IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]           In August of 2014, the Defendant Finola Fogarty hired the Claimant Costa Coboyannis to perform some renovations to a home she had in Sechelt, B.C. The Defendant’s mother was suffering from some serious health issues and the Defendant wanted to have a suite built in the home so that a live-in caregiver could stay in the home. The Defendant had a friend who was a contractor, and she first asked if he could do the job, but he was too busy working at another job that he had. After making some inquiries, the Defendant asked the Claimant to do the job and he agreed to do so.

[2]           There is some debate about precisely when the work began. The Claimant says that it began in late August, while the Defendant says it was not started until early September. Little seems to turn on this distinction, but it foreshadows a pattern in the relationship of these parties in which they seem to agree on very little and retain a strong dislike of one another. For example, both denied receiving one another’s documents prior to trial, even though both produced registered mail receipts which each claims proves that such documents were in fact sent to one another.

[3]           A central problem in this case is the lack of any clear prior understanding of what the scope of work was, how long it was supposed to take, and what it was supposed to cost. The Defendant says that before the project began, this was discussed in an email document, but she was not able to produce it and says that she never bothered to save it. The Claimant says that there was no such document and that the first time when the scope of the work and its cost was discussed was in a Scope of Work document that he sent the Defendant on September 27, 2014. The Claimant says that prior to that, he was concerned that there were no plans drawn up for the renovation. In an email that the Claimant sent to the Defendant on July 3, 2014, he wrote:

[4]           In an email sent on August 11, 2014, the Defendant asked the Claimant what his estimate for the project was, and how long it should take. He replied by email that he would “have to see the plans.” Later in the same email, he estimated that it would take two to four weeks to complete “start to finish”, but he added that there were “always delays due to opening up walls, beefing up bearing points, and other miscellaneous stuff.” The next day, the Claimant emailed the Defendant, telling her that he was “drawing up some plans” for her. He asked for the dimensions of the room, which she gave as 18.5 by 25.5 feet. The Claimant added, “you’ll save thousands of $$”.

[5]           On August 14, the Claimant sent another email in which he suggested that the two of them sit down and draw up some floor plans. Specifically, he needed to know how the Defendant wanted the exterior of the house to look, and where the windows would be placed. He asked the Claimant to bring the permits and drawings that she had submitted to the city. It appears that the two of them met on August 15 and after the meeting, the Claimant wrote in an email: “I clearly understand what you want now.”

[6]           It appears from the email correspondence that there was some problem initially about the cost of the windows. The Defendant believed that she had an original quote for $2200, but the quote provided was $1200 higher than that.

[7]           On September 2, 2014, the Defendant emailed the Claimant and asked him: “Can you please draft up a contract? Are you licensed or not? Accountant will want to know too.” The Claimant replied that he was not a licensed building contractor. As September progressed, it looked as if the work was progressing satisfactory, according to the tone in the email. On September 13, the Claimant suggested the inclusion of a totem pole in the studio, and the Defendant replied “absolutely great idea!” The relationship between the two seemed to be going well, and the Defendant told the Claimant: “I realize you are a great contractor and I am so happy you are doing this project for me. I trust your judgement very much and do not mean to question it ever!” She also told the Claimant: “I thank you so much and trust you implicitly and am impressed by you and your obvious intelligence and entrepreneurship.”

[8]           On September 16^th, the Defendant inquired about certain changes to the skylights, to the overhang of the roof, and also about having a mantle added. The Defendant replied that it was a little late for those changes, but that he would do his best to maximize the overhang.

[9]           On September 22^nd, the Claimant asked the Defendant for a receipt setting out everything that she had paid for up to that point. The Claimant was asking for her credit card information and the Defendant said that she was experiencing some cash flow problems due to the “billing people” being away. The following day she explained the reasons for her cash flow problems in more detail and said that her bank was threatening not to honour some of her cheques. The Claimant said that he needed to purchase more lumber for the job. The Defendant once again asked how much she had paid for materials and windows up to that point, On September 23^rd; she sent the Claimant an emphatic message which read “NO MORE MONEY UNTIL AN ESTIMATE IS DONE”. The Claimant sent this reply:

[10]        In the next message, the Claimant wrote “I can give you a rough estimate of $15,000. The Defendant asked if this meant that the total cost would be $15,000, to which the Claimant replied “not getting anything. Until we have an understanding.” He threatened to quit the project at 8:00 p.m. that evening. He also told the Defendant that he was suffering financial difficulty because he had to pay some funeral expenses for his stepfather. Later in the day the Defendant was able to rearrange her financial affairs so that the work could continue.

[11]        On September 27, 2014, the Claimant sent the Defendant a “Scope of Work” document which provided the Defendant with a quote that was described as “just for labour”. It is summarized in the table below:

[12]        The Scope of Work document estimated the time to completion to be another three to four weeks. It said that up to this point, the Claimant had been paid a total of $7,500 either in cash or in e-transfer payments. Through a service known as Square, the Claimant was also able to access the Defendant’s credit cards. The Square account had been accessed for another sum of $4,472.62. Of this amount, $3,184.68 had been spent on materials and for the Claimant’s purchase of a trailer for the project.

[13]        The first thing that stands out from this document is that, while the Claimant gave the Defendant a “rough estimate” that the project would cost $15,000, the Scope of Work document estimates labour costs of nearly triple that amount. If, as the Claimant says, this is because the $15,000 quote only referred to the framing, this was not clear in his original message, and does not match the Defendant’s understanding. The second thing that is curious is that the copy of this document that the Claimant included in his book of documents is sent from himself to himself. It is attached to an email that is sent from the Defendant’s own email address to the same address.

[14]        It is also interesting to note that in the message exchange between the parties, the Defendant does not mention receiving this or make any comments or complaints about this document. The Defendant says that this is because she only received one “Scope of Work” document, but the Claimant says that he sent her three. The second was sent on November 1 and was sent to the Defendant’s email address. It included another $8,750 in extras.

[15]        The independent records (i.e. the email) suggest that is unlikely that the Defendant received the first Scope document on the day it was sent. On October 6, she messaged the Defendant asking “how’s the list of materials coming along?” She had earlier asked for this on October 4^th. The only copy of a Scope of Work agreement in her documents shows the status of work as of October 22^nd. This matches the document that the Claimant says is the Second Scope of Work Document.

[16]        Although none of the Scope documents show this, the Claimant testified that both he and his labourer billed their labour out at $50 per hour. In addition, the labourer received free lodging at the home that he was working on. The news of the rate seemed to come as a surprise to the Defendant, who wondered how this was supposed to be saving her “thousands” of dollars as the Claimant had promised.

[17]        On October 26^th the Defendant requested a copy of the building inspector’s report. She was told that this was provided only when the job passed. The Defendant asked the Claimant what the concerns were during the inspection. Suspiciously, he did not answer this question. He told the Defendant “I can show you when you come.” He added that he had to remove the windows which had been installed, put in a sealing membrane and reinstall them. He attributed the problem to a “new code” and it appears that this work for removing and reinstalling the windows was charged to the Defendant. The following day, the two of them got into an argument via messaging about the Defendant’s failure to show up at the property for the building inspector.

[18]        On October 28^th, the Defendant messaged the Claimant about changing the beams. The Claimant said he would inquire about what could be done from an engineering point of view. The next day, a problem presented itself about the pot lighting. Apparently the pot lights selected could not be used around insulation. It was also discovered that the stairs would have to be moved to provide proper clearance for the electrical panel.

[19]        By November 1^st, problems developed in the relationship between the parties. The Defendant was alleging that the Claimant had charged $12,550 on her Square account (which was charged against her credit card). Two charges for $6,300 and $6,250 showed up, and the Defendant said that she had no warning about these charges and had never authorized them. She was very upset reported the matter to the police as a theft. The Defendant was also upset that the project was now into its third month, when the Claimant had estimated that it would take between three and four weeks. The Defendant had been letting the Claimant’s labourer stay in the property, rent free. She was upset about what the Claimant’s delay was costing her in lost rent.

[20]        The Defendant sent the Claimant a lengthy message on November 2^nd, making it clear that the trust that she once had in him was no longer present. In the message she set out a number of deficiencies in the job that she wanted the Claimant to remedy. She blamed the problems on the Claimant’s failure to provide a contract with clear time-lines. She was also critical of the Claimant for his lack of knowledge of the local building code, problems with the support beams, the problem with the stairs, and with the gutters. She was also upset that the Claimant and his employee had abused her hospitality by partying in her home and by allowing uninvited persons to stay there.

[21]        The Defendant reached the point where she had had enough. On November 9^th the Defendant messaged the Claimant telling him that she was having guests at her home and that his employee would have to leave. When he did not do so, the Defendant went to the premises late at night and told the employee and his guest to get out. The two of them did so.

[22]        The Defendant sought a refund of the two payments made to the Claimant from the Square Account. The Claimant was notified of the dispute. As part of his dispute response, the Claimant submitted invoices that were made out to the Defendant for the two disputed amounts: one for $6,250 dated October 15, 2014, and another for $6,300 dated October 22, 2014. Interestingly, these invoices were not presented as part of the Claimant’s case, and it appears as if he produced these to support his dispute response for Square. He did not testify about ever sending such invoices to the Defendant and she says that she did not receive such invoices prior to seeing them as part of the dispute. The Claimant did not produce similar invoices for the remainder of his claim. On February 22, 2015, Square decided the dispute in the Defendant’s favour and the sum of $12,110.45 was withdrawn by Square from the Claimant’s account.

[23]        On February 10, 2015, the Claimant sent his final Scope of Work document. It claimed that the Defendant had “ALMOST” completed all of the work. It claimed that he had only completed 70% to 75% of the work on the windows and doors, and only 15% to 20% of the interior labour. The extras were estimated at a cost of $8,750. The bottom line was that the Claimant said that he was owed $8,370.37 for his labour. This Scope of Work document is summarized as follows:

[24]        The third Scope document says that the Claimant is owed $25,250 for the work he has completed. It says that he has received payment of $16,879.63, leaving a balance of $8,370.37. The payments are made up of receipts of $3,000 in cash, $7,500 in e-transfers and $9,965.73 received through the Square account. The final Scope document also claims that the Claimant is owed an additional $641.13 for bills that it paid for materials. The Claimant’s Notice of Claim askes for judgement in the sum of $25,889, made up as follows:

[25]        According to the Defendant’s records she has paid the Claimant $16,500, not including the two Square account payments that she authorized. Her bank records show that she paid $2000 on August 27 and another $2000 on August 28 and another of $1500 on September 12 (all by bank e-transfers to “Costa”). His scope of work document acknowledges receipt of this. She also says that she paid him $6000 in cash on September 3. Her bank statement shows a withdrawal of that amount that day. He says he only received $3000 in total in cash. The emails do not shed any light on who is being truthful about this. The Defendant says that she paid another $2000 on September 30 and $3000 on October 10 (her bank records show e-transfers to “Costa” on those days). In dispute is an extra $3000 that the Defendant says she paid to the Claimant in cash on September 3^rd, which he denies.

[26]        The Defendant has counterclaimed. Initially part of her claim concerned the disputed Square payments, but those have now been resolved in her favour. She is counterclaiming for the return of $15,000 of her money paid to the Claimant. She says that this is the amount that she overpaid for the job that she got. She testified that it has cost her about $20,000 to get the job finished and that a job that was quoted to her at around $15,000. She says that this project has now cost her around $70,000 in total.

[27]        Usually in a case of this nature, parties will present some sort of independent opinion evidence about the quality of the work, and the value of the work. If a court is not satisfied that the parties entered into any sort of a contract because of their failure to reach agreement, that doesn’t mean that the contractor does not get paid for his or her work. Typically, the court receives some evidence of the actual value of the work and makes an award accordingly. In this case, this type of evidence really wasn’t presented. From the Claimant’s side, the only evidence as to the value of the work came from himself and his hired helper. Neither can be said to be independent, objective or unbiased.

[28]        The Defendant claimed that there were letters “on file” from contractors, but she did not refer to these in her evidence, and if they are contained in her book of documents, they are well hidden. These persons were not called to swear or affirm to their statements, and the Claimant was not given any opportunity to cross-examine them on what they were saying (or on what the Defendant says that they were saying). In general, both parties took an approach to proving their cases much like the person who goes to his or her accountant with a shoebox full of documents and says “you figure it out.” The email correspondence paints a picture of two people who want to see something done “on the cheap”, and this is consistent with how each presented their respective cases, both seeming to believe that just by showing up at court and asserting they were owed what they say they were, this was enough proof of the righteousness of their cause, and that the documents to support what they were saying were in there somewhere.

[29]        The closest thing to independent expert evidence about the value of the work performed by the Claimant came from Guido Rupf. He is a friend of the Defendant’s and the person she had originally hoped would do this work for her. He has roughly eight years of experience as a building contractor, though this is not his primary occupation today. His experience as a carpenter goes back over 25 years when he worked in that occupation in Switzerland. He testified that he inspected the work done by the Claimant and had a number of serious concerns about it. These included the following:

[30]        Mr. Rupf estimates that the total value of the labour on this job to be around $16,000. In cross-examination, the Defendant suggested that some of these deficiencies may be been part of the work that was not yet completed under the contract, and Mr. Rupf acknowledged that this might well be the case.

[31]        In this case, the Claimant is saying that the Defendant owes him $25,889.79 for money owing on a construction contract. The Defendant has counterclaimed, saying that she over-payed on a construction contract by as much as $15,000. In a civil case, the burden of proof in a civil case rests with the Claimant to prove his case on a balance of probabilities, and on the Defendant to prove her counter-claim on the same standard. The Supreme Court of Canada summarized the law in F. H. v. McDougall 2008 SCC 53; [2008] 3 S.C.R. 41, at para. [49]:

[32]        In order for the existence of a valid contract between the parties, the following must be present:

[33]        In this case, it is the last element that is problematic. Despite the wise suggestion of the Defendant at the early stages of the negotiations that a written contract be prepared, it does not appear that these parties had reached any agreement on some very important and essential elements of their relationship. Until the Claimant prepared the Scope of Work document and presented it to the Defendant, and until she actually expressed her agreement to the terms set out in the document (if that ever occurred), the parties had not reached any agreement on these terms.

[34]        Often one party will allege that the parties entered into a “verbal contract”, meaning that there is no written record of what it is the parties agreed upon. These types of agreements can be very difficult to prove if denied by the other party. Unless there is some independent support in the evidence that such a contract was made, a verbal contract is very difficult to establish. For this reason, when parties make agreements that concern a sum of money that is significant to them, they are wise to set out the terms of their agreement in writing.

[35]        Just because the parties have not agreed on any precise terms in a contract, such as a contract for renovations for example, when the builder goes ahead and performs work, this does not mean that the customer gets the benefit of that work for nothing. Where the parties have not agreed on such important details as the scope of work, or the cost, the person who has done the work is entitled to compensation for the work done based on what is known as “quantum meruit” or unjust enrichment. If the original contract was unenforceable or abandoned by the parties, or void or frustrated, the party who has provided goods or services may still get compensated for those goods or services. Liability does not depend on the parties’ agreement, but on the principles of unjust enrichment.

[36]        To succeed on this basis, the Claimant must establish:

[37]        Although an award in quantum meruit is considered to be an equitable remedy, it has been held to be one that is available under the Small Claims Act. Dulay v. Gill 2011 BCSC 890; Madhavji v. Empire Life Insurance Co. 1993 BCPC 6; Canpages Inc. v. Avi Pizza Factory Ltd. 2009 BCPC 159; Magnum Consulting Inc. v. Paz Fuels Ltd. 2015 BCPC 249. In Dulay v. Gill, the BC Supreme Court held, at paragraph 53, that even though he had not done so, the Small Claims trial judge could have made a finding of unjust enrichment and made an award in quantum meruit. In making that order, the appellate judge referenced section 13 (1)(a) of the Small Claims Act which provides that the appellate court may make orders available in this court. Accordingly, I am satisfied that this remedy is available to this court.

[38]        While the Claimant and the Defendant had some of the elements of a contract for the renovations to the Defendant’s home, an important element was lacking, that being certainty of some very fundamental terms. The most important term was the cost. It is clear from the evidence that the parties never came to any firm agreement about the cost of this work. This is clear from the following evidence:

[39]        All of the evidence satisfies me that the parties never reached agreement on the scope of the work to be performed, or on the cost that Claimant unilaterally set out in the scope of work document. There was, therefore, no agreement between the parties on these essential terms and the Claimant cannot ask this court to enforce an agreement that only he agreed to, but that the Defendant did not.

[40]        Having concluded that the parties never reached agreement on the work to be performed, or on the price of it, this does not mean that the Claimant gets no remuneration for the work he performed. The messages that passed between them make it clear that much of the work that was done by the Claimant was acceptable to the Defendant. The evidence is also clear that much of it wasn’t. The Claimant billed the Defendant for some work that had to be redone because of his lack of knowledge of the building code.

[41]        The difficulty is this case is in fixing a value on the work that the Claimant did perform. Unfortunately neither party focused their efforts on providing unbiased and independent evidence of an important aspect of this claim, namely what an objective value of the Claimant’s work is. This is something that they most certainly do not agree on. Two things are clear from the evidence however. Firstly, the Claimant did represent that the cost of the work would be in the ballpark of $15,000, though this figure was quoted without full knowledge of what things would look like when the walls were stripped. Secondly, the Claimant represented to the Claimant that it would be more cost efficient for the Defendant to hire him and that by doing so, she would save “thousands” of dollars. Neither of these things came to pass.

[42]        The Claimant has not met the burden of proof of showing that he is entitled to any more money than that which has already been paid to him. He has not proven any agreement on the part of the Defendant to pay him any more money, and he has not provided any independent evidence that the work he performed was worth more than he has been paid. His claim for more money for his labour must fail.

[43]        The evidence also satisfies me that the Defendant never authorized the Claimant to make the disputed withdrawals from the Square account. Firstly, they are withdrawals to pay the Claimant an amount that she never agreed to pay. Secondly, the evidence is clear that these were withdrawals made without the Defendant’s knowledge or consent. The Claimant simply assumed that he could use the Square account to pay himself for money he thought was owing to him, without the Defendant’s agreement or consent. He assumed wrong.

[44]        For those reasons, the Claim brought by the Claimant must fail.

[45]        The Defendant has brought her own counterclaim for $25,000. Some of this is the funds that were wrongly taken by the Claimant from the Square account, but this money has now been refunded to her. The remainder is for what the Defendant believes she has overpaid to the Claimant.

[46]        Here the burden of proof shifts to Defendant to provide unbiased and independent evidence of the value of the work. She says that she has provided some letters about this, but the authors of those letters did present any evidence under oath or affirmation and were not provided for cross-examination by the Claimant. The only evidence concerning the value of the work came from Mr. Rupf, who is not a disinterested observer in this dispute. His evidence is that he valued the labour performed by the Claimant as being worth about $16,000. The Claimant’s third and final Scope of Work document states that he has received payment of $16,879.63. This is close to the $16,500 that the Claimant says that she has paid the Defendant. All three of these figures are in the neighbourhood of the $15,000 “rough” figure originally given by the Claimant.

[47]        While it is clear that the Defendant feels that, in her words, she has been “ripped off” by the Claimant, it is also clear that she has gotten some value from his work. It is not clear what that value is because of the absence of any independent and objective evidence put forth by either party. The burden of proving what if any refund should be coming to the Defendant rests with her. The Defendant has not met the burden of proving that any of the money she has paid to the Claimant should be refunded to her. Accordingly, her counterclaim must also fail.

[48]        Both of the parties have to take ownership of the problems that have resulted in this matter. The Claimant did complex renovation work without being a licensed contractor. When this was finally disclosed to the Defendant, she decided to let him go ahead with the work anyhow. The Claimant was unfamiliar with the building codes and believed that the Defendant should pay for his lack of knowledge. He was disingenuous when he told the Claimant that he would save her “thousands”. He and his helper abused Defendant’s hospitality by staying in her home and bringing unauthorized guests, knowing that the project would take longer than the three to four weeks that was continuously quoted. He would not directly answer the Claimant when she asked what the problems were with the building inspection. When the Defendant insisted that she get a firm handle on the costs from him, he threatened to dismantle the work he had done.

[49]        The Defendant knew that the terms of their agreement should have been set out in writing. She was told early on that proper plans were needed, but she ignored this recommendation or felt that this was solely the Claimant’s problem. She professed complete trust in the Claimant, leaving him unaccountable. She kept on leaving the matter of putting the terms of their agreement in writing up to the Claimant, rather than taking the initiative to protect herself. Each party must accept their part and their responsibility for creating this problem. Both wanted to proceed “on the cheap”. Sometimes that turns out to be the most expensive option.

[50]        For the foregoing reasons, both the Claim and the Counter-Claim are dismissed. Because there has been divided success (or perhaps more accurately, shared failure), no costs are awarded to either party.