Rivera v. Metropolitan Construction Ltd. Date:, 2012 BCPC 2

Citation: Rivera v. Metropolitan Construction Ltd. Date: 20120105 2012 BCPC 0002 File No: 0823365 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: GLENDA RIVERA & EDILBERTO RIVERA CLAIMANTS AND: METROPOLITAN CONSTRUCTION LTD. DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE N. N. PHILLIPS Counsel for the Claimants: Emily M. Williamson Appearing for the Defendant: T. Agalou & E. Agalou Place of Hearing: Vancouver , B.C.

Date of Hearing: December 19 th & 20 th , 2011 Date of Judgment: January 5, 2012 Overview [ 1 ] In early 2007 Glenda and Edilberto Rivera contacted Metropolitan Construction and spoke with the owner of the company, Theoharis Agalou, to see about building a new home on a lot they owned on East 31 st Avenue in Vancouver. After looking at some home designs in their price range, the Riveras sought mortgage financing. Before financing was in place, the Riveras provided Metropolitan with $10,000 to advance their plans to build. On the same day the money was provided to Metropolitan, Mr.

Rivera learned he was likely to be laid off from work. The couple decided to cancel the project with Metropolitan and seek return of the money paid, less costs incurred to survey the building lot. [ 2 ] When Metropolitan refused to refund the money to the Riveras, a claim was brought by the couple seeking a return of the balance of their $10,000. Metropolitan brought a counterclaim seeking $25,000 in damages it claims to have suffered due to lost business opportunities and other damages as a result of breach of contract. This is the decision of the Court following a trial held in this case.

Evidence at Trial [ 3 ] Ms. Glenda Rivera testified that in the spring of 2007 she and her husband were contemplating building a new home to replace the older home their young family had outgrown. The family thought they might be able to obtain a mortgage of $350,000 to finance a new house.

[ 4 ] The couple decided to call Metropolitan, having been referred to the company by a neighbour. Ms. Rivera told the Court that the owner of Metropolitan, Mr. Agalou, then dropped by the Rivera home in March 2007 and they talked about the project. Ms. Rivera recollected she asked Mr. Agalou whether it was possible to build a home for $350,000 and he told them it depended on the materials used and the size of the home. The need to survey the property and obtain building plans was discussed as next steps in the process. [ 5 ] Ms. Rivera testified that she and her husband accepted Mr.

Agalou’s offer to drive them around Vancouver that same day to look at homes. After driving around a number of neighborhoods, the trio found a home on Slocan Avenue the Riveras liked. Ms. Rivera said she asked Mr. Agalou how much a home like it would cost to build and he told them between $390,000 to $400,000. Ms. Rivera said she knew this would be too expensive for them and said they told Mr. Agalou repeatedly they could only afford a $350,000 home. When Mr. Agalou brought the couple back to their home, he told them they should go to a place on Nanaimo Street where they could look at building plans. Ms.

Rivera told the Court that at no time did Mr. Agalou tell the couple he would be charging them for the time he had spent with them nor did he mention an hourly rate for his time. [ 6 ] Ms. Rivera said Mr. Agalou asked the couple whether they had obtained mortgage financing when they met that first day. It was her recollection that the parties next got together when Mr. Agalou drove the couple to a credit union to apply for a mortgage. When the couple did not hear back from the bank, Mr. Agalou suggested they try another branch of the same credit union and arranged another mortgage application meeting.

This branch later notified the Riveras they had been approved for financing but only for $200,000. [ 7 ] Ms. Rivera testified she told Mr. Agalou about the $200,000 approval amount and he offered to connect the couple with a mortgage broker he knew. After that introduction, Ms. Rivera faxed an application for financing to the broker. A copy of the document was provided to the Court showing the application was faxed to the broker on July 27, 2007. Ms. Rivera told the Court the couple never heard back from the broker. [ 8 ] Ms. Rivera testified she next heard from Mr.

Agalou when he called her shortly afterward and asked her for $20,000 so he could start with the survey of their property. She told the Court she could not recall whether Mr. Agalou said “deposit” or “down payment”, only that he asked for money to start the survey. Ms. Rivera testified she told Mr. Agalou she had not heard back from his broker. Ms. Rivera said she told Mr. Agalou it would be a waste to go ahead with the project in case they were not approved for financing. She said Mr. Agalou told her it would not be a waste because they could keep the results of the survey for the future. [ 9 ] Ms.

Rivera said she told Mr. Agalou the couple could not afford to give him $20,000 and, after some negotiation, he agreed to accept $10,000. She said he suggested the couple use their line of credit to pay the $10,000 given that they did not have the money on hand. Ms. Rivera said Mr. Agalou did not tell her how much the survey would cost but testified he told them he would repay the couple the balance of the $10,000 if they were unable to go ahead and build the home. Ms.

Rivera said after the phone call she discussed the matter with her husband and they decided to go ahead with the $10,000 payment given that they would benefit from the survey regardless of when they built. [ 10 ] Ms. Rivera testified Mr. Agalou’s wife called shortly after asking for the $10,000 and told her that the surveyor had been booked. Ms. Rivera followed Ms. Agalou’s instructions and attended to the deposit of $10,000 to the Defendant’s account on July 30, 2007. The copy of the cheque provided to the Court has the notation “deposit for house construction” recorded in the memo line. Ms.

Rivera agreed she had appended the note to her cheque. [ 11 ] Ms. Rivera said her husband came home from work that same day and told her he had just found out he was going to be laid off in October. Ms. Rivera asked her husband to tell Mr. Agalou about the family’s situation and let him know that they could not go ahead with the project. She recollected the couple learned from Mr. Agalou’s wife that he was in Seattle at the time. Mr. Rivera called Mr. Agalou that day and left a message to call back. [ 12 ] Ms. Rivera told the Court Mr.

Agalou called her husband back a few days later and her husband explained what had developed and that they could not go ahead with construction. She said her husband also told Mr. Agalou they had not heard back from his broker about the financing. [ 13 ] Ms. Rivera said a short time later Mr. Agalou attended to their home to discuss the matter. She said her husband asked if they could deduct the cost of the now complete survey from the $10,000 and Mr. Agalou said he had also started to obtain construction permits. When Ms. Rivera asked for receipts for the permits, Mr. Agalou did not provide them.

She said the couple was willing to deduct confirmed costs from the $10,000 amount. She said she questioned Mr. Agalou about why he would apply for permits if they had not settled on a price for the home and they had yet to be approved for financing. [ 14 ] Ms. Rivera told the Court Mr. Agalou continued to talk about going ahead with the building project but the Riveras told him it was useless to do so given that they were not in a position to go ahead. She recollected the meeting at their home ended with Mr. Agalou and her husband heading to the surveyor’s office to attend to payment of that expense.

She testified Mr. Agalou agreed he would pay the couple the rest of their money in October or earlier if he got another project. Ms. Rivera added that Mr. Agalou did not give her husband any paperwork relating to the survey the day they went to the surveyor’s office and that her husband went there again later on his own and got a copy of the invoice for $1627.10. [ 15 ] In cross-examination, Ms. Rivera did not agree with the suggestion that Metropolitan had sent a surveyor to their property earlier in the year nor that the Riveras had sent the person away because they did not have the money to pay. Ms.

Rivera agreed Mr. Agalou had provided a quote of $390,000 to $400,000 to build a home for them but they had told him that price was too high. She said the couple told Metropolitan the maximum they could afford inclusive of tax was $350,000. She said despite the fact they spoke a number of times about the price for the home, they never agreed on an amount. Although they liked the outside design of the home they had viewed on Slocan Avenue, Ms. Rivera told the Court they had not agreed on plans for the home Metropolitan was to build for the couple. [ 16 ] Mr. Rivera also testified at trial.

He told the Court that at the first meeting with Mr. Agalou in March 2007, the couple asked him whether it was possible to build a home for $350,000 and he told them it might be possible. He recalled Mr. Agalou estimated the cost to build a home similar to the one on Slocan would be about $390,000. Mr. Rivera told the Court he had no conversation himself

with Mr. Agalou about the $10,000 payment at the time it was made. [ 17 ] Mr. Rivera told the Court that after he had notified Mr. Agalou he was going to be laid off from work, Mr. Agalou told him he would pay back the balance of the couple’s $10,000. Mr. Rivera acknowledged that Mr. Agalou had offered to hire him at $16 per hour to do labour on their housing project to help out the couple. Mr. Rivera agreed this was a kind gesture by Mr. Agalou and was made in recognition of the fact both men were refugees to Canada and family men. [ 18 ] At trial, Mr. Agalou showed Mr.

Rivera entries in a notebook said to relate to discussions the two men had about building the home. Mr. Rivera testified he had not seen Mr. Agalou’s notes before the start of the court case. Mr. Rivera did not agree with the suggestion that he and Mr. Agalou had a lengthy meeting during which Mr. Rivera had recorded in writing details about the finishing plans for the home. Mr. Rivera agreed the couple later went ahead and built a home using another builder who had come in with a price of $350,000. Mr. Rivera denied having told Mr.

Agalou the couple would call him back in the future if they decided to go ahead and build. [ 19 ] Mr. Agalou testified on behalf of Metropolitan and told the Court he is the owner of the company. The evidence established that Mr. Agalou had sustained a significant injury around 2001 and subsequently had not been fully involved in home construction although he did do renovation work. [ 20 ] Mr. Agalou told the Court he had met more times with the Rivera’s than the three occasions they testified about and said he had spent a lot of time trying to help the couple come up with a home they could afford to build. Mr.

Agalou estimated he had spent about fifty hours of his time and $800 in fuel costs on this building project. [ 21 ] Mr. Agalou recollected that after some of the early meetings with the Riveras, he had gone to Seattle to visit family and while there he received a call from Mr. Rivera telling him they were going to have an agreement to proceed on the job for their house. He said he came back from Seattle after the $10,000 deposit had been made by the Riveras and that he next met with Mr. Rivera at the couple’s home. [ 22 ] Mr.

Agalou’s wife also testified briefly and told the Court she had received a telephone call from Mr. Rivera wanting to reach her husband and she passed a message to him when he was in Seattle. She recollected it was the next day that Ms. Rivera called to say she was going to make the deposit and requesting banking information. [ 23 ] Mr. Agalou testified that at the meeting at the couple’s home, Mr. Rivera wrote down details down about the house, including interior finishing specifications, but Mr. Agalou did not get a copy of what Mr. Rivera had written. A copy of three pages of notes made by Mr.

Agalou during this meeting were provided to the Court at trial. Mr. Agalou’s notes contain miscellaneous references to financial institutions, survey and demolition companies, and building plan sources. The notes do not contain any references to building size or material quality. [ 24 ] Mr. Agalou said at the meeting with Mr. Rivera he lowered his price $9,000 to $388,999. In cross-examination he agreed this was the price the men wrote down that day but it was not the final price.

He said the two men agreed to go ahead with the building project and to proceed with getting the plans for the home, which would be put into the contract later. Mr. Agalou said he told Mr. Rivera that he was not going to do anything without a deposit. [ 25 ] Mr. Agalou told the Court he had also worked out arrangements for an excavator to be hired to demolish the existing home on the Rivera’s property prior to the construction of the new home.

Metropolitan also claimed it had incurred other expenses relating to obtaining building permits, insurance and lining up trades for the project, but no receipts were provided to the Court. On behalf of his company, Mr. Agalou said the lost profit suffered by Metropolitan as a result of the breach of the Rivera building contract was $30,000. [ 26 ] Mr. Agalou’s son, Evangelos, testified about his education and training in the construction industry and the plan he had in the summer of 2007 to help Metropolitan build a home for the Riveras.

He told the Court his father had let him know there was an agreement for constructing a home on East 31 st Avenue. The son said he recalled when the Riveras provided the $10,000 deposit he had spoken to his father about the need to have more details and plans in order to have a proper contract. He agreed he had never seen a written contract or plans for the Rivera project and that the $390,000 price he heard about was a rough estimate.

The son added that an agreement was to be written up as soon as the plans were ready and after that construction would begin. [ 27 ] The son said the ordinary business practice was to take a 20 to 30% down payment but Metropolitan only took $10,000 in this case due to the fact there were no plans for the project. The son said the $10,000 was to demonstrate that the Riveras were willing to go through with the project. He added there was to be a further initial payment of 20 to 30% of the contract value but said that it had not yet been addressed due to the fact there were no building plans.

He agreed a start date to build had not been set due to the lack of plans. [ 28 ] The Court also heard very briefly from Eric Tachsinoglou who testified in 2007 he owned a building company that had more work than it could handle. As a result he asked Mr. Agalou whether he could build a home for his company in Richmond and Mr. Agalou told him he was unavailable because he had signed an agreement to build a home for someone by the name of Rivera. Mr. Tachsinoglou told the Court Mr. Agalou’s company would have made approximately $30,000 on the Richmond job. Mr.

Tachsinoglou agreed in cross-examination that he had not reached a final price for the Richmond home with the customer, had not signed a contract, and that the Richmond house project did not actually go ahead in the end. Issues 1. Did the parties agree to a contract to build a home? 2. Was money paid pursuant to any such agreement a deposit or a partial payment (start-up money)?

3. If it was not a deposit, is the Defendant entitled to be compensated for work performed for the benefit of the Claimants on aquantum meruit basis? Applicable Law Consensus Ad Idem [29] In examining a case to determine whether the parties have a binding contract, a court will look to see if there was consensus adidem. In Ron Ghitter Property Consultants Ltd. v.

Beaver Lumber Company Limited, [2003 ABCA 221], the Alberta Court of Appealconsidered the test for consensus ad idem (@ paragraphs 8 & 9): Regardless of the theories underlying the enforcement of contracts, mutuality of agreement lies at the root of any legally enforceablecontract. The required degree of mutuality of agreement mandates that the parties reach a consensus ad idem on essential terms. Indetermining whether the parties have reached agreement for legal purposes, the starting point must be the alleged contract itself:Associated Japanese Bank (International) Ltd. v.

Credit du Nord S.A., [1989] 1 W.L.R. 255 at 268 (Q.B.). If the wording of the contractis plain and unambiguous, that will ordinarily be an end of the matter. The accepted test is whether a reasonable observer would inferfrom the words or conduct of the parties that a contract had been concluded: Smith v. Hughes (1871), L.R. 6 Q.B. 597 at 607. That is, onan objective basis, have the parties reached consensus ad idem?

The common thread running through the cases is that the parties will be found to have reached a meeting of the minds, in other words bead idem, where it is clear to the objective reasonable bystander, in light of all the material facts, that the parties intended to contract andthe essential terms of that contract can be determined with a reasonable degree of certainty… [30] In Rafal v.

Legaspi [2007 BCSC 1944], Justice Fisher considered the basic elements of a housing contract in the context ofwhether the parties were ad idem: … for building contracts, it is not sufficient for both parties to have agreed on the building of a house. For the contract to be enforceable,the parties must also agree on the exact type of house, the timeline for completion and the price… (@ paragraph 23). Deposit or Partial Payment [31] A deposit operates as an earnest or guarantee that the contract will be performed. It is not merely a partial payment, but an earnestto bind the agreement.

The law relating to recovery of deposits was considered by the Court of Appeal in Vanvic Enterprises Ltd. v.Mack [1985 BCJ No. 5]. The Court cited with approval Chitty on Contract (@ paragraph 21): …"Recovery of deposits. Where a sum of money is paid under a contract, and the contract is not completed, the right of the payer toclaim the return of the money depends on the construction of the particular terms of the contract.

If it is called a "deposit" then, ifnothing is said expressly about the conditions governing it, it will be taken to be required as a security for the completion of the contractby the payer and will be forfeited to the other party if the payer fails to perform his side of the contract. If only part of the agreed deposithas actually been paid then, although the matter is not entirely free from doubt, the better view is that the innocent party can sue torecover the balance of the deposit." [32] In Stevenson v. Colonial Homes Ltd. [1961 O.J.

No. 550 (CA)], the Ontario Court of Appeal considered whether a sum of moneywas a deposit or a partial payment (@ paragraphs 9-10): A useful

summary of the law upon this point is to be found in the judgment of Finnemore, J., in Gallagher v. Shilcock, [1949] 2 K.B. 765at pp. 768-9: ...When money is paid in advance, it may be a deposit strictly so called, that is something which binds the contract and guarantees itsperformance; or it may be a part payment -- merely money pre- paid on account of the purchase price; or, again it may be both: in thelatter case, as was said by Lord Macnaghten in Soper v. Arnold (1889), 14 App.

Cas. 429, 435: "The deposit serves two purposes -- if thepurchase is carried out it goes against the purchase-money -- but its primary purpose is this, it is a guarantee that the purchaser meansbusiness." If it is a deposit, or both a deposit and prepayment, and the contract is rescinded, it is not returnable to the person who pre-paid it if the rescission was due to his default. If, on the other hand, it is part-payment only, and not a deposit in the strict sense at all,then it is recoverable even if the person who paid it is himself in default. That, I think, follows from Howe v. Smith, 27 Ch.

D. 89, andfrom Mayson v. Clouet, (UK JCPC), [1924] A.C. 980, a case in the Privy Council. As I understand the position, ineach case the question is whether the payment was in fact intended by the parties to be a deposit in the strict sense or no more than a partpayment: and, in deciding this question, regard may be had to the circumstances of the case, to the actual words of the contract, and to the evidenceof what was said. As was stated by Lord Dunedin in Mayson v.

Clouet, at p. 985: Their Lordships think that the solution of a question of this sort must always depend on the terms of the particular contract." The contractbetween the appellant and the respondent should be critically examined to see if from it can be drawn the intention of the parties as towhether the $1,000 was to be a deposit or a part payment of purchase-price only.

[33] The Ontario Court of Appeal added (@ paragraph 14): ...If the respondent had intended to induce the appellant to enter into a contract and pay money under conditions whereby the moneywould have been forfeited in the event of default, it should have included the word "deposit" in its contract in place of the word "downpayment" or it should have spelled out with some particularity the obligation which the appellant was undertaking by signing thecontract.

Having failed to do so, the Court should not be asked to interpret the contract in its favour unless the document is capable of noother meaning when read by a reasonably intelligent man. [34] As stated in Dies et al v.

British International Mining & Finance Corp., [1939] 1 K.B. 724 (@ p. 743) …where the language used in a contract is neutral, the general rule is that the law confers on the purchaser the right to recover hismoney, and that to enable the seller to keep it he must be able to point to some language in the contract from which the inference to bedrawn is that the parties intended and agreed that he should. [35] In Strong v. Wilton Custom Homes Ltd. [2000] O.J. No. 5191 (Sup.

Ct.), Justice Hambly considered a claim by the Strongs forthe return of a $21,000 deposit paid to Wilton Custom Homes relating to a home construction project. The Court held that the partieswere not clear on the most essential contractual terms such as the size and price of the house (@ paragraph 28): Central to an agreement for building a house on a lot is agreement on the size of the house, the specifications of the house includingbasic material and essential features such as the size of the rooms, the quality of the materials and the important fixtures and the price ofthe house.

I find that there was no agreement between the parties on these essential terms and hence there was no agreement. [36] The Court held that the Strongs were entitled to a return of their deposit and that the builder was not entitled to a set off for workit claimed to have carried out because the prospective buyers received no benefit from the work done by the builder. Justice Hamblystated (@ paragraph 29): Whether or not a defendant is entitled to a set off is governed by the principle approved by the Court of Appeal, which was articulated bythe trial judge in Magical Waters Foundations Ltd. v.

Corp. of the City of Sarnia and Brenner (ON SC), [1992] O.J.No. 1320 (O.C.A.) as follows: If a person expends time and money to prepare a quotation or a proposal, in speculation that he will be awarded a contract and thecontract fails to materialize, he may get no relief even though the work is done at the request of the other and it benefits the other. (Firstscenario) But, if the person's work goes beyond the work normally involved in the preparation of a quotation or proposal, with a mutualunderstanding that the work is not being done gratuitously, then recovery should be available; and this will be so even though the cominginto existence of the contract is frustrated by something or somebody else. (Second scenario). [37] As set out in Rafal [supra]: Where one party “confers a benefit on another party by part performance of services under a contract and that other party accepts suchservices”, the party conferring the benefit may “recover reasonable remuneration for services rendered under a contract, despite the factthat a contract may not exist or has been abandoned”… Quantum meruit will be available if the services in question were furnished at the request or with the encouragement or acquiescence ofthe opposing party in circumstances that render it unjust for the opposing party to retain the benefit conferred by the provision of theservices…(@ paragraphs 29 -30).

Analysis [38] As is often the case in business disputes that come before the Small Claims Court, the parties involved in this trial encountereddifficulties when circumstances caused them to depart from what I imagine to be their usual prudent practices of creating paperwork anddocumenting agreements reached on important matters. This dispute would likely not have reached an impasse had Metropolitan and theRiveras documented what they understood they were agreeing to, including whether Mr.

Agalou would be compensated for hispreliminary work and whether the balance of the up-front money would be refundable. [39] Although the parties differed considerably on some material aspects of their evidence, I did not find they were deliberatelyattempting to mislead the Court. I was impressed by the respectful manner in which the parties treated one another and the Courtprocess.

It was clear from the evidence that the parties trusted one another to a high degree and thus were complacent about recordingtheir discussions and any agreements in writing, never expecting problems to develop. [40] Where their evidence differed, it is likely that the considerable passage of time since the events happened has impacted theirability to accurately recall the details about the timing of their interactions and the discussions they had.

Some of the differences in theway the parties recalled what happened may also relate to the fact the parties involved have mother tongues other than English andconsequently the discussions they had were necessarily filtered and interpreted through that multi-lingual milieu. [41] I should note that the written argument filed on behalf of Metropolitan was of assistance to the Court in so far as it provided a

helpful

summary of the applicable case law. The argument appears to have been written by a lawyer who did not attend the trial and assumed certain facts were established without the benefit of hearing the evidence. The conclusions the Defendant’s argument asked the Court to come to were based on facts not established at trial (especially in relation to the timing of Mr. Rivera’s layoff notice and any written pre-contractual or contractual materials). In the circumstances, the written argument must be considered cautiously. It should also be noted that the Supreme Court decision in 375186 B.C. Ltd. v.

Coquitlam Enterprises Ltd. cited in the Defendant’s legal argument was overturned on appeal to the Court of Appeal for British Columbia [1998 B.C.J. No.3086 ]. [ 42 ] I turn then to the question of whether the evidence at trial established the existence of a building contract between the parties. Mr. Agalou spent a significant amount of time working with the Riveras helping them to find a home design to fit their budget and their taste. Financing options were explored and the parties discussed at some length what Metropolitan could build for the couple within their financial means.

However, when the $10,000 was paid to Metropolitan, the evidence was clear that the parties had yet to settle on either a price or a design for the home. [ 43 ] In my opinion, at the time the money was provided to Metropolitan, a reasonable observer would have had difficulty discerning what, if anything, the parties had agreed to do and what the obligations of the Riveras and Metropolitan were regarding the construction of a home. Lack of consensus on the price and the design of a home are essential terms to a contract of this type going directly to the question of what was to be bought and sold.

On an objective basis, I cannot find the parties in this case were in agreement or ad idem . The lack of agreement on the essential terms means I am unable to find there was a contract between the parties. [ 44 ] I turn next to the question of whether the money paid prior to the formalizing of a building contract was by way of a partial pre- payment or a deposit. The Riveras believed that after providing the $10,000 the parties would continue to work out key details of the housing project, including obtaining suitable mortgage financing, agreeing on a price to build the home, and settling on building plans.

I accept that Mr. Agalou honestly believed a contract had been finalized with the Riveras at that point in time and looked to the $10,000 as proof of a commitment by the Riveras to go ahead with the project and compensate Mr. Agalou for his valuable time and effort. [ 45 ] When the Riveras paid the $10,000 to Metropolitan, they had not been approved for sufficient financing to be able to go ahead with the home. I accept their evidence that they did not see the point in paying the money to Metropolitan in light of that fact. Although Mr.

Agalou denied he had told the Riveras he would refund any unused amount if the project did not go through, I accept the Riveras testimony that he did so as I find it impossible to believe the couple would have provided the $10,000 to Metropolitan but for that promise. [ 46 ] I do not find that the single entry on the cheque recording the payment as a deposit to be determinative of the issue as the evidence did not show Ms. Rivera used the word “deposit” as a term of art on the cheque or that she was giving up the ability to recoup any unspent funds.

Moreover, as a professional builder, had Metropolitan intended the money to be legally interpreted as a deposit, it should have ensured that was communicated to the Riveras in a clear fashion. Metropolitan failed to do so at its’ peril. I find in the circumstances that the Riveras have proven the money was not paid as a deposit. [ 47 ] I find the $10,000 was advanced to cover the costs Metropolitan would incur to the benefit of the Riveras with the expectation that further funds would be advanced if the housing project moved forward. It was thus a partial payment toward a larger price.

Nothing in the evidence established that the $10,000 would be treated as a genuine pre-estimate of damages or that it would be regarded as liquidated damages or as a penalty. [ 48 ] The evidence at trial supports the conclusion that the $10,000 sum was a down payment intended to cover work and materials supplied or obtained by Metropolitan.

The evidence does not establish the parties intended the $10,000 be forfeited to Metropolitan in the likely event the Riveras would be unable to fulfill their end of the bargain because they could not finance the project. [ 49 ] The next question for the Court is whether Metropolitan is entitled to compensation for the time and effort spent on behalf of the Riveras even though the parties did not formalize their contractual relationship. Mr. Agalou submitted he provided approximately fifty hours of his time and $800 in fuel toward the Riveras’ building project. However, Mr.

Agalou provided the Court with no time records nor any details to establish how much time he spent on behalf of the Riveras. Although he told the Court he incurred about $800 in fuel costs on their behalf, he provided no proof to that effect nor did his description of the amount of time he spent driving the Riveras around accord with his estimated claim. [ 50 ] The evidence made clear that Mr. Agalou genuinely tried to assist the Riveras and gave generously of his time in the early stages of their interaction.

I do not think it reasonable for the Riveras to have expected to benefit from that initial work without any compensation. However, based on the evidence at trial I am only able to assign a modest amount of time to Mr. Agalou’s efforts. I think it reasonable on the evidence to conclude he spent about ten to fifteen hours helping them find a potential home design, lining up a surveyor and an excavator, inquiring about permits and insurance, and trying to help the Riveras obtain financing.

The work he did on the home design, financing and surveying, benefited the Riveras and Metropolitan is entitled to reasonable compensation for that work. I assign the sum of $1500 to Metropolitan for that work. As for the excavating, permitting and insurance inquiries, I do not find that work was beneficial to the Riveras nor did they ask for or expect it to be done on their behalf. Accordingly, there will be no compensation ordered for that work. [ 51 ] Metropolitan also claimed for lost business opportunity relating to the fact it was unable to accept the offer to work on Mr.

Tachsinoglou’s Richmond housing project. However, the evidence from Mr. Tachsinoglou was that he ultimately did not get the Richmond contract and thus no opportunity was lost to Metropolitan because of the Riveras. [ 52 ] Finally, the defendant company claimed for lost profit due to the alleged breach of the housing contract by the Riveras. The evidence of Mr. Agalou’s son was clear that the terms of any subsequent payments or deposits under the building project with the Riveras would not be arrived at or due until after building plans were determined and a project price agreed upon.

The evidence does not provide a basis upon which to conclude Metropolitan suffered financial loss as a result of the Riveras breaching a contract as no contract yet existed. Thus I am unable to find in the Defendant’s favour in this regard. Result

[ 53 ] To summarize, I have found the parties in this case did not have a contract to build a home. The $10,000 was provided by the Riveras to cover up-front costs and not as a deposit in the legal sense. As such, the Riveras have succeeded in their claim that they are entitled to a return of those funds, less the money already paid to the surveyor ($1,627.10) plus the amount of $1500.00 to compensate Metropolitan for time spent to the benefit of the Riveras at the outset of this project. Metropolitan is thus ordered to repay to the Riveras is $6872.90.

The Claimants are entitled to interest pursuant to the Court Order Interest Act from August 7, 2007 on that amount. [ 54 ] The Riveras have mostly been successful at trial. In the circumstances, I find it appropriate to order the Defendant to reimburse the costs of filing and serving the claim brought by the Claimants along with other reasonable disbursements relating to the case.

If the parties are unable to reach an agreement as to costs, I delegate to the Registrar the authority to consider any written materials submitted on point and to determine the matter. [ 55 ] Finally, I direct that Metropolitan pay the amount of the judgment to the Claimants by February 15, 2012 unless prior to that date a Payment Hearing application has been filed and a Payment Hearing date has been scheduled. _______________________ N. N. Phillips Provincial Court Judge