Date Issued: October 10, 2023

File: SC-2022-008291

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Mplus Architecture Inc. v. Maunsell Investment Company Ltd.,

2023 BCCRT 857

Between:

MPLUS ARCHITECTURE INC.

Applicant

And:

MAUNSELL INVESTMENT COMPANY LTD., MOHAMMED DAWOOD AL QAIS, and SAAD AL JAF

Respondents

REASONS FOR DECISION
Tribunal Member:	Megan Stewart

INTRODUCTION

1.      This dispute is about payment for architectural services.

2.      The applicant, Mplus Architecture Inc. (Mplus), entered into an agreement with the respondent, Maunsell Investment Company Ltd. (Maunsell), to conduct a feasibility study for Maunsell’s development project. The respondents Mohammed Dawood Al Qais and Saad Al Jaf[1] are Maunsell’s directors. Mplus says the respondents failed to pay for the feasibility study. Mplus claims $3,360 for its unpaid invoice, and $672 for legal fees it incurred to send Maunsell a demand letter before starting this CRT proceeding, for a total of $4,032.

3.      The respondents disagree with the invoiced amount, and say it is not in line with the services Mplus provided. The respondents say they are prepared to pay $1,500 for the feasibility study, less $687.37 for dispute-related expenses they incurred to respond to this dispute. I address the respondents’ request for dispute-related expenses separately further below.

4.      Mplus is represented by its principal. Saad Al Jaf represents himself and Maunsell. Mr. Al Qais is self-represented.

JURISDICTION AND PROCEDURE

5.      These are the Civil Resolution Tribunal’s (CRT) 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.

6.      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.

7.      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.

8.      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.

ISSUES

9.      The issues in this dispute are:

a.    Must the respondents pay Mplus $3,360, or another amount, for the feasibility study?

b.    Must the respondents pay Mplus $672 for legal fees?

EVIDENCE AND ANALYSIS

10.   In a civil proceeding like this one, the applicant Mplus must prove its claims on a balance of probabilities. I have read all the parties’ submissions and evidence but refer only to the evidence and argument I find necessary to explain my decision. I note Mplus did not provide reply submissions, despite having the opportunity to do so.

11.   At the outset, I dismiss Mplus’ claims against Mr. Al Qais and Saad Al Jaf personally. Mplus did not make any specific allegations against Mr. Al Qais or Saad Al Jaf. In addition, corporations are distinct legal entities, separate from their directors and officers. Mr. Al Qais and Saad Al Jaf are undisputedly Maunsell’s directors, and the evidence is that Mplus’ agreement was with Maunsell, a corporation, not with Mr. Al Qais or Saad Al Jaf personally.

12.   I turn to Mplus’ claims against Maunsell.

13.   On November 30, 2021, Maunsell contacted Mplus to request a fee proposal for the design of Maunsell’s development property. Representatives of Mplus and Maunsell met online on December 2 to discuss the scope of work. On December 7, Mplus provided Maunsell with an initial fee proposal for the project’s cost, and following Maunsell’s additional requests, Mplus provided an “all-encompassing” fee proposal on December 18. None of this is disputed.

14.   Mplus says it had numerous discussions with Maunsell to review the scope of work and cost estimates, including after December 18. Mplus says it verbally informed Maunsell that its services had extended beyond providing a fee proposal to include a feasibility study. Mplus says it advised Maunsell of its standard $100 hourly rate to conduct the feasibility study, and that Maunsell did not object to this rate.

15.   Maunsell does not dispute it engaged Mplus to conduct the feasibility study, nor does it dispute Mplus’ $100 hourly rate for that service. So, I find Mplus and Maunsell’s verbal agreement was for Mplus to conduct a feasibility study at an hourly rate of $100. There is no evidence Mplus provided an estimate of the number of hours the study would take or its overall cost.

16.   On February 24, 2022, Mplus issued Maunsell a $3,360 invoice for the feasibility study, which Maunsell undisputedly did not pay. In June 2022, Mplus followed up by email, asking Maunsell to pay the invoice immediately. Further to Maunsell’s request, Mplus provided a timesheet with the breakdown of hours spent on the feasibility study, and in July, Mplus sent Maunsell a revised and discounted invoice for $2,467.50. It is undisputed that Maunsell did not pay the revised invoice either.

17.   Maunsell does not say Mplus did not perform the work charged to a reasonably competent standard. Rather, Maunsell only disputes the invoiced amount, and in particular, the number of hours Mplus says it spent on work related to the study.

18.   In open-ended hourly contracts, a commonly implied term is that the hours spent are reasonably required and put to some useful purpose (see the non-binding but persuasive decision Simple Moves North Shore Movers Inc. v. Kenney, 2022 BCCRT 452, referring to Herbert v. Smith, 2010 NSSM 44 at paragraph 26). I find it is appropriate to imply this term here. Further, I find Maunsell bears the burden of proving any hours charged that were not spent reasonably.

19.   Based on the correspondence and communication, document review, and drawings and design work submitted in evidence, as well as the timesheet, I find there is nothing obviously unreasonable about the amount Mplus charged Maunsell, with one exception that I address below.

20.   Maunsell specifically points to the fact that the timesheet reflects time spent on 5 different options for the development’s layout, while the final product only included 2 options. I agree that there are 5 “options” described in the timesheet, but I find these include revised versions of the final 2 options (one with underground parking and one without) outlined in the feasibility study Mplus sent to Maunsell in March 2022. I note that the timesheet includes hours worked in March 2022, after Mplus issued the February 24 invoice. However, Maunsell acknowledges Mplus spent some time working on each of the 5 versions of the development’s layout for which it should be paid, including in March, so I infer the February invoice included time Mplus anticipated spending on the feasibility study in March.

21.   Maunsell submitted a version of the timesheet that includes the number of hours it says Mplus should have spent on different elements of the feasibility study. Maunsell says based on its calculations, Mplus should only have charged it for 19 hours of work, rather than for the 32.5 hours billed. However, Maunsell does not provide a reason for saying Mplus spent too much time on the study and overcharged it, other than pointing out the 5 options discussed above. In its version of the timesheet, Maunsell simply substitutes the number of hours Mplus recorded for performing certain tasks with a lower figure, without explanation. As noted above, Maunsell bears the burden of proving the hours charged were not spent reasonably. I find in these circumstances it has failed to do so.

22.   I turn to the one aspect of Mplus’ billed amount I find unreasonable. The timesheet reflects a 1-hour client meeting on February 14 for which Mplus charged Maunsell $450. As noted above, I find the verbal agreement only contemplated a $100 hourly rate. There is no evidence Maunsell agreed to any other rate for client meetings. So, I find Mplus was only entitled to charge Maunsell $100 for the February 14 meeting.

23.   For the reasons above, I find Mplus is entitled to payment of its $3,360 invoice, less the $350 I find it overcharged Maunsell for the February 14 client meeting. This amounts to $3,010.

24.   Mplus also claims $672 for legal fees it says it incurred to send Maunsell a demand letter before starting this CRT dispute, which I find is supported by its lawyer’s invoice in evidence. However, legal fees are not generally recoverable as damages (see Voyer v. C.I.B.C., 1986 CanLII 1226 (BCSC)). Rather, at the CRT they are recoverable in the context of dispute-related expenses, which are reasonable expenses and charges that the CRT considers directly relate to the conduct of the proceeding. Though Mplus’ claimed legal fees pre-date this proceeding, there is an argument to be made that they are dispute-related expenses, as they were likely incurred in contemplation of litigation. However, even if they are dispute-related expenses, CRT rule 9.5(3) says the CRT may order reimbursement of legal fees charged only if there are extraordinary circumstances, and I find there are no extraordinary circumstances here. So, I find Mplus is not entitled to its claimed $672 for legal fees.

25.   The Court Order Interest Act (COIA) applies to the CRT. I find Mplus is entitled to pre-judgment interest on the $3,010 debt award from February 24, 2022, the date of Mplus’ invoice, to the date of this decision. This equals $138.57.

26.   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. As Mplus was largely successful in its main claim, I find it is entitled to reimbursement of $175 in CRT fees. I have addressed Mplus’ claim for reimbursement of its legal fees above, and otherwise, Mplus did not claim dispute-related expenses. Maunsell claimed $687.37 for dispute-related expenses, but as it was unsuccessful, I dismiss its claim.

ORDERS

27.   Within 21 days of the date of this order, I order Maunsell to pay Mplus a total of $3,323.57, broken down as follows:

a.    $3,010 in debt,

b.    $138.57 in pre-judgment interest under the COIA, and

c.    $175 in CRT fees.

28.   Mplus is entitled to post-judgment interest, as applicable.

29.   I dismiss Mplus’ claims against Mr. Al Qais and Saad Al Jaf.

30.   I dismiss Maunsell’s claim for dispute-related expenses.

31.   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.