Date Issued: October 27, 2021

File: SC-2021-002878

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Anabtawi v. Claudia Alan Inc., 2021 BCCRT 1139

Between:

MOHAMMAD ANABTAWI also known as MOE SAMI

Applicant

And:

CLAUDIA ALAN INC.

Respondent

INTRODUCTION

1.      This dispute is about an alleged breach of contract for contract work. The applicant, Mohammad Anabtawi also known as Moe Sami, says the respondent, Claudia Alan Inc. (Claudia), terminated their fixed-term employment contract without justification. Mr. Sami seeks $3,500 as damages.

2.      Claudia disagrees. It says the parties did not have a binding agreement. It also says it paid $500 as part of a settlement agreement and that it should not pay for work that was never done.

3.      Mr. Sami represents himself. Claudia’s principal Carla D’Angelo represents it.

4.      For the reasons that follow, I find Mr. Sami has proven his claims. I order Claudia to pay the amounts set out below.

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. Some of the evidence in this dispute amounts to a “he said, she said” scenario. The credibility of interested witnesses, particularly where there is conflict, cannot be determined solely by the test of whose personal demeanour in a courtroom or tribunal proceeding appears to be the most truthful. The assessment of what is the most likely account depends on its harmony with the rest of the evidence. 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 CRT’s process and found that oral hearings are not necessarily required where credibility is an issue.

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 issue in this dispute are as follows:

a.    Did the parties have a binding contract?

b.    If so, did Claudia breach the contract, and are any remedies appropriate?

EVIDENCE AND ANALYSIS

10.   In a civil proceeding like this one, the applicant Mr. Sami must prove his claims on a balance of probabilities. This means more likely than not. 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.   I begin with the undisputed background facts. On February 17, 2021, Mr. Sami met with Claudia’s representative. They signed a letter of intent (LOI). It said that Claudia would employ Mr. Sami for 2 months starting from February 22, 2021. Mr. Sami agreed to work from home for 10 hours weekly and provide new accounts or leads to Claudia by reviewing other sales transactions. Claudia agreed to pay $50 per hour. The parties disagree on whether the LOI was binding, as noted above.

12.   On February 19, 2021, Claudia’s representative called Mr. Sami. She said that she had spoken to Mr. Sami’s previous employer and it was uncomfortable with the idea of Claudia and Mr. Sami working together. Claudia’s representative submits that she then advised that Claudia no longer wanted to hire Mr. Sami. Mr. Sami disagrees and says she only expressed some reservations. Overall, I prefer Claudia’s version of events because I find it consistent with an email Mr. Sami sent to Claudia’s representative on the same date. However, for reasons discussed below, nothing turns on which version is accurate.

13.   Despite the phone call, Mr. Sami decided to begin work on February 22, 2021. The work is shown in a spreadsheet. He emailed Claudia’s representative to advise he had started the next day. On February 23, 2021, Claudia’s representative replied that, as stated before, Claudia would not proceed. Mr. Sami disagreed. On February 24, 2021 Claudia emailed Mr. Sami that the LOI was not binding. It offered to pay for 10 hours of work. Mr. Sami invoiced Claudia for $500 on March 1, 2021. Claudia subsequently paid Mr. Sami $500 on March 5, 2021.

14.   The parties dispute whether the $500 was paid under the terms of a settlement agreement. I find it was not. There is no settlement agreement in evidence. In the February 2021 emails, Claudia did not say that by accepting payment Mr. Sami had to release his claims. Consistent with my conclusion, Mr. Sami’s invoice said the amount charged was only for work done. He also provided Claudia the work in a spreadsheet file. I also found Claudia’s submissions on this issue to be equivocal. It said it paid the amount “as a gesture of good will”.

Issue #1. Did the parties have a binding contract?

15.   A binding contract must have the following elements: its parties must have an intention to contract, the parties must agree on the essential terms, and the essential terms must be sufficiently certain. Whether these requirements are met is determined from the perspective of an objective reasonable bystander and not the subjective intentions of the parties. The determination must also consider the context, including the communications between the parties and the conduct of the parties both before and after the agreement is made. See Oswald v. Start Up SRL, 2021 BCCA 352 at paragraph 34.

16.   I find that viewed objectively and as of February 17, 2021, the parties had an intention to contract and agreed to sufficiently certain and essential terms. This is because they signed the LOI, it outlined Mr. Sami’s primary work responsibilities, and also said the amount Claudia had to pay. So, I find that the parties were in a binding contract as of February 17, 2021.

17.   I find that the circumstances support the existence of a binding agreement. It is undisputed that on February 17 or 18, 2021, Claudia provided Mr. Sami work documents. It also set up an email account for him.

18.   Claudia says the LOI was not binding because it was labelled a letter of intent. I do not find this determinative. For example, in Oswald the Court of Appeal found a memorandum of understanding was a binding contract and not merely an agreement to agree. I find that, aside from its title, the LOI lacked any language to suggest it was not binding. There were no prerequisites or conditions precedent in its terms. It said it was a “2 month contract starting Feb 22, 2021”, but as the surrounding language referred to Mr. Sami’s work responsibilities, I find this only referred to when Mr. Sami had to start work. I find this phrase was not clear enough to suggest the parties were not bound or that the parties could cancel the contract before February 22, 2021.

Issue #2. Did Claudia breach the contract, and if so, are any remedies appropriate?

19.   An anticipatory breach occurs when one party shows through words or conduct an intention not to perform or be bound by the agreement in the future. An anticipatory breach is considered an anticipatory repudiation if it would deprive the non-breaching party of substantially the whole benefit of the contract. See Kaur v. Bajwa, 2020 BCCA 310 at paragraphs 13 and 14.

20.   The non-breaching party may choose to accept the repudiation to end the contract and sue for damages immediately. Alternatively, the non-breaching party may affirm the contract and keep it “alive” for both parties, and risk committing a breach of its own. However, if the party repudiates the contract again, or if the repudiation is continuing, the non-breaching party may subsequently elect to accept the repudiation or affirm the contract. See Dosanjh v. Liang, 2015 BCCA 18, at paragraphs 33 to 37 and 42 to 43.

21.   As stated above, on February 19, 2021 Claudia’s representative essentially told Mr. Sami that it would refuse to perform the contract. So, I find that Claudia committed an anticipatory breach that was also an anticipatory repudiation on that date. I find that ultimately nothing turns on this because Mr. Sami affirmed the contract and kept it alive by starting work on February 22, 2021, and emailing Claudia about this.

22.   I find that Claudia then repudiated the contract on February 23, 2021 by emailing that it would not perform its obligations. I find nothing turns on whether this was a new, repeated, or continuing repudiation because the results are the same. Mr. Sami was entitled to accept Claudia’s repudiation in any event, to end the contract and sue for damages. He did so by subsequently ceasing work.

23.   This leaves the issue of what damages are appropriate. Based on the written terms of the LOI, I find that Claudia agreed to employ Mr. Sami for a fixed-term contract of 2 months, from February 22 to April 21, 2021. I also find that the LOI had no terms about reasonable notice or severance.

24.   Under the common law, fixed-term employees are entitled to damages for the balance of the contract, less money earned elsewhere during the term. See Quach v. Mitrux Services Ltd., 2020 BCCA 25 at paragraphs 39 to 40. There is some uncertainty as to whether a fixed-term employee has a duty to mitigate loss if they are terminated early. However, it is clear that the burden of proving that an employee failed to mitigate loss rests on the employer. See Payne v The Kimberley Academy Ltd., 2020 BCSC 506 at paragraph 40.

25.   Claudia paid for 1 week of work. So, I find that Claudia must compensate Mr. Sami for the period of March 1 to April 21, 2021. This equals 7 weeks and 2 days. Mr. Sami seeks payment of $3,500, which is equivalent to 7 weeks of work. So, I order Claudia to pay Mr. Sami $3,500 as damages.

26.   I further find that Mr. Sami is entitled to the full claimed amount without reduction. There is no evidence he earned any other income during the contract’s term. To the extent that Mr. Sami had a duty to mitigate, if any, I find Claudia has not proven that Mr. Sami failed to meet this duty.

27.   The Court Order Interest Act applies to the CRT. Mr. Sami is entitled to pre-judgment interest on the damages award from April 21, 2021, the end of his fixed term of employment, to the date of this decision. This equals $8.18.

28.   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. I find Mr. Sami is entitled to reimbursement of $175 in CRT fees. As he did not claim for any specific dispute-related expenses, I order none.

ORDERS

29.   Within 14 days of the date of this order, I order Claudia to pay Mr. Sami a total of $3,683.18, broken down as follows:

a.    $3,500 as damages for breach of contract,

b.    $8.18 in pre-judgment interest under the Court Order Interest Act, and

c.    $175 in CRT fees.

30.   Mr. Sami is entitled to post-judgment interest, as applicable.

31.   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.

32.   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.