Date Issued: February 24, 2022

File: SC-2021-005614

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Fathi-Nejad v. Khadra, 2022 BCCRT 203

Between:

ABDOLLAH FATHI-NEJAD

Applicant

And:

IYAS KHADRA and INSTANT OFFICE LTD.

RespondentS

REASONS FOR DECISION
Tribunal Member:	Shelley Lopez, Vice Chair

INTRODUCTION

1.      This dispute is about a commercial tenancy agreement. The applicant, Abdollah Fathi-Nejad, says the respondent Iyas Khadra rented “office 9” to him and that their agreement was it would be ready on March 1, 2021. Mr. Fathi-Nejad says office 9 was not ready on time and that on March 9, 2021 he determined the alternative “office 7” offered was unsuitable. Mr. Fathi-Nejad claims a refund of his $700 security deposit, $100 for an application fee paid to the Residential Tenancy Branch (RTB), and $50 for reprinting his business cards.

2.      Mr. Khadra denies personally signing the tenancy agreement with Mr. Fathi-Nejad. The corporate respondent Instant Office Ltd. (Instant) says its tenancy agreement authorized it to assign Mr. Fathi-Nejad an office of similar size and equipment if Instant deemed it necessary. Instant says office 7 was similar and that Mr. Fathi-Nejad asked for office 7 to be repainted and for furniture installed similar to office 9. While they did not file a counterclaim, the respondents say Mr. Fathi-Nejad’s refusal to occupy office 7 has caused Instant to incur expenses. They also say the $700 deposit was used to cover March 2021 rent. So, the respondents say they owe Mr. Fathi-Nejad nothing.

3.      Mr. Fathi-Nejad is self-represented. Mr. Khadra represents himself and Instant.

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 by 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.  Is Mr. Khadra a proper respondent in this contract claim?

b.  Was Instant entitled to substitute office 7 for office 9?

c.   Is Mr. Fathi-Nejad’s entitled to a refund of his paid $700 deposit?

d.  Is Instant entitled to a set-off for March 2021 rent and the expenses it incurred in making office 7 available to Mr. Fathi-Nejad?

e.  Is Mr. Fathi-Nejad entitled to $100 for his RTB filing fee and $50 for reprinting his business cards?

EVIDENCE AND ANALYSIS

9.      In a civil claim like this one, as the applicant Mr. Fathi-Nejad has the burden of proving his claims, on a balance of probabilities (meaning “more likely than not”). The respondents have the same burden to prove their claimed set-off. I have read the parties’ submitted evidence and arguments. I have only referenced below what I find is necessary to give context to my decision.

10.   On January 6, 2021, Mr. Fathi-Nejad signed a commercial tenancy agreement (Agreement) with Instant. Mr. Khadra was not a party to it, though he signed the Agreement on Instant’s behalf. A corporation is legally distinct from its owners, directors, and officers. At law, a corporation’s officers, directors, and employees are not personally liable for the corporation’s acts unless they committed a wrongful act independent from that of the corporation. See Merit Consultants International Ltd. v. Chandler, 2014 BCCA 121. There is no evidence before me that Mr. Khadra committed any such wrongful act. I dismiss the claims against Mr. Khadra personally. My decision below addresses Instant’s liability.

11.   The Agreement was for Mr. Fathi-Nejad to rent office 9. The monthly rent was $700 per month, with a $700 security deposit that Mr. Fathi-Nejad undisputedly paid on January 7, 2021. The Agreement said the security deposit was “fully refundable, less any outstanding amounts” due to Instant, 60 days after the Agreement’s termination. The Agreement also required Mr. Fathi-Nejad to give Instant 2 “clear calendar months” written notice to end the Agreement.

12.   The Agreement described the rented property as a “full private office”. There is no other written description of the office itself. Central to this dispute, the Agreement also said Instant could move Mr. Fathi-Nejad to another office of “similar size and equipment within its premises” should this become necessary.

13.   The parties agree office 9 was not available for the March 1, 2021 tenancy start date as Instant’s tenants had not moved out. In late February, Instant offered Mr. Fathi-Nejad an office in a different building, but Mr. Fathi-Nejad declined. I find nothing turns on that offer because in context I find “within its premises” meant at the same building address.

14.   Instant then offered Mr. Fathi-Nejad office 7, 2 offices down the hall from office 9. Mr. Fathi-Nejad says on February 25 he viewed office 7, which at that point was being used by the then-tenant for storage of dental equipment.

15.   I find the evidence, including the parties’ texts, shows that on February 25, 2021 Mr. Fathi-Nejad agreed to have Instant clear out and paint office 7, clean its carpet, plus install office desks and chairs. The texts show Mr. Fathi-Nejad agreed to delay his move-in until this work was done, which Instant completed by March 9, 2021. The undisputed evidence is that Instant offered Mr. Fathi-Nejad a credit for March rent to reflect the 10 days he had no use of the office. At the same time, Instant released the existing office 7 tenant from its lease obligations.

16.   However, Mr. Fathi-Nejad never occupied office 7 because when he attended on March 9 after Instant had completed its work, Mr. Fathi-Nejad refused the office and never occupied it or paid Instant any money beyond the security deposit. More on this below.

17.   So, was office 7 “similar in size and equipment” to office 9? If so, I find Instant was entitled under the Agreement to make the substitution.

18.   Based on the map of offices appended to the Agreement, office 7 and office 9 appear to be identical in size and as noted are in the same building hallway. Mr. Fathi-Nejad asserts office 7 was “smaller” but provided no evidence in support. Based on the evidence before me, including the map and photos, I find the 2 offices are of similar size. This leaves “equipment”.

19.   Mr. Fathi-Nejad submitted no photos of either office. Instant’s submitted photos of them show that office 9 has some built-in open shelving and a lower cabinet with doors. Office 9 also has what appears to be a free-standing filing cabinet, water cooler, and a floor lamp. I cannot tell if those latter items belonged to the tenant occupant and Mr. Fathi-Nejad does not address them. So, I find they are not at issue. Mr. Fathi-Nejad also does not argue that the built-in shelving or cabinet was an issue, and I do not find it amounts to “equipment”. I say the same about the “closet cavity” that Mr. Fathi-Nejad says was absent in office 7. I also say the same about the glass window differences Mr. Fathi-Nejad addresses, as I find a glass window is not equipment.

20.   In particular, I find “equipment” under the Agreement meant office equipment, including furniture. I find in context “equipment” did not include the walls, windows, or built-in shelving. This is supported by the parties’ text messages in early late February and early March, where Mr. Fathi-Nejad asked only for the same desks and chairs as were in office 9. There is no evidence that when Mr. Fathi-Nejad viewed office 9 it had any included equipment other than desks and chairs.

21.   Mr. Fathi-Nejad says office 7 had ripped carpet and old broken furniture. I find wall-to-wall carpeting does not fall within the definition of equipment, and in any event I find it unproven the carpet was ripped in office 7 and this is not visible in the photo in evidence. As for the furniture, based on the photos in evidence the furniture in office 7 is not visibly broken and appears to be similar to office 9. I find it unproven office 7 did not have similar equipment to office 9.

22.   Mr. Fathi-Nejad makes other arguments about why office 7 was essentially inadequate under the parties’ Agreement. He says office 7 reeked of a foul odour. Instant denies this and says the entire hallway would have been affected if there had been a foul odour. Plus, Instant says it is unlikely storage of dental appliances would create any foul odour. On balance, I find a foul odour unproven on the evidence before me.

23.   Given my conclusions above, I find Instant was entitled to substitute office 7 for office 9 under the Agreement. Further, the parties’ texts in evidence show Mr. Fathi-Nejad agreed on February 25 to substitute office 7. I find Mr. Fathi-Nejad breached the Agreement by refusing to accept office 7 as the substitute.

24.   So, what about the claimed $700 deposit? The Agreement said the $700 deposit was fully refundable to Mr. Fathi-Nejad less any money owed to Instant. As noted, Instant did not file a counterclaim. This brings me to the set-off that I find Instant essentially requests although it did not use that phrasing. An equitable set-off here means that if Instant can prove that Mr. Fathi-Nejad owes it money that is reasonably connected to the Agreement, Instant can deduct it from the amount it owes to Mr. Fathi-Nejad.

25.   With that, I find this dispute next turns on whether Mr. Fathi-Nejad owed Instant money. Instant says that it spent money on getting office 7 ready for Mr. Fathi-Nejad. It also says that it applied the $700 security deposit to March rent.

26.   The evidence shows that Instant released its office 7 tenant from its agreement because Mr. Fathi-Nejad was going to take office 7. The evidence shows the parties agreed Mr. Fathi-Nejad’s March rent of $700 would be pro-rated to account for the March 10, 2021 expected move-in date, which would be about $467. However, as noted, the Agreement required 2 months’ notice of termination and Mr. Fathi-Nejad undisputedly did not give any notice. I accept the undisputed evidence that Instant was not otherwise able to rent office 7 for March 2021, which is not surprising since Mr. Fathi-Nejad did not reject it until March 9, 2021. I also accept Instant paid $270 to repaint office 7 at Mr. Fathi-Nejad’s request, as shown in a receipt in evidence. So, I find Instant is entitled to a set-off of the entire $700 security deposit for the rent owed under the Agreement given Mr. Fathi-Nejad’s breach and for the painting expense.

27.   Given my conclusion above that Mr. Fathi-Nejad breached the Agreement by failing to accept office 7 as a substitute and not giving 2 months’ notice of termination, I dismiss his claim for business card printing expenses.

28.   Finally, I refuse to resolve the $100 RTB fee claim, under CRTA section 11. This is because I find application fees paid to another tribunal are more appropriately dealt with as part of that other tribunal’s process. Had I concluded the CRT ought to decide that claim, I would have dismissed it given my conclusion above.

29.   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. Mr. Fathi-Nejad was unsuccessful and so I dismiss his claims for CRT fee reimbursement and for dispute-related expenses. The respondents did not pay CRT fees or claim expenses.

ORDERS

30.   I refuse to resolve Mr. Fathi-Nejad’s claim for reimbursement of a $100 RTB application fee. I dismiss Mr. Fathi-Nejad’s other claims.