Date Issued: January 17, 2022

File: SC-2021-005150

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Lux Law Corporation dba McLeod & Schneiderat Lawyers v. Bushfield,
2022 BCCRT 60

Between:

LUX LAW CORPORATION DBA MCLEOD & SCHNEIDERAT LAWYERS

Applicant

And:

CINTHIA BUSHFIELD

Respondent

INTRODUCTION

1.      This dispute is about payment of a law firm’s account. The applicant law firm, Lux Law Corporation dba McLeod & Schneiderat Lawyers (Lux), claims $1,357.88 from the respondent client Cinthia Bushfield. Lux acted for Ms. Bushfield in a property sale where she was the seller. Lux ultimately paid an outstanding utilities account for the property on Ms. Bushfield’s behalf, further to an undertaking Lux gave the buyer’s lawyer. Lux claims $1,357.88 as reimbursement of that utilities account payment plus associated disbursements and taxes.

2.      Ms. Bushfield says it was Lux’s mistake to release a $2,000 holdback to her rather than first ensuring she had paid the full utilities account. Ms. Bushfield also denies she has been unjustly enriched because the utilities account for the property was not her own but perhaps her former tenant’s. She also says Lux filed its claim too late. So, Ms. Bushfield says she owes Lux nothing.

3.      Lux is represented by one of its firm’s lawyers, Benamm Maughn. Ms. Bushfield is self-represented.

JURISDICTION AND PROCEDURE

4.      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.

5.      CRTA section 39 says the CRT has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. Bearing in mind the CRT’s mandate that includes proportionality and a speedy resolution of disputes, I find I can fairly hear this dispute based on the submitted evidence and through written submissions.

6.      Under CRTA section 42, 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.

7.      Where permitted CRTA section 118, in resolving this dispute the CRT may: order a party to do or stop doing something, order a party to pay money, or order any other terms or conditions the CRT considers appropriate.

ISSUES

8.      The issues are a) whether Lux’s claim is out of time, and b) whether Ms. Bushfield owes the claimed $1,357.88, for Lux’s payment of a utilities account and Lux’s disbursements and taxes.

EVIDENCE AND ANALYSIS

9.      In a civil claim like this one, as the applicant Lux has the burden of proving its claims, on a balance of probabilities (meaning “more likely than not”). I have only referenced below what I find is necessary to give context to my decision. I note Lux did not provide a final reply submission, despite having the opportunity to do so.

10.   Lux acted for Ms. Bushfield in a spring 2018 property sale transaction, where Ms. Bushfield was the seller. Cary Schneiderat was the assigned lawyer advising Ms. Bushfield. On May 25, 2018, Ms. Bushfield signed Lux’s retainer agreement. Ms. Bushfield’s sale closed on June 6, 2018. None of this is disputed.

Limitation period – is Lux’s claim out of time?

11.   Under the Limitation Act (LA) that applies to the CRT, Lux had 2 years to start its claim. Under CRTA section 13.1, the running of time stopped when Lux applied to the CRT on July 9, 2021. So, if Lux discovered its claim against Ms. Bushfield earlier than July 9, 2019, its claim is out of time.

12.   As detailed below, the evidence shows Lux did not pay the outstanding utilities account on Ms. Bushfield’s behalf until September 2019, after Lux had unsuccessfully asked Ms. Bushfield to address the issue and the buyer’s lawyer asked Mr. Schneiderat to comply with his undertakings. I find it was Lux’s utilities account payment that triggered Lux’s “discovery” of its claim against Ms. Bushfield and the running of time. Since Lux’s payment was after July 2019, I find Lux’s CRT claim was filed in time.

Is Ms. Bushfield responsible to reimburse Lux for the paid utilities account and associated disbursements and taxes?

13.   In June 2018, as part of the sale transaction’s closing, Lux sent the buyer’s lawyer a letter that included Mr. Schneiderat’s professional undertakings. One undertaking was that he would ensure the sale property’s outstanding final utilities account was paid, by way of holdback, and provide the buyer’s lawyer with proof of payment in a timely manner. The evidence shows Lux retained a $2,000 utilities holdback, to be released to Ms. Bushfield only on proof the outstanding utilities account was paid.

14.   On August 1, 2018, Ms. Bushfield confirmed to Lux she had paid the final utilities account. Significantly, shortly after the City of Penticton (City) emailed Lux “there is no outstanding balance on [Ms. Bushfield’s] account”.

15.   On August 3, 2018, Lux advised the buyer’s lawyer that the utilities account had been paid. Lux then deposited the $2,000 holdback into Ms. Bushfield’s account on August 7, 2018.

16.   However, on December 28, 2018, the buyer’s lawyer emailed Lux that the City had advised there was still an outstanding utilities account. The City’s December 18, 2018 letter to the buyer said the property had an outstanding balance “in the name of” an SS. SS’s account’s “sign-off” date was March 5, 2018, which was before Ms. Bushfield sold the property to the buyers. Lux submits SS was likely Ms. Bushfield’s former tenant and I accept SS was, as Ms. Bushfield does not deny it. Given the City’s December 18, 2018 letter, I do not accept Ms. Bushfield’s submission that “no evidence was provided” to show the outstanding utilities account was from her former tenant.

17.   Lux then asked Ms. Bushfield to pay the outstanding utilities account. Between January and March 2019, there was a back and forth between Lux and Ms. Bushfield, who essentially said she would do further research into the utilities account. Ms. Bushfield never paid the outstanding utilities account.

18.   On August 16, 2019, the buyer’s lawyer wrote Lux to comply with their undertakings in a timely manner.

19.   So, on September 26, 2019, Lux paid the outstanding $1,180 utilities account to fulfill its undertaking, and because Ms. Bushfield had failed to pay it. On December 16, 2019, Lux paid the City a further $169.90 to cover a government penalty and interest on the utilities account. Together, these payments total $1,349.90.

20.   On March 9, 2020, Lux sent Ms. Bushfield its $1,357.88 account and request for payment. This was for the $1,349.90 utilities Lux paid, plus $7.98 for Lux’s disbursements and taxes.

21.   I turn then to the parties’ arguments.

22.   Lux submits Ms. Bushfield was contractually obligated to pay the sale property’s utility accounts. Lux says the parties’ retainer agreement also included the giving and receiving of undertakings on Ms. Bushfield’s behalf. Lux correctly submits a lawyer is bound to fulfil an undertaking given, under the Law Society of BC’s Code of Professional Conduct, section 5.1-6.

23.   Lux submits that it released the $2,000 holdback based on information available at the time and did not release Ms. Bushfield from further liability. Lux also argues Ms. Bushfield was unjustly enriched by Lux paying the utilities account. I agree with Lux, as discussed further below.

24.   Lux correctly notes the statement of adjustments clause 2 contained 2 terms: a) where property taxes and/or metered utilities are adjusted on an estimated amount, it represents an amount believed to be accurate from the taxing authority and no responsibility is assumed for its correctness, and b) the seller and buyer will be responsible for any further adjustments upon receipt of the current tax levy notice and/or utility billing.

25.   Ms. Bushfield says Lux’s utilities account payment was contrary to clause 2. Ms. Bushfield argues Lux should bear the utilities expense because it should not have released the $2,000 holdback to her, and, because the statement of adjustments said further adjustments were left to the buyer and seller.

26.   I disagree with Ms. Bushfield’s interpretation of clause 2. Instead, I find Ms. Bushfield is responsible for the utilities under her contract of purchase and sale or her retainer agreement with Lux. I find clause 2 confirms Ms. Bushfield and the buyer agreed they were financially responsible for any errors or omissions discovered after closing, not Lux.

27.   Next, relevant terms in the parties’ retainer agreement included:

a.    It is Ms. Bushfield’s responsibility to “arrange to have utilities read as close as possible to the date of possession and to ensure that the utilities are taken out of your name.”

b.    Ms. Bushfield acknowledged that Lux agrees to identify and confirm with her “the charges” that are her responsibility to discharge, and that Lux will agree to negotiate “appropriate closing undertakings” with the buyer’s lawyer.

28.   I find Ms. Bushfield authorized Lux to give the relevant undertaking to the buyer’s lawyer. Contrary to Ms. Bushfield’s bare assertion, I find Lux did not act in a conflict of interest because it gave that undertaking or otherwise. I also find the parties’ retainer agreement held Ms. Bushfield responsible for “the charges” which I find included the sale property’s outstanding utilities account, even if it was in SS’ name.

29.   Next, I find Ms. Bushfield was unjustly enriched by Lux’s utilities account payment. The legal test for unjust enrichment is that the applicant must show 1) that the respondent was enriched, 2) that the applicant suffered a corresponding deprivation or loss, and 3) there is no valid basis for the enrichment. See Kosaka v. Chan, 2009 BCCA 467. I agree with Lux that Ms. Bushfield would be unjustly enriched if she did not have to pay the utilities account, and that Lux would suffer the corresponding deprivation. There is no valid basis for the enrichment because under the contract of purchase and sale Ms. Bushfield was undisputedly responsible for the sale property’s outstanding utilities accounts, whether she personally incurred the debt or not. Ms. Bushfield received the $2,000 utilities holdback and yet did not fully pay for the utilities.

30.   Ms. Bushfield essentially argues that Lux should not have released the $2,000 holdback and that Lux has admitted its error in doing so instead of paying the utilities account with it. Even if Lux did err, I find that is not determinative and not a valid basis for the enrichment. Further, given the retainer agreement’s terms summarized above and Ms. Bushfield’s failure to respond to Lux or pay the utilities account, I find Lux reasonably paid the utilities account to honour its undertaking.

31.   I find there is no legal basis to hold Lux responsible for a utilities account that Ms. Bushfield agreed to pay for with her property’s buyers. In short, I find Ms. Bushfield owes Lux the claimed $1,357.88, which I find reasonable.

32.   Lux claims contractual interest of 2% per month as set out in the retainer agreement, with no annual rate specified. Under section 4 of the federal Interest Act, where an annual rate is not specified the maximum allowed is 5% per year. Calculated from Lux’s March 9, 2020 letter that enclosed its invoice to the date of this decision, this interest equals $58.41.

33.   Under section 49 of the CRTA and the CRT’s rules, a successful party is generally entitled to reimbursement of their CRT fees and reasonable dispute-related expenses. As Lux was successful, I allow its claim for reimbursement of $125 in paid CRT fees. No dispute-related expenses were claimed.

ORDERS

34.   Within 30 days of this decision, I order Ms. Bushfield to pay Lux a total of $1,541.29, broken down as follows:

a.    $1,357.88 in debt,

b.    $58.41 in pre-judgment contractual interest at 5% per year, and

c.    $125 in CRT fees.

35.   Lux is entitled to post-judgment interest, as applicable.

36.   Under CRTA section 48, 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.

37.   Under CRTA section 58.1, the Provincial Court of British Columbia can enforce a validated copy of the CRT’s order. 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 a Provincial Court of British Columbia order.