Date Issued: July 24, 2023
Files: SC-2022-004632
Type: Small Claims
Civil Resolution Tribunal
Indexed as: Bai v. K Fitness Ltd., 2023 BCCRT 618
Between:
Applicant
And:
Respondent
REASONS FOR DECISION |
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Tribunal Member: |
David Jiang |
INTRODUCTION
1. This decision is the first of 2 linked disputes, which have common issues. This dispute, file number SC-2022-004632, is about gym fees. The other dispute is file number SC-CC-2022-008921. So, I have considered the collective evidence and submissions in both disputes to avoid inconsistent findings. However, as discussed below the parties are different, and so I have written 2 separate decisions.
2. The applicant, Shujun Bai, says they paid the respondent, K Fitness Ltd. (K Fitness) for kickboxing classes. Mr. Bai says K Fitness provided the lessons to JB, a family member. Mr. Bai says that K Fitness improperly charged his credit card for 10 months’ worth of lessons after their contract ended. He claims a refund of $1,613.10.
3. K Fitness disagrees. It says that after the parties fixed-term contract ended, Mr. Bai entered into a month-to-month contract for lessons. It says that it temporarily closed its facility and suspended payments due to the COVID-19 pandemic, then appropriately began charging Mr. Bai again after reopening. K Fitness also says that Mr. Bai should have provided notice of cancellation earlier, but as he did not, Mr. Bai is not entitled to a refund.
4. Mr. Bai represents himself. K Fitness is represented by Farhad Dordar, one of its principals.
5. For the reasons that follow, I find Mr. Bai has proven some of his claim.
JURISDICTION AND PROCEDURE
6. 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.
7. 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.
8. 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.
9. 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.
Named Parties and the Style of Cause
10. Under section 61 of the CRTA, the CRT may make any order or give any direction in a CRT proceeding it thinks necessary to achieve the CRT’s mandate. In particular, the CRT may make such an order on its own initiative, on request by a party, or on recommendation by a CRT case manager (also known as a CRT facilitator).
11. Originally Mr. Bai named “Avesta Sarviha (Doing Business As KFitness)” as the sole respondent in this dispute. The CRT issued a Dispute Notice accordingly. Inconsistent with this, the Dispute Response filed by Mr. Dordar previously said that the sole respondent was “Farhad Dordar (Doing Business As KFitness)”. I asked CRT staff to contact the parties to resolve this discrepancy. Both Mr. Bai and Mr. Dordar agreed that the proper respondent in this dispute is K Fitness Ltd. As noted above, Mr. Dordar is a principal of K Fitness. His submissions show he acted on behalf of K Fitness during the parties’ interactions.
12. CRT staff advised that the CRT’s system normally does not allow such a discrepancy to occur, but it did here for technical reasons. I find this to be an unusual and extraordinary circumstance under CRT rule 1.19 that is sufficient to justify issuing an amended Dispute Notice and Dispute Response. I find the amendments are also warranted under CRTA section 61. In reaching this decision I put significance on the fact that the parties both consented to the change. The CRT issued the new Dispute Notice and Dispute Response at my request. I have reflected this change in the style of cause above.
Mr. Bai’s Late Evidence
13. Mr. Bai provided 7 credit card statements as late evidence. They each document charges by K Fitness over the course of several months. K Fitness did not object to the late evidence. CRT staff provided K Fitness the opportunity to respond to it. I find the evidence is relevant to the issues in this dispute. I allow the late evidence as I find there is no prejudice in doing so.
14. Some of this evidence documents transactions from 2020. Given the age of the transactions, I asked the parties to provide submissions about the Limitation Act, and they did so. I discuss this as an issue below.
ISSUES
15. The issues in this dispute are as follows:
a. Is any part of Mr. Bai’s claim out of time under the Limitation Act?
b. Did K Fitness breach the parties’ contract?
c. Are any remedies appropriate?
BACKGROUND, EVIDENCE AND ANALYSIS
16. In a civil proceeding like this one, Mr. Bai as the applicant must prove his claims on a balance of probabilities. This means more likely than not. I have read all the parties’ submissions and evidence but refer only to the evidence and argument that I find relevant to provide context for my decision.
17. Mr. Bai signed a written contract with K Fitness around January 2018. The contract said its term started on January 20, 2018 and ended on January 23, 2020. K Fitness agreed to accept Mr. Bai’s family member, JB, as a student and provide JB access to its facilities and other services as part of the “2 years kickstart” program. In return, Mr. Bai promised to pay a total of $3,757.16, consisting of a $525 down payment and a monthly fee of $140.53 thereafter, starting from February 23, 2018, and ending when the amount was fully paid.
18. Section 3 said that Mr. Bai agreed to pay the fees when due regardless of how much JB used the facilities. Section 24 similarly said that Mr. Bai had to pay full tuition regardless of whether JB attended classes.
19. Section 6 said that the 2-year term programs such as the 2-year kickstart “may be renewed” on a month-to-month basis or for 2 years. Section 29(a) said that members could terminate a monthly membership at any time with at least 30 days’ written notice. Section 29(c) said any membership could be terminated by the member on written notice and the reason for the cancellation, at any time if there has been a material change in JB’s or K Fitness’ circumstances.
20. JB began classes at K Fitness in January 2018 as contemplated, until the contract end date of January 23, 2020. The parties disagree on what happened next. Mr. Bai says that he did not sign any contract to extend the lessons. He says he received a blank form to do so, but did not sign it. In contrast, K Fitness says that the contract converted automatically into a continuing month-to-month agreement.
21. As noted above, section 6 said that parties “may” renew it. I find that section 6, and the contract as a whole, lacked any term that said it would automatically be renewed or otherwise continue. There are no documents to show that Mr. Bai or JB agreed to renew the contract on a monthly basis or otherwise. So, I find that K Fitness was not entitled to charge Mr. Bai any monthly fees after January 23, 2020.
22. In linked dispute number SC-CC-2022-008921, Mr. Dordar says that K Fitness JB’s other guardian, LK, authorized renewing the contract into a month-to-month arrangement. However, I find this unsupported by any evidence, such as an actual written agreement to that effect.
23. On March 15, 2020, K Fitness closed its facility in order to comply with a provincial health order in connection with the COVID-19 pandemic. K Fitness reopened the facility on June 6, 2020. K Fitness had to close its facility again on February 1, 2021 because of another pandemic-related order. It reopened again on March 1, 2022. During this time, K Fitness continued to charge monthly fees as follows: $145.83 on the 23rd of the months of February, March, April, May, June, July, August, and September 2020. K Fitness also charged an additional $145.83 on August 8, 2020. The 9 charges total $1,312.47. I note that Mr. Bai claims $1,613.10 for 10 months’ worth of lessons, so I find there is a slight discrepancy.
24. The credit card statements show that K Fitness charged LK’s credit card rather than Mr. Bai’s. However, Mr. Bai’s undisputed submission is that he paid the charges, so I ultimately find nothing turns on this.
25. K Fitness also provided multiple emails it sent to Mr. Bai throughout several months in 2020. In summary these emails updated Mr. Bai on the various closures and reopening dates discussed above. However, they do not show that Mr. Bai at any point agreed to renew the parties’ contract after it ended on January 23, 2020.
Issue #1. Is any part of Mr. Bai’s claim out of time under the Limitation Act?
26. Section 6 of the Limitation Act says that the basic limitation period is 2 years, and that a claim may not be started more than 2 years after the day on which it is “discovered”. Under section 8, a claim is “discovered” when the applicant knew or reasonably ought to have known they had a claim against the respondent and a court or tribunal proceeding was an appropriate means to seek a remedy. CRTA section 13.1 says the basic limitation period under the Limitation Act does not run after the applicant requests dispute resolution with the CRT and pays the applicable fee.
27. Mr. Bai applied for dispute resolution on July 11, 2022. So, I find Mr. Bai must have discovered his claim on or after July 11, 2020, in order for it to be in time.
28. In the Dispute Notice, Mr. Bai says he discovered his claim in June 2022. His submissions are inconsistent with this. He says that in August 2020 he looked at his credit card statement and noticed K Fitness’ charges. He says he called K Fitness that month, and asked it to stop charging him. He then saw that K Fitness continued to charge him on August 23, 2020, in the September 2020 statement. As such, he told his credit card company to stop payments to K Fitness. The final payment occurred on September 23, 2020, and appeared on his October 2020 credit card statement. He says he did not immediately apply for dispute resolution because he wanted to take time to negotiate with K Fitness.
29. In emailed response submissions, K Fitness did not directly address when Mr. Bai discovered his claim.
30. I find that Mr. Bai could have reasonably discovered his claim for each transaction starting from 1 month after K Fitness charged the credit card. I say this because I find the transaction would appear on the credit card statement at around that time. Given this, I find that Mr. Bai’s claims for the 5 charges of February 23 through May 23, 2020, were reasonably discoverable by June 23, 2020. These claims are out of time because the discovery date for them are before July 11, 2020. The remining 4 charges of July 23, August 8, 23, and September 23 were reasonably discoverable by August 23, 2020. So, these claims are in time because the discovery date is after July 11, 2020.
31. For those reasons, I find only claims for 4 of the charges are still in time. I dismiss the balance as out of time under the Limitation Act.
Issue #2. Did K Fitness breach the parties’ contract?
32. As noted above, I have found that the parties’ contractual obligations ended on January 23, 2020, without any renewal. Given this, I find K Fitness breached the contract by charging Mr. Bai a monthly fee after the end date.
33. I have found that only the claims for July 23, August 8, August 23, and September 23, 2020 are still in time. So, I order K Fitness to pay Mr. Bai $583.32. I dismiss the balance of Mr. Bai’s claim.
34. The Court Order Interest Act applies to the CRT. Mr. Bai is entitled to pre-judgment interest on damages of $583.32, calculated from the date of each underlying invoice to the date of this decision. This equals $24.67.
35. 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. Mr. Bai proved only part of his claim. So, I find Mr. Bai is entitled to partial reimbursement of $62.50 in CRT fees. The parties did not claim any specific dispute-related expenses.
ORDERS
36. Within 30 days of the date of this order, I order K Fitness to pay Mr. Bai a total of $670.49, broken down as follows:
a. $583.32 as damages,
b. $24.67 in pre-judgment interest under the Court Order Interest Act, and
c. $62.50 in CRT fees.
37. Mr. Bai is entitled to post-judgment interest, as applicable.
38. I dismiss the balance of Mr. Bai’s claim.
39. 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.
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David Jiang, Tribunal Member |