Rhodes v. All Pro Building Maintenance Ltd.

2013 BCSC 1249 Rhodes v. All Pro Building Maintenance Ltd.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Rhodes v. All Pro Building Maintenance Ltd., 2013 BCSC 1249 Date: 20130712 Docket: S128509 Registry: New Westminster Between: Forsdick Rhodes doing business as Rhodes Standard Building and Marine Maintenance and the said Forsdick Rhodes Plaintiffs And All Pro Building Maintenance Ltd. and Acom Building Maintenance Limited Defendants Before: The Honourable Mr. Justice Williams Reasons for Judgment Forsdick Rhodes, on his own behalf and on behalf of Rhodes Standard Building and Marine Maintenance: In Person Counsel for the Defendants: G.N. Harney Place and Date of Hearing: New Westminster, B.C. May 27, 2013 Place and Date of Judgment: New Westminster, B.C. July 12, 2013 [1] This is an application by the defendants, All Pro Building Maintenance Ltd. ("All Pro") and Acom Building Maintenance Limited ("Acom"), seeking judgment on a summary trial basis pursuant to Rule 9-7 and an order dismissing the plaintiffs' claims. [2] The plaintiffs, who are without counsel and self-represented, oppose the application. Background [3] In the style of cause, the plaintiffs are described as "Forsdick Rhodes doing business as Rhodes Standard Building and Marine Maintenance and the said Forsdick Rhodes". As I understand, Mr. Rhodes operates a sole proprietorship janitorial business as Rhodes Standard Building and Marine Maintenance ("RSBMM"). [4]

Mr. Rhodes apparently had an historical relationship with BC Ferries ("BCF"), dating back to when he was performing cleaning work on board certain of the ferry service's vessels. By the time the subject agreement in the matter at bar was reached, he was no longer actively performing services for BCF. [5] The principal of the defendant corporations is Soony Ko. At the relevant times, that is, when the subject agreement was reached, he was active in the janitorial business through his company, Acom. [6] At some point in 2003, BCF called for tenders to provide janitorial services for certain of its vessels. Both Mr. Rhodes and Acom were interested in pursuing that work. Ultimately, an agreement was reached between them, whereby they would work together to submit a bid for the BCF contract. [7] There is no dispute between the parties that the agreement dated June 22, 2003 ("the Agreement") is the embodiment of their agreement, and that it is central to the dispute at bar. By the Agreement, Acom was to be the principal contractor and RSBMM would be the sub-contractor. [8] Because BCF only permitted unionized workers to maintain its equipment, in order to perform the work, Mr. Rhodes would be required to form a union-certified company to perform the sub-contract. [9] Mr. Rhodes alleges that when Acom's bid with BCF was successful, Acom failed to notify him. He says that instead, Acom

and Mr. Ko used a separate company, All Pro, to make application for union certification. As matters turned out, All Pro received that certification and its employees went on to perform the cleaning services. [10] The defendants say that Mr. Rhodes was aware that the BCF contract had been awarded to Acom but he was either unwilling or unable to form a company and obtain union certification. [11] Mr. Ko says that he made several attempts to contact Mr. Rhodes to ascertain the status of the union certification but that Mr. Rhodes did not reply. Mr. Ko says that ultimately he was forced to make alternate plans; otherwise the BCF contract would have been lost. In the plaintiffs' Amended Notice of Civil Claim, the alleged breaches of contract are set out as follows: 25. Specifically, Acom has breached the Agreement with Rhodes by: (a) failing to advise Rhodes that Acom had been successful in its bid (b) circumventing Rhodes by hiring the Defendant Allpro, a subsidiary of Acom, to obtain union certification and to perform the sub-contract services pursuant to the Contract for which Acom was contractually obligated to have Rhodes perform. In doing so, Acom has used to its advantage in securing the Contract for its own enrichment the reputation, knowledge and experience of Rhodes. [12] In the Amended Notice of Civil Claim, the legal basis for the claim is stated as follows: The

Defendant Acom breached the Agreement with the Plaintiffs by forming a subsidiary company, the Defendant Allpro, to perform the services for which the Defendant Acom had contracted with the Plaintiffs. Moreover, the breaches were calculated, planned and deliberate. [13] To be clear, the plaintiffs' claim is for breach of contract. Rule 9-7 Proceeding [14] At the outset, it is necessary to deal with the issue of whether this matter is suitable for adjudication by summary trial. [15] The defendants contend that the matter is so suited. They say that the plaintiffs have had sufficient time to make their investigation and prepare to meet this application. They point out that the plaintiffs were provided with notice of this application in January 2013. [16] The plaintiffs take the position that this matter is not appropriate for adjudication by way of summary trial process. [17] I note that the plaintiffs have a date set for trial, five days commencing August 19, 2013. In fact, there is dispute between the parties concerning this. Counsel for the defendants says that there was no consultation and that date is not available to him. [18] When the matter came on for hearing on May 27, 2013, Mr. Rhodes, for the plaintiffs, addressed the Court. He advised that he does not have legal counsel at present and so he was appearing on behalf of the plaintiffs. He sought to have the hearing

adjourned. He advised the Court that while he did not have counsel at the time, he was in the process of retaining a lawyer. He provided that person's name. In order to further explore that matter, I directed defendants' counsel to make contact with that lawyer, to make such enquiries as would be appropriate concerning the status of the arrangement and to advise the Court accordingly. [19] The matter was stood down briefly and those inquiries were made. Defendants' counsel subsequently advised the Court that he had spoken with the lawyer in question. That person confirmed that he had spoken with Mr. Rhodes but that there were no arrangements in place for him to act. [20] In the circumstances, I decided that the matter should proceed; there was no proper basis upon which to adjourn the hearing. [21] By ways of observation, it is apparent that the state of the plaintiffs' case and materials is quite problematic. [22] Mr. Rhodes has had three different lawyers represent him over the course of the litigation. His most recent counsel withdrew earlier this year. [23] During the hearing, Mr. Rhodes sought to have the Court consider two additional affidavits, other than those which had been previously filed. One of the new affidavits had been filed only the very day of hearing and the other had been filed six days earlier. Mr. Harney, counsel for the defendants, opposed those materials

being received in evidence at the hearing. [24] In order to decide how to deal with the affidavit issue, I have examined each of them. Frankly, they contain little of relevance to the substantive dispute. They are largely concerned with the machinations that have gone on with respect to scheduling a trial and other litigation activities. They also contain an unfortunate amount of content which is not appropriate for an affidavit, principally argument and personal opinion. [25] In the result, they have not been considered as evidence in this hearing. [26] The defendants have raised a number of substantive bases upon which they say the plaintiffs' case is fundamentally defective and is doomed to fail. They say that this Court should deal with these now, in the context of the summary trial proceeding, and that the claims should be dismissed. [27] As a dimension of their application, the defendants say that the principle of proportionality is relevant. They say that the relatively modest quantum of what is at stake militates in favour of deciding this case by some less extensive and expensive means other than a full trial. [28] The position of the plaintiffs is that there is a claim of substance and merit which should be determined in a way that provides the plaintiffs with an appropriate and fair means of making their case. [29] The fact that the plaintiffs' case, as at this time,

is in a state of disarray, is truly unfortunate. It is evident that Mr. Rhodes has had difficulty maintaining legal counsel. Presently, the plaintiffs are represented by Mr. Rhodes. At the same time, it is clear that he and they have had adequate notice of this application. [30] It is well-established that when a party faces a summary trial application, there is an obligation to take the necessary measures to be able to meet the issue on its merits. A party cannot produce only limited evidence and then argue that the case is not suitable for summary trial adjudication because there is insufficient evidence before the Court. [31] In a sense, the matter at bar is a vivid example of the complications that can arise where parties represent themselves. [32] Mr. Rhodes does not presently have the benefit of competent legal counsel. It is apparent that he has not had continuity of legal advice over the term of this litigation. That has resulted in him being woefully ill-prepared to meet the application. It is also the reason that the prosecution of his lawsuit appears to have been executed quite poorly. [33] For the Court, the situation presents a dilemma. Should Mr. Rhodes, or other self-represented litigants like him, be granted expanded latitude and liberties in the conduct of their case? Is the Court delivering fairness if it makes those extraordinary accommodations? What about

the other litigants whose legal and procedural rights appear to be diminished when those accommodations are made? [34] For this case, the answer, in my view, is that the application must be heard on its merits, on the basis of the record as it stands. Fairness requires that. [35] In the circumstances, I intend to now deal with each of the defendants' submissions. The Substantive Application [36] The defendants advance two specific bases upon which they say their application should succeed and that the Court should grant judgment as they seek, dismissing the claims of the plaintiffs. These are a limitation issue and an argument that the contract is not enforceable because it is in fact only an agreement to agree. [37] As well, they submit that the plaintiffs are not entitled to recover damages because they have failed to take reasonable steps to mitigate any losses. [38] Finally, they advance an argument seeking an order that, in any event, the action against the defendant All Pro should be dismissed because there is no privity of contract between the plaintiffs and that entity. [39] I intend to now deal with each of these submissions. The Limitation Issue [40] The defendants say that the plaintiffs' cause of action arose at the point that the defendants moved forward without Mr. Rhodes and entered into the contractual arrangements with BCF without the plaintiffs. They say that

no action was taken by the plaintiffs until the Notice of Civil Claim was filed on June 22, 2010, which is more than six years after the basis for the claim occurred and the plaintiffs were aware of the situation. [41] The plaintiffs' response is that there were ongoing discussions between the parties in that interval, discussions for the purpose of settling the dispute, and those must be taken into account. Conceptually, the position relied upon by the plaintiffs is in the nature of estoppel. They say that the defendants cannot rely on a limitation defence where they conducted themselves in a way that would lead the other party, that is, the plaintiffs, to believe the matter would be resolved. [42] An examination of the evidentiary record leads me to conclude that the position of the plaintiffs is viable. For the issue to be properly adjudicated, I find it would be necessary for that evidence to be examined in the context of a trial proper; there are issues of credibility that are not amenable to resolution in a proceeding under Rule 9-7. [43] The defendants' application under this head is dismissed. The Agreement [44] The actual Agreement that the parties executed and which it is agreed forms the centrepiece of the dispute is in evidence [45] The Agreement stipulated a term of three years. It provided that the profits would be shared between Acom and Mr. Rhodes

"fifty-fifty". [46] A further clause of the Agreement provided that the three-year term would have a three-month probation period, and at the end of it, the parties would re-negotiate the profit-sharing component of the Agreement. [47] In the submission of the defendants, when that provision is given effect, the actual contract between the parties is only enforceable for the initial three months. After that, it is simply an agreement to agree or an agreement to negotiate, a situation that the law of contract will not enforce. [48] In accordance with that submission, the defendants say that, at most, the plaintiffs only have a claim for a share of the profits from the initial three-month period, and that is a consideration in the proportionality analysis: at best, the plaintiffs would be able to recover damages for three months of operation. Although no quantification has been offered, the thrust of the submission is that that sum would be relatively nominal, and so the costs of a multi-day trial are not warranted. [49] As for the three months, the defendants say that the plaintiffs are not entitled to succeed because the necessary obligation imposed on them by the Agreement was a requirement that they incorporate an operating company and secure union certification. The defendants say that was not done and thus the plaintiffs were never in a position to fulfil or perform their

obligations under the Agreement. [50] On my reading of the material, it is certainly quite within the realm of reasonability to conclude that prima facie, there was an agreement between the parties for a fifty-fifty split of the profits and a provision that the matter could be re-examined or revisited. I am not prepared to accept the defendants' characterization that this was nothing more than an agreement to agree, so as to conclusively find against the plaintiffs at this stage of the proceedings. In my view, that is a matter that requires the benefit of full argument and interpretation of the evidence which may be adduced. The Party Issue [51] The defendants say that the plaintiffs cannot maintain this action against All Pro. They say the Agreement is between Acom and Mr. Rhodes. There is no assertion that All Pro was a party to any dealings with Mr. Rhodes. The Notice of Claim alleges that Mr. Rhodes had a contract with Acom and that Acom breached the contract. It asks the Court to award judgment against both defendants, jointly and severally. [52] Accordingly, the defendant All Pro says that the claim against it should be dismissed, and relies upon a line of authorities, including: Grasser Contracting Ltd. and Carl Grasser v. Butler Brothers Equipment Ltd., [1979] B.C.J. No. 1046; MacKinnon v. Instaloans Financial Solution Centres (Kelowna) Ltd., 2004 BCCA 472; and Johnson

v. Hanson, [1981] Y.J. No. 12. [53] In my view, All Pro's position is sound. There is nothing in the material that would meaningfully detract from it. The plaintiffs have not provided any material or argument that causes me to conclude that they have a proper basis to maintain their action against All Pro. [54] In the result, that specific aspect of the application to dismiss the action is allowed. The plaintiffs' claim against All Pro is dismissed. Mitigation [55] The defendants say that there is a positive duty imposed upon the plaintiffs, a duty to mitigate any losses from the breach of contract which are alleged. The defendants submit that the plaintiffs have not done so in this case. [56] In my view, the matter of mitigation is properly considered as an ancillary issue. It falls to be examined in the context of the entirety of the action, an action which I have concluded should not be dismissed or terminated at this phase of the proceedings. Accordingly, I cannot find that the mitigation issue constitutes a basis upon which to resolve the dispute by way of summary trial. Conclusion [57] Insofar as the defendants' application is concerned, it stands dismissed, with the exception that the application to dismiss the action against the defendant All Pro is allowed. Further Direction [58] I am quite troubled by the state of preparation of the plaintiffs' case. As I noted

earlier, Mr. Rhodes has experienced difficulty in retaining counsel; that has impacted most adversely upon the progress of the matter. The prosecution of the action is languishing, and that has an adverse impact upon the defendants. Indeed, that is the reason they saw fit to bring this application. [59] In my view, it would be unacceptable for this matter to continue to languish. [60] In the circumstances, I conclude that it would be in the interests of all parties to spur the matter forward by ordering that there be a case planning conference in this matter, to be convened within 60 days of the release of these Reasons. Hopefully that will provide a mechanism whereby the steps can be taken to see this matter advanced in an efficient way. Costs [61] The outcome of this application has been of mixed success. Not having heard submissions based upon that result, I will make no order as to costs. As an observation, it might be reasonably expected that any order will be informed by that outcome. If necessary, I will receive submissions as to costs, although I invite the parties to consider whether it would be preferable to have the issue be decided by the trial judge who ultimately adjudicates the matter, or as the parties might agree. "The Honourable Mr. Justice Williams"