$5,000 claim against PoCo company dismissed

A collaboration between two companies based on a medical device landed in small claims court recently, with each side accusing the other of causing delays.

Pheedar Mfg. Inc, a Maple Ridge-based company specializing in in sterilization products, was developing a medical device and needed a Quality Management System, noted Civil Resolution Tribunal Member Alison Wake.

A Quality Management System, or QMS, is a formal process or processes designed to meet a certain quality standard.

On March 5, 2018, Pheedar contacted Port Coquitlam-based Ashbrooke Quality Assurance Limited to develop a QMS.

The two companies agreed to start work on April 1, 2018, with an initial target certification date by the end of December.

On June 15, 2020, a third-party conducted a Stage 1 audit of the Quality Management System, finding several areas of concern and concluding the QMS was “noncompliant.”

In July 2021, Ashbrooke informed Pheedar the auditor would require a new Stage 1 audit before proceeding because a year had elapsed.

Pheedar, which had paid Ashbrooke $14,553, terminated their agreement that fall.

Pheedar claimed $5,000 from Ashbrooke – the small claims limit – as a partial refund, contending Ashbrooke’s QMS didn’t meet industry standards.

Ashbrooke submitted the case should be dismissed, noting the contract didn’t guarantee a specific outcome and contending the company provided the contracted services.

Standard

For Wake, the key questions in the case were: was Ashbrooke either negligent or in breach of contract and, if they were, did they owe Pheedar $5,000?

As a civil proceeding, Pheedar had to prove its claims on a balance of probabilities.

Pheedar might have won its case if it could prove Ashbrooke failed to meet a “reasonably competent standard.” However, Ashbrooke’s was not obviously substandard and, in the absence of expert evidence, Pheedar failed to establish Ashbrooke was negligent or in breach of contract, Wake concluded.

Ultimately, Wake dismissed the case, noting the contract didn’t include a guaranteed timeline or a specific outcome from the audit.

Delays

Pheedar argued one of Ashbrooke’s consultants was unavailable to attend some meetings. Ashbrooke argued Pheedar was slow in responding to emails and taking steps to move the project forward.

“Both parties provided emails that support their delay allegations to some degree,” Wake wrote. However, Pheedar didn’t establish Ashbrooke obviously delayed the project.

“The agreement said that all dates would be ‘subject to final agreement and confirmation by both parties,’” Wake noted.

Legal Process

Wake opted to hear the dispute through written submissions.

Pheedar submitted several pieces of evidence after deadline and, despite Ashbrooke’s objections, Wake admitted and considered the late evidence.

However, Wake ultimately dismissed Pheedar’s claims and the dispute.