Date Issued: December 18, 2018

File: SC-2018-003312

Type: Small Claims

Civil Resolution Tribunal

Indexed as: TTICL v. IMPERIAL DATA SUPPLY CORP., 2018 BCCRT 870

Between:

TTICL

Applicant

And:

IMPERIAL DATA SUPPLY CORP.

Respondent

INTRODUCTION

1.      This is a dispute about credit for returned goods. The applicant, TTICL, supplied goods to the respondent, IMPERIAL DATA SUPPLY CORP. The applicant says the respondent returned some of the goods outside of its 1-year warranty period and wants the respondent to pay the $3,550 balance owing on their account. The applicant also wants the respondent to pay its Civil Resolution Tribunal (tribunal) fees and its dispute-related expenses.

2.      The respondent says the returned goods were defective and it will not pay for defective goods.

3.      Both parties are represented by an employee or principal.

JURISDICTION AND PROCEDURE

4.      These are the formal written reasons of the Civil Resolution Tribunal (tribunal). The tribunal has jurisdiction over small claims brought under section 3.1 of the Civil Resolution Tribunal Act (Act). The tribunal’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the tribunal must apply principles of law and fairness, and recognize any relationships between parties to a dispute that will likely continue after the dispute resolution process has ended.

5.      The tribunal has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. The tribunal may accept as evidence information that it considers relevant, necessary and appropriate, whether or not the information would be admissible in a court of law. The tribunal may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

6.      Under tribunal rule 126, in resolving this dispute the tribunal may order a party to do or stop doing something, order a party to pay money, or order any other terms or conditions the tribunal considers appropriate.

ISSUES

7.      The issue in this dispute is whether the respondent owes the applicant for the value of the returned goods.

EVIDENCE AND ANALYSIS

8.      In civil claims like this one the applicant has the burden of proving their claim on a balance of probabilities. This means the tribunal must find it is more likely than not that the applicant’s position is correct.

9.      I have only addressed the parties’ evidence and submissions to the extent necessary to explain and give context to my decision. The respondent submitted a Dispute Response and made submissions but failed to submit any evidence. For the reasons that follow, I find the respondent must pay the applicant the outstanding balance on its account.

10.   It is undisputed that the parties had a contract for the applicant to supply goods to the respondent, and that the respondent made numerous purchases from the applicant in 2016 and 2017. The respondent says it received complaints late last year from its customers about the applicant’s ink not registering in their printers. The respondent says it investigated and found that the last shipments of ink from the applicant had expired and the applicant had covered the expiry dates with new labels. The respondent did not specify the dates it received the customer complaints, or which shipments from the applicant contained the allegedly defective goods. At some point the respondent returned some of the ink to the applicant (the goods), claiming the product was defective. The applicant says the respondent returned the goods in December 2017. The respondent did not specify the date it returned the goods, but it did not dispute the applicant’s evidence on this point. I find the respondent returned the goods in December 2017.

11.   The applicant submitted a statement addressed to the respondent dated December 31, 2017 (the statement). It shows 11 transactions with corresponding invoice numbers and a total of $6,764.12 owing to the applicant. Nine of these transactions appear to be purchases the respondent made between October 18, 2016 and February 27, 2017 (the purchases). The 2 remaining transactions on the statement show negative amounts, and they appear to be approved credits for returned product. One of these credits is dated December 12, 2016 for $160.21. The other is dated December 31, 2017 for $355.85.

12.   The respondent says the “invoice in question” is from last year, not 2 years ago, though it is unclear what the respondent means by this. However, the applicant submitted a document it says it received from the respondent. This document shows 9 amounts and invoice numbers that correspond with the 9 purchases on the applicant’s statement. The document also shows a credit of $3,500 which the respondent held back for the value of the returned goods. The only other difference between the respondent’s document and the applicant’s statement is that the respondent’s document does not include the two approved credited amounts which show on the statement. The credited amounts on the statement are in favour of the respondent. On balance, I find the statement to be the most accurate reflection of the transactions between the parties. The question is whether the respondent must pay for the returned goods.

13.   The applicant says it has a 60-day return policy and a 1-year warranty period. The respondent did not dispute the applicant’s return policy or warranty period, and so I accept the applicant’s evidence on this point.

14.   The applicant says when the respondent returned the goods in December 2017, most of the goods fell outside of the 1-year warranty period, although some of the goods did fall within the warranty period. For the goods that fell within the warranty period, the applicant says it provided a report to the respondent which credited the total amount of those goods against the respondent’s total balance owing. The applicant submitted the report, and it lists the prices and quantities of the goods and their corresponding invoice numbers. Those invoice numbers correspond with 4 of the invoices on the statement between January 10, 2017 and February 27, 2107. The report says the total amount of the credited returned goods is $338.90. I note that one of the approved credits on the applicant’s statement is dated December 31, 2017 for $355.85. These numbers obviously do not match, however since the credit amount on the statement is higher than the credit amount on the report, and therefore in favour of the respondent, I find the applicant credited the returned goods at the higher amount of $355.85.

15.   The respondent says the value of the returned goods is $3,550, and that is the amount of its outstanding balance that it refuses to pay the applicant. I have found the applicant credited the respondent $355.85 for the returned goods that were returned within the warranty period. Therefore, the value of the goods the applicant says were returned outside the warranty period is $3,194.15. As I have found the respondent returned the goods in December 2017, the goods the respondent purchased in October or November 2016 fall outside of the applicant’s 1-year warranty period. According to the statement, the respondent made 3 purchases in those two months for a total of $4,223.10. On balance, given the applicant’s detailed evidence about the credited goods returned within the warranty period, the fact that the respondent did not specifically dispute that the returned goods were outside the warranty period, and the fact the respondent did not submit any evidence at all, I find it is more likely than not that the returned goods valued at $3,194.15 were returned outside the 1-year warranty period.

16.   In a contract for the supply of goods, section 18 (c) of the Sale of Goods Act (SGA) says there is an implied warranty that the goods will be durable for a reasonable period of time in the course of their normal use in all of the circumstances. A seller can only contract out of an implied warranty under section 18 of the SGA if it is made expressly clear (see Queen Charlotte Lodge Ltd. V. Hiway Refrigeration Ltd., 1998 CanLII 6552 (BC SC)). The applicant submitted its written 60-day return policy, however its 1-year warranty is not in writing. The applicant says a 1-year warranty period is standard in the industry. I do not find the applicant’s 1-year warranty to be expressly clear given it was not provided to the respondent in writing, and therefore the implied warranty of durability under section 18 (c) of the SGA applies to the contract. That said, while the respondent says the goods should not expire for three years, it failed to provide any supporting evidence that the goods had expired or that they were not durable. I therefore find there is no evidence the applicant breached section 18 (c) of the SGA.

17.   As referenced above, the respondent accuses the applicant of acting fraudulently and engaging in unethical and deceitful business practices by covering the expiry dates of some of its product with new labels. The respondent says that in these circumstances it should not have to pay for the returned goods regardless of the applicant’s warranty policy. I note that the respondent has not brought a counterclaim against the applicant for this allegation.

18.   In Anderson v. British Columbia Securities Commission, 2004 BCCA 7 (CanLII), the court said that because fraud is a very serious allegation which carries stigma, there must be clear and convincing proof to establish the elements of fraud. The respondent failed to submit any evidence to support this serious allegation. The applicant says the manufacturer erroneously labelled some of its product and that it applied corrected labels. In the circumstances, and given the applicant provided a reasonable explanation for the allegations, I find there is no basis on which to find the applicant acted fraudulently, unethically or deceitfully such that the goods are exempt from the applicant’s 1-year warranty policy. I find the respondent must pay the applicant the remaining balance on its account. However, I find the amount owing is $3,033.94, not $3,550. The applicant’s statement shows an outstanding balance of $6,764.12, and it is undisputed that the respondent paid the applicant $3,730.18. The difference is $3,033.94.

19.   Under section 49 of the Act, and tribunal rules, the tribunal will generally order an unsuccessful party to reimburse a successful party for tribunal fees and reasonable dispute-related expenses. I see no reason in this case not to follow that general rule. I find the applicant is entitled to reimbursement of $125 in tribunal fees. The applicant claimed $21.88 for courier fees. Since the applicant was required to serve the respondent with the Dispute Notice I find this to be a reasonable expense. I find the applicant is entitled to $21.88 in dispute-related expenses.

ORDERS

20.  Within 14 days of the date of this order, I order the respondent to pay the applicant a total of $3,219.54, broken down as follows:

a.    $3,033.94 as the balance owing on its account with the applicant,

b.    $38.72 in pre-judgment interest under the Court Order Interest Act,

c.    $125 in tribunal fees, and

d.    $21.88 in dispute-related expenses.

21.  The applicant is entitled to post-judgment interest, as applicable.

22.  Under section 48 of the Act, the tribunal will not provide the parties with the Order giving final effect to this decision until the time for making a notice of objection under section 56.1(2) has expired and no notice of objection has been made. The time for filing a notice of objection is 28 days after the party receives notice of the tribunal’s final decision.

23.  Under section 58.1 of the Act, a validated copy of the tribunal’s order can be enforced through the Provincial Court of British Columbia. A tribunal order can only be enforced if it is an approved consent resolution order, or, if no objection has been made and the time for filing a notice of objection has passed. Once filed, a tribunal order has the same force and effect as an order of the Provincial Court of British Columbia.