If Nobody Agreed Then Why Pay Anything

One email reply can feel harmless until it turns into a $17,500 invoice. We start with a recruiter placement fee fight that asks a deceptively simple question: when do you actually have a contract? A law firm agrees to work with an external recruiter, receives resumes, interviews a candidate, and hires them, then gets a “standard form” contract after the fact, demanding 17.5% of the salary. We unpack what contract law requires in British Columbia, why not every deal needs a signature, and why “sure” is not always acceptance of a price you never saw. 

Then we shift to employment law and a fixed-term employment contract that ends right on schedule. A worker argues that passing a performance review and changing a title from manager to executive director effectively turns a one-year agreement into permanent employment. We walk through why the court rejects that theory, what a title change does and does not prove, and why clear written terms can prevent expensive ambiguity for both employers and employees. 

We close with a cautionary tale from the Royal Vancouver Yacht Club: a 1969 wooden yacht collapses in a boat lift, and the owner sues for negligence, only to run into a signed waiver and a failed spoliation argument about overwritten video. The result highlights how enforceable waivers work, why evidence preservation matters, and how cost clauses can raise the stakes after a claim is dismissed. If you found this useful, subscribe, share the episode with a friend who signs things too fast, and leave us a review.

Follow this link for a transcript of the show and links to the cases discussed.

Transcript

Why These Legal Stories Matter

Michael Mulligan 0:25

Yeah, so these are actually uh important issues that were discussed in this case. I think uh listeners may just want to know about in terms of their daily dealings with people uh uh uh and contracting for things. And the particular fact pattern here was this law firm posted uh a uh job posting on a uh Canadian Bar Association website indicating they were looking for a junior associate as a lawyer to hire. Uh and they got a response, not directly from a prospective lawyer, but instead they got a response from a company called WiseWork. And the company that responded said, Hey, we're an employment uh company. Would you be interested in working with an external recruiter? Words to that effect. And the lawyer at the law firm said, sure. Uh and the that firm, Wisework, first of all, sent them a resume for somebody who was a lawyer with some 15 years experienced, which the law firm said, Well, that's not quite what we're looking for. We want somebody more junior. Uh and the uh Wisework responded with another resume for somebody who was more junior. And the law firm wound up uh meeting with that person, had an interview, seemed to go well, uh, and then they got a uh response or another inquiry from the uh employment uh company uh saying uh, you know, how did that all go? Uh and by the way, here's our contract uh for our standard form contract for service. Um and the contract had various things in it, including uh requests for a fee amounting to 17.5% of the salary paid to the person if they were hired. Wow. Uh the law firm didn't sign the contract or agree to it. They had interviewed the person, um, uh, and the law firm hired the person. Uh and then what came of it is that the uh employment firm responded by saying, Where's our fee? We're we deserve 17.5%. I guess you can do the math, but the the employment firm requested$17,500 as a fee uh for hiring the person. The law firm said, no, we don't have a contract to do that. Um and so the case went to court. And so the first thing the judge had to deal with, and this is why it's sort of a general principle of importance for people to know about, um, is that the court had to get into what is required in order for there to be a contract. Like what is necessary for that? Um, and the first thing to know is that not all contracts are in writing. You can have contracts that are oral, right? If you say to somebody, want to buy my bike for$500, the person says, sure, I'll take it. Well, that's a contract, right? Um, but the core idea before there can be a contract, um, is that there needs to be what's referred to as like a meeting of the minds, like an agreement between the two people to enter into the contract, which are the various elements to it. Okay, this is my bike, I'm selling it. I want five hundred dollars. You want that? Yes, great, okay. We have a contract. And there so there has to be like an offer, somebody saying, You want to buy my bike? Then there has to be an acceptance, sure. Right? And other terms like the price of it and so on, right? Now, here one of the challenges was well, the this firm's ridge started with, hey, do you might want to work with an employment recruiter, external recruiter, to which the lawyer at the law firm said, sure. And started getting these uh resumes sent. And so what and so they argue that well, that was an agreement to this contract, right? Um oral or at least by email, right? Uh and so another thing to know about, right, in that regard, is that while the cost of something would ordinarily be an element of a contract, there can be circumstances where you can in kind of imp uh uh conclude that there would be an agreement to pay, even if it wasn't specified in the agreement. Like for example, if you phoned up a company and said, Oh my goodness, my hot water tank has just exploded, can you come over and replace it for me? And the plumber says, Sure, I'm on my way. And they come on over and get the exploded water tank out, put the new one in, and then hand you a bill for it, you're not gonna be able to get away with saying, Well, he never told me how much the water tank was, so I thought it was free. Right. You're gonna wind up with, okay, well, you're gonna be on the hook for the reasonable cost of doing that. You didn't expect the plumber to show up at an emergency in the middle of the night and change your water tank for nothing. But here, the law firm said, Well, look, it's even more than that. The law firm said, Look, they asked whether I'd be prepared to work with them, but it wasn't even clear to us, the law firm, that that meant that we would have to pay for it. It's not like we phoned up the plumber to fix our hot water tank. He said the law firm said, Well, it could have been that the person was paying that recruiting firm to f for the purpose of having them seek out work for them. Saying it wasn't clear that we wasn't made clear to us that we would even have to pay for it. Now, in that regard, the judge said, Well, I'm not quite sure about that. The law firm's a pretty sophisticated actor. You'd expect if they had experience with such things, they would have understood that they would have had some obligation to pay for it, not just the person using that kind of a recruiting firm. Yeah. But despite that, the judge said, Look, there just wasn't a meeting of the minds here. You had the one party sending the contract, the other person not signing it. They just didn't agree. And it's not like the plumber case, right? Yeah. But that wasn't the end of it. And this is where that quantum marouette comes in and supports people to know this. So even though there's no contract, and so the starting point might be, well, no contract, no pay, too bad for you, um, the the court has uh equitable jurisdiction. And now the other thing about that is this even though this is in small claims court, it was made clear in a decision just last year from the BC Supreme Court that the provincial court, even though it's not a uh court of inherent jurisdiction, does have authority to grant what are referred to as equitable remedies. And one of those is this it comes from this concept of unjust enrichment, uh, and then that concept of quantum marrow it, which would amount to the concept of reasonable remuneration, like what's the job worth? And that same concept of quantum marrow would apply in, for example, in the uh exploded hot water tank example, right? When you phone up and say, fix my hot water tank, it's an emergency, get over here, and somebody urches over it, does that, you sure couldn't expect it's going to be free, but if the plumber handed you a bill for$50,000, you'd be able to say, well, hold on a minute. That's not reasonable, right? And what would be imputed would be sort of the reasonable amount to do that work. The court might need to have evidence on that point. And so this equitable jurisdiction allows courts to deal with circumstances where there may not be a contract, but sort of equitable principles for things like unjust enrichment or the person being deprived of something to arrive at sort of a fair resolution of something even where it might not fit within contract law. And there's a long history to that jurisdiction. It used to be in the UK many years ago there were like separate courts that would deal with those different concepts, but they've been unified. And now it's clear that the even provincial court, small claims court, has jurisdiction to impose these sort of equitable remedies, which would include things more than just, hey, you haven't met the your legal requirements for a contract, nothing for you, too bad. This allows there to be those sort of equitable fairness sort of based um legal remedies. And here, the other interesting thing was that the uh recruiting firm hadn't pled those things, and by pleading them, it means like when you sue somebody, you've got to put down like why are you suing them? What are you asking for? Yeah. Right? Those are the plea, and the other side responds saying, No, I don't have to. Here's why I say you don't have to. And they never asked for that. It wasn't in there. Uh and so one of the one of the issues for the judge was can they get into these equitable remedies when the other side the side hadn't even asked for them? And on that ground, I and I dare say in Supreme Court, you might well find that you just would be out of luck if you didn't ask for it. You don't get what you don't ask for, because that's what pleadings kind of frame what this is all about. But in provincial court, small claims court, the small claims court act says that the purpose of that thing, small claims court, is to provide, amongst other things, a just, speedy, inexpensive, and simple manner of remedying a dispute. And so the judge took that into account when deciding whether it was appropriate to allow considerations of those equitable remedies, even though they hadn't been written out in the pleadings. And the judge concluded, yes, it was fair and reasonable, even though it wasn't in the pleadings. And that finally led the judge to, okay, well, what would be the fair amount to provide? The uh recruiting firm said, well, we want our$17,500 because that's what we would usually get if you signed our standard contract. The judge looked at that and contemplated that and said, Well, no, that's not really what the quantum marrowit kind of fair amount for this would be. And the parties aren't bound by the contract that wasn't signed. And so the fact that you might have asked for that, but the other side didn't agree to that contract doesn't mean you get that now. Instead, the judge relied on that sort of quantum merrowit assessment, kind of like what's the fair amount for the hot water tank and changing that out at four in the morning for you. It's going to be whatever fair amount would be for that. Up to the judge, might need some evidence on it. But here, ultimately, considering all those things, the judge concluded that it was an appropriate case for one of those equitable remedies, and instead awarded the employment firm the sum of$4,500. Uh, and so that's the outcome. And I thought it was just an interesting case because it deals both with those issues of what do you need to actually have a contract, uh, and then what some of the other remedies might be when the legal requirements for a thing like a contract aren't met, but you still have a circumstance where one side might have been, for example, unjustly enriched and gotten some benefit uh and uh the how the court has some jurisdiction to make that right. Uh and so that's the latest in the BC provincial court dealing with the employment contracts, who has to pay when there's a company like that uh involved, uh, and uh what happens when uh you haven't actually met the requirements uh for contracts.

Adam Stirling 10:28

Michael Mulligan defensive right after Michael Mulligan defensive performance review contract is a title. Michael employment law, complicated area. How does it fit together?

Performance Reviews And Title Changes

Michael Mulligan 10:51

Yeah, for sure. This is a complicated area, but it's also one of those areas sort of like uh contract law that's gonna have a lot of impact on a lot of people, right? So I think it's something worth uh worth knowing about. And so the background here is that the person making a claim for wrongful dismissal had been hired originally the title was manager uh of a uh it was a not-for-profit uh local arts uh uh community uh organization. Uh and so she was hired as a manager of that. And happily for everyone, maybe not everyone, but happily, I guess for the purpose of sorting out disputes, there was a written contract of employment. Good news. Uh and the written employment contract indicated uh that she was referred to as a manager uh and that uh the it would be a contract for one year, uh which could be renewed, may be renewed on a yearly basis, and it provided that uh either party could terminate it giving two weeks uh notice, or the contract could be modified with written consent of both of them. So off the person goes, uh starts in this job, and several months into it they have a performance review. That was also an element of the contract, and she passed the uh uh performance review. Uh and then a number of months later, the uh employee made a uh request, uh I don't know quite why, but requested that there be a change of her title from manager to executive director. Uh, and then things went on for a little bit longer until the uh uh volunteer board of directors uh provided notice that they were not going to be renewing the contract, uh, and that was provided more than two weeks before the end of it. And so you think, well, what's the problem there? Well, the arguments made by the employee uh included uh a number of things. Um one of the requ arguments made was uh once they did this um uh review uh of her employment, uh, that uh the it was referred to as a passing a performance review. One of the arguments made was, well, that changed the nature of what this agreement was, and now that's become a permanent job, not a one-year job. Uh the judge didn't have much time for that, saying, look, passing a performance review after three months confirmed that you were doing your job, kind of what you'd agreed to. It doesn't mean that it's been transformed uh in some material way into something else. Uh and so that that didn't get too far. Uh and the next argument made, this is an interesting one, is this uh argument that the this change of title had some implication in terms of the nature of the contract. Uh and one of the ways in which that was argued, which I thought was a creative one, um, is that there is an argument that um if you have a complete change in what the nature of uh an employment relationship is, um that can effectively uh mean render the contract no longer in force. So here'd be an example of that. Let's say somebody was hired as a uh part-time uh receptionist at a firm, uh, and then they do really well uh and uh sometime later they get promoted to general manager, right? Yeah. Uh and they have a completely different set of job requirements and so on. In that kind of a circumstance, you can actually argue that because there was just a total change in what was going on here from part-time receptionist to general, full-time general manager, that the original contract is really no longer dealing with what's going on here. And so that was one of the arguments made with respect to that title change. The idea that the change from the term manager to the term executive director was that kind of a just a fundamental change, meaning the whole contract written down to no longer had anything to do with anything. Uh, but it didn't get any traction here because the evidence for the judge was that, well, there was that change in the title, uh, which the claimant claimed was a promotion, uh indicated that there was absolutely no evidence that there was any change in the actual duties required of the person. Uh they didn't have to do anything else. There were no new duties, there wasn't a change in the job description, nothing else changed. It was just a title change. Uh and so it just didn't have that uh effect. Uh and so what's left uh is the written agreement, uh, which is, well, it's a one-year agreement, and parties can renew it, and either party can give notice. Um and the other thing pointed out um is that uh when you uh have uh uh an agreement uh like that, uh it uh doesn't um it doesn't transform into a permanent contract at the expiry of that term, even, uh, and that uh there's no also no obligation for there to be any particular process or explanation uh for not renewing a contract, which is for a particular term, just like a person, the employee could decide after the one year, thanks so much, really enjoyed it all here. Buy. I'm not renewing that. An employer would be equally entitled to say this is a one-year contract, I appreciate all of your work very much, uh, but we're not renewing it. Uh and so there isn't a legal obligation either to explain yourself or indeed to enter into a process or anything else to come to that uh conclusion. Um, when you have uh an employment contract for that period of time, not unlike I guess in the residential tenancy contact context, uh they don't transform into a permanent position simply by the expiry of time. Uh and so the result of all that, despite some creative arguments about the job title and the impact of that, and the impact of trying to passing the performance review, uh, none of that had uh an impact on the nature of the written agreement. Uh and so the applic the uh claim for uh wrongful dismissal was itself dismissed. And I guess the other takeaway there is just it's a good thing for both parties to make these uh agreements in writing so that there isn't ambiguity. And at least in a case like this, it can shorten the disagreement. We can just look at the thing and say, here's what was agreed to. Um and so uh that's the uh that's the legal outcome of the uh claim for wrongful dismissal despite uh changes in job title and passing your performance review.

Adam Stirling 17:11

And number three on our agenda today, a question Is the yacht club responsible when a wooden yacht collapses when being lifted out of the water in a boat lift?

Waiver Enforced Spoliation Fails Costs Loom

Michael Mulligan 17:21

So a few things here. I guess first of all, this is not exactly an ad for buying yourself a vintage wooden yacht. Uh this is a uh this by the yacht in question is well named, was called the Real Naughty, uh spelt N-A-U-T-I, uh, which was a 1969 40-foot wooden yacht. Uh, and the woman who bought it purchased it uh in 2021, uh, and she was storing it at the Royal Vancouver Yacht Club. Um, and as one must do from time to time when you're the owner of a 40-foot wooden vessel, uh, you would need to from time to time have it hauled out of the water in order to clean up the bottom of it, and you'll repaint the bottom and perform repairs, that kind of thing. Uh, and in the uh the on the occasion in question, this was back in 2023, this was like the fourth time that that had been done for this particular wooden yacht by the the owner. Uh and what happened, as you it probably deduced from the uh the title there, um, when the uh it was being hauled out of the water, initially it seemed to get out of the water fine, and it was being suspended in this thing that uh heaved it out of the water. Um, and then the owner of it uh had been uh doing some work uh on it. I think it was mixing up some uh uh paint put on the bottom. Uh and a couple of hours after it was out of the water, there were some creaking sounds which sounded problematic, causing her to get off and I think run back to the office. Uh and then uh the entire thing unfortunately collapsed uh in what was described as a catastrophic uh damage. The uh bot the boat lift uh the thing in the boat lift collapsed, forcing the keel up into the bottom of it. It was just completely destroyed, fell apart. And so the claim was brought against the yacht club on the uh claim based on negligence, claiming that they were careless in terms of how they had prepared the wooden boat to be lifted up. Uh there, and so that was one issue, the sort of the substantive issue of did they do something careless? But this also turned on, again, a written agreement. And as is common with these kind of risky things, uh, there was a waiver form uh handed uh to the person to sign. Uh and it was common ground that she signed the waiver form. The dispute, uh, in part was she claimed, first of all, that she had not signed the waiver form until after the boat was listed up, which is interesting. And in that regard, she also made an interesting legal argument on a point that people should also be aware of. Uh she had claimed that the yacht club had engaged in what's referred to as spoliation. And that term spoliation refers to a circumstance where one of the parties in a civil case has destroyed evidence. And if you do that, knowing that you're going to be involved in litigation, uh there can be an adverse inference drawn about what you've done. And here, the claim was that the yacht club had destroyed the video uh of the uh her signing the agreement because this area was on video. Uh however, it didn't get anywhere because the uh video itself just got overwritten every couple of weeks. The yacht club, for their part, had saved the video of the boat collapsing, but not everything else. So by the time they were asked to go and look for it, it just didn't exist. And so uh that concept of spoliation simply didn't apply. And despite various other arguments made by the boat owner about why this written uh uh waiver uh shouldn't have any application, I think she came up with seven of them, uh all kinds of things, alleging that uh, you know, she was uh uh induced into it or that uh she uh because she took a photograph of it, that meant that she wasn't agreeing to it. Various arguments about why it ought not to apply. None of those the judge found had any application. The judge pointed to the fact that she had signed similar things at the same place on multiple occasions when the boat had been hauled out before, um, and uh also pointed out that uh her own employee, one of the people she was going to have do some of the work on the boat, testified that she saw her actually sign the agreement before the boat got lifted up. Uh and so the spoliation argument didn't get anywhere on the basis that it wasn't done intentionally, and it was clear from that evidence that she had signed it in advance. And the net result was the uh waiver agreement was found to be valid. And the final part of it people should be aware of is that that agreement indicated uh that if you nonetheless sued, you would be on the hook for all of the expenses caused by doing that. And so the next issue for the judge having dismissed the claim would be whether the woman, the boat owner, will be required to pay all the legal expenses of the yacht club. And so that's latest on uh what happens when you lift your wooden yacht and the whole thing falls. apart and why you need to pay attention to those waivers because they are in fact enforceable uh assuming the various requirements are met.

Final Takeaways And Signoffs

Adam Stirling 22:07

Legally speaking on C Fax ten seventy with Michael Mulligan with Mulligan Defense Lawyers, thank you so much, Michael. Pleasure as always. Thanks so much. Always Alright, quick break. The news is next.