IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]         Ms. Gesner claims she contracted with Ms. Jennings in February 2022 to provide “permit ready” design drawings for a renovation of Ms. Jennings’ residence at 2472 Grant Road, Roberts Creek, British Columbia. Ms. Gesner asserts she delivered the drawings on September 29, 2022. Ms. Jennings paid the bills rendered by Ms. Gesner between May 9, and October 20, 2022, which totalled $14,279.27.

[2]         Several months later, in January 2023, Ms. Gesner sent a demand letter, together with a further bill for $39,905.45. The demand letter refers to a “10% fee of construction budget”. It also refers to a “signed contract” from August 8, 2022, for a fee of 10% for “Architectural” Design, and 3% for Interior Design. The reference to “Architectural” was subsequently struck out by Ms. Gesner in the copy she provided to the court and “RESIDENTIAL” was handwritten in. Ms. Gesner acknowledged at trial that the bill should have been for $36,680.73. The difference between the amounts related to expenses she said she incurred babysitting Ms. Jennings’ young child for a week or so.

[3]         The defendant, Ms. Jennings, disagrees with Ms. Gesner as to the terms of the contract. She submits they agreed Ms. Gesner would provide permit ready drawings for the renovation to her residence for a fee of $5,000. She further counterclaims against Ms. Gesner for not fulfilling the terms of the contract, as the permit department would not accept the drawings because the residence was within a designated “development permit area”, which imposed restrictions on any development. Ms. Jennings seeks return of the funds she paid to Ms. Gesner. Her counsel also seeks a penalty pursuant to Rule 20(5) as he submits that Ms. Gesner’s claim had no possibility of success.

[4]         Ms. Gesner testified that the Proposal is at Exhibit 11, Tab L. This document consists of a letter dated Feb 26, 2022, which says it attaches “a proposal based on the scope of work”. The attached pages seem to be a columned template with various headings. Most of the material appears to be general in nature; however, it is clear that information particular to Ms. Jennings’ residence has been inserted under certain headings.

[5]         Pertinent information in the document includes:

[6]         Ms. Jennings testified that she proposed that Ms. Gesner design the renovation for a fee of $5,000 as a discounted rate to give Ms. Gesner experience in the field, and meet Ms. Jennings’ limited budget. Emails exchanged between the parties include references to an hourly rate between $60 and $150. Other emails reference Ms. Jennings’ proposal that the fee was $5,000. On the other hand, Ms. Jennings paid the bills issued by Ms. Gesner between May 9, 2022 and October 20, 2022.  

[7]         Ms. Gesner submits that the fees are set out on the second page of the template referred to above, as, “typically based in the range of 10 – 12% of the construction budget. Hourly rate breakdown is $75 - $150/hr.”

[8]         Ms. Jennings testified that the contract never included any percentage fee. She produced an electronic document, very similar to the template pages described above, except that it is missing the reference to the percentage fee. Given the metadata, which shows when the document was created and last amended, I accept that this document is the original contract document provided to Ms. Jennings on March 1, 2022, and it did not include any reference to a percentage fee.

[9]         Ms. Gesner also relied on a letter addressed to Ms. Gesner from Ms. Jennings, dated August 8, 2022, in support of her submission that she was entitled to a percentage of the total value of the project. The letter referred to purports to be a “Verification of Employment for Ashley Gesner”. Ms. Gesner referred to it as a contract between her and Ms. Jennings. It states, in part, that Ms. Gesner will receive 10% of the construction budget for the architectural component and 2 – 3% for the interior design.

[10]      Ms. Jennings testified that in August 2022, Ms. Gesner requested Ms. Jennings prepare a letter as a favour, “for business lending purposes”, as she was having trouble securing a business line of credit. The messages between the parties support Ms. Jennings’ evidence that Ms. Gesner suggested the letter should “aim high” with respect to Ms. Jennings’ budget and Ms. Gesner’s “commission percentage”.  

[11]      I accept Ms. Jennings’ evidence that she was busy with work at the time and invited Ms. Gesner to prepare the letter for her signature. I find that it is not a contract, nor is it reflective of the agreement between the parties. I note that the letter goes on to describe phase 2, 3 and 4 of the project. Phase 2 describes “$500,000 CAD Barn, Equine facility, Sauna/spa, Auxiliaries dwellings” and I accept Ms. Jennings’ evidence that she never discussed or proposed such facilities.

[12]      While Ms. Jennings paid the bills submitted to her, she said she began to panic when they exceeded double the proposed cost. Again, the documents confirm this. On August 15, 2022, she emailed Ms. Gesner to express her concerns about the following:

[13]      On September 1, 2022, she again emailed Ms. Gesner raising concerns about the costs, as well as Ms. Gesner’s reference to “industry standard” in her statements of account. Ms. Jennings asked Ms. Gesner to stop work until they can discuss these issues and she feels more comfortable with the budget.  

[14]      I accept Ms. Jennings’ evidence that she followed up with a telephone conversation to clarify her concerns about the cost and the scope of work, including that she did not want Ms. Gesner sourcing appliances for her.

[15]      I find that the parties did not clearly define the terms of payment under the contract. Ms. Jennings acknowledged this in the course of the trial when she testified that as the costs mounted she felt embarrassed about letting it get out of control. Nonetheless, Ms. Jennings acquiesced to paying the fees on an hourly rate as billed between May 9 and October 20, 2022. I further find there is no evidence of a term of the contract for payment on a percentage of the value of the proposed work. In the result, I find I must dismiss Ms. Gesner’s claim for payment on a percentage basis.

[16]      Ms. Gesner testified that she submitted permit ready drawings to Ms. Jennings on September 29, 2022. At trial, she referred to that as “completing the task”. As noted above, Ms. Jennings attempted to submit the plans to the Planning Department; however, they refused to accept them. The problem was that three-quarters of the residence and much of the property lies within a development permit area because it is near a creek. This is a regulated area, which requires a special application to ensure that sewage facilities are equipped to deal with the demand placed on them in the event of flooding.

[17]      Ms. Jennings testified that in order to proceed with her development application, she would first have to upgrade her sewer system, which would cost as much as her budget for the entire renovation. She has been unable to proceed because she does not have the funds to undertake the preparatory work necessary before she can even begin the renovation.

[18]      I find that the terms of the contract anticipated arriving at a “project that is uniquely suited to the client, site, climate, context and culture”. It included a “Pre design phase” which included:

[19]      Counsel for Ms. Jennings submitted the British Columbia Regulations under the Riparian Areas Protection Act. This statute provides directions to local governments, including the Sunshine Coast, regarding any residential development in riparian assessment areas over which local governments have power. Local governments must restrict development in those areas through their local zoning bylaws by requiring special approval or by implementing a rules-based scheme that prohibits development unless there is compliance with an assessment report.

[20]      I find that Ms. Gesner provided assurances to Ms. Jennings that Ms. Gesner had professional supervision, for which she billed Ms. Jennings. Mr. Robins, Ms. Gesner’s informal mentor, testified that it is his practise to consider development permits at the beginning of a job and certainly, by the time of the drawing stage. However, it is evident that Ms. Gesner and her architectural advisers did not consider it in this case at any stage.   

[21]      I find it was reasonable for Ms. Jennings to rely on Ms. Gesner to determine whether there were any factors related to the property, which would frustrate the entire project. This applies particularly to those factors relating to zoning, Municipal Code, or environmental factors, specifically referred to in the pre-design phase of the contract, and included within the first eight hours of the project’s scope.

[22]      I also note that Ms. Jennings and Ms. Gesner became friends during the time they worked together. Ms. Gesner even babysat Ms. Jennings’ child, so they were quite familiar with each other’s circumstances. Although Ms. Gesner asserted during the trial that Ms. Jennings was a “venture capitalist”, and suggested she was a sophisticated client, I find that this is not an apt description of Ms. Jennings’ circumstances. Ms. Jennings describes herself as a single mom who works hard to support her child. The home, itself is a small, unassuming house, and the proposed renovation was not ambitious or extravagant, as suggested by Ms. Gesner.

[23]      Given that I have found the following facts:

[24]      I find that the services provided by Ms. Gesner did not have any value to Ms. Jennings. As in the case of Chan v. Wong and Westshore Aluminium Ent. Inc., 2008 BCPC 24, I find that there was a complete failure of consideration.

[25]      In the result I find that Ms. Jennings is entitled to a return of her fees paid. Ms. Gesner will refund Ms. Jennings the sum of $14,279.27.  

[26]      My findings, above, are in part a result of my assessment of the reliability and credibility of the witnesses that testified, and in particular, Ms. Gesner and Ms. Jennings. Credibility is primarily concerned with the truthfulness, reliability and accuracy of a witness. It involves an assessment of the trustworthiness of a witness’ testimony based upon the accuracy of the evidence that the witness provides. Reliability has to do with the ability of a witness to observe, comprehensively recall, and testify about the events in question.

[27]      In assessing the credibility and reliability, the case of R. v. Parent [2000] B.C.J. No. 2772 sets out the main factors to consider. Relevant to this case are the following:

[28]      I have considered all these factors in assessing the testimony of the witnesses.

[29]      There were a number of issues raised with respect to Ms. Gesner’s credibility and reliability. The most concerning related to inconsistencies with her own or other reliable evidence.

[30]      Ms. Gesner’s use of the designation “architect” is also the subject of significant inconsistency in her evidence. For example:

[31]      The evidence raised concerns about Ms. Gesner’s memory and her ability to recall and describe the events accurately. For example:

[32]      There were many times when Ms. Gesner’s responses to questions did not accord with common sense. For example:

[33]      Finally, Ms. Gesner was a difficult witness under cross-examination. The court had to caution Ms. Gesner that her role was to answer the questions asked of her, or risk the court drawing adverse inferences against her interests. Ms. Gesner was unable to heed this warning and on many occasions gave non-responsive or tangential answers to questions.

[34]      Ms. Jennings presented her evidence in a calm, straightforward manner. She seemed to have a good recollection of the events and was frank about any limitations in her memory. Her evidence was consistent with the records produced by both parties and she was consistent in giving her evidence in direct and in cross-examination.

[35]      While Ms. Jennings asserted that she intended to hire Ms. Gesner for $5,000, she also took some responsibility for the fees ballooning out of control. On the other hand, she was clear in her expectation that she was paying for services that would have some value to her. She expected to receive drawings that she could submit for a permit in support of her renovation.

[36]      Ms. Jennings was not significantly challenged by Ms. Gesner on her version of the events. Overall, her evidence made sense.

[37]      Both Mr. Anthony Robins and Mr. Wesley McAuley acknowledged they were informal mentors to Ms. Gesner. Both also acknowledged that given the informality of their roles, their recollection was not very good. Mr. Robins, in particular, acknowledged that he was having significant difficulties with his memory to the extent that he was considering retirement as a result.

[38]      Mr. McAuley testified that his recollection was not complete and that he did not recall the details of his conversations with Ms. Gesner about the project.

[39]      Both professionals also acknowledged they did not know any details of the terms of the contract between Ms. Gesner and Ms. Jennings, which limited the value of their evidence as to the nature of the services provided.

[40]      Ms. Gesner sought to elicit their opinions about her work at trial, despite being warned at the Pre Trial Conference that she would not be permitted to do so unless she presented an expert report, in accordance with the Rules of Court. She elected not to do so, so I can give only limited weight to any of the opinion evidence volunteered by these witnesses.

[41]      Finally, both of these witnesses were clearly very fond and supportive of Ms. Gesner. This was evident in their apparent reluctance to say anything negative about her. For example, it was put to Mr. Robins that Ms. Gesner sent a text to Ms. Jennings, stating, “having a principal with his experience allows me the confidence to execute plans and respond to your questions with more accuracy”. Counsel for Ms. Jennings suggested to Mr. Robins that the reference to him as Ms. Gesner’s principal implies he was acting in a formal supervisory role to her. Mr. Robins replied that he interpreted that reference to refer to him as the boss of his firm, not Ms. Gesner’s principal. Ultimately, he agreed one could possibly interpret it to suggest an official relationship, although he suggested it was vague.

[42]      Likewise, Mr. McAuley testified that he would call a Bachelor of Environmental Design an Architectural Degree, although he stated he would “put it this way – you still need a Masters of Architecture”.

[43]      Mr. Juan Matias Rocha Jaje did computer, administrative and security work for Ms. Gesner and did not have anything helpful to add.

[44]      Rule 20(5) authorizes a judge to order a party to pay up to 10% of the amount claimed or the value of the claim or counterclaim if there was no reasonable prospect of success.

[45]      Given that Ms. Gesner’s claim depended on:

[46]      I find that it is appropriate to assess a penalty against Ms. Gesner for 10% of her claim which amounts to $3,500.

[47]      In the result, Ms. Gesner must pay to Ms. Jennings the total amount of $14,279.27 + $3,500.00 = $17,779.27 plus filing fees of $206.00 for a total of $17,985.27.