Hersley v. EMRlogic Systems Inc. Date:, 2010 BCPC 339

Citation: Hersley v. EMRlogic Systems Inc. Date: 20101210 2010 BCPC 0339 File No: 08-19592 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: RICHARD HERSLEY CLAIMANT AND: EMRlogic SYSTEMS INC. DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE M. F. GIARDINI Counsel for the Claimant: M. Tweedy Counsel for the Defendant: R. Underhill Place of Hearing: North Vancouver, B.C. Dates of Hearing: March 4; May 10; July 22, 2010 Date of Judgment: December 10, 2010 INTRODUCTION [ 1 ] The claimant, Mr. Hersley , works in the multimedia field under the business name Motion Visual.

He works on videos, graphics, flash movies, and on websites. He claims EMRlogic Systems Inc., the defendant, owes him money pursuant to an agreement that he would be paid for certain “extra work” performed for the company in 2007 - 2008. [ 2 ] Mr. Hersley provided webmaster services for the company and was paid a monthly retainer for those services. However, he says that during the period of July 2007 to February 2008 he performed “extra work” over and above his usual website related duties as webmaster.

The extra work pertained to three new websites, new videos and new flash movies. [ 3 ] EMRlogic maintains that the extra work for which the claimant seeks payment was not in fact extra work but part of the regular duties the claimant performed for EMRlogic . He was paid a monthly retainer of $2,000 for the work he did for EMRlogic . The defendant maintains there was no agreement between it and the claimant that he would receive additional payment for the extra work now claimed. [ 4 ] The central issue in dispute between Mr.

Hersley and EMRlogic is whether they entered into an agreement relating to extra work on new websites, new videos and new flash movies. FACTS NOT IN DISPUTE [ 5 ] The following facts emerged from the evidence during the course of the trial and are not in dispute:

1. EMRlogic is a producer and vendor of medical records software. 2. The president and CEO of EMRlogic is Glenn Brand. He is one of the founders of the company and is the chief architect of the software produced by the company. 3. In the fall of 2005, when the claimant began his relationship with the company, EMRlogic was a vendor of a product called OD Professional. This product consisted of optometric practice software used by optometric practitioners. At that point in time EMRlogic was trying to expand its share of the medical records software market. 4.

In the fall of 2005, the claimant created a series of videos for EMRlogic and was paid for them. 5. The claimant was placed on retainer to provide webmaster services for the company. There was a difference in the evidence about the initial amount. However, at the relevant time, between July 2007 and February 2008, it is clear the claimant was receiving a retainer of $2,000 a month. 6 The claimant was paid $2,000 per month retainer to perform webmaster duties. 7. There was no written contract between the claimant and EMRlogic . 8. The claimant did work for EMRlogic until February 2008.

INVOICE ISSUED BY CLAIMANT [ 6 ] The claimant issued Invoice #0844 dated February 29, 2008. This was a four page invoice which set out the work the claimant said he had done for EMRlogic from 2006 to 2008. The claimant set out a description of the work which he described as “Website Management (Maintenance) Create Marketing Materials”. He differentiated between his web manager duties, which he described as creating graphics, managing website(

s) changes, inventing and creating logos, changing and re-changing text, shooting small videos and so on, and the other duties he performed. The other duties he described in part as “all other duties assigned by vice president of marketing, company CEO, company technical advisor and company art-director were performed on promise of future monies, future time and profit sharing”. [ 7 ] The invoice was particularized by year. Each year was sub-divided into what was paid and what was not paid. All “web maintenance” work done by the claimant was paid.

A note under “Paid 2007” states he was paid $4,000 a month from August 15, 2006 to November 15, 2006 to cover some of the time for the corporate videos. [ 8 ] For 2007 and 2008 the following was shown on the invoice as “Not Paid – Promised:” NOT PAID 2007 – PROMISED Duties, assigned by vice president of marketing, company CEO, company technical advisor and company art director were performed on promise of future monies and profit sharing. OD Professional – website Create new 80 pages web design and web architecture including multiple revisions.

Monumental and complicated web creation process where OD Professional.com including taking detailed and contracting instructions from 4 bosses resulting in making and remaking the website over and over. 50.00 per hour times 240 hours= $12,000 Video Products (including multiple revisions): Next Wave Video (3 min corporate) 12,000.00

Complicated video creation process including taking detailed and contrasting instruction from 2 bosses resulting in making and remaking the video over and over. 100.00 per hour X 30 hours Action Manager Video (3 min corporate) Complicated video creation process including taking detailed and contrasting instruction from 2 bosses resulting in making and remaking the video over and over. 100.00 per hour X 30 hours Connection Manager Video (3 min corporate) Complicated video creation process including taking detailed and contrasting instruction from 2 bosses resulting in making and remaking the video over and over. 100.00 per hour X 30 hours Image Manager Video (3 min corporate Complicate video creation process including taking detailed and contrasting instruction from 2 bosses resulting in making and remaking the video over and over. 100.00 per hour X 30 hours EMRlogic Create new web design and web architecture including multiple revisions Complicated web creation process for EMRLogic.com including taking detailed and contrasting instruction from 4 bosses resulting in making and remaking the website over and over 50.00 per hour X 180 hours MDProfessional Create new web design and web architecture including multiple revisions Monumental and complicated web creation process for ODProfessional.com including taking detailed and contrasting instruction from 4 bosses resulting in making and remaking the website over and over. 50.00 per hour X 180 hours 3,000.00 3,000.00 3,000.00 3,000.00 9,000.00

9,000.00 NOT PAID 2008 – PROMISED Duties, assigned by vice president of marketing, company CEO, company technical advisor and company art director were performed on promise of future monies and profit sharing.

Flash Web Movie for site ODPro Main Flash (create complicated flash product 3 times over – 10 hours for each revision plus multiple updates to final revision = 40 hours X 100.00 per Flash Web Movie for site MDPro Main Flash (create complicated flash product 3 times over – 10 hours for each revision plus multiple updates to final revision = 40 hours X 100.00 per Flash Web Movie for site EMRLogic Main Flash (create complicated flash product 3 times over – 10 hours for each revision plus multiple updates to final revision = 40 hours X 100.00 per 4,000.00 4,000.00 4,000.00 The total amount not paid was shown as $54,000. [ 9 ] A different version of the Invoice #0844 was attached to the Notice of Claim.

That version was two pages long and contained less detailed information about what was done, the number of hours worked, and so forth. However, the outstanding amount shown on both invoices is the same. The claimant invoiced the company for $54,000 for extra work done in 2007 and 2008. The GST on that amount was $2,700. The total due on the invoices is shown as $56,700. The claimant waived the amount over $25,000 so his claim could fall under the monetary jurisdiction of this Court. EVIDENCE FOR THE CLAIMANT Mr. Richard Hersley’s Testimony [ 10 ] Mr.

Hersley said when he first performed services for EMRlogic in 2005 he was asked to shoot a video of some doctors. He arranged this with Mr. Brand. He was to be paid a fee of $800 for the video. Mr. Hersley created a series of other videos and was paid for them. The work on those videos was done before he was placed on retainer. Mr. Brand asked him to do more work on videos and to design a new website for EMRlogic . Mr. Brand said he would pay Mr. Hersley a retainer of $2,000 a month. Mr. Hersley worked on retainer from November 2005 to August 2006. Mr.

Hersley sent invoices to EMRlogic and was paid up to August 2006. [ 11 ] In August 2006 Mr. Brand asked the claimant to do some training videos. Mr. Hersley said Mr. Brand told him he would pay him an extra $2,000 a month. Mr. Hersley said the discussions about how he was going to be paid and what work he was to do were with Mr. Brand and with no one else. [ 12 ] The claimant said he reached an agreement with Mr. Brand that between August 2006 and December 2006 he would create training videos for EMRlogic and he would be paid an extra $2,000. Mr. Hersley said the training videos were completed by December 2006.

At that point the amount of money he was paid was reduced to a retainer of $2,000 a month for regular duties. [ 13 ] Mr. Hersley said from July 2006 to August 2007 he performed his regular webmaster duties for $2,000 a month. In July or August 2007 Mr. Brand asked Mr. Hersley to do extra work on three new websites, namely: EMRlogic , OD Professional, and MD Professional. In addition to working on the three new websites Mr. Hersley continued to do his regular work as webmaster. He also

worked on new videos and new flash movies. Mr. Hersley said he was paid $2,000 per month for his regular work as a webmaster during the entire time he worked for the company. [ 14 ] Between July 2007 and February 2008 Mr. Hersley said he created the new websites, new videos and flash movies. He said the agreement with EMRlogic was that he would work extra hours. Mr. Hersley claimed he never received any compensation for the extra work he did. He also claimed the three new websites he created were used by EMRlogic until the week before the first pre-trial conference which was held in November 2008. [ 15 ] Mr.

Hersley said for the first year he worked with EMRlogic , from 2005 to 2006, he kept a running total of what he was owed by the company. However, in December 2006, Patrick Chow the company’s accountant told him to just send a simple invoice each month. He told Mr. Hersley not to invoice the extra work in detail. Mr. Hersley said he sent invoices by email to EMRlogic and also provided hard copies. He said EMRlogic did not ask him for further details or to explain alleged discrepancies. [ 16 ] Mr. Hersley claimed that Mr.

Brand told him he would get an increase in pay when he discussed the creation of the three new websites with him. Mr. Brand apparently told Mr. Hersley to keep a record of his time. Mr. Brand told Mr. Hersley he would pay him as he had before. Mr. Hersley understood this to mean he would be paid 2% of gross sales which would result in an extra $2,000 per month, if not more. Mr. Hersley said this was how he was paid for the extra work he had done the first time. He did not have a discussion about payment with anyone else other than Mr. Brand. [ 17 ] Mr.

Hersley said the original detailed invoice was sent to the defendant. He calculated the amount owed to him based on $50 per hour. He charged $50 per hour for any extra hours he did. This was over and above the $2,000 he was paid on retainer for his webmaster duties. [ 18 ] The claimant said when he started providing services to EMRlogic he worked on a website for them. This website was called OD Professional. The company already had a website for OD Professional but the claimant developed it further.

The first OD Professional website he worked on grew from a small site to a massive site of 80 pages with numerous videos and flash movie inserts. The claimant said he later worked on two additional websites: one called MD Pro, that was a website of approximately 70 to 80 pages, and another website called EMRlogic which was either three to four or six to eight pages. [ 19 ] The claimant said some of the content for the new website was taken from the first OD Professional website he had worked on in 2006 and edited and re-edited. He said some of the text was prepared by Alistair Jackson, the VP of sales.

However, the claimant edited the text. The claimant said the three websites were very complex. They were many, many pages long. He said he did not want them to be so large but the director of marketing did. The claimant said he was involved in intense interaction with Mr. Jackson while working on the new websites. This included telephone calls, personal meetings, a slew of emails and changes upon changes. [ 20 ] The claimant was asked about a suggestion that all he did was copy the original website. The claimant said when one is marketing for a company one needs to keep the product somewhat similar.

He acknowledged that the MD Pro website in some ways looked similar to the OD Pro website. However, he said on the MD Pro website there were many graphics which had to be changed to accommodate the colour they were working with on that site. Further, the claimant said there was also lots of editing. He said Mr. Jackson was involved on a daily basis. [ 21 ] The claimant said that in addition to the websites, he also shot five corporate videos which he created from scratch. He said shooting a corporate video is a complex procedure.

One needs to understand what the company wants to say and then determine how to say it in an interesting way. He said he needed to prepare the script, find a location and then do the actual shooting of the videos. In addition to the videos he also shot three flash movies. [ 22 ] The claimant said the three websites were up and running for a period of time. He said the websites “came on” throughout 2007 and then he managed them. He noted he went from being a webmaster of one site to being a webmaster of three sites.

The claimant said he approached Alistair Jackson on a few occasions about the fact that he was doing much more work than he had originally done as webmaster. Mr. Jackson told him to speak to Mr. Brand. The claimant said he spoke to Mr. Brand about that suggestion and sent him an email about being paid more than $2,000 a month. Cross-Examination of Mr. Hersley [ 23 ] In cross-examination it was suggested to Mr. Hersley that the original retainer was $1,000 and later it was raised to $2,000. Mr. Hersley said that could have been the case. [ 24 ] With respect to the extra work done in 2006, Mr.

Hersley denied there was a meeting in August 2006 with Mr. Brand and another person, at which he was told the company could not afford to pay $4,000. Mr. Hersley maintained he was offered $4,000. He also maintained there was no agreement that $2,000 would be “accrued”. Mr. Hersley was asked whether he had expressed concern about money accruing and about how he would be paid. Mr. Hersley agreed he had. Mr. Hersley said Mr. Brand had come up with the suggestion that the company would pay Mr. Hersley 2% of sales until the amount owing (the accrued amount) was paid off. Mr.

Hersley agreed that EMRlogic paid him the amount owed for the extra work he performed from August to December 2006 over time, albeit very slowly. He said that was why he decided to go out on a limb the second time. [ 25 ] Mr. Hersley was asked when he started to have more work relating to running three websites. He said it was in July and August 2007. He maintained that Mr. Brand told him he would be paid for the extra work like the last time, i.e. during first period in 2006 when the amount he was paid was raised to $4,000. However, the claimant said Mr.

Brand told him he could not afford to pay him but he should keep track of his time and Mr. Brand would pay it later as he had last time. Mr. Hersley denied the suggestion that he confused the discussion he said had taken place in 2007 with a discussion that had taken place in 2006 with Mr. Brand. [ 26 ] Mr. Hersley said the discussion occurred in July or August 2007. There was a telephone discussion with Mr. Brand and then a meeting in Mr. Brand's office. The claimant acknowledged that Mr. Brandt did not send anything to him in writing. However, Mr.

Hersley said he had received an email from Patrick Chow regarding the previous arrangement. In that email Mr. Chow said he had heard

of an arrangement regarding the payment of 2% and asked if it was true. When pressed, Mr. Hersley acknowledged he did not get an email from the company directly but said he got an email second hand from Patrick Chow. [ 27 ] The claimant was questioned about certain emails he exchanged with Patrick Chow on or about December 29, 2006. He acknowledged that this dealt with the arrangement they had regarding the 2006 extra work. The claimant said he may have initiated the emails. He noted he had been asked earlier whether he had any written correspondence confirming the arrangement.

He pointed to the email of December 29, 2006 and said this was the roundabout way he communicated with the company and all the correspondence with the company was like this. [ 28 ] The claimant was asked whether it was his evidence that he met with Mr. Brand the following year (i.e. 2007) about the work on the websites and that he had made exactly the same arrangements as the previous year. The claimant said he could not remember the exact words but it was to the effect it would be the same as before and he was to keep track of his time. He said Mr. Jackson got involved and made the project a lot bigger.

The claimant was asked whether this could have been in September 2007, he said “yes” but added it could also have been in June 2007. [ 29 ] The claimant was asked about an email dated September 21, 2007, which was titled “Talking?” This email exchange actually began on September 20, 2007, when an email from the claimant to Mr. Brand asked when was a good time to meet or buy lunch. The claimant was asked about another email he had sent to Mr. Brand on September 25, 2007. In that email he said the immediate results of the chat were a bit disappointing. He was asked what the disappointment was.

The claimant said he was disappointed that his retainer for webmaster duties could not be raised to $3,000. [ 30 ] The claimant also said the reference to tempering his enthusiasm and only working on OD projects 30 or 40 hours a week and not 60 to 80 hours a week as he had been doing referred to combined hours he had worked both as a webmaster and on extra work. The claimant was asked whether he had arranged the call to discuss getting paid extra money. The claimant said that may have been the case. He had tried to talk to Alistair Jackson and had been told to talk to Mr. Brand.

He said that may have been about getting paid another $1,000. [ 31 ] It was suggested to the claimant that references to the chat being disappointing and thanks to Mr. Brand for his honesty related to concerns Mr. Brand had raised with the claimant’s work. The claimant said those comments in his email were not related to any such thing. He said Mr. Brand had not said anything to him about being dissatisfied with his work. The claimant said Mr.

Brand had only ever complained about the finances of the company and not about his work. [ 32 ] The claimant agreed that as of September 2007, his monthly retainer was $2,000. He was asked why he would do the enormous amount of additional work he claimed when he was only getting paid $2,000. The claimant said he did so because Mr. Brand had told him to do the work and he would be paid. The claimant said he had been paid in the past, albeit slowly. [ 33 ] The claimant was asked about an email dated September 14, 2007, titled “balance of account”.

In the last of a string of emails dated September 14, 2007, the claimant asked whether he would be able to keep the commission going once the balance was paid off. The claimant was asked why he would ask that question. He said at that point the company was paying off approximately $13,000 owing to him from the previous (2006) period. The claimant did not remember sending the email. He also said the date could be wrong. It was suggested to him that the reference to the balance being paid off was to the balance of $13,000 that was owing and not to the alleged new arrangements for additional money.

The claimant said he did not know but the date seemed wrong to him. [ 34 ] The claimant was asked why he would ask to keep the commission going in his email of September 14, 2007. He said he did not understand the question. He was then asked why he sent an email referring to continuing the commission if there was an agreement about being paid for extra work going forward. The claimant said the email could be a forgery.

He also said anything could be changed. [ 35 ] The claimant said he was confused by the document but, if it was correct and not edited, he was probably referring to where he was going with the company because Mr. Brand may have said something off hand. The claimant said maybe he was alluding to the fact that an extra $1,000 or $2,000 for the extra work as webmaster could be paid by commission. He claimed that Mr. Brand had told him one way to increase his webmaster salary was by commission. [ 36 ] The claimant was asked about a string of emails ending with an email dated January 2, 2008 titled “balance owing”.

The claimant said the “balance owing” referred to the money owing from the 2006 extra work. It had nothing to do with the extra work done on the website in 2007-2008. [ 37 ] The claimant was asked about emails dated January 4, 2008 and January 26, 2008 titled “websites – request”. He said the reference to the debt owed which had been brought down was to the original 2006 debt. The claimant said in the January 4, 2008 email he was asking for a raise in salary in relation to his regular webmaster duties. He said he was asking for his monthly retainer of $2,000 to be increased.

This was completely separate from the other agreement regarding the extra work in 2007-2008. EVIDENCE FOR THE DEFENDANT Glenn Brand’s Testimony [ 38 ] Mr. Brand is the president and chief executive officer of EMRlogic and one of the owners. Mr. Brand said the claimant was recommended to him to do some video work. After that he asked the claimant to do work to improve the company’s website. Mr. Brand’s recollection is that the claimant was initially paid at about $1,000 a month and, with other added work, it became $2,000 a month. Mr.

Brand said it was the claimant’s responsibility to do enhancements to the website and to do whatever it took to make the website pertinent. Mr. Brand said the claimant was essentially given the task of webmaster. The claimant was engaged to develop the website. He was to submit invoices to the company. Mr. Brand did not remember who the claimant initially submitted invoices to but in 2006 Patrick Chow was hired as the company’s accountant and from that time invoices were submitted to him via email.

[ 39 ] Mr. Brand said for a four month period in 2006 the claimant was paid an additional $2,000 a month to work longer hours and complete certain website work more quickly. Mr. Brand said the claimant told them he could do the website work more quickly if he could spend more hours. [ 40 ] Mr. Brand explained that for the four month period in 2006 during which the claimant charged an extra $2,000 a month above his retainer, $2,000 was accrued but not paid. Towards the end of the year, the claimant expressed concern about whether he would ever receive his money.

At that point an agreement was reached that the claimant would receive an amount equal to 2% of all new sales in addition to the retainer of $2,000 a month. This arrangement continued until all of the money that had accrued in 2006 was paid off. By the end of 2007 the accrued amount had been completely paid off. [ 41 ] Mr. Brand testified that the first time he became aware of Invoice #0844 was shortly after February 21, 2008, when the claimant was told his services were no longer needed. Mr. Brand said he received a letter from the claimant’s lawyer with a copy of the invoice.

The same invoice was later attached to the Notice of Claim. Mr. Brand said the invoice he received did not reflect a contractual obligation. He said the company had not entered into any agreement with the claimant other than the one they had been paying him on, namely, $2,000 a month. Mr. Brand said there was no contract over and above the contract for $2,000 a month. He said by the end of 2007, the agreement relating to the accrued monies for extra work in 2006 had ended. The claimant had received payment for all the monies accrued in 2006.

The agreement, whereby the company paid the claimant 2% of new sales, had ended by the end of 2007 when the accrued amount was paid off. [ 42 ] Mr. Brand maintained the only agreement between him and the claimant was that the claimant would receive $2,000 a month. In September 2007 the claimant asked Mr. Brand for more money. Mr. Brand told him no. The claimant then wrote an email to Mr. Brand saying he was disappointed and that he would reduce his work to 30 or 40 hours a week. [ 43 ] Mr.

Brand noted that the two-page invoice attached to the Notice of Claim, indicated that approximately $28,000 related to work done on the OD Professional website. Mr. Brand said the contract he had with the claimant required the claimant to do work on the websites. For that the claimant was paid $2,000 a month. Mr. Brand maintained there was no other contract. He said the claim now advanced by the complainant, alleging a different contract for different websites, does not make sense. [ 44 ] Mr. Brand testified that the claimant had spoken to him in September 2007 and asked for more money. At that time Mr.

Brand told him no. Mr. Brand said the claimant responded by email saying he was disappointed and would be reducing his hours. Mr. Brand said he assumed they had understood each other. There was no more money. However, Mr. Brand pointed out that in January 2008 the claimant again asked for an increase. Mr. Brand said no. The claimant then sent him an email to the effect that he wished to continue the 2% arrangement. Mr. Brand again responded no. Mr. Brand said he did not know how he could have entered into another contract with the claimant when he kept saying no. Cross-Examination of Mr. Brand [ 45 ] Mr.

Brand was cross-examined on a number of points. First, he was asked about the change made to the claimant’s contract for four months in 2006. Mr. Brand agreed the reason he changed the contract was that the claimant was doing work on the OD Professional website. He said the claimant wanted to increase the amount of work done during a certain time frame and they agreed to pay him more money for a four- month period. It was agreed the claimant would submit invoices. He would be paid $2,000 a month and another $2,000 a month would accrue. Mr.

Brand acknowledged the money which so accrued was paid to the claimant by paying him 2% of the company’s gross sales over a period of time. [ 46 ] Mr. Brand was asked whether the additional money the claimant was paid during that four-month period in 2006 was meant to reflect additional work on the OD Professional website. He acknowledged that was correct. However, he disagreed that the OD Professional website did not form part of the work the claimant was retained to do originally. Mr. Brand said the claimant was originally contracted to do videos.

They then agreed the claimant would work on their website plus do some training videos. In August 2006 the claimant told them things could go a lot faster if he could work additional hours for a four month period and be paid an additional amount on top of what he was already being paid. [ 47 ] Mr. Brand said the additional money they paid the claimant during that four month period was not for redesign. He said they had contracted with the claimant for $2,000 a month to be the company webmaster, that is, to do the website.

The claimant then told them he could enhance the website substantially if he could do it all at once, rather than in dribs and drabs as he had been doing under the contract of $2,000 a month. Mr. Brand agreed that additional monies were paid to the claimant to expedite the process of completing the project. [ 48 ] Mr. Brand was asked whether the company had paid the claimant an additional $2,000 per month, for that four-month period, to redesign the website on an expedited basis. Mr. Brand said, “No, that was not the case”.

He said they paid the claimant $2,000 more so he could finish the website he had agreed to start back in November 2005. The claimant went to Mr. Brand and told him he could finish the project faster if he got more money over a short period of time. Mr. Brand agreed he had paid the claimant to expedite the completion of the new OD Professional website. [ 49 ] Later, Mr. Brand was asked to confirm that the $4,000 a month payment was made for a period of time when the claimant was working on an expedited basis on the new OD Professional site. Mr. Brand said that was not correct.

When pressed on this, he said the claimant was contracted for $2,000 a month to do a new website but the project had dragged on. The claimant said he could expedite the completion of the process if they paid him an additional amount. Mr. Brand told the claimant they could not afford anything more. That is when the claimant suggested he could accrue the money. [ 50 ] Mr. Brand was asked whether there was a period of time, from December 2006 to August 2007, when the claimant simply did webmaster duties. He said the claimant was working on the website; his job was to provide them with web services. Mr.

Brand said the claimant did not really finish the new website in December 2006. It was suggested to Mr. Brand that the additional $2,000 a month stopped being paid when the work was substantially completed on the new website. Mr. Brand did not agree. He said the claimant continued to work on the website just like he always did. Mr. Brand said the money did not stop simply because the website was up and

running. The money stopped because they had only agreed on a four month period of extra funds. Mr. Brand said the new website was not ever completed. He said it was a work-in-progress. He was asked whether there was a period of time when the claimant was not working on developing a new website. Mr. Brand said that was not the case. He said the claimant was their web resource. He had done work on their website and shortly after he began his first work-in-progress was up on the internet. The claimant, according to Mr. Brand, continued to do work on the website.

He said the website was always a work-in-progress that was never actually completed. [ 51 ] Mr. Brand explained that by the term “work-in-progress” he meant that as the claimant did the work, he put it up. Later, Mr. Brand and others in the company would look at it, tell him what they liked, what they did not like, and then a number of changes would be made to the website. He said this kept on going during the claimant’s time as webmaster with the company. [ 52 ] Mr.

Brand was referred to his “will say” statement where he stated the additional $2,000 a month was charged to the company “in order to do a substantive change to the website”. Mr. Brand agreed that statement was correct. It was suggested to him that the same arrangement was entered into in 2007. It was suggested that, at that time, Mr. Brand agreed to pay the claimant additional sums for the creation of two new websites and for a further revamp of the OD Professional website. Mr. Brand said that was not correct. Mr.

Brand denied he had a conversation with the claimant telling him not to invoice his time for that extra work. [ 53 ] Mr. Brand agreed he knew the claimant was working on two new websites and that he was working on a third version of the OD Professional website. He asserted his expectation was that the claimant would do that work for the sum of $2,000 a month which was his regular retainer as a webmaster. [ 54 ] Mr. Brand was questioned about an exchange of emails in January 2008. Mr. Brand confirmed that the claimant asked him for “a bit of a raise in salary” in an email dated January 4, 2008. Mr.

Brand said he refused any kind of raise or an additional 2%. He was asked whether the raise was in respect of the claimant’s webmaster duties. Mr. Brand said the raise, as he understood it, was for the claimant’s contract work with the company to work on the website. It was put to Mr. Brand that the reason the claimant asked for a raise was to reflect the fact that he was now acting as webmaster for three websites. Mr. Brand said he did not know why the claimant asked for a raise. He simply responded there was not going to be any raise regardless of the reason. [ 55 ] Mr.

Brand was asked about the invoice he received from the claimant. He said he received it in a letter sent by the claimant’s counsel. Mr. Brand said that was the first time he had seen the invoice and he was surprised by it. Mr. Brand confirmed that the reference to balance owing in an email dated November 15, 2007, did not refer to any of the money being claimed by the claimant in this action. Mr. Brand said as of November 15, 2007, when he received that email, he knew of no other claim nor did the claimant mention any other claim.

He said the reference to the balance owing was to what the company owed the claimant for what work invoiced at that time. Mr. Brand said there was nothing else owing and they told the claimant there was nothing else owing. [ 56 ] Mr. Dennis Ball also testified on behalf of the defendant. I found his testimony of limited assistance on the central issue so have not summarized it in these reasons. POSITION OF THE PARTIES The Claimant’s Position [ 57 ] The claimant submits this is a simple case. He asserts he performed web design work between 2007 and 2008 for EMRlogic for which he was not paid.

The claimant submits the issue of whether there was an agreement between him and EMRlogic and the nature of that agreement was only addressed by two people, namely, the claimant himself and Glenn Brand on behalf of EMRlogic . Accordingly, this case turns on his credibility and that of Mr. Brand. [ 58 ] The claimant argues his testimony, that he performed certain work which is set out in the February 2008 invoice, was not seriously challenged. Additionally, there is no dispute he was not paid for the amount invoiced. The plaintiff submits his evidence establishes he had an agreement with Mr.

Brand to create three additional websites. That agreement was made when he already had another agreement in place to perform webmaster duties for $2,000 a month. The claimant submits it makes no sense to accept EMRlogic’s position that he agreed to do a substantial amount of additional work as part of his webmaster duties for $2,000 a month. The claimant submits there is no issue that EMRlogic asked him to do additional work. Further, there is no issue that EMRlogic used the new websites. [ 59 ] The claimant argues his evidence was clear, straightforward and believable whereas Mr.

Brand, representing EMRlogic , was argumentative, evasive, and at one point, in response to a straight forward question, thought he was being tricked. The claimant submits his version of events makes more sense than the defendant’s version. The claimant was already being paid $2,000 a month for his webmaster duties.

It is not consistent with common sense and defies logic that he would agree to undertake a greatly increased workload for the same remuneration. [ 60 ] The claimant notes that earlier in his relationship with EMRlogic there had been an arrangement where additional monies were paid to complete work on new websites. He asserts that his testimony about what happened in 2007 – 2008 is consistent with what had happened before. The claimant further submits that his testimony about the amount of work he did and the type of work he did was not countered or challenged.

He submits his evidence should be accepted because there is no evidence to contradict what he told the Court and because his version of events is consistent with common sense and is believable. Position of EMRlogic [ 61 ] EMRlogic submits there was no agreement between EMRlogic and the claimant that he would be paid additional money for performing extra work during 2007 and 2008. In fact, the defendant maintains there was no separate agreement that the claimant would perform extra work.

Further, the defendant argues that during that period any work the claimant performed during that time was part of the $2,000 a month retainer that he was receiving at the time. APPLICABLE LAW

Onus of Proof [ 62 ] The party who alleges a breach of an agreement has the onus of proving the terms of the agreement. Accordingly, in this case the claimant has the legal and evidentiary burden of proving, on a balance of probabilities, that the alleged oral contract was made, see: Clifford v. Flores [2004] B.C.J. No. 522 (B.C.S.C.) The fact that an agreement may not have been reduced to writing does not alter the requirement to satisfy the Court about the certainty of the terms agreed to by the parties, see: Canadian Bedding Co. v. Western Sleep Products Ltd. , [2009] B.C.J. No. 2180 (B.C.S.C.) .

The basic contractual principles of offer and acceptance and certainty of terms apply, see: Clifford v. Flores . Elements of a valid contract [ 63 ] Accordingly, in order to assess whether Mr. Hersley has proved his claim, I will need to determine whether the elements necessary for the formation of a contract have been established, namely: 1. The making of an offer – has an offer been made to enter into an agreement on certain terms? 2. Acceptance of the offer – has each term of the offer been accepted by each party, either by words or by conduct? 3.

Is there consideration – has one party given a benefit or has the other suffered a detriment or loss? 4. Do the parties to the agreement intend to create legal relations? 5. Are the terms of the agreement certain and not vague? 6. Is the agreement complete – are there any terms left outstanding to be agreement upon later? [ 64 ] Before a legally binding contract can be established there must be a meeting of the minds ( consensus ad idem ) about the essential terms. There can be no contract without a meeting of the minds.

The question to be asked is whether the reasonable observer, examining the exchanges between the parties, would conclude that a contract had been entered into, see: British Columbia (Minister of Transportation and Highways) v. Reon Management Services Inc. , [ 2001] B.C.J. No. 2500 (B.C.C.A.) . [ 65 ] The law is concerned not with the parties’ intentions but with their manifested intentions. Sometimes it is a simple matter to decide what the parties have manifested to each other, for example where the parties have put their agreement into a written document and have signed it.

If there is no single document then everything that occurred between the parties relevant to the alleged contract must be considered by the Court. This will assist the Court to determine whether an agreement can be established on the basis of what the parties have said, done, or written, see: Fridman , The Law of Contract in Canada (4 th ed.) at pp. 16-18. Credibility [ 66 ] In this case, in order to determine whether the elements of a valid contract have been established, I need to consider the credibility and reliability of the two main participants in the events which led to this claim.

The seminal case on the issue of credibility in civil proceedings is Faryna v. Chorny , 1951 CanLII 252 (BC CA) , [1952] 2 D.L.R. 354 (B.C.C.A.) . That case stands for the following propositions: (

a) The validity of evidence does not depend on whether it remains uncontradicted or whether the judge had a favourable or unfavourable view of the evidence or demeanour of the witness. These factors may be used to test the evidence but, ultimately, they are subject to whether the evidence is consistent with the probabilities affecting the case as a whole and shown to be in existence at the time. (

b) A trial judge’s finding of credibility ought not to depend solely on who made the better appearance of sincerity in the witness box. The appearance of telling the truth is simply one element that is considered in assessing the credibility of the evidence of a witness. (

c) Other elements which ought to be considered in assessing credibility include: (

i) opportunities for knowledge; (ii) powers of observation; (iii) judgment and memory; (iv) ability to describe clearly what was seen and heard. (

v) other factors (

d) In cases of conflict of evidence and where there is an interested witness, a judge should consider the consistency of the evidence with the probabilities that surround the existing conditions. (

e) The test of the truth of the story must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions. (

f) The fact that a witness may sincerely believe what he tells the Court does not mean that his evidence is correct or true because he may be honestly mistaken. ANALYSIS [ 67 ] At the beginning of this analysis I want to make it clear that this case is not about the nature of the professional relationship

between the claimant and EMRlogic , neither is it about the quality of the claimant’s work or whether EMRlogic was satisfied with the work product. It was evident at trial that there is now a degree of animosity between the parties because their professional relationship ended, for whatever reason, on a sour note. [ 68 ] The central issue in this case is whether there was an oral contract between the parties.

Is there evidence that supports the claimant’s assertion that he was to be paid additional money, over and above his retainer as webmaster, for extra work performed in 2007-2008? [ 69 ] The claimant says he had an oral agreement with Mr. Brand that he would be paid for the extra work he did in 2007-2008. Mr. Brand denies this is so. Mr.

Brand acknowledges the claimant was paid as a webmaster, however, he denies there was any agreement whereby the claimant would be paid for extra work in 2007-2008. [ 70 ] In order to determine whether a contract was entered into I have considered the exchanges between the parties in emails tendered at trial as well as the testimony of Mr. Hersley and Mr. Brand. [ 71 ] The emails exchanged between the parties do not contain any direct evidence to support the claimant’s assertion that he and Mr.

Brand had reached an agreement that he would be paid for extra work in 2007 and 2008. [ 72 ] I am therefore left with the conflicting testimony of the claimant and Mr. Brand because there is no independent direct evidence to confirm the story of one or the other. The claimant maintains he had an agreement to perform extra work, separate from the agreement relating to his webmaster duties. The defendant, through Mr. Brand, flatly denies there was any such agreement. [ 73 ] The claimant argues that the evidence raises a credibility contest between him and Mr. Brand.

He asks the Court to accept his version of events over Mr. Brand’s. [ 74 ] Mr. Brand was an assertive and, on occasion, a combative witness. There were a number of exchanges between him and the claimant’s lawyer during which he was argumentative. Sometimes he seemed annoyed about the proceedings. At one point he expressed his view that the claimant’s lawyer was trying to trick him and ended up not answering a question. However, although Mr.

Brand was a difficult witness, his demeanour alone is not enough to allow me to conclude he was not telling the truth. [ 75 ] I will next turn to the claimant’s testimony that he reached an agreement with Mr. Brand. After observing the claimant give his evidence, I am satisfied he was doing his best to be truthful and to accurately recall what had occurred in 2007 and 2008 regarding the extra work.

However, for reasons that are set out below, I find that the claimant’s evidence about the existence of a new oral contract is not reliable and is not in harmony with the preponderance of the probabilities in the circumstances: (

a) The claimant’s memory and ability to recall details relating to the making of the agreement were poor. For example, in direct the claimant said Mr. Brand told him he would get an increase in pay for the extra work and he would pay him as before. In cross- examination when first asked about that discussion the claimant said Mr. Brand told him he would work like he did last time when his money was raised to $4,000, but Mr. Brand could not afford to pay it and Mr. Brand would pay it later as he did last time.

When he was asked a second time the claimant acknowledged he could not remember the exact words but asserted the arrangement was to be the same as before. What this meant is not entirely clear. Was the claimant to be paid an extra $2,000 per month or 2% of gross sales? The claimant said he understood this to mean payment of a 2% commission; however, there is no evidence to establish that Mr. Brand agreed with this understanding. In either case for what period of time was this payment to be made? (

b) The claimant’s recollection is unclear but the invoice, prepared after the fact, is very detailed. The details the claimant recalled about the alleged oral agreement are vague and imprecise. However, in Invoice #0844 the claimant based his claim on an hourly rate of $50 per hour. There is no evidence that an hourly rate was discussed at all let alone that the hourly rate was to be $50. The claimant based his claim for work done on flash web movies and videos on an hourly rate of $100 per hour. There is no evidence that $100 per hour was discussed for the flash web movies and videos. (

c) The email exchanges between the claimant and Mr. Chow and Mr. Brand belie the existence of an agreement. For example, if there was a new agreement why was the balance owing on the new agreement not mentioned when the claimant was corresponding with Mr. Chow about the 2006 accrued monies owing that were being paid at 2% of gross sales? Emails were exchanged going back to at least July 2007 on that issue. The final email in the series is dated January 2, 2008. It refers to the balance being “all paid”. I accept the claimant’s submission that this referred to the balance for the 2006 work.

However, if there was a new agreement for an arrangement on the same terms, it is difficult to understand why the claimant did not mention it, especially since that new arrangement would have been in place for about five months at the time the January 2008 email was sent. (

d) A question asked by the claimant in a September 2007 email does not make sense if there was a new agreement. In an email dated September 14, 2007, (which related to the balance owing to the claimant for the earlier 2006 accrued amount) the claimant wrote he wanted a little information about where he was going in the company. He specifically asked: “Will I be able to keep the commission going once the balance is paid off?” This does not jibe with his evidence that he spoke with Mr. Brand about the new extra work in July or August 2007 and that he would be paid the same as before.

He said one of the possibilities discussed was a 2% commission. If that was discussed why is he asking this question about keeping the commission going? (

e) There is a further email dated September 25, 2007, subject: “Websites” in which the claimant wrote that the results of his chat with Mr. Brand were “disappointing”. He also wrote it would be difficult to temper his enthusiasm and only work on OD projects 30 to 40 hours per week instead of the 60 or 80 hours he had been working. If the claimant had an agreement that he would be paid for extra work commencing the summer of 2007 why would he refer to cutting back on his hours? (

f) Further, the claimant’s response to questions about a September 2007 email was equivocal and confused. In cross-examination the claimant was asked about an exchange of emails on September 14, 2007. Those emails were titled “Balance of Account”. He was asked why he asked if he would be able to keep the commission going once the balance was paid off. The claimant said at that point the company was paying off the previous amount owing. He also said he did not remember sending the email and that the date on the email

could be wrong. It was put to him that the “balance” being paid off was a reference to the balance owing from previous work (2006) he had done and not to the new arrangements he claimed to have arrived at with Mr. Brand. The claimant said he did not know but that the date on the email seemed wrong to him. He was asked again why he would ask to keep the commission going in the email of September 14, 2007. He said he did not understand the question. The claimant was then asked why he sent an email referring to a continuing commission if there was an agreement about being paid for extra work going forward.

The claimant said the email could be a forgery and that anything could be changed. He said, if he did make that statement in the email, he was referring to his regular webmaster salary. The claimant’s response to this question is troubling. His initial explanation that the email had been tampered with is not a reasonable response in all of the circumstances. Other than the suspicions voiced by the claimant there is no evidence to suggest that someone tampered with the email.

Further, the second answer the claimant gave – that if he said it, he was referring to his regular webmaster salary – is clearly grasping at straws. (

g) In cross-examination the claimant was asked whether he had anything in writing from Mr. Brand regarding a new arrangement. He acknowledged he did not. However, he said he had received an email from Patrick Chow regarding the previous (2006) arrangement. He commented about getting an email in December 2006 from Patrick Chow and said that this was the roundabout way he communicated with the company. My review of the two December 29, 2006 emails leads me to conclude that particular exchange was not roundabout.

The claimant referred to having the outstanding balance of his account paid “with a bit of a commission as well as any extra checks we can find as sales develop”. Mr. Chow’s reply clarified the “commission part”. The company was paying money based on 2% of new sales to speed up paying off the 2006 balance due. Mr. Chow’s email made it clear that once the balance due was paid the 2% commission arrangement would end. (

h) In cross-examination the claimant was asked why he would do the enormous amount of additional work he claimed to have done when he was only getting paid $2,000. He answered he did so because Mr. Brand had told him to do the work and that he would be paid. He said he had been paid in the past albeit slowly. An email dated July 11, 2007, from Patrick Chow to the claimant indicated that the original 2006 accrued amount owing was $12, 720. That amount was due under Invoice #670 as of December 31, 2006.

That email indicates the claimant invoiced the defendant every two weeks or so, generally in the amount of $1, 060. That email shows that on many occasions he was paid more than that amount. The payment amounts varied but the extra amounts were very modest, except for a payment in April 2007 which was significant. At the time that email was sent there was a balance of $5, 681.20. This email is a graphic illustration of Mr. Hersley’s assertion that he was being paid the 2006 accrued amount slowly. In fact, he was being paid the accrued amount generally in dribs and drabs.

The question this raises is - why would he put himself in a similar position with respect to payment of the extra 2007 work. It took the defendant a considerable amount of time to pay the monies owing and accrued from 2006. Given this experience and the time it had taken EMRlogic to pay the accrued amount from 2006, the claimant’s assertion that he accepted a new arrangement on the same basis is surprising. Further, the amount of extra money he was paid to retire the 2006 debt belied his assertion that he understood he would be paid 2% of gross sales which would result in an extra $2,000 per month, if not more.

Under the arrangement to retire the 2006 debt it appears that, except for one occasion, the extra payments he received were nowhere near $2,000 a month. (

i) On January 4, 2008, the claimant sent Mr. Brand an email once again to “revisit and hope for a bit of a raise in salary”. In that email he noted that the debt owed to him by the company had been brought down and he thought it was a good time to suggest that they “continue with the 2% commission to act as the raise in question”. He said that he would prefer a straight raise but was prepared to treat the commission as an increase in salary.

More importantly he noted: “As you know my work load has increased substantially with the introduction of the two new websites and Alistair has also suggested he may support me in my request for a bit of a raise.” When questioned on this the claimant said this referred to a raise in salary and was a completely separate matter from the other agreement regarding the extra work in 2007-2008. The claimant’s

interpretation of this email, namely, that he was asking for a raise in the amount of money he was paid for his webmaster duties is certainly a plausible one. However, that

interpretation itself raises doubts about the existence of a contract for the 2007-2008 extra work. The claimant refers to having managed to “bring down the debt owed me by the company”. However, why would he say this if there was money owing to him under the alleged new contract? Further, if the claimant already had an agreement that he would be paid 2% for the 2007-2008 extra work (which is one of the answers he gave about how he would be paid) why does he refer to continuing the 2% commission? This simply does not accord with common sense.

CONCLUSION [ 76 ] Oral contracts can be as binding on the parties as contracts reduced to writing. However, in order to find that an oral contract exists, I must be satisfied that the parties in fact, did arrive at a meeting of the minds. Further, I must also be satisfied that the essential terms of the contract were settled between them. As noted, the claimant has the legal and evidentiary burden of proving his case on a balance of probabilities. Mr. Hersley must prove the existence of the contract as well as the terms.

The test for determining if there has been a meeting of the minds is an objective one satisfied by looking to the outward expressions of intent by the parties involved. In coming to a conclusion on this case I have considered the conduct of the parties including their correspondence. I find that Mr. Hersley has not proved, on a balance of probabilities, that a contract was created for the payment of extra work in 2007-2008. _______________________________ The Honourable Judge M. F. Giardini Provincial Court of British Columbia