Date Issued: March 25, 2022

File: SC-2021-004589

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Goldstream Ventures Ltd. v. Tirso Holdings Ltd., 2022 BCCRT 339

Between:

GOLDSTREAM VENTURES LTD.

Applicant

And:

TIRSO HOLDINGS LTD.

Respondent

REASONS FOR DECISION
Tribunal Member:	David Jiang

INTRODUCTION

1.      This dispute is about a $5,000 damage deposit held under the terms of a commercial lease. The applicant, Goldstream Ventures Ltd. (Goldstream), was a former tenant of the respondent, Tirso Holdings Ltd. (Tirso). Goldstream originally claimed $4,066.96 for the partial return of the deposit in the Dispute Notice. In submissions it now says Tirso should return $4,165.35.

2.      Tirso disagrees that it should return any amount. It says it is still owed $2,113.46 even after accounting for the $5,000 deposit. Tirso did not file a counterclaim in this dispute.

3.      The parties are represented by their respective employees or principals.

4.      For the reasons that follow, I find Goldstream has partially proven its claims and make the orders set out below.

JURISDICTION AND PROCEDURE

5.      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.

6.      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.

7.      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.

8.      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.

ISSUES

9.      The issue in this dispute is whether Goldstream is entitled to the return of any portion of the damage deposit under the terms of the parties’ commercial lease.

BACKGROUND, EVIDENCE AND ANALYSIS

10.   In a civil proceeding like this one, the applicant Goldstream must prove its claims on a balance of probabilities. This means more likely than not. I have read all the parties’ submissions but refer only to the evidence and arguments that I find relevant to provide context for my decision.

11.   I begin with the undisputed background. The parties signed a commercial lease agreement dated October 15, 2015. It had a term of 5 years, ending on January 31, 2021. Goldstream was the tenant and Tirso was the landlord.

12.   As required by section 4.1 of the lease, Goldstream paid $20,000 to Tirso as a damage deposit. That section said that upon the expiry of termination of the lease, and upon an inspection attended by both parties, Tirso would return the deposit to Goldstream, less deductions for necessary repairs, maintenance, cleaning, or replacement of equipment and chattel in the leased premises. Section 4.1 also said that if the parties did not agree upon what deductions were necessary, an independent inspector would determine what was owing. Neither party submitted that an independent inspector should determine what is owed, so I infer they have agreed the CRT is an appropriate means to settle this dispute.

13.   It is undisputed that Goldstream occupied the leased premises until the evening of January 31, 2021. The parties each had representatives walk through the premises on February 1, 2021, for about 45 minutes. At the time, Goldstream’s representatives agreed to repair a kitchen hood fan and pay any remaining utilities invoices current to January 31, 2021. Goldstream said it expected the hood fan repairs and utilities would cost around $4,000. After some negotiations, Tirso’s representative returned $15,000 of the $20,000 deposit.

14.   In March 2021 Goldstream requested the return of the $5,000 balance, less the agreed-upon hood fan repairs and utility costs to January 31, 2021. I infer that Goldstream believed the repairs had been completed by this time. In a March 25, 2021 email, Tirso refused to return any money and said Goldstream still owed more.

Goldstream’s Claims for the Deposit Holdback

15.   In submissions, Goldstream agrees that Tirso was entitled to hold back $1,246.20 to pay for the following: a February 24, 2021 invoice charging $495.03 for hood fan repairs, a February 5, 2021 invoice charging $105 for draught line cleaning, and an undated invoice charging $646.17 for grease trap pumping. This last invoice is not in evidence, but the amount is undisputed. This leaves a balance of $3,753.80 that is in dispute.

16.   Goldstream says it should also be reimbursed a total of $411.55, broken down as follows: $68.25 for partial reimbursement of an alarm system battery, and $343.30 for cable credits. I find these claims are separate from those for the return of the security deposit. They were not included in the Dispute Notice and instead outlined only in uploaded submissions. I do not find them to be properly before me and make no findings about them.

Tirso’s Set-off Claims for the Deposit Holdback

17.   Tirso did not file a counterclaim, so I have only considered whether it is entitled to a set-off. The burden to prove a set-off is on the party alleging it. Here, that is Tirso. A claimed set-off must arise from the same course of dealings between the parties and engage the same issues requiring resolution in the dispute. See Wilson v. Fotsch, 2010 BCCA 226 and Dhothar v. Atwal, 2009 BCSC 1203.

18.   I asked the parties whether any of the holdback was still required to pay for utilities owing up to January 31, 2021. Goldstream says that there is still $1,796.52 outstanding for utilities and the holdback was intended to pay for this. Tirso disagrees and relies on a spreadsheet that shows a “Utilities for final” amount of $4,117.29. However, I find this amount unsupported by evidence. For example, the spreadsheet refers to Fortis and BC Hydro bills totaling $3,694.78, but these bills are not in evidence. So, I find it appropriate to use the amount Goldstream agrees to and further reduce the deposit amount owing of $3,753.80 by $1,796.52, for a total of $1,957.28.

19.   Tirso also claims a set-off of $529.74 for a February 14, 2021 invoice for a replacement thermometer. As it controls the premises’ temperature, I find this was a “necessary” repair under the parties’ contract and provide a set-off for it, leaving a total owing of $1,427.54.

20.   Tirso also claims that it is still owed money for the following:

a.    $1,216 for a March 19, 2021 invoice for septic pipe cleaning done in 2020,

b.    $816.62 for prorated reimbursement of a $1,400 July 2, 2020 invoice for an annual liquor license fee,

c.    $225.75 for a November 9, 2019 invoice to install a backflow valve, and

d.    $1,369.97 as reimbursement for a $1,105 November 2019 invoice for an emergency pump-out of septic waste.

21.   I find these are not set-off claims and are properly separate claims or counterclaims. This is because I find they do not engage the same issues requiring resolution in this dispute. As outlined in the parties’ contract, the deposit is to satisfy necessary repairs, maintenance, cleaning, or replacement of equipment and chattel at the termination of the lease at the end of January 31, 2021. These claims are about issues that arose well before that time.

22.   The Court Order Interest Act applies to the CRT. Goldstream is entitled to pre-judgment interest on the $1,427.54 deposit from February 24, 2021, the date of the last invoice for repairs, to the date of this decision. This equals $6.93.

23.   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. I see no reason in this case not to follow that general rule. As Goldstream only partially proved its claims, I find it is entitled to partial reimbursement of $87.50 in CRT fees. The parties did not claim for any specific dispute-related expenses.

ORDERS

24.   Within 14 days of the date of this order, I order Tirso to pay Goldstream a total of $1,521.97, broken down as follows:

a.    $1,427.54 for the return of the deposit,

b.    $6.93 in pre-judgment interest under the Court Order Interest Act, and

c.    $87.50 in CRT fees.

25.   Goldstream is entitled to post-judgment interest, as applicable.

26.   Under section 48 of the CRTA, the CRT 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 CRT’s final decision.

27.   Under section 58.1 of the CRTA, a validated copy of the CRT’s order can be enforced through the Provincial Court of British Columbia. A CRT 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 CRT order has the same force and effect as an order of the Provincial Court of British Columbia.