IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]           In November 2016, the Claimant, Accutemp Refrigeration, Air-Conditioning & Heating Ltd. (“Accutemp”), completed the installation of HVAC systems in two restaurants owned by the Defendants Tung and Sidhu Holdings Ltd., and Tung and Sidhu Ltd. (referred to collectively herein as the “Defendants”). The Defendants, were unsatisfied with some of Accutemp’s work and sought repairs. Accutemp, represented in this trial by Scott Krafte and Rob Masztalar, reluctantly agreed to address the Defendants’ concerns though it does not agree its work was deficient. It was, Mr. Krafte testified, more about keeping the customer happy.

[2]           Though Accutemp invoiced the Defendants for its work in November 2016, the Defendants have yet to pay Accutemp fully. The Defendants acknowledge they still owe Accutemp something slightly less than $40,000. While not disputing the bulk of the monies claimed by Accutemp, the Defendants seek a set-off of whatever amount remains owing against what they say are their costs arising from the late delivery of the services contracted for, costs related to faulty installation, including spoiled food, mental anguish, and a leaking roof. The Defendants’ counterclaim more than offsets the claimed amount, but for the question whether Accutemp is entitled to its contract interest over and above the claim limits that are recoverable under the Small Claims Act, RSBC 1006, c. 430.

[3]           As this brief summary evidences, this case raises several issues. The first is whether the Defendants have proven all or any part of their counterclaim. Secondly, Accutemp’s claim to interest over and above any amounts this Court may find owing to it under contract, raises the question whether interest in s. 3(1) of the Small Claims Act, is limited to court ordered interest only, or whether it can include contractual interest as well. If Accutemp is successful on this point, it seeks an order totalling $59,665.45.

[4]           Accutemp is in the business of installing refrigeration, air conditioning and heating units both in residential and commercial buildings. It is owned and operated by Fraser Valley Refrigeration, a company operating in the lower mainland for over 50 years. Accutemp has been operating for some five years here on Vancouver Island. Mr. Krafte, a 30 year employee of Fraser Valley Refrigeration, and now also of Accutemp, testified that there is no job too big or too small the company will not take on.

[5]           In the fall of 2016, Accutemp bid on the installation of HVAC systems in two restaurants owned and operated by the Defendants. Both were Pizza Hut outlets: one in Sidney, the other in Brentwood Bay. At least one of the Defendants, Jasdeep Sidhu, also operates a Pizza Hut location in Delta, BC.

[6]           Accutemp offered two proposals to the Defendants. The first, entitled “Proposal #1” set out a price for the installation of the HVAC system in the Sidney restaurant in the amount of $60,500, plus GST (the “Sidney Contract”). The second, a proposal for a similar but not identical installation in the Brentwood location, in the amount of $61,750, plus GST (the “Brentwood Contract”). Both proposals were accepted and signed by all the parties herein (referred to collectively hereafter as the “Contracts”).

[7]           There is no evidence in this trial as to when exactly the work started on either the Sidney Contract or the Brentwood Contract. It is apparent that work started on the Sidney location first, and that work on both sites was completed before the end of November 2016. Accutemp invoiced the Defendants for the Sidney Contract on November 29, 2016 (“Invoice #2446”) and for the Brentwood Contract (“Invoice #2447”) on December 2, 2016.

[8]           Accutemp’s installation work did not go exactly as either of the parties expected. The Defendants point out that the work was not finished on the dates agreed upon. Accutemp agrees but submits it was slowed down by the disorganized state of each of the Defendant’s two construction sites, and because the ceiling in the Brentwood location was raised contrary to the engineered plans. This latter fact caused Accutemp to carry out extra work, at no cost to the Defendants. It made the installation at Brentwood much more time consuming at the least. Although there was a significant change in the site between the signing of the two Contracts and the commencement of work, Accutemp proceeded nonetheless. There is evidence that Accutemp made up for lost time by having its tradespeople work nights and weekends. Accutemp’s workers say they did so at the behest of Mr. Sidhu. Mr. Sidhu does not agree, though what Accutemp’s workers say makes sense. On the whole of the evidence, though there were complaints about delay during construction, I am satisfied that both parties, though acknowledging Accutemp would not meet its proposed dates for completion, were content to carry on with the Contracts.

[9]           Once the restaurants opened, the Defendants did express concern about indoor temperatures, and the location of at least two diffusers. The Defendants blamed their temperature problems on the HVAC system installed by Accutemp. They also complained about a water leaking in from the roof of their Brentwood location.

[10]        Because of these concerns, the Defendants held up payment on the Contracts. Accutemp then ultimately brought these two small claims actions, one for each of the two Contracts, claiming a total of $39,125 owing between the two. I accept the Defendants’ submission that as a practical matter, they have paid out the Brentwood Contract in full. This fact has minor implications for costs, which I will address at the end of these reasons.

[11]        As Mr. Jasdeep Sidhu testified at trial, the Defendants do not seriously dispute Accutemp’s claim for monies owing on their work in the amount of $39,125. There is a minor dispute totalling no more than $1,500 regarding a damaged hood, but fundamentally the Defendants accept Accutemp’s monetary claim. The Defendants submit that despite owing this money, the faults they have identified in Accutemp’s HVAC installation work have caused them to lose much more money. For that reason, they have filed a counterclaim on each of the claims seeking by way of set-off all the money owing to Accutemp. At issue in this trial therefore is whether the Defendants have proven all or even part of their counterclaim for damages.

[12]        To determine the Defendants’ various counterclaims for damages, this Court must be satisfied, on balance of probabilities, that the Defendants have shown a loss arising out of conduct for which the Claimant, Accutemp, must be held liable. In a text on contract law, authors Angela Swan, Nicholas Bala and Jakup Adamski put it this way at page 155 as follows:

[13]        In this case, the Defendants seek damages for breach of contract arising out of Accutemp’s failure to complete its installations at both restaurant locations on the date proposed in each of the two Contracts. The Defendants maintain that Accutemp was contractually obligated to finish its work on the Sidney location by November 6, 2016, and on the Brentwood location by November 20, 2016. The failure to do so, the Defendants submit, cost them a loss of profit as they had expected to be open before December 3, 2016 at both locations. On the evidence, neither restaurant was complete until the end of November 2016. Assuming the Defendants prove a breach of contract, it must still be determined whether they have proven their damages. According to the counterclaims filed in each of these matters, the Defendants seek damages in the amount of $10,000 for each restaurant arising out of this alleged delay.

[14]        The Defendants also maintain that Accutemp did not install the duct work in either location in accordance with engineered plans. As such, various diffusers shown in the plans were not installed either at all, or in the locations shown on the plans. The Defendants maintain Accutemp was contractually obligated to install the duct work in accordance with its engineered plans. Failure to do so, the Defendants submit, constitutes a breach of contract for which they seek damages both for loss of profit, and for food loss which they allege occurred because of improper duct installation which required repairs.

[15]        The Defendants seek damages in the amount of $5,000 for the costs of repair to the HVAC system at the Brentwood location, as well as $14,773.50 for the cost of spoiled food. They seek damages in the amount of $2,500 for repairs to the Sidney location, and $1,500 for a stove hood replacement. They make a claim for the cost of food damage at the Sidney location totalling $15,361.50.

[16]        The Defendants also seek damages for mental harassment and punitive damages in the amount of $5,000 for having to deal with these contractual issues and Accutemp’s demand for payment of its invoices.

[17]        Finally, the Defendants maintain there remains a leak in the roof of their Brentwood location, caused by Accutemp’s faulty installation of its duct work, that needs repair.

[18]        Each of the proposals submitted by Accutemp and later signed by the Defendants, include a reference to a completion date. Accutemp did propose to complete installation at the Sidney location on November 6, 2016 and at the Brentwood location on November 20, 2016.

[19]        Mr. Sidhu testified that the evidence at Tabs 11 and 12 of the Defendants’ Book of Documents, marked as Exhibit #2 in the trial, are evidence of delay on the part of Accutemp. Tab 12 is, I find, of no assistance. Tab 11, though it is hearsay, is an email dated November 3, 2016 written by someone who was obviously a contractor on the project complaining that Accutemp’s sheet metal worker did not attend at what looks to be the Sidney site. This in turn, the writer continues, has caused delay for one of his tradesmen. There is a threat to pass any costs associated with the delay onto the Defendants but as Mr. Sidhu testified, it was just a threat.

[20]        While the email clearly suggests some delay on the part of Accutemp, it falls well short of proof on balance that this in turn caused a delay in the opening of either of the Pizza Hut locations. For that to be the case, this Court would need some evidence of the overall construction schedule. Did Accutemp alone cause the schedule to collapse? It is impossible to say on the evidence. As an example, Mr. Sidhu agreed on cross-examination that he was unaware when the site was ready for Accutemp to start its installation. Despite the content of the email at Tab 11, Mr. Sidhu had no idea when that contractor got on the site, or when they supplied the roof curve necessary for Accutemp to begin its work.

[21]        I accept that Accutemp did not install the HVAC systems on the dates set out in the Contracts. Acknowledging that fact, Accutemp submits much of the blame lies with the Defendants.

[22]        Andrew Thompson, Accutemp’s estimator on the project, testified that the change in ceiling height from that shown on the engineered plans which had informed his estimate, as well as the difference of the roof line at the Sidney location relative to building plans, caused the work schedule to be pushed back. Additionally, Accutemp points to the lack of organization at both sites as contributing to a work slow down.

[23]        Mr. Krafte, Daniele Fontaine, a journeyman refrigerator mechanic for Accutemp, and Howie Morris, Accutemp’s sheet metal subcontractor, all testified that the construction sites were disorganized. David Cram, a sheet metal journeyman with Fraser Valley Refrigeration, gave similar testimony. To the extent there was a general contractor, it appeared to Accutemp’s trades to be Mr. Waldemar Sloninia, a carpenter of long association with the Defendants. Mr. Sloninia, whatever his formal role, was a constant presence at both the Brentwood and Sidney sites.

[24]        Both Mr. Fontaine and Mr. Morris testified that the Defendants – represented, to their knowledge, by Mr. Sloninia – decided to raise the ceiling some nine inches at the Brentwood location. It made the installation of duct work much more difficult for Mr. Morris, and more costly for Accutemp. I accept Mr. Morris’ evidence that the raising of the ceiling at Brentwood made it impossible to install the duct work in accordance with the engineered plans. For Mr. Fontaine, the decision to raise the ceiling forced him to re-do some of his gas pipings, as well as some other additional work.

[25]        Mr. Sloninia testified that he was not acting as general contractor for the Defendants, whatever may have been the impression of Mr. Fontaine and Mr. Morris. Moreover, Mr. Sloninia denied the ceiling had been raised at the Brentwood location in a manner that did not accord with the engineered plans. That evidence is entirely inconsistent with the bulk of the evidence in this trial that I do accept. The position the ceiling was inconsistent with the plans was maintained by Accutemp throughout lengthy discussions with the Defendants, and their plan designer, Mr. Avi Singh, P. Eng. At no time did anyone, including Mr. Singh, contradict Accutemp’s basic view. It was, for example, the main reason Accutemp refused to pay to lower the ceiling once the Defendants complained of the location of the duct work. Far from challenging Accutemp’s position, Mr. Singh is said to have paid for the cost of lowering the ceiling himself.

[26]        This is not clear evidence of Accutemp’s position, but the balance of the evidence does support its argument that the ceiling was raised in the Brentwood location, of that there is no doubt, and that the engineered plans had proposed a ceiling lower by some nine inches, leaving reasonable room for duct work.

[27]        I accept that the disorganization of the construction site, coupled with the decision to raise the ceiling at the Brentwood location, caused the proposed work schedule to be pushed back. Despite the change in plans, Accutemp continued to work on both sites, at some additional cost relative to the contracted prices. Up until Accutemp brought these legal actions, and certainly at the material time, it appears that all parties accepted this altered schedule and moved as quickly as possible in the circumstances to complete the work.

[28]        There is, in this case, insufficient evidence to establish on balance that by not completing installation on the dates proposed, Accutemp caused a delay of the opening of the two restaurants. The witness most likely to provide such evidence, Mr. Sloninia, testified he did not know the cause of the delay. Specifically, he was not prepared, he testified, to attribute any delay in the construction work specifically to Accutemp. For all these reasons, I find the Defendants have failed to show a causal connection between Accutemp’s failure to complete installation on the proposed dates, and the opening dates of either restaurant.

[29]        Alternatively, even assuming Accutemp’s failure to complete installation at either site on the dates proposed is shown to have been the cause of a delay in restaurant operations, there remains the question of damages. This Court can accept that a delay in opening would lead to some financial consequences. The question is what those would be. In his testimony, Mr. Sidhu introduced into evidence two documents titled “Tung and Sidhu Ltd. Period Sales.” On one was written the word “Sidney” and on the other the word “Brentwood.” Across the top of each is a two line chart setting out various numbers under categories such as “Royalty Sales”, “Deposits” and so forth. Mr. Sidhu testified to receiving these two documents from his bookkeeper. They are, he testified, proof of the business losses suffered by the Defendants as a result of the late opening of each of the two restaurants.

[30]        The documents, entered as Exhibit 5, show royalty sales for each of the Sidney and Brentwood locations for 90 days, commencing opening day, December 3, 2016. The royalty sales number reflects the figure on which the Defendants must pay royalties to Pizza Hut. Based on those royalty numbers, Mr. Sidhu calculated that the Defendants’ profit over three months, or 90 days, would total some $10,000 to $12,000 a month for the Sidney location, and some $8,000 to $10,000 per month for the Brentwood location. Using the lower numbers, the Defendants seek damages for loss of profit for one month at Brentwood totalling $8,000 and one month at Sidney totalling $10,000. This, despite their counterclaim which seeks $10,000 per month at each location.

[31]        Accutemp objected to the admissibility of these two sheets, entered as Exhibit 5, on the grounds they demonstrated little or nothing in terms of actual profit realized by the Defendants. I allowed the document in as evidence though I attribute to it little weight given the deficiencies identified by Accutemp. At best, Exhibit 5 provides the starting point for a calculation of the actual profits of the Defendants in these two locations over a 90 day period.

[32]        The Defendants have offered no more than a guestimate of what they might have lost in profit had the restaurants been open sooner. It is not sufficient proof of actual damages. Still, there is another much more significant problem with this damages claim of a loss of one month’s profit at each of the restaurants. Accutemp proposed to install its HVAC system in Brentwood by November 20, 2016. After the installation, other contractors would have needed additional time to finish their work. Mr. Sloninia testified that he needed about seven days after Accutemp to complete his work. In the result, given the Brentwood location was operational and apparently making a profit by December 3, 2016, there would be no basis to award the Defendants one month’s loss of profit at this location. Assuming everything went perfectly for Mr. Sloninia and others, and had Accutemp installed on or before November 20, 2016, the Brentwood location could not have opened much before December 3 in any event. The Court could speculate that perhaps Accutemp caused a delay of some three days, but it is just guesswork. In my view, the Defendants have not proven a loss of any profits at their Brentwood location arising out of Accutemp’s work.

[33]        Similar concerns arise with respect to the Sidney location where Accutemp proposed an installation date of November 6, 2016 It invoiced for the work on November 29, 2016 meaning it had completed installation by then at the latest. As with the Brentwood location, Accutemp would not have been the last contractors on site before opening. Rather, more time would be needed by others. This fact suggests Accutemp completed its work even before November 29, 2016; an assumption strengthened by the Defendants’ evidence that both restaurants were complete by the end of November 2016. If there is any loss of profit at the Sidney location arising out of Accutemp’s failure to complete its HVAC work by November 6, 2016, it is far short of one month.

[34]        This claim for damages seems to have been a poorly considered, almost reflexive response to Accutemp’s demand for payment. I find nothing in the evidence to justify an award in damages for loss of profit arising out of a breach of contract. I find, as I have noted, no causal link between the breach (assuming, for the sake of argument, Accutemp’s failure to install its HVAC systems in the locations before the proposed dates is a breach) and any damages suffered by the Defendants. I would dismiss this part of their counterclaim for all these reasons.

[35]        In addition to the claim for damages for delayed openings, the Defendants seek substantial damages for what they claim are the costs of the repair of faulty installation by Accutemp of its HVAC systems, as well as the cost of food spoiled by this alleged faulty installation. Again, if Accutemp is to be held liable for these damages, the Defendants must show, on balance, the systems installed by Accutemp were faulty, and that these faults caused the damages alleged.

[36]        The Defendants called no opinion evidence to support this claim. Rather, their claim seems to be based on the following: first, that Accutemp did not install its duct work and diffusers as provided in the engineered plans utilized by, among others, Mr. Thompson in his estimate. Secondly, that the temperature inside both restaurants was sometimes too high, certainly for the effective operation of a pizza restaurant. Thirdly, that one of the diffusers was located above the make-table at the Brentwood location, causing the toppings to dry out.

[37]        Fundamentally, the Defendants blame a number of problems in both restaurants on the location of the diffusers and duct work. As Mr. Sidhu put it in evidence “we figured out that placing different ducts different places where it was supposed to be, but Howie just put one big duct in there and that was it. Due to that, everything was falling apart… the same thing happened in Brentwood….”

[38]        Without question, in the first 12 months following the installation, Accutemp received complaints from the Defendants about the air and temperature in their restaurants, as well as a leak in the roof of the Brentwood location. As Accutemp had not been paid, Mr. Krafte was weary about the kind of work he was prepared to do to address the Defendants complaints, aside from warranty work. Moreover, Mr. Krafte did not agree the problems identified by the Defendants were caused by faulty installation or by Accutemp’s work at all.

[39]        It is the case that Mr. Morris did not install the diffusers according to the engineered plans. He testified that at the Brentwood location, it was not possible to install according to the plans because of the raised ceiling. Mr. Morris recalled the Sidney site going well, though he installed only two of the four diffusers shown on the engineered plans. Again, it was what he could do properly in the circumstances. Mr. Morris knew his work would be inspected by an engineer and if it was found wanting, he would have to fix any deficiencies. In this instance, his work at both sites was inspected by Mr. Singh, who subsequently certified the work.

[40]        As the Defendants continued to complain to Accutemp particularly about the Brentwood location, Mr. Krafte maintained it was not possible to install other diffusers in that restaurant because of the height of the ceiling. Ultimately, Mr. Singh, who tried unsuccessfully to broker payment by the Defendants in favour of Accutemp, paid to have the ceiling lowered. On the promise of payment on both Contracts, Mr. Krafte had Accutemp go back in and reinstall ductwork and diffusers in accordance with the original plans, at no cost to the Defendants. Still, the Defendants did not fully pay on the Contracts.

[41]        Mr. Sidhu questioned a number of witnesses at length concerning the potential impact of substituting one air diffuser for four on the overall operation of the HVAC system. In the end, Mr. Sidhu got no agreement from any of the witnesses that the installation was faulty, or done in such a manner as to cause the problems experienced by the Defendants. Rather, the evidence suggests the installation was done correctly, albeit not as shown on the engineered plans. Mr. Singh signed off on Accutemp’s installation at both sites by completing a Schedule C-B, Assurance of Professional Field Review and Compliance.

[42]        As Mr. Daniel Jones, building official for the Town of Sidney testified, a Schedule C-B document from a professional engineer is a statement that the work is complete and that it meets the requirements of the building code. Moreover, throughout the next year or so during which Accutemp sought payment and the Defendants sought re-dress for their complaints, Mr. Singh worked unsuccessfully to bring the parties together and to get Accutemp paid.

[43]        Mr. Sidhu also questioned witnesses extensively regarding air balance yet two air balance reports were completed, one for each location, in December 2016, and no deficiencies or issues were identified.

[44]        Accutemp did work with the Defendants for some time to try to address their complaints without accepting responsibility for any faulty installation. In addition to reinstalling duct work at its own cost after the Brentwood ceiling was lowered, Accutemp tried to address the temperature problem at the same location. On June 4, 2017, Accutemp’s workers found loose wiring in the breaker panel which was corrected. I have no difficulty with Mr. Krafte’s testimony that a loose wire in the breaker panel has nothing to do with HVAC installation. Other work, described as warranty work, was conducted at the Sidney restaurant in January 2017, and it appears to have resolved temperature issues at that location.

[45]        While Accutemp did re-install duct work at the Brentwood location after the ceiling was lowered, it refused to carry out any alterations to its installation at the Sidney location because, as Mr. Krafte put it, Accutemp hadn’t been paid. Mr. Sidhu testified that ultimately Mr. Singh hired contractors to “install proper duct work” at the Sidney location although as Mr. Sidhu also testified, he did not know what the repairs were as they cost him nothing.

[46]        Clearly, the Defendants expressed dissatisfaction with Accutemp’s work after December 2016. They identified issues around temperature and the direction and flow of air in each of the restaurants, both of which they thought were related to the location of diffusers, or to the absence of diffusers. In this trial, the Defendants have not proven on balance that any of these issues were caused by negligence on the part of Accutemp, or by a breach of contract. As an example, the Defendants point out that the duct work was not installed as per Mr. Singh’s engineered plans. I am not satisfied that Accutemp was contractually bound to install the duct work in accordance with those plans. There is, for example, no such term in either Contract. Moreover, Mr. Singh signed off on Accutemp’s work; a fact that supports Accutemp’s position the work was done properly, and in accordance with the building code. As for the claim in negligence, there is no evidence on which I could conclude the work done by Accutemp fell below industry standards. To the extent issues arose, such as temperature problems, those were addressed. Accutemp never conceded the temperature issues were caused by faulty workmanship on its part, and the Defendants herein have not proven on balance Accutemp was responsible for these issues.

[47]        The Defendants have not made out a case in either professional negligence or breach of contract regarding the installation of the HVAC system by Accutemp. In the result, their claim for damages for cost of repair and spoiled food is denied.

[48]        The Defendants also seek damages for mental harassment, and punitive damages in the amount of $5,000. This, as I understand Mr. Sidhu’s evidence, is based largely on the fact that Accutemp has aggressively and relentlessly sought payment for all of its work. This includes, for example, an instance where Mr. Thompson told the Defendants’ Brentwood landlord that Accutemp had not yet been paid for its work.

[49]        Damages for mental harassment, as the Defendants have phrased it, and punitive damages are quite distinct. As Judge Skilnick writes in Klaus and Klaus v. Taylhardat, 2007 BCPC 21, at paras. 5 to 8, it is necessary to bear in mind the distinction between mental harassment, which I will categorize here for ease of references as “emotional stress” and punitive damages. In cases involving emotional stress, damages may be awarded if a tort is made out and the claimant shows they suffered an emotional trauma that manifests itself in a physical disorder or illness. Similar damages can be awarded for breach of contract, but only if it is shown an important part of the contract relates to peace of mind and the contrary occurs.

[50]        In this case, though there is unquestionably hostility between the parties in this trial, nothing in the evidence before me justifies an award in damages for emotional distress. There is no proof of, or even a suggestion of a physical disorder or illness arising out of the efforts of Accutemp to get paid for its work. The only evidence of the Defendants’, given by Mr. Sidhu, provides no basis for such an award, though I accept he has found this process stressful. As for contract, the Contracts at issue in this case are in no way “peace of mind” agreements such that any damages must be awarded for their breach, assuming, again for the sake of argument, a breach has been made out.

[51]        Punitive damages are distinct from other heads of damages in both tort and contract law in that they are intended to punish a wrongdoer for egregious conduct and provide additional deterrence. As Justice Skilnick writes at para. 8 of Klaus:

[52]        As with the claim for damages for emotional distress, there is no evidence in this case to support a claim for punitive damages. Whatever Accutemp is said to have done to pursue payment on its Contracts, the conduct falls far short of the standard necessary for an award of punitive damages.

[53]        Both parties agree that there was a water leak complaint at the Brentwood location. Mr. Krafte for Accutemp visited the site to determine the source. As he testified, he looked up into the duct work and satisfied himself that the insulation above the duct was not wet. In the result, Mr. Krafte formed the view the leak was a roofing problem. He testified the parties agreed that a roofer would then come, examine the leak, and if it was determined the leak was a result of the duct work, Accutemp would pay for repairs.

[54]        Even though a roofer attended at the Brentwood location and subsequently did give the opinion that the leak was coming through the duct work, Mr. Krafte was unpersuaded. He testified that, as the roofer suggested, Accutemp tarped its duct work on the roof of the Brentwood location and yet the leak continued. In the result, Mr. Krafte is convinced the source of the leak cannot be the duct work. As I understand the evidence, Accutemp remains prepared to pay to have the leak repaired provided it can be satisfied of the source.

[55]        At the end of the third day of trial, the parties agreed Accutemp could attend at both the Sidney and Brentwood locations to examine various issues that had arisen during trial. In particular, Accutemp was to try to isolate the source of the leak at the Brentwood location. On the last day of trial, Mr. Masztalar testified as to his site visit to each location. It had, he testified, taken some time to set up a visit. When the appointed day came, Mr. Masztalar was given from 10 a.m. to 11 a.m. to see both stores. He testified he tried to take photographs at the Sidney location but Mr. Tung grabbed his camera. It did not go well. The parties then drove to the Brentwood location where Mr. Masztalar was allowed to look above the ceiling tiles. He testified he saw dark stains eight to 10 feet away from the duct work and consequently formed the view the leak was most likely sourced somewhere away from the duct work. Mr. Tung did not accept the suggestion. Mr. Masztalar was then ushered out of the restaurant at 11 a.m. so as to enable it to open, though other contractors were allowed to remain.

[56]        This last site visit did not, unfortunately, accomplish what the parties and the Court had hoped would be the resolution of at least one issue: that being the leak. As the source of the leak remains unproven, and there is consequently no estimate of damages, there is nothing this Court can do by way of an order to resolve this matter. It remains for the parties to determine the source of the leak and if it is shown to be related to Accutemp’s duct work, Accutemp agrees to bear the cost of repair.

[57]        For the reasons given, I find the Defendants have not made out their counterclaim for damages. While I accept a delay in opening the two restaurants would have resulted in some financial loss, the Defendants have failed to prove on balance that any delay was caused by Accutemp, though I accept that Accutemp did not install the HVAC systems in either location on the dates proposed. Moreover, I am not satisfied the Defendants have proven the quantum of damages they allege to have suffered as a result of any delay.

[58]        Additionally, the Defendants have not proven on balance that Accutemp was negligent in the installation of any or all of the HVAC systems in either location, or that it breached any contractual obligation by failing to install the systems as shown on the engineered plans. Finally, while the Defendants have claimed damages for mental distress as well as punitive damages, the facts in this trial fall far short of support for either claim.

[59]        There remains the issue of the leaking roof. At present, the Defendants have not shown that Accutemp’s installation is the source of the leak at the Brentwood location. As I understand the matters, Accutemp remains prepared to pay for the repairs of the leak assuming it can be satisfied the leak is caused by its installation.

[60]        Having dismissed the whole of the Defendants’ counterclaim, I now turn to the question of what is owed to Accutemp.

[61]        Accutemp seeks payment for work performed under contract totalling $39,125.00. I have determined that this reflects the remainder left over after the Defendants’ down payment on the Sidney Contract is deducted. As I noted earlier in these reasons, while Accutemp has, in filing these two claims, tried to divide the monies owing between the two Contracts, I am satisfied on the evidence that the Defendants have paid the Brentwood Contract in full. If any interest is owed, it is on the Sidney Contract from the date Invoice #2446 was issued on December 2, 2016.

[62]        In the correspondence between the parties entered into evidence in this trial, the Defendants questioned the $39,125.00 figure, arguing that from it had to be deducted a total of $1,500 – a credit for a hood damaged by Accutemp’s contractors during installation. In reply, Accutemp’s position, again in the correspondence, is that it had promised a $500 credit for the hood. Accutemp seems to have agreed with Mr. Singh, it would accept payment in the amount of $38,825.

[63]        At trial, the Defendants gave no evidence concerning the hood or the credit. In the event, I am left with nothing other than Accutemp’s own evidence, which I have just referred to above. Given Accutemp’s concession to Mr. Singh by email dated March 14, 2018, I would award Accutemp damages in the amount of $38,825. This makes little difference given the Small Claims monetary limit. It could, however, have bearing on Accutemp’s claim for contract interest at 18% per annum.

[64]        Accutemp claims not only payment for outstanding amounts owed on the Sidney Contract, but also interest at the rate of 18% from the date it issued its invoice. If successful, Accutemp seeks an overall award in the amount of $59,665.45. Accutemp submits that the Small Claims Act provides for the payment of interest over and above this Court’s monetary limit. It relies on s. 3(1) of the Small Claims Act which provides as follows:

[65]        As all of the parties in the matter acknowledged at trial, the amount prescribed by Small Claims Court Monetary Limit Regulation 179/2005 is $35,000. Knowing it was open to either to proceed to Supreme Court to seek a greater amount, the parties opted to continue in this Court.

[66]        Accutemp argues that s. 3 of the Small Claims Act enables it to recover the debt it says remains owing on the Sidney Contract, and, in addition, to recover, outside of this Court’s monetary limit, the interest alleged to be owing on that debt. Accutemp relies on the wording of s. 3, particularly the phrase “excluding interest…”

[67]        Although the word “interest” is not defined in the Small Claims Act, the courts in British Columbia has generally interpreted the term “interest” in s. 3(1) of the Act to mean court ordered interest only, and not to encompass contractual interest. To come within the jurisdiction of the Provincial Court Small Claims, a claim under contract must be $35,000 or less, including the principal and any contractual interest.

[68]        In 32262 BC Ltd. v. Karobi, 2004 BCPC 433, at paras. 27 and 28, the Court held that it did not have jurisdiction to order a judgment amount in excess of the prescribed monetary limit except in the case of court ordered interest and costs. The Court declined to award contractual interest in excess of the prescribed monetary limit of Small Claims Court.

[69]        Karobi was followed by Telus Services Inc. v. Hussey, 2016 BCPC 41. In Telus Services Inc., the Court held at paras. 11 to 14 that the term “interest” in s. 3(1) of the Act must be interpreted to refer to court ordered interest under the Court Order Interest Act, RSBC 1996, c 79, and not to contractual interest. The Court reasoned that this interpretation is consistent with the purpose set out in s. 2 of the Act, and avoids any inconsistency between the Act and the Court Order Interest Act. Telus, in turn, is followed by the court in Canadian Tire Bank v. Konkin, 2018 BCPC 151, at para. 56.

[70]        Given the weight of authority on this point in British Columbia, I am not prepared to award Accutemp interest in addition to the amount owing on its Sidney Contract with the Defendants.

[71]        Accutemp is entitled to payment on the remainder of its Sidney Contract in the amount of $35,000, the monetary limit under the Small Claims Act. As neither party takes issue with Accutemp’s claim the parties had agreed on interest, this Court cannot award prejudgment interest as it otherwise might have pursuant to the Court Order Interest Act, RSBC 1996, c. 79. The Claimant is entitled to post-judgment interest pursuant to s. 7 of that Act, as well as its reasonable costs in this trial, excluding its filing and service fees on the Brentwood claim. Both parties must bear their own filing and service fees for that small claims action.