Date Issued: November 27, 2023

File: SC-2022-007252

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Schellenberg v. Schut, 2023 BCCRT 1023

Between:

GORDON JAMES SCHELLENBERG and ZORANA MIHAILOVIC

Applicants

And:

HERMAN SCHUT (Doing Business As H.S.CONSTRUCTION)

Respondent

REASONS FOR DECISION
Tribunal Member:	Micah Carmody

INTRODUCTION

1.      The applicants, Gordon James Schellenberg and Zorana Mihailovic, purchased a home in 2020 intending to completely renovate it. The home’s basement had moisture present. The applicants hired the respondent, Herman Schut (doing business as H.S. Construction), to install a drain system around the home.

2.      The applicants say the respondent did not install the drain system they wanted. They say the installed drain system is not “up to code” and has not remedied the basement’s moisture issues. The applicants seek $5,000, which they say is the cost of fixing the drainage system so that it will work.

3.      The respondent says the drainage system he installed reflected the applicants’ budget constraints and the parties’ agreement. He says moisture issues in the basement persisted because the applicants failed to connect their downspouts and roof rainwater was getting behind the rainscreen.

4.      Mr. Schellenberg represents the applicants. The respondent represents himself.

JURISDICTION AND PROCEDURE

5.      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.

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. In some respects, the parties in this dispute call into question each other’s credibility. Credibility of witnesses, particularly where there is conflict, cannot be determined solely by the test of whose personal demeanour in a courtroom or tribunal proceeding appears to be the most truthful. In Yas v. Pope, 2018 BCSC 282, the court recognized that oral hearings are not necessarily required where credibility is in issue. In the circumstances of this dispute, I find that I am able to assess and weigh the evidence and submissions before me. Bearing in mind the CRT’s mandate that includes proportionality and prompt resolution of disputes, I decided to hear this dispute through written submissions.

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.

ISSUES

8.      The issues in this dispute are:

a.    What were the key terms of the parties’ drainage system contract?

b.    Did the respondent breach any contractual terms? If so, did the respondent have the opportunity to remedy his work?

c.    If the respondent breached the contract, what are the damages?

EVIDENCE AND ANALYSIS

9.      In a civil proceeding like this one, the applicants must prove their claims on a balance of probabilities, meaning more likely than not. While I have considered all the parties’ evidence and submissions, I only refer to what is necessary to explain my decision.

10.   In 2020, the applicants purchased a 1957-built home and 4 other buildings on the property. The previous owner disclosed moisture in the basement and the applicants asked a home inspector to look at it. The inspector advised that there were drainage issues and the home’s perimeter needed to be excavated to confirm the nature of the issues. None of this is disputed.

11.   The applicants obtained quotes, including a September 20, 2020 quote from Schmidt Bobcat & Trucking Ltd. (Schmidt). The Schmidt quote is important because although the applicants did not hire Schmidt, they allege that the Schmidt quote formed the basis of their contract with the respondent. I return to this below.

12.   The home includes concrete slab patios at the front and back. The Schmidt quote set out in some detail that the work involved removing those concrete slab patios, excavating around the home, adding waterproofing to the foundation, and installing perforated pipe around the footings, solid outflow pipes, and cleanouts. The quote also included a rough drawing. The quoted price was $15,750.

13.   What the respondent installed was undisputedly different. He did not remove the concrete patios. The drainpipe jogged around the patios, which extended 10 feet away from the home. Rainscreen was installed around the entire home and the patios’ perimeters. According to the respondent’s invoice, this work was $10,000. The respondent also dug out and installed a perimeter drain around the shop building for $7,875. None of this is disputed.

14.   The applicants say this was, in effect, a “skirt drain” rather than a perimeter drain. They say it has not been effective at addressing the basement moisture issue and is not compliant with the BC Building Code (code). They say when they asked the respondent to fix it, he refused, so they had to hire someone else.

15.   In 2022, the applicants hired D.I.R.T. Island Excavating Inc. (DIRT). According to DIRT’s invoice and CEO Craig Cherry’s written statement, DIRT removed the front patio and installed a perimeter drain for $4,000 before taxes, along with unrelated work indicated on the invoice. The applicants say they will still need to remove the back patio and install a proper perimeter drain under it, along the house. So, the applicants claim $5,000 for the front and back patio removal and drain installation.

16.   I pause to note that the applicants submitted a statement from Craig Cherry as expert evidence. Craig Cherry has been installing drainage systems since 2016 and the respondent does not challenge their qualifications. Craig Cherry said the code requires all perforated piping to be within 1 foot from a building’s foundation footings. They said rather than doing this, the respondent ran pipe around the perimeter of the concrete patios, which is undisputed. They said they consider this a “French drain,” which addresses surface water rather than ground water.

17.   The respondent says his work was done to code. However, I find the issue here is not whether the work was done to code or what type of drain was installed but whether the work was what the applicants contracted for.

The contract’s terms

18.   As noted above, the applicants say the Schmidt quote formed the basis of their contract with the respondent. It is undisputed that Mr. Schellenberg used to work for the respondent and showed him the Schmidt quote. The applicants say the respondent agreed to do the same work for the same price. However, the applicants say the respondent decided not to remove the concrete patios.

19.   In contrast, the respondent says the parties agreed not to remove the concrete patios because it saved around $4,000. I find this is consistent with the balance of the evidence. First, the respondent invoiced the applicants $10,000 for the drain work, which is $5,750 less than the Schmidt quote. The applicants do not dispute that they wanted a perimeter drain around a separate shop building as well, and I find the cost savings in part facilitated this work, for which the respondent charged $7,875. Second, the applicants promptly paid the invoice without protest, and they do not say they were somehow unaware that the patio slabs had not been removed. Third, in a witness statement, Zorana Mihailovic said that before installing the drain, the respondent said that if there were still moisture issues after installation, he would return in the spring and remove the concrete. Based on this, I find the applicants were aware of and allowed the respondent to proceed without removing the patios. So, while the applicants argue that they always wanted the patios removed and the drains installed as per the Schmidt quote, I find that they agreed to proceed with the respondent’s suggested method. They may now wish they had insisted on a different method, but the law is concerned with the parties’ objective intentions at the time they formed (or amended) their contract (see Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53).

20.   Did the respondent breach an implied term? While there is generally an implied term that work will be done to a reasonably competent standard, I find the applicants have not proven that the respondent’s work was substandard, since it was what they asked him to do. If the applicants wanted the patios removed, they could have insisted that the respondent do it or chosen to proceed with a different contractor, such as Schmidt. While I accept that the drains do not meet the code’s requirements for perimeter drains, I am unable to imply a contractual term that the work would meet the code’s requirements for perimeter drains because the contract was not for perimeter drains.

21.   In summary, I find the respondent did not breach the parties’ agreement by not removing the patio slabs or by installing drains around them instead of directly against the foundation.

22.   The applicants also say the respondent failed to paint the foundation with tar or foundation sealer. The respondent does not specifically dispute this. However, I find the applicants have not established that this obligation remained part of the parties’ contract. By not removing the patios it would have been impossible to paint much of the foundation. I find the applicants have not proven a material breach here and in any event they do not claim any specific damages for this.

23.   The applicants say the respondent “implied a warranty,” by saying if not removing the concrete caused a problem he would “deal with it [then].” However, the applicants do not allege that the respondent said he would do this for free. I find that such a term would not make commercial sense because the applicants paid the respondent less than they would have paid for the patio removal method. Although the applicants say they asked the respondent many times to return and address the issue, I find he was not obligated to do so without a new contract, which never materialized.

24.   For these reasons, I find the respondent did not breach the parties’ contract and the applicants are not entitled to any damages. I dismiss their claim.

25.   Under section 49 of the CRTA and CRT rules, a successful party is generally entitled to reimbursement of their CRT fees and reasonable dispute-related expenses. The respondent was successful but did not pay CRT fees. I dismiss the applicants’ claim for CRT fees. Neither party claims dispute-related expenses.

ORDER

26.   I dismiss the applicants’ claims and this dispute.