Amplus Marketing & Design v. Optim Pacific Realty, 2020 BCPC 282

Citation: Amplus Marketing & Design v. Optim Pacific Realty 2020 BCPC 282 Date: 20200422 File No: C-1862709 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Small Claims Court BETWEEN: AMPLUS MARKETING & DESIGN INC. CLAIMANT AND: OPTIM PACIFIC REALTY INC. doing business as OPTIM PACIFIC REALTY DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE V. CHETTIAR Counsel for the Claimant: Bradley T. Hara Counsel for the Defendant: Self-Represented Place of Hearing: Robson Square, B.C. Date of Hearing: December 5, 2019 and March 13, 2020 Date of Judgment: April 22, 2020

I.

INTRODUCTION [ 1 ] This is a claim for damages arising out of a dispute relating to a website design and development agreement entered into on January 19, 2018, between the Claimant, Amplus Marketing & Design Inc., and the Defendant, Optim Pacific Realty Inc., doing business as Optim Pacific Realty (the “Agreement”). [ 2 ] Under the Agreement, the project (the “Project”) was for the Claimant to design, create, test and deliver to the Defendant a fully functional website, named “vanhome.ca” (the “Website”), within the timeline (the “Project Schedule”) provided in the Agreement, at a total cost of $31,500, payable in five instalments, upon reaching certain milestones. [ 3 ] During the course of the Project, the parties encountered some delays. [ 4 ] As a result, the Defendant terminated the Agreement by letter dated September 15, 2018 (the “Termination Letter”), on the basis that the Claimant breached the Agreement, primarily by failing to deliver the Project according to the Project Schedule. [ 5 ] The Claimant submits that it substantially performed its obligations under the Agreement, and that it is the Defendant who breached the Agreement by unilaterally terminating it without justification. [ 6 ] The Claimant seeks $19,845.00, being the balance of the amount owing to it under the Agreement.

It also seeks reasonable costs, and court ordered interest pursuant to the Court Order Interest Act , [ RSBC 1996], c. 79 . [ 7 ] The Defendant counterclaims for $13,230.00 that it has already paid to the Claimant under the Agreement. It also seeks reasonable costs, and court ordered interest pursuant to the Court Order Interest Act . II. BACKGROUND [ 8 ] The Claimant is a British Columbia corporation engaged in the business of website development. [ 9 ] The Defendant is a real estate brokerage firm operating in the Greater Vancouver area. [ 10 ] Mr. David Shih is the President of the Claimant. [ 11 ] Ms.

Jian (Faith) Zhou is the Director of the Defendant. Ms. Zhou also owns and operates a construction company. [ 12 ] Ms. Zhou learned that the Claimant was the creator of the website for T & T Supermarket (“T & T”), with which she was very impressed. Therefore, she approached the Claimant in November 2017 with a view to engaging the Claimant to create the Website, similar in core functionalities to that of an existing website named “vanfun.net”.

Negotiations in this respect ensued between the parties. [ 13 ] Effective January 19, 2018, the parties entered into the Agreement, which set out various terms and conditions, including the following: (

a) The Project cost of $31,500 and applicable Goods and Services Tax (GST) were payable in stages, as set out in Exhibit “E” (Monthly Service & Payment) of the Agreement: (i) $6,300 plus GST upfront deposit upon the signing of the Agreement; (ii) $6,300 plus GST 2 nd payment upon the completion of the website layout design; (iii) $6,300 plus GST 3 rd payment upon the completion of the MLS database integration; (iv) $6,300 plus GST 4 th payment upon the delivery of the staging of URL for review; and (v) $6,300 plus GST final payment upon the launch of the website. (

b) The Project Schedule, as set out in Exhibit “D” of the Agreement, included a note that any revision of the Project scope may cause delay to the Project Schedule. It stated that the timelines and milestone deliveries are approximate, and that the actual progress and date should be within +/- 15 days of the estimation.

The following is the Project Schedule: MILESTONE TIMELINE NOTE Signing of contract Day 0 Deposit payment Choose a website template Client submit all content Day 15 Review website structure and pages Website design confirmed Website template development Day 30 Content migration to new website Website template online Day 45 Review theme template MLS database development starts Process data feed Day 60 Client review data output and verify

Integrate listing to website Implement module for MLS listings Day 75 Client review Update listings Test functionality User Profile function Beta site review Day 90 Client review Test and verify functionality Website beta launch On-site training Day 100 Client review Begin maintenance [ 14 ] Diana Chan, was the Web Designer and Project Manager, at the Claimant. She has a Bachelor of Arts degree from the University of British Columbia. She is a graduate of the British Columbia Institute of Technology Digital Design and Development Program (April 2014 to September 2016).

Since her graduation from BCIT, she has worked at the Claimant as a Web Designer. Prior to joining the Claimant, she worked as a freelance designer. [ 15 ] Ms. Chan was not the project manager for the Project, but she worked on the Project until May 25, 2018, when she was replaced by Ms. Duo (Doris) Wang on a contract basis. At that time, Ms. Wang was working full time at T & T as their Graphic Designer. She has been working at T & T since 2008, and has been their Senior Graphic Designer since 2013. Ms. Wang graduated university in 1997 from China, with a degree in graphic design.

She has 21 years’ experience as a full-time graphic designer. She was born and raised in China, Chinese is her first language, and she is familiar with the Chinese culture. [ 16 ] Ms. Chan’s main responsibility on the Project was to come up with a responsive web design, which included branding elements and designs for different pages of the Website. [ 17 ] Ms. Chan prepared a number of drafts of the layout design for the Project, but the Defendant rejected them all. According to Ms.

Chan, on a typical project, there are only three rounds of back and forth between the Claimant and the client regarding the layout design. But, in the Defendant’s case, there was a significant amount of back and forth between Christine Yu, the Claimant’s Project Manager for the Project, and the Defendant. [ 18 ] In Exhibit “A” (Project Specifications) of the Agreement, under the heading “Custom Web Template Design”, it specifically states “[a]ll design includes 3 variation[s] and 3 review iterations.” [ 19 ] In or around March 2018, Flora Wu became involved with the Project, on behalf of the Defendant.

According to Ms. Zhou, Ms. Wu was hired as a contractor to assist Ms. Zhou with the Project. [ 20 ] By email dated May 14, 2018, Ms. Wu notified the Claimant that because the Defendant had decided to terminate the Project, it terminated its contract with Ms. Wu, and that any further communication regarding the Project should be directed to Ms. Zhou. [ 21 ] However, on the same date, May 14, 2018, Ms. Zhou sent an email to Mr. Shih, notifying the Claimant that she would like to proceed with the Project “as agreed if the timeline is [ sic ] able to catch up.” [ 22 ] Ms.

Wang started work on the Project on May 28, 2018. She prepared 10 different designs for the Website’s front (or home) page, using the work that Ms. Chan had done on the Project. Ms. Wang’s design for the home page was approved on June 4, 2018. She worked on the Website’s other pages until June 14, 2018. [ 23 ] In or around May 2018, Ms. Zhou noticed that a website named “behome.com”, similar in concept to the Website, appeared on the market. [ 24 ] To distinguish the Website from other similar sites on the market, Ms.

Zhou proposed adding two features: (1) a bilingual function, permitting the Website to be displayed in English and Chinese, and (2) a for-sale-by-owner function, independent of the Multiple Listing Service (collectively, “Ms. Zhou’s Proposed Changes”). [ 25 ] To incorporate Ms. Zhou’s Proposed Changes, the Claimant sent a Project Change Request dated June 11, 2018 (the “PCR”) to the Defendant for review and signature. However, the Defendant did not sign the PCR, as it did not agree with the additional cost or the terms of the changes. [ 26 ] In or around August 2018, Ms.

Zhou noticed that two further websites: “youlive.ca” and “johome.com”, similar to the Website, appeared on the market. [ 27 ] In August 2018, Ms. Wang worked on the Defendant’s logo design. On the first round, she provided four designs, but they were not approved. Then, on the second round, she provided eight designs, and they too were not approved. After two rounds of the logo design, the Claimant put a hold on her work. She did not do any further work on the Project. The Claimant paid her for her work. III. ISSUES [ 28 ] There is no dispute as to the validity or the enforceability of the Agreement.

However, the parties disagree as to the

interpretation of certain provisions in the Agreement, which I will address later. [ 29 ] The issues to be determined in this case are as follows: 1. Who breached the Agreement: the Claimant or the Defendant? 2. Did the innocent party suffer any damages as a result of the breach? 3. What is the appropriate measure of damages?

IV. DISCUSSION Evidence [30] Mr. Shih and Ms. Chan testified on behalf of the Claimant. Ms. Zhou and Ms. Wang testified on behalf of the Defendant. Variousdocuments were entered into evidence. [31] On the whole, I had no concerns with the credibility of the witnesses, except Ms. Zhou. I found Ms. Zhou to be confrontationaland argumentative. There were some internal and external inconsistencies in her evidence. Where there were inconsistencies between herevidence and that of the other witnesses, I prefer to accept the evidence of the other witnesses. [32] Ms. Zhou represented the Defendant on her own.

It is unfortunate that she did not have the benefit of legal counsel assisting herat trial. From her submissions, it became apparent that she did not fully grasp the legal issues in this case. Some of her submissions wereill-informed, confused, and not supported by the evidence. Applicable Law [33] The Claimant’s counsel referred to one case dealing with the issue of damages: Six Factor Professional Services Ltd. v. AcquiliniInvestment Group Limited Partnership, 2020 BCSC 127. Ms.

Zhou did not refer to any case law. [34] For purposes of analysis, I will refer to some case law that discusses the legal principles that are relevant to the issues before me. [35] In Pacific Vending Ltd. v. Fraser Valley Playgrounds, 2015 BCPC 250, the court discussed a number of legal principles,including the following: 1. Burden of Proof [16] The burden of proof in a civil case rests with the Claimant to prove its case on a balance of probabilities. As the Supreme Court ofCanada stated in F. H. v.

McDougall 2008 SCC 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.” I note that, in a civil case, where the Defendant has put forth a counterclaim, the burden of proof rests with the Defendant to prove itscounterclaim on a balance of probabilities. 2. Authority of [another person] to Contract on Behalf of [a Corporation] [17] . . .

At common law, under the doctrine of ostensible authority (sometimes called “apparent authority”), when a corporation holdsanother person out as acting on behalf of the corporation such that persons dealing with the corporation might reasonably assume that theperson has the authority to enter into contracts on behalf of the corporation, it is no defence for the corporation to say that the person didnot have such authority, unless the corporation can prove that the other party to the contract knew that the person lacked such authority. [18] This principle is stated in Bowstead & Reynolds on Agency (17th ed. 2001) at page 307 as follows: Where a person, by words or conduct, represents or permits it to be represented that another person has authority to act on his behalf, heis bound by the acts of such other person with respect to anyone dealing with him as an agent on the faith of any such representation, tothe same extent as if such other person had the authority that he was represented to have, even though he had no actual authority. [19] This principle has been codified in section 146 (1) (

c) of the British Columbia Business Corporations Act which provides that “acompany may not assert against a person dealing with the company, or dealing with any person who has acquired rights from thecompany, that… a person held out by the company as a director, officer or agent: (

i) is not, in fact, a director, officer or agent of the company, as the case may be, or (ii) has no authority to exercise the powers and perform the duties that are customary in the business of the company or usual for suchdirector, officer or agent”. 3.

Interpretation of the Contract [22] . . . 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.

4. In cases where the language used in a contract is ambiguous, that language should always be construed against the party who preparedthe contract. (This is often called the contra proferentem rule.) Arthur Anderson Inc. v. Toronto Dominion Bank (1994) (ON CA), 17 O.R. (3d) 363 (Ont. C.A.) [23] The parties are before the court to enforce the contract that they actually made, not the one that one or both of them may wish theyhad made. The parties and the outcome of this litigation will be governed by the terms of that agreement and the law directing howagreements are to be interpreted. 4.

Could the Defendant Terminate the Contract For Dissatisfaction of Service? [24] Non-performance of a term of a contract in any way, even if only to a slight degree, may amount to a breach of contract, unless thenon-performance is excused, justified, or otherwise permitted or excused by law. The law also distinguishes between a breach thatjustifies the innocent party treating the contract as at an end, and one that only allows the innocent party to claim damages for the lossincurred.

In the former case, terms whose nature is such that their performance is fundamental to the contract may entitle the wrongedparty to end the contract. In the latter case, terms of lesser importance, called “warranties”, only entitle the wronged party to damageswhich flow from the breach. [25] Only breaches of conditions or breaches of terms with serious consequences can lead to the remedy of termination of the contract.The test of whether a breach discharges the innocent party from further performance was stated as follows by the court in Hong Kong FirShipping Co. Ltd. v.

Kawasaki Kisen Kaisha Ltd., [1962] 1 All E.R. 474 at 485 (C.A.) and is paraphrased as follows: Does the breach deprive the party who has further undertakings still to perform of substantially the whole benefit which it was theintention of the parties as expressed in the contract that he should obtain as the consideration for performing those undertakings? [36] The Supreme Court of Canada in Bank of America Canada v. Mutual Trust Co., 2002 SCC 43 , in discussing howdamages are assessed for breach of contract, said, at paras. 25 to 27: [25] Contract damages are determined in one of two ways.

Expectation damages, the usual measure of contract damages, focus on thevalue which the plaintiff would have received if the contract had been performed. Restitution damages, which are infrequentlyemployed, focus on the advantage gained by the defendant as a result of his or her breach of contract. [26] Generally, courts employ expectation damages where, if breach is proved, the plaintiff will be entitled to the value of the promisedperformance (S. M. Waddams, The Law of Damages (3rd ed. 1997), at p. 267). [27] See Haack v.

Martin, (SCC), [1927] S.C.R. 413, per Rinfret J., at p. 416: The case is governed by the general rule applicable to all breaches of contract, and laid down as follows by Parke B. in Robinson v.Harman (1848) [1 Ex. 850, at p. 855]. The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to beplaced in the same situation, with respect to damages, as if the contract had been performed. Analysis 1.

Who breached the Agreement: the Claimant or the Defendant? [37] The Claimant submits that it substantially completed the work as required under the Agreement, and provided the completedwork, or evidence thereof, to the Defendant, but the Defendant terminated the Agreement without justification. [38] The Claimant says, initially, the Defendant’s reasons for termination were: (1) competitor websites, similar to the Website,emerged and that the Website is of no further value; and (2) the Claimant failed to send the required materials to the Real Estate Board ofGreater Vancouver (the “Board”) for the compliance review.

However, in the Termination Letter, in addition to these two reasons, theDefendant says one of the main reasons it terminated the Agreement was because the Claimant did not assign a qualified designer to theProject according to the terms of the Agreement, thereby causing an enormous delay in the Project. [39] According to the original Project Schedule, the Project was to have been completed within 90 days from the signing of theAgreement on January 19, 2018 – that is, by April 19, 2018 (the “Original Completion Date”), give or take 15 days from that date – thatis, at the latest by May 4, 2018.

Then the launch of the Website was to have occurred within 10 days of the latter date. In any event,everything should have concluded at the latest by late May 2018. [40] However, that is not what happened. The evidence indicates that the Claimant was working on the Project until the Agreementwas terminated on September 15, 2018 (the “Termination Date”). [41] The parties disagree as to who caused the delay. They point the finger at each other for causing the delay. [42] Mr.

Shih testified that one of the main reasons for the delay was because the Defendant did not have a specific set ofrequirements for the Website design, and that the scope kept changing, requiring a lot of back and forth discussion between the parties.Ms. Zhou, on the other hand, testified that one of the main reasons for the delay was because the Claimant did not assign, from theoutset, a qualified designer to the Project. The Claimant’s reasons for the delay: [43] The Claimant’s reasons for the delay, and the evidence, submissions and my findings in this respect are as follows: (

a) Failure to provide customer delivery items on time

[ 44 ] The Claimant submits that the Defendant failed to provide the customer delivery items listed in Exhibit “B” (Customer Delivery Items) of the Agreement, as required by the following term, at page 2 of 13, of the Agreement (unfortunately, the terms in the Agreement are not numbered): Delivery Responsibilities of the Customer Within 14 days from the date of execution of this Agreement, Customer will deliver the items listed in Exhibit “B” attached hereto . . .

The items described in Exhibit “B” shall include all content to be included in the Website, including but not limited to textual materials, logos, photographs, sound files, databases, video files and other Website content (“Website Content”) required to be included in the Website as described in the specifications, . . . All such Website Content shall be delivered to Amplus via Email with a backup copy on a “Flashdrive”. Photographs shall be in JPG format, written text shall be in Microsoft Word format, video files shall be in MP4 format, and sound files shall be in MP3 file format.

Exhibit “B” listed the following customer delivery items: Delivery items shall be [delivered] in traditional Chinese, in word document, formatted in the fashion to be presented on the website. Textual Content 1. Access to RETS database for all boards in Greater Vancouver 2. All connection account information 3. Banner promotion text 4. List of all search filter 5. List of neighbourhood and regions 6. List of school district 7. Contact form field 8. New

article categories + contents 9. Privacy policy 10. Terms of use Photograph/ Video/ Graphic 1. Company logo / graphics 2. Branding guides 3. Other image or graphics materials (collectively, the “Customer Delivery Items”). [ 45 ] Mr. Shih’s evidence was that even by the Termination Date, the Defendant had not provided all of the Customer Delivery Items, as required by the Agreement. [ 46 ] Mr.

Shih testified that the Claimant was not provided access to the RETS database until April 18, 2018 (one day before the Original Completion Date), and that it was the Defendant who had to initiate the application and approval process for the Board to grant access to the RETS database to the Claimant. [ 47 ] He explained that RETS is a technical term that refers to the data feed that the Board would supply to the Claimant to enable the Claimant to start building the Website on top of it.

He said access to the database was critical in building the page layout for the Website, and that without it, the designer will not know what kind of columns or fields are available; and without those fields, the designer will not know how to put in the listing fields correctly. [ 48 ] Ms. Zhou testified that the Defendant provided all the Customer Delivery Items on time, as required by the Agreement. However, on cross-examination, she wavered a little as to the exact format in which some of the items were delivered.

I gather that they were not exactly the same as specified in the Agreement. [ 49 ] When questioned about why the Claimant was not given access to the RETS database until April 18, 2018, Ms. Zhou said she sent her request to the Board and paid the required fees within one week of signing the Agreement. [ 50 ] The Claimant argued that simply sending a request to the Board to release the RETS data to the Claimant does not absolve the Defendant of its obligation under the Agreement to deliver access to the RETS database within 14 days of signing the Agreement. [ 51 ] Ms. Zhou disputed Mr.

Shih’s evidence that the Claimant only received access to the RETS database on April 18, 2018. Mr. Shih said that he has a record of Ms. Zhou sending him an email on April 18, 2018 with the data that she finally received from the Board. Ms. Zhou became confrontational, and asked Mr. Shih, “[o]kay, can you give me right now? Can you show me right now?” to which Mr. Shih responded, “I don’t have it here right now?”

[ 52 ] Ms. Zhou became argumentative regarding the dates as to when she sent her request to the Board and when the Claimant got access to the RETS database. She expressed frustration and said that these events happened two years ago, and she could not remember the exact delivery dates of the various required deliverables. However, she was adamant that she delivered all the items on time. She said if she had not, she surely would have received an email or some form of communication from the Claimant “pushing” her to deliver the items.

She said she did not receive any such reminders from the Claimant. [ 53 ] However, the point she fails to understand is that it is not the Claimant’s obligation under the Agreement to remind her, but it is the Defendant’s obligation under the Agreement to provide the Customer Delivery Items on time. [ 54 ] I have no reason to doubt Mr. Shih’s evidence on the timeliness of the delivery of the Customer Delivery Items. I find that the Claimant received access to the RETS database only on April 18, 2018.

I also find that the Defendant’s non-compliance with the term of the Agreement relating to the Customer Delivery Items caused some delay in the progression of the Project. (

b) Appointment of Flora Wu as a new person in charge of the Project and her proposed changes [ 55 ] The Claimant submits that when Ms. Wu came on board with the Defendant in March 2018, she proposed a number of changes to the scope of the Project, which required the Claimant to put the Project on hold until the changes were explored and agreed to by the parties, and that that caused some delay. [ 56 ] Mr. Shih’s evidence was that: on March 15, 2018, Ms.

Wu contacted the Claimant and said that the Defendant has assigned her to be in charge of the Project; after she came on board, she sent different specifications for the Website, which included the following complex features that were not part of the Project’s original scope: (

a) neighbourhood search function (which involves creating a set of pages illustrating all the neighbourhoods in the Greater Vancouver area and nearby amenities); (

b) building information

section (which involves a layer of extrapolation on top of the real estate data); and (

c) sales statistics (which involves sourcing sales statistics outside of the MLS database, as such statistics are not contained in the MLS database); (collectively, “Ms. Wu’s Proposed Changes”). [ 57 ] Mr. Shih said because Ms. Wu’s Proposed Changes were quite different from the scope set out in the Agreement, his team immediately discussed them internally and notified the Defendant that the Claimant would have to put the Project on hold until the scope could be fully agreed upon between the parties. Several discussions and meetings between the parties ensued in this respect.

The Claimant sent a cost estimate to the Defendant for the proposed changes, but the Defendant did not approve it. [ 58 ] Ms. Zhou vehemently argued that she was always the Project’s project manager and not Ms. Wu, and that any proposals from Ms. Wu should have no impact on the Project’s original scope or timeline. Although she did not articulate it, the essence of her argument was that Ms. Wu had no authority to bind the Defendant to any proposed changes. [ 59 ] Ms. Zhou’s evidence was: Ms. Wu was hired on a contract basis to assist Ms. Zhou with the Project; Ms.

Wu raised some issues and came up with some ideas for discussion, which entailed only a difference in the features to distinguish the Website from the vanfun.net website, and that they did not change the scope of the Project; however, when the Claimant informed the Defendant that Ms. Wu’s Proposed Changes were different and would change the Project’s original scope, thereby costing more money, Ms. Zhou did not approve any of those changes. Later, she said the Claimant did not send her a cost estimate for Ms.

Wu’s Proposed Changes, contradicting her own testimony. [ 60 ] She also argued that the Agreement does not require the Defendant to obtain approval from the Claimant to hire a “helper”, as she put it, for assistance on the Project. This is one example of Ms. Zhou’s lack of understanding of the issues in this case. The Claimant made no such allegation. It is a completely irrelevant argument. [ 61 ] In spite of the discussions between the parties regarding Ms. Wu’s Proposed Changes, during the period (March 2018 to May 14, 2018) Ms. Wu was with the Defendant, Ms.

Zhou was adamant that the Defendant did not request any changes to the Project before May 2018, which she notes was well after the Original Completion Date. [ 62 ] For the following reasons, I disagree with the Defendant’s submission that Ms. Wu was not in charge of the Project during the period she was with the Defendant or that the discussions between the parties regarding Ms. Wu’s Proposed Changes did not cause a delay in the Project. [ 63 ] When Ms. Wu came on board with the Defendant, she sent an email to Mr. Shih on March 19, 2018, which in part read: “Nice to meet you guys here.

Faith [Zhou] has designated me to be in charge of this project, . . . .” [ 64 ] Then on May 14, 2018, Ms. Wu sent an email to Mr. Shih, which in part read: “Because Faith [Zhou] has decided to terminate the project of VANHOME.CA, the contract between [the Defendant] and me will terminate as well. You guys can contact Faith [Zhou] directly for the remaining problems of the contract.” [ 65 ] The evidence is clear that Ms. Wu was hired specifically to work on the Project, and she was actively communicating and attending meetings with the Claimant’s representatives regarding the Project.

There can be no doubt that she was representing the Defendant, and acting on its authority, in these discussions. [ 66 ] As I set out above, the law is very clear that

[w]here a person, by words or conduct, represents or permits it to be represented that another person has authority to act on his behalf, he is bound by the acts of such other person with respect to anyone dealing with him as an agent on the faith of any such representation, to the same extent as if such other person had the authority that he was represented to have, even though he had no actual authority. [ 67 ] Therefore, even though Ms. Wu may not have had “actual authority,” she had “ostensible or apparent authority” in the circumstances.

The evidence indicates that the Claimant was of the view that she was in charge of the Project, and there is no evidence to the contrary. [ 68 ] Regarding any change in the timeline, the Agreement contains the following term on page 3 of 13, which the Defendant acknowledged by Ms. Zhou’s initials at the bottom of that page: Stages of Completion Amplus shall use its reasonable efforts to meet the completion

schedule attached hereto in Exhibit “D”. It is contemplated by the parties that the final completion and delivery date shall be as indicated on Exhibit “D”. However, Customer acknowledges and agrees that any changes or deviations in the specifications, site plan, mockups, graphics, or any other element of the Website, and Customer delays in fulfilling Customer’s responsibilities, includ[ing] delivering Site Content and promptly reviewing and commenting on completed work will lead to significant delays in the completion schedule. [My emphasis.] [ 69 ] I find that while Ms.

Wu was with the Defendant, she had authority to deal with the Claimant regarding the Project, and Ms. Wu’s Proposed Changes caused some delay in the progression of the Project. (

c) Ms. Zhou’s Proposed Changes [ 70 ] The Claimant submits that further delays were caused by Ms. Zhou’s Proposed Changes. [ 71 ] As I said earlier, to distinguish the Website from others in the market, Ms. Zhou proposed adding two features, the bilingual and for-sale-by-owner functions. [ 72 ] The evidence indicates that between May 2018 and June 2018, there were a number of meetings between the parties regarding Ms. Zhou’s Proposed Changes. Since Ms.

Zhou’s Proposed Changes had the effect of altering the Project’s original scope, the Claimant prepared the PCR and sent it to the Defendant for approval and signature. However, the Claimant never received the signed PCR back from the Defendant. [ 73 ] Mr. Shih testified that the Claimant could not proceed with the Project until the PCR was signed because they did not know whether they needed to re-plan their team’s capacity to account for the extra scope to be delivered within the new timeline they suggested in the PCR (which extended to mid-October 2018). He said the PCR was sent to Ms.

Zhou, but she claimed that she did not receive it when Ms. Yu followed up with her. The PCR was sent to Ms. Zhou again, but the Claimant never received any response to the PCR from the Defendant. [ 74 ] However, Ms. Zhou’s evidence was that she did respond to Ms. Yu regarding the PCR in a timely manner, but that it was Ms. Yu who did not get back to her until August 2018 regarding some of the questions Ms. Zhou raised regarding the PCR. It is not clear exactly when Ms. Zhou communicated with Ms. Yu. [ 75 ] Ms.

Zhou said that she did not sign the PCR because she did not receive reasonable answers to the questions she raised regarding the PCR, and that she did not agree with the incremental cost or the changes to the terms of the Agreement. [ 76 ] Ms. Zhou argued as follows: no changes to the Website features would have been necessary if the Claimant had completed the Project by the Original Completion Date; Ms.

Zhou’s Proposed Changes were only a “proposal” and they should not affect the original timeline in the Agreement; and the Defendant did not ask the Claimant to put the Project on hold until the negotiations regarding Ms. Zhou’s Proposed Changes were finalized. She insisted that the original timeline was the timeline that the Claimant should have followed, and that even if the two features she proposed were approved, they could have been added after the Project was completed according to the original timeline. [ 77 ] In my view, all of Ms. Zhou’s arguments are without merit.

I will go so far as to say that they are even nonsensical. As I have discussed above, the first set of changes proposed by the Defendant were Ms. Wu’s Proposed Changes. The discussions on those changes commenced in March 2018, well before the Original Completion Date. That and other intervening events I have discussed above caused further delay. The discussions relating to Ms. Zhou’s Proposed Changes started sometime in May 2018, and culminated in the PCR dated June 11, 2018. Even by June 2018, the parties were well beyond the original timeline due to the delays caused by the Defendant.

At this point, how could the Claimant have kept to the original timeline, when the Project’s scope was constantly in question? Furthermore, as Mr. Shih testified, it would have been inefficient for the Claimant to have continued with the Project, without knowing whether the Project’s scope was going to be changed, as any work already undertaken may become futile and a significant portion of the work may have to be redone, resulting in wasted cost for either, or both, parties. [ 78 ] I find that Ms. Zhou’s Proposed Changes caused further delay in the progression of the Project. (

d) The Defendant’s delay in reviewing and commenting on the completed work [ 79 ] The Claimant submits that the Defendant’s delay in approving the layout design for the Website home page significantly contributed to the delay in the Project Schedule. [ 80 ] It points to the term of the Agreement, at page 3 of 13 (set out above), which clearly states that any “Customer delays in . . . promptly reviewing and commenting on completed work will lead to significant delays in the completion schedule.”

[ 81 ] The Claimant says the Claimant’s general practice is to provide three versions of the layout design and three rounds of revisions, but in the Defendant’s case, there was a significant amount of back and forth, before the Defendant finally approved the layout design for the Website home page on June 4, 2018. [ 82 ] Ms. Chan’s evidence certainly supports the Claimant’s submission. [ 83 ] Ms. Chan also testified that there was not much difference between the rejected versions that she prepared and the final approved version that Ms. Wang prepared.

She said, structurally, they were both very similar, and that she followed a list of requirements for the design to ensure it included certain elements, but the final version had certain elements that were not initially mentioned when she created the design. [ 84 ] The Defendant argued that the delay in approving the layout design for the Website home page was solely due to Ms. Chan’s inability to create the design the Defendant was looking for, and that Ms. Chan did not possess the qualifications to do so.

I will discuss this argument in detail shortly. [ 85 ] The point is that the Defendant’s refusal to approve the layout design for the Website home page until June 4, 2018 certainly caused a significant delay in the Project Schedule. Even though this date was well beyond the Original Completion Date, the parties kept working together towards completion of the Project. Therefore, there was clearly an implied waiver by the Defendant of the original timeline. [ 86 ] While the Defendant argued that time was of the essence, no such term was included in the Agreement. [ 87 ] Ms.

Zhou appeared to be an astute businesswoman. Under cross-examination, she admitted that as a realtor and an owner of a construction company, she has experience with commercial contracts. Even in this case, the Additional Terms on page 13 of 13 of the Agreement were added at Ms. Zhou’s request. [ 88 ] Ms. Zhou is not an unsophisticated person. She seems to understand the implications of contractual terms. Otherwise, she would not have asked for the Additional Terms to be added to the Agreement.

That being the case, she could have asked to be added a “time of the essence” clause, or a “waiver” clause providing that a party does not waive its rights to insist upon strict compliance with the terms of the Agreement in the future simply because it has deviated from the enforcement of those terms in the past, or any modified waiver clause spelling out the parties’ rights and obligations. But she did not.

The Defendant cannot now claim the benefit of such clauses, because that was not what the parties intended at the time they entered into the Agreement. [ 89 ] In the end, I am satisfied that the Claimant has established, on a balance of probabilities, that the actions and inactions of the Defendant, as discussed above, caused significant delays in the Project Schedule.

The Defendant’s reasons for the delay and termination of the Agreement: [ 90 ] The Defendant’s reasons for the delay and the termination of the Agreement, and the evidence, submissions and my findings in this respect are as follows: Lack of assignment of qualified designer [ 91 ] The Defendant submits that one of the main reasons for the delay in the Project

Schedule was because the Claimant did not assign a qualified designer to be in charge of the design work for the Project until May 2018, in direct contravention of the following term in the Agreement, at p. 13 of 13: The Technician(

s) to be assigned to this project must have identical or comparable qualifications as the creators of the Work itself as http://precisionhearing.com and www.tnt-supermarket.com . (the “Disputed Term”) [ 92 ] The Defendant says the Website was intended to be a real estate search platform in the Chinese language, aimed at Chinese customers. As such, the Defendant submits, the Project required the Website’s visual content designer to be “strong [in] Chinese language skills” and be familiar with the “preferences of the Chinese culture.” [ 93 ] Ms.

Zhou’s evidence was that the Defendant hired the Claimant to do the Project because the Defendant understood that it was the Claimant that designed the websites for Precision Hearing and T & T. She said, at their initial meeting, her discussions with Mr. Shih regarding the T & T website’s attractive points related to the visual component, being the content and graphics. She said that is why the Disputed Term was added to the Agreement. [ 94 ] The Defendant submits that the Claimant breached the Disputed Term by assigning Ms.

Chan to be in charge of the Website’s graphic design (as opposed to the web design) since she did not design the graphics (the visual content) for the T & T website. It says it learned from Ms. Yu, in May 2018, that it was Ms. Wang who was the T & T website’s graphic designer. [ 95 ] The Defendant submits that Ms. Chan was not qualified to do the Website’s graphic design because she only had two years’ experience as a full-time designer and had very limited knowledge in reading and writing Chinese. The Defendant also questioned Ms.

Chan’s familiarity with the Chinese culture, which it says is important for capturing the meaning and spirit of the Defendant’s idiom it wanted captured in the graphic design. [ 96 ] The Defendant argues that if, from the outset, the Claimant had assigned someone with the qualifications of Ms. Wang, who has approximately 21 years’ experience as a full-time graphic designer, was born and raised in China, has a university degree from China, is fluent in Chinese, and is fully familiar with the Chinese culture, the Defendant would not have faced the delay it did, as Ms.

Wang was able to present the layout design, to the Defendant’s satisfaction, within a matter of a few days after she was hired by the Claimant.

[ 97 ] The parties disagree on the meaning of the Disputed Term. [ 98 ] The Defendant says in the context of the Disputed Term, the words “Work itself” refers to the website of “tnt-supermarket.com”, and not the Website, as the Claimant submits. [ 99 ] The Claimant points out that the Disputed Term was added at the very end of Exhibit “E” of the Agreement, and it was preceded by provisions dealing with the Website’s maintenance and support, such as the following: • Base maintenance includes website related maintenance and support only. • With maintenance / support package, the requests are prioritized and processed immediately, 48 hours turnaround time in most standard cases.

If more complex issue, a timeline will [be] provided for estimate[d] delivery. • . . . • Hosting is optionally recommended for faster support. [ 100 ] Therefore, the Claimant submits, the Disputed Term relates to maintenance and support, and the words “Work itself” refers to the original creation of the Website. [ 101 ] The Claimant says the use of the term “technician” in its ordinary application does not refer to a website designer.

It submits that the term “technician” refers to “a person with technical skills in the back end of systems and websites in order to keep the website operational,” whereas the term “designer” in this context “refers to the front end of websites and systems that are viewed by the public and make up the majority of the visual content.” [ 102 ] The Claimant submits that if the court finds that the Disputed Term is ambiguous, it should invoke the contra proferentem rule, and interpret the Disputed Term against the Defendant, as Ms.

Zhou testified that she drafted the Disputed Term. [ 103 ] In the alternative, the Claimant submits that if the court finds that the Disputed Term refers to the creation of the Website, as opposed to its maintenance and support, then the Claimant did assign a qualified person, being Ms.

Chan, who was the designer of the Precision Hearing and T & T websites, as required by the Agreement. [ 104 ] As I noted earlier, the law with respect to construction of contracts states that the contract must be read as a whole, giving the words used in the contract their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of the making of the contract. [ 105 ] I agree with the Defendant that the Disputed Term does not relate to the maintenance and support of the Website, but to its creation.

The fact that it appears on the last page under the heading “Additional Terms”, amongst a number of terms dealing with a number of topics relating to the Website, including maintenance, support, and copyrights to graphics, and it does not appear under the heading “Maintenance Terms”, is indicative that the parties did not intend the Disputed Term to relate solely to maintenance and support, even though the use of words such as “technicians” causes ambiguity. [ 106 ] Needless to say, the wording of the Disputed Term is not ideal. It raises a number of concerns: Does a “technician” include a “designer”?

If it does, does it include both a graphic designer and a web designer? What does the term “Works” refer to, as it is not defined in the Agreement? What does the term “creators” mean? Does it include both the graphic and the web designers?

Does it refer to the creators of the Precision Hearing and T & T websites or to the Website? [ 107 ] I suspect that the terms under the Additional Terms were copied from another source, and included in the Agreement, without much thought given to how they fit into the context and terminology of the rest of the Agreement – thus, now the conundrum of what the parties intended at the time they made the Agreement. [ 108 ] The following evidence sheds some light in determining what the parties likely intended by the Disputed Term: (

a) Mr. Shih’s evidence: (

i) the Claimant was the creator of the T & T website, which was confirmation of the Claimant’s ability to build a website that appeals to Chinese buyers; (ii) the Defendant approached the Claimant after learning of the Claimant’s development of the T & T website; (iii) Ms. Chan was the designer of both the Precision Hearing and T & T websites, as she was the only designer employed at the Claimant at that time; (iv) typically, when the Claimant works with smaller-sized clients, the Claimant’s team is entrusted with the full design (both visual content and web design), but because T & T was a larger enterprise, it had a set of graphic

definitions that it wanted to adhere to, and because it also wanted to control its own branding, it requested its own graphic designer to take the lead on creating the graphic; (

v) the Claimant’s team was in charge of giving consultation, advice and feedback to T & T on all of the design work (graphic and web), because the Claimant’s team had the industry knowledge on the website user design and layout; (vi) the graphic designer at T & T was only a graphic designer, and was not a web designer; (vii) “graphic designer” typically refers to the person who can create beautiful print materials such as logo, brochure or business cards, but a “web designer” is someone who has been trained to build a website, which is a live layout that users interact with, and that requires additional training; and

(viii) at the Claimant, Ms. Chan was both a graphic designer and a web designer; Ms. Chan provided consultation and advice on the graphic design that the T & T graphic designer prepared; and the consultation process was very intensive. (

b) Ms. Chan’s evidence: (

i) between January 19, 2018 and May 14, 2018, Ms. Chan provided various drafts of the Website page layout design to the Defendant, which the Defendant rejected; (ii) even after Ms. Chan was removed as a graphic designer for the Project, she provided guidance in converting Ms.

Wang’s graphic design to ensure it worked well with the Claimant’s web development standards and typical web standards, as she has noticed from her experience that designs that come from external designers are not compliant with a lot of the web design principles and, as a result, they would not work in a responsive web design setting; and (iii) for the Project, Ms. Chan’s speciality as a web designer was to go through all the layouts, and also create layouts that work with responsive web and all of the Claimant’s standard web practices. (

c) Ms. Wang’s evidence: (

i) Ms. Wang did the graphic and the page layout designs for the T & T website; and (ii) her work was passed on to the Claimant to be incorporated into the T & T website design. [ 109 ] It is reasonable to infer from all of this evidence that the Defendant wanted the individuals responsible for creating the Website to have identical or comparable qualifications as those individuals who were responsible for creating the Precision Hearing and T & T websites.

Therefore, I find that that was the focus of the Disputed Term, and that is what the parties intended by adding that term to the Agreement. [ 110 ] The evidence does not indicate whether there were any individuals, other than Ms. Chan and Ms. Wang, who were involved in the creation of the T & T website. The Defendant only focused on Ms. Chan and Ms. Wang. [ 111 ] The Disputed Term only refers to identical or comparable “qualifications”. Both Ms. Chan and Ms. Wang have university degrees. Ms. Wang majored in graphic design, whereas Ms. Chan has certification as a Graphic and Web Designer. While Ms.

Wang has many more years’ experience as a graphic designer compared to Ms. Chan, Ms. Wang is not a web designer. The creation of the Website requires the skills of both a graphic designer and a web designer, which Ms. Chan has. [ 112 ] Some of the other attributes that the Defendant compared between Ms. Wang and Ms. Chan include their facility in the Chinese language and their knowledge of the Chinese culture. The Defendant asserted that because Ms.

Wang was born and raised in China, went to university in China, was fluent in the Chinese language, and was familiar with the Chinese culture, she was better qualified than Ms. Chan. The Defendant alleged that because Ms. Chan was not born or raised in China, had limited facility in the Chinese language, and was not familiar with the Chinese culture, she was unable to produce the Website page layout designs in accordance with the Agreement. [ 113 ] I note that what the Defendant was really arguing was that because of these factors, Ms.

Chan was unable to produce the Website page layout designs, not in accordance with the Agreement, but in accordance with the Defendant’s expectation or satisfaction. [ 114 ] At this juncture, I would like to highlight what I noted earlier that parties to a contract must understand that a court will enforce the contract that they actually made, and not the one they intended to make, the one they thought they had made, or the one they wish they had made. [ 115 ] The additional attributes that the Defendant raised were not part of the terms of the Agreement and there is no basis to imply them into the Agreement.

The Claimant argues that these attributes are discriminatory in nature, and that even if they were included in the Agreement, they would be void ab initio , as they are contrary to public policy. I agree that the Claimant has a valid argument in this respect. It is not necessary for me to address this issue as these attributes were not part of the terms of the Agreement. [ 116 ] Since Ms. Wang was not a web designer, even if the Claimant had hired and assigned Ms. Wang to work on the Project from the outset, that would not have avoided the delay at issue.

As I have discussed above, there were a number of other factors that caused the delay. [ 117 ] I find that, given the circumstances at the time the Project began, the Claimant’s assignment of Ms. Chan to the Project was a reasonable one, because she had the educational background, and the skills and experience, both as a graphic designer and a web designer to build the Website. She also had direct, hands-on experience consulting with, and providing advice on, the creation of the T & T website. [ 118 ] Also, Ms.

Chan testified that: she has taken refresher courses to improve her facility in the Chinese language; she has worked on some Chinese projects, which did not require her to read Chinese; and she has worked on advertising in Chinese. Her point was that she had experience working in the Chinese medium. When Ms. Zhou challenged Ms. Chan that she did not understand the Defendant’s idiom because of her lack of knowledge of the Chinese language and culture, Ms. Chan explained that Ms.

Yu, who was the Project’s project manager at that time, explained to her the meaning of the Defendant’s idiom. [ 119 ] Therefore, I am satisfied that the Claimant did assign a qualified designer to the Project. I find that the Claimant did not breach the Disputed Term. Reasons for the termination of the Agreement (

a) Lack of assignment of qualified designer

[ 120 ] In the Termination Letter, the Defendant states, “one of the major factors for the termination of the Agreement is . . . [the Claimant] did not assign a qualified designer to be in charge of the design work for [the Defendant] until May 2018. This action is in direct breach of the [Disputed Term] in the Agreement.” [ 121 ] As discussed above, I have already found that the Claimant did not breach the Disputed Term, and that the delay in the Project

Schedule was caused by the Defendant’s actions or inactions. [ 122 ] What is interesting is that even though the Defendant was not satisfied with Ms. Chan’s work, it did not terminate the Agreement in May 2018. [ 123 ] Ms. Zhou’s evidence was that she repeatedly complained to Ms. Yu about the delay and the Claimant’s inability to produce page layout designs to the Defendant’s satisfaction. [ 124 ] However, in spite of these complaints, Ms. Zhou sent an email to Mr. Shih, on May 14, 2018, stating in part as follows: 2.

As spoke [ sic ] with Christine on [ sic ] last Friday, I would like to proceed [with] the Project as agreed if the timeline is [ sic ] able to catch up. [ 125 ] It appears that, based on this communication, the Claimant removed Ms. Chan from the Project, and hired Ms. Wang to work on the Project, in an effort to address the Defendant’s complaints and satisfy the Defendant’s demands. [ 126 ] There is no evidence to indicate what Ms. Zhou meant when she wrote “if the timeline is [ sic ] able to catch up”.

However, the evidence is clear that the parties continued to operate under the terms of the Agreement, except that it is not clear under what timeline they were operating under. [ 127 ] It is incongruent for the Defendant to now argue that the Project should have been completed by the Original Completion Date, when it effectively reaffirmed the Agreement on May 14, 2018 and continued to operate under it until the Termination Date. Furthermore, it was the party that caused the delay. [ 128 ] As I noted earlier, a party cannot take advantage of and benefit from a state of affairs produced by its own wrong.

Within the context of contract law, a party cannot use its own breach or default as a basis for being relieved of its contractual obligation. (

b) Extent of work completed [ 129 ] The second reason stated in the Termination Letter is “a four (4) month project is still only at its half way mark after nine (9) months have passed.” [ 130 ] The parties had very different perceptions of the extent of work that had been completed under the Agreement. (

i) Custom web template design [ 131 ] The Defendant argued that according to Exhibit “A” of the Agreement, the Claimant was to produce 15 different page style, but it only produced approximately nine. It said the school catchment page (being a sizeable portion of the Project, valued at $8,000 of the total Project value of $31,500) did not exist. It said the Claimant only did some preparation work on that page.

Therefore, the Defendant denies that the Project was “substantially” complete, as the Claimant submits. [ 132 ] With respect to the custom web template design, Exhibit “A” states: “Design for around 15 different page style.” I note that this is an estimation and not an absolute number. [ 133 ] Mr. Shih testified that when the design for the initial pages was submitted in May 2018 and approved in June 2018 for development, the Claimant continued during that process to create the design for the other pages, while they built the initial set of pages.

He said, because the Defendant was not able to deliver the Customer Delivery Items on time, the Claimant switched the order of the Project and started work on the school catchment data, as it was an independent component. [ 134 ] Mr. Shih said the Claimant had completed the design for all 15 pages, and had sent it to the Defendant for approval. By September 2018, the Claimant was awaiting approval for two or three pages, before it could start building the Website. Ms. Zhou challenged Mr. Shih’s evidence in this respect. She asked for proof of when these were sent to her for approval. Mr. Shih said Ms.

Yu would have sent them to Ms. Zhou by email. [ 135 ] On a number of occasions during the trial, Ms. Zhou challenged Mr. Shih to produce “immediately” or “right now” proof of certain communication he was testifying to – the communication I referred to in the preceding paragraph is one such example. Mr. Shih was firm that such communication did occur, and that all of the communication between the parties was captured on their project management platform “Basecamp”, and that he would be able to obtain printouts of such communication if necessary. [ 136 ] As I said earlier, I found Mr.

Shih to be a credible witness, and where there were inconsistencies between the evidence of Mr. Shih and Ms. Zhou, I preferred to accept Mr. Shih’s evidence. [ 137 ] Therefore, I accept that the Claimant had completed the design work for all of the 15 pages, and was awaiting approval for only two or three of them. (ii) School catchment development [ 138 ] The Defendant submits that even by the Termination Date, it had not received the layout page for the school catchment component. However, Ms. Zhou referred to an email from Ms. Yu to Ms.

Zhou, dated August 30, 2018, attaching the design for the school catchment page. This, again, appears to be a contradiction.

[ 139 ] Mr. Shih explained that while the Project’s scope was being worked out, and in an effort to not fall behind the Project Schedule, the Claimant started work on the school catchment data collection. He explained that this work involved the mapping of all of the coordinates of the school catchment, which will translate into a database that will eventually be put on the Website at the end. He said this data preparation work took over two months, and the Claimant was able to collect all that data, without having to do any page design because it was an independent component. [ 140 ] Mr.

Shih said screenshots of the data collected were sent to Mr. Zhou for review, and the input of the data into the Website was pending the Defendant’s approval of the design for the school catchment page. [ 141 ] Ms. Zhou again challenged Mr. Shih to show proof of when these screenshots were sent to her. Mr. Shih again said all of the communication between the parties can be tracked in the Basecamp platform the parties were using to communicate with each other on this Project. [ 142 ] I do not doubt Mr. Shih’s evidence. Perhaps, Ms.

Zhou was not closely monitoring all of the communication that was taking place on the Basecamp platform regarding this Project. [ 143 ] Ms. Zhou vehemently argues that some of the preparation work, such as the school catchment data collection, the MLS database integration and the URL staging for review cannot be done before the completion of the website layout design. She said: The page layout for a website development is like the framing of a house. Without the frame, it is impossible to install, for example, drywall, windows, and doors. Hence, to say that latter parts of the work was completed before the first

part is analogous to the claim that doors were installed without any framing. [ 144 ] With all due respect to Ms. Zhou, this analogy appears to be another example of Ms. Zhou not understanding the intricacies of the Project or web development in general. She is a realtor and a businessperson. There is no evidence to indicate that she is knowledgeable in web development. Her constant challenging of Mr. Shih’s evidence as to the process involved in the development of a website demonstrates that she does not have the knowledge or sufficient understanding in this field. At one point, when Ms. Zhou asked Mr.

Shih, “Without the page layout set up, how can you build the data into the website?” Mr. Shih said to Ms. Zhou, “I think you are confused about the work itself,” and he went on to explain the Claimant’s work regarding the collection of the school catchment data and how it would be incorporated into the web page. In spite of his repeated explanation, Ms.

Zhou still made the house framing analogy I refer to above. (iii) Staging URL for Review [ 145 ] The other contention between the parties was the handling of the compliance review by the Board. [ 146 ] The Defendant submits as follows: even by the Termination Date, the Claimant had not completed the nine pages that were sent to the Board for review; even with those pages, the Board identified some deficiencies, but there is no indication that the Claimant responded to those deficiencies; the Claimant failed to send all 15 pages to the Board for review; the Board will only review what is sent to them, and will not be aware of the extent of the pages the parties have agreed to; and, therefore, it is “ridiculous” to say that the pages submitted to the Board is an indication of work completed. [ 147 ] The Claimant submits that it received access to the RETS test data only on April 18, 2018, and that it could not do any development work prior to receiving this access because it would not have known the fields that exist in the database. [ 148 ] Mr.

Shih explained that when the Board receives an application from a real estate brokerage or a realtor for access to RETS data, it will only issue temporary access to a testing version (containing the actual structure of the database, but only the testing data). Once the staging website is approved, access to real MLS data will be granted. He said the only difference between the testing database and the real database is that the data is different. [ 149 ] Mr.

Shih clarified that only pages containing real estate content need to be sent to the Board for review, and that it was not necessary for all 15 pages to be sent to the Board. [ 150 ] The evidence indicates that on August 28, 2018, the Claimant sent the staging website (URL – uniform resource locator) to the Board for a compliance review. Mr.

Shih explained that the expectation after the Board’s compliance review is for the Board to say: the website is built, it is integrated fully with the testing version of the database, it is fully compliant with the regulations applicable to website developers, and the website is ready to receive the real data. [ 151 ] In the Claimant’s case, after the compliance review, the Board sent an email to the Claimant, on September 6, 2018, stating “[t]he site looks good.

There are only a few items that need to be addressed to meet compliance.” [ 152 ] The Claimant submits that the few items the Board noted as needing correction were minor in nature, and that the Website was otherwise ready to be rolled out. [ 153 ] The Claimant submitted the following list, as the work it has completed under the Agreement: 1. Functional website on staging with all the work completed in phase 1 contract a. https://van-home.staging.amplusclient.com (note, some images are missing because it’s using the demo RETS data) b. Phase 2 = 2 additional feature areas that are currently in the sitemap i.

Owner’s Listings ii. Search property by school catchment

c. See Screenshots 2. At least 4 design iterations a. We have raw design files that can be provided upon request 3. Built a school catchment tool to record school boundaries for all the regions in the Greater Vancouver Area a. http://staging.amplusclient.com/school-catchment/ b. See Screenshot 4. Built a tool to scrapped data from Fraser Institute for school ranking a. https://www.fraserinstitute.org/ b.

See Screenshot (collectively, the “Completed Work”). [ 154 ] The Claimant submits that the Completed Work covers the first four milestones (or stages of completion) listed in Exhibit “E” of the Agreement, and that it comprises a substantial portion of the work contemplated by the Agreement. [ 155 ] I have no reason to doubt that the Claimant did not complete the “Completed Work”. I find that the Claimant did complete a substantial portion of the work contemplated by the Agreement.

While there was some delay in the Project Schedule, that delay, as I have already found, was caused by the Defendant’s actions or inactions. Furthermore, the Defendant reaffirmed the Agreement effective May 14, 2018. Therefore, it cannot be said that there was a fundamental breach of the Agreement by the Claimant, entitling the Defendant to terminate the Agreement. [ 156 ] As I have set out above, the law distinguishes between a breach that justifies the innocent party treating the contract as at an end, and one that only allows the innocent party to claim damages for the loss incurred.

In the former case, terms whose nature is such that their performance is fundamental to the contract may entitle the wronged party to end the contract.

In the latter case, terms of lesser importance, called “warranties”, only entitle the wronged party to damages which flow from the breach. [ 157 ] In this case, at most, the Defendant could have only claimed damages for any breach of warranty that the Claimant may have committed. [ 158 ] The Agreement contains a warranty clause which reads as follows, at page 1 of 13: At each milestone review, if the deliverable is not functional up to the standard illustrated in the specification document, Client [the Defendant] shall provide Amplus [the Claimant] with notice and reasonable time to address the issue.

If after reasonable attempts, the deliverable is still unsatisfactory, Client [the Defendant] may request termination of project, and Amplus [the Claimant] shall provide 50% refund on the total amount paid to date. [ 159 ] However, the Defendant submits that this warranty clause does not apply in the circumstances. It submits that it has suffered “significant damage” due to the Claimant’s delay. It says if the Claimant had finished the Project on time, it could have benefitted from the launch of the Website before other competitor websites appeared on the market.

However, the Defendant presented no evidence in support of this submission. Accordingly, the Defendant has not proved that it has suffered significant damage. (

c) Emergence of competitor websites [ 160 ] Another reason stated in the Termination Letter is the emergence of four competitor websites in the market. [ 161 ] Ms. Zhou testified that by August 2018, there were four similar websites on the market, rendering the Project “useless”. [ 162 ] The Claimant submits that completion of the Project before a competitor created a similar website was never a term of the Agreement, or a concern that the Defendant raised with the Claimant. [ 163 ] Mr.

Shih testified that the Claimant provided no guarantee that the Website would be up and running prior to the launch of any competitor website. He said, even when they started the Project, vanfun.net itself, which they were trying to emulate in some respects, was a competitor. [ 164 ] Ms. Zhou agreed that no one can predict 100 percent as to when a competitor website might be launched on the market, but that whoever launches first will have a better opportunity to “crack” the market.

She said the Claimant’s delay caused the Defendant to lose that opportunity. [ 165 ] I have already discussed the delay issue at length. The Defendant caused the delay, and the Claimant was doing its best to respond to the delay at each stage. [ 166 ] In the circumstances of this case, I find that the emergence of competitor websites is not a justifiable reason to terminate the Agreement. [ 167 ] For the reasons stated above, I conclude that the Claimant did not breach the Agreement, but the Defendant did by terminating the Agreement without justification.

2. Did the innocent party suffer any damages as a result of the breach? [ 168 ] The Claimant acknowledges that it received the first payment of $6,615.00 in January 2018 and the second payment of $6,615.00 on May 29, 2018. [ 169 ] It submits that it has suffered damages, equal to the balance of the amount due to it under the Agreement, being $19,845.00. [ 170 ] I am satisfied that the Claimant suffered damages as a result of the Defendant’s breach of the Agreement. 3. What is the appropriate measure of damages? [ 171 ] In this case, I conclude that the expectation damages are the appropriate measure of damages.

As I stated earlier, the expectation damages focus on the value the wronged party would have received if the contract had been performed. [ 172 ] I have already found that the Claimant completed a substantial portion of the work contemplated by the Agreement. It was virtually at the tail end of the fourth stage of completion (i.e. delivery of staging URL for review). It was in the process of communicating with the Board in the first week of September 2018.

Had the Defendant not terminated the Agreement on September 15, 2018, I have no doubt that the Claimant would have addressed the Board’s minor deficiencies and proceeded to the final stage of launching the Website. [ 173 ] I say, I have no doubt, because the evidence indicates that throughout the course of the dealings between the parties, the Claimant did what it could to keep the Defendant as a satisfied customer, including hiring Ms.

Wang, on a contract basis, to work on the graphic design for the Defendant, in addition to the Claimant’s in-house designer. [ 174 ] While the Defendant argues that it has not received any benefit from the Claimant’s work, it states, in its Termination Letter, that the design concept may be of use to the Defendant for its future website. In exchange for a full refund from the Claimant, the Defendant offered to pay the design fee (I assume the fee that the Claimant paid to Ms.

Wang) and secure the rights to and ownership of the design. [ 175 ] This offer by the Defendant indicates that there was value in the Claimant’s work, and the Defendant was eager to secure it at the cost of the design fee paid to the outsourced designer. Besides, whether the Defendant received any benefit is not the appropriate test where there is no issue of a fundamental breach by the Claimant . [ 176 ] Also, I am not persuaded by the Defendant’s argument that it has incurred “significant damage” due to the Claimant’s delay.

The Defendant says if the Claimant had finished the Project on time, it could have benefitted from the launch of the Website, all of Ms. Zhou’s and Ms. Wu’s work on the Project would not have been rendered futile, and the cost of the three-year domain name registration for the Website and the review fee to the Board that it had to pay would not have been wasted. I find that any damage the Defendant may have suffered was as a result of its own making. [ 177 ] I conclude that the Claimant is entitled to be placed in the same situation, with respect to damages, as if the Agreement had been performed.

Therefore, the appropriate measure of damages to be awarded to the Claimant is $19,845.00 ($18,900.00 plus $945.00 GST). V. CONCLUSION [ 178 ] In

summary, my conclusions are as follows: (

a) the Defendant breached the Agreement; (

b) the Claimant suffered damages as a result of the Defendant’s breach of the Agreement; (

c) the appropriate measure of damages to be awarded to the Claimant is $19,845.00. VIII. ORDERS [ 179 ] The Defendant shall pay to the Claimant the following amounts: (

a) damages totalling $19,845.00; (

b) costs totalling $184.58 (comprising filing fees of $156.00, service fees of $20.00, and corporate search fee of $8.58); and (

c) pre-judgment interest on $20,029.58 ($19,845.00 + $184.58) from November 14, 2018 (the date this action was filed in this court) to the date of this Order, calculated in accordance with the Court Order Interest Act (which the Small Claims Court Registry will calculate); (collectively, the “Judgement Amount”). [ 180 ] The Defendant shall pay to the Claimant the Judgment Amount within four months of the date of this judgment, unless the Defendant has applied for a payment hearing before that date. [ 181 ] The Defendant’s counterclaim is dismissed. By the Court

_____________________________ The Honourable Judge V. Chettiar Provincial Court of British Columbia