Way v. Baby Smart Childcare and Education Ltd., 2022 BCPC 196

Citation: Way v. Baby Smart Childcare and Education Ltd. 2022 BCPC 196 Date: 20220920 File No: C-18806 Registry: Port Coquitlam IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: GEOFFREY WAY AND KEELY MCGOWAN CLAIMANTS AND: BABY SMART CHILDCARE AND EDUCATION LTD. DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE D.L. DOREY Appearing on their own behalf: G. Way and K. McGowan Appearing for the Defendant: J. Zhang Place of Hearing: Port Coquitlam, B.C. Date of Hearing: August 11, 2022 Date of Judgment: September 20, 2022

Introduction [ 1 ] This is a contract dispute involving childcare services that arose during the early stages of the COVID-19 pandemic. [ 2 ] Geoffrey Way and Keely McGowan (the “Claimants”) are the parents of a one-year-old son. They secured a space with the Defendant’s (“Baby Smart”) daycare facility in Coquitlam as Ms. McGowan was returning to work following her maternity leave.

The Claimants allege Baby Smart breached their agreement to provide daycare services for their son when Baby Smart unilaterally terminated their son’s daycare placement without advance notice or explanation for the cancellation of services. [ 3 ] The Claimants allege they actively looked for another daycare until they found a new placement two months later.

In the intervening period, the Claimants each took time off work and they relied on friends, neighbours, and family to care for their son so they could work. [ 4 ] They seek $2,640 in damages for mental distress against Baby Smart for breaching their agreement, or alternatively, they seek compensatory damages for their time and inconvenience as a result of Baby Smart’s breach. [ 5 ] Baby Smart denies the Claim on the basis that the parties did not have a binding contract for daycare services.

Baby Smart seeks the dismissal of the Claim. [ 6 ] The Claimants initially filed this claim with the Civil Resolution Tribunal (the “Tribunal”) on September 18, 2020. On January 13, 2021, the Tribunal rendered its decision. The Defendant filed a Notice of Objection in relation to the Tribunal’s decision on February 8, 2021. On March 3, 2021, the Claimants filed a Notice of Civil Resolution Tribunal Claim (the “Claim”) in this Court. On March 12, 2021, Baby Smart filed its Reply seeking a dismissal of the Claim. Baby Smart opposes the Claim stating that the “Claimant brings extra work and expense”.

Baby Smart seeks reimbursement of filing and objection fees totalling $250.00. [ 7 ] This Claim was filed in this Court before the repeal of the Notice of Objection and Provincial Court trial de novo for Civil Review Tribunal Small Claims pursuant to the Attorney General Statutes Amendment Act, 2022 SBC 6, which came into force July 2, 2022. Accordingly, this Claim proceeded before me as a trial de novo . [ 8 ] The Claimants each testified in their case. The Defendant called one witness, Jefferson Zhang, a part-time employee of Smart Baby who had no dealings with either Claimant.

Neither the company’s owner and director Jingyi (Sunny) Wu, nor the on-duty manager, Bing Zhang, who met with Mr. Way testified at trial. Instead, Mr. Zhang relied on two short unsworn statements from these witnesses. Most of the facts found in these statements were admitted by the Claimants. The admitted portions of the witness statements were marked as exhibits and entered in evidence. Issues [ 9 ] The issues in this dispute are: 1. Whether the parties had a binding contract for daycare services? 2. If so, did Baby Smart breach the agreement? 3.

What are the Claimants’ remedies for the breach? [ 10 ] The Claimants must prove their Claim on a “balance of probabilities”. Simply put, the balance of probabilities means that the only “practical way in which to reach a factual conclusion” is to decide whether it is more likely than not that the event occurred on “sufficiently clear, convincing, and cogent evidence”: F.H. v. McDougall, 2008 SCC 53 , at paras. 44 , 45, and 46.

Thus, in this case, the Claimants have the burden of convincing me as the trial judge on the evidence that it is more probable than not that they had a binding contract for daycare services that was breached by Baby Smart, and that they suffered losses as a result of the Baby Smart’s breach.

Summary of the Evidence [ 11 ] Mr. Way is a self-employed businessman in the information technology field. He works out of a home office. [ 12 ] Ms. McGowan works full-time as a business analyst for Metro Vancouver in information technology in the water treatment division and is designated as a level 2 essential services worker. She took a one-year maternity leave after their son Dexter was born in 2019. She planned to return to work full-time in April 2020 before the pandemic hit in March 2020. [ 13 ] Ms.

McGowan began her search for a daycare space for Dexter in August 2019 as there was a high demand and limited supply of licenced daycares in their neighbourhood in Coquitlam. This search continued until February 2020 when Ms. McGowan found an opening at Baby Smart for Dexter beginning March 1, 2020. [ 14 ] Baby Smart is a fully licenced infant toddler daycare for up to 8 children which has been in operation for the past 4 years. Baby Smart has a staff of two full-time teachers, and a part-time bookkeeper/maintenance worker. The facility is located on the basement level of a residential house in Coquitlam.

Sunny Wu is the owner/operator and director of the daycare who divides her time between teaching in the daycare and administrative duties. [ 15 ] Mr. Zhang testified on behalf of Baby Smart. He works part-time as a bookkeeper and maintenance worker for Baby Smart. Although he had no direct involvement with the Complainants prior to the filing of this Claim, he is familiar with the Baby Smart’s policies, operational procedures, and rules. He testified that the operational policies are very important because the business is fully regulated and closely monitored. [ 16 ] Ms.

McGowan visited Baby Smart’s daycare facility on February 20 and met with one of the teachers. After this visit, she

determined that Baby Smart would be a good fit for her son. She telephoned Ms. Wu that evening and confirmed her intention to register Dexter with Baby Smart for full-time daycare. Ms. Wu told Ms. McGowan that the monthly fee was $1,300 and that a $500 deposit was required at the time of registration. She told Ms. McGowan that she would email her a registration package. [ 17 ] On March 1, Ms. Wu emailed Ms. McGowan the registration package. This included a registration form, parent handbook, and immunization record form. [ 18 ] In a follow-up email exchange on March 1, Ms. McGowan asked Ms.

Wu if Dexter could begin at the daycare on March 30. Ms. Wu replied stating there was a “spot” available that she would hold for Dexter once she received back the signed registration form and $500 deposit. [ 19 ] On March 2, Ms. McGowan e-transferred the deposit to Baby Smart and on March 3, Ms. McGowan signed and returned to Ms. Wu the completed registration form, signed copy of the parent handbook, and signed immunization record. In her cover email to Ms. Wu, Ms. McGowan asked if Dexter could start earlier on March 29 with a “gradual entry”. [ 20 ] In her reply email of March 4, Ms.

Wu agreed that Dexter could start two days earlier and that they would charge $65 for each of those days. Ms. Wu also stated that she would send out the contract the following week and asked her to bring the signed contract to the daycare on March 30. [ 21 ] On March 17, 2020, a public health emergency was declared in the Province of British Columbia owing to the COVID-19 pandemic. As a result, all daycares were closed until May 2020 when they re-opened only for the families of essential services workers. [ 22 ] In an email dated March 22 to “all parents”, Ms.

Wu wrote, “if you do not come to daycare completely in April, we will still keep the spot for your kid with no charge in April, 2020 …” Ms. McGowan replied to Ms. Wu’s email to confirm that Dexter would not be attending daycare in April. [ 23 ] On May 21, 2020, Ms. McGowan wrote to Ms. Wu that they were interested in “starting” Dexter in daycare when “you are ready to go”, and that Dexter could attend part-time or full-time as Ms. McGowan would be working from home. [ 24 ] The next day, Ms. Wu responded to Ms.

McGowan’s email to confirm that the daycare was now open and that she can “pay half month or full month during covid-19 pandemic” and asked if Dexter would start in June. On May 23, Ms. McGowan confirmed that Dexter would attend part-time and asked “how much do we pay each day?” On May 24, Ms. Wu replied, “$55/day during the covid-19 pandemic” and asked if Dexter would be attending in June. [ 25 ] Mr.

Zhang explained in his testimony that the daycare operations were adversely impacted by the COVID-19 public health emergency and that Baby Smart adhered to the Provincial directives for daycare closures and re-openings during the pandemic. He testified that in June 2020, that Baby Smart held 7 spots for children who were not attending due to the pandemic, adding that the parents of those 7 children were not charged to keep their daycare spaces. [ 26 ] Mr.

Zhang also testified that even though the daycare operates with full-time enrolment only, they were willing to accommodate families during the pandemic who wanted to change their enrolments to part-time. Thus, when the Claimants wanted to change Dexter’s enrolment from full-time to part-time, Baby Smart accommodated their request. [ 27 ] Ms. McGowan sent two follow-up emails on May 25 and May 26 confirming her intention for Dexter to attend part-time with a gradual entry on the

schedule as recommended in the parent handbook. The gradual entry begins with a 2-hour day followed by two half-days to allow a child to acclimate to the daycare routine. [ 28 ] Ms. McGowan testified that the reasons behind this change were twofold: First, she had concerns as to how and whether her son would adapt to full-time daycare. Second, she had reservations about exposing Dexter to other children and staff in a daycare setting to the COVID-19 virus. For these reasons, the Claimants thought it best to limit these risks with a part-time daycare placement. [ 29 ] On May 26, Ms. Wu wrote back to Ms.

McGowan to confirm that Dexter could start on June 1 and again asked Ms. McGowan to confirm if he would be attending part-time or full-time and whether she wanted a one or two-week gradual entry period. [ 30 ] Ms. McGowan replied on the same date to confirm that Dexter would start June 1, part-time, with a one-week gradual entry period. [ 31 ] On May 27, Ms. Wu replied to Ms. McGowan’s email stating, “see you on 1 June. Miss Bing works in the daycare now.” Ms.

McGowan testified that she regarded this email as her confirmation that everything was “fine and ready to go” for Dexter to start daycare on June 1 and that following his transition period, they would have a sense of how many days per week he would attend the daycare. [ 32 ] Ms. McGowan further testified that she was unaware there were any issues with the contract and assumed that the contract would be revised by Ms. Wu once they confirmed the number of days per week that Dexter would attend after the gradual entry period and that the fees would be adjusted accordingly.

It is for this reason that neither she nor Mr. Way signed the contract Ms. Wu previously provided in early March before Dexter’s first day. [ 33 ] On May 30, Mr. Way wrote to Ms. Wu seeking clarification of the fees for Dexter’s part-time enrolment, and for the gradual entry period. Ms. Wu did not respond to this email. [ 34 ] On June 1, Mr. Way took Dexter to and from his first day of daycare at Baby Smart. He dropped Dexter off at 9:30 and picked him up approximately two hours later. Mr. Way observed that Dexter was the only child present in the daycare that day. [ 35 ] Mr.

Way and Dexter were greeted by Bing Zhang. She provided him with a package of documents, including the contract, emergency consent form, duplicate copies of the parent handbook, immunization form, field trip authorization form and permission to

photograph form, which Ms. McGowan had previously signed. [ 36 ] Mr. Zhang testified that before a child is accepted into the daycare, Baby Smart has to ensure that the procedures are followed carefully, which means that all documentation, including the contract, have to be completed prior to the child’s start date along with the deposit, and payment of the monthly fees. [ 37 ] Ms. Wu never sent Ms. McGowan a reminder email that the signed contract was needed on or before Dexter’s first day of gradual entry. Ms. Zhang, the manager on duty, never told Mr.

Way that the signed contract and the June fees were needed on Dexter’s first day in order for the daycare services to continue. Instead, Ms. Zhang told Mr. Way to bring back the signed documents along with a number of supplies for Dexter the following day. [ 38 ] Mr. Way signed some of the documents at the daycare centre and took the balance of the forms with him to sign at home. [ 39 ] That evening (June 1), Ms. Wu sent him an email stating, “[w]e cannot take care of your child. Sorry about that. Your deposit cheque will be available at 9:00 am in daycare. Today is free.

Please do not bring your child to daycare anymore. Thanks!” [ 40 ] Mr. Way and Ms. McGowan testified they were in a state of shock upon receiving this email. It took them by surprise as Mr. Way felt that everything went well for Dexter at the daycare that day. He thought there had been some misunderstanding and wanted to clear that up the next day. [ 41 ] On June 2, Mr. Way and Dexter went to the daycare. He brought with him the completed forms and the supplies Ms. Zhang requested. He was met by Ms.

Zhang who told him daycare services were terminated and provided him with a cheque for the return of their $500 deposit. He asked Ms. Zhang if this had been a mistake. Ms. Zhang did not answer. Mr. Way then asked for an explanation and Ms. Zhang’s only response was “sorry, we cannot take care of your child”. Mr. Way asked to speak to Ms. Wu in person. Ms. Zhang left the daycare facility and returned approximately 15 minutes later accompanied by Ms. Wu. [ 42 ] Mr. Way asked Ms. Wu for an explanation as to why Dexter’s daycare services were terminated and she told him, “sorry we can’t take care of your child”.

When Mr. Way pressed Ms. Wu for an explanation, she told him “for gradual entry we can cancel at any time”. [ 43 ] In his testimony, Mr. Zhang explained the reason why Baby Smart terminated Dexter’s daycare services. [ 44 ] He testified that Ms. Wu waited until the end of the day to receive the signed contract and the cheque for the June fees before she sent the email to Mr. Way that evening terminating services. According to Mr. Zhang’s testimony, it was the responsibility of the Claimants, not Baby Smart, to confirm the contract terms and to make the adjustments for part-time enrolment.

Simply put, the dispute arose because the Claimants did not sign the contract and pay the June fees. Thus, the Claimants were not a “client” which, according to Mr. Zhang’s testimony, gave Baby Smart the right to refuse to accept Dexter into the daycare. [ 45 ] Baby Smart’s decision to terminate daycare services left the Claimants without any childcare. This was a difficult time for the Claimants as they managed their work and family responsibilities as both parents were working from home during the pandemic and while caring for Ms. McGowan’s 8-year old son and an active one-year old baby. [ 46 ] Ms.

McGowan testified that she and Mr. Way shared Dexter’s childcare duties as they actively looked for an alternate daycare placement for Dexter. They also relied on family, friends, babysitters, and neighbours to look after Dexter with limited success. [ 47 ] She made arrangements for her older son to be looked after by his father full-time during the period she was without childcare for Dexter as neither she nor Mr. Way were able to manage the responsibilities of both children from home and work in the circumstances. Her older son missed his mother, step-father, and brother during this period. [ 48 ] Ms.

McGowan testified that this was a particularly stressful time for her work as well as she was leading a project and felt she let her team and manager down because she could not manage full-time hours until they found a daycare placement for Dexter. She testified that she was unable to meet certain commitments and that her manager had to take on the added work she could not do. [ 49 ] Mr. Way testified that this was a difficult period for him as well with his work and family commitments and juggling Dexter’s needs. [ 50 ] On July 29, 2020, Ms. McGowan found a part-time daycare spot for Dexter for two days a week.

This placement increased to 3 days per week in late August. [ 51 ] On August 4, 2020, Mr. Way sent a formal demand letter to Ms. Wu seeking an explanation as to “why” Dexter’s daycare spot was cancelled. This letter went unanswered. Mr. Zhang was asked in cross-examination why Baby Smart never responded to his letter. He responded stating that because the Claimants did not sign the contract, Baby Smart was under no obligation to explain their reasons for terminating Dexter’s daycare placement.

Discussion [ 52 ] The Claimants contend that irrespective of whether or not they signed the written contract, they had a binding agreement with Baby Smart for daycare services which Baby Smart breached when Ms. Wu terminated services. [ 53 ] Baby Smart, on the other hand, contends that the Claimants failed to comply with the parent handbook that states they are required to provide a signed contract and payment of the first month’s fees “to reserve a space for your child”. [ 54 ] Because the Claimants did not sign the contract, Baby Smart submits they did not have a binding agreement.

Accordingly, Baby Smart submits that it was entitled to terminate the daycare placement at will.

[ 55 ] A contract may be oral or it may be in writing. In order to find that a contract exists, the court must be satisfied on the evidence, objectively considered, that there was an offer made by one party that was accepted by the other party, that the parties reached a consensus on all the essential terms of their agreement, there was valuable consideration given (typically payment of money) for their promises, and that the terms of the agreement are certain and capable of enforcement: 0930032 B.C. Ltd. v. 3 Oaks Dairy Farms Ltd., 2015 BCCA 332 , at para. 42 ; J.

McCamus, The Law of Contracts, (3d) at p. 31 and 97. [ 56 ] The email correspondence between Ms. McGowan and Ms. Wu establishes that there was an accepted offer made by Baby Smart to provide part-time daycare services to the Claimants commencing June 1, 2020. In accordance with the parent handbook, and as requested by Ms.

Wu in her email correspondence, the Claimants signed and returned the parent handbook and registration form and paid a $500 deposit to secure Dexter’s daycare space. [ 57 ] The evidence further establishes that the parties agreed to a one-week transition period for Dexter to acclimatize to the daycare routine at the rate of $55 per day (which was a reduced rate during “COVID”). I find as a fact on a review of the email correspondence that the parties had agreed to the rate of $1,300 per month for full-time daycare services.

It was agreed that this rate would be adjusted for part-time services after Dexter’s one-week gradual entry period was completed and Ms. McGowan determined how many days of care she required each week. [ 58 ] It is also clear from the evidence that Ms. Wu never told the Claimants that the signed contract was a necessary pre-condition before daycare services could begin, nor did she send a reminder to Ms. McGowan to bring the signed contract on or before June 1, 2020. [ 59 ] Although Ms. Wu told Mr.

Way that Baby Smart could terminate services at any time during the gradual entry period when he pressed her for an explanation, there is no evidence that any such term was discussed with or agreed to by the Claimants, and there is no evidence of any such policy found in the parent handbook. [ 60 ] In any event, Baby Smart did not comply with this policy when it accepted Dexter into the daycare on June 1, 2020, without the signed contract. [ 61 ] I accept Ms.

McGowan’s testimony that it was mutually understood that the contract would be amended in due course to reflect Dexter’s change to part-time enrolment and that the revised contract would be signed after Dexter’s gradual entry period completed and after she decided the number of days each week he would attend the daycare. [ 62 ] I find on the evidence that the parties had a binding oral agreement for daycare services which was secured by the payment of the $500 deposit as consideration for the services. I further find on the evidence that Baby Smart breached the agreement when Ms.

Wu unilaterally terminated services by email sent the evening of June 1, 2020. [ 63 ] The next issue is what is the appropriate remedy. [ 64 ] The object of damages for breach of contract is to put a claimant in the same position (as fairly and as reasonably within the contemplation of the parties) as if the contract had been performed. This is known in law as the principle of reasonable expectation: Hadley v. Baxendale (1854), 9 EX. 341, at p. 151; Fidler v.

Sun Life Assurance Co. of Canada, 2006 SCC 30 , at paras. 27- 29 . [ 65 ] The Claimants seek $2,640 as compensatory damages for mental distress against Baby Smart for breaching their agreement and for the arbitrary and highhanded manner in which they terminated services.

This sum is calculated using the rate of $55 for each day or partial day the Claimants made do without childcare until they secured a placement at another daycare based on a spreadsheet that Ms McGowan reviewed in her testimony. [ 66 ] The Claimants contend that the daycare services agreement they had with Baby Smart was akin to a “peace of mind” contract, which in this context meant that they would be able to go to work knowing that their son would be cared for during the day. They rely on Fidler , supra , in support of their position.

That case holds that the law recognizes a “peace of mind exception” to the general rule against recovery for mental distress in contract breaches. This exception is generally confined to contracts which had their object the pleasure, relaxation, or peace of mind. One such example of a “peace of mind” contract is a disability insurance policy (which was the subject of the claim for mental distress in Fidler ) . [ 67 ] I do not find that a contract for daycare services fits within the peace of mind exception and thus I am unable to grant an award for damages for mental distress for Baby Smart’s breach.

However, the law also recognizes that some non-pecuniary losses arising from a breach of contract, such as physical inconvenience and discomfort, are compensable: Fidler , at para. 31 . [ 68 ] The Claimants were left in the lurch without childcare services due to Baby Smart’s breach. Ms. Wu would have clearly been aware of this when she sent the email terminating services.

As a result of Baby Smart’s breach, the Claimants had to juggle home, work, and childcare responsibilities that included caring for a very young child with limited reprieve, all of which occurred during the early stages of the COVID-19 pandemic. This was clearly a difficult and stressful time for the Claimants. It should have or ought to have been within the contemplation of Baby Smart that the Claimants would experience considerable discomfort and inconvenience with the sudden termination of Dexter’s daycare services.

Accordingly, I accept the Claimant’s damage calculation and award them the sum of $2,640 against Baby Smart as a fair and reasonable sum for their inconvenience and discomfort. [ 69 ] In

summary, the Claimants have judgment against Baby Smart for $2,640 plus expenses and service fees of $175, for a total judgment of $2,815. Baby Smart is further ordered to pay this sum to the Claimants within 30 days. ____________________________

The Honourable Judge D.L. Dorey Provincial Court of British Columbia