Date Issued: May 25, 2021

File: SC-2020-009270

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Arockiasamy Holdings Inc. v. 0782174 B.C. Ltd., 2021 BCCRT 561

Between:

AROCKIASAMY HOLDINGS INC.

Applicant

And:

0782174 B.C. LTD.

Respondent

INTRODUCTION

1.      This dispute is over missing belongings.

2.      The applicant, Arockiasamy Holdings Inc. (AHI), contracted with the respondent, 0782174 B.C. Ltd., which does business as Winmar Property Restoration Specialist (Winmar), to perform restoration services for a strata lot’s water damage.

3.      Winmar was to pack, move, store, and put back AHI’s belongings where they found them in the strata lot (re-set). However, after Winmar took possession of AHI’s belongings, some of it undisputedly went missing. What is disputed is how the items went missing. Winmar says it was stolen. AHI disagrees and says there is no evidence of a theft and that Winmar failed to return its belongings. AHI seeks $2,384.82 compensation from Winmar for a television, 2 mattresses, various bedding items, an area rug, a table lamp, and various utensils and bathroom supplies that went missing (missing items).

4.      Winmar disagrees. Winmar says that a third-party, Space Centre Self Storage (SCSS), stored AHI’s belongings. I infer Winmar means that it was not responsible for the missing items while in SCSS storage. SCSS is not a party to this dispute.

5.      AHI is represented by its director Vincent Arockiasamy. Winmar is represented by its business manager Jay Rhode.

JURISDICTION AND PROCEDURE

6.      These are the formal written reasons of the Civil Resolution Tribunal (CRT). The CRT has jurisdiction over small claims brought under section 118 of the Civil Resolution Tribunal Act (CRTA). Section 2 of the CRTA states that the CRT’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the CRT must apply principles of law and fairness, and recognize any relationships between the dispute’s parties that will likely continue after the CRT process has ended.

7.      Section 39 of the CRTA says the CRT has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. Here, I find that I am properly able to assess and weigh the documentary evidence and submissions before me. Further, bearing in mind the CRT’s mandate that includes proportionality and a speedy resolution of disputes, I find that an oral hearing is not necessary in the interests of justice.

8.      Section 42 of the CRTA says the CRT 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 CRT may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

9.      Where permitted by section 118 of the CRTA, in resolving this dispute the CRT may order a party to do or stop doing something, pay money or make an order that includes any terms or conditions the CRT considers appropriate.

ISSUE

10.   The issue in this dispute is whether Winmar is responsible for the missing items, and if so, what is the appropriate remedy?

EVIDENCE AND ANALYSIS

11.   In a civil proceeding like this one, the applicant AHI must prove its claim on a balance of probabilities. I have read all the parties’ submissions but refer only to the evidence and argument that I find relevant to provide context for my decision.

12.   In this dispute the law of bailment applies. The law of bailment is about the obligations on a party to safeguard the belongings of another party. The “bailor” is the person who gives the belongings, here AHI, and the “bailee” is the person who takes possession of them, here Winmar. In this case, Winmar was what is known in law as a bailee for reward. A bailee for reward is someone who agrees to receive goods as part of a transaction in which the bailee gets paid.

13.   The standard of care for a bailee for reward is what care a reasonable person would take of the belongings in all the circumstances (see: Harris v. Maltman and KBM Autoworks, 2017 BCPC 273). If a thing entrusted to a bailee for reward is lost, then the burden of proof is on the bailee to show the loss was not a result of their failure to take the care a reasonable person would take of their possessions. This means to determine whether Winmar is liable for AHI’s property, I must determine whether Winmar exercised the same care it would have exercised over its own property in the circumstances. I find the evidence shows Winmar did not but is exempted from liability. My reasons to follow.

14.   On February 21, 2019, the parties signed Winmar’s contract for restoration services.

15.   On February 25, 2019, Winmar took possession of AHI’s belongings. Winmar took a photo inventory of AHI’s belongings. It is undisputed that Winmar did not create a written itemized inventory of AHI’s belongings. The fact that Winmar did not create an itemized inventory is significant. In Webb v Tyldesley’s Ltd., [1998] BCJ No. 2978, a case with similar facts to this dispute, the BC Provincial Court held the bailee and the warehouser jointly and severally liable for the bailor’s loss. The court found that the bailor was negligent because it did not inventory the bailee’s belongings and could not account for what was left in its possession after belongings were lost or stolen from changing through multiple hands. In coming to this decision, the court relied on Pazitch v Shaughnessy Antique Gallery, 1997 CanLII 4320 (BCSC), where the B.C. Supreme Court held that the duty of care over goods bailed for reward includes a duty of bailee to keep track of them.

16.   Almost a year later, on February 24, 2020 Winmar notified AHI that AHI’s television was stolen from storage, which is undisputed. Winmar says it determined that AHI’s television was stolen by checking its inventory but the only evidence before me is the photo inventory from the strata lot. So, I conclude that Winmar used this record to check AHI’s inventory. It is also undisputed that storage locker was locked in a secured facility when it was broken into. So, without evidence to the contrary, I cannot conclude that Winmar failed to safeguard the television. I make no findings on SCSS’s liability because it is not a party to this dispute.

17.   On June 11, 2020, after completing the restoration, Winmar re-set AHI’s belongings and learned that 2 mattresses were also missing and notified AHI on June 12, 2020.

18.   On June 14, 2020, AHI discovered more missing items and notified Winmar about it, which Winmar does not dispute. Winmar accepts that because they did not create an itemized inventory list and there were “a box or two” missing, the missing items were likely in the boxes. I am satisfied from this that AHI has established that the other missing items were not returned by Winmar.

19.   Winmar submits the other missing items were all stolen from the break-in. However, I am unable to conclude that. I agree with AHI that there is insufficient evidence to support that the other missing items were stolen. The other missing items were not discovered stolen nearly 4 months after the break-in and it was not recorded as missing initially after the break-in. Winmar submitted into evidence a police report. However, I do not find this report helpful. The report does not say what was stolen and conversely says that storage lockers contained construction equipment. The police requested Winmar to provide a list of what was stolen but there is no evidence that this was done. Winmar says that after the break-in it did another photo inventory at SCSS, but this evidence is also not before me. In any event, I find that Winmar’s photo inventory method was inadequate in the circumstances. This is evident from the fact that the parties discovered more and more items missing at different times after the break-in. I also find that in stating “a box or two” were missing shows that Winmar was not sure what it had in its possession.

20.   In Pazitch, the court at paragraphs 11 and 12 found the bailee liable for an inadequate inventorying method leading to a failure to account and care for what was bailed. I am bound by Webb and Pazitch and I find that Winmar likewise is liable for the other missing items in not keeping an itemized inventory. It was simply not possible for Winmar to care for AHI’s belongings when it did not know what it had in its possession. Like in Webb and Pazitch, without an itemized inventory, I find it impossible for Winmar to determine which of the other missing items at which time were the result of it being stolen or lost. I find this because it is undisputed the parties learned about the other missing items at 2 different times. The mattress first and the June 14, 2020 items later. At the same time, Winmar says that it contracted with 2 different moving companies at different times to move AHI’s belongings. This means that AHI’s belongings changed hands multiple times between different parties. For this reason it is impossible to tell at which time whether one, some, or all of the other missing items were stolen at SCSS as alleged, lost or misplaced by a sub-contractor or a Winmar employee, or even stolen by a sub-contractor or a Winmar employee. So, I reject Winmar’s suggestion that it is not responsible for the other missing items. Without an itemized list at any time during the term of bailment, there is insufficient evidence to support whether the other missing items were ever in SCSS’s storage locker to begin with. So, I find that Winmar has not proven on a balance that the other missing times were stolen from the break-in. I am only able to conclude that Winmar failed to return AHI’s other missing items bailed.

21.   However, this does not conclude the matter. It is undisputed that the parties signed the restoration contract. Winmar says that the contract’s liability limitation clause applies to the other missing items because it is “in connection with the performance of the Work”. I agree. The contract defines the “work” as for the “Temporary Repairs and Emergency Remediation Services”. The limitation of liability clause specifically says that Winmar will not be liable for any negligence or failure to exercise reasonable care “in connection with the performance of the Work”. AHI submits that because the contract has a separate heading for “Handling of Dwelling and Contents”, it is not part of the “work”. I do not agree and find that the limitation of liability clause applies to the bailment. It is clear from a plain and harmonious reading of the contract that the “work” must extend to the bailment as a necessary part of the remediation work. AHI acknowledged this as well in its reply submissions that the bailment was to “permit the remediation to be completed”. As stated in Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53 at paragraph 47, exclusionary clauses are not to be read in isolation but construed with the agreement as a whole to give the words their ordinary and grammatical meaning in harmony with the rest of the contract’s purpose and the commercial context. The purpose and the context here was for Winmar to repair and restore AHI’s strata lot, which required the bailment of AHI’s belongings. Therefore, I find that the bailment was in connection with the “work” and find that Winmar cannot be found liable for the other missing items because the limitation of liability clause is enforceable.

22.   In summary, I find that Winmar breached its bailment duty to AHI for failing to return AHI’s other missing items but is exempted from liability under contract.

23.   For the reasons above, I dismiss AHI’s claim and this dispute.

24.   Under section 49 of the CRTA and CRT rules, the CRT will generally order an unsuccessful party to reimburse a successful party for CRT fees and reasonable dispute-related expenses. As the applicant was not successful, I do not order reimbursement of the tribunal fees. The respondent did not pay fees or claim expenses.

ORDERS

25.   I dismiss AHI’s claim and this dispute.