under the contract’s terms. There is nothing to suggest Mr. Haug was warned about this possibility when he purchased the alternator. I find that Parts Avatar breached its contract with Mr. Haug by cancelling the order.

27.   I do not find, however, that Parts Avatar agreed with Mr. Haug that it would deliver the alternator by a specific date. If Parts Avatar provided such guarantees on its website or other documents, those are not before me. I will return to this below.

28.   I next consider the appropriate remedy. The normal remedy for breach of contract is damages. Damages for breach of contract are meant to put the innocent person in the same position as if the contract had been performed. See Water’s Edge Resort v. Canada (Attorney General), 2015 BCCA 319 at paragraph 39.

29.   The doctrine of remoteness is relevant. It excludes losses that were caused by the breach of contract, but which were not reasonably foreseeable when the contract was made. The reason for this is fairness. A respondent might have declined the risk or made other arrangements if they were aware that such losses could reasonably occur. Knowledge of special circumstances may be relied upon to enhance damages recoverable. However, the respondent must be informed of the special circumstances at the time of the contract and in such circumstances that the respondent impliedly undertook to bear any special loss flowing from a breach in those special circumstances. See Al Boom Wooden Pallets Factory v. Jazz Forest Products (2004) Ltd., 2016 BCCA 268 at paragraphs 62 to 63 and 77 to 78.

30.   Mr. Haug claims courier fees of $124.40 for picking up and delivering the alternator overnight on February 24 and 25, 2020. I find that this loss was not reasonably foreseeable when the contract was made. Parts Avatar was unaware of Mr. Haug’s situation when it agreed to supply the alternator on February 17, 2020. Parts Avatar was not responsible for the date of the flight to Costa Rica. Parts Avatar did not make any promises about delivery time to Mr. Haug.

31.   I find that Mr. Haug subsequently advised Parts Avatar about his special circumstances, but Parts Avatar did not agree to bear any special loss resulting from them. In his February 19, 2020 email, Mr. Haug told Parts Avatar that the alternator needed to reach Ohla Sirant before the flight. He said he might go to another parts dealer. Parts Avatar responded by canceling the order shortly thereafter, also on February 19, 2020. As such, I dismiss the applicants’ $124.40 claim.

32.   I next consider the applicants’ claim for damages of $160.09 for mental distress. Damages for mental distress are available as remedies for breach of contract where the contract’s subject matter is to provide pleasure, relaxation, or peace of mind. However, in normal commercial contracts, the likelihood of a breach of contract causing mental distress is not ordinarily within the parties’ reasonable contemplation. A breach of contract may leave the wronged party feeling frustrated or angry, but the law does not award damages for such incidental frustration. See Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30 at paragraphs 41 to 47.

33.   As evidence, Mr. Haug provided a physician’s note. The note describes the negative effects Mr. Haug experienced from dealing with Parts Avatar. Ohla Sirant also submitted that both applicants experienced negative feelings.

34.   I find that Mr. Haug’s contract was a normal commercial contract and not one for pleasure, relaxation, or peace of mind. While I accept that Parts Avatar caused the applicants to feel frustration, I find these feelings were incidental frustration and not compensable. As such, I dismiss this claim.

35.   In summary, I have found that Parts Avatar breached its contract with Mr. Haug, but no damages are proven. I dismiss the applicants’ claims.

36.   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. I see no reason in this case not to follow that general rule. Parts Avatar is the successful party. It paid no CRT fees and claimed no dispute-related expenses. As such, I do not order any for any party.

ORDER

37.   I dismiss the applicants’ claims and this dispute.