Edwards v. Sayeghan Date:, 2012 BCPC 110

Citation: Edwards v. Sayeghan Date: 20120216 2012 BCPC 0110 File No: 10-21369 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Civil Division BETWEEN: DAVID EDWARDS CLAIMANT AND: DARIUSH SAYEGHAN doing business as CYRUS MARINE DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE C. BAIRD ELLAN Appearing in person: David Edwards Appearing in person: Dariush Sayeghan Place of Hearing: North Vancouver , B.C. Date of Hearing: December 1, 2011

Date of Judgment: February 16, 2012 [ 1 ] Between September 2008 and July 2009, David Edwards and Dariush “Cyrus” Sayeghan were involved in a business arrangement which involved the purchase of equipment and the sharing of space in a shop rented by Mr. Sayeghan. The terms of the arrangement were not documented. The parties fell out. They now ask the Court to sort out the financial ramifications of their parting. Each believes the other owes him money. [ 2 ] The issues are what were the agreed upon terms of the arrangement between the parties, and whether either of the parties breached those terms.

The resolution of these issues depends upon credibility because each party believes something different about what the arrangement was and whether it was breached. [ 3 ] In a lawsuit of this type, the onus falls on the party asserting the terms of an agreement to establish those terms, on a balance of probabilities. That means that the party must show that it is more probable than not that the events occurred as they say they did. The same onus applies to a party that alleges the other party breached the agreement.

FACTS [ 4 ] I set out here the facts as I find they have been established on the evidence of the parties and their witnesses. 1. Nature of the Arrangement [ 5 ] Mr. Sayeghan runs a marine mechanics shop at Lynwood Marina. In 2008 he had need of a machinist. Mr. Edwards was a skilled machinist who was on disability with a shoulder problem and looking for a new situation. The two were introduced by a mutual acquaintance, Joel Morassutti, in the summer of 2008. [ 6 ] Mr. Morassutti thought their talents and business requirements might be complementary. He says that Mr.

Sayeghan has a strong personality, is set in his ways, and is a hard working guy. He believes he told Mr. Edwards this. [ 7 ] The parties met and discussed the potential for a business arrangement between them. They agreed that Mr. Edwards would run a machine shop out of the premises that Mr. Sayeghan rented. Each had somewhat different expectations in relation to rent and the business model but it appears there was really no discussion at the beginning about any of the details. Nothing was committed to writing. [ 8 ] At some point, perhaps the outset, they discussed Mr.

Edwards performing some marine mechanic duties for or with Mr. Sayeghan to assist in his business, for remuneration. The parties agree Mr. Sayeghan told Mr. Edwards about the onerous physical nature of the marine mechanic work. They do not agree on Mr. Edwards’s response. [ 9 ] Mr. Sayeghan says he told Mr. Edwards the work was physically demanding and he had to be physically fit. He says Edwards told him he was on short term disability for a shoulder problem which would be resolved in a short time. Mr. Sayeghan believed that Mr.

Edwards would be able to perform the work, and he says that was in part what persuaded him to undertake the business arrangement. [ 10 ] Mr. Edwards says he told Mr. Sayeghan he would not be able to do any heavy lifting. He says he did not know much about marine mechanics, and the arrangement was primarily for him to do machine work in his own business, taking clients referred to him by Mr. Sayeghan. [ 11 ] Mr. Sayeghan’s accountant, Mr. Basogh, says he was involved in a discussion in which he explained to the parties how they should operate so that Mr. Edwards would be a subcontractor and not an employee.

He told them Mr. Edwards should have a GST number and a business licence. He also recommended to the parties that they have a written agreement. It seems they did not follow his advice. [ 12 ] Mr. Edwards moved his tools into Mr. Sayeghan’s shop in the fall of 2008. 2. Equipment purchase [ 13 ] In the winter of 2008 to 2009, Mr. Edwards purchased a lathe and a milling machine (referred to by the parties as the “CNC”) for $2,500 and $15,500 respectively. Mr. Sayeghan put up the entire price of the lathe and $10,000 of the price of the milling machine. Mr.

Sayeghan says he also paid for a crane to deliver the CNC to the shop, and used his own truck to transport the lathe. [ 14 ] Again, nothing was documented. Mr. Edwards was to pay Mr. Sayeghan back with labour, and cash as he received it, from his machine work at the premises. Edwards made several payments. He only has cancelled cheques for $2,300 but he says he paid Mr. Sayeghan $3,820, and Sayeghan accepts that figure. [ 15 ] While Mr. Sayeghan initially paid Mr.

Edwards for the work he did for Sayeghan or his clients, after he helped Edwards buy the equipment, they agreed he would apply Edwards’s work to the price of the equipment.

3. Conflicts [ 16 ] From the outset, and throughout the relationship between the parties, they had conflicts. Edwards says that Sayeghan wanted to control his hours and the way he worked. Edwards did not always agree with his demands.

For instance, Sayeghan always wanted the door open in the winter, and he wanted Edwards there early in the morning. [ 17 ] Edwards viewed it as a separate business relationship, not an employee relationship, and he did not comply with requests that he did not see as reasonable. [ 18 ] At the outset, both parties contemplated that Edwards would eventually develop his own clientele and business, and pay for the machinery. But Edwards expected Sayeghan to help him develop his business. Sayeghan expected in turn that Edwards would put up a sign and print business cards for his own business.

He says he even talked to the manager of the marina about a sign, on Edwards’s behalf. [ 19 ] To Sayeghan, Edwards seemed reluctant to proceed. He came to believe they had different work ethics. He made efforts to pin Edwards down about when he would be advertising, putting up a sign, and registering as a business, but Edwards never gave him an answer other than to say he intended to. [ 20 ] Sayeghan says he wanted Edwards to become a permanent partner. He expected that Edwards would register with the CRA, get a GST number and a business licence, pay rent, and run his milling business out of the shop.

Sayeghan wanted to be repaid for the equipment, and he did not think Edwards was working hard enough to develop a machining business. In due course, Sayeghan had signs and business cards made in his own name: “Cyrus’ Machine Shop”. Edwards said he wanted the machine shop to be in his name, and Sayeghan said that was fine, he should go ahead and do that. [ 21 ] Sayeghan believes Edwards was dragging his heels because his shoulder was a problem and he was not sure about his future. He says Edwards finally told him that his shoulder could not be fixed and he was not going to spend the money on putting up signs.

However, Edwards did not suggest he wanted to move out at that point. Sayeghan felt he was stuck, as he had already made the investment in the machinery. [ 22 ] In due course, Sayeghan says, he concluded there was no point in keeping Edwards because he was not showing up reliably, nor working when he did. It was costly to keep him in the shop, he says, and he concluded he had no choice other than to remove him from the business. [ 23 ] Edwards feels that Sayeghan failed to look after his interests by finding him machining work.

Since there was little work for him to do, there was no reason for him to be there in the morning. He went in late and stayed later than Sayeghan, so he was not there to see that. Edwards says he did not get a GST number because he did not need one until his work exceeded $30,000. He says the fact that he was committed to the business is evidenced by his having spent thousands of dollars on drill presses and band saws. [ 24 ] Edwards says he did not want to advertise until he became proficient with the CNC. There was a learning process, as it was an older interface.

It was a mid to late 80s machine, still in great shape, but the control was dated, and the software was difficult to understand. Edwards expected it would take him three months to become proficient with it. But Sayeghan became aggressive and controlling, he says, as if he was an employee, wanting signs and business cards, as if it was his own business. [ 25 ] The differences became insurmountable. The parties parted ways in about July 2009. Edwards left with his tool boxes but did not take the equipment and says he left other items of value behind. [ 26 ] Both parties approached their mutual acquaintance Mr.

Morassutti to help them resolve their differences, but no meeting took place. Edwards says that Sayeghan did not return any of his calls or respond to his attempts to resolve the issue. Morassutti says that when he tried to mediate their differences by talking to Sayeghan on Edwards’s behalf, Sayeghan said that Edwards should come and talk to him. 4. Items Retained by Sayeghan [ 27 ] Some time after he left the shop, Edwards came back to pick up the CNC and the lathe and the other things he had left behind at the shop. Sayeghan refused to let him take them. He told Edwards he still owed him $10,000.

By this time, Edwards says, he had already arranged another space to work in and a truck to go and pick up his equipment. [ 28 ] In November 2009, Edwards saw a craigslist advertisement seeking a machinist to take over his business and equipment at Sayeghan’s shop. There were some communications between the parties, and Sayeghan agreed that Edwards could come to the shop to retrieve some of the items he had left behind. [ 29 ] Sayeghan says he put Edwards’s things outside the shop because he did not want a confrontation.

Edwards says there were things missing: some hand tools, a surface plate and stand, a computer, a grinder, and the vice for the milling machine. [ 30 ] Edwards says the missing items are worth about $8,759. He supplied catalogue pages showing their replacement values, but he acknowledged he had acquired all the items used. He was not able to provide any documentary evidence showing that the missing items had been on the premises. Some of the items he claims were not listed on his Notice of Claim. [ 31 ] Sayeghan admits that he retained the lathe and CNC, because they were not paid for.

He believes that apart from those items, Edwards took back all that he brought in. He says he sold the lathe for $2,000. He says that when Edwards listed the items he was

missing in his Notice of Claim, he agreed with it and returned the items that he had, except the lathe and CNC. [ 32 ] Sayeghan says the CNC is not being used. The fellow who replaced Edwards at the shop did not understand how to use it. He uses his own equipment which is also in the shop. [ 33 ] Edwards says he does not want the CNC back, now. He is concerned that Sayeghan has had someone try to fix it and that has made it inoperable. He says he is also now not physically capable of using it. 5.

Rent [ 34 ] No written agreement was made in relation to rent. [ 35 ] Edwards says that Sayeghan told him after he had moved in that his share of the rent would be $1,500 per month. He considered the amount ridiculous and refused. He says he occupied only a small corner of the 1500 square foot total floor space in the shop, perhaps 200 square feet, until February when he got the CNC. After that, he says he used a maximum of 300 square feet. Edwards takes the position that he should pay one-fifth of the rent for six months and less before that.

But he says that this should be offset by the $325.00 per month he has spent on the new space he rented but could not occupy because Sayeghan kept his equipment. [ 36 ] Edwards did not claim for the rent on his new premises in his Notice of Claim. He says things had changed after he filed it. It was after that he discovered that the vice was missing, and that Sayeghan had sold the lathe. [ 37 ] Sayeghan says the total rent on the shop was $1,585 a month and that he only ever asked Edwards to pay half, which for the nine month period of their relationship would be $6,900.

However, he never invoiced Edwards for rent, he says, because it was all left “vague” and he saw it as pointless, as neither of them agreed with the other’s invoices. 6. Machine and Mechanical Work Done by Edwards [ 38 ] The parties agreed that when Edwards did work for Sayeghan’s clients he would be paid for it, and later, that it would be credited against the price of the equipment. There was not a lot of machine work. Edwards did some small mechanical jobs with Mr. Sayeghan or alone, for Mr. Sayeghan’s clients.

During their relationship, Edwards invoiced Sayeghan a few times for his work, and Sayeghan paid him by cheque on two occasions. In these invoices Edwards charged an hourly rate of $30.00. [ 39 ] After Edwards acquired the equipment, Sayeghan stopped paying him directly, and agreed to credit him for the jobs he did at Mr. Sayeghan’s request. Edwards issued a series of undated invoices just before, and then after the parties’ relationship ended. In these invoices he charged an hourly rate at $40.00. Edwards says the work amounted to $13,500 and exceeds what he owed Sayeghan for the purchase of the equipment.

Sayeghan says the work was not sufficient to offset the debt. He performed a

summary and breakdown of the invoices in which he obtained a total of $12,082.50, but he challenges much of the work Mr. Edwards says he did. He says he owes Edwards just $1,457. [ 40 ] Sayeghan says firstly that the invoices lack detail. They include the hours, the boat, and the name of the customer, but nothing about the problem or nature of the repair. He points out that the hourly rates vary. He says that customers complained about Edwards’s work and Sayeghan had to redo it. He came to believe that Edwards was not competent to assist in the mechanical work.

He takes the position that on some of the jobs he had merely taken Edwards along so he could learn how to do mechanical work, and there was no agreement he would be paid for his time. Sayeghan also says that Edwards took apart a dinghy but was unable to fix it, so it still does not work. It was sold for $200.00. Sayeghan claimed $750.00 for that in his Counterclaim but in his calculations he claims a loss of $300.00. [ 41 ] Sayeghan called two witnesses who were clients of his for whom Edwards did work. Both said that the work was substandard and Sayeghan had to redo it.

One had a problem with the head gasket and thermostat on a boat motor. The second was some mill work on an antique engine that needed to be shaved to fit into the client’s boat. The client understood that Edwards had shaved too much off and Sayeghan had to have shims made to make it fit. Edwards says that neither of these problems were brought to his attention; however, the first customer says Edwards was present when Sayeghan did the repair. [ 42 ] Mr. Morassutti testified that he asked Edwards to fix the diesel pump on his boat. Edwards came and took out the old pump, but brought back the wrong kind.

Morassutti paid him $100.00 for the pump but found out later from Sayeghan it was the wrong pump. Sayeghan got another and finished the work. Sayeghan says this pump is included in the work that Edwards billed him for. Morassutti agreed that Edwards fixed the chain on his steering mechanism but did not recall if he had billed him for it. [ 43 ] Edwards says the dinghy was fixed. He says there were never any conversations about the invoices. Sayeghan looked them over, and gave no response. He paid the first couple and Edwards assumed that the rest would come off the milling machine.

He assumed that since the totals added up to more than that, he would take the machines, and the balance would be applied to rent. [ 44 ] Edwards wonders why Sayeghan did not bring up with him these jobs that he says failed. He acknowledges he did re-attend for one repair to the vessel, “Brutus”, but he did not invoice for that work. He says Sayeghan never discussed with him that he was just coming to learn any jobs. He drove Sayeghan to Port Moody because the customer was not willing to come and pick him up.

Sayeghan had taken his work truck off the road, and he did not have any tools, so he used Edwards’s or the client’s tools, and Edwards drove him to jobs. [ 45 ] Edwards acknowledges that his invoices may have been confusing, but says they all included the hours and the hourly rate, as well as a total. The hourly rates varied depending on how hard the job was. He billed $20.00 per hour for some mechanical repairs, and

$80.00 if it was machining. He intended the invoices to open a discussion with Sayeghan as to what the rate should be. He noted that Sayeghan charged himself out at $90.00. He also says he did some errands and repairs without invoicing them. [ 46 ] Edwards says there is no proof that Sayeghan actually redid any jobs, and he says he had to fix some that Sayeghan did. He says Sayeghan’s complaints are just a dodge because Sayeghan does not want to pay him.

He points out that Sayeghan said nothing about his complaints as they arose, and ignored all Edwards’s calls after he left the shop. [ 47 ] Edwards called two character witnesses, one to say that he performed well as a team member in yacht races and had a good work ethic, and the second to say that he did some superb mill work for him on the CNC, at Sayeghan’s shop. [ 48 ] In reply, Sayeghan says that if the original intention was to have Edwards do mechanical work, it would not have made sense for Sayeghan to invest his own money in Edwards’s machinery.

He says that whenever Edwards gave him an invoice, he told him about the jobs that had failed, and reminded him he was not coming through with his promises. He says if Edwards wanted to own the equipment, he could have paid for it by cheque, but he told Sayeghan that he did not want a paper record, because he was collecting disability. He suggests that Edwards did not want to pay for the CNC because after he had bought the machine, he realized it didn’t work for him. ANALYSIS & CONCLUSION 1. Nature of Relationship [ 49 ] Based on the evidence as outlined above, I find as follows.

Firstly, it is clear the parties had a contractual relationship, even if the terms were not ironed out. Edwards was going to run a milling business out of Sayeghan’s shop, doing jobs of his own and jobs referred to him by Sayeghan. There was also agreement that Edwards would help Sayeghan in some of his mechanical work, though Edwards had no training and was not physically capable of heavy work. 2. Value of Work Done [ 50 ] The parties did not agree on an hourly rate that Edwards should charge for his services.

He invoiced early in the process and was paid, and after that he invoiced in two batches, one at the end of the contract and one after. The fact that Sayeghan paid two early invoices supports Edwards’s position that he was to be remunerated for services he performed. [ 51 ] Sayeghan did not question the invoices in a particularly timely fashion; however, by the time the later invoices were rendered relations between the parties had broken down. As he put it, they did not agree on anything by that point.

I do not take his silence at that point as agreement with the amount of Edwards’s billings. [ 52 ] Having said that, Edwards is entitled to be remunerated in a reasonable fashion for work he actually did. His $80.00 hourly rate for the machine work is reasonable as he is a specialist, and I did not take Sayeghan to have challenged that. The $40.00 hourly rate he billed on the later invoices for the mechanical work was not agreed to by Sayeghan. By paying the earlier ones at $30.00 he may be taken to have agreed to that rate. That would be a reasonable rate in light of Mr.

Edwards’s capabilities. [ 53 ] As for jobs having to be redone, Edwards was entitled to be given notice of these and an opportunity to rectify his work. It does not appear that Sayeghan informed him of his dissatisfaction with the particular jobs about which he now complains. [ 54 ] Mr. Sayeghan’s acknowledgments amount to a position that Edwards’ work and payments entitle him only to a total credit of $5,277 against the total Sayeghan financed, which was $12,500.

This total of $5,277 consists of the payments Edwards made toward the equipment, of $3,820, and the amount Sayeghan admits to owing for work Edwards did. [ 55 ] Sayeghan’s position respecting the balance of the invoices amounts to giving no value to much of the work Edwards performed. He has also subtracted from his calculations damage he says he was required to repair on jobs done by Edwards. [ 56 ] I do not find support in the evidence for Mr. Sayeghan`s drastic reduction in Edwards`s wages, or assessment of damage to jobs done by him.

As noted, these issues were not brought to Edwards`s attention in a timely fashion and in any event it has not been established that Mr. Sayeghan was out of pocket due to deficiencies in Mr. Edwards’s work. [ 57 ] Clearly Edwards did some work in addition to having made payments directly to Sayeghan. Edwards invoiced Sayeghan for a total of $12,080.50. In my view however, the jobs he invoiced at higher than $30.00 per hour for non-machine work should be reduced to reflect $30.00. I do not have a

summary or breakdown of the invoices that would assist in this calculation. However, a majority of the work relates to mechanical jobs. For lack of better documentation or a breakdown of the type of work performed, I am going to assume that 10% of the jobs related to machine work, at the $80.00 rate, and that the balance, 90%, was billed at a rate one-third higher than the rate established between the parties. Reducing 90% of the bill of $12,080.50 to a $30.00 rate yields a total of $9,362 for the work Edwards performed. 3. Equipment [ 58 ] In relation to the equipment, given the amount I have found Edwards is entitled to be paid for his work, the balance owing in

relation to the original amount financed by Sayeghan will be calculated as follows. Firstly, Sayeghan is entitled to the costs he paid to have the equipment delivered. His contribution to the cost was therefore $12,975. He agrees that Edwards has paid $3,820 against that. That leaves a balance of $9,155. That balance has been satisfied by the work performed by Mr. Edwards, with a balance owed by Mr. Sayeghan of $207.00. [ 59 ] Mr. Edwards is entitled to take delivery of the CNC.

Since he paid for the lathe, he is entitled to the amount Sayeghan sold it for, $2,000, which is a reasonable measure of its fair market value at the time that he sold it. [ 60 ] The other items Edwards says were kept were not properly documented or inventoried, and they were used items, so their replacement value is not recoverable. In any event, I am unable to find that any items of value were retained by Sayeghan beyond the CNC and the lathe. No amount will be payable for them. The balance owed by Mr. Sayeghan for equipment will be the price of the lathe plus the balance owed for work, or $2,207. 4.

Rent [ 61 ] There is nothing in writing to establish what was agreed to by the parties in relation to rent. Edwards concedes he should pay some rent, based on the amount of floor space he took up. He says it is one-fifth for only part of the time he occupied the premises. No measurements were provided, and there any no documentation of what the current rent is on the premises or of what the current tenant is paying. [ 62 ] Sayeghan’s evidence is that he pays $1,585 per month. [ 63 ] I do not accept that Edwards’s share of the rent should have been half of that.

The size of the signs Sayeghan erected indicate that the machine shop is a smaller enterprise; at least they create that perception. The nature of the relationship was not one of equality. Sayeghan clearly expected Edwards to be subordinate to him. [ 64 ] In my view a reasonable amount for the use of space in the shop, given its location, the nature of the arrangement, and all the circumstances, would in my view be $300.00 per month. For the nine months of the business relationship, that would be $2,700.

I would reduce that by $500.00 to account for the time before the equipment was on site. [ 65 ] Edwards’s claim for rent on his new premises was an afterthought, and did not form part of his claim. In any event, his evidence about setting up a new machine shop was equivocal. He indicated in court that his shoulder injury had not resolved sufficiently for him to use the CNC, and he did not wish to have it returned. He was required to mitigate his losses, not add to them. It does not appear he had a viable machine shop running at Sayeghan’s premises, and it does not appear that he intended to continue the business.

He has also not claimed for loss of income from Sayeghan’s having withheld the equipment. In any event, Sayeghan was entitled to withhold the items given that Edwards had not paid him any rent. Edwards is not entitled to recover the rent on his new premises. [ 66 ] The amount owed by Mr. Edwards for rent during the relationship between the parties is therefore $2,200. Order [ 67 ] I find that Mr. Sayeghan owes Mr. Edwards $7.00. This Court will not enforce that amount and there will be no payment order. [ 68 ] Mr. Edwards is entitled to have the CNC returned to him.

The expense of transporting it will be for him to pay. If he does not pick it up before June 30, 2012, Mr. Sayeghan will be at liberty to dispose of it, or keep it. Mr. Edwards may apply for an extension of that deadline if he produces quotations for the cost of removing the item. [ 69 ] The counterclaim is dismissed. Each party will bear their own costs. _______________________________ The Honourable Judge C. Baird Ellan Provincial Court of British Columbia