Date Issued: May 5, 2023

File: SC-2022-002996

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Akbari v. VGC Vancouver General Contractors Inc., 2023 BCCRT 371

Between:

HELIA AKBARI

Applicant

And:

VGC VANCOUVER GENERAL CONTRACTORS INC.

Respondent

REASONS FOR DECISION
Tribunal Member:	Nav Shukla

INTRODUCTION

1.      The applicant, Helia Akbari, entered into a design agreement with the respondent, VGC Vancouver General Contractors Inc., for a home renovation project. The applicant says the respondent misrepresented the discounts it could obtain for the applicant on materials for the project and failed to fulfill its obligations under the parties’ contract in a number of ways. The applicant seeks a $3,000 refund from the $3,675 she paid the respondent. The applicant is self-represented.

2.      The respondent says it provided everything it was required to provide under the design agreement. So, it denies it owes the applicant any refund. The respondent is represented by a principal or employee.

JURISDICTION AND PROCEDURE

3.      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.

4.      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.

5.      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.

6.      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.

7.      The evidence includes an agreed statement of facts (SOF) in which the parties agree the applicant paid the respondent $3,575. However, the parties’ contract in evidence shows that the agreed upon price was $3,500 plus GST which totals $3,675. Further, in emails in evidence, the respondent referred to a $1,750 settlement offer as “50% of the design fee”, suggesting the full design fee the applicant paid was the contracted $3,500 plus tax. There is no suggestion in the parties’ submitted evidence or written arguments that the applicant paid anything less than the full contract price. So, it appears this discrepancy in the SOF may have been an oversight. In any event, the applicant claims only $3,000 and not a full refund. So, I find nothing turns on this discrepancy.

ISSUES

8.      The issues in this dispute are:

a.    Did the respondent misrepresent the discounts it could obtain for the applicant?

b.    Did the respondent breach the parties’ contract?

c.    If yes to either or both of the above, what are the applicant’s damages?

EVIDENCE AND ANALYSIS

9.      In a civil proceeding like this one, the applicant must prove her claims on a balance of probabilities (meaning “more likely than not”). I have considered all the parties’ submitted evidence and argument but refer only to what I find relevant to provide context for my decision.

10.   On May 25, 2021, the parties entered into a written design agreement. Under the agreement, the respondent agreed to provide a design for the applicant’s home renovation project, which was to include new flooring, new countertops and a general “refresh” to the applicant’s home.

11.   The parties’ signed contract set out a design process that included the respondent’s designer or draftsmen attending at the applicant’s home to take measurements, design presentation, design finalization, estimate preparation, and a finishing schedule and allowances to be provided before the renovation would start. As noted above, the contract price was $3,500 plus $175 for GST, totaling $3,675, which the applicant undisputedly paid.

12.   The contract further said that if the applicant proceeded to enter into a “build contract” with the respondent for the renovation work, the amount she paid under the design agreement would be credited back against the build contract amount.

13.   On June 1, 2021, the applicant had her first virtual meeting with the respondent to review the proposed design and project estimate. The evidence shows the respondent’s first estimate totaled $41,766.40, after deducting the $3,500 design fee. The applicant says that this estimate was double her budget, so she decided to eliminate countertops from the project.

14.   The evidence includes 3 additional estimates, 1 for $37,820.82 which excluded paint work, 1 for $29,305.29 which excluded the countertops, and the final estimate for $21,552.65 for just the flooring work and a few other tasks. It is unclear if all of these estimates were provided to the applicant. However, the applicant admits receiving at least 2 revisions to the original estimate.

15.   In a June 4, 2021 email to the respondent, after receiving what I infer was the $21,552.65 estimate for the flooring work, the applicant said the estimate was “very expensive and not transparent”. She asked the respondent to provide a better breakdown of the scope of work.

16.   The respondent undisputedly did not provide any further breakdown for the scope of work and the applicant did not proceed with hiring the respondent for the renovation project. Based on emails in evidence, it appears the applicant sought a refund from the respondent. The respondent made at least 2 settlement offers to attempt to resolve the matter which the applicant refused.

Alleged Misrepresentation

17.   The applicant says that at a May 7, 2021 meeting with the respondent’s project manager, SA, SA emphasized that the respondent could obtain discounts of 40-50% from their materials’ suppliers for the applicant’s renovation project. The applicant says that statement was not true. In particular, the applicant says that the respondent told her it had obtained a discount for her on wood flooring for the renovation. However, the applicant says that after she did her own research, she discovered that other flooring shops were offering the same flooring at a lower price, without any discounts applied.

18.   Though the applicant does not use these exact words, I find the applicant essentially alleges SA negligently or fraudulently misrepresented the respondent’s ability to obtain discounts on materials for her. A negligent misrepresentation occurs when someone carelessly makes an untrue, inaccurate or misleading statement. A fraudulent misrepresentation occurs when someone knowingly or recklessly makes a false statement. Either way, the applicant must prove that the respondent made an inaccurate or untrue representation about the discounts it could obtain for the applicant.

19.   I find that the applicant has not proven that SA made statements about discounts the respondent could obtain that were untrue or inaccurate. The applicant provided no evidence other than her own assertions that the discounted price the respondent quoted her for wood flooring was higher than other suppliers’ pricing.

20.   So, I find the applicant has not proven that the respondent misrepresented its ability to obtain discounts on materials. As a result, I find the applicant is not entitled to a refund on this basis and I dismiss this part of her claim. I turn now to the applicant’s various breach of contract allegations.

Failure to Provide “On-Budget” Estimates

21.   The applicant argues, in essence, that the respondent breached the parties’ contract by providing estimates that were much higher than the applicant’s stated budget. The applicant says she repeatedly emphasized her budget was $20,000, which the respondent does not dispute, but the respondent’s initial proposed estimate was more than double that. The respondent says the reason for the higher than expected estimates was due to the expensive flooring the applicant selected.

22.   Did the parties’ agreement include a requirement that the project’s estimates be within any particular range? While the agreement included a spot for a target budget to be inputted, no amount was filled out here. The agreement stated that the respondent’s “goal” was to design the project to be within 5-10% of the target budget. However, I do not find this stated goal equates to an explicit requirement.

23.   Given that there was no explicit requirement that the estimates be within a certain range, I find the applicant essentially argues that there was an implied term that the respondent’s estimates would be reasonably close to the applicant’s stated budget. Implied terms are contractual terms that the parties did not expressly consider, discuss, or write down. The court (and the CRT) will only imply a term if it is necessary to give business efficacy to the contract. Put another way, the term must be something that both parties would have considered obvious if they had been asked about it when they signed the contract (see Zeitler v. Zeitler (Estate), 2010 BCCA 216, at paragraphs 25 to 32).

24.   Applying that legal test, I find that there was not an implied term that the respondent would prepare estimates for the renovation project within a certain range. It is possible that the applicant would have considered it obvious that there would be a hard limit on the renovation costs, but I find that the respondent likely would not have agreed given the uncertainty around the cost of materials.

25.   Since there was no contractual term limiting the estimated cost for the renovation work, I find the respondent did not breach the contract by providing estimates that were over the applicant’s stated budget.

Failure to Provide Designs

26.   The parties’ written contract said the conceptual design would include drawings, a 3D visualization of the finished product, and a 2-dimensional layout of the interior space. The applicant says the respondent never provided it with any designs as “deliverables”. She says that she only ever saw a “simple rendering” on a shared screen during the June 1 virtual meeting and that the design was incomplete.

27.   While the respondent says it completed the design, it provided no drawings or designs in evidence. Further, the respondent does not dispute it did not provide copies of any drawings or designs to the applicant to keep.

28.   The parties’ agreement did not specifically say the respondent would provide designs or drawings as “deliverables” for the applicant to keep. However, I find the parties’ agreement included an implied term that the respondent would deliver a finalized design to the applicant for the applicant’s keeping if the applicant decided not to proceed with hiring the respondent for the construction work. I find this is supported by the fact that the agreement said that if the applicant chose to hire another contractor for the construction portion, the applicant would assume liability for the design. So, I find the respondent breached the parties’ contract by failing to provide copies of a final design for the applicant to keep.

29.   The contract specifically stipulated that the $3,500 price was for the “building design”. Based on this, I find a large part of the applicant’s payment was for the respondent to create a final design that could be used to complete the renovation project. Other than the stated price in the contract, there is little other evidence before me of the design’s monetary value. However, it is undisputed that the respondent did a site visit to prepare the design and the estimates, had meetings with the applicant to discuss the estimates, and that the respondent had to determine the cost of materials and labour. As mentioned above, the evidence includes emails where the respondent offered the applicant $1,750 to resolve the matter. In a June 16, 2021 email, SA said the $1,750 offer accounted for an alleged restocking fee charged by the flooring company as well as the time the respondent spent “working on drawings and estimate options.” The applicant disputes she should be responsible for any restocking fee. In any event, in a June 20 email, SA later said that the flooring company was going to cover this fee but that the respondent still felt that $1,750 was a reasonable offer. Based on the above, on a judgment basis, I find that $2,000 will adequately compensate the applicant for the respondent’s failure to provide a final design for the applicant to keep. I award the applicant $2,000 in damages for this breach.

Failure to Provide Breakdown of Estimates

30.   The applicant’s final argument is that the estimates the respondent provided were substandard because they did not contain a proper cost breakdown for each line item in the scope of work. The applicant suggests the estimates were inflated.

31.   There is an implied term in contracts for professional services that the service will be done to a reasonably competent standard. In general, expert evidence is required to prove whether a professional’s conduct fell below a reasonably competent standard. This is because the ordinary person does not know the standards of a particular profession or industry. The exceptions to this general rule are when conduct is obviously substandard or about something non-technical (see Schellenberg v. Wawanesa Mutual Insurance Company, 2019 BCSC 196, at paragraph 112).

32.   Here, I find there is nothing obviously substandard about the respondent’s work in preparing the estimates. I find the question of whether the estimates were inflated or poorly done is something that would require expert evidence to prove, and there is no expert evidence before me. So, I find the applicant has not proven that the respondent’s failure to provide a breakdown of its estimates fell below a reasonably competent standard. I dismiss this part of the applicant’s claim.

Interest, CRT fees, and dispute-related expenses

33.   The Court Order Interest Act applies to the CRT. However, in the Dispute Notice, the applicant expressly waived her right to pre-judgment interest, so I order none.

34.   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 the applicant is entitled to reimbursement of $175 in CRT fees. Since the respondent was unsuccessful, I find it is not entitled to reimbursement of its paid CRT fees for setting aside a default judgment. Neither party claims any dispute-related expenses, so I order none.

ORDERS

35.   Within 21 days of the date of this decision, I order the respondent to pay the applicant a total of $2,175, broken down as follows:

a.    $2,000 in damages for breach of contract, and

b.    $175 in CRT fees.

36.   The applicant is entitled to post-judgment interest, as applicable.

37.   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. Once filed, a CRT order has the same force and effect as an order of the Provincial Court of British Columbia.