IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]           The Claimants, Rodney Bojechko and Diane Bojechko, carry on a refrigeration business in Trail, BC known as Kooltech Refrigeration Partnership.  The Defendant, Harpreet Singh Toor is the principal officer, director and shareholder of the Corporate Defendant Imraj Holding Enterprises Ltd.  At the times material to this action, the Corporate Defendant was in the process of renovating a recently acquired truck stop in Salmo, BC, known as the Whiteline Truck Stop.

[2]           There is no argument that between July 26, 2011 and November 5, 2011, the Claimants provided refrigeration services at the Whiteline Truck Stop.  No issue is taken with the quality of the work or over the amount charged for the work.  The real issue is who is responsible for the Claimant’s bill.  They say that they had a contract with the Defendants.  The Defendants deny this.  The Defendants say that the Claimants had a contract with Trousdale Construction Ltd., who they say was the general contractor on this project.  Trousdale Construction had once been a Third Party in this litigation, but for reasons that were not explained at the trial of this matter, Trousdale was let off the hook as a Third Party.  No one from Trousdale Construction testified at the trial of this matter, and the Claimants and Defendants have differing versions of who was responsible for the Claimants’ bill.  The Claimants say that it was the Defendants who were responsible to pay the bill, while the Defendants say it was Trousdale, from money that the Defendants paid to Trousdale.

[3]           It appears that everyone was careless about documenting exactly who was supposed to pay what to whom.  The Claimants are alleging a “verbal contract” with the Defendants, something that the Defendants deny.  The Claimants also admit that they did not have any direct discussions with the Defendants about who was paying for their work until most of it had been done.  Up until that point in time, the Claimants say that they dealt with John Trousdale and, based on their discussions with him, they presumed that they had a contract with the Defendants.  I say “presumed” because by the Claimants own evidence, they never bothered to confirm this with the Defendants, and did not discuss this with Mr. Toor until after most of the work was done.  The Claimants say that they got a verbal agreement from Mr. Toor to accept responsibility for the cost of the work.  Mr. Toor denies this.  The Claimants did not bother to get this confirmed in writing at the time, nor did they lien the job when they failed to get paid.

[4]           All of this happened in 2011.  The Claimants waited until September 21, 2017 before commencing this action.  The Defendants say that the Claimants started the claim too late, at least for the work that was performed before September 20, 2011.

[5]           At the trial of this matter, both of the Claimants testified, and Mr. Toor testified on behalf of the Defendants.  Neither party called Mr. Trousdale to testify, although he did file an affidavit on the file in support of a previous application.

[6]           Following is a summary of the evidence presented at trial, of the applicable law, and the reasons for the order made in this matter.

[7]           In January of 2011, the Corporate Defendant entered into a lease of a truck stop located in Salmo, BC.  The premises needed a lot of work according to Mr. Toor.  The gas pumps were not working and work was required for the walk-in cooler and the sales counter.  It appears from a letter filed as part of the Claimant’s book of documents that the premises was owned either by Mr. Ed Philipzyc or by his company, Ed’s Equipment Service Ltd.  Mr. Toor testified that Mr. Philipzyc introduced him to John Trousdale of Trousdale Construction.  Mr. Toor testified that he hired Mr. Trousdale’s company, Trousdale Construction Ltd. to build a walk-in cooler and a sales counter at this location.  This is consistent with what Mr. Trousdale swore in an affidavit for this action on May 22, 2018.  In the affidavit, Mr. Trousdale swears that his company was hired by the Corporate Defendant “in a verbal contract to provide labour and materials on a cost plus basis for a commercial renovation.”

[8]           In that same affidavit, Mr. Trousdale swears that he never engaged the Claimants as a subcontractor on the project.  The problem with this is that both of the Claimants say that it was in fact Mr. Trousdale who hired them for this job.  They say that it was Mr. Trousdale who they spoke with, and that he gave them their instructions on the completion of the work.  Both of the Claimants say that it was Mr. Trousdale who told them that they would get paid by the Defendants.  Unfortunately, the Claimants never bothered to confirm this with the Defendants.  They went ahead and did the work, in Mr. Bojechko’s words, “on a handshake.”  That handshake wasn’t even with Mr. Toor, it was with Mr. Trousdale.  Mr. Bojechko testified that he never even had a conversation with Mr. Toor until early August of 2011.

[9]           It appears that from sometime in June or July of 2011 until early October, the work on the premises proceeded along satisfactorily.  Nobody had ever bothered to get anything put in writing.  The Claimants believed that they had an agreement with the Defendants to pay for the work, not because the Defendant had ever agreed to this, but because Mr. Trousdale had told them so.  In cross-examination, Mr. Bojechko testified that he never had any discussion with Mr. Toor about the scope of work, what it would cost, what his mark-up on materials would be, or what interest he would charge on overdue accounts.

[10]        Mr. Toor believed that he was paying Trousdale Construction to do the work.  He testified that he had paid Trousdale Construction approximately $80,000 to get the work done.  Without any sort of written agreement, it is unclear how anyone was supposed to know what work was being done, what it would cost, or who was responsible to pay for it.

[11]        Problems arose in early October of 2011.  It appears that the Claimants had submitted a bill to Mr. Trousdale or had made some sort of inquiry about getting paid for their work.  It also appears that up to that time they believed that Trousdale Construction Ltd. was the general contractor on the job and that they would be getting paid by Trousdale.  On October 3, 2011, McEwen & Company, the lawyers for Trousdale Construction Ltd., sent a letter to the Claimants and to an electrician who had worked on the project, telling the Claimants that they were wrong about this assumption.  The letter reads in part:

[12]        Mr. Bojechko testified that he was surprised to get this letter.  He did not seek out any independent legal advice, and relied on what he was told in the letter from Trousdale Construction Ltd.’s lawyer that the Defendants were responsible for his bill.

[13]        The Claimants prepared an invoice dated September 1, 2011 for labour and materials in the sum of $11,365.73.  It is simply addressed to “Whiteline” in Salmo, BC.  The invoice contained a notation at the bottom of it which reads:

[14]        Sometime in early October of 2011, after receiving the letter from McEwen and Company, Mr. Bojechko says that he went to see Mr. Toor.  He testified that when he presented the lawyer’s letter to Mr. Toor, Mr. Toor asked him how many more days of work was required.  He says that he was told by Mr. Toor, “finish the work and I’ll pay you.”  This is as close to any sort of agreement that Mr. Bojechko testified to having directly with Mr. Toor.

[15]        Mr. Toor denied that he ever agreed to pay the Claimants’ bill for the work.  He testified that as far as he was aware, his contract was with Trousdale Construction Ltd.  He had already paid Trousdale Construction around $80,000, and he later paid them another $40,000 after they filed a Builder’s Lien on the property.  This is consistent with what is sworn to in the Affidavit of John Trousdale, who acknowledges that after the lien was filed, the Corporate Defendant may a payment under protest.  Once again, if either of the Defendants did agree to the pay the Claimants for the work, no one bothered to have this confirmed in writing.

[16]        On November 1, 2011, the Claimants submitted another invoice for work done on this project.  This invoice is for labour and materials provided between September 5 and November 4 of 2011.  It is once again addressed to “Whiteline” at Salmo, BC.

[17]        After the Defendants paid to have the lien on the property removed, the Corporate Defendant sued Trousdale Construction Ltd. in a small claims action in Nelson, BC that was commenced sometime in late 2012 or early 2013.  Mr. Toor says that he was suing Trousdale Construction in part because he had paid them the additional amount which he believed covered what the Claimants were owed.  It is clear that his claim in that action did include a claim for Trousdale to pay the Claimants.  In that action, Trousdale once again denied that the Claimants were its subcontractor.

[18]        At a settlement conference held in that action, an order was made to “strike claim as regards Cantoo Electric and CoolTek (sic).”  The settlement conference record does not disclose why this order was made.  Both Mr. Toor in his evidence, and Mr. Trousdale in his affidavit, expressed their belief as to why the order was made, but no clear reasons for doing so appear from the record.  Mr. Bojechko made some reference to an action in the BC Supreme Court, but nothing from that action was provided in evidence.

[19]        Mr. Bojechko testified that, aside from one or two visits to Salmo, he did not take any collection proceedings against the Defendants until the Notice of Claim in this matter was issued in this action on September 21, 2017.  He said that he wanted to wait until the Supreme Court action was complete.  He relies on the notation on his invoices which states that no monthly statement will be sent, as justification for the Claimants not being more aggressive about the collection of this outstanding invoice.

[20]        On October 25, 2018, the Claimants were allowed to amend their claim to allege that (in addition to the invoice amounts of $11,365.73 and $3,803.61) their claim for interest amounts to $19,850.66.  This is apparently calculated at the rate of 2% per month.  The Defendants have denied that there was ever any agreement on their part to pay any interest, let alone at this rate.  The Defendants also note that the invoices say that the interest rate claimed is 2%, not 2% per month, and so there is no basis for this claim.  They also say that a claim for interest at this rate violates the Interest Act.

[21]        In this case, the Claimant is saying that the Defendants owe them $35,000 for goods and services provided under a construction contract, as well as contractual interest.  The Defendants have denied ever entering into such a contract.  In a civil case, the burden of proof rests with the Claimants to prove their case on a balance of probabilities.  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]:

[22]        In this case the Claimants say that they had a contract with the Defendants based on their discussions with Mr. Trousdale.  That obviously can’t be correct.  It things worked that way, then Mr. Imraj could tell all of his creditors to “send the bill to Kooltech” and the Claimants would be on the hook to anyone who was foolish enough to provide goods and services on that basis.  Two parties to a contract cannot bind a third party to something if the third party does not agree to it.  The case would be otherwise if one of the parties is acting as the agent for the third party, in other words if that party has the third party’s permission to negotiate the contract on its behalf.  In this case no one (including Mr. Trousdale in his affidavit) has suggested that Mr. Trousdale was negotiating as agent for the Defendants.

[23]        If there was any contract made between the Claimants and either Defendant, on the evidence presented at trial, such a contract would have been made in October, after the Claimants had done a considerable amount of work and had learned that Trousdale Construction would not be paying them.  The burden of proof rests with the Claimants to prove that such a contract was entered into between the parties.

[24]        In order for there to be a valid contract between the parties, the following must be proven to be present:

[25]        In this case, it is clear that if the parties reached agreement, it is one that would result in a legal relationship.  The issue here is whether or not there was an acceptance by one of the Defendants to pay the Claimants directly for their work (as opposed to paying them indirectly through Trousdale Construction.)  It is clear that if all of the other elements of the contract are present, there was also an exchange of consideration.  The Defendants got the benefit of the work done by the Claimants and the Claimants were supposed to get paid for that work.

[26]        The Claimants ask, in addition to the amount of its claims, that the Defendants pay six years’ worth of interest on the amount of its invoices at the rate of 2% per month from and after the date of the invoices.  It bases this claim on a statement which appears at the bottom of its invoices, which reads “Interest Will Be Charged at 2% Net 30 days on All Over Due Accounts.”

[27]        Counsel for the Defendants says that this notation on the bottom of the Claimants’ invoice is not binding on the Defendants.  First of all, Counsel points out that there is no evidence that either of the Defendants ever agreed to this.  It is a claim for interest based on a unilateral assertion.  In other words one side (the Claimants) says that this is a term agreed to, but there is no evidence that the other side (the Defendants) ever agreed to it.  Even the Claimants admit that this was never discussed with the Defendants.  I believe counsel to be correct that this is the law in British Columbia.  One party cannot impose an agreement to pay interest on another party without that party’s agreement.

[28]        In N.B.C. Mechanical v. A. H. Lundberg Equipment Ltd. 1999 BCCA 775, a decision of the British Columbia Court of Appeal, the court held that “a right to charge interest cannot be based simply on a unilateral assertion in an invoice.”  Where there is no express agreement to pay interest, agreement can sometimes be inferred from a course of conduct or an acknowledgement by the debtor after the contract was entered into.  For example, if interest had been charged to the Defendants by the Claimants in previous contracts and the Defendants had actually paid it, then acceptance to this term could be inferred from the conduct of the parties.  That is not the case here however.

[29]        Often some businesses extend credit to their customers by having them sign an agreement in which the customer agrees to pay interest at the set rate on amounts that are owing past a set length of time (usually 30 days).  No such agreement exists here, and the Claimants both agree that the Defendants never expressly agreed to pay interest.  They just assumed that putting this on their invoice somehow made the Defendants liable to pay it.

[30]        This is not to say that the Claimant is not entitled to any interest on any amount that may be found owing.  The Court Order Interest Act states, in section 1(1), that, subject to certain exceptions, “a court must add to a pecuniary judgment an amount of interest calculated on the amount ordered to be paid at a rate the court considers appropriate in the circumstances from the date on which the cause of action arose to the date of the order.”  Unlike post-judgement interest, which is set at a rate fixed under section 7 of the Act, the rate of pre-judgement interest appears at first to be left to the discretion of the court.  In fixing the rate of pre-judgement interest, the courts of this province have interpreted section 1(1) as putting the rate of pre-judgment interest to be paid at a rate set at two percent below the prime lending rate.  The BC Supreme Court sets this out in paragraph 23 of Henry v. British Columbia 2016 BCSC 2082 and that decision is binding on this court.

[31]        Although parties have not agreed on any precise terms in a contract, in a contract for renovations when the tradesman goes ahead and performs work, this does not automatically 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 may be 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.  The idea is that it is unfair for the owner or tenant of the premises to get something for nothing.

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

[33]        In this case for some reason that is not clear from the evidence, the Claimants did not commence their Claim until September 21, 2017.  This is over six years after all of the work described in the invoice of September 1, 2011 was performed, but not quite six years after some of the work described in the second invoice was performed.  (That invoice claims for services and materials provided between September 5 and November 4, 2011.  It does not provide any further breakdown.)  The Claim was commenced less than six years after the day in October when the Claimants say that Mr. Toor agreed to pay for the work performed on site.

[34]        The current Limitation Act, SBC 2012, Chapter 13, came into force on June 1, 2013.  Under section 6 of that that Act, “a court proceeding in respect of a claim must not be commenced more than 2 years after the day on which the claim is discovered.”  This is subject to a variety of exceptions, one of which applies to “pre-existing claims” which are defined in section 30 of that Act as claims that are based on an act or omission which took place before June 1, 2013.  The Claim brought in this action is a “pre-existing claim”.

[35]        In the fall of 2011 when the subject matter of this Claim arose, the Limitation Act as it then existed set out specific limitation periods for specific causes of action.  It also said that for other specific causes of action, there was no limitation period at all.  Claims for debt under a contract or for unjust enrichment or quantum meruit were not contained in either of those lists.  Section 3(5) of the Limitation Act, as it existed in 2011, read as follows:

[36]        It is clear from the evidence that at the commencement of the work performed by the Claimants, no contract has been proven to exist between the Claimants and either Defendant.  Mr. Bojechko has testified that he spoke with Mr. Trousdale, not with Mr. Toor.  He assumed that he had a contract with the Defendants, but had never discussed this directly with Mr. Toor.  Mr. Toor has testified that he never entered into any contract with the Claimants.  He says that it was always his understanding that his contract was with Trousdale Construction and that the Claimants were a sub-trade of Trousdale’s.  The Defendant has denied that he gave Mr. Trousdale any authority to enter into contracts on his behalf.  The Claimants did not testify about witnessing any discussion about this between Mr. Trousdale and Mr. Toor, and Mr. Trousdale did not testify at all at the trial of this matter.

[37]        There is no evidence of any offer and acceptance being exchanged between the Claimants and either Defendant before October.  At this point one of two things likely happened.  Either Mr. Trousdale became responsible to pay the Claimants because he was the one who ordered the work, or Mr. Trousdale told the Claimants that they would be paid by the Defendants, but the Claimants never bothered to confirm this with the Defendants.

[38]        Under these circumstances, no contract was entered into between the Claimants and either Defendant prior to October of 2011 because it has not been shown that there was ever an express agreement made directly between the Claimants and either Defendant that one or both Defendants would be responsible to pay the Claimant.

[39]        If there was an agreement on the part of the Defendants to pay for the Claimants’ work, it was on the basis of the agreement alleged by Mr. Bojechko in which he says that he was told by Mr. Toor, “finish the work and I’ll pay you.”  Mr. Toor denies that he ever said any such thing.  It was his evidence that the Claimants were to be paid by Trousdale Construction from the approximately $120,000 that he paid to them.

[40]        Determining who is telling the truth about this is difficult to discern for a number of reasons.  The Claimants never bothered to get this promise in writing, or record it in any other manner.  Mr. Trousdale was not called as a witness to shed any light on the matter.

[41]        There are collateral proven facts which support the version of both parties.  On the one hand, it is clear that by October 3, 2011, the Claimants knew from the letter received from McEwen and Company that Trousdale Construction was not going to willingly pay their bill.  This letter suggests that, up until that time, the Claimants did believe that their contract was with Trousdale and not with the Defendants.  Knowing that Trousdale was not going to pay them willingly, it seems unlikely that they would have continued to perform work on this job unless they had some assurance from the one or both Defendants that they would get their bill paid.

[42]        There are problems with this assumption however.  Firstly, the Claimants’ final invoice is for work performed between early September and early November of 2011.  It is unclear how much of that work was done before the Claimants received the letter from McEwan and Company, and therefore just how much work was actually remaining.  The Claimants have demonstrated a tendency to make assumptions about what was in the minds of other people.  Assuming that Mr. Toor made the statement “finish the work and I’ll pay you” as Mr. Bojechko alleges, was he agreeing to pay the entire bill or just the portion of the work that was required to finish the job?

[43]        Mr. Toor denies ever entering into any agreement to pay the Claimants directly for the work they performed.  He has consistently maintained that this was part of the work that he paid Mr. Trousdale for.  He testified that he paid Trousdale Construction $80,000 and then after a Builder’s Lien was filed against the title to this property, he paid Trousdale another $40,000.  This is corroborated in paragraph 7 of the affidavit of John Trousdale, which swears that after Trousdale Construction filed a Builder’s Lien, it was paid by the Defendants.  Trousdale Construction Ltd. filed a lien on this job, but for some reason the Claimants never did.  This, along with Mr. Bojechko’s evidence that he took his instructions from Mr. Trousdale and never from Mr. Toor, adds credibility to Mr. Toor’s assertion that his contract was with Trousdale Construction and that Trousdale in turn hired the Claimants.

[44]        The Claimants performed their services without the benefit of any sort of written contract.  Mr. Trousdale also states in his affidavit that his company “was engaged by the Defendants (“Imraj”) in a verbal contract to provide labour and materials on a cost plus basis for a commercial renovation.  There is some belief on the part of these parties that proceeding without anything in writing is somehow honourable.  In reality proceeding this way, when thousands of dollars are involved, is careless and foolish.  So called “verbal contracts” not only keep Small Claims Courts busy, but more importantly, they often give rise to misunderstanding, with both sides having a different belief in what was being agreed to.  In this case, the Claimants and Defendants have given different evidence on what precisely was agreed to between them.  Though both sides give differing versions, both are possible.  The lack of any sort of record and the passage of time has muddied the waters, making it virtually impossible to find where the truth lies.  The burden of proof rests with the Claimants to prove that he had a contract with the Defendants and not with Trousdale.  They have not done so and accordingly their claim based on contract must fail.

[45]        Even if no agreement ever existed between the parties, it is clear here that the Defendants received the benefit of the Claimants’ goods and services.  At issue is whether they have been unjustly enriched.  It is difficult to say if they have, or if they are being unfairly asked to pay for the same work twice.  The evidence shows that the Defendants did pay a significant sum of money to Trousdale Construction.  Mr. Toor’s evidence is that this included what was owing to the Claimants.  There is no evidence to contradict this.

[46]        Mr. Trousdale has sworn to something in his affidavit that is questionable.  He swears in paragraph 12 of his affidavit that at a Settlement Conference held on March 7, 2013 in Nelson Small Claims Court File 17184, the Honourable Judge Mrozinski of this court struck a portion of a claim brought by the Defendants against Trousdale that included the outstanding amount owing to the Claimants.  He swears that this was because of a finding made by Judge Mrozinski that his company did not engage the services of the Claimants.  No such finding of fact appears on the record.  It is presumptuous for the deponent of an affidavit to speak on behalf of a judge in the absence of a clear statement on the record showing that such presumption is true.  In this case, it is more likely that the portion of the claim in the Nelson case which related to the Claimants was struck because the Defendants had never actually paid the Claimants and therefore had not yet suffered this loss.  The statement sworn to in the affidavit is also contradicted by the evidence of Mr. Bojechko, who has sworn that Trousdale Construction did in fact engage the services of the Claimant.

[47]        To summarize the claim for unjust enrichment, it has not been proven, on a balance of probabilities, that the Defendants were unjustly enriched.  It remains a reasonable possibility that they did pay for the work they received, by paying the party they were dealing with, namely Trousdale Construction.  It seems odd that in 2011, a contract to build a walk-in cooler and a sales counter would cost $120,000 and would not include the refrigeration company’s services, especially where, as was the case here, the customer provided some of the equipment.  If the refrigeration work cost under $12,000, were the Defendants being charged over $100,000 to build a sales counter?  No one provided any sort of breakdown of the work or its cost.  It remains a reasonable possibility that Trousdale was paid, but never paid the Claimants.  It is also reasonably possible that Trousdale was responsible to the Claimants, based on the evidence of Mr. Bojechko that he took his instructions from Mr. Trousdale (and never spoke with Mr. Toor when the contract was formed) and on the evidence of Mr. Toor that he never authorized Mr. Trousdale to contract on his behalf.  It would unfair to find this as a fact however, without affording Mr. Trousdale the opportunity to testify, beyond just his affidavit.

[48]        With all of this in doubt, the Claimants have failed to prove that they had a contract with the Defendants or that the Defendants have been unjustly enriched.  Accordingly their claim is dismissed.

[49]        Even if the Claimants had been successful for all or some of their Claim, their claim for interest at 2% per month must also fail for many reasons.  Their invoice never claimed interest at 2% per month and as the authors of this document, any ambiguity in its construction must be interpreted against them.  In any event, here there clearly never was any agreement on the part of the Defendants to pay interest at such an exorbitant rate, or any course of conduct on the part of the Defendants from which such an agreement could be inferred.

[50]        It is also unclear how much of the work was performed before September 21, 2011, so it is not possible to decide if all or some of the Claim is also barred under the Limitation Act.

[51]        Both of the parties bear some responsibility for what has happened here, in carelessly thinking that proceeding without any sort of written agreement was somehow making things simpler.  Accordingly, neither side will be awarded any costs in this action.

[52]        For the foregoing reasons, the Claimants’ Claim against the Defendants is dismissed.  No costs are awarded to either party.