Hunky Dory Sawmills v. Hassell, 2018 BCPC 68

Citation: Hunky Dory Sawmills v. Hassell 2018 BCPC 68 Date: 20180221 File No: 17610 Registry: Smithers IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Small Claims BETWEEN: HUNKY DORY SAWMILLS LTD. CLAIMANT AND: CHRISTINE HASSELL DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE J.T. DOULIS Counsel for the Claimant: Hill, R. Counsel for the Defendant: Fitzmaurice, J. Place of Hearing: Smithers , B.C.

Date of Hearing: November 22 & 23, 2017, January 8, 2018 Date of Judgment: February 21, 2018 Introduction [ 1 ] In 2003 Hunky Dory Sawmills Ltd. built a custom log home shell with purlins, wood trusses and pine subflooring at 26278 Walcott Road, Telkwa, B.C. These structures became an integral part of the family home of Kelly and Christine Hassell. Hunky Dory charged $80,150 for these goods and services plus $343 for extras for a total of $80,493. The Hassells paid Hunky Dory $35,000 on December 22, 2003 and nothing again until February 29, 2008.

Between February 29, 2008 and December 22, 2010 the Hassells paid Hunky Dory a further $12,500, thereby reducing the debt to $32,993 plus accrued interest. At some point between 2009 and 2012, Kelly Hassell caused a Mitsubishi excavator to be delivered to the Hunky Dory mill yard near Houston B.C. as either security for the unpaid account or as payment in full or partial satisfaction of that account. [ 2 ] Hunky Dory seeks the outstanding balance together with interest accruing at the rate of 2% per month.

Hunky Dory asserts Kelly Hassell delivered the excavator as security for the unpaid balance on the account; however, Hunk Dory is willing to keep the excavator and reduce the debt by a further $5,000. This would leave a balance of $27,993 plus interest ($80,493 - $35,000 - $12,500 - $5,000 = $27,993). Hunky Dory waives any outstanding amount in excess of the new Small Claims Court monetary jurisdiction of $35,000. [ 3 ] Kelly Hassell declared bankruptcy on May 27, 2015 and received a Certificate of Discharge on February 28, 2016.

On February 28, 2017, Judge Jackson dismissed Hunky Dory’s claim against Kelly Hassell prior to trial for want of jurisdiction. The sole remaining Defendant, Christine Hassell, asserts that if any debt was owed to Hunky Dory it was owed by Kelly Hassell alone. Alternatively, she argues, the excavator delivered to Hunky Dory was in full satisfaction of the debt or provided to Hunky Dory to work off the debt. Issues: a. Is Hunky Dory’s claim statute barred? b. Did Ms. Hassell contract with Hunky Dory? c. Does Hunky Dory have an equitable claim? d. Is the debt to Hunky Dory a joint debt? e.

How much is owing to Hunky Dory on the debt? f. Can Ms. Hassell rely on the equitable remedy of laches? g. Did the Defendant(

s) settle the claim with the delivery of the excavator? History of the Proceedings [ 4 ] On September 19, 2016, Hunky Dory Sawmills Ltd. filed a Notice of Claim in the Smithers Provincial Court Registry seeking damages against Christine Hassell and Kelly Hassell for an outstanding debt in the amount of $29,916.05, plus contract interest at 2% per month. Hunky Dory abandoned any amount owing in excess of the monetary jurisdiction of the Provincial Small Claims Court, then $25,000.

The contract (the “Contract”) in issue was with respect to a custom built log home shell, inclusive of purlins, wood trusses and hardwood flooring. [ 5 ] In the Notice of Claim, Hunky Dory also states the Hassells made their final partial payment in 2012 when they gave Hunky Dory an excavator valued at approximately $5,000. [ 6 ] On October 13, 2016 Christine Hassell filed a Reply and Counterclaim. She asserted: a. no hardwood flooring was supplied; b.

Hunky Dory’s contract was with Kelly Hassell alone; c. no interest was payable; d. the excavator was not given to Hunky Dory but rather delivered to Hunky Dory’s millsite to work off the debt; e. the excavator was worth at least $20,000 at the time of its delivery; f. Ms. Hassell now owns the excavator as a result of a separation agreement between herself and Mr. Hassell dated November 5, 2013; g. Hunky Dory is liable for $1,000 per month rent for using the excavator for the past four years; and h. Hunky Dory owes Ms.

Hassell $48,000 for the use of the excavator from 2012 forward. [ 7 ] Also on October 13, 2016, Christine Hassell filed a Third Party Notice against Kelly Hassell with respect to monies which Hunky Dory claims are owing in its Notice of Claim.

[ 8 ] On October 21, 2016, Kelly Hassell filed a Reply in which he stated: a. any agreement made with Hunky Dory was made on behalf of himself and Christine Hassell; b. the agreement included an obligation to pay interest; c. there are no monies owing to Hunky Dory; d. the excavator was transferred to Hunky Dory in complete payment of Hunky Dory’s outstanding claim; e. at the time it was delivered to Hunky Dory, the excavator was worth $18,000 “as it had just been purchased” for that sum. Hunky Dory had the use of the excavator since 2012 and treated it as his own. If Mr.

Hassell has any liability, the value of the excavator in 2012 should be allocated as part payment at that time; f. Christine Hassell assumed any liability remaining under the agreement with Hunky Dory as a result of Kelly Hassell transferring to her title to the house in 2014; g. pursuant to a separation agreement, Christine Hassell, agreed to accept ownership of the land in question and all buildings associated therewith and to save, protect and indemnify Mr.

Hassell from any claim arising out of that property; h. subsequent to settling all matters with Christine Hassell in 2013, he declared and was discharged from bankruptcy and with it Hunky Dory’s claim arising from the Contract. [ 9 ] On November 1, 2016, Hunky Dory filed a Reply to Ms. Hassell’s Counterclaim, claiming its Contract was with both Kelly Hassell and Christine Hassell and denying her assertion: a. there was no interest owing; b. Hunky Dory accepted the excavator to work off Hassell’s debt; or c. Hunky Dory is liable to pay $1,000 per month rent to Ms.

Hassell for the use of the excavator. [ 10 ] On November 4, 2016, Mr. Hassell filed an Amended Reply in which he reiterated his position as set out in his October 21, 2016 Rely, and further that in the event the claim against him proceeds, then Hunky Dory should account for all use of the excavator, including an accounting of net benefits of the use of the excavator in addition to its value. [ 11 ] At a settlement conference on January 3, 2017, Mr. Hassell applied to the Court to have the claims against him dismissed. Judge Jackson reserved his decision until February 28, 2017, at which time he ordered: a.

Hunky Dory and Ms. Hassell claims against Kelly Hassell dismissed on the basis the Provincial Court had no jurisdiction to hear a claim against Mr.

Hassell which predated the Certificate of Discharge; b. the claims against Kelly Hassell in his reply filed August 21, 2016 pleading a right to offset any claim by the claimant by the value of the excavator transferred to the claimant and alleging the value of the excavator as being $18,000 at the time assigned and that it had been used by the claimant to reduce the debt, or added to the reply of Christine Hassell filed October 13, 2016; and c. the reply of Christine Hassell is also amended by adding the defences of laches to the defences of Christine Hassell on the basis that Christine Hassell was hampered in her defence by the delay of the claimant in commencing these proceedings to the time after which Kelly Hassell has already declared bankruptcy. [ 12 ] Christine Hassell appeared in person at the January 3 and February 28, 2017 court appearances.

Kelly Hassell appeared by telephone from Northern Alberta and was represented at these appearances by legal counsel, G.E. Greene. [ 13 ] The first trial dates were scheduled for October 11 and 12, 2017. By application of Ms. Hassell filed July 4, 2017 these dates were adjourned to November 22 and 23, 2017 to accommodate the

schedule of her new legal counsel. [ 14 ] On September 7, 2017, Hunky Dory filed an amended notice of claim pursuant to Rule 8(7) of the Small Claims Rules abandoning any portion of its claim in excess of $35,000, the new monetary jurisdiction of Provincial Small Claims Court. [ 15 ] The trial of the matter was scheduled for November 22 and 23, 2017 and January 8 and 9, 2018. On the first day of trial, the parties filed an Agreed Statement of Facts which was marked Exhibit 1. During the course of the trial the parties put into evidence 22 exhibits.

The Court heard viva voce evidence from three witnesses: Joseph Sworyk, Gayle Sworyk and Christine Hassell. Kelly Hassell did not appear and neither party knew his whereabouts to serve him with a summons: Exhibit 1, para. 9. At the time of the settlement conference (January 12, 2017), Mr. Hassell’s legal counsel indicated Mr. Hassell “currently lives and works in Northern Alberta.” The Parties Hunky Dory Sawmills Ltd. (“Hunky Dory”) [ 16 ] Hunky Dory Sawmills Ltd. (“Hunky Dory”) is a corporation registered in British Columbia under the B usiness Corporations Act , SBC 2002, c 57, and located in Houston, B.C.

It started as a small business of the Sworyk family in 1975 or 76. It was incorporated in 1981 and offers a number of services including custom saw milling, planing, quarrying and some trucking. [ 17 ] Hunky Dory’s principals were Joseph Sworyk and his parents, Nick Sworyk and Gayle Sworyk. Nick Sworyk was the President of Hunky Dory until he died on May 3, 2015, after which Joseph Swoyrk assumed that position. While alive Nick Sworyk

worked in the family business and took care of the banking. [ 18 ] Joseph Sworyk is a self-taught tradesman and works long hours in the family business. He suffers from dyslexia and a learning disability which can interfere with his ability to correctly interpret what is being communicated to him or to articulate his thoughts. [ 19 ] Gayle Sworyk is 78 years old. She describes herself as a “mom” who made meals and took her husband and son lunches at work.

She also prepared invoices from her son’s worksheets and made up Hunky Dory’s bank deposits. [ 20 ] Hunky Dory has an independent bookkeeper and accountant who took care of its books and taxes. Christine Hassell [ 21 ] Christine Hassell is 54 years old and the former spouse of Kelly Hassell.

She has lived in the family home at 26278 Walcott Road, Telkwa, British Columbia, since it was built in 2003 and continues to do so: Exhibit 1, para. 10. [ 22 ] Christine Hassell and Kelly Hassell (collectively, “the Hassells”) cohabitated from January 1985 until they separated permanently on April 22, 2013. [ 23 ] A redacted version of the Hassell’s separation agreement (the “Separation Agreement”) dated November 5, 2013 was entered into evidence as Exhibit 21. It represents as true as of the date it was signed: a.

Kelly Hassell was a class one truck driver and the sole proprietor of Fratzco Contracting operating three tractor trailer units in the Alberta oil fields; b. Kelly Hassell and Christine Hassell were partners in Frogwater - a fish guiding business with 43 Angler Days registered in Kelly Hassell’s name; c. Kelly Hassell and Christine Hassell were partners in KCK Farms - which is also the family residence and property consisting of 100 acres, and is no longer operated as a farm; d.

Christine Hassell was a homemaker and the primary care giver of the children of the marriage and assisted Kelly Hassell with the operation of the businesses; e. Kelly Hassell and Christine Hassell owned 26278 Walcott Road, Telkwa, B.C. which was the family residence; f. The family residence at 26278 Walcott Road, Telkwa, B.C. was encumbered by the following family debts: i. a mortgage in favour of Bulkley Valley Credit Union; ii. a mortgage to Bulkley River Steelhead ULC for the purchase of Kelly Hassell’s Angler Days; iii. Line of Credit with the Bulkley Valley Credit Union; g.

Upon the separation, Kelly Hassell moved out of the family residence and Christine Hassell remained. Background Facts: Evidence of the Claimant [ 24 ] In 2001, Mr. Sworyk built his parents a custom-made log timber framed home. At the time, it was a unique show home, with square logs and dove-tailing. Kelly Hassell and Christine Hassell came to view the Sworyk residence in the Spring of 2001 while it was still under construction.

They were looking to build a home for themselves and wanted to view the Sworyk residence. [ 25 ] The Hassells came to the Sworyk residence a couple of times in the summer of 2001 in the company of a friend who was a building inspector from the Northwest Territories. Mr. Sworyk remembers this event because it was at this time he learned the person who engineered the trusses for the Sworyk residence was not insured. [ 26 ] Late in the summer of 2001 the Hassells asked Mr. Sworyk for a quote on a square log house shell. In the Fall of 2001, Kelly Hassell asked Mr.

Sworyk for another quote on a square log house shell if Mr. Hassell provided the raw logs. [ 27 ] In February 2002, Mr. Hassell delivered the raw logs to the Hunky Dory millsite in Houston, B.C. Later, in the Spring of 2002, Mr. Sworyk met with the Hassells four or five times and discussed prices. [ 28 ] Mr. Sworyk worked up an estimate which Gayle Sworyk copied onto an invoice: Exhibits 2 and 3. [ 29 ] In or about July 2002, Mr. Sworyk provided Kelly Hassell with a written quote for the cost of one custom log shell with three wooded trusses with purlins and 1½ inch pine flooring throughout. Mr.

Sworyk quoted $70,000 plus taxes in the amount of $10,150: Exhibits 2 and 3. As an addition, the quote included three 8 x 12 x 24 beams for $300 plus $43.50 in taxes making for a total contract price of $80,493. This quote was based on Mr. Hassell providing the raw logs and Hunky Dory providing the labour. Mr. Sworyk and Hunky Dory’s employee, Steve Bell, would build the shell. [ 30 ] The Hassells accepted Mr. Sworyk’s quote and solidified the deal. [ 31 ] Mr. Sworyk said in early July 2002 he gave the Hassells the quote (Exhibit 3) so they could take it to the bank providing the construction mortgage.

[ 32 ] In his dealings with them, Mr. Sworyk sometimes dealt with the Hassells together and sometimes individually. He understood Hunky Dory was providing goods and services to both Kelly and Christine Hassell for use in the construction of their family home. [ 33 ] Mr. Sworyk and Mr. Bell started work on the Contract near the end of June 2003, before they had even received the Hassells’ blueprints. [ 34 ] When Mr. Sworyk and Mr. Bell had four rows up on the shell, Mr. Hassell wanted to change its configuration. Mr. Sworyk and Mr. Bell tore down what they had constructed and replaced it with the new structure Mr.

Hassell had requested. Mr. Sworyk made the changes without any additional cost to the Hassells. [ 35 ] In early or mid-August 2003 Mr. Hassell arrived at the Hunky Dory building site with a Super B transport truck, removed the cants and trusses and transported them to 26278 Walcott Road. Hunky Dory did not require the Hassells make any payments before allowing them to move the goods from Hunky Dory’s millsite. Mr. Sworyk understood the Hassells would pay for the shell when it was erected onsite. [ 36 ] The shell remained at 26278 Walcott Road while the Hassells finished the footings for joists.

In the first or second week of September 2003, Mr. Sworyk and Mr. Bell went to 26278 Walcott Road to complete the shell. Christine Hassell was present and assisted with the work. Kelly Hassell showed up after Mr. Sworyk and Mr. Bell put on the first round. Mr. Hassell had been fish guiding and arrived on site with his clients. [ 37 ] It took Mr. Sworyk and Mr. Bell approximately 2 ½ weeks to construct the log shell. They used the Hassells’ excavator to assist in constructing the shell. Mr.

Hassell had acquired this used Mitsubishi excavator for $18,000 from Pacific Truck Equipment Sales in Houston, B.C.: Exhibit 1, para. 1. [ 38 ] Mr. Sworyk and Mr. Bell finished their work on the shell in late September or early October 2003, after which the roofers arrived and put up the trusses. [ 39 ] Mr. Sworyk understood Hunky Dory would be paid when the shell was erected at 26278 Walcott Road. This occurred in October 2003, at which time the entire Contract price in the amount of $80,493.50 became due and owing: Exhibit 1, para. 2; Exhibit 4. [ 40 ] Mr.

Sworyk says at the time of completion of Hunky Dory’s obligations under the Contract, he did not give the Hassells a final invoice. He was asked to hold off in case the Hassells needed more products inside the home for closets and staircases. [ 41 ] In late November 2003 the Hassells gave Mr. Sworyk a cheque in the amount of $35,000 postdated to December 22, 2003: Exhibit 13. The Hassells explained they had run out of money from the bank and Hunky Dory would have to wait for future instalments. [ 42 ] In early December 2003, Mr.

Sworyk took and delivered to the Hassells at 26278 Walcott Road, Hunky Dory’s Invoice 12162 addressed to “Kelly & Chris Hassel” showing the $35,000 payment on the Contract price leaving $45,493.50 outstanding: Exhibit 4. [ 43 ] While at 26278 Walcott Road, Mr. Sworyk assisted Kelly and Christine Hassell with installing the pine flooring. Mr. Sworyk describes Ms. Hassell’s being “awesome” at this task. [ 44 ] Mr. Sworyk returned to 26278 Walcott Road around New Years 2004. He assisted the Hassells with putting up the vapour barrier. At this time Mr.

Sworyk asked the Hassells when he was going to get the rest of his money. They told him he had to wait for the next mortgage installment. [ 45 ] Mr. Sworyk did not charge the Hassells for assisting with the flooring and vapour barrier. [ 46 ] Mr. Sworyk next saw Kelly Hassell on or about March 20, 2004 when he came to pick up some additional lumber from Hunky Dory: Exhibit 5. They again discussed the monies owing to Hunky Dory under the Contract. Mr.

Hassell told him they were behind on their credit cards and could not catch up. [ 47 ] The Hassells continued with the construction of their home at 26278 Walcott Road and eventually moved in just before Christmas in 2003. They did not pay Hunky Dory from future mortgage advances. [ 48 ] Mr. Sworyk did not file a builder’s lien against 26278 Walcott Road nor take any enforcement action other than to raise the issue of the outstanding debt with Kelly Hassell from time to time. [ 49 ] In 2004, Mr.

Hassell ran a company called Fratzco Contracting through which he provided eight hours of hauling services for Hunky Dory on July 23, 2004. He told Mr. Sworyk to deduct the cost of these services from the outstanding account under the Contract. Mr. Sworyk told him in order to keep the records straight, he would prefer to pay Fratzco Contracting and have Mr. Hassell return the money to Hunky Dory as payment of Hassell’s outstanding account. Hunky Dory paid Fratzco Contracting’s invoice; however, Mr. Hassell did not return the money to Hunky Dory as agreed.

Exhibit 6 is Fratzco Contracting’s Invoice 721851 dated July 23, 2004 in the amount of $556.40, signed “Thanks Chris.” [ 50 ] Between 2004 to 2007, Mr. Sworyk spoke to either Kelly Hassell alone or in the company of Christine Hassell about the monies owing under the Contract. He was upset that the Hassells continued to make improvements to their home, such as the installation of $30,000 in rock work, but did not pay for Hunky Dory’s good and services provided at the outset. Mr. Hassell told Mr.

Sworyk the rock work was paid with an inheritance and that Hunky Dory would have to wait for the next mortgage instalment. [ 51 ] At this time Hunky Dory had not issued any past due notices to the Hassells because they kept promising Mr. Sworyk he would get paid. [ 52 ] In 2008 Hassells made the following payments to Hunky Dory under the Contract:

a. On or about February 29, 2008, the Hassells paid to Hunky Dory $1,000: Exhibits 1 and Exhibit 13; b. On or about July 16, 2008, the Hassells paid Hunky Dory $2,000 in two cheques of $1,000 each: Exhibits 1, para. 3 and Exhibit 13; and c. On or about September 9, 2008, the Hassells paid Hunky Dory $1,000: Exhibit 1, para. 3; and Exhibit 13. [ 53 ] At the end of 2008, the amount owing under the Contract was $41,493 ($80,493 - $35,000 - $4,000 = $41,493). [ 54 ] At some point in 2009, Mr. Sworyk’s friend, Doug Stump, warned him that Kelly Hassell was planning on leaving town. Mr.

Sworyk believed that around this time Mr. Hassell had started hauling ore from Dome Mountain for Stan Spletzer. Mr. Sworyk went to Spletzer’s shop in Houston, B.C. and found Mr. Hassell present working on his truck. Mr. Hassell told Mr. Sworyk about the great time he and his family had on a Caribbean fishing trip they had taken where the Pirates of the Caribbean was filmed. Mr. Hassell then mentioned he was “splitting town.” [ 55 ] Mr. Sworyk asked Mr. Hassell about the monies owing to him. Mr. Hassell told Mr. Sworyk he would get his money. Mr. Hassell offered Mr.

Sworyk a Peterbilt truck with a new motor worth $27,000. At that time Mr. Hassell was using the truck to haul ore from Huckleberry Mines to Stewart for Arrow Transportation. Mr. Sworyk rejected the offer. He told Mr. Hassell it did not cover the cost of the shell, and new motor or not, the Peterbilt was only worth $18,000. [ 56 ] When Mr. Sworyk declined to take the Peterbilt truck, Mr. Hassell then offered him the Mitsubishi excavator . Mr. Sworyk said he thought he could use the excavator. Mr. Sworyk told Mr. Hassell he could leave the excavator for collateral because Mr.

Hassell needed the Peterbilt truck for work. Nothing came of this discussion. Two weeks later Jamie McEwen, a low bed operator, arrived at the Hunky Dory millsite with the excavator. [ 57 ] Don J. McEwen Holdings Ltd. billed Hunky Dory $962.85 for the cost of moving the excavator from 26278 Walcott Road to Hunky Dory millsite on Morice River Road and then to the quarry at Owen North. Hunky Dory paid this bill on October 20, 2009: Exhibit 15. Gayle Sworyk remembers this event because she was annoyed that Hunky Dory was billed for the transporting the excavator. [ 58 ] A few days after Mr.

McEwan delivered the excavator Mr. Hassell arrived at the Hunky Dory millsite. He told Mr. Sworyk, “Now you can work off our debt.” Mr. Sworyk could not believe what Mr. Hassell was saying. Mr. Sworyk asked Mr. Hassell “what do you mean, work off your debt, how does that work?” Mr. Sworyk told Mr. Hassell he could not even use the excavator because it had no mechanical thumb and bucket. Mr. Sworyk remembered that when using the excavator at the Hassell residence in 2003, it was outfitted with a mechanical thumb. Mr. Hassell told Mr.

Sworyk he had removed the mechanical thumb and bucket and replaced it with the one currently attached to the excavator. [ 59 ] Mr. Hassell said if Mr. Sworyk could not use the excavator to “work off the debt”, then he would leave it with Mr. Sworyk as collateral and he could use it at his own free will. Mr. Sworyk asked Mr. Hassell if he still had the mechanical thumb and Mr. Hassell said he would go get it. Mr. Hassell left and Mr. Sworyk never saw him again. [ 60 ] In around November 2009, Mr.

Sworyk had the excavator moved to the Owen North quarry, where Hunky Dory quarried rock to make flagstones and water fountains. The excavator sat there unused while Mr. Sworyk waited for Mr. Hassell to deliver the mechanical thumb. About two or three weeks later (November 2009) Mr. Sworyk gave up waiting and attempted to load rock with the excavator with the existing bucket. He found the excavator totally unsuitable for the job with its existing attachment. What should have been a one-half hour loading job took three hours. Mr. Hassell never did deliver the promised bucket with the mechanical thumb.

Moreover the excavator’s hydraulics were also problematic. The excavator remained at the Owen North quarry unused for many years. It was transferred back to Hunky Dory’s millsite on or about August 4, 2015. [ 61 ] After delivering the excavator to Hunky Dory, the Hassells continued to make payments on their debt to Hunky Dory throughout 2010. They left the following 10 post-dated cheques totaling $8,500 in an envelope stuck in the door at the Sworyk residence: a. On or about February 18, 2010, the Hassells paid $2,000 in two cheques of $1,000 each: Exhibits 1, para. 3 and Exhibit 13; b.

The Hassells paid Hunky Dory $1,000 on March 22, 2010, April 28, 2010, May 25, 2010 and July 14, 2010: Exhibits 1, para. 3 and Exhibit 13; and c. The Hassells paid Hunky Dory $500 on August 18, 2010, September 16, 2010, October 22, 2010, November 18, 2010 and on December 16, 2010: Exhibits 1, para. 3 and Exhibit 13. [ 62 ] The Hassells made all the 2010 cheques payable to Mr. Sworyk personally.

The cheque dated December 16, 2010, in the amount of $500 was written on the account of “Kelly J. or Christine Hassell” with the Bulkley Valley Credit Union, and signed by Christine Hassell. [ 63 ] Between December 22, 2003 and December 22, 2010, the Hassells paid $47,500 under the Contract: Exhibit 1. The December 22, 2010 payment of $1,000 was the last payment the Hassells made to Hunky Dory. As of that date the amount outstanding under the Contract was $32,993.50 plus interest. [ 64 ] In 2013 Mr. Sworyk tried to call the Hassells a few times without success to discuss payment on the outstanding debt.

He also tried dropping by the Hassells’ residence but either no one was home or the gateway to their property was locked. [ 65 ] In or around May 2015 Mr. Sworyk drove out to 26278 Walcott Road and spoke to Ms. Hassell about the debt. Ms. Hassell greeted Mr. Sworyk and invited him inside the residence. Ms. Hassell’s new partner, Mike Elder, was present at the time. Ms. Hassell

told Mr. Sworyk that she was selling the property to pay off the debt to Hunky Dory. Mr. Sworyk told her that would be a shame and asked if they could work something out. At the end of this conversation Mr. Sworyk understood Ms. Hassell was going to sell 26278 Walcott Road and pay off the Hassells’ debt to Hunky Dory. [ 66 ] Mr. Sworyk next saw Ms. Hassell and Mike Elder at the Hunky Dory millsite in late June 2015. Ms. Hassell had called Mr. Sworyk ahead to confirm he would be at the mill. She came to the millsite seeking the return of the excavator. Mr. Sworyk asked her when he was going to be paid on the debt.

Mr. Sworyk said he would take something off the debt for the excavator, but he was not giving it back and until he knew whether he was going to get paid or not. Ms. Hassell told him she would trade off the excavator for payment on the house. Mr. Sworyk declined the offer, saying “then I have nothing.” He asked her when he was going to get paid and catch “this thing up.” [ 67 ] In August 2015, Mr. Sworyk moved the excavator from the quarry to the Hunky Dory Mill yard on a friend’s low bed, although with some difficulty. Hunky Dory purchased a new starter for the excavator from Napa Houston.

The starter had died while the machine was lying fallow at the quarry: Exhibit 7. [ 68 ] In the Fall of 2015, Mr. Sworyk wrote a letter to the Hassells with the assistance of his friend, in which he stated: Hassells Some questions I would like answered: Why was Joe not paid in full when you received the mortgage money from the bank? When was the last time Hassel’s came to disguss the payments left owing on the house? What about the 2% interest per month as stated on the bottom of your bill? Joe had to pay interest on the money he had to pay out to build the house. This amounts to a good some of cash.

Joe got the hoe when he heard some talk of someone skipping town when they returned from a fishing trip to the Carabean which Kelly confirmed. Kelly never brought the thumb for the hoe which made it completely useless. I question Kellys thoughts on what he was really thinking. See Exhibit 8. [ 69 ] Gayle Sworyk delivered the letter personally to Christine Hassell. [ 70 ] Mr. Sworyk obtained three appraisals on the Mitsubishi excavator in 2016: a. Brandt Tractor Ltd. dated November 23, 2016, estimated the value of the “1983 Mitsubishi 180 LC Excavator” of that date was $6,500.

The appraiser comments the hydraulics were not working properly and the travel was not even on the tracks. Brandt Tractor would not take it on a trade because it was so old and there were problems with its hydraulics: Exhibit 9; b. Pacific Truck & Equipment dated October 23, 2017, estimating the 1979 or 1980 Mitsubishi excavator to be worth between $3,000 and $5,000. The appraiser describes the excavator as being in poor shape : Exhibit 10; and c.

Finning Cat, dated November 7, 2017, estimating the excavator to be worth between $3,000 and $5000: Exhibit 11. [ 71 ] The Hunky Dory accounting records as of June 30, 2013, does not indicate the debt on the Hunky Dory’s list of accounts receivable: Exhibit 16 Evidence of the Defendant [ 72 ] Christine Hassell and Kelly Hassell are no longer a couple; however, Christine Hassell continues to own and reside at 26278 Walcott Road, Telkwa, B.C. She now works for Solid Holdings one day per seek as an administrator. Stan Spletzer is the President of Solid Holdings and Ms.

Hassell has worked there for six years. [ 73 ] Ms. Hassell and Mr. Hassell cohabitated from January 1985 until they separated permanently on April 22, 2013: Exhibit 1, para. 5. In their Separation Agreement dated November 5, 2013 (Exhibit 21) the Hassells divided up their assets and liabilities. Neither the excavator nor the debt owing to Hunky Dory was specifically referenced in the Separation Agreement. [ 74 ] Mr. and Mrs. Hassell jointly owned 26278 Walcott Road. Prior to constructing the log residence on that property, the Hassells’ lived in a 6 x 24 foot trailer with their three children. [ 75 ] Ms.

Hassell remembers viewing the Sworyk residence on two occasions, once while it was being built and again after the Sworyks had moved in. She liked the idea of square logs. [ 76 ] On June 13, 2001 Kelly Hassell purchased a used Mitsubishi excavator from Parker-Pacific Inland Group, for $18,000: See Exhibit 18. This excavator was an older machine used to help build the residence at 26278 Walcott Road. [ 77 ] Ms. Hassell claims that it was Mr. Hassell alone who negotiated the Contract with Mr. Sworyk. She describes Mr. Hassell as the “final decision maker” and that it was “not her place” to negotiate with Mr.

Sworyk. [ 78 ] Ms. Hassell confirmed that Kelly Hassell delivered the raw logs for their home in a logging trailer to the Hunky Dory millsite in February 2002. Mr. Sworyk cut the logs into square beams, sometimes called cants. Ms. Hassell says she went with Mr. Hassell to the

millsite and has photographs that are date stamped. She did not give the Claimant a copy of these photographs or tender them into evidence. [ 79 ] When asked if she was present when Mr. Sworyk delivered the quote for the Contract (Exhibit 3) Ms. Hassell testified in her direct examination, “Not that I remember. I know we needed one for the bank.” [ 80 ] When asked when she first saw the quote (Exhibit 3), Ms. Hassell testified: I don’t know when I first saw it. It was before building the house because we would have needed it for the bank.

I found the original document with my other quotes with other items that were going to be purchased for building the house. [ 81 ] Ms. Hassell admits that after receiving the quote from Mr. Sworyk, she took it to the bank and proceeded with beginning the construction of the house. Ms. Hassell testified: . . . we had to talk to other contractors We looked at the possibilities of different kind of buildings, . . .

There were a lot decisions that had to be made as we never built a house before and we were living in a 6 x 24 trailer with three children and going stark raving mad. [ 82 ] The construction on the residence at 26278 Walcott Road commenced in the Spring of 2003. Because Kelly Hassell was working, he was never on the property. As they had so many different contractors Ms. Hassell was supposed to be on the property full time to oversee everybody. [ 83 ] Although Ms.

Hassell does not have all the documents from the period when the residence at 26278 Walcott Road was under construction, she acknowledges it was financed by way of a construction mortgage with the Royal Bank of Canada. Ms. Hassell describes the mortgage funds were released as follows: . . . It had to be approved. We had to have quotes for everything. We took it in so they could see where the money was going to go to. We were allowed a third. They would allow us that money.

When the next stage came, they would give another allotment When it finished they would give the last allotment. . . [there were] different allotments [which were] definitely wildly spaced. [ 84 ] Ms. Hassell claims not to remember signing the mortgage; however, her counsel concedes this would have been the case for a family residence on property jointly held. [ 85 ] The Hassells were able to move into the residence at 26278 Walcott Road just before Christmas, 2003. [ 86 ] Ms. Hassell acknowledges that Mr. Sworyk was helpful in guiding her in building the residence. She states: I never built a house before.

Kelly claimed he had but he hadn’t. I remember nine distinct fights with Kelly and Joe would come and straighten out a few things. [ 87 ] From its date, Ms. Hassell accepts she would have first received Hunky Dory’s invoice (Exhibit 4) around the beginning of December 2003. She is sure that either Mr. Sworyk or Mr. Hassell delivered the invoice to the residence. [ 88 ] Ms. Hassell does not deny that she and Mr. Hassell did not pay Hunky Dory all the monies under the Contract. When asked why they made no payments to Hunky Dory in 2004, Ms.

Hassell said: The bank allotted a certain amount of money at a certain amount of time. And each time we had to prove what stage we were at and so there were many contractors. And Kelly didn’t have a regular income, so there wasn’t always money available as I wished. [ 89 ] Ms. Hassell did not explain why of all the contractors they engaged to build the residence at 26278 Walcott Road, the Hassells chose not to pay Hunky Dory for the goods and services it provided at the outset of the construction. [ 90 ] Ms. Hassell said as time went by, Mr. Hassell talked to Mr. Sworyk about making payments on the debt.

She said: . . . Kelly would come back home tell me we have to get some money for Joe. So I would budget it in and figure out when I could I would make cheques out for Joe. [ 91 ] With respect to the cheques the Hassells provided to Hunky Dory in 2008, Ms. Hassell states: Kelly would come home and say

Joe needed money We would try and figure how we could budget it I would write out some cheques and give them to Kelly to deliver when he dropped by whenever There might have been an occasion I dropped an envelope off at the house [ 92 ] Ms. Hassell admits the Hassell family did go on a Caribbean fishing trip, which she claimed occurred in 2008. [ 93 ] Ms. Hassell is fairly sure she personally dropped off the 2010 post-dated cheques at the Sworyk residence. She acknowledges the cheques were drawn on her joint account with Mr. Hassell and that she signed most of the cheques.

When asked about the genesis of the 2010 cheques Ms. Hassell stated: Once again Kelly said Joe needs money So once again we sit down and agree on a budget, So I would fill out the cheques and sign them and put them together and get them to the Sworyks. [ 94 ] After the residence in 26278 Walcott Road was built, the excavator remained parked in Hassells’ front yard for years. Ms. Hassell recalls her daughter saying in 2009 she couldn’t get married at the house with the excavator sitting in the living room window. To appease their daughter, Mr. Hassell moved the excavator to the barnyard. Ms.

Hassell did not notice when it was moved from the barnyard at 26278 Walcott Road to Hunky Dory millsite. [ 95 ] Ms. Hassell said that 2009 was when her marriage to Mr. Hassell started to fall part. He abused her and she had him arrested. They did not formally separate until April 23, 2013, when their youngest daughter graduated from high school. Still, life for the Hassells went downhill in and after 2009. [ 96 ] Ms. Hassell said that at some unknown date, Mr.

Hassell came home distraught and told her, “Joe asked for the excavator and I gave it to him.” Because of the turmoil in their marriage, she was not concerned about the excavator and was glad it was gone. She stated in direct examination: I don’t remember the date of the transactions because it was not a concern for me. I had so many other things in life and Kelly did the transaction. [ 97 ] In cross examination: Ms. Hassell acknowledged she had no idea what transacted between Mr. Hassell and Mr. Sworyk, all she knew is that Mr. Sworyk had the excavator. She testified: [Kelly] came through the door.

We were standing at the island in the kitchen. He said, Joe asked for the excavator, so I took it to him, so it was moved. I don’t remember when it was. [ 98 ] When asked if Mr. Hassell told her how the excavator was moved, Ms. Hassell replied, “No, and I didn’t ask.” She did acknowledge that it would likely have been moved on a lowbed. [ 99 ] Based on Mr. Sworyk’s comments as to when he spoke to Mr. Hassell at Spletzer’s shop, Ms. Hassell believes the excavator changed hands in October 2011 and not before.

She states: I felt that when he gave the excavator to Joe It was a relief, because I was thinking, no more payments. It was done. There was so much debt going on with the trucks, I didn’t think any more of it. [ 100 ] Ms. Hassell did not explain why the excavator sat dormant in the Hassell’s driveway or barnyard and not put to work for the monthly rent she claims in her Reply the excavator commanded. [ 101 ] As to the date when the excavator changed hands, Ms. Hassell theorizes it was after 2009, likely in October 2011 or 2012. Her view is based on Mr. Sworyk’s evidence that Mr.

Hassell had the excavator delivered to the Hunky Dory millsite after Mr. Sworyk spoke to Mr. Hassell at Spletzer’s shop. Mr. Sworyk testified that he believed Mr. Hassell was hauling ore for Mr. Spletzer from Dome Mountain. [ 102 ] Ms. Hassell says that she did the invoicing for Mr. Hassell’s trucking business, Fratzco Contracting. Mr. Hassell did not partner with Mr. Spletzer until the Fall of 2011 when Mr. Hassell took his trucks and Mr. Spletzer took his dump trailers to a rock pit in Prince Rupert from where they hauled rock on a barge to Alaska.

They did not start hauling ore from Dome Mountain until March 23, 2012: Exhibit 20. [ 103 ] Ms. Hassell does not believe Mr. Hassell would be working on his trucks in Spletzer’s Shop before he and Mr. Spletzer went to Prince Rupert in the Fall of 2011. [ 104 ] Ms. Hassell agrees that Mr. Hassell may have offered Mr. Sworyk the Peterbilt truck in satisfaction of the debt to Hunky Dory, but not in 2009. In 2009, the Peterbilt truck was only one year old and “hadn’t had an engine go on it yet.” Moreover, Mr. Hassell was

working for Arrow Transportation fulltime and needed the truck for work. [ 105 ] In her oral evidence at trial, Ms. Hassell testified that Mike Elder told her that what they needed was an excavator. She responded: I think I might have one, I don’t know. You know what, let’s ask Joe about it. [ 106 ] In 2015, Ms. Hassell and Mr. Elder went to Hunky Dory’s millsite to purchase railing posts which would match the style of the house. At that time she asked Mr. Sworyk about the excavator. She testified: Mike and I had asked about the hoe when we arrived because it wasn’t in the yard.

He said it was up in a quarry 52 kilometers up the Morice behind a locked gate and it was a long walk in. We got that we were not allowed to see it. I didn’t bother asking why, we came for lumber, I wanted to see about the hoe, it wasn’t there; we left with our order. [ 107 ] Ms. Hassell says that between 2008 and 2015, Mr. Sworyk never spoke to her personally about the amount owing under the Contract. She acknowledges he did come to her home in 2015, but that was to obtain the blueprints for the house. Although she went to the Hunky Dory millsite on three occasions in 2015 to purchase lumber, Mr.

Sworyk raised the issue of the outstanding debt to Hunky Dory on only one occasion, and this was when she was alone. Mr. Sworyk did not discuss the debt in Mr. Elder’s presence, and except on the one occasion, Mr. Elder was with Ms. Hassell when she met with Mr. Sworyk. [ 108 ] Ms. Hassell said that when she was at the millsite obtaining lumber for a carport in 2015, she began chatting with Mr. Sworyk. They discussed Mr. Hassell skipping town and leaving lots of debt. Ms. Hassell testified: I said what is going on? It there anything owing? I did not know the conditions [on which] the hoe went to Joe.

I knew he would not give it back. He would not speak of anything in front of Mike. So with me by myself, he said: “There was some money owing. “I don’t know the exact amount; don’t worry about it; we can work it out.” That’s what he said to me. I said okay and I came home with my load. [ 109 ] Mr. Hassell filed for bankruptcy on May 27, 2015, and received a Certificate of Discharge on February 29, 2016: Exhibit 22. Neither the excavator nor the debt were referenced in Mr. Hassell’s Form 79, Statement of Affairs filed with the Official Receiver.

In support of his application of January 12, 2017, for an order dismissing the claim against him, Mr. Hassell represented he did not list Hunky Dory as a creditor in his bankruptcy proceedings because Ms. Hassell had contracted to protect him from such claims in exchange of the family home and lands: Judge Jackson’s Reasons for Judgment, February 28, 2017. [ 110 ] Ms. Hassell admits that she had received calls from Mr. Sworyk on her cell phone but these occurred when she was at work so she did not answer her phone and he did not leave a message. She denies telling Mr.

Sworyk she intended to sell 26278 Walcott Road to pay off the debt owing to Hunky Dory. Ms. Hassell acknowledged that Mr. Sworyk told her they “could work things out” but claimed she didn’t know what he meant by that comment. She said, “a lot of people knew I was single, I didn’t know what he was inferring.” [ 111 ] Ms. Hassell acknowledges that Hunky Dory provided the shell, purlins, trusses and pine flooring for the residence which was being built as the Hassells’ family home. She acknowledges she lived in this home since its inception and continues to do so to this day. Ms. Hassell says she is debt free.

She denies any liability for the debt owing to Hunky Dory because she did not sign any document in which she personally agreed to pay for these items. Issue #1: Is Hunky Dory’s claim statute barred? [ 112 ] At the time the Contract was formed, the limitation for a claim of breach of contract was governed by the Limitation Act R.S.B.C. 1996, c. 266 (“ Former Limitation Act ”).

Section 3(5) provided for a six-year limitation period on a claim based on breach of contract. [ 113 ] Pursuant to s. 5 of the Former Limitation Act , when a party against whom an action lay confirms the cause of action, time runs, for limitation purposes, from the date of confirmation.

Section 5 provided, in relevant part: Effect of confirming a cause of action 5

(1) If, after time has begun to run with respect to a limitation period set by this Act , but before the expiration of the limitation period, a person against whom an action lies confirms the cause of action, the time during which the limitation period runs before the date of the confirmation does not count in the reckoning of the limitation period for the action by a person having the benefit of the confirmation

against a person bound by the confirmation.

(2) For the purposes of this section, (

a) a person confirms a cause of action only if the person (

i) acknowledges a cause of action, right or title of another, or (ii) makes a payment in respect of a cause of action, right or title of another, (

b) an acknowledgment of a judgment or debt has effect (

i) whether or not a promise to pay can be implied from it, and (ii) whether or not it is accompanied by a refusal to pay. [114] On June 1, 2013, the Limitation Act, SBC 2012m c, 13 (the “New Limitation Act”) replaced the Former Limitation Act. Pursuantto s. 30 of the New Limitation Act, the limitation periods established by the Former Limitation Act continue to govern if a pre-existingclaim arose and was discovered before the New Limitation Act came into force. [115] In Freeway Properties Inc. v. Genco Resources Ltd., 2012 BCCA 258 , the B.C. Court of Appeal considered s. 5 of theFormer Limitation Act. K.

Smith, J.A., for the unanimous court, states at para. 38: [38] This recommendation was given effect in s. 5(2), which defines “confirm”. As this Court said in Fournier v. Evanow (1995), (BC CA), 2 B.C.L.R. (3d) 237 at para. 3 (C.A.), [3] Section 5(2)(

a) of the Limitation Act (the “Act”), provides two distinct methods by which a person may “confirm” a cause of action. The two methods are: (

i) an “acknowledgment” of the cause of action; and (ii) the making of a payment in respect of it. To the same effect, the Supreme Court of Canada said, in Ryan, supra, in respect of the Limitations Act, S.N.L.1995, c. L-16.1, s. 16,which is identical to our s. 5, 40 When a person acknowledges the cause of action of another person or makes a payment in respect of that cause of action, aconfirmation of that cause of action occurs. Consequently, the time accrued before the date of that confirmation shall not be consideredwhen determining the limitation period (s. 16(2)).

Confirmation must, of course, be made prior to the expiration of the limitation period(s. 16(3)). ... 43 In order to establish confirmation, one of two events must be proven: (1) that the party acknowledged the cause of action; or (2) thatthere was a payment made in respect of the cause of action (see Mew, at p.115). [39] Thus, “confirmation” is not

an act separate from an acknowledgment or a part payment – rather, “confirmation” is merely a genericterm used to describe acknowledgments and part payments . . . [116] In this case, the Hassells’ confirmed the debt owing to Hunky Dory by making part payments on that debt in 2008 and again in2010. Had the Hassells not made any further payments after December 2003, Hunky Dory would have had until December 21, 2009 tofile a Notice of Claim. The Hassells’ payments in 2008 and 2010 had the effect of restarting the clock on the Former Limitation Period.

The last payment the Hassells made under the Contract to Hunky Dory was on December 22, 2010. This means that Hunky Dory haduntil December 21, 2016, to file a Notice of Claim. As it filed the Notice of claim in the B.C. Provincial Court on September 19, 2016,Hunky Dory complied with the provisions of the Former Limitation Act and its claim is not statute-barred. Issue #2: Did Ms. Hassell contract with Hunky Dory? [117] It is uncontested that Hunky Dory contracted to provide a shell, purlins, trusses and pine flooring for the residence constructedat 26278 Walcott Road in 2003 for $80,150, inclusive of PST and GST.

It is uncontested Hunky Dory provided additional lumber at acost of $343.50. It is uncontested that at all material times, Kelly and Christine Hassell owned the lands and premises at 26278 WalcottRoad. The question is whether both of them solicited and/or accepted Hunky Dory’s offer tendered as Exhibit 3 in these proceedings.

The salient issue in the formation of the resulting oral Contract is whether Kelly and Christine Hassell were jointly liable to pay HunkyDory the Contract price for the goods and services. [118] The principles of contract law were canvassed extensively by Madam Justice Dickson in Le Soleil Hotel and Suites Ltd. v. LeSoleil Management Inc., 2009 BCSC 1303 , (cited in Chiu v. Lam), in which she states at paras. 321 - 323 (citations omitted): 321 Courts strive to uphold contractual obligations solemnly and freely undertaken.

They do not, however, impose them upon partieswho have not reached agreement on all essential terms. 322 For parties to be bound in a contractual relationship there must be a manifest meeting of the minds. They must express themselvesoutwardly in a manner that indicates both an intention to be bound and reasonably certain mutually agreed terms. 323 These fundamental principles of contract law enable commercial life to operate in a fair, predictable and efficient manner. Theyapply whether the purported contract in question is concluded in writing, orally, by conduct, or by a combination thereof.

The keyquestion in all cases is whether an agreement has been reached on all essential terms, regardless of its form. [119] In respect of oral contracts, Dickson J. stated at paras 328 (citations omitted):

328 The

interpretation of oral contracts turns on the same essential principles [as written agreements]. If the alleged agreement has notbeen reduced to writing, the Court must consider what the parties said and did and assess objectively whether, in context, their words andactions establish an intention to be bound. The genesis and aim of the transaction is an aspect of the relevant context for consideration. The credibility of witnesses will be particularly important and differing versions of events will increase the difficulty of establishing thatan enforceable bargain was made. [120] Mr.

Sworyk testified when negotiating the Contract, he understood he was doing so with the Hassells as a married couple. It isfor this reason he was not precise as to whether he was dealing with Kelly Hassell or Christine Hassell or both. Mr. Sworyk claims thatalthough sometimes he dealt with the Hassells together and sometimes separately, he believed Hunky Dory was been asked to providethe goods and services by and for both Kelly and Christine Hassell. [121] Hunky Dory bears the legal and evidentiary burden of proving, on a balance of probabilities, that Ms. Hassell was a party to theContract: Chiu v.

Lam, 2016 BCSC 299, citing (at para. 39) Clifford v. Flores, 2004 BCSC 358; Gill Tech Framing Ltd. v. Gill, 2012BCSC 1913 , at para. 245). In determining whether Hunky Dory has met this burden, I have had to assess the reliability andcredibility of the witnesses. In doing so I have taken guidance from the oft-cited decision of Faryna v. Chorny (1951), (BC CA), referenced in Chiu v. Lam. In Faryna v. Chorny, O'Halloran J.A., advocates a common sense approach to the assessment ofwitnesses and the weighing of their testimonies with the total evidence. [122] The Contract was not made in a vacuum.

In my view the factual matrix giving rise to its formation support an

interpretation thatHunky Dory, Kelly Hassell and Christine Hassell were parties to the contract. Mr. Sworyk’s evidence in this respect is “in harmony withthe preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in thecircumstances.” In reaching this conclusion I have considered the following circumstances: a. At the time the Contract was formed and executed, the Hassells had been a couple for over 17 years. Although they eventuallyseparated, this did not happen until 2013, ten years after Hunky Dory had executed the Contract.

The Separation Agreement indicatesthat during their long marriage, Kelly and Christine Hassell raised three children, ran multiple businesses and acquired various assets andliabilities; b. Both Kelly and Christine Hassell told Mr. Sworyk they were looking to build a family home. To this end they came to viewthe Sworyk residence on more than one occasion in 2001or 2002 to see if it was the type of construction they wanted for their familyhome; c. Before they undertook the construction of the residence at 26278 Walcott Road, the Hassells lived on the property in a mobilehome with their three children; d.

Either Kelly Hassell alone or in Christine Hassell’s presence asked Mr. Sworyk to provide them with a quote for a log shell,purlins, trusses and pine flooring; e. The goods and services Mr. Sworyk was asked to provide on behalf of Hunk Dory was for the construction of the Hassells’family home on land jointly held; f. A family home is a necessity of life; g. Mr. Sworyk was asked for a quote which the Hassells intended to take to the bank to obtain a mortgage to finance theconstruction of their residence; h.

The Hassells did take the quote (Exhibit 3) to the Royal Bank in support of their application for a construction mortgage; i. Ms. Hassell was active at the building site overseeing the work of the contractors; j. Ms. Hassell actively participated in the construction of the residence alongside Mr. Sworyk; k. The Hassells paid all other contractors engaged in the building of the residence; l. The Hassells made what payments they did to Hunky Dory under the Contract from a joint bank account; m. Ms. Hassell made out, signed and delivered cheques to Hunky Dory as payments on the Contract; n.

At no time until these proceedings did Ms. Hassell suggest to Mr. Sworyk that she was not a party to the Contract or jointlyresponsible for the debt to Hunky Dory; o. The Separation Agreement clearly states the residence at 26278 Walcott Road was a family home which belonged to and wascohabited by both Mr. and Ms. Hassell and their children; p. The Separation Agreement clearly indicates that Mr. and Ms.

Hassell were jointly liable to the encumbrances on title to theresidence at 26278 Walcott Road; q. in British Columbia, the law presumes a family home is family property and that debts associated with the acquisition andimprovement of that property be divided equally between spouses: Mohammadi v. Mohammadi, 2016 BCSC 1873 , para. 37;and r. Had it chosen to do so, Hunky Dory would have been entitled to file a lien under the Builder’s Lien Act against the title to thelands and building at 26278 Walcott Road.

The Builders Lien Act would have provided Hunky Dory with statutory protection forpayment of the outstanding money due for work and material it provided on the construction of the Hassells’ residence. Hunky Dory’sright to claim against the owners’ interest existed even if it did not contract with the owner.

[123] Although Ms. Hassell claims to have no recollection of signing a mortgage for the construction of the residence at 26278Walcott Road, I find it implausible any bank would provide a construction mortgage for a family home on property jointly held withoutrequiring both property owners to sign the mortgage. The evidence indicates that some of the mortgage funds were earmarked formonies owed to Hunky Dory for the shell, purlins, trusses, and pine flooring. Ms. Hassell does not argue otherwise. The Hassellssimply chose to divert those funds for other purposes. [124] In Gill Tech Framing Ltd. v.

Gill, 2012 BCSC 1913, Justice Ker cites the following principles distilled from Clifford and Flores: Constantly reiterated in the judgments is the idea that the test of agreement for legal purposes is whether parties have indicated to theoutside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract. The law isconcerned not with the party’s intentions but with their manifested intentions.

It is not what an individual party believed or understoodwas the meaning of what the other parties said or did that is the criterion of agreement; it is whether a reasonable man in the situation ofthat party would have believed and understood that the other party was consenting to the identical terms. [125] In my view, the manifest intention of the parties was that Hunky Dory would and did provide goods and services to Kelly andChristine Hassell for the construction of their family home at 26278 Walcott Road. The terms were clear and unambiguous.

AlthoughExhibit 3 did not clearly specify with whom Hunky Dory was contracting, Mr. Sworyk, Mr. Hassell and Ms. Hassell were dealing withone another in person. I have no doubt they manifested to and agreed with one another that Hunky Dory would provide the goods andservices for Kelly and Christine Hassells’ benefit and that Kelly and Christine were liable to pay for those goods and services. [126] I am guided by the Jasser v. Kim, 2009 BCSC 782, in which Justice Macaulay found the defendant spouses were jointly liable tothe builder of a family home. The parties stopped paying the builder after they separated.

There was insufficient equity in the home tosatisfy the builder’s lien. The defendant wife claimed she had not signed the building contract and therefore was not liable for the debt.

The Court found otherwise, and doing so took into consideration a number of factors, including the fact that she was part-owner of theproperty, attended on-site regularly, knew the builder was providing goods and services, and actively participated in making decisionsand giving her direction respecting the work. [127] Notwithstanding the initial quote (Exhibit 3) was addressed only to Kelly, I am satisfied on a balance of probabilities theContract was intended to bind and did bind Hunky Dory, Kelly Hassell and Christine Hassell. Even if she did not expressly agree to payfor Hunky Dory’s goods and services, Ms.

Hassell was fully aware they had been requested and provided for her benefit as well as Mr.Hassell’s. I find that in requesting and accepting the goods and services from Hunky Dory, Mr. Hassell was acting personally and asagent for Ms. Hassell. In my view, Ms. Hassell, through her conduct, effectively approved of or ratified the Contract. Issue #3 Does Hunky Dory have an equitable claim? [128] If I am wrong that Ms.

Hassell was a contracting party, then I must consider whether Hunky Dory is entitled to recover from herreasonable remuneration for services rendered in any event based on the equitable principle of quantum meruit. In Gill Tech Framing v.Gill, Justice Ker describes restitutionary quantum meruit as follows [citations omitted]: 253 . . .

Where the parties contract for the provision of goods and services, with an understanding that they will be paid for, “then theymay be presumed to have intended a reasonable price and, on that basis, a contractual term to pay a reasonable price may be implied” 255. . . restitutionary quantum meruit is grounded in the principles of unjust enrichment . . . [129] In Jassar v. Kim Justice Macaulay cites the Ontario Court of Appeal decision in Consulate Ventures Inc. v. Amico Contracting& Engineering

(1992) Inc., 2007 ONCA 324 (at para. 99) for the proposition a claim for restitutionary relief based on quantummeruit does not require “an explicit mutual agreement to compensate for services rendered”, but rather, It suffices if the services in question were furnished at the request, or with the encouragement or acquiescence, of the opposing party incircumstances that render it unjust for the opposing party to retain the benefit conferred by the provision of the services. [130] Justice Ker states in Gill Tech at para. 260, that for a claim for unjust enrichment to succeed, there must be evidence to prove: a. the defendant was enriched by the work done by the plaintiff; b. the plaintiff was correspondingly deprived; and c. there is no juristic reason for the enrichment.

Pettkus v. Becker, (SCC). [131] The Court in Kerr v. Baranow, 2011 SCC 10 reviewed and explained these three elements [citations omitted] asfollows: [36] The first and second steps in the unjust enrichment analysis concern first, whether the defendant has been enriched by the plaintiffand second, whether the plaintiff has suffered a corresponding deprivation. [37] The Court has taken a straightforward economic approach to the first two elements -- enrichment and corresponding deprivation.

Accordingly, other considerations, such as moral and policy questions, are appropriately dealt with at the juristic reason stage of theanalysis: [Citations omitted] [38] For the first requirement -- enrichment -- the plaintiff must show that he or she gave something to the defendant which the defendantreceived and retained. The benefit need not be retained permanently, but there must be a benefit which has enriched the defendant andwhich can be restored to the plaintiff in specie or by money. Moreover, the benefit must be tangible. It may be positive or negative, the

latter in the sense that the benefit conferred on the defendant spares him or her an expense he or she would have had to undertake . . . [39] Turning to the second element -- a corresponding deprivation -- the plaintiff's loss is material only if the defendant has gained abenefit or been enriched . . . That is why the second requirement obligates the plaintiff to establish not simply that the defendant hasbeen enriched, but also that the enrichment corresponds to a deprivation which the plaintiff has suffered . . . .

(2) Absence of Juristic Reason [40] The third element of an unjust enrichment claim is that the benefit and corresponding detriment must have occurred without ajuristic reason. To put it simply, this means that there is no reason in law or justice for the defendant's retention of the benefit conferredby the plaintiff, making its retention "unjust" in the circumstances of the case. . . [41] Juristic reasons to deny recovery may be the intention to make a gift (referred to as a "donative intent"), a contract, or a dispositionof law. . .

The latter category generally includes circumstances where the enrichment of the defendant at the plaintiff's expense isrequired by law, such as where a valid statute denies recovery. . . However, just as the Court has resisted a purely categorical approach tounjust enrichment claims, it has also refused to limit juristic reasons to a closed list.

This third stage of the unjust enrichment analysisprovides for due consideration of the autonomy of the parties, including factors such as "the legitimate expectation of the parties, theright of parties to order their affairs by contract. . . [132] In this case, the evidence clearly shows Ms. Hassell was and continues to be enriched by the goods and services Hunky Doryprovided to the Hassell residence at 26278 Walcott Road, in Telkwa, B.C. There is no evidence the parties reasonably expected that Ms.Hassell was entitled to retain the goods and services without compensation to Hunky Dory which provided them.

In my view it would beunjust and unfair to leave Ms. Hassell as owner, with the benefit and enhanced value to the property at 26278 Walcott Road associatedwith Hunky Dory’s services without fully paying for them. [133] Ms. Hassell did not simply acquiesce to Hunky Dory providing the goods and services, she oversaw their implementation. Sheworked with Mr. Sworyk on installing the subflooring. She called upon Mr. Sworyk to resolve building disputes with Mr. Hassell.

Inearly December 2003, Hunky Dory provided an invoice addressed to both Kelly and Christine Hassell clearly indicating it expected to becompensated for the goods and services. Until the inception of these proceedings, she never suggested to Hunky Dory, she was notjointly liable for its accounts. [134] I do not accept Ms. Hassell’s evidence there was no agreement, obligation or understanding that she would compensate HunkyDory. I do not believe Mr. Hassell tightly controlled all the family finances and Ms. Hassell had only such money as he would allow.

This is contradicted by the Separation Agreement and by her own evidence as to her involvement in the family enterprises and that shealways paid all of her debts notwithstanding she had no income of her own. I do not believe that Mr. Hassell was the ultimate decisionmaker on all aspects of the construction of their home. This is contradicted by Ms. Hassell’s evidence that she was supposed to be at thehouse full time to “oversee everybody” and that she and Mr. Hassell had “nine distinct fights” in which Mr. Sworyk was asked tointervene and “straightened things out.” [135] Accordingly, if I err in finding Ms.

Hassell liable in contract, I also find in favour of Hunky Dory on the quantum meruit claimfor the reasons set out above. Ms. Hassell has not seriously challenged the amount which Hunky Dory says is still owing under theContract. I value the quantum meruit claim as I do the Contractual claim, namely $32,993 plus interest less any amounts deducted as aresult of my decision on the excavator. Issue #4: Is the debt to Hunky Dory a joint debt? [136] I have already found that Hunky Dory contracted with both Kelly and Christine Hassell for the goods and services it provided on26278 Walcott Road.

There is a presumption that a contract made with two or more persons is joint: McLeod v. Wilford, (BC SC). Where the parties are joint, their obligation (or benefit) is one and indivisible: G.H.L. Fridman, The Law of Contract inCanada, 5th ed. (Toronto: Thomson Canada, 2006), p. 181. The question of whether the promise of two or more persons is a jointpromise or a joint and several promises is a matter of construction: E.A.Towns Ltd. v. Harvey, (BC SC), [1945] 2D.L.R. 782 (B.C.S.C.), affirmed (BC CA), [1946] 2 D.L.R. 72 (B.C.C.A.); Robert Porter & Sons Ltd. v. Armstrong, (SCC), [1926] S.C.R. 328; Puciato v.

Charles (1967), (BC SC), 59 W.W.R. 193 (B.C.S.C.). In the Canadian Encyclopedic Digest (Ontario), 3rd. ed., looseleaf, Vol. 5, (Toronto: Carswell, 2002), “Contracts”, para. 21, it states: Whether a covenant made to or by persons is joint, several, or joint and several depends in the first place on its construction. Thus, apromise made by named persons “and by each of them” is joint and several, whereas a promise by covenantors simply that “they willpay” creates only a joint liability.

Similarly, a promise by several persons to pay one price for buildings being constructed for themcreates a joint obligation even if the affected property is owned separately. [137] For the purposes of this action, I find that the sum payable to Hunky Dory was a joint obligation of Kelly and Christine Hassell. Issue #5: How much is owing to Hunky Dory? [138] In its Notice of Claim as amended on November 22, 2017, Hunky Dory claims the amount outstanding under the Contract was$34,916.05 less $5,000 for the excavator plus contract interest at 2% per month.

My calculations indicate that before adjustments for theexcavator and interest, the balance outstanding under the contract was $32,993. In Exhibit 1, Hunky Dory has credited the Hassells with$47,000 in payments, when in fact they paid $47,500. [139] Although Mr. Hassell stated in his October 21, 2016 Reply the agreement with Hunky Dory included an obligation to payinterest, Ms. Hassell says the opposite. In her October 13, 2016 Reply, Ms.

Hassell claimed that no interest was payable. [140] Hunky Dory’s claim for 2% per month interest is based on endorsement on Exhibits 3 and 4, both which state at the body of thedocument:

Terms: Net 30 days. 2% Service Charge per month charged on overdue accounts. [141] Interest chargeable on a debt is governed by the provisions of the Interest Act, RSC 1985, c I-15. Sections 2 to 4 of thatlegislation states: No restriction except by statute 2 Except as otherwise provided by this Act or any other Act of Parliament, any person may stipulate for, allow and exact, on any contractor agreement whatever, any rate of interest or discount that is agreed on.

Interest rate when none provided 3 Whenever any interest is payable by the agreement of parties or by law, and no rate is fixed by the agreement or by law, the rate ofinterest shall be five per cent per annum.

When per annum rate not stipulated 4 Except as to mortgages on real property or hypothecs on immovables, whenever any interest is, by the terms of any written or printedcontract, whether under seal or not, made payable at a rate or percentage per day, week, month, or at any rate or percentage for anyperiod less than a year, no interest exceeding the rate or percentage of five per cent per annum shall be chargeable, payable orrecoverable on any part of the principal money unless the contract contains an express statement of the yearly rate or percentage ofinterest to which the other rate or percentage is equivalent. [142] There is no written agreement the Hassells signed agreeing to pay interest, nor is this required: Davis & Company v.

Jiwan et al,2006 BCSC 658 , at para. 298, citing Feller Meyer Drysdale v. Piper (1984), (BC SC), at 26. Nevertheless,Hunky Dory bears the burden of proving an agreement to pay interest. An agreement must be clear and concise: Gregory & Gregory v.Chen (2005), 2005 BCSC 1505 , at para. 32. [143] In this case there is no written contract between the parties with respect to the payment of interest. The courts have onlyawarded a contractual rate of interest if there is an express agreement or an agreement can be implied from the course of conduct of theparties. There is no express agreement in this case.

Hunky Dory relies upon the argument of course of conduct, because the originalquote and the December 1, 2013 invoice (Exhibits 3 and 4) both include the endorsement that interest is chargeable at the rate of 2% permonth. [144] The Hassells did not pay any invoice which included interest upon which I can imply an agreement to pay interest. In this casethey gave Mr. Sworyk a post-dated cheque before Hunky Dory even tendered an invoice. Any payments the Hassells made do notappear to be in response to receiving invoices or overdue notices, but rather, to Mr. Sworyk’s verbal request for payment. [145] In B.C.

Mechanical Inc. v. A.H. Lundberg Equipment, 1999 BCCA 775 , the Court of Appeal stated at para. 41: ...I will observe that the cases in this and other provinces seem to reflect a tendency in recent years to be less willing to imply a contractto pay interest in the absence of proof of a clear intention between the parties. That seems appropriate in light of the fact that theunsatisfactory situation which prevailed in this province prior to 1975 was remedied by the passage of what is now the [Court OrderInterest Act], which provides for a reasonable amount of interest to be added to a pecuniary judgment.

The history of this case illustratesthe unfairness which can result if the court must award interest at a usurious rate in a case involving a genuine dispute which has takenyears to resolve. If the parties have clearly agreed on such a term, then so be it. But there no longer is any reason to stretch the conceptof implied contract to create a basis for awarding interest. [146] I find in this case, there is no express agreement and I cannot imply an agreement to pay interest from Ms. Hassell’s course ofconduct.

Although an agreement to pay interest may be inferred from the manner in which the parties interact and address outstandingdebts, the general rule is that a claim for interest cannot be grounded on a unilateral term in an invoice: B.C. Mechanical Inc. v. A.H.Lundberg Equipment. It is not enough the Hassells had had some awareness that Hunky Dory was claiming in its invoices the right tocharge interest on overdue accounts. This alone is not enough to create an obligation on the part of the Hassells. [147] There is no evidence of the Hassells paying interim bills inclusive of interest.

Hunky Dory’s invoice was delivered onDecember 1, 2003, included a reference to a 2% per month interest rate. However, there is no indication that a monthly interest rate wasdiscussed by the parties prior to this invoice. Courts will not infer or imply a contract to pay interest in the absence of proof of a clearintention of the parties that interest would be payable. The parties did not have a prior business relationship and in this case the parties’intention in that regard is unclear. [148] I am not satisfied Ms. Hassell clearly turned her mind to the rate of interest Hunky Dory charged.

In any event, the interest rateset out on Exhibits 3 and 4 does not comply with s. 4 of the Interest Act, which means that at most, Hunky Dory would be entitled to 5%interest per annum. [149] The claimant’s claim for interest rate at 2% per month is denied. The rate of interest which will be charged is the rate set bythe Court Order Interest Act from the date the cause of action arose. Issue #6: Can Ms. Hassell rely on the equitable remedy of laches? [150] Ms. Hassell raises the defence of laches.

She argues the doctrine of laches applies to this matter because Hunky Dory took toolong moving forward with enforcing payment of the debt. As a result of the delay and changing circumstances, enforcing paymentagainst Ms. Hassell at this time would no longer be just. [151] Laches is an equitable defence to an equitable claim. It is not available as a defence to a legal claim, such as a claim for

damages arising from a breach of contract or simple debt. This is because historically the doctrine of laches was restricted to claims forequitable relief that were not subject to a statutory limitation period. The courts of equity developed their own limitation defences todelayed equitable claims. In this case, Hunky Dory sued in debt, a legal right, and the equitable principle of laches does not come intoplay: Walters v. Talop Estates Ltd., 2004 BCSC 879 , para. 29; Bank of Montreal v. Awards-West Ventures Inc. (1990), (BC CA), 50 B.C.L.R. (2d) 363 (C.A.). Accordingly, Ms.

Hassell cannot successfully raise a defence of laches to defeatHunky Dory’s claims for legal relief that is subject to an unexpired basic limitation period. [152] Laches may be available to Ms. Hassell if Hunky Dory’s claim for damages arises from unjust enrichment. In this case, HunkyDory’s delay in seeking to enforce payment of its debt is significant. Nevertheless, Ms. Hassell bears the burden of establishing laches. [153] Mere delay is insufficient to trigger laches: M.(K.) v. M.(H.), (SCC). To trigger a laches defence, the defendantmust establish one of two things: (

a) the delay of the plaintiff must “[constitute] acquiescence or (b) [result] in circumstances that makethe prosecution of the action unreasonable.” [154] In Manitoba Metis Federation Inc. v. Canada (Attorney General), 2013 SCC 14 , [2013] 1 S.C.R. 623, at paras.145-46,McLachlin C.J.C. and Karakatsanis J., writing for the majority, citing M.(K.), summarized the doctrine as follows: The equitable doctrine of laches requires a claimant in equity to prosecute his claim without undue delay. It does not fix a specific limit,but considers the circumstances of each case.

In determining whether there has been delay amounting to laches, the main considerationsare (1) acquiescence on the claimant’s part; and (2) any change of position that has occurred on the defendant’s part that arose fromreasonable reliance on the claimant’s acceptance of the status quo. As La Forest J. put it in M.(K.), at pp. 76-77, citing Lindsay Petroleum Co. v.

Hurd (1874), L.R. 5 P.C. 221, at pp. 239-40: Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, whichmight affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy. [155] A party seeking to rely on the defence must show both acquiescence and prejudice. [156] I accept Ms. Hassell is prejudiced by Hunky Dory’s delay in seeking payment for its goods and services. She has separated fromMr.

Hassell and they have already entered into a Separation Agreement with respect to their assets and liability. Mr. Hassellsubsequently declared bankruptcy giving rise to Judge Jackson’s order that Hunky Dory’s claim against him cannot proceed inProvincial Court. [157] Prejudice, however, is not determinative of the issue of whether laches applies. I am not satisfied that Hunky Dory acquiesced tothe Hassells’ failure to pay the Contract price in a timely way.

In M.(K.), the Supreme Court explained what acquiescence means in thecontext of laches: after the deprivation of the claimant’s rights and in the full knowledge of their existence, the claimant delays. Thisleads to an inference the claimant has waived its rights. [158] Mr. Sworyk repeatedly raised the subject of the debt with Mr. Hassell and then Ms. Hassell. He accepted they were goingthrough hard times and believed Mr. Hassell’s assurances Hunky Dory would get paid eventually. Mr. Sworyk tried contacting theHassells at their home, at their work place and by telephone.

He said he heard rumours of Kelly and Christine Hassell’s divorce and“did not want to cause more frustration.” In 2015 Mr. Sworyk finally sent a letter to the Hassells which was marked as Exhibit 8 in theseproceedings. [159] Although I found Ms. Hassell liable to Hunky Dory in contract, I am not persuaded that Hunky Dory sacrificed its right to anequitable remedy by simply being a patient and non-aggressive creditor. Issue #7: Did the Defendant(

s) settle the claim with the delivery of the excavator? [160] Hunky Dory acknowledges receipt of the excavator which it accepted as collateral security for payment of the outstandingamount under the Contract. Gayle and Joseph Sworyk testified Jamie McEwen delivered the excavator from Walcott Road on a lowbedto the Hunky Dory millsite in October 2009. The Sworyks’ evidence is corroborated by Exhibit 13. Ms. Hassell admits she had noinvolvement in brokering this deal; however, argues the excavator was delivered in 2011 or 2012 based on Mr.

Sworyk’s recollection ofwhere he understood Kelly Hassell was working around the time the excavator was delivered. [161] Ms. Hassell asserts Kelly Hassell delivered the excavator to Hunky Dory in full settlement of the amount outstanding under thecontract. If I accept the excavator was delivered in 2009, then Ms. Hassell’s position is significantly weakened by the fact the Hassellsmade 10 payments to Hunky Dory in 2010 after the excavator had been delivered. [162] Ms.

Hassell points out that Hunky Dory’s 2013 accounting records do not set out the amount owing under the Contract as anaging account receivable: Exhibit 16. Joseph and Gayle Sworyk testified accountants prepared these financial statements and theSworyks had limited understanding of their preparation or meaning. I do not infer from the fact the Hassell debt is not referenced in theaccounting records as affirmation Hunky Dory accepted the excavator in full settlement of that debt.

Accountants routinely write-offlongstanding accounts receivable for income tax purposes. [163] I do not find Hunky Dory accepted the excavator as a full settlement of the monies outstanding under the contract. In reachingthis conclusion, I have taken the circumstances referred to above including: a. Exhibit 13 corroborates Gayle and Joseph Sworyk’s evidence the excavator was delivered in October 2009; b. Mr. Sworyk refused to accept Mr. Hassell’s offer of the more valuable Peterbilt Truck as settlement for the outstanding debt, soit made no sense he would accept an excavator which was worth significantly less;

c. The Hassells continued to make payments on the excavator a year after it had been delivered to Hunky Dory’s millsite; d. Although the Hassells were having problems paying their bills, they still owned 26278 Walcott Road, Telkwa, B.C. and other as

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