COURT FILE NO.: 17/59931 DATE: 2019/01/02

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

2189880 Ontario Inc. o/a Burlington Studio Dance and Jennifer Harrison Plaintiffs

Ronald Allan, for the Plaintiffs

- and -

2428438 Ontario Inc. o/a Boogie Down Studio and Emma Schellenberg Defendants

Andrea Parliament, for the Defendants

HEARD: September 18, 19, 20, 25, 2018

REASONS FOR JUDGMENT

M. J. Donohue, J.

OVERVIEW

[1] This is a contract case where a deal was made between two dance studio owners. The defendant, a former dance student of the plaintiff, wished to expand her studio and take over the plaintiff’s studio space, chattels, and student body. The plaintiff agreed as it would allow her to step back and relinquish control and responsibility for a business she had built up over 19 years. The defendant drafted an agreement to do so and each signed. Each now claims the other breached that agreement.

[2] The agreement provided for the plaintiff to assign the rest of her studio lease to the defendant, transfer her students and chattels to the defendant, and in exchange, the defendant would pay her $45,000. The defendant also agreed to hire the plaintiff as a teacher for the season and allow the plaintiff’s daughter to dance for free.

[3] The lease assignment proposed by the landlord set out that the tenant would be responsible for HVAC repairs. The defendant refused to sign the assignment and drafted a sublease which the plaintiff refused to sign.

[4] To give September 1 occupancy of the studio space to the defendant, the plaintiff broke her lease. The defendant signed a fresh lease with the landlord and gained occupancy on September 9, just before dance classes were to commence on September 12. On September 26, the defendant advised the plaintiff that she was terminating the plaintiff’s employment for the season and was refusing to pay the $45,000 as she did not have the space as of September 1.

[5] The parties each testified, as did the plaintiff’s husband. A joint document brief was filed, and much of the evidence was supported in the documents and was undisputed.

Factual Background

Harrington Road Location

[6] The plaintiff began teaching dance in 1994. She owned her own studio from 1997 to 2016 when the defendant proposed the agreement. The plaintiff’s studio was a large space located at a plaza on Harrington Road.

[7] The defendant had been a student in the plaintiff’s early classes in 1997. She was now a dance instructor, herself. The defendant had a one-room studio on Ishibashi Way, and she was looking to expand. In November 2015, she began looking for a suitable space but had no success. By February 2016, she hired a real estate agent to assist her to find a good location. She stated “it was challenging” and that most landlords were not interested in renting to a dance studio. She said she “got shut down a couple of times” and had tried fifteen spaces before she located the Harrington Road location.

[8] The defendant’s agent located a space next door to the plaintiff’s space at Harrington Road. The defendant required the plaintiff’s permission to occupy that space and open a competing studio.

[9] As it happened, the plaintiff contacted the defendant inquiring about a barre class, which the defendant taught. The defendant responded and suggested a meeting for May 13, 2016, to seek the plaintiff’s consent.

May 13, 2016 Meeting

[10] The plaintiff testified that at the meeting the defendant told her that her studio was doing well, and she was looking for a larger space to operate and that the best place in all of Burlington was close to the plaintiff’s studio. The plaintiff said she asked “where?” and the defendant replied, “next door”.

[11] The plaintiff’s evidence was that she said it was not a good idea. The plaintiff believed that she had the right of first refusal and that the defendant was seeking her consent. The plaintiff testified that she had no intention of getting rid of her studio at that time. She had two years left on her lease and had already begun to plan the next season. She said she would not be happy having the defendant running a studio next door. The conversation, however, began her thinking of alternatives.

[12] The defendant, on the other hand, testified that the plaintiff told her that the plaintiff would have to “think about it” but then gave her the go-ahead. The defendant said the plaintiff described that she was “near the end” and was wanting to focus more on kids and family.

[13] No firm decision was made at that time.

May 15, 2016 Meeting

[14] The plaintiff testified that she discussed with her husband the defendant’s request for the space next door and considered instead of saying ‘no’ that perhaps it was a good opportunity to do something different by working with the defendant and selling the business.

[15] The plaintiff contacted the defendant to meet again and present some ideas. One was for the defendant to buy the studio but with the plaintiff staying on as an instructor and her daughter being allowed to continue to dance there at no cost. The defendant testified similarly that several options were discussed, with this being one of them.

Information Before Agreement

[16] The defendant was advised that the lease was $7,000 a month and that the plaintiff had 250 students on her contact list.

[17] The plaintiff provided an asset list of what the plaintiff had paid for various chattels in the business and what she had spent on the studio space itself.

[18] The plaintiff introduced the defendant to the competitive dance director of her studio, Ms. Campagna, to see if they got along and to discuss the scheduling for the following dance season.

[19] On June 2, 2016, the defendant did a full walkthrough of the studio space with her realtor, Ms. Boonstra, the plaintiff, and a representative of the landlord (“Dream”). The defendant said she was concerned about the HVAC system as it did not reach all three studio spaces. The landlord agreed to look into the HVAC deficiencies.

[20] The defendant testified that HVAC was critical for the functioning of the studio. She said she then kept the HVAC issue in mind when she drafted the agreement with the help of a friend who has some “legal background”.

[21] The agreement she presented made no mention of the HVAC system however.

[22] There is no evidence or suggestion that the plaintiff misrepresented anything to the defendant.

Agreement June 11, 2016

[23] The defendant drafted the agreement and met with the plaintiff on June 11, 2016, with her offer. The agreement proposed that the plaintiff would assign the lease for the Harrington road space to the defendant who would complete the payment of $45,000 upon occupancy of the space on September 1, 2016. Included in the agreement were chattels listed as flooring, mirrors, barres, and a trailer.

[24] The agreement obligated the plaintiff to communicate to the students, teachers, and parents that her studio was closing and the defendant was taking over on June 12, 2016.

[25] The agreement provided that the terms were irrevocable.

Additional Unwritten Terms

[26] The defendant does not dispute that she also agreed to retain the plaintiff as a teacher to teach classes in that winter season and included the plaintiff in the teaching schedule.

[27] Further, the defendant does not dispute that the plaintiff’s daughter, “J.” was to continue to dance at the new studio at no charge, as part of the proposal.

[28] The plaintiff testified that the defendant wanted her to sign the agreement right away. The plaintiff asked for time to review it with her husband. She did so and signed it later that day.

Essence of the Agreement

[29] Although at discoveries the defendant stated it was just an asset purchase, she agreed at trial that she was purchasing the plaintiff’s business. The evidence is clear that she sought both the Harrington Road studio location and the student body that the plaintiff had built up.

[30] The defendant emphasized that she wanted a positive transition from the plaintiff’s studio to her studio. The defendant agreed that she needed the plaintiff’s goodwill to procure the students and keep them with the new studio. The defendant agreed that she needed to gain the students’ and their families’ trust from the past relationship, which they had with the plaintiff. The defendant agreed that she needed the plaintiff’s competitive dance students, in particular, to transfer to her studio as they bring in more income. The defendant agreed that she would likely not have moved forward with the deal without the assurance that the plaintiff would urge the students to transfer over. The defendant agreed that having the plaintiff stay on as a teacher would encourage the plaintiff’s students to transfer to her studio.

Irrevocable Contract

[31] Both parties testified that they understood that having the agreement “irrevocable” meant that neither could pull out of it.

Student Transfer

[32] The evidence is undisputed that the plaintiff fully and promptly performed her obligations to get her students and teachers to transfer to the defendant’s studio. The plaintiff made a special introduction of the defendant to the competitive student group and their families on June 15, 2016, assuring everyone that they would, “love Emma” (the defendant).

[33] The plaintiff sent out an email, approved by the defendant, to all students, explaining the merger of the two studios. The plaintiff assisted in drafting a letter to allow sharing of email addresses with the defendant and followed up on July 26, 2016, to all students who had agreed. She was still responding to parents’ email requests in September explaining the studio merger.

[34] The defendant was free to include the plaintiff’s studio name in her own advertising. The defendant used a similar format to advertise as did the plaintiff’s studio.

[35] The student transfer was successful. All but one of the competitive dance students transferred from the plaintiff studio to the defendant studio.

Transfer of Chattels

[36] It is not disputed that the chattels listed in the June 11, 2016 agreement were transferred to the defendant. The plaintiff brought the barres to the studio on September 11, 2016, as arranged with the defendant. The plaintiff made the trailer available for the defendant to pick up.

Lease Assignment--HVAC Difficulties

[37] The non-party landlord, “Dream”, provided an assignment for the defendant’s signature, which she never signed.

[38] The defendant’s concern was that there were HVAC deficiencies, which the landlord now claimed were the responsibility of the tenant.

[39] On July 29, 2016, the non-party landlord wrote the plaintiff demanding that she was to do $28,000 of HVAC work.

[40] The plaintiff testified that $24,000 of that estimate was to repair rooftop units which had never worked since she occupied the space and to which she had no access. The plaintiff promptly contacted two HVAC consultants and reviewed her lease, which confirmed that the HVAC was the landlord’s responsibility. She emailed the landlord on August 2 and 8, 2016.

[41] In text messages, the defendant fully agreed that the plaintiff was not responsible for paying to fix the HVAC and that it was the landlord’s responsibility. In her texts, however, she noted that the landlord would “not budge” on the HVAC issue. She, reasonably, did not wish to sign the assignment with the non-party landlord.

[42] At trial, the defence suggested that the plaintiff’s prior leasehold improvements caused venting problems, which caused or contributed to the HVAC deficiencies. This was not proven.

[43] The plaintiff’s husband testified that when he finished off the studio partitions, the vents were already covered.

[44] Although the landlord claimed that the plaintiff was responsible for the HVAC deficiencies, they did not pursue it. Rather, the plaintiff was able to use the landlord’s failure to do the HVAC repairs required under her lease as a basis to break her lease and thereby free the space for the defendant.

[45] This action to break the lease in this way was approved by the defendant’s lawyers on September 1, 2016. The defendant was ultimately able to negotiate a lease on her own, which had the landlord, Dream, do the necessary HVAC repairs. These were completed in January 2017.

[46] What is clear is that both parties were reasonable in holding their ground that the landlord was responsible for covering the HVAC costs rather than the tenant.

Sublease as an Alternative

[47] The parties’ evidence differs on how the sublease idea arose.

[48] The defendant testified that at an August 2, 2016 meeting with the plaintiff and the landlord, the landlord suggested a sublease and that all three agreed on it.

[49] I prefer the evidence of the plaintiff who said she was not interested in subletting the premises as that would have kept her tied to the business and she did not want to be a “middleman”.

[50] I find the plaintiff’s evidence consistent with the agreement the parties had, wherein the plaintiff relinquished all control in the studio and just became an employee.

[51] The plaintiff’s evidence is also consistent with correspondence she sent to the landlord on August 9, 2016, which was copied to the defendant, where she twice stated that she was not interested in a sublease.

[52] Despite being advised, in writing, that the plaintiff did not want to sublet, the defendant had her lawyer draft a sublease agreement. On August 19, 2016, the draft sublease provided that the plaintiff and non-party landlord would resolve the HVAC dispute by October 31, 2016.

[53] The landlord was not called as a witness at trial. There was no evidence that they approved the wording or approach of this sublease, although the defendant relies on the draft sublease to allege that the plaintiff breached their agreement.

[54] The draft sublease further made new provisions to the agreement between the plaintiff and defendant. It provided that the defendant would pay the plaintiff $5,000 for the transfer of students; $20,000 for the transfer of assets on October 31, 2016; and the final $20,000 on November 30, 2016, contingent on successful restoration of the HVAC to full working condition.

[55] Despite the June 11, 2016 agreement not mentioning HVAC, and despite the defendant’s earlier acknowledgement that the plaintiff was not responsible for HVAC, the defendant attempted to make the plaintiff responsible for HVAC in this new proposal.

[56] This is a material change to their agreement. It is not surprising that the plaintiff did not sign the sublease that was proposed.

Last Two Weeks of August 2016

[57] The time became stressful for the parties as the defendant intended to take over the Harrington space on September 1 and prepare for classes to commence on September 12, 2016.

[58] The plaintiff retained counsel to write to the landlord to confirm that the lease clearly stipulated that HVAC was the landlord’s responsibility, and the landlord could not make the lease assignment conditional upon the plaintiff paying for HVAC repairs.

[59] The defendant tried, unsuccessfully, to find other space to run her classes. She desperately needed this space to proceed.

[60] From the court’s perspective on the evidence, it became a game of ‘chicken’ between the landlord and these two dance studio owners.

[61] The plaintiff moved out of the premises by August 31, 2016, and confirmed this to the defendant.

[62] The plaintiff had her lawyer write to the landlord breaking the lease based on the landlord’s default with the HVAC. The defendant’s lawyer approved this September 1 letter.

Events after September 1, 2016

[63] The parties’ two lawyers were corresponding and exchanging paperwork with the landlord to confirm that the plaintiff was waiving her rights of recourse under the terminated lease. This was complete by September 8, 2016, such that the defendant negotiated a fresh lease and gained occupancy on September 9, 2016. It was an anxiety-ridden time for the defendant.

[64] The defendant alleged that the plaintiff was not communicating with her at the end of August and early September, and that “she didn’t know what was happening.” The text message history shows that plaintiff wrote twice the number of messages as the defendant and that the plaintiff promptly replied to the defendant. Although the plaintiff was away camping in the first week of September, she did speak by phone with the defendant, and the plaintiff’s lawyer was dealing with matters. The defendant, in cross-examination, acknowledged that both their lawyers were communicating over this time and were keeping her up to date.

[65] Although their agreement was for September 1, 2016, the defendant was aware that the plaintiff was breaking the lease for her. The defendant, in text messages, was urging the plaintiff to expedite the paperwork. The plaintiff texted back each time with follow-up to the lawyers.

[66] In evidence in-chief, the defendant testified that the landlord put up a notice on the studio door on September 7, 2016, which stated the plaintiff studio owed $17,000. A parent saw the notice, but it was taken down the next day.

[67] The plaintiff gave evidence that she did not owe that money to the landlord as she had credits owing to her and had pre-paid the last month’s rent.

[68] On cross-examination, the defendant said she did not think the notice was bad, but that it was a surprise.

[69] Ultimately, the defence did not link this evidence to any reason for the defendant to repudiate the agreement. Overall, the evidence seemed to have been given to underpin the defendant’s view that the plaintiff’s business had financial problems. This was not proven nor was it relevant to the agreement, which did not require the defendant to assume any of the plaintiff’s potential liabilities.

Agreement Confirmed

[70] The evidence is clear that the plaintiff and defendant and their lawyers were cooperating to get the lease and occupancy switched over from the plaintiff to the defendant as rapidly as possible. The defendant gained occupancy on September 9, 2016.

[71] Both the plaintiff and her husband testified to a telephone conversation on speaker phone with the defendant on September 6 or 7, 2016. They discussed the plaintiff breaking the lease, and the plaintiff asked if the contract and money was still the same. They said the defendant replied, “Yes, of course.”

[72] The defendant did not deny the conversation.

[73] Before September 26, 2016, neither the defendant nor her counsel gave any indication that they felt the plaintiff had breached the June 11 agreement, or that the terms had changed.

[74] At trial, it was the defendant’s position that the plaintiff had breached the agreement as of September 1, 2016. She nonetheless had her lawyers and the plaintiff working to get her in the premises by September 9. She admitted on examination for discovery that the letter to the landlord, approved by her lawyer, was essentially saying that the plaintiff’s studio waived all rights, and could be kicked out immediately, as long as the landlord put the defendant’s studio in that space.

Pressure Before Opening

[75] The defendant gained occupancy on Friday night, which gave her very little time to clean and organize in preparation for classes starting on Monday. She was understandably stressed.

[76] She and the plaintiff arranged that the plaintiff would deliver the barres on Sunday evening, September 11. The plaintiff came and showed the defendant how to assemble the barres and left her tools.

[77] The defendant was upset that she did not have time to assemble all the barres. There is no evidence that she asked the plaintiff for assistance, but the defendant blames her nonetheless.

Termination

[78] After two weeks of classes, on September 26, 2016, the defendant and her father had a meeting with the plaintiff. The defendant advised the plaintiff that they received legal advice, and as she did not get to occupy the space on September 1, she did not owe the plaintiff anything. She offered $5,000 in payment of the barres only. The defendant also advised that she planned to take ballet in a different direction, and she no longer needed the plaintiff’s services as a teacher. She gave no reason that would be for termination for cause.

[79] The following day, the defendant emailed all the students advising that the studio was not going to continue with the Royal Academy of Dance syllabus, which the plaintiff taught, as it did not produce the “same level of quality”. The defendant planned to offer a “more current style which will better everyone’s technique”.

Law

[80] When a party behaves as if they were going to go through with an agreement, they may be subject to the doctrine of estoppel. Marshall J. in Cliff Crucibles Inc. v. Toronto-Dominion Bank, 2007 ONSC 49867, at para. 50, quoted Lord Denning, who provided a summary of the principles on the law of estoppel:

When the parties to a transaction proceed on the basis of an underlying assumption — either of fact or of law — whether due to misrepresentation or mistake makes no difference — on which they have conducted the dealings between them — neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands.

[81] Further, when a party proceeds with an agreement to their detriment based on the other party’s representations, the law of estoppel by representation applies. Jones J. in Muhammad v. Canlanka Ventures Ltd., 2015 ABQB 145, at para 70, cited Scotsburn Co-operative Services Ltd. v. W.T. Goodwin Ltd., [1985] 1 S.C.R. 54, at p. 66, where a majority of the Supreme Court of Canada provided the following description of estoppel by representation:

The essence of estoppel is representation by words or conduct which induces detrimental reliance. A more exhaustive definition is offered in Spencer Bower and Turner, The Law Relating to Estoppel by Representation (3rd ed. 1977), at p. 4:

...where one person (“the representor”) has made a representation to another person (“the representee”) in words or by acts or conduct, or (being under a duty to the representee to speak or act) by silence or inaction, with the intention (actual or presumptive), and with the result, of inducing the representee on the faith of such representation to alter his position to his detriment, the representor, in any litigation which may afterwards take place between him and the representee, is estopped, as against the representee, from making, or attempting to establish by evidence, any averment substantially at variance with his former representation, if the representee at the proper time, and in the proper manner, objects thereto.

[82] Strict terms in a contract are not always enforced, particularly where one party’s conduct or behaviour leads the other party to understand that strict compliance is not being relied upon. This is the law relating to promissory estoppel, which is set out in 1376273 Ontario Inc. v. Knob Hill Farms Ltd. (2003), 2003 ONSC 28382, 34 B.L.R. (3d) 95 (Ont. S.C.), at para. 136, aff’d (2003), 2003 ONCA 11925, 42 B.L.R. (3d) 32 (Ont. C.A.), as follows:

Equity will intervene in appropriate circumstances where a party expressly or implicitly, by unambiguous representation or by its conduct or silence, waives compliance with a term in a contract or leads another party to suppose that strict rights arising under the contract will not be enforced. Such conduct invokes the principle of promissory estoppel or detrimental reliance. [Citations omitted.]

[83] The court is also required to look at all the circumstances and consider whether there has been substantial compliance with the contract. As noted in Rydel Homes v. Desrochers, 2014 NSSC 250, 347 N.S.R. (2d) 362, at paras. 14-15, relying on LeMesurier v. Andrus (1986), 54 O.R. (2d) 1 (C.A.), the purchaser who receives substantially the whole benefit that the parties intended to receive under the contract cannot avoid the obligation to pay pursuant to an amended agreement.

[84] The crux of the defence position is that they ask the court to imply in the agreement that time was of the essence even though it was not expressly stated. This may be done in certain circumstances, but when a party wishes to rely on a time of essence provision, they must meet a number of common law conditions, as set out in para. 48 of Webster v. BCR Construction, 2012 ONSC 2217, 16 C.L.R. (4th) 288:

First, they must demonstrate that they themselves were “ready, desirous, prompt and eager” to carry out the agreement…. Second, they cannot be the cause of the default they seek to take advantage of…. Finally, they cannot rely on a time of essence provision where they have waived the provision or otherwise acquiesced to the delay. [Citations omitted.]

Analysis of the Breach

[85] The defendant’s argument that the plaintiff breached the agreement is baffling.

[86] The agreement was for the plaintiff to assign her lease to the defendant, which the plaintiff agreed to do, but the defendant herself refused to sign.

[87] The defendant considered that a properly working HVAC system was critical for the space, but she made no mention of it in her June 11 agreement, which she drafted.

[88] The defendant, at no time, appeared to consider the HVAC to be the tenant’s responsibility; rather, it was the landlord’s issue. She, in fact, negotiated with the landlord to redo the HVAC, and it was done by January 2017.

[89] There is no evidence that the delays caused by the HVAC dispute were due to the plaintiff in any way. Rather, they were delays by the non-party landlord.

[90] The defendant very much wanted this space. She had looked at length without success, for another space. She had the plaintiff’s competitive students signed in August and other registrations and teachers set up. But it was the non-party landlord who “would not budge” on the HVAC issue in the lease assignment.

[91] The plaintiff did the very thing to accomplish the defendant’s goal and need to get the space by breaking the lease, waiving all rights and chattels under the lease, and forcing the landlord to mitigate their loss by leasing to the defendant with a proper HVAC system.

[92] The plaintiff’s lawyers worked together with the defendant’s lawyers in doing so. The plaintiff vacated the space before September 1 for the defendant.

[93] The eight-day delay has not been shown to be the plaintiff’s fault.

[94] The essence of their agreements, both written and verbal, was that the defendant would obtain the entire student body, assets, venues, reservations, and the 19 years of goodwill that the plaintiff had built as well as the particular space, which the defendant wanted and needed.

[95] The defendant’s communicating that she did not plan to honour the agreement,

• after all the competitive students had transferred to her;
• after all the registrations;
• after all the students paid deposits;
• after using the plaintiff’s studio name and format in advertising her new studio
• after her lawyers worked jointly with the plaintiff’s lawyers;
• after she gained possession of the premises and all chattels, except for picking up the trailer;
• after she confirmed on the phone that their agreement was still in place; can only be described as underhanded. She had put the plaintiff out of business and out of work at no cost to herself.

Analysis of the Breach—the Sublease Argument

[96] The thrust of the defendant’s argument was that the plaintiff breached the agreement by not signing the sublease, which the defendant proposed.

[97] The argument cannot stand for four reasons.

[98] Firstly, the defendant provided no evidence that the landlord was consenting to the sublease as drafted.

[99] Secondly, the parties’ agreement contemplated, both written and verbal, that the student body, space, assets, and venues would be transferred to the defendant, releasing the plaintiff from all business concerns. A sublease would have kept her obligated and tied to the business and was fundamentally contrary to the essence of their agreement.

[100] Thirdly, the sublease added responsibility for the HVAC potentially to the plaintiff, which was never part of their original agreement. It was also contrary to the defendant’s knowledge and position that the HVAC was not the tenant’s responsibility.

[101] Fourthly, the defendant, while stating that the agreement was breached when she had no lease assignment as of September 1, actively encouraged and cooperated with the plaintiff to breach the lease, waive conditions, and free the space for her studio.

[102] The defendant, in describing what ‘irrevocable’ meant, in the June 11 agreement, stated that it meant they agreed to move forward and agreed not to back out of what they were working towards. Yet, the evidence is that the plaintiff moved forward to achieve all the defendant’s goals while the defendant defaulted on payment.

Analysis of the Breach—Monies Owed to the Landlord

[103] The defendant argued that the plaintiff owed $28,000 in HVAC repairs to the non-party landlord and roughly $11,500 in back rent and that this was somehow relevant to the alleged breach of the agreement by the plaintiff.

[104] The plaintiff disputes that these monies were owed, and the defendant did not prove them. In fact, the defendant’s evidence is the HVAC repairs were not owed by a tenant. There is no evidence that the non-party landlord pursued either claim.

[105] In any event, I find that the alleged payments between the plaintiff and a non-party are not relevant to the agreement between the parties wherein the plaintiff relinquished her entire business assets and location to the defendant.

Analysis—Summary

[106] The landlord consented to the lease assignment as evidenced in several letters, but the landlord put in conditions that were unacceptable to the defendant. The defendant raised issues about the HVAC system that were not in the agreement between the parties. The plaintiff, through her actions and through her legal counsel’s action advocated against the landlord from claiming such expenses from either herself or the defendant.

[107] The plaintiff took action in breaking the lease, in coordination with the defendant and her counsel, to effect the defendant’s occupation of the premises before the start of classes, which the defendant desperately wanted and needed.

[108] The defendant received all she bargained for except for the eight-day delay due to her HVAC demands and the non-party’s stubbornness. The defendant’s conduct and her express agreement were that the agreement would still be in play despite the eight-day delay. By this conduct, she waived any reliance on the September 1 date set out in the agreement. She is thereby estopped from relying on that term of the agreement to renege on payment.

[109] In conclusion, I find that the plaintiff fully performed the agreement which she contracted to do and should have been paid by the defendant in full. I order the defendant to pay $45,000 to the plaintiff.

Employment Termination

[110] The defendant agreed that she hired the plaintiff for the season from September to June and that the plaintiff was in the schedule for the season.

[111] The defendant suggested that the termination was for cause. She said that the plaintiff did not attend the first staff meeting but then admitted she told the plaintiff not to come. She testified that the plaintiff missed a class, but their text messages demonstrate that the plaintiff had been sent an old timetable and was unaware of the class. Finally, the defendant complained that the plaintiff was two minutes late for a class and should have been there ahead of time. The plaintiff apologized, however, and said it would not happen again. In sum, there was no reason for termination for cause.

[112] The defendant admitted that she hired the plaintiff to attract her students to the defendant’s studio, but after the delayed occupancy of the studio by September 9, she began to consider that she did not want the plaintiff instructing there. In the next two weeks, she avoided meeting with the plaintiff to discuss the employment contract.

[113] I find the plaintiff was wrongfully terminated from employment in these circumstances.

[114] The plaintiff claims $1,280 per pay over 17 pay periods for a total of $21,760 for the lost income on the employment agreement. The defendant did not challenge the calculations.

[115] Furthermore, the plaintiff testified that she missed two employment opportunities due to her expected commitment to work for the defendant’s studio. She looked for another position but was unable to find one for the season.

[116] As noted in Ntibarimungu v. Vancouver Career College Inc., 2009 BCPC 254, at para 39, “The general principle in law is that wrongfully dismissed employees on fixed-term contracts are not entitled to reasonable notice but rather to the balance due under their fixed-term contract.”

[117] Thus I find the plaintiff’s claim for lost income is well supported and order the defendant to pay $21,760.

Claim for Daughter’s Lessons

[118] Part of the agreement, acknowledged by the defendant, was that the plaintiff’s daughter could dance for free at her studio that season.

[119] When the defendant dishonoured the agreement to pay and wrongfully terminated the plaintiff’s employment, the plaintiff took her daughter to another studio and incurred $4,455 for lessons. The defence did not challenge this figure.

[120] The defendant testified that the plaintiff’s daughter could have continued at the studio, but I find that to be unreasonable and unrealistic. It was very clear that the defendant did not want anything to do with the plaintiff at that point and would not have welcomed the plaintiff bringing her daughter to the studio and other events, seeing other students and parents whom she had known so long.

[121] I find this claim for $4,455 is supported on the evidence and order the defendant to pay these costs to the plaintiff.

Counterclaim

[122] The defendant’s counterclaim for damages hinged on proving that it was the plaintiff who failed to perform the agreement. I found it was the defendant, however, who breached the agreement.

[123] Several claims were due to delays, but the evidence shows they were the fault of the non-party landlord rather than the plaintiff.

[124] Furthermore, the damages were not proven. The defendant claimed a loss of income from the plaintiff removing the barres after the breach but provided no financial support or accounting evidence. The defendant argued that the late occupancy impacted enrollment but provided no evidence of this, while acknowledging that enrollment was done online and by phone, and she still was advertising during this time.

[125] The defendant claimed the legal cost of preparing the sublease and suggested that the landlord and the plaintiff agreed to share the cost. Under cross-examination, she became uncertain of any such agreement. There is no evidence that the landlord paid a share nor that they were asked to do so. In light of the plaintiff stating in writing, twice, that she was not interested in a sublease, I consider this to be a cost which the defendant undertook alone with no agreement from anyone to share the legal costs. I deny this claim.

[126] The defendant claimed damages for the inability to use a Milton dance venue booked for February 2017 in the plaintiff’s name. She required the plaintiff’s consent to release the venue to her studio. The defendant could not prove by email or phone records that she ever asked the plaintiff to consent, and the defence did not cross-examine the plaintiff on this issue.

[127] The defendant claimed damages for her studio’s reputation being harmed by alleged unpaid bills to a costume maker and the landlord. Again, these were not proven, and the defendant continued advertising using the name of the plaintiff’s studio, which belies any concern about a sullied reputation by association.

Further Submissions and Costs

[128] If the parties require further directions from the court on the transfer of the barres and trailer, the plaintiff is to serve written submissions within seven days. The defendant may serve responding submissions, if required, three days thereafter. Such submissions are to be three pages or less. If submissions are not received within 14 days of this judgment, this issue will be considered settled.

[129] If the parties are unable to resolve costs, the plaintiff is to serve written submissions within 14 days of this judgment. The defendant is to serve responding submissions within seven days thereafter. The plaintiff may serve reply submissions within seven days thereafter. Cost submissions are not to exceed three pages plus any bills of costs, offers to settle, and case law.

[130] If submissions are not received within 30 days of this judgment, the issue of costs will be considered settled and the file closed.

M. J. Donohue, J.

Released: January 2, 2019