Magnum Consulting Inc. v. Paz Fuels Ltd. Date:, 2015 BCPC 249

Citation: Magnum Consulting Inc. v. Paz Fuels Ltd. Date: 20150908 2015 BCPC 0249 File No: 22025 Registry: Abbotsford IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (SMALL CLAIMS COURT) BETWEEN: MAGNUM CONSULTING INC. CLAIMANT AND: PAZ FUELS LTD. DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE K. D. SKILNICK Counsel for the Claimant: L. F. Kushner Appearing for the Defendant: J. Wiefelspuett Place of Hearing: Abbotsford , B.C.

Dates of Hearing: June 23-24, August 31, 2015 Date of Judgment: September 8, 2015 Introduction [ 1 ] The Claimant Magnum Consulting Inc. is a corporation which provides consulting services in the area of restaurant and food services management. Its principal is Janice Martin. The Defendant Paz Fuels Ltd. is a corporation that operates an independent wholesale and retail fuel business. Its principal is Mike Paz.

In May of 2014 these parties entered into a written contract, prepared by the Claimant, in which the Claimant was to provide the Defendant with consulting services, more particularly set out in the contract, to upgrade the service and sale of food at the Defendant’s gas bar in Aldergrove, B.C. Under the terms of the written agreement, the Claimant was to be paid $32,500 in two instalments.

The first instalment of $15,000 has been paid, while the second, of $17,500, was not. [ 2 ] The Claimant alleges that the Defendant has breached the contract and brings this claim for the balance of $17,500, either under the contract, or alternatively under the equitable doctrine of quantum meruit . The Defendant alleges that the Claimant has failed to provide the services it agreed to provide under the terms of the contract. It takes the position that not only should the Defendant not be required to pay the balance of the contract price, but that it should receive a refund of most of the $15,000 it paid.

In its counterclaim, the Defendant takes the position that it has paid the Claimant the sum of $15,000, but it was only provided with services of an approximate value of $2,050 and it seeks judgement against the Defendant for the difference. [ 3 ] Three witnesses testified on behalf of the Claimant (Ms. Martin, Mr. Olson of Trimen Food Service Equipment Inc. and Ms. Peregrym, an employee of the Claimant) and two on behalf of the Defendant (Mr. Paz and his executive assistant Ms. Grant). Following is a

summary of the evidence given at trial, the applicable law, and the reasons for making the order that is being made in this matter.

Summary of Evidence [ 4 ] Janice Martin, the President of the Claimant, met Mike Paz, President of the Defendant, sometime in 2007. At the time Ms. Martin was the general manager of a food services company and the Defendant was a client of that firm. Ms. Martin began operating her own company (the Claimant) in 2010. In the summer of 2013 the two met to discuss improvements that might be made to the food services area of the Defendant’s gas bar, located on the Fraser Highway in Aldergrove, B.C. Mr.

Paz testified that he did not have experience in operating a kitchen as part of a gas bar, but he was hopeful that improvements could be made so that the kitchen could show a profit and attract customers to his business. [ 5 ] Mr. Paz decided that he needed the services of a consultant in order to be successful in his goal of having the kitchen at his gas bar turn a profit and increase the number of customers who patronized his business. He called Ms. Martin and the two of them met in the summer of 2013 to discuss the project. Mr.

Paz testified that his plan was for the kitchen to be something unique and something that would bring more customers to his business. He knew that what he was doing wasn’t accomplishing this, and he hoped that a consultant would provide a plan that would achieve what he wanted. He testified that this was his first experience with something of this nature and believed that hiring a consultant would be beneficial. He also testified that he had known Ms. Martin for approximately eight years and had some trust in her. [ 6 ] In September of 2013 Ms.

Martin visited the Defendant’s business and the two principals met and she began to work on a number of ideas. They met again at a food show in October. According to the evidence of Ms. Martin, they next met in January of 2014. Later that month she inspected the equipment in the kitchen at the Defendant’s premises to see whether or not that equipment could be used in the refurbishment of the kitchen. She worked on kitchen designs, tentative menus, logos and other ideas and when the two met again in February, she brought drawings along of possible kitchen designs. Ms.

Martin testified that by this time she had spent over 200 hours working on the project, even though no formal contract had been signed between the parties. [ 7 ] In March Ms. Martin became concerned that she had put a lot of time into the project without any formal written agreement. She told the Defendant that she would not do any further work on the project until a formal agreement was signed. She prepared a written agreement and met with Mr. Paz and his executive assistant Ms. Grant in late March to go over the agreement she had prepared. The contract was signed at that time.

There is some confusion as to the exact date the contract was executed. The first page of the document lists the date as May 26, 2014, but Ms. Martin testified that this was not the correct date. The page on which the contract was signed shows the date as April 1, 2014. While this error seems to have some significance to the Defendant, little, if anything, turns on this discrepancy.

The fact is that the parties entered into a written agreement setting out the terms of their contractual relationship. [ 8 ] Under the terms of the agreement, the Claimant was to provide the services of a café project consultant on the upgrading of the current kitchen to meet the requirements of offering hot and cold breakfast lunch and snacks, including take-out food. This task was broken down to include the following components:

a) Developing job descriptions;

b) Recruiting team members;

c) Assisting in developing food side concepts;

d) Assisting on building a “business case”;

e) Menu development (including the cost of food and labour);

f) Design and upgrade of kitchen components;

g) Working with the general contractor on the kitchen upgrade;

h) On-site consultation during the building phase;

i) Liaising with the owner and executive assistant;

j) Development of a food safety plan;

k) On-site attendance to set up facility;

l) Training the manager and service team;

m) Development of a take-out food program; and

n) Consultation on a weekly basis after the opening of the new kitchen. [ 9 ] The agreement provided (in paragraph 3) that either party could terminate the agreement on 30 days’ notice to the other. It provided, in paragraph 7, that the Claimant was to be paid the sum of $32,500 “for the services rendered by the Contractor as required by this agreement”, payable by a deposit of $15,000 upon execution of the contract, and the balance on May 1, 2014. [ 10 ] The contract also provided, in paragraph 20, that any disputes were to be resolved by binding arbitration. This has not been done.

However the parties have agreed that neither of them is seeking to rely on this provision of the agreement. They both agree that they are now before this court and they would each like the matter resolved and decided, for better or worse. [ 11 ] At its essence, this dispute is about whether or not the Claimant has performed the services it has agreed to provide under the contract. It is the Claimant’s position that it is entitled to the balance of the contract amount because of the time spent on the project. Ms.

Martin testified that the following time was spent in respect of each of the various components of the contract:

a) Developing job descriptions: 10 hours. She testified that this was completed during the last week of March.

b) Recruiting team members: 40 hours, which included posting of the job descriptions on culinary career websites.

c) Assisting in developing food side concepts: 20 to 30 hours, which included researching possible options such as “quick serve”, “grab and go”, having a short order cook and a “food truck concept”.

d) Assisting on building a “business case”: 20 to 25 hours.

e) Menu development (including the cost of food and labour): 40 to 45 hours.

f) Design and upgrade of kitchen components: 20 to 35 hours. Ms. Martin testified that she worked with Trimen Food Service Equipment Inc., who generated conceptual drawings of what the kitchen might look like.

g) Working with the general contractor on the kitchen upgrade: 4 to 5 hours, during which time Ms. Martin met with John Craig, the Defendant’s general contractor at the project site.

h) On-site consultation during the building phase: No time was spent on this aspect of the project as it never reached this stage.

i) Liaising with the owner and executive assistant: No time estimate was given, but Ms. Martin testified that there were “quite a few visits of up to three hours”.

j) Development of a food safety plan: 10 hours. Ms. Martin testified that she applied for a permit plan to the provincial government authority which approves these plans.

k) On-site attendance to set up facility: No time was spent on this aspect of the project as it never reached this stage.

l) Training the manager and service team: No time was spent on this aspect of the project as it never reached this stage.

l) Development of a take-out food program: 5 hours.

m) Consultation on a weekly basis after the opening of the new kitchen: No time was spent on this aspect of the project as it never reached this stage. [ 12 ] Ms. Martin testified that she spent between $1300 and $1900 for expenses connected with the contract, including $1000 paid for kitchen drawings. She obtained quotes from Trimen Food Service Equipment Inc. for kitchen food service equipment as well as drawings for prospective kitchen designs. She also prepared and submitted draft menus, as well as a “business case” (a draft operating budget for the kitchen).

She prepared job descriptions and collected resumes from prospective employees. [ 13 ] Ms. Martin testified that she felt held back on the project by the Defendant’s inability to make important decisions about the project. Specifically, she alleges that the Defendant was delinquent in approving any proposals for the purchase of kitchen equipment or

a kitchen design plan. It was also frustrating for her that in the time she had worked on the project, the Defendant hadn’t even approved a menu plan or even offered any useful feedback on the plans that had been submitted. She testified that she had set up a meeting for the Defendant to taste various food options, but no one from the Defendant showed up for it. [ 14 ] In an email dated May 16, 2014 from Ms. Martin to Mr. Paz and his executive assistant Ms. Grant, Ms. Martin inquired if any decision had been made on a timeline for construction.

A week later, she sent another email asking if the Defendant was willing to sign off approval on the kitchen design she had proposed. It does not appear that the Defendant ever responded to these emails and on June 25, 2014 an email from Ms. Martin to the Defendant confirms that a decision on the kitchen plan had still not been made. Further emails were sent by Ms. Martin on July 7, 2014 asking for approval of the proposed kitchen design. [ 15 ] In mid-June of 2014, Tod Olson of Trimen Food Service Equipment Inc. met with Ms. Martin and Mr. Paz at the Defendant’s premises.

Cassandra Peregrym, an employee of the Claimant, was also at this meeting and she places the date as June 19 th . At that time Mr. Olson toured the premises and he prepared a proposal for the design of the kitchen. He testified that he made some changes in the designs presented after further reflection about the project. For some reason the Defendant felt that the submission of a second kitchen design so soon after the first was submitted reflected poorly on the Claimant, but Mr. Olson testified that this was his decision.

He also testified that he became concerned when he did not hear anything about whether or not the Defendant was approving his design proposal. [ 16 ] Cassandra Peregrym recalls that two other meetings between the Claimant and Defendant took place: on June 22 and 26. Both Ms. Martin and Ms. Peregrym testified that Mr. Paz was anxious for the recruitment of staff to begin, but the Claimant thought that it was unwise to do so before any kitchen construction had begun. However they followed Mr. Paz’s instructions and began seeking out candidates for positions in the new kitchen.

It appears that a problem arose in July when the Claimant had spoken with one the Defendant’s current employees. The Defendant had not told its employees about any prospective changes and it appears from the tone of email sent that Mr. Wiefelspuett, the Defendant’s General Manager, was upset about this. On July 11, 2014 Ms. Martin sent an email to Mr. Wiefelspuett apologizing for the misunderstanding. [ 17 ] Mr. Paz testified that despite having a number of meetings with Ms. Martin, he felt that he still didn’t have a good idea of what to expect.

He had retained consultants for other projects including the construction of a car wash, a new underground propane system and other projects, and he was satisfied with his experiences working with consultants on those projects. His concern with Ms. Martin was that she was too vague in telling him what to expect and, in his words, he “didn’t have confidence in the formula.” For example, in one of the discussions he had with Ms. Martin, she mentioned the possibility of serving frozen foods. This concerned him because up to then he was under the understanding that they were looking at serving fresh food. In

summary, Mr. Paz testified that by late July, he didn’t feel that he had been presented with a concept that he could move forward on. He had retained the Claimant to provide him with that and the Claimant had not done so. [ 18 ] It wasn’t until July 21, 2014 that Mr. Paz emailed Ms. Martin and set out a list of concerns that he had about the project. These included concerns that the “business case” was incomplete as it was only composed of one spreadsheet. He also wondered why the menu plan had changed and asked for a more detailed explanation of the kitchen layout and the components in it.

He testified that he didn’t think this was an unreasonable request on his part for clarification of these things. [ 19 ] Ms. Martin responded to this email two days later and from a reading of her response, she took offence to the requests made in Mr. Paz’s email, calling its tone “accusatory”. One might reasonably expect that things could have been addressed by a meeting at which Ms. Martin answered specific questions on the points raised in Mr. Paz’s email. Instead, Ms. Martin said that responding to such inquiries had not “been budgeted or billed for”.

She offered to answer the questions for a fee, which may have amounted to as much as $1500 (10 hours at her hourly rate of $150). She was understandably concerned over the issue about a lack of timely response from the Defendant on a number of her proposals. She also reminded the Defendant that under the terms of the contract between the parties, the second instalment of $17,500 was supposed to have been paid on May 1 st , and it was now 83 days past that. [ 20 ] On July 24 th , Mr. Paz emailed Ms.

Martin and proposed a meeting at her “earliest convenience.” Unfortunately a meeting was not arranged in a timely manner. Mr. Paz testified that he had no communication from the Claimant for at least a week. Finally the two principals met on August 7 th along with their support staff. Ms. Martin testified “I was quizzed on every point” and stated “they wanted to go back on the contract.” Mr. Paz’s perception of the meeting was that he simply wanted to get to the point and lay out his concerns on the table. Unfortunately Ms. Martin didn’t see it this way.

From her perspective, she felt offended at having to justify her work. From Mr. Paz’s perspective, he was looking at a significant expenditure and wanted his concerns addressed before going ahead with that expenditure. He was simply not confident, based on the information that he had received from the Claimant to date, that he was doing the right thing in going ahead with the project. [ 21 ] On August 8 th Mr. Paz emailed Ms. Martin and asked for her available dates for another meeting. He once again set out what his concerns were and what it was he wanted to know before proceeding with the project. Ms.

Martin arranged a meeting for August 14 th . But on August 11 th , less than an hour after the email setting up this meeting was sent Mr. Paz emailed Ms. Martin and stated that he had lost confidence in the Claimant. he wrote: “Based on my impressions from our latest meeting and the quality of the information exchanged in the recent past I am no longer of the opinion that you will be able to conclude the project in a timely and satisfactory manner. I know this may come as a disappointment, but I am disappointed too.

It is after much thought and consideration that I have decided to terminate our agreement with immediate effect in accordance with the contractually agreed terms and conditions.” [ 22 ] Mr. Paz went on to state that he did not believe that the services provided to date merited the payment of the first instalment that the Claimant had already received and asked for an itemized breakdown of the services provided under the contract to date. In his evidence, Mr. Paz testified that to him there is no evidence that the Claimant worked the hours on the project that it claims to have and if

these hours were worked, the Defendant has not received any benefit from them. He said that prior to hearing Ms. Martin’s evidence,there was nothing he was aware of to suggest that she had spent over 200 hours on this project. [23] On August 13, 2014, Ms. Martin emailed Mr. Paz and stated that under the terms of the contract between the parties, theClaimant was not required to report on its hours worked.

She went on to state that she had “kept meticulous notes on the project” and hadtracked her hours worked and was willing to provide them to any third party who was required to adjudicate any outstanding issuesbetween the parties. Despite making this statement, the Claimant has not disclosed these records in the course of this litigation and theywere not entered into evidence at the trial of this action. Position of the Parties [24] The Claimant takes the position that the Defendant is in breach of the contract made between the parties.

Counsel for theClaimant argues that the Defendant breached the contract when it failed to pay the second instalment of $17,500 on May 1, 2014. Heargues that this was a repudiatory breach, which gave the Claimant the right to terminate the agreement (something which it did notimmediately do) or to affirm the contract. In this case, Counsel argues that initially the Claimant affirmed the breach and continued to perform its obligations under the contract, even though the Defendant had not paid the May 1st instalment.

Counsel argues that when, inAugust, the Defendant said that it was terminating the contract and was refusing to pay the contract price, a second repudiation of thecontract occurred, at which time the Claimant was entitled to reject the breach and sue for damages. He argues that the proper measure ofdamages is the balance of the contract price. [25] Alternatively, counsel for the Claimant argues that if the Claimant does not have a remedy in contract, it has a remedy under theequitable doctrine of quantum meruit.

It would be unjust for the Claimant to have worked hundreds of hours for the benefit of theDefendant, and to have done so while turning away other work, for little compensation. Counsel submits that, based on the evidence ofMs. Martin, the work that she performed for the benefit of the Defendant equals or exceeds the balance of the contract price, entitling theClaimant to judgement against the Defendant for $17,500. [26] The Defendant disputes that the Claimant has worked the hours that Ms. Martin testified to.

It argues that this does not matchthe work product, and it is suspicious that the Claimant has never produced the source documents proving that such work wasperformed, even at trial and even after claiming in an email that it would do so. The Defendant argues that a reasonable

interpretation ofthe contract is that the Claimant was to be compensated for the work it performed and that, notwithstanding the timelines set out in theagreement for the two instalments, the money had to be earned (i.e. services of that value had to be performed) before Defendant wasobliged to pay the Claimant the money it now claims. The Defendant submits that there were were huge portions of this contract thatwere not performed.

The right to payment was not an absolute one; it was contingent on the Claimant actually providing the services. [27] The Defendant argues that it was the Claimant who frustrated performance of the contract by introducing a new term, the rightto be paid an exorbitant amount for answering its client’s questions. The Defendant submits that it was the Claimant who actedunreasonably by refusing to answer its client’s questions and address issues that were concerning the Defendant and any damages flowfrom the Claimant’s actions, not the Defendant’s. Applicable Law 1.

Burden of Proof [28] The burden of proof in a civil case rests with the Claimant to prove its case on a balance of probabilities, and on the Defendantto prove the case for its counterclaim on a balance of probabilities. As the Supreme Court of Canada stated in F. H. v. McDougall 2008SCC 53; [2008] 3 S.C.R. 41, at para. [49]: “[I]n civil cases there is only one standard of proof and that is proof on a balance of probabilities. In all civil cases, the trial judge mustscrutinize the relevant evidence with care to determine whether it is more likely than not that an alleged event occurred.” 2.

Interpretation of Contracts [29] The parties have a different point of view on the issue of whether, under the terms of the contract made between them, theDefendant is obliged to pay the second instalment of $17,500 to the Claimant. In constructing the contract made between the parties, Ikeep in mind the following principles of law: 1. The contract must be read as a whole, giving the words used in the contract their ordinary and grammatical meaning, consistent withthe surrounding circumstances known to the parties at the time of the making of the contract.

While the surrounding circumstances willbe considered in interpreting the terms of the contract, they must never be allowed to overwhelm the words in the agreement. SattvaCapital Corp. v. Creston Moly Corp. 2014 SCC 53; Robb v. Walker 2015 BCCA 117. 2. If there is an ambiguity in the terms of an agreement, the subsequent conduct of the parties can be taken into account to assist inresolving the ambiguity. Silver Standard Mines Ltd. (N.P.L.) v. Granby Mining Company Ltd. (1971) (BC CA), 19D.L.R. (3d) 578 (B.C.C.A.) 3. A party cannot take advantage of and benefit from a state of affairs produced by its own wrong.

Within the context of contract law, aparty cannot use its own breach or default as a basis for being relieved of its contractual obligation. Barclays Bank PLC v. Trustee ofDevonshire Trust 2013 ONCA 494.

[30] There is also a principle of construction of contracts which provides that in cases of ambiguity, language should always beconstrued against the party who prepared the contract. This is often referred to as the contra proferentem rule. In Arthur Anderson Inc. v.Toronto Dominion Bank (1994) (ON CA), 17 O.R. (3d) 363, Justice Abella, then a member of the Ontario Court ofAppeal, explained the rationale for the rule as follows: “It is a rule meant to relieve the non-authorial party to a contract from an

interpretation that party could not clearly discern from a plainreading of the document. This prevents the party who did draft and understand the contract from springing a hidden contractual burdenon an unsuspecting signator.” 3. Breach of Contract [31] The law concerning repudiation of a contract was summarized by the BC Court of Appeal in Baughman v. Rampart ResourcesLtd. (1995), (BC CA), 4 B.C.L.R. (3d) 146 (C.A.), by Southin J.A. at paragraph 61 as follows: 1.

One party has either committed an anticipatory breach (i.e. that party has expressed the intention not to perform the contract before thetime for performance by him has arrived) or it has committed a breach going to the root of the contract, which, if accepted by the otherparty to the contract, brings the obligation of further performance to an end on both sides. 2.

When either of these takes place, the wronged party is entitled to damages which are calculated with reference to the contract. [32] The wronged party can either affirm the contract (continue to perform its obligations under the contract) or it can accept therepudiation (ending the contract) in which case the wronged party is excused from further performance under the contract. The wrongedparty can then sue for its damages. 4.

Calculation of Damages for a Repudiatory Breach [33] The wronged party in a repudiatory breach may sue for damages or may be able to claim on a quantum meruit basis for thevalue of services rendered prior to repudiation. [34] As a general rule, damages are to be calculated as of the time of the breach.

The general rule for the assessment of damages forbreach of contract is that the award should put the wronged party in the position it would have been in had the other party fullyperformed its contractual obligations. [35] A quantum meruit claim may be brought based on the concepts of restitution or unjust enrichment. In these claims, for examplewhere the original contract was unenforceable or abandoned by the parties, or void or frustrated, the plaintiff’s claim is based on legalfoundations other than contract. Liability does not depend on the parties’ agreement, but on the principles of unjust enrichment.

Tosucceed, the claimant must establish: 1. An enrichment (for example, the receipt of professional services without remuneration); 2. A corresponding deprivation (for example, the provision of those services by the provider without any the remuneration); and 3.

The absence of any fair reason for the enrichment. (Once the case is made out that the enrichment and deprivation have occurred, theburden of proof shifts to the enriched party to show why the enrichment should be retained.) [36] Although an award in quantum meruit is considered to be an equitable remedy, it has been held to be one that is available underthe Small Claims Act. Dulay v. Gill 2011 BCSC 890; Madhavji v. Empire Life Insurance Co. 1993 BCPC 6; Canpages Inc. v. Avi PizzaFactory Ltd. 2009 BCPC 159. In Dulay v.

Gill, the BC Supreme Court held, at paragraph 53, that even though he had not done so, theSmall Claims trial judge could have made a finding of unjust enrichment and made an award in quantum meruit. In making that order,the appellate judge referenced section 13 (1)(

a) of the Small Claims Act which provides that the appellate court may make ordersavailable in this court. Accordingly, I am satisfied that this remedy is available to this court. Analysis [37] From the evidence presented it is clear that both of the parties to this agreement had differing perceptions of the nature of theirrelationship. It is also clear that there was a breakdown in communication between the parties. It is difficult for any outside party toaccurately discern how this came about or who bears the lion’s share of the responsibility for the breakdown in the relationship.

Bothprincipals of the parties present as reasonable people. The Claimant portrays the Defendant as being unable to make a decision, leadingto delays in the project and frustration both for the Claimant and for her suppliers. The Defendant states that its reluctance was foundedon the failure on the part of the Claimant to clearly articulate and explain what it was precisely that its consultant was proposing and howthis would accomplish the Defendant’s desired goals. [38] The Defendant’s reaction to the Claimant’s email of July 23rd is understandable.

The Claimant ought to have realized that, formost small businesses, the expenditure of $32,500 for a consultant, along with the costs of the kitchen renovations themselves, was notan insignificant or minor expense. It does not seem unreasonable for a client who is unclear about the concept to ask to have itsmisgivings addressed. Whether or not this is expressly set out in a contract, reasonable persons would expect that a consultant would

answer questions of this nature. The Claimant’s response that these questions would be answered only if the Defendant paid for them to be answered (at a cost of as much as $1500) appears to be a questionable method of client relations. The case might be otherwise if the Defendant had shown a pattern of time wasting, but no such behaviour appears from the evidence. [ 39 ] It must be kept in mind however that the Defendant signed a contract in which it agreed to pay the second instalment under the contract by May 1 st .

There were no conditions attached to this and the Defendant should not have agreed to this condition if it did not intend to honour it. The Defendant has not satisfactorily explained why it did not honour this promise and appears to have avoided confronting this issue in its discussions with the Claimant. I suspect that this contributed to the climate of mistrust that arose between the parties. [ 40 ] The contract itself added to the atmosphere of confusion between the parties and it is human nature for parties to read a contract in a manner that serves their interests.

In this case for example, clause 2 of the contract gives either party the right to terminate the contract on thirty days’ notice to the other. The contract is silent as to how accounts are to be settled if termination occurs, as it did here, before all of the services have been provided. [ 41 ] The Compensation

section of the contract also opens itself to possibilities of misunderstanding and conflicting expectations among the parties. For example, while clause 8 provides that the contract price is to be paid in two instalments (one of which was made in this case and one which was not), this does not mean that the Claimant becomes entitled to those sums merely by the passage of time. Clause 7 clearly provides that the compensation is to be paid to the Claimant “for the services rendered”. Those services are itemized in paragraph one of the contract.

It would be unreasonable to find that the contract entitled the Claimant to be paid $32,500 even if the agreement was terminated before all of the services had been provided. If this was the case, the Claimant could have decided to terminate the contract after May 1 st but before performing all of the services under the contract and kept the full contract price.

I don’t believe that the Claimant is suggesting such a construction, and it would be unreasonable to interpret the contract as such. [ 42 ] Parties to a contract must understand that a court will enforce the contract that they actually made, not the one they intended to make, nor the one they thought they had made, nor the one they wish they had made. In this case, the Defendant agreed to pay the Claimant $32,500 and that full sum was to be paid by May 1 st . Clause 22 provided that time was to be of the essence of the contract. This means that the times set out in the contract were important to the agreement.

A breach of such a clause went to the root of the contract. Breach of this term cannot be ignored just because the services under the contract had not yet been performed. If that was what was intended, the contract ought to have stated so. By agreeing to make payment on specified dates, unconnected to whatever stage the services had been performed, the contract required the Defendant to “pay up front”. Whether that was for the purpose of allowing the Claimant to meet its disbursements under the contract or simply to provide with security for payment is irrelevant.

There is no ambiguity as to when the Defendant had agreed to pay the contract instalments. It was something that the Defendant agreed to, and it failed to live up to that agreement. [ 43 ] Where, as here, one party has breached an important term of the contract, the wronged party is entitled to a remedy at law. This does not mean however that the Claimant is entitled to the full amount of the compensation. Rather the Claimant is either entitled to an award in quantum meruit or in damages. [ 44 ] There is considerable difficulty in calculating what the Claimant is entitled to in quantum meruit.

It is true that the Claimant has provided services under the contract and should be compensated for them. Quantifying the amount of that compensation is practically difficult. It is frustrated in part by the Claimant’s failure to disclose or produce the records which are referred to in Ms. Martin’s email of August 13, 2014, records which she said would be disclosed as part of any dispute resolution process. The parties do not agree on the hours that the Claimant worked on the project and this dispute is unresolved on the evidence presented at trial.

The contract never contemplated any reimbursement at an hourly rate, so that even if one was able to make a finding as to the hours spent on the project, making a quantum meruit claim based on an hourly rate would not match the intent or the expectation of the parties, as set out in the contract. It was never contemplated that this was to be a contract for services provided at an hourly rate. [ 45 ] In awarding the Claimant damages for the Defendant’s breach, the Claimant is to be put in the same position as if the contract had been honoured.

Under the terms of the agreement, either party was entitled to terminate the contract, as occurred in this case, on appropriate notice to the other side. Notwithstanding the

schedule of payments, clause 7 provided that the Claimant was to be paid only “for the services rendered” under the agreement. Notwithstanding the calculations of the Defendant to the contrary, the evidence satisfies me that the Claimant had performed a considerable amount of the services at the time of termination of the contract, well beyond the Defendant’s estimate. Specifically, job descriptions had been developed, some effort had taken place to recruit staff, and some work had been done in development of food concepts.

Judging from what has been produced in evidence, the work done on the business case does not match the time that the Claimant reports to have spent on it, and the value of what the Defendant received on the business case cannot be what was reasonably expected. Some work had been done on a food safety plan. [ 46 ] The contract had not yet reached the stage where work contemplated under the contract that was connected with the construction had taken place.

The general contractor had not begun work, there were no building phase consultations, no training of staff had occurred, and there was no post-opening consultation. [ 47 ] In fixing damages, the Claimant is entitled to be paid for that portion of the contract that it performed and only that portion.

Because of the absence of clear evidence about how much time the work performed reasonably ought to have taken, how much time the tasks yet to be performed would have taken and what a fair proportion of these two components of the contract would be, any estimate of damages must be imprecise. [ 48 ] The Claimant has been paid $15,000 of a $32,500 contract. It has received approximately 46.15% of the total contract price, and from the evidence presented that is very close to the portion of the contract that it was able to complete before the contract was terminated in accordance with clause 3.

It may be that the Claimant has performed more than 46.15% of the contract services, or it may be, as the Defendant states, that the Claimant has performed much less of the contract services. The law requires each party to prove their position on a balance or probabilities. I find on the evidence presented at trial that neither side has met that burden.

[ 49 ] On the evidence provided, the fairest result presenting itself is for the Claimant to be permitted to keep the $15,000 it has been paid. Its Claim for the balance of $17,500 is dismissed. The Defendant’s Counter-claim is also dismissed. Because neither party has been successful in proving its Claim or Counter-Claim on a balance of probabilities, no costs are awarded to either party. Order [ 50 ] For the foregoing reasons, the Claim and Counter-claim are dismissed. Each party shall bear its own costs of this action.

Dated at the City of Abbotsford, in the Province of British Columbia this 8 th day of September, 2015. ______________________________________ The Honourable Judge K. D. Skilnick