CHENGHAI WU CLAIMANT AND: 537699 B.C. LTD. v. PHD PROPERTIES LTD., 2013 BCPC 24

Citation: Wu v. 537699 B.C. Ltd. et al. Date: 20130128 2013 BCPC 0024 File No: 1136621 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: CHENGHAI WU CLAIMANT AND: 537699 B.C. LTD. and PHD PROPERTIES LTD. DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE J. O'C. WINGHAM Counsel for the Claimant: W. Lim Counsel for the Defendants: M. Siren Place of Hearing: Vancouver , B.C. Date of Hearing: January 28, 2013 Date of Judgment: January 28, 2013

[ 1 ] THE COURT: The claimant operates a computer sales and repair business called Toptech Computers Inc. which I will refer to as Toptech. On March 1st, 2001, he entered into a lease with the defendant, 537699 B.C. Ltd., of premises owned by that defendant at Number 108 - 11500 Bridgeport Road in Richmond, British Columbia. [ 2 ] The defendant, 537699 B.C. Ltd., subsequently assigned its interest in the lease to the defendant, PHD Properties Ltd. The lease was renewed twice with the final expiry date to be June 30th, 2011.

The premises were part of a building which had other commercial tenants. [ 3 ] In early 2011, the claimant and the defendant agreed to terminate the lease one month early on May 31st, 2011. The claimant located other premises in Richmond and moved out of the premises on Bridgeport Road even earlier, but paid the rent due under the lease to May 31st, 2011. [ 4 ] Prior to the expiry of the lease of the premises, the defendant entered into a lease with a Mr. Ip, who was the lessee of the unit immediately adjacent to the unit which had been leased by the claimant. Mr.

Ip wanted to take over those premises as he needed more space for his business. [ 5 ] The claimant says that when he moved his business from the premises on Bridgeport Road, he left furniture and inventory in the premises, intending to pick them up before the lease expired on May 31st, 2011. He says that when he sent his employee to the premises to pick up the goods it was discovered that Mr. Ip had gained access to the premises and was undertaking renovations. [ 6 ] He says that the inventory (which he valued at $54,196.80) was gone as was the furniture that he had left behind.

He alleges that the defendant took his inventory or, at the very least, is responsible for its loss. He also blames the defendant for the loss of the furniture that he says he left behind. Mr. Wu also says that he did not receive his security deposit back from the defendant. [ 7 ] His total claim has been reduced to the sum of $25,000 in order to bring it within the jurisdiction of this court.

The details as set out in his notice of claim are $54,196.80 for missing inventory; $2,660.77 for the return of his security deposit; $338.08 for an insurance premium (a claim that he did not pursue at trial); $3,569.96 for the June 2011 rent (which is also a claim he did not pursue at trial as he admits that he did not pay that month's rent). [ 8 ] The defendant agrees that the security deposit was not returned to the claimant. It denies that it took Mr. Wu's inventory as alleged by him.

It says that the claimant has not proven on a balance of probabilities that the inventory was, in fact, left in the premises by the claimant, let alone that it was taken by the defendant. The defendant says that it did not move any furniture from the premises and that, in fact, the premises were left vacant by the claimant when he moved out. [ 9 ] The defendant says the claimant left garbage and discarded furniture in the parking lot at the rear of the premises, which the defendant had to have removed.

The defendant also says that several light fixtures in the premises vacated by the claimant were not working when he vacated the premises. The defendant has counterclaimed for $1,311.29 for cleanup costs relating to the discarded furniture and debris behind the premises and the repair of light fixtures in the premises which were vacated by the claimant. [ 10 ] Mr. Danny Lee gave evidence on behalf of the claimant. He has been employed by the claimant for five years. He is the claimant's office manager. He testified that when Toptech moved out of the premises on Bridgeport Road on April 15th, 2011, he and Mr.

Wu took inventory of the items which were left behind. He testified that about 150 computer cases, 20 boxes of power supplies, 80 LCD computer monitors, 100 printers, and one colour copier were left in the premises on Bridgeport Road. He also testified that several customers' computers were left at those premises. [ 11 ] He valued the computer cases at $130 each, the power supplies at $65 each, the computer monitors at $169 each for the 22-inch monitors and $239 each for the 24-inch monitors, and the printers ranging in price from $89 to $109. He valued the colour copier at $10,000. [ 12 ] Mr.

Lee said that when the premises were vacated by the claimant, there was no rubbish or garbage strewn about and all the lights were working normally. [ 13 ] Mr. Lee testified that on May 31st, 2011, he went to the Bridgeport address at about 10:30 a.m. He said he saw the front and back doors were open and that all of the items that had been left there were missing. He testified that he called Mr. Wu who came over with a camera and took pictures. [ 14 ] Mr. Lee's evidence was that Mr. Wu had his own inventory list of the items which were being left behind when the claimant originally vacated the premises.

He said that he and Mr. Wu checked it off before leaving. Later in his evidence, he said that the inventory was prepared by himself and Mr. Wu. He then said that he knew that there were 80 LCD computer monitors because it was his job to remember. [ 15 ] The defendant had subleased part of the premises of Bridgeport Road to another party. Mr. Lee testified that before moving out on April 15th, 2011, he wanted to make sure that the sub lessee was also moving out and that he checked the lighting in the sub lessee's area and that it was all fine. He also testified that he knew that Mr.

Wu had a set of keys for the Bridgeport premises and that no one else had access to those premises. [ 16 ] Mr. Lee said that he had made arrangements for the transportation company to transfer the entire inventory to a self-storage unit on May 31st, 2011. When he was asked on cross-examination what the name of the transportation company was, he simply answered that it was a Chinese company. When he was reminded by the court that he was not asked what type of company it was, but the name of the company, he provided a Chinese name.

When he was asked for documentation concerning the agreement with the transportation company, he said that it was a verbal contract and he did not have any documentation.

[ 17 ] Mr. Lee was asked if he called the police concerning the missing inventory. His answer was that he did not call the police. Although he saw Mr. Ip at the premises when he attended there on the morning of May 31st, 2011, he did not ask Mr. Ip what happened to the inventory. [ 18 ] Mr. Lee said, however, said that he did phone Mr. Virvillis, the principal of the defendant, on May 31st, 2011, and told him that the inventory was missing. He later sent an email to Mr.

Virvillis about the return of the security deposit, but he did not mention anything about missing inventory or furniture in that email. [ 19 ] Mr. Wu described himself as the boss of Toptech Computer. Mr. Wu testified that he moved out of the premises on Bridgeport Road on April 15th, 2011, and moved into new premises on No. 3 Road in Richmond. He testified that the rent was paid on the Bridgeport address up to May 31st, 2011. [ 20 ] He also testified that the inventory was left behind. He described the inventory in the same detail that Mr. Lee described it. He gave similar values for that inventory.

He testified that when they left the premises on Bridgeport Road, the doors were locked and it was secure. He denied that he gave the key to anyone. He said he never gave consent to the landlord to enter the premises before May 31st, 2011, and that he did not give his consent to anyone to enter those premises. [ 21 ] Mr. Wu said that inventory was left behind because the premises they were moving into was smaller than the premises on Bridgeport Road. Mr. Wu testified that on May 31st, 2011, he sent his manager, Danny Lee, to the premises and that he subsequently received a call from Mr.

Lee telling him that the doors to the premises were open and the inventory was missing. Mr. Wu testified that he went to the premises and discovered that the items were missing. [ 22 ] He said he asked Mr. Lee to call the landlord to tell him about it. I note that this is inconsistent with Mr. Wu's later evidence that he did not want Mr. Lee to raise the issue of missing items in an email with Mr. Virvillis because of the volatile relationship between Mr. Lee and the landlord. [ 23 ] Mr.

Wu testified he did not report the missing items to the police because he felt the landlord had stored the items somewhere to allow the renovations to take place. He testified he did not visit the premises from April 15th to May 31st or send anyone there. [ 24 ] Mr. Wu testified that over the years in which his business operated out of the Bridgeport premises, he suffered two break and enters; one in 2005 resulting in $30,000 worth of property being stolen, the other in approximately 2003 resulting in $20,000 worth of property being stolen.

He reported both of those break-ins to the police and to the property insurer. He received compensation both times. He agreed that he has never reported this alleged theft to the property insurance company. He said he did not do so because the insurance company had warned him that if he had stuff stolen again, they would not insure him.

He also agreed that he has never reported this alleged theft to the police even though he now knows that the goods were stolen. [ 25 ] When asked on cross-examination if, in view of the break and enters that he had suffered in the past, he had any concerns about leaving the premises vacant with $55,000 worth of inventory in it, Mr. Wu answered that the door was locked and nobody knew what was in there and it was all wrapped up.

He agreed that the premises had no security system as it had been moved to the new premises that he had moved into. [ 26 ] When asked on cross-examination if he was concerned that perhaps it was Mr. Ip or his employees who took the inventory, Mr. Wu answered that he thought it was the landlord, not Mr. Ip or his employees during the renovations. He disagreed that there was any possibility that it could have been Mr. Ip or Mr. Ip's employees. [ 27 ] Mr. Wu was shown photographs of furniture and debris that had been placed in the parking lot behind the premises. He agreed that the furniture was his.

He denied that he or his employees moved it there and he denied knowledge of who might have moved it. [ 28 ] Mr. Wu was shown photographs that were entered as Exhibit 1 in these proceedings. On the fourth page of those photographs at the top is a photograph of the inside of the premises which were vacated by Mr. Wu. He was asked on cross-examination if the ceiling lights were on in the photograph and he said yes. It is quite clear, however, from looking at the photograph that most of the lights are not working. [ 29 ] Mr. Virvillis is an owner of the defendant companies.

He is also the property manager of the premises on Bridgeport Road. He testified that he does not have a key for any of the units located in the building. He described the discussions between himself and Mr. Wu concerning ending the lease early. [ 30 ] Mr. Virvillis testified that after Mr. Wu told him that he was moving, he talked to Mr. Ip about taking over the premises being vacated by Mr. Wu. Mr. Ip told him that he wanted to take over those premises, but that the earliest he could do so would be June 1st, 2011. Mr. Virvillis agreed with Mr.

Wu that he could end his lease of the premises on May 31st, 2011. [ 31 ] He recalled Mr. Wu telling him that he was going to leave the premises in mid-May. He said that he told Mr. Wu that he could simply turn the keys over to Mr. Ip when he vacated the premises. He did not do a walk-through with Mr. Wu as he usually does when premises are vacated. Mr. Virvillis testified that when he first saw the premises after they were vacated by Mr. Wu, he did not see any computers or any other inventory. He saw renovations underway which were being performed by Mr. Ip. He testified that Mr.

Ip had told him that he had received the keys from Mr. Wu and that he was going to start the renovations earlier than he had planned. [ 32 ] Mr. Virvillis denied that he received any contact from Mr. Wu or any of his employees on May 31st, 2011. He said he did receive an email in June asking for a return of the damage deposit, but he had no other dealings with Mr. Wu or his employees until he heard from Mr. Wu's lawyer in August 2011. He said that was the first he heard of the allegation of missing inventory. [ 33 ] Mr.

Virvillis also testified that the lighting ballasts in the part of the premises that had been sublet by Mr. Wu to the sub lessee were not working. He testified that Mr. Wu had left garbage and old furniture in the parking lot. He produced an invoice from a junk removal company for $448 which was related to the removal of a large pile of old desks and junk left behind the premises in the parking

lot. He also produced an invoice for lighting ballasts in the amount of $863.29. [ 34 ] On cross-examination, Mr. Virvillis testified that he understood that Mr. Ip would be doing renovations because he was expanding his business. He reiterated that Mr. Wu said that he was leaving the premises in mid-May and that he told Mr. Wu that he could give the key to the premises to Mr. Ip. He knew that they had a relationship. [ 35 ] Mr. Ip also testified on behalf of the defendant. Mr. Ip operates a countertop business at 11500 Bridgeport Road.

Up until May 2011, he occupied the premises located at Unit 107, which is immediately adjacent to the premises which had been leased by Mr. Wu. He had been there for about five or six years. He now occupies Unit 107 as well as Unit 108, which is the unit vacated by Mr. Wu. [ 36 ] He testified that he had approached Mr. Virvillis and mentioned that he would consider taking more space if anyone moved out. When Mr. Wu decided to vacate Unit 108, Mr. Ip entered into an agreement with the defendant company to lease that unit. Mr. Ip testified that he knew Mr.

Wu as he had seen him from time to time in the premises next door before he vacated them. He said that Mr. Wu moved out in early May 2011 and it is not disputed that he loaned Mr. Wu his vehicle to assist him to move. [ 37 ] Mr. Ip testified that on the day when Mr. Wu finished moving from the premises, Mr. Wu gave him the keys to the premises and said that he could start his renovations any time. Mr. Ip testified that he went into the premises that day. He said the premises were empty except for some trash which Mr. Wu had left behind.

He testified there was nothing broken or damaged inside the premises, but many of the lights were not working. He described the premises as being very dark and dim. [ 38 ] Mr. Ip testified that on May 31st, 2011, when Mr. Wu came back to take pictures of the premises, he was present. He said that Mr. Wu told him that he came back to take pictures just for the record. He testified that Mr. Wu did not mention anything was missing, but did mention to him that the landlord had refused to give him back his security deposit. [ 39 ] Mr.

Ip was shown the photographs on page 2 of Exhibit 1, i.e., the furniture and debris in the parking lot behind Unit 108. He said that those items were moved there by Mr. Wu and his employees in early May 2011. He said that he complained to Mr. Virvillis and asked that they be removed and they eventually were removed. [ 40 ] Mr. Ip had further dealings with Mr. Wu in either January or February 2012 when he took his computer to Mr. Wu's new business premises for repair. Mr. Ip testified that sometime later when he picked up his computer at Mr. Wu's place of business, Mr.

Wu asked him if he had received an email about being a witness at this trial. He said Mr. Wu told him that Mr. Virvillis had refused to give him back his deposit so it forced him to retain a lawyer to sue him. [ 41 ] He said that Mr. Wu told him that he hoped that he would not be a witness because if he was not a witness, Mr. Wu's chance of winning would be good. Mr. Ip testified that Mr. Wu told him that he wanted to teach Mr. Virvillis a lesson not to be so arrogant. Mr. Wu told Mr. Ip that he had already spent several thousand dollars and that he could not retreat now. [ 42 ] In cross-examination, Mr.

Ip reiterated that he received the key for the premises directly from Mr. Wu. He said Mr. Wu told him that he had been waiting for Mr. Virvillis, but Mr. Virvillis did not show up. He said that Mr. Wu told him that he could have the key so that he would have more time to design and renovate the premises for his purposes. He went into the premises with Mr. Wu on that date. He was not sure of the date, but he thought it was probably in early May that he received the key and that he started his renovations approximately one week later which was approximately the middle of May 2011. [ 43 ] Mr.

Ip was challenged on cross-examination as to what occurred on the day that he says he received the key for the premises. His evidence was quite detailed. He said only one key was given to him and it was only for the front door of the premises. He said by then everything had been moved out. He said that he went inside to look around and there were several bags of trash, that he told Mr. Wu that he would help move them out. He testified he did not see a photocopier and he did not see pallets of inventory on skids. [ 44 ] He again described the conversation he had with Mr. Wu when he picked up his computer in 2012.

He testified that he paid for the computer and walked out to his car and that Mr. Wu ran out to the parking lot after him to talk to him. [ 45 ] This case turns on the issue of credibility of the witnesses, particularly the credibility of the claimant, Mr. Lee, his employer, Mr. Wu, and Mr. Ip. The internal and external consistency of the witnesses' evidence, whether they had a motive to mislead the court, and common sense are all factors which are relevant in the consideration of credibility in this case. [ 46 ] Mr. Lee is an employee of Mr. Wu. He consistently referred to Mr. Wu as the boss.

His evidence concerning the preparation of the inventory is internally inconsistent. In describing how he knew the details of the inventory which was left behind. He began by saying the boss had his own inventory list and that he and his boss checked it off. He then said he was there when his boss marked it off. He then said that the inventory record was prepared by his boss and by him. He then said that he knew there were 80 LCD computer monitors because it was his job to remember. [ 47 ] When he was asked what the square footage of the subleased premises was, he said he did not know.

He then agreed that the sublease was approximately one-third of the premises and that he knew that the square footage of the premises was 2,400 square feet. [ 48 ] Mr. Wu testified that he asked Mr. Lee to call the landlord to tell him that the inventory was missing. This is inconsistent with his evidence that he did not want Mr. Lee to raise the issue of the missing items in an email because of the volatile relationship between Mr. Lee and the landlord. His evidence that over the years the collaboration between him and the landlord was pleasant was also inconsistent with his evidence that the landlord and Mr.

Lee would get into arguments and insult and swear at each other when they communicated. I note that the evidence indicates that most communication between the landlord and Mr. Wu was done through Mr. Lee because Mr. Wu does not speak English. [ 49 ] Mr. Wu's evidence that he would leave in excess of $50,000 worth of computer equipment in unoccupied premises and not send someone to check up on the premises over a period of six weeks does not have the ring of truth to it. It is also unlikely that someone would store $50,000 worth of computer equipment in a self-storage locker as Mr. Wu said he intended to do.

[ 50 ] I note that the claimant's evidence included the allegation that there were a number of customers' computers left in those premises, as well. It seems unlikely that customers' computers would be left unattended and unvisited for a period of six weeks as alleged by Mr. Wu. Common sense indicates that the customer would expect to have his or her computer returned to them earlier than six weeks and would expect that it would not be left unattended in unoccupied premises for that period of time. [ 51 ] Mr.

Wu's evidence that he did not report the alleged theft to the police or to his insurance company also lacks the ring of truth. His evidence that he did not report the loss of his inventory to the insurer because he would not get insurance again from the company, quite frankly, is illogical. He alleges that he lost $54,000 worth of inventory. He would have the court believe that he is willing to absorb that loss rather than risk not being able to get insurance from that company in the future.

Even if I were to believe his evidence on that point, which I do not, it does not explain why he did not report the alleged theft to the police. [ 52 ] I found Mr. Ip to be a credible and a reliable witness. He is an independent party who has no interest in the outcome of this litigation. He and Mr. Wu were on friendly terms. He loaned Mr. Wu his truck to allow Mr. Wu to move to his new premises on No. 3 Road. [ 53 ] He says that Mr. Wu provided him with a key to the premises in early May once he had moved all of the items out of the premises on Bridgeport Road. Given that Mr.

Ip had loaned him his vehicle, it seems reasonable and believable that Mr. Wu would have accommodated Mr. Ip by allowing him to move in and begin his renovations early. [ 54 ] Mr. Ip's evidence that there were lights out in the premises is corroborated by the photographs in Exhibit 1. [ 55 ] There is absolutely no reason to think that Mr. Ip would attend court and fabricate his evidence. Long after the events that gave rise to this lawsuit occurred, Mr. Ip took his computer to the claimant's business to have it repaired. It was after he picked it up and paid for it that Mr.

Wu approached him concerning not testifying at this trial. [ 56 ] I disbelieve Mr. Wu and Mr. Lee when they say that inventory and furniture were left inside the premises. Where Mr. Ip's evidence and the evidence of Mr. Wu and his witnesses conflict, I reject Mr. Wu's evidence and his witnesses' evidence and I accept the evidence of Mr.

Ip. [ 57 ] I find that the claimant has failed to prove on a balance of probabilities, firstly, that any inventory or furniture was left in the Bridgeport premises when he vacated them and, even if I were to accept that evidence, which I do not, there was no evidence produced by the claimant that the landlord either removed those items itself or allowed anyone else to. [ 58 ] I also accept the evidence of Mr. Ip as corroborated by the photographs and the evidence of Mr.

Virvillis that several lights in the premises occupied by the claimant were not working when he vacated them and that the reason for them not working was that the ballasts had to be replaced. I am satisfied that the replacement of the ballasts falls within the duty of the tenant to repair reasonable wear and tear under Clause 5.11 of the lease and that the claimant is responsible for the cost of replacing those ballasts. [ 59 ] I am also satisfied that discarded furniture and other debris in the parking lot belonged to the claimant and that it was the claimant or his employees who left them there.

The claimant is responsible for the cost of removing those items. [ 60 ] The counterclaim in the amount of $1,311.29, that being $863.29 for the lighting repairs and $448 for the garbage removal is allowed. [ 61 ] The defendant admits that it owes the claimant $2,660.77 for the security deposit. The claimant's claim is allowed in that amount. [ 62 ] After setting off the amount awarded to the defendant in its counterclaim, the claimant's claim is allowed in the amount of $1,349.48. [ 63 ] The defendant claims a penalty of 10 percent of the amount claimed by the claimant.

Rule 20(5) of the Small Claims Rules provides: A judge may order a party to pay the other party up to 10% of the amount claimed or the value of the claim or counterclaim if the party made a claim, counterclaim or reply and proceeded through trial with no reasonable basis for success. [ 64 ] In this case, the claimant made allegations which were not true. The evidence that I have accepted establishes that there was no inventory or furniture left in the premises when the claimant vacated it contrary to his evidence.

Even if I were to believe the claimant's evidence that there had been inventory and furniture left behind, which I do not, there is no evidence which would indicate that the defendant landlord was responsible for its disappearance. [ 65 ] The claimant's claim in this case for the most part was based on false allegations and lacked an evidentiary base on which to establish liability on the part of the defendants.

In short, it had no reasonable basis or chance of success. [ 66 ] I order the claimant to pay a penalty to the defendant, PHD Properties Ltd., in the amount of $2,233.92 which is 10 percent of the portion of the claimant's claim which did not succeed and which had no reasonable basis for success. [ 67 ] In

summary, the defendant shall be entitled to a penalty of $2,233.92 and judgment on its counterclaim in the amount of $1,311.29. From that will be deducted the amount of the deposit owing to the claimant in the amount of $2,660.77. The effect is that there will be an order that the claimant pay to the defendant the sum of $884.44. [ 68 ] The defendant will also be entitled to prejudgment interest on that sum from May 31st, 2011, to today's date and its costs for

filing and serving documents. The defendant will also be entitled to reimbursement from the claimant for the costs of the interpreter for Mr. Ip. [REASONS FOR JUDGMENT CONCLUDED]