Date Issued: March 14, 2022

File: SC-2021-005556

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Smith v. McIntosh, 2022 BCCRT 280

Between:

DARREN SMITH

Applicant

And:

DARCY MCINTOSH

Respondent

And:

DARREN SMITH

Respondent BY COUNTERCLAIM

REASONS FOR DECISION
Tribunal Member:	Chad McCarthy

INTRODUCTION

1.      This dispute is about residential construction work. The applicant, and respondent by counterclaim, Darren Smith, hired the respondent, and applicant by counterclaim, Darcy McIntosh, to plan and build a sunroom on an existing concrete pad beside his house. The agreed price was $65,800. Mr. Smith gave Mr. McIntosh a $20,000 advance payment to purchase materials and begin work. Mr. Smith says Mr. McIntosh bought few materials, did little work on the sunroom, and abandoned the project before it was completed. Mr. Smith estimates that after deductions for Mr. McIntosh’s labour, expenses, and materials, Mr. McIntosh owes him a refund of about $10,000. However, Mr. Smith claims only $5,000, the maximum Civil Resolution Tribunal (CRT) small claim amount, and has abandoned his claim to anything more.

2.      Mr. McIntosh says he did work, paid expenses, and purchased materials totalling more than $20,000, and owes nothing. He counterclaims for $5,000 of an additional $7,064.01 he says Mr. Smith owes him for the work he performed. I find Mr. McIntosh has abandoned any counterclaim amount exceeding $5,000. Mr. Smith denies owing anything further.

3.      Each party is self-represented in this dispute.

JURISDICTION AND PROCEDURE

4.      These are the CRT’s formal written reasons. 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.

5.      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. Although the parties’ submissions each call into question the credibility of the other party to some extent, I find I can properly assess and weigh the written evidence and submissions before me, and that an oral hearing is not necessary in the interests of justice. In the decision Yas v. Pope, 2018 BCSC 282, the court recognized that oral hearings are not always needed where credibility is in issue. Keeping in mind that the CRT’s mandate includes proportional and speedy dispute resolution, I find I can fairly hear this dispute through written submissions.

6.      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.

7.      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

8.      The issue in Mr. Smith’s claim is whether he is entitled to a $5,000 refund under the parties’ contract, because Mr. McIntosh allegedly did not complete the relevant work.

9.      The issue in Mr. McIntosh’s counterclaim is whether he provided labour and paid for materials and expenses totalling more than $20,000, and if so, does Mr. Smith owe him an additional $5,000?

EVIDENCE AND ANALYSIS

10.   In a civil proceeding like this one, as the applicant Mr. Smith must prove his claim on a balance of probabilities, meaning “more likely than not”. Mr. McIntosh must prove his counterclaim to the same standard. I have read all the parties’ submissions but refer only to the evidence and arguments that I find relevant to provide context for my decision.

11.   The parties undisputedly agreed on a price of $65,800 including tax for Mr. McIntosh to add a sunroom to Mr. Smith’s home, including labour, materials, plans, permits, and related expenses. However, I find there was no formal written contract itemizing the anticipated project work, materials, or expenses. On the evidence before me, I find that the parties’ contract consisted of the written invoice terms, which are minimal, as well as implied terms, explained below.

12.   The April 4, 2021 invoice listed a single item, “20x20 sunroom addition”, for $65,800. The invoice said it was a formal agreement, it was to be paid in full upon completion, and that Mr. McIntosh would carry out necessary work to ensure the client received the “product agreed upon”. The invoice said building plans accompanied it, so that the parties were fully aware of “the responsibilities” and the project design. However, neither party submitted the plans as evidence, without explanation.

13.   The invoice also said that deposits would be required to ensure a timely completion date, although no completion date was stated. Mr. Smith undisputedly paid Mr. McIntosh a $20,000 “deposit” that was requested in a separate April 4, 2021 deposit invoice. Although the parties call it a deposit, it is undisputed that the $20,000 was an advance payment for materials, expenses, and labour. So, I find it was an implied term of the parties’ contract that unused deposit amounts were refundable if the parties mutually agreed to terminate the contract.

14.   Mr. Smith says Mr. McIntosh agreed to build the sunroom within 3 weeks after the building permit was issued. Mr. McIntosh does not say whether he agreed to that timeframe. As explained below, I find nothing turns on the alleged 3-week schedule.

15.   The building permit was issued on June 16, 2021, and Mr. McIntosh undisputedly paid the $691 fee with deposit money. By late June 2021, Mr. McIntosh had undisputedly paid for some lumber that was delivered to the worksite, removed some house siding, and partially framed 2 sunroom walls. A late June 2021 heat wave caused Mr. McIntosh to pause work for several days, which Mr. Smith agrees was reasonable.

16.   In July 2021, Mr. McIntosh advised Mr. Smith that he was stopping work due to wildfires, related smoke, and truck problems. He said he would not be back until the fires were under control and things were “back to normal”, although he provided no timeline for work resumption or completion in response to Mr. Smith’s inquiries.

17.   After multiple discussions about the project timeline, Mr. McIntosh texted on July 11, 2021 that he would reimburse Mr. Smith $2,000 and “you can have someone else take over”. He also said that when he returned to town, he would collect his equipment and deliver that refund, although the evidence does not show that he provided any refund. Mr. McIntosh also said he would not be putting any more time into helping Mr. Smith with the project or helping him understand its costs. Mr. Smith undisputedly hired someone else to take over the project after that point. So, I find that the parties terminated their contract by mutual agreement on July 11, 2021. As noted, it was an implied term of the parties’ contract that Mr. McIntosh would be paid for the value of the work he had actually provided on the project, as well as any materials he had purchased and expenses he had paid for the project.

18.   What is the value of the work, expenses, and materials provided by Mr. McIntosh? Mr. McIntosh refused Mr. Smith’s requests to provide those details. Mr. McIntosh also submitted no evidence in this dispute, despite having an opportunity to do so. Given that the parties mutually terminated the project, I find that information about the work Mr. McIntosh actually provided is relevant to the issue of what was owed, and by whom. However, it is not clear whether Mr. McIntosh kept any records of the number of hours worked, tasks performed, expenses incurred, materials purchased, or any other information related to the sunroom project. Further, the parties did not agree to an hourly labour rate for the project, which was for a fixed price.

19.   By refusing to provide any paperwork to Mr. Smith when the parties agreed to terminate the contract, I infer Mr. McIntosh meant any invoices or materials receipts. Mr. McIntosh texted Mr. Smith that he was welcome to price things out himself. So, Mr. Smith contacted the suppliers about Mr. McIntosh’s material orders for the sunroom project. Mr. McIntosh now says this was his business and not Mr. Smith’s. I disagree. I find such inquiries were the only method Mr. Smith was left with to determine how much Mr. McIntosh spent on materials.

20.   How much of the $20,000 deposit did Mr. McIntosh spend? I find receipts in evidence show that the lumber delivered to the worksite cost $4,601.13, which Mr. McIntosh undisputedly paid for. I also find other receipts show Mr. McIntosh paid a $1,000 deposit for roof trusses. This equals $5,601.13. I find there is no evidence before me showing that Mr. McIntosh ordered or paid for any other materials.

21.   What was the likely value of Mr. McIntosh’s time and labour? I find this subject is beyond common knowledge and experience, and requires expert evidence to prove (see Bergen v. Guliker, 2015 BCCA 283 at paragraph 124). In the absence of any details from Mr. McIntosh, Mr. Smith obtained a report from Daniell Guillou, the owner and operator of Highland Valley Building Supplies, about the value of the work. The report said Mr. Guillou has 51 years of experience in the construction industry, specifically with new homes and renovations. Under the CRT’s rules, I find Mr. Guillou is qualified by experience to give expert evidence on the value of Mr. McIntosh’s work. Mr. McIntosh does not directly dispute Mr. Guillou’s evidence.

22.   In the report, Mr. Guillou said his opinion was based on a personal inspection of the sunroom at the framing and insulation stage. Mr. Guillou said that the labour for stripping the house siding and building the incomplete walls would have totalled $1,000. He said that supplying “that degree” of building plans, applying for the building permit, and paying the permit fee, would have totalled $2,000, which I find includes the $691 permit fee noted above. Mr. Guillou also said that organizing the lumber and roof truss orders, including travel, would have totalled $1,500, and that other time spent on quoting, site inspection, and other tasks, would have totalled $1,500. Altogether, this equals $6,000. I find this estimated amount is not contradicted by any other expert evidence, and I accept that it is accurate.

23.   Mr. McIntosh says he spent a lot of time and effort on the project. He says the $20,000 deposit was “barely enough” to cover materials, fuel, drawings, permits, and other job-related expenses, not including any labour or profit. He also says that beyond the deposit, he is entitled to an additional $7,064.01 for his project work. However, as noted, Mr. McIntosh submitted no evidence, including any showing how much he spent on materials and expenses, or showing which tasks he completed or how much time they took. He provided no information showing how he arrived at the $7,064.01 amount allegedly owing, or what he based his calculations on. In the absence of evidence from Mr. McIntosh, I find the only reliable evidence of the value of Mr. McIntosh’s work is Mr. Guillou’s report. I am satisfied that the value of Mr. McIntosh’s project work was $6,000, as shown in that report. Under the legal principle of quantum meruit, meaning “the value of what one has earned”, I find that Mr. McIntosh was entitled to $6,000 for that work.

24.   On the evidence before me, I find Mr. McIntosh was entitled to retain from Mr. Smith’s $20,000 deposit $6,000 for labour and expenses, and $5,601.13 for the cost of materials he purchased for the project. This equals $11,601.13. As Mr. McIntosh provided no refund, I find he kept the remaining $8,398.87 of Mr. Smith’s deposit when he was not entitled to under the contract. So, I allow Mr. Smith’s claim for $5,000, noting again that he abandoned any amounts over $5,000. I dismiss Mr. McIntosh’s counterclaim for $5,000.

CRT Fees, Expenses, and Interest

25.   The parties did not agree to any interest in their contract. However, the Court Order Interest Act applies to the CRT. I find Mr. Smith is entitled to pre-judgment interest on the $5,000 owing, reasonably calculated from the July 11, 2021 contract termination date until the date of this decision. This equals $15.23.

26.   Under section 49 of the CRTA, and the 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. Mr. Smith was successful in his claim, so I find he is entitled to reimbursement of the $175 he paid in CRT fees for that claim. Although the evidence shows Mr. Smith paid Mr. Guillou for his expert report, neither party claimed any CRT dispute-related expenses. Further, although Mr. McIntosh was unsuccessful in his counterclaim, Mr. Smith paid no CRT fees for that counterclaim. So, I order no further reimbursements.

ORDERS

27.   Within 30 days of the date of this decision, I order Mr. McIntosh to pay Mr. Smith a total of $5,190.23, broken down as follows:

a.    $5,000 in debt for a deposit refund,

b.    $15.23 in pre-judgment interest under the Court Order Interest Act, and

c.    $175 in CRT fees.

28.   I dismiss Mr. McIntosh’s counterclaim.

29.   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.

30.   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.