Pacific Plumbing and Heating v. RKI Properties, 2023 BCPC 196

Citation: Pacific Plumbing and Heating v. RKI Properties 2023 BCPC 196 Date: 20230825 File No: 5761 Registry: Duncan IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Civil BETWEEN: PACIFIC PLUMBING AND HEATING CLAIMANT AND: RKI PROPERTIES LTD. DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE J.P. MacCARTHY Counsel for the Claimant: Andrew LaCroix Appearing for the Defendant: Rohn Mahen Place of Hearing: Duncan , B.C. Dates of Hearing: May 24, October 14, 2022 and April 20, 2023 Date of Judgment: August 25, 2023

INTRODUCTION [ 1 ] This is a dispute about who, if anyone, authorized and is responsible in contract or quantum meriut for paying for services rendered. [ 2 ] This case demonstrates that parties who engage with each other in any form of business arrangement should at the outset have a clear understanding and answers to the fundamentally important question: who is doing what for whom, when, at what cost and who is responsible for paying? These parties failed to address that fundamental question and hence are before this Court. BACKGROUND [ 3 ] The Claimant 572927 B.C.

Ltd., carries on business under the name and style of Pacific Plumbing and Heating. It is a well- established, full service plumbing, heating, ventilation and air conditioning (“HVAC”), sheet metal and mechanical contracting business. 572927 B.C. Ltd (the “Claimant”) has some 25 to 30 employees and services clients on the southern part of Vancouver Island. Its principal is Kevin Wright. [ 4 ] The defendant, RKI Properties Ltd. is the owner of head leases for ten Fresh Slice Pizza restaurant franchise locations on Vancouver Island, including one in Nanaimo and another in Duncan, British Columbia.

Its principal is Rohn Mahen and its related company is Ming Enterprises Ltd. which is the master Fresh Slice Pizza franchisor for Vancouver Island. [ 5 ] At all material times in and around March of 2019, RKI Properties Ltd. (the “Defendant”) was in the process of negotiating an offer to lease relating to leasehold space for a new franchise outlet in a commercial and office complex located at 435 Trunk Road, Duncan, British Columbia.

This complex is commonly known as the “Cowichan Health and Wellness Centre” (the “Centre”). [ 6 ] The Centre was at all material times owned by Quadra Equities Ltd. (the “Landlord”) whose authorized representative at all material times was Jim Myers. The Landlord’s realtor and leasing agent was Ed Williams with whom Rohn Mahen principally dealt but then ultimately also with Jim Myers. [ 7 ] The lease space in question which the Defendant was seeking to obtain is identified in various documents as Unit 110.

It is on the ground floor of the Centre and faces in a southerly direction towards the main entrance of the Centre on Trunk Road. [ 8 ] Immediately adjacent to Unit 110, and also on the ground floor is another lease space identified as Unit 111. It faces onto the opposite side of Centre, in a northerly direction towards a parking lot for the Centre.

A different party was seeking to become the tenant occupant of Unit 111 and to open a retail “vaping” business to be known as “Vapour Solutions”. [ 9 ] Prior to and in and around March of 2019 the areas which were identified as Unit 110 and Unit 111 were all one open space on the Centre’s ground floor and a demising wall had not been constructed between the two proposed units (the “Open Area”). No leasehold improvements had been installed. [ 10 ] The Claimant had been retained by the Landlord to complete the concrete scanning, cutting and coring work of the concrete slab floor comprising part of the Open Area.

The scanning was required for the layout work necessary to ascertain any existing buried utility services or other obstructions within the concrete slab and to thereby determine the route for the installation of plumbing and sewer utility connection lines within the Open Area, running from the northerly side of the Centre, in order service Unit 111. [ 11 ] The Claimant says that it was verbally instructed by Rohn Mahen, as a representative of the Defendant, to concurrently extend and complete that same type of layout and scanning work for the anticipated installation of those lines and connections which were required to provide services into that portion of the Open Area that would form Unit 110.

Those lines would connect to such things as a washroom sink and toilet, kitchen sinks and required drains, condensation drains and soda pop machine drains for the proposed pizza restaurant. [ 12 ] The Claimant and the Defendant had no prior business dealings. [ 13 ] As part of the negotiations between the Landlord and the Defendant, the Defendant prepared and then submitted to the Landlord a “Preliminary Layout Plan” for Unit 110, dated March 3, 2019 and “updated March 4, 2019”. [ 14 ] It showed the proposed layout of the improvements and equipment for the pizza restaurant to be located in Unit 110 (the “Preliminary Layout Plan”).

A copy of the Preliminary Layout Plan came into the possession of the Claimant. There is a dispute about how that occurred. It was entered as a documentary exhibit. On the reverse side of the entered exhibit were a number of hand written notes which had been inserted by Kevin Wright. [ 15 ] The Claimant hired a subcontractor K & S Services Group which is an experienced concrete coring, cutting and scanning contractor (“K & S Services”) to concurrently complete the work for both Unit 110 and Unit 111. Ground penetrating radar (“GPR”) technology was required to conduct the scanning.

The principal of K & S Services is Doug Taylor. K & S Services has been in business since 1996 and has worked frequently with the Claimant for the last seven or eight years. K & S Services billed the Claimant and the Claimant paid K & S Services for the completed work for both Units 110 and 111 areas. The invoice for Unit 110 was dated March 29, 2019 in the amount of $2,310.00 (the “K & S Invoice”). [ 16 ] Thereafter, the Claimant initially billed the Landlord the amount of $3,605.66 for all of its own layout work plus the services provided by K & S Services in Unit 110 (the “Claimant’s Invoice to the Landlord”).

However, the Claimant was then directed by Jim Myers as the representative of the Landlord to bill the Defendant for the work that had been completed within Unit 110 area. The Claimant then sent its invoice number 8230, dated March 28, 2019, in the amount of $3,605.56 to the Defendant for the work completed on Unit 110 (the “Claimant’s Disputed Invoice”).

[17] The Defendant has denied that it had authorized the work to be completed at its expense or at all and has refused to pay theClaimant’s Disputed Invoice. [18] The Claimant initiated proceedings against the Defendant with the Civil Resolution Tribunal (the “CRT”) which were completedand a decision was rendered. A Notice of Objection was filed and then Civil Resolution Tribunal issued a Certificate which then broughtthe matter before this Court under the CRT rules then in effect. I am not aware of the results of the CRT decision since a decision of theCRT is not filed with this Court.

Summarizing the Evidence [19] I do not intend to describe the minutiae of all of the evidence presented in this case. Rather, I have taken a more compressed andsomewhat selective canvassing of the evidence where it is relevant and necessary in making evidentiary findings. This approach wasapproved by the Honourable Judge Woods in R. v. Connell, 2017 BCPC 123 , 2017 BCPC123, at paras. 5 and 6. This approachhas been followed in other recent decisions of our court, including by me in Vista Leadership Inc. v. Pilon, 2012 BCPC 320 and inSterczyk v.

DFS Motors Ltd., 2022 BCJ No. 1146. [20] However, in drawing necessary inferences and in reaching my conclusions, I have carefully considered all of the evidence, evenif I have not made specific reference to certain aspects of it. Legal Framework and Legal Principles Applicable Legal Principles Burden of Proof [21] The burden of proof in a civil case rests with a Claimant to prove their case on the standard of a balance of probabilities. TheSupreme Court of Canada in F.H. v.

McDougall, 2008 SCC 53 , [2008] 3 S.C.R. 41 at paragraph 49, states: [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. [22] Therefore, the Claimant must prove the existence of the facts and other essential elements upon which it relies in order tosucceed in its claim against the Defendant. If it fails to do so, it cannot succeed. [23] What does “proof on a balance of probabilities” mean?

It does not mean proof beyond a reasonable doubt. That standard of proofapplies only in criminal trials. In civil trials the party who has the burden of proof on an issue must convince the finder of fact (herebeing the court) that what she or he asserts is more probable than not, or to put it another way that the balance is tipped in his or herfavour. [see: F.H. v.

McDougall, supra]. [24] The degree of probability required to meet the standard and to discharge this burden of proof has been defined by Lord Denningin the following terms: it must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunalcan say: ‘we think it more probable than not’, the burden is discharged, but if the probabilities are equal it is not. [see: Miller v. Minister of Pension, [1947] 2 All E.R. 372. at 374 (K.B.)] [25] In Smith v. Smith (SCC), [1952] 2 S.C.R. 312; [1952] S.C.J. No. 25 (S.C.C.).

Justice Cartwright (as he then was)of the Supreme Court of Canada articulates the applicable test as follows: … that civil cases may be proved by a preponderance of evidence or that a finding in such cases may be made upon the basis of apreponderance of probability and I do not propose to attempt a more precise statement of the rule.

I wish, however, to emphasize that inevery civil action before the tribunal can safely find the affirmative of an issue of fact required to be proved it must be reasonablysatisfied, and that whether or not it will be so satisfied must depend upon the totality of the circumstances on which its judgment isformed including the gravity of the consequences of the finding. [26] Sopinka, Lederman & Bryant: The Law of Evidence in Canada, Third Edition (LexisNexis Canada Inc., 2009) (“Sopinka et al”)at sections 5.52 and 5.53 provides the following useful

summary: [5.52] … Simply put, the trier of fact must find that the existence of the contested fact is more probable than its nonexistence.Conversely, where a party must prove the negative of an issue, the proponent must prove its absence is more probable than its existence. [5.53] But how does a trier of fact determine if the standard has been met? Certainly not based on the number of witnesses or the volumeof evidence adduced. Also, if the nature of the inquiry is serious or the evidence adduced is very unsatisfactory, a jury may not besatisfied as to the existence of a disputed fact even though the proponent of the issue adduced a preponderance of evidence. [27] Sopinka et al in

section 5.53 at footnote 135 go on to cite Dixon J. in Briginshaw v. Briginshaw (1938), 60 C.L.R. 336 at 361-362(H.C.A.) for the proposition that there must be a subjective belief by the tribunal of the fact, expressed in the following words: The truth is that, where the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existencebefore it can be found … [28] If the evidence on an issue is evenly balanced, such that the trier of fact is unable to say where the balance of probabilities lies,then the decision on that issue must be made against the party who has the burden of proving it.

[ 29 ] In deciding whether an issue has been proven on a balance of probabilities, the trier of fact must consider all of the evidence relevant to that issue, no matter who produced it. Expert Witnesses [ 30 ] Neither the Claimant nor the Defendant called any independent expert evidence nor sought to have any of the witnesses so qualified as an expert. The Claimant’s Witnesses [ 31 ] In support of its case, the Claimant called the following witnesses:

a) Kevin White, the principal of the Claimant;

b) Doug Taylor, the principal of K & S Services; and

c) Megan Doerksen, the Claimant’s present contract bookkeeper. [ 32 ] In support of its case, the Defendant called a single witness, namely Rohn Mahen who also conducted the trial on its behalf. Additional Evidence of the Circumstances Giving Rise to the Claim The Claimant’s Witnesses Evidence of Kevin Wright [ 33 ] In his evidence, Kevin Wright, who is a very experienced and qualified plumber, pipe fitter and gas fitter, testified about the nature of the work which was performed in this case.

He testified that the layout and design of required concrete coring and cutting is done by a plumber working with the concrete coring contractor. It is customary for the plumbing contractor to go through a layout plan with both the coring contractor and the customer in order to make sure that it meets the customer’s needs. [ 34 ] The GPR scanning of the concrete slab by the coring contractor is required to locate any potential obstructions for the proposed placement of plumbing and other utility lines.

Thereafter, “snap chalk lines” are placed upon the concrete slab to set out the proposed route for the coring and cutting of the concrete slab. [ 35 ] Kevin Wright specifically testified as to the processes required in order to install the necessary utility lines and drains for Unit 110 and Unit 111 in the concrete slab. In part that entailed utilizing the Preliminary Layout Plan in order to plan for and complete the GPR scan of the concrete slab. Thereafter the route of the utility lines is cut and cored in the concrete slab as close to the exact location of the intended installations as possible.

In the case of Unit 110, this required making provision for drains that would connect to the municipal sanitary sewer which is located on the north side of the Centre. In the course of cutting and coring an old and apparently inoperative sewer line was discovered in the concrete slab under the Open Area. [ 36 ] Kevin Wright conceded in his evidence that the Claimant had been instructed by either the Landlord or the intended tenant of the proposed vaping shop to do the work in the area to comprise Unit 111.

As I understand it, the Claimant’s invoice for that work was rendered to the Landlord and paid for by the Landlord, but possibly in part by the tenant who would be occupying Unit 111, all pursuant to its prior arrangements with the Landlord. The details of those arrangements were unknown to Kevin Wright. [ 37 ] Kevin Wright testified that he was introduced to Rohn Mahen by the Landlord’s maintenance man, described as “Daniel” (whose last name is unknown), in and around the time that the Claimant was doing work in the Unit 111 area.

In cross examination, Kevin Wright agreed that there was then a meeting that occurred on site at the Centre, arranged by a representative of the Landlord to which he was invited. Jim Myers, Daniel the maintenance man, Kevin Wright and Rohn Mahen all attended (the “Centre On-site Meeting”). This meeting appears to be the same one described in Rohn Mahen’s evidence and referenced below as the “Myers-Rohn Meeting”. [ 38 ] As I understand Kevin Wright’s evidence, following that meeting he received a copy of the Preliminary Layout Plan.

There is a dispute as to who actually provided Kevin Wright with the Preliminary Layout Plan. Kevin Wright says he was given it by Rohn Mahen.

That is denied by Rohn Mahen in his testimony on behalf of the Defendant, in which he asserts that it must have been provided to Kevin Wright by a representative of the Landlord, since it was not him. [ 39 ] Kevin Wright agrees that as a result of the Centre On-site Meeting there was an invitation from Rohn Mahen for Kevin Wright to visit the Nanaimo location of Fresh Slice Pizza for a meeting. [ 40 ] Kevin Wright agrees that he attended that meeting (the “Nanaimo Meeting”) at no expense to the Defendant.

He further agrees that the Claimant was interested in doing all of the plumbing work in the Unit 110 area and that the Nanaimo Meeting was to assist in visualizing the overall layout for the proposed restaurant in Unit 110. [ 41 ] He also agrees that he was aware that the Defendant had other proposed restaurant locations which would require plumbing and mechanical services and coring and cutting services.

The Claimant was somewhat interested in performing that other work as well as in Unit 110. [ 42 ] However, he denied that he was requested by Rohn Mahen to have the Claimant provide a written estimate to do all of that type of work in the Unit 110 area including the scanning and layout work. [ 43 ] Furthermore, Kevin Wright specifically testified that no verbal or written quote or estimate could be provided to the Defendant by the Claimant because of a multitude of unknowns and variables that could affect a fixed price.

In particular and for the same reason, it would not be possible to provide any type of estimate for the cutting and coring for Unit 110.

[ 44 ] Kevin Wright could not recall whether he had discussions with Rohn Mahen about the basis for the cost of performing the cutting and coring work for Unit 110 at the Nanaimo Meeting. [ 45 ] However, according to Kevin Wright’s testimony, it was prior to any work being undertaken by the Claimant in the area to comprise Unit 110 that he told Rohn Mahen it would be much more cost-effective to complete the necessary work in Unit 110 area concurrently with the work in Unit 111 area.

This was because the routing of the sanitary sewer servicing Unit 110 needed to go through Unit 111 and it would be much more expensive to undertake that work for Unit 110 separately at a later time. [ 46 ] Therefore, he testified that the cost arrangement he discussed with Rohn Mahen and what he says was agreed to as between these representatives of the Claimant and the Defendant, was that the work would be completed on a “time and materials” basis.

This meant that the Claimant would charge the Defendant the actual billed cost of K & S Services invoice, the Claimant’s employees’ bill out rates plus an overall 10% markup and a further 10% overhead markup, plus a flat rate “truck charge” which covered fuel and insurance and also “miscellaneous truck supplies”, those being miscellaneous consumable items such as spray paint, chalk materials and the like.

Kevin Wright says that this was the historical billing arrangement used by the Claimant when it undertook this type of work for other parties and projects. [ 47 ] According to Kevin Wright’s evidence, the Claimant had significant experience in this type of work, stated to be some 20 to 30 projects; in all cases, this type of billing arrangement was used for both residential and commercial projects, including a number of other restaurants. Kevin Wright testified that the Claimant’s charges using the “time and materials” basis is less than the Claimant’s “call out rate” for both residential and commercial projects.

The higher “call out rate”, as I understand it, is based upon the various hourly charge out rates utilized for each employee of the Claimant. [ 48 ] As I further understand this evidence, the Claimant’s hourly charge out rate for its employees is based upon the actual expense for that employee including applicable payroll taxes plus an overhead component. Kevin Wright says that the Claimant’s various charges, whether on a “time and materials” basis or on a “call out basis”, are in keeping with their competitors, determined by the Claimant’s periodic “spot checks”.

All of the Claimant’s various billing rates have increased since the rendering of the Claimant’s Disputed Invoice in 2019. [ 49 ] There is no documentary evidence that confirms the Claimant’s agreed billing arrangement with the Defendant. Kevin Wright stated that this was not unusual and in keeping with the Claimant’s business practices.

That said, he further testified that the Claimant does not proceed with work without the prior authorization of either a landlord or a tenant where leasehold premises are concerned. [ 50 ] Furthermore, Kevin Wright says that he and Rohn Mahen had numerous discussions, both by way of phone and on-site meetings, about the planned work and the basis for the billing. As I understand his evidence, he says that this all occurred prior to the commencement of the work in the Unit 110 area. He testified that at no point did Rohn Mahen “say no” to this arrangement.

Similarly, the Landlord never told the Claimant not to proceed with this work in the Unit 110 area. [ 51 ] Kevin Wright testified that he and another employee of the Claimant completed the chalk layout work on the concrete slab floor which was inspected and approved of by Rohn Mahen; all of this occurred before any scanning, cutting and coring work was started by K & S Services and which work was then approved of after that work was completed. Kevin Wright also testified that he made two site visits to the Open Area and specifically to the Unit 110 area in the course of the work being completed by K & S Services.

Kevin Wright stated that he did not recall Rohn Mahen being on site in Unit 110 when he was present to observe the work being undertaken by K & S Services. [ 52 ] The Claimant received an itemized invoice number 1563 from K & S Services, dated March 29, 2019 (the “K & S Invoice”) for labour in the amount of $2,200 plus GST of $110 for a total balance of $2,310, in relation to its work in Unit 110. As noted above, the K & S Invoice was paid by the Claimant. A separate invoice was also rendered by K & S Services to the Claimant for the work on Unit 111, which was also paid by the Claimant.

That separate invoice was not submitted into evidence. [ 53 ] Besides the K & S Invoice, the Claimant also received a copy of a K & S Services work order dated March 28, 2019 (the “K & S Work Order”) which contained a description of the “Work Order Requested” which included: “scan floor, cut & remove slab 6” (inches) times 175 feet, concrete/slurry disposal, slurry clean up, layout”. [ 54 ] On a printed line signifying “Customer Signature for Job Completed” is a handwritten signature and the date of March 28, 2019 is inserted in handwriting. There is a factual dispute about whose signature it is.

The Claimant contends it is Rohn Mahen’s signature. Rohn Mahen denies that. [ 55 ] Documentary Exhibit 1 contains first a single page detailed printed work order form, headed with the Claimant’s business name Pacific Plumbing, Heating & Refrigeration, specifying it to be “A Division of 572927 BC Ltd.” It was completed by Kevin Wright and contains a number of his handwritten insertions (the “Detailed Work Order”). [ 56 ] The following are the relevant features of the Detailed Work Order:

a) It relates to the work completed at the Centre and the location being specifically identified as “Fresh Slice Pizza”;

b) In the box shown as “Bill To:” it states “Cowichan Health and Wealth Centre” and specifies a North Vancouver BC mailing address, which I understand to be that of the Landlord. The email addresses of both Jim Myers and the main principal of the Landlord are inserted for reference. Other than the location reference of “Fresh Slice Pizza” no mention is made of the Defendant nor to Rohn Mahen.

c) The Detailed Work Order further states - “Date Started: March 27/19“ and “Completed: March 28/19”.

d) The “Work To Be Performed”: is expressed in the past tense as “March 27 layed (sic) out locations of proposed Fresh Slice Pizza Restaurant” and then “see attached - invoice-scan of floor cutting and coring of floor”. That referenced attached invoice is the K & S Services Invoice, as described below, which did not form part of Exhibit 1 but was introduced as part of Exhibit 2, Tab 4.

e) The time recorded, the description of the work and miscellaneous charges noted (but without any totalling) were as follows: Mar. 27 Ryan Layout 2.5 (hours) @ 80 (dollars); Mar. 27 Kevin (Wright) Layout 2.5 (hours) @ 80 (dollars); Mar. 28 Kevin 2 (hours) @ 80 (dollars); Truck Charge 1 @ 28.50 (dollars); MSC Truck Stock 1 @ 23.50 (dollars)

f) A hand written insertion at the very top of the printed form says: “85 & 10% & 10%” purportedly being a reference to the basis for the billing. [ 57 ] The second part of Exhibit 1 is a copy of the invoice apparently rendered by the Claimant to the Landlord and addressed to “Cowichan Health and Wellness Centre” dated “28-Mar-19” referencing “Fresh Slice Pizza” (the “Invoice Rendered to the Landlord”).

It is very detailed and appears to be calculated on the basis of the information set out in the Detailed Work Order; it and the Invoice Rendered to the Landlord both show an invoiced amount due of $3,605.66. [ 58 ] The work starting with the layout work and the actual scanning, cutting and coring apparently took place over a period of two to three days.

As I understand it, this Detailed Work Order was sent to the Landlord with the Invoice Rendered to the Landlord but it was never sent to the Defendant along with the Claimant’s Disputed Invoice. [ 59 ] It is particularly noteworthy that Kevin Wright testified that the Claimant was “not clear if they were to bill the Landlord or the Defendant as tenant”.

However, the Claimant initially sent its original invoice (being the Invoice Rendered to the Landlord) only to the Landlord for the work completed on Unit 110. [ 60 ] After being instructed by the Landlord’s representative, Jim Myers, to re-submit its invoice to the Defendant for payment, the Claimant then rendered invoice number 8230 dated March 28, 2019, to the Defendant that being the Claimant’s Disputed Invoice, but the recipient is only cryptically identified therein as “Sold to: Fresh Slice” and thereafter specifying: “Attn: Rohen” (sic). [ 61 ] In cross examination, Kevin Wright indicated that the Claimant was directed to render the Claimant’s Disputed Invoice because, according to Jim Myers, it was part of the arrangement as between the Landlord and the Defendant relating to the leasehold improvements, and for which the Defendant was responsible.

That hearsay evidence was accepted for contextual purposes only, as to why the Claimant then re-submitted the Claimant’s Disputed Invoice to the Defendant, but not for the purposes of establishing the contractual arrangements between the Defendant and the Landlord.

No documentation was presented by the Claimant regarding the instructions purportedly received from Jim Myers or the basis for the Landlord’s apparent assertion that the Defendant was responsible for the charges set out in the Claimant’s Invoice Rendered to the Landlord. [ 62 ] Kevin Wright was uncertain as to when he received those instructions from Jim Myers in relation to sending the Defendant the Claimant’s Disputed Invoice. [ 63 ] The Claimant’s Disputed Invoice indicates as follows: Fresh Slice Pizza Laid out Locations of Proposed Fresh Slice Pizza Restaurant Scan of Floor, Cutting and Coring of Floor Materials/Equipment Labour Truck Charge MSC Truck Stock $2662.00 $719.95 $28.50 $23.50 Subtotal $3443.95 GST- 5% Total Amount $171.71 $3,605.66 [ 64 ] The K & S Invoice amount plus the Claimant’s mark-up percentages have apparently been incorporated into the “Materials/equipment” itemized amount. [ 65 ] The total of the Claimant’s Disputed Invoice and the Invoice Rendered to the Landlord are equal as to the total invoiced amount, but the Claimant’s Disputed Invoice is much less detailed. [ 66 ] A second, somewhat abbreviated form of the Claimant’s Work Order was introduced into evidence as Exhibit 2 Tab 2, Tab 4 the (“Abbreviated Work Order”).

It lacked most of the information contained in the Detailed Work Order. [ 67 ] The following are the relevant features of the Abbreviated Work Order:

a) In the box: “Bill To”: it only specifies “Fresh Slice Pizza” without any address or other contact particulars.

b) There are no dates whatsoever.

c) There is no description of the work or services performed other than: “Kevin (Wright) Layout 1.5 (hours); Site Visit 2.5 (hours); Dave Layout 1.5 (hours) Site Visit 2.5 (hours). The enumerated hours are not totalled but do equal 8 hours.

d) There are no charge references to the Truck Charge or the Miscellaneous Truck Stock. [ 68 ] Kevin Wright was uncertain when the Claimant’s Disputed Invoice was actually sent to the Defendant and whether or not it was

a new or amended form of invoice that was ultimately sent to the Defendant after the Invoice Rendered to the Landlord was sent.

Given the significant differences in the details, it is clear that a new form of invoice was ultimately generated and sent to the Defendant. [ 69 ] Kevin Wright says that no payment was received from the Defendant and thereafter, in the usual course of the Claimant’s business procedures, the Claimant’s former book-keeper would have sent multiple reminders to the Defendant on a monthly basis. [ 70 ] He also suggested that he “probably” had a number of telephone discussions with Rohn Mahen or left voicemail messages for him about the unpaid account, at least one or two times prior to the “Defendant’s July 30, 2019 Email” as described below. [ 71 ] He did not recall the specific timing of those telephone discussions.

He testified that Rohn Mahen never complained about the quality of the completed work covered by the Claimant’s Disputed Invoice. [ 72 ] An email was entered as Exhibit 2 Tab 5. It was from Rohn Mahen dated July 30, 2019 and was apparently sent in response to the Claimant’s Disputed Invoice (the “Defendant’s July 30, 2019 Email”). It was sent to Kevin Wright on behalf of the Claimant but also directed to Jim Myers on behalf of the Landlord, and to Ed Williams, the Landlord’s real estate and leasing agent, with whom Rohn Mahen was negotiating to obtain a lease for Unit 110.

In it, the Defendant denies responsibility for the Claimant’s Disputed Invoice.

The contents of the Defendant’s July 30, 2019 Email are summarized more fully below in Rohn Mahen’s evidence. [ 73 ] Ultimately, the Claimant was not engaged by the Defendant to do any further work in Unit 110, which was completed by another plumbing contractor retained by the Defendant, known as Dan-Car Mechanical Ltd. (“Dan-Car”). [ 74 ] However, the Claimant continued to do the HVAC maintenance work within the Centre at the behest of the Landlord, both before and after completion of its work in Unit 110 and after the Defendant’s refusal to pay the Claimant’s Disputed Invoice. [ 75 ] That maintenance arrangement permitted Kevin Wright to visit the now operational pizza restaurant in Unit 110.

He stated that from his observations, the restaurant layout appeared to be “pretty close” to the work that the Claimant and K & S Services had completed in accordance with the Preliminary Layout Plan. [ 76 ] In his cross examination, he was shown what was purportedly a revised construction plan for the layout of improvements in Unit 110 dated November 11, 2019 (the “November 2019 Construction Plan”). Kevin Wright denied ever seeing that particular plan. However, from his in-court observations, Kevin Wright agreed that the layout was different than the Preliminary Layout Plan.

Specifically, with some items having been relocated, including the ovens and the soda fountain. Kevin Wright stated that he could not say whether the relocations depicted on the November 2019 Construction Plan would affect that layout and coring work completed by K & S Services and billed on the Claimant’s Disputed Invoice. [ 77 ] Kevin Wright denied that the Claimant was responsible for obtaining any permitting from the City of Duncan on behalf of the Landlord, Vapour Solutions or the Defendant for work being completed in the Centre.

He did concede that from time to time he or the Claimant served as a contact person for the City of Duncan in relation to permitting issues and inspections in the Centre. [ 78 ] He testified that from his significant experience in construction, it was most common for there to be a single building permit issued for project work being completed in a commercial building.

Similarly, it was not always necessary to submit isometrics, that being technical and engineering drawings, in support of a building permit. [ 79 ] In Kevin Wright’s cross examination, he was shown various emails and inspection reports from the City of Duncan for the period between April 9 and April 11, 2019 regarding permit requirements, some of which were purportedly sent to or copied to the Claimant. At best, he had an incomplete recollection of previously seeing some of these documents.

Although entered as exhibits, the documents were not admitted into evidence for the truth of their contents. [ 80 ] The documents purportedly relate to a “Building Permit No. 1584” that “was issued by the City of Duncan for the underslab (sic) plumbing” at the Centre.

Also purportedly, the limitations on that Building Permit and the further requirements of the City of Duncan and the Vancouver Island Health Authority (“VIHA”) are listed, to thereby permit plumbing and other tenant’s improvements work to proceed. [ 81 ] Kevin Wright suggested that the work that the Claimant and K & S Services performed in the Open Area was completed under Building Permit No. 1584 which he presumed had been taken out by the Landlord, as the owner of the Centre.

He suggested it was possible that he may have called for an inspection of that work which in turn gave rise to the correspondence from the City of Duncan. He was adamant that neither he nor the Claimant were responsible for dealing with the requirements of either the City of Duncan or VIHA. He was unaware as to the steps taken and by whom in order to meet the requirements of the City of Duncan and VIHA.

That included obtaining the services of, professional advice and reports from a mechanical engineer. [ 82 ] Kevin Wright stated that at the time the Claimant was performing its work in the Open Area, he was told, by some unspecified person, that the Defendant’s lease for Unit 110 “was forthcoming”. There is a further indication that he learned at this stage from Rohn Mahen that the Defendant had not signed the lease with the Landlord, but Kevin Wright was not aware as to the reasons.

He stated it was not uncommon for the Claimant to be doing work for prospective tenants within leasehold premises without a signed lease and for the cost of that work to be paid in accordance with the arrangement made between the landlord and the prospective tenant. Evidence of Doug Taylor [ 83 ] Doug Taylor of K & S Services testified that he was contacted by Kevin Wright about a GPR concrete scanning and coring job in the Centre.

Thereafter, he met together with Rohn Mahen, the maintenance man from the Centre and Kevin Wright on site at the Centre to discuss the required work, including the layout, the required scanning and the coring work (sometimes referred to as the trenching work) in the Open Space and in particular Unit 110. This occurred prior to the commencement of any work by K & S Services. [ 84 ] He testified that K & S Services was unable to provide a cost estimate for their work because of unknown obstacles that may be

detected by the scanning and the resulting necessary diversions to the routing of the proposed trench. He noted that the more diversions from a straight line increased the cost. In particular he noted that the coring work entailed cutting within the concrete floor slab starting on the Trunk Road side of Unit 110 and proceeding for a distance of some 40 feet to the back of the wall of Unit 111 where it would connect with the municipal sewer. He stated that this trenching was to accommodate pipes to be used for both plumbing and sewer.

Especially on the Unit 110 portion there were a number of required branches to be cut off of the main line to accommodate several sewer and drain connections, including those for the bathroom for the proposed pizza restaurant. [ 85 ] Doug Taylor testified about the required procedures that were used to determine the route for the utility services to be placed in the concrete slab. This included the chalk layout on the upper surface of the concreate slab, which was then overlaid by painters’ tape; this was created by the plumber initially using the Preliminary Layout Plan.

Thereafter the GPR scan was undertaken using that outline, and then followed by the coring work. Again, all of this was done with the assistance and with oversight of the Claimant’s assigned plumbers.

Doug Taylor stated that he “looked to the plumber for guidance” as to the routing and further stated it was common and useful to have the advice of a representative tradesperson (such as a plumber or an electrician) present on site for that purpose. [ 86 ] Doug Taylor further testified that Rohn Mahen was present and involved with the work being undertaken by K & S Services including giving final approval to the marked layout on the concrete slab (the “Approved Layout”).

Doug Taylor stated that it was the Approved Layout that was used for the coring work; that was not necessarily the same as that shown on the Preliminary Layout Plan because of the further approved diversion changes which occurred in the course of the coring work. [ 87 ] According to Doug Taylor, K & S Services’ work took place over more than three days, during which time Rohn Mahen was present on several occasions; that presence was estimated to be between six to nine times during that period or some two to three times per day.

Thus, Doug Taylor says that Rohn Mahen “did not seem puzzled by our presence and the work that was being done by us.” In his cross examination, Doug Taylor further stated that Rohn Mahen had given K & S Services the “green light” to proceed with the work that it undertook and completed. That assertion is disputed by the Defendant. [ 88 ] Doug Taylor testified that while the Claimant had actually hired K & S Services, Rohn Mahen approved a further diversion from the route shown on the Approved Layout because of the discovery of an obstacle in the concrete slab and the need to relocate a sanitary sewer cleanout.

This further route change was accepted in accordance with K & S Services’ requirement to have “somebody in authority” approve that further change. [ 89 ] At no times did K & S Services receive any comments of dissatisfaction or complaints from Rohn Mahen about the work it completed in the Unit 110 area, including the final routing of the trench.

Similarly, no such negative comments were received by Doug Taylor at a later time, when he and Rohn Mahen met in Nanaimo about another proposed job at Rohn Mahen’s personal residence; apparently, K & S Services was unable to undertake that job. [ 90 ] Doug Taylor identified the K & S Work Order which he prepared and which he stated accurately set out the completed work for Unit 110. It identified the address as: “Fresh Slice”. He testified that he saw Rohn Mahen sign it on the line beside the words: “Customer Signature for Job Completed” and the inserted date of March 28, 2019.

Doug Taylor explained it is the standard procedure for K & S Services to have a “person in authority” sign off on their work orders because it “shows we were there and the end user is happy” with the completed work. The Defendant denies that it was Rohn Mahen who signed it. [ 91 ] Doug Taylor also identified the K & S Invoice sent to the Claimant for the completed work on Unit 110, which he acknowledged contained a misnomer as to the location of the work by calling it “Slice of Life”.

He testified that the K & S Services Invoice was paid in full by the Complainant. [ 92 ] Doug Taylor described the work in the Unit 110 area and the Unit 111 area as two separate jobs, noting that the work in the Unit 110 area required more time because of a larger number of cuts to accommodate the large number of the various branches for the proposed utility lines. He confirmed that a separate invoice was rendered by K & S Services for the services completed in the Unit 111 area which was paid by the Claimant. Evidence of Megan Doerksen [ 93 ] Megan Doerksen is a contract bookkeeper retained by the Claimant.

She started in that position in July 2019, which was after the circumstances giving rise to this dispute.

She testified about the Claimant’s invoicing procedures that were in use in or around March 2019 and which were currently still used by the Claimant. [ 94 ] She confirmed that the usual invoicing procedure utilized by the Claimant, having regard for its accrual method of accounting, is that the invoices are dated as at the time of the completion of the work covered by the invoice and not necessarily the actual date that the invoice is rendered to the customer. [ 95 ] She further explained the use of the internal completed worksheets to produce the invoices for billing purposes.

She testified that if there were any matters requiring clarification, such as the actual hours recorded, any required adjustments to the final amount billed, the actual amount of the invoice or the intended recipient of the invoice, then the bookkeeper would seek clarification from the employees working on the job and ultimately from Kevin Wright. She noted that not all of the hours recorded on Abbreviated Work Order for the work on Unit 110 were actually billed on the Claimant’s Disputed Invoice.

She did not provide any evidence as to when the Claimant’s Disputed Invoice was actually generated and sent to the Defendant. [ 96 ] In her cross examination she confirmed that there were two work orders for the same work performed on the Unit 110 job being the Detailed Work Order and the Abbreviated Work Order, which was apparently used for the Claimant’s Disputed Invoice. She was unable to say which work order had been prepared first. She suggested that there were two work orders because “more than one person worked on the job”. She was unable to explain the difference in the recorded hours of work.

The most likely correct answer is that the Detailed Work Order was prepared first because it was the detailed basis for the Invoice Rendered to the Landlord, which was first in time.

The Defendant’s Witness Evidence of Rohn Mahen The Defendant’s Negotiations with the Landlord [ 97 ] Rohn Mahen testified that in early 2019, on behalf of the Defendant, he started looking to acquire leasehold premises for an interested investor who wished to buy a turn-key Fresh Slice Pizza restaurant franchise in Duncan. That resulted in him dealing with the Landlord’s realtor and leasing agent, Ed Williams.

The Open Space in the Centre was vacant and available but it was in excess of 2000 square feet, being about double the size requirements for the proposed Fresh Slice Pizza restaurant. [ 98 ] The Landlord, Quadra Equities Ltd. of North Vancouver, as represented by its principal Paul Myers, took the initial position that if the Open Space was to be subdivided into smaller lease areas by way of a demising wall to be constructed on an east-west axis rather than a north-south axis.

Rohn Mahen testified that such a division would result in an area that was too narrow to accommodate the proposed Fresh Slice Pizza restaurant and therefore the Defendant insisted on it being on a north-south axis. The Landlord walked away from the negotiations. [ 99 ] At that point in early March of 2019, Jim Myers, being the son of Paul Myers, became involved in the Centre and took over responsibility for the leasing negotiations on behalf of the Landlord.

Thus, Jim Myers was providing instructions to the leasing agent and realtor, Ed Williams. [ 100 ] During the first two weeks of March 2019, Jim Myers apparently became agreeable to the concept of subdividing the Open Space in the Centre on a north-south axis and thereby was interested in accommodating the Defendant as a tenant.

Through Ed Williams, he asked the Defendant to come up with a plan to show the location of the demising wall between the areas subsequently identified as Units 110 and 111. [ 101 ] Accordingly, the Defendant had the Preliminary Layout Plan prepared on or about March 3, 2019 which was updated March 4, 2019.

Thereafter, it was presented to the Landlord’s representative, Jim Myers, apparently through Ed Williams. [ 102 ] There was still an outstanding issue relating to the location of a required 24 inch by 24 inch ventilation exhaust shaft to service the required pizza oven that would have to be installed in Unit 110 space. According to Rohn Mahen, a meeting was arranged as between Rohn Mahen and Jim Myers on March 28, 2019 to discuss the location of the ventilation exhaust shaft which was initially proposed to go up from Unit 110 on the ground floor, through two stories above and out from the roof of the Centre.

That location had to be approved by Jim Myers on behalf of the Landlord which it was, at that March 28, 2019 meeting (the “Myers-Mahen Meeting”). [ 103 ] However, that approval was conditional upon the Defendant’s mechanical engineers designing the ventilation exhaust shaft at the expense of the Defendant. The Defendant engaged Clover Contracting Ltd. for that purpose. They ultimately came up with an alternative plan whereby the ventilation exhaust fan would be routed out the side wall of the Centre from Unit 110 rather than through the roof.

According to Rohn Mahen, this resulted in a change to the restaurant layout depicted in the Preliminary Layout Plan. Those changes were ultimately reflected in the November 2019 Revised Construction Plan. [ 104 ] After the Myers-Mahen Meeting further lease negotiations continued for the lease of Unit 110, apparently focused primarily on the demising wall to be constructed between Units 110 and 111.

These negotiations appear to have been conducted on a very strained basis such that on April 11, 2019, Jim Myers sent Rohn Mahen an email at 5:02 pm which was purportedly copied to a number of other individuals including Ed Williams.

It referenced a telephone discussion held immediately before hand as between Ed Williams and Jim Myers, in which it alleged their mutual conclusion was that the Defendant was “not operating in good faith”; the Defendant was in breach of a contract to provide a demising wall thereby leading to the mutual conclusion reached that the Defendant was “not a tenant that would be suitable for our building” and thus it was “Time for us to both move on!!” [ 105 ] Therefore, at this point the lease negotiations as between Quadra Equities Ltd and the Defendant had completely collapsed. [ 106 ] It was not clear from the evidence being provided initially by Rohn Mahen as to what were the essential terms of the alleged contract as between the Landlord and the Defendant and what were their respective obligations, if any, up to this time.

In particular, it was unclear as to who was responsible for the cost of the work already completed by the Claimant and K & S Services in the Open Area in late March of 2019.

Accordingly as noted below, on October 14, 2022 this Court directed the Defendant to provide further documentary disclosure with respect to the “Lease Documentation” as defined below. [ 107 ] However, Rohn Mahen testified that by April 11, 2019 there was still no signed offer to lease nor a signed lease in place as between Quadra Equities Ltd., as the landlord and the Defendant, as tenant, for the Unit 110 space. [ 108 ] Based upon Rohn Mahen’s evidence, it appears that lease negotiations eventually were resurrected, but the timing of that is unclear.

However, according to Rohn Mahen, that resurrection occurred primarily because of the prospective Duncan Fresh Slice franchisee’s continuing interest in the Centre’s space and the existence of or a pending offer to lease for Unit 111.

Rohn Mahen also mentioned that he had also become aware of a pending offer for the sale and purchase of the Centre which, in Rohn Mahen’s view, would likely mean a new and presumably a more amenable owner-landlord. [ 109 ] As will be seen below, some form of documentation setting out the respective obligations of the Landlord and the Defendant as the tenant was put in place by the late summer or fall of 2019 (the “Lease Documentation”).

This is discussed further below. [ 110 ] Again it bears mentioning that such Lease Documentation was not initially disclosed by the Defendant prior to or during the first two days of the hearing of this trial. Late on the second day of trial an order was made by this Court requiring disclosure by the Defendant of the Lease Documentation because of its emerging potential relevance as to the financial responsibility for certain work to be completed in Unit 110, including the work covered by the Claimant’s Disputed Invoice.

[ 111 ] According to the email exchanges as between Jim Myers and Ed Williams on behalf of the Landlord with Rohn Mahen and the oral evidence of Rohn Mahen it can be concluded that the Landlord and the Defendant did finally reach certain agreements surrounding a lease of Unit 110 and the respective obligations of both the Landlord and the Defendant as tenant.

According to Rohn Mahen many of these agreements related to the Landlord’s correction of certain deficiencies in Unit 110 involving its insufficient electrical service, lack of a water service, absence of natural gas and an inoperative HVAC system. [ 112 ] Rohn Mahen testified that in the finalized form of the Lease Documentation, the Landlord assumed responsibility for installing a new and separate electrical panel to service for Unit 110, with sufficient 200 amp capacity for the electrical requirements of a restaurant; providing Unit 110 with services for water, natural gas, sanitary sewer and drains and a properly operating HVAC service. [ 113 ] Rohn Mahen said in his evidence that the primary obligation on the Defendant in the Lease Documentation was for it to construct the demising wall between Unit 110 and Unit 111. [ 114 ] As I understand from Rohn Mahen’s initial evidence, the parties had settled on a form of a lease or an offer to lease in or around July of 2019.

In an email dated July 26, 2019 from Ed Williams to Rohn Mahen, the leasing agent reminded Rohn Mahen that the Defendant would not be given the keys and therefore would not be permitted access to Unit 110 until the Landlord had been provided with requested drawings “for both mechanical and plumbing installations” and “until we receive the executed Lease back from you”.

Thereafter, apparently the Defendant, as the tenant, signed and sent the Lease Documentation to the Landlord for execution and return. [ 115 ] However, according to Rohn Mahen, the Landlord refused to return the signed version of the Lease Documentation because the demising wall was not yet completed. On the other hand, the Defendant was reluctant to complete the demising wall finishing before it had received and had in hand the signed Lease Documentation.

It is not clear on the evidence but as I understand it, eventually the Landlord and the Defendant were able to resolve the issue in such a fashion that the Defendant procured the signed Lease Documentation. Rohn Mahen says that completion of the demising wall was not a stipulated requirement for delivery of the signed Lease Documentation.

In his subsequent evidence at the continuation, after the further disclosure order was made, Rohn Mahen testified that the demising wall was constructed by the Landlord but at the cost of Tenant which apparently occurred after the delivery of the Lease Documentation. [ 116 ] In an email of October 28, 2019 from Rohn Mahen to Jim Myers and Ed Williams, Rohn Mahen makes reference to “Outstanding Landlord’s work:

Schedule E” with indications of outstanding electrical installation deficiencies which could delay the Defendant’s building trades from starting on October 31, 2019. At the same time a further request was made by Rohn Mahen for the return of the “signed lease”. As noted in the further evidence of Rohn Mahen the reference to

Schedule E is to the

Schedule E which formed part of the Lease Documentation. [ 117 ] It is unclear when the signed Lease Documentation being held by the Landlord was actually delivered to the Defendant. However, apparently Quadra Equities Ltd. did complete the sale of the Centre in the fall of 2019. [ 118 ] It also appears that the Defendant’s construction trades were able to start work in late October or early November of 2019 and then proceeded to complete the Defendant’s leasehold improvements. One of those contractors was a Clover Contracting Ltd. and another was the plumbing and mechanical contractor Dan-Car.

Dan-Car did all of the plumbing and natural gas installations using the connections apparently installed in Unit 110 by the Landlord at the Landlord’s expense. [ 119 ] Rohn Mahen testified that Dan-Car was required to re-do much of the layout and concrete coring that had been completed previously by the Claimant and K & S Services because of necessary changes from the Preliminary Layout Plan that eventually appeared in the final layout as depicted in the November 2019 Construction Plan. [ 120 ] It is not clear on the evidence when the Defendant’s tenant leasehold improvement work was completed but the Fresh Slice Pizza restaurant did finally open in Unit 110.

The Work Completed in the Open Area by the Claimant [ 121 ] In advance of the Myers -Mahen Meeting on March 28, 2019, Rohn Mahen had sought recommendations from the Centre’s maintenance man, Daniel, about certain local trades. One of the names provided was that of the Claimant. Personal introductions apparently followed between Rohn Mahen and Kevin Wright at the Myers - Mahen Meeting. [ 122 ] At the time of the Myers - Mahen Meeting, Rohn Mahen testified that he had observed that certain work was being undertaken in the Open Area by the man that he eventually came to know as Doug Taylor of K & S Services.

There were two other unknown people present on site, besides Doug Taylor. [ 123 ] Rohn Mahen testified that he was “only there a few minutes” because of the noise from the concrete cutting in the Unit 111 area and the clouds of dust being produced. He did not speak to anybody who was working or present in that area. [ 124 ] Rohn Mahen testified that he knew nothing about the work that was taking place. He understood from Ed Williams that it was being undertaken as required preparatory work for the leasing of the Unit 111 area to Vapour Solutions.

He did not observe any layout markings on the concrete floor at the time of the brief visit. [ 125 ] According to Rohn Mahen’s evidence, in the course of the Myers - Mahen Meeting, Kevin Wright attended at the invitation of Jim Myers to discuss future work on the second and third floors of the Centre which may be required as a result of the proposed construction of the exhaust ventilation shaft. [ 126 ] Rohn Mahen stated that Kevin Wright had a copy of the Preliminary Layout Plan in his hand. It had not been provided to him by Rohn Mahen.

There was a discussion about Jim Myers and Kevin Wright needing to know things about the proposed layout of the pizza restaurant but in particular, the proposed location of the toilet.

[ 127 ] It was at that point that Rohn Mahen says he provided his business card to Kevin Wright. The invitation to the Nanaimo Meeting was then extended to Kevin Wright for the purposes of seeing the proposed layout of the pizza restaurant and to obtain an estimate from the Claimant, which ultimately was never provided. [ 128 ] Rohn Mahen testified that as at that date of March 28, 2019, he was not in a position to authorize any work to be undertaken in the area to form Unit 110 and in particular, he was not able to authorize any work by K & S Services and the Claimant.

He denied that he ever authorized any such work by those two entities. He testified that he never discussed anything with the Kevin Wright about the work that the Claimant was performing for the Landlord. [ 129 ] In any event, Rohn Mahen said in his evidence that it was too premature to finalize any layout in Unit 110 because, among other things, it would be necessary for the Defendant to retain its own engineers and receive advice regarding the proposed exhaust ventilation shaft.

Furthermore, it would be necessary to obtain health approvals from VIHA for the proposed layout of the restaurant before the Defendant was in a position to start any work in Unit 110. Obtaining the necessary permitting requirements and approvals was essential from a practical perspective. For example, it would avoid having to re-cut the concrete slab if the proposed layout was not approved by VIHA.

In that regard he points to the timing of correspondence from the City of Duncan’s Building Inspector in support of the fact that none of the necessary approvals had been obtained. [ 130 ] Rohn Mahen specifically denies at any time retaining the Claimant or K & S Services to perform any work at the expense of the Defendant. In doing so he notes the uncertainty of the lease negotiations ever coming to fruition which, of course, was a condition to the Defendant gaining occupancy of Unit 110.

He further contends that in any event, the type of work covered by the Claimant’s Disputed Invoice would be the responsibility of the Landlord and by inference none of that responsibility was ever assumed by the Defendant. [ 131 ] Rohn Mahen denies that he was on site in the Open Area on the numerous occasions as asserted by both Doug Taylor and suggested by Kevin Wright. The time immediately preceding the Myers - Mahen meeting was one of the few occasions he did so.

He further denies that it was he who approved the K & S Services Work Order, or that it was his signature that appears beside the area noted as “Customer Signature for Job Completed”, with a March 28, 2019 date inserted. He points to the dissimilarities of that signature and his own which he says appears in the jurat of the small portion of the Lease Documentation originally presented to this Court. He denies knowing whose signature appears.

The Defendant’s Response to the Claimant’s Disputed Invoice [ 132 ] Rohn Mahen concedes that at some unspecified time after March 28, 2019 the Defendant received the Claimant’s Disputed Invoice but thereafter received no further communications from the Claimant, nor any of its representative concerning payment. [ 133 ] He testified that he was “shocked to receive” an email from Ed Williams around July 29, 2019. That email was not put into evidence but apparently it related to the unpaid Claimant’s Dispute Invoice.

According to Rohn Mahen, Ed Williams stated that it was the financial responsibility of the Defendant. [ 134 ] In response, Rohn Mahen sent the Defendant’s July 30, 2019 Email. In

part it confirmed his position and that of the Defendant, as follows:

a) he never instructed Kevin Wright to do anything and he never hired him to do any work, and hence he requested proof of any hiring arrangements from Kevin Wright;

b) the Preliminary Layout Plan was provided to the Landlord to determine the demising wall location between Unit 110 and 111 and suggested that if Kevin Wright received it, presumably from the Landlord, it was to locate “the rough-in as the premises did not have drainage”;

c) the work billed for by the Claimant was completed for the Landlord and it was their responsibility;

d) Rohn Mahen had invited Kevin Wright to the Nanaimo Meeting at the existing Nanaimo location of Fresh Slice Pizza to see that restaurant’s layout; furthermore Kevin Wright was invited to provide an estimate for the plumbing work in Unit 110, which was never provided, and further to permit Kevin Wright to bid on other work for other Fresh Slice locations;

e) the final layout was changed to accommodate venting in Unit 110 and thus the existing cutting completed by the Defendant was “not useful” for the Defendant. [ 135 ] No responding communications from the Landlord or subsequent emails from the Claimant on this topic were put into evidence. Rohn Mahen says there were none.

Also, there is no evidence that the Landlord took any steps to protect the payment by the Defendant of the Claimant’s Disputed Invoice, either by way of the provisions of the Lease Documentation or in the fashion it had used when protecting its own interests in ensuring the completion of the demising wall by the Defendant, that is by withholding the delivery signed Lease Documentation. [ 136 ] Thereafter this matter proceeded to Civil Resolution Dispute Tribunal and eventually before this Court.

Court Ordered Disclosure and Relevant Provisions of the Lease Documentation [ 137 ] As noted above, an order was made in the course of the trial on October 14, 2022, for the Defendant to produce the Lease Documentation because of its emerging potential relevance as to the financial responsibility for certain work to be completed in Unit 110, and possibly the work covered by the Claimant’s Disputed Invoice. [ 138 ] In addition, this Court also ordered the Defendant to produce documentation and invoices relating to the subsequent plumbing work of Dan-Car completed in Unit 110, following the initial work completed by the Claimant and K & S Services in that area.

[ 139 ] At the continuation of the trial on April 20, 2023, the Defendant submitted documentation which was entered as Exhibit 4. It contained the following:

a) Tab 1: photos of concrete and plumbing work done after the Defendant took possession of Unit 110;

b) Tab 2: copies of invoices directed to the Defendant from Capital Concrete Cutting Ltd. for concrete cutting work; TLAR Complete Services for disposal; and Dan-Car for plumbing work;

c) Tab 3: Offer to Lease dated for reference February 1, 2019 between the Landlord and the Defendant as tenant consisting of 11 pages including

Schedule “B” headed “Landlord’s Work” (the “Offer to Lease”).

d) Tab 4: A total of only seven pages of what apparently is a multi-page document and purportedly being a Lease dated for reference July 23, 2019 between the Landlord and the Defendant as Tenant, all in connection with Unit 110. It specifically includes

Schedule “E” entitled “Special Terms”, and which under

section 1 are found “Landlord’s Work”. [ 140 ] Thus, the Defendant has not fully complied with the further disclosure order in so far as it failed to provide a full copy of the Lease dated for reference July 23, 2019 (the “Landlord’s Lease”). [ 141 ] The Offer to Lease in paragraph 7 under the heading “Condition of the Premises” states as follows: The Premises shall be delivered to the Tenant on an “as is” basis save and except the work to be carried out by the Landlord in respect of the Premises as set forth in

Schedule “B” hereto. [ 142 ]

Schedule B entitled “Landlord’s Work” contains the following relevant provisions: The Landlord shall carry out the following work in the Premises in a good and workman-like manner: 1. SANITARY: Install one (1) four-inch (4”) sanitary drain rough in to a location within the Premises as agreed between the Tenant and the Landlord. … 3. WATER: Install one (1) (one-inch) domestic cold waterline brought to a location in the Premises as agreed between the Landlord and the Tenant, capped an (sic) complete with shut-off valve. 4. PLUMBING: Landlord will provide a 1” (one-inch) domestic cold waterline only.

The Tenant shall be responsible for rough-in and completion of the washroom and associated fixtures all as per National Building Code. … 9. FLOOR: As is. [ 143 ] The Offer to Lease contains the following provision under paragraph 9 headed “Tenants Improvements” as follows: The Tenant shall be responsible for all improvements to the Premises (the “Tenant Improvements”) including but not limited to design, construction, plumbing, electrical ceiling, floors HVAC, distribution and upgrades and the construction of a demising wall creating the Premises (generally as shown on the

Schedule A hereto). The Tenant will be responsible for the preparation of design, mechanical, electrical and plumbing drawings to be submitted to the Landlord for approval in advance of commencing any work, such approval not be unreasonably withheld.

All work shall be undertaken and completed in a workman-like manner by fully qualified contractors with all required permits and approvals and subject to all applicable provisions of the Landlord’s Lease. [ 144 ] The portion I have underlined above regarding the construction of a demising wall was apparently deleted by being struck out but then reinserted by a handwritten interlineation. A similar provision was also struck out and reinserted in paragraph 1 of the Offer to Lease. [ 145 ] There are two further relevant provisions contained within the Offer to Lease as follows: 21.

AGREEMENT OF LEASE The terms and conditions of this Offer shall be reflected in the Lease document and in the event of a dispute as to the

definitions or terminology herein between this Offer and the Lease, the Lease shall prevail. 22. BINDING CONTRACT This Offer if accepted, shall constitute a binding agreement to enter into a lease of the demised premises upon the terms and conditions as herein contained as contained and expanded upon in the Lease. Evidence Received Following the Further Ordered Disclosure Evidence of Rohn Mahen [ 146 ] At the April 20, 2023 continuation of the trial and following the further disclosure ordered on October 14, 2022, additional evidence was heard from both Kevin Wright and from Rohn Mahen.

Rohn Mahen testified that the Offer to Lease was signed by the Landlord on February 5, 2019 and by the Defendant on February 6, 2023. However, it actually expired and terminated because of the operation of paragraph 11 entitled “Fixturing Period/Free Rent”. It stipulated that that the Offer to Lease was null and void if the Tenant

had not received its approvals for the completion of the Tenant Improvements by May 30, 2019. In fact, the Defendant did not apply for a building permit until September of 2019 and did not obtain a building permit until November 4, 2019. [ 147 ] Furthermore, the Tenant’s Conditions contained in paragraph 17 of the Offer to Lease were not satisfied and removed by the Tenant by March 9, 2019. Those conditions included the review, approval and negotiation of amendments to the form of the Landlord’s Lease and the Tenant being satisfied with the feasibility of obtaining municipal or other regulatory approvals.

Similarly, neither the Landlord nor the Tenant had removed the conditions for their respective benefits regarding the feasibility of the ventilation exhaust shaft being routed through the upstairs units and out through the Centre’s roof. [ 148 ] So far as I can determine, notwithstanding the expiry of the deadline for the removal of the various conditions, the Landlord and the Tenant continued to informally proceed with their negotiations on the basis of the essential terms within the Offer to Lease but no new offer to lease was prepared nor executed.

According to Rohn Mahen, the executed Landlord’s Lease made July 23, 2019 subsumed or replaced the terms and conditions of the Offer to Lease. The incomplete copy of the Landlord’s Lease makes it difficult to assess his assertion and determine its relevance, if any. [ 149 ] The incomplete copy of the Landlord’s Lease entered as Exhibit 4 does contain a reference in

section 1.1 (

n) to the “Schedules forming part of this Lease”. One of those is “Schedule E Special Terms”. [ 150 ]

Section 1 of

Schedule E is headed “Landlord’s Work” and then goes onto to provide in part as follows: The Landlord shall provide the Premises on an “As Is-Where is” basis, except for the following Landlord’s Work, which shall be completed at the sole expense of the Landlord on or before the Commencement Date . [ 151 ] Parenthetically I note that the “Commencement Date” is stipulated to be December 1, 2019 but subject to “Section 2.3 and 2.4” which provisions are not attached to Exhibit 4. The commencement of the “Fixturing Period” for the Tenant to start completion of the Tenant’s Works was specified as October 1, 2019. [ 152 ] Thereafter the identical relevant language used in the Offer to Lease in

Schedule B,

section 1, entitled “Landlord’s Work” (as noted above) specifically appears in

Schedule E as it relates to “Sanitary”, “Water”, “Plumbing”, “Floor”, etc. [ 153 ] The contentious issue of the “Demising Wall” was dealt with in subsection 1 (

n) which provides for the Landlord to construct the demising wall, in a slightly different location from the proposed plans, to a described standard and to then to deduct that cost to a maximum of $8,500 from the Tenant’s Improvement Allowance. The Tenant was responsible at their cost for insulating, boarding and finishing their side of the demising wall. [ 154 ] Furthermore,

section 1 concludes with the following language: “All other work or improvements shall be at the Tenant’s sole cost and expense.” [ 155 ] Also within Exhibit 4 and in particular

Schedule “E”

section 2 entitled “Tenant Allowance” it provides for a Tenant’s Improvement Allowance for the lesser of $22,800 plus GST or the actual amount spent for Tenant’s Improvements. Rohn Mahen testified that the Defendant did receive the full amount of $23,750 in March or April of 2020. He noted that no amount was withheld by the Landlord to cover the amount owed on the Claimant’s Disputed Invoice. As I understand his evidence, the total cost to convert Unit 110 from bare space into an operating pizza restaurant was in the range of some $300,000. [ 156 ] Under Exhibit 4,

section 3 headed “Tenant’s Work”, there is a slight variation from the language which appears in the Offer to Lease under

section 9 set forth above.

Section 3 of

Schedule E states, inter alia , as follows: The Tenant and/or the Tenant’s approved contractor shall be responsible for any and all improvement work within the Premises including design, construction, plumbing, electrical, ceiling, floors, HVAC distribution and upgrades, if required , any work required by the City of Duncan and the City of Duncan Fire Department regarding supply and installation of emergency lighting and related equipment (the “Tenant’s Work”). [ 157 ] The provisions of

section 3 also provide that the Tenant’s Works must be completed in a “first class manner in accordance with the Landlord’s Lease and plans approved of in writing by the Landlord prior to any work be undertaken. [ 158 ] The series of five photographs in Tab 1 of Exhibit 4 depict the various stages of concrete cutting completed in Unit 110. [ 159 ] The photograph at Tab 1 (

a) apparently shows the work completed by K & S Services. It shows the location of the sanitary sewer rough-in connection near but south of the constructed demising wall. There is a large branch continuing therefrom in a southerly direction from which two branches extend in an easterly direction. The top branch of the concrete cut is several feet in length and leads to an area to accommodate the sanitary sewer connections for a bathroom toilet and sink.

The lower branch was originally made by K & S Services to accommodate the connections to the sanitary sewer for the location of sinks as shown in the Preliminary Layout Plan. [ 160 ] In his testimony, Rohn Mahen suggested that the “agreed location” for the installation of the four inch sanitary drain rough-in (which was the obligation of the Landlord under the Landlord’s Work in both the Offer to Lease and the Landlord’s Lease), was at the far east end of the top branch leading to the toilet and not at the point where it comes out from below the demising wall.

That point is a much more central location within Unit 110. He testified that the less central location at the toilet connection, was agreed to by the leasing agent Ed Williams on behalf of the Landlord but there is no documentary evidence to support that contention. Hence, he suggests that it was the Landlord’s responsibility for cutting that top branch as part of the plumbing rough in work and not that of the Tenant. [ 161 ] The remaining photographs in Exhibit 4, Tab 1, (b), (c), (d), (

e) show the layout of and completed concrete floor cuttings and trenching which, according to Rohn Mahen, were completed by the Tenant’s contractor Capital Concrete Cutting Ltd. (“CCC”). According to his evidence and CCC’s Invoice 5906 dated November 5, 2019, the cost was $1,163.24 for cutting 128 inches of five and one half inches deep of concrete. That invoice was paid for by the master franchisor, Ming Enterprises Ltd. on behalf of the eventual sub

tenant-franchisee who then reimbursed Ming Enterprises Ltd as part of the franchisee’s tenant improvement expenses.

Similarly, an invoice in the amount of $380.90 rendered by TLR Complete Services dated November 6, 2019 for removal and disposal of the concrete debris from the CCC cutting was paid for my Ming Enterprises Ltd. [ 162 ] No invoice was produced by the Defendant concerning the alleged expense of $3,000 that it says was incurred in mitigating and filling in the unused trenching that had been completed by K & S Services. [ 163 ] There is no invoice entered into evidence or any other indication that additional GPR scanning was completed in the Unit 110 area by any of the Defendant’s contractors in the floor of Unit 110 or that the Defendant paid for any such additional scanning.

Rohn Mahen testified that some additional GPR scanning work was completed at an earlier point by another contractor at the expense of Ming Enterprises Ltd. on the two floors above Unit 110 in order determine the possible routing of the proposed exhaust ventilation shaft for the pizza oven. No invoices for it were submitted into evidence. This all occurred before it was clear that Defendant would be able to finalize a lease for Unit 110.

Rohn Mahen described it as “cost of doing business”. [ 164 ] When asked in cross examination if he ever instructed the Claimant and K & S Services to stop doing the work in the Unit 110 area, Rohn Mahen’s response was to the effect that he had no idea about the discussions between the Landlord, the Claimant and K & S Services and because of the difficult ongoing negotiations with the Landlord, he was not even certain they would getting a lease. Hence, he did not say stop. [ 165 ] Again Rohn Mahen was asked and denied that it was his signature on the K & S Work Order.

Evidence of Kevin Wright [ 166 ] Kevin Wright was permitted to provide further evidence in connection with the additional documents that were produced by the Defendant as result of the Court’s October 14, 2022 order for further disclosure. [ 167 ] He testified that Rohn Mahen was incorrect when he contends that the Landlord’s Work obligation to install “one four-inch sanitary drain rough in” as stipulated in paragraph 1 of

Schedule B of the Offer to Lease and in paragraph 1(

a) of

Schedule E of the Lease was to be located at the end of the long trenched branch to the proposed washroom’s toilet. Rather, Keven Wright noted that the capped sanitary sewer outlet is visible just near the demising wall and as depicted in Exhibit 4, Tab 1, photograph 1 (a). The Claimant completed that installation at the cost of the Landlord prior to the construction of the demising wall. He testified that over the years he has installed over 50 such four-inch sanitary drain rough-ins in such a fashion. Thus the installation to the pictured location near the demising wall satisfied the Landlord’s obligation.

That sanitary rough-in was completed by the Claimant prior to the construction of the demising wall using the Preliminary Layout Plan. [ 168 ] As I understand Kevin Wright’s evidence, Rohn Mahen’s suggestion that the four-inch sanitary drain rough-in location at the toilet is not consistent with common plumbing construction practices.

Also, the original branches of the trenching completed by K & S Services and the additional branches completed by the Defendant’s contractor which are partially depicted in the series of photographs found in Exhibit 4 Tab 1 are necessary to service the numerous drains required for the various pieces of equipment installed in the Unit 110 for the pizza restaurant’s operations. [ 169 ] He further noted that the extra trenching completed by the Defendant’s contractors depicted in the Exhibit 4 Tab 1 photographs necessarily ties in with and thereby uses the trenching work completed by K & S Services and covered by the Claimant’s Disputed Invoice. [ 170 ] The Claimant also completed at the cost of the Landlord, the requirements contained in the Landlord’s Work provisions of

Schedule B and

Schedule E for plumbing and gas. [ 171 ] In further cross examination, Kevin Wright conceded that:

a) the photograph (

a) at Exhibit 4 Tab 1 depicts part of the trenching work completed by the Claimant and K & S Services;

b) based upon the series of photographs in Exhibit 4 Tab 1 some but not all of that trenching appears to have been used in the course of installation of drainage lines by the Defendant’s concrete coring and plumbing contractors;

c) based upon those Exhibit 4 Tab 1 photographs and a review of some of the documentary evidence, certain proposed installations for leasehold improvements and equipment both requiring and not requiring drains in Unit 110 had been relocated from the positions shown in the Preliminary Layout Plan close to the locations set out in the November 2019 Construction Plan. Those relocations would necessitate additional concrete coring and trenching;

d) based upon the Exhibit 4 Tab 1 photographs a significant amount of additional trenching had been completed by the Defendant’s contractors beyond the original trenching work completed by the K & S Services;

e) there would be an expense to fill in any unused trenching. Submissions of the Parties Position of the Claimant [ 172 ] The Claimant submits that the Claimant and the Defendant had a contractual relationship and that the Defendant authorized the work which was completed for the benefit of the Defendant. That work is described and represented by the Claimant’s Disputed Invoice. [ 173 ] In support of this position, the Claimant says that there was a meeting of the minds both through the various discussions as between Kevin Wright and Doug Taylor on behalf of the Claimant and by Rohn Mahen on behalf of the Defendant about the layout

approval and evidenced by Rohn Mahen signing the K & S Work Order. [174] The Claimant, further or in the alternative, relies upon recovery against the Defendant in contractual quantum meruit orrestitutionary quantum meruit on the principle of unjust enrichment. [175] The work completed by the Claimant and its sub-contractor K & S Services was not the responsibility of the Landlord under theOffer to Lease or the Landlord’s Lease but rather that of the Defendant.

Position of the Defendant [176] The Defendant denies any contractual relationship with the Claimant or that it approved of or authorized the work represented bythe Claimant’s Disputed Invoice. [177] Specifically, it is denied that Rohn Mahen signed the K & S Work Order on behalf of the De

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