Zachariuk v. Gareau and McLaughlin Date:, 2015 BCPC 134

Citation: Zachariuk v. Gareau and McLaughlin Date: 20150204 2015 BCPC 0134 File No: 12-1153 Registry: Williams Lake IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: SUSAN ZACHARIUK coba SUE Z Q'S SALES CLAIMANT AND: MARY MARAGRET GAREAU aka MARY MARGARET KEATIN AND WILLIAM MCLAUGHLIN DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE E. L. BAYLIFF Appearing on their own behalf: S. Zachariuk Appearing on their own behalf: M. Gareau & W. McLaughlin Place of Hearing: Williams Lake , B.C. Dates of Hearing: July 22, 25, December 10, 2013 & February 24, 2014 Date of Judgment: February 4, 2015

[ 1 ] Susan Zachariuk sues Mary Gareau for monies which she says Ms. Gareau owes her, arising out of a business enterprise - a Christmas store - which the ladies operated together for the month leading up to Christmas, 2011. [ 2 ] As I said to the parties on the last day we were in court together, this case has proved to be one of the most difficult I have ever had to decide. The two ladies and their witnesses tell very different stories and there is little in the way of solid written evidence upon which to base a decision. Decision [ 3 ] In the end, I have concluded that the Claimant, Ms.

Zachariuk, has made out her Claim to the somewhat limited extent of $548.05 and that is the sum I award to her plus the court filing fees ($100.00) for a total of $648.05. [ 4 ] I will give Ms. Gareau until April 3 rd , 2015 at 4 pm to pay this sum. Post-judgment interest (calculated pursuant to the Court Order Interest Act) will begin to accrue from February 16 th , 2015 until the day the judgment is paid in full. (Put another way, if Ms.

Gareau pays the judgment in full prior to February 16 th of this year, she will not have to pay any post-judgment interest). [ 5 ] I will explain why I have reached this decision, beginning with a brief discussion of the burden of proof in such matters. Burden of Proof [ 6 ] The burden of proof in a civil law suit of this kind is “proof on a balance of probabilities”. This means that the person asserting a fact must prove that it is more probable than not that the fact is true or that the event occurred. [ 7 ] Applying this to the case at bar, this means that Ms.

Zachariuk must prove that it is more probable than not that Ms. Gareau still owes her some share of the sales made at the Christmas store. As it concerns her allegation that Ms. Gareau “stole” certain of her inventory (dresses, some other items and some of her consignor’s items), Ms. Zachariuk must also prove this on a balance of probabilities - that it is more probable than not. 1. Claim for Missing Inventory (Dresses & Other Items) [ 8 ] Ms.

Zachariuk testified that some gift items plus 20 to 25 of the brightly coloured “Suzy Q” and “Mystical Imports” dresses disappeared out of her inventory but were not accounted for by sales. She believes that Ms. Gareau took these dresses and other items while she (Ms. Zachariuk) had them in storage or on display at the Christmas store and, that some months later, Ms. Gareau tried to sell them over the internet. [ 9 ] Ms. Zachariuk called Ms. Sherry Cuthbertson and Ms. Tara Spender to testify that Ms. Gareau had been trying to sell these same dresses in April and in early July, 2012. Ms.

Cuthbertson testified that some or all of the pictures of dresses marked Exhibit 2 were taken by her, in Ms. Gareau’s presence, in preparation for posting them for sale on-line. [ 10 ] Ms. Gareau adamantly denies taking any of Ms. Zachariuk’s dresses or any of the other items Ms. Zachariuk says are missing. She adamantly denies trying to sell any of the dresses on Sherry Cuthbertson’s website and adamantly denies any knowledge of the pictures of dresses marked Exhibit 2. She says Ms. Cuthbertson has a vendetta going against her and is telling lies about her because Ms. Cuthbertson believes Ms.

Gareau stole her ring (see pp. 96 to 98 of Facebook exchanges between Ms. Cuthbertson and Ms. Gareau marked Exhibit 7 ). As for Tara Spender’s evidence, Ms. Gareau adamantly denies trying to sell any dresses to Ms. Spender. She says Ms. Spender must have been bribed in some way by Ms. Zachariuk in order to come to court and testify as she did. [ 11 ] Although both Ms. Cuthbertson and Ms. Spender appeared to be credible witnesses, I have concluded that I cannot grant judgment for the Claimant, Ms.

Zachariuk, with respect to the dresses or any other items which she says went missing from her inventory during the operation of the Christmas store. The main reason I have reached this conclusion is that there is simply no comprehensive written inventory of items, dresses included, that Ms. Zachariuk took into the Christmas store and then took back out of the Christmas store. [ 12 ] Ms. Zachariuk testified that she did have a reliable system of keeping track of her inventory of dresses even though she maintained no paper or computerized record.

She described her system to the court and said that she was sure 20 to 25 dresses went missing during the operation of the Christmas store, over and above those accounted for by sales. [ 13 ] However, as against this I must consider, firstly, the evidence of Joan Webber, a witness called by Ms. Gareau. Ms. Webber is one of Ms. Gareau’s consignors. She is retired now but her career was in retail sales and she has a long experience of that type of work. She filled in for Ms. Gareau at the Christmas store on at least one occasion. Ms. Webber testified that from what she saw she was very concerned by Ms.

Zachariuk’s lax methods of keeping track of her inventory. Ms. Gareau testified to similar effect and said that it caused her (Ms. Gareau) a good deal of frustration when they were running the Christmas store together. I note as well Ms. Zachariuk’s own evidence that she “piled” her dresses on the floor of her storage unit after the Christmas store closed and did not get back to doing a

detailed inventory of them for 6 months. [ 14 ] I simply cannot find, on this body of evidence, that Ms. Zachariuk has proven that it is more probable than not that 20 to 25 dresses were missing from her inventory. [ 15 ] As it concerns Ms. Cutherbertson’s evidence, I agree with Ms. Gareau that there was an inconsistency between her (Cuthbertson’

s) evidence about having overheard Ms. Gareau’s end of the phone conversation wherein Ms. Gareau said “this woman just will not give up!” and her evidence about when it was that she was first in Ms. Gareau’s house. The email marked Exhibit 15, assuming it is authentic as to date and content, seems to indicate that this telephone conversation between Ms. Zachariuk and Ms. Gareau occurred on January 31 st , 2012. Yet, Ms. Cuthbertson testified that it must have occurred sometime after January. Ms. Gareau argues that this is an indication that Ms.

Cuthbertson embellished her evidence - that she claimed to have overheard this phone call which she had heard about later from Ms. Zachariuk, when, in fact, she could not possibly have done so as she admits herself that she had not even been in Ms. Gareau’s home as of January 31 st . [ 16 ] This inconsistency in Ms. Cuthbertson’s evidence is probably explained by the fact that, as she said herself, “I have a very poor memory for dates, unaided.” [ 17 ] Ms. Gareau attacks Tara Spender’s evidence saying Ms. Spender could not possibly have seen dresses hanging in Ms.

Gareau’s little store at the historical site because there was no place to hang such items. See photos marked Exhibit 6. As I said earlier, I found Ms. Spender to be a credible witness. However, as I also said earlier, I cannot grant judgment to Ms. Zachariuk in relation to the dresses because of the lack of a detailed written inventory made at the time. [ 18 ] Ms. Zachariuk listed a number of other items that disappeared while the Christmas store was in operation. She believes Ms.

Gareau either sold these items without accounting to her for them, or took the items home with her when the store closed after Christmas, 2011. These items included: knitted and wooden consignment items provided by Gaylene and Ed Stieffel, an Elvis cookie jar, some blown glass jewellery and a blown glass paperweight, three bird houses, and an oil painting on a plaque. Once again, I have concluded that, in the absence of a clear list of inventory that was brought into the store by Ms. Zachariuk and then taken out of the store by her, I cannot find that it is more probable than not that it is Ms.

Gareau who is to blame for the disappearance of these items. [ 19 ] I will move now to the second aspect of Ms. Zachariuk’s case which is a claim that Ms. Gareau failed to fully “settle up” with her for sales of her’s and her consignors’ inventory at the Christmas store. 2. Claim for an Additional Share of the Revenue [ 20 ] Ms. Zachariuk testified that Ms. Gareau failed to properly account to her for her share of the revenue earned at the Christmas store. In other words, she says that Ms. Gareau has failed to pay her (Ms.

Zachariuk) everything that she is owed for items belonging to her and to her consignors that sold through the Christmas store. [ 21 ] Both ladies testified about a plan for a logical system of record keeping for a store of this sort where there was a fairly high volume of merchandise and multiple vendors. Ms. Gareau, Ms. Zachariuk, and their many consignors, all had property for sale in the Christmas store. The ladies knew they needed to keep track of who was owed what, for what.

It appears that they had a plan for doing so involving the use of a daily sales journal, a receipt book, the till tape, credit card slips and Ms. Zachariuk’s Global Payments account statements which would show what money was received from sales paid for by credit card. [ 22 ] It appears that they originally planned to “settle up” with each other once a week - figuring out who was owed what, for what and ensuring that each received her proper share, either in cash or deposit, from the revenue earned to that point.

However, that plan was derailed somewhat by the fact that there was always a delay of a week or so in receiving the money from the credit card sales. It was probably also derailed because Ms. Gareau was extremely busy working long hours at the Christmas store and sometimes didn’t have the energy or the time to sit down with Ms. Zachariuk and do a proper accounting. Ms. Zachariuk had intended to do an equal share of the work in the store but, for various reasons, was unable to. This left the burden on Ms. Gareau and Mr. McLaughlin. Ms.

Zachariuk acknowledged this in her evidence. [ 23 ] As I understand it, the situation at the start of 2012 was that Ms. Gareau had partially, but not fully, accounted to Ms. Zachariuk for the sale of her’s (Ms. Zachariuk’

s) and her consignors’ inventory. Ms. Zachariuk was waiting for Ms. Gareau to complete the accounting and to produce the “paperwork” - the original sales journal, receipt book and perhaps till tape that would show her (Ms. Zachariuk) that she had been properly and fairly paid for those items belonging to her and to her particular consignors which had sold through the Christmas store. [ 24 ] Ms. Zachariuk testified that she made numerous requests to Ms. Gareau for this “paperwork” so that they could “settle up” with each other and with their consignors. See Facebook entries marked Exhibit 3. She said that Ms.

Gareau continuously made excuses or told stories to try to explain why the “paperwork” was missing. The bottom line, Ms. Zachariuk says, is that she has never yet seen the original records from the store, such as the daily sales journal, the receipt book, till tape and so on that would satisfy her that she has been paid what she ought to have been paid. She finally decided that in order to get a clear answer about who was owed what, for what, her only option was to sue Ms. Gareau. [ 25 ] For her part, Ms. Gareau testified that, to the best of her recollection, she did make a full and fair accounting to Ms.

Zachariuk for all sales of Ms. Zachariuk’s or her consignors’ inventory. She points to the handwritten yellow sheets included in Exhibit 11 along with the credit card slips, all of which were handed over to Ms. Zachariuk either while the store was in operation or in the months

following. [ 26 ] Ms. Gareau testified that she has been selling for 6 years or more, often on behalf of many consignors, and that she always follows the same system. Here is her description of how she accounted to Ms. Zachariuk, to Ms.

Zachariuk’s consignors and, indeed, to her own consignors, such as Sage Birchwater: “I have run a store now for maybe 6 years and I always do it the same, everyone brings me an inventory sheet, I keep notes of what sells, like “#3 sold a bunny blanket” or whatever, at the end of the week -- I don’t do this for people but I did it for her because -- she needed to be paid every second, to do with the Visas or something -- I wait to the end of the month -- like in the summer time people trust me I guess because I have been doing it for so long, people leave stuff with me in May and they come in on a designated day in September and, same as I did at the Mall, like you’ve seen on the paper from Sage, you have the invoice [reference to Exhibit 5] which says how much was sold and this is what you’re owed.

That’s it. I don’t write up -- like I wrote up a receipt if someone needs one, like she wanted one from Sage -- but I don’t do that unless I don’t have -- you know if you don’t have the inventory sheet, then I carry that over to the next week, I write it back in the book, right, at the end of each week as I transfer this onto “sold May 13 th ” or whatever it is, right, that paper gets thrown away . The only thing I carry over are the things I need to carry over and they go back in the book for next week.

It’s a lot of paperwork but I am not computer literate and none of the computer programs work for me so I do it this way. At the end of the season when I am done with my month or 3 months I take whatever you gave me, make two copies, one I keep, one you keep, it shows what the sales were, the commission was and how much I paid you . If you disagree with it what would take you four months , like I mean, for instance, Susan said one of these sheets, like the second week, is wrong.

Well she had it when we were still at the store, she sat and played with papers all the time, along with her linen or whatever - wouldn’t she have noticed, why would it take 4 months to find this? I mean I have done it that way all the time. It may not be the ‘right’ way, but it works.” [ 27 ] Ms. Zachariuk did not have a written list of her inventory so Ms. Gareau wrote up, on the “yellow sheets”, a list of dates and the items which she recognized as belonging to Ms. Zachariuk that sold on each date, together with the price each item sold for.

It would appear from what she said in the excerpt quoted above, that Ms. Gareau obtained this information from original documents such as the daily sales journal and receipt book. [ 28 ] Since Ms. Zachariuk challenges the accuracy of the “yellow sheets” - questioning whether Ms. Gareau listed all, or only some, of her (Ms. Zachariuk’

s) items that sold and therefore whether she (Ms. Zachariuk) has been ‘short-changed’ in her share of the revenue earned by the Christmas store, it would have been helpful to have been able to compare the “yellow sheets” against the original documents - the daily sales journal, receipt book and till tape - they were prepared from. Ms. Gareau has not produced those original documents and it remains unclear to me whether they are still in existence. For example, in the portion of her evidence I have quoted above, Ms. Gareau seems to say that her usual practice with the daily sales journal is “that paper gets thrown away” once she has prepared a

summary for each vendor, similar to what we see in the “yellow sheets”. Yet, in cross examination Ms. Gareau seemed to say that the original documents associated with the Christmas store had not been thrown away but, instead, had been sent into either Canada Revenue Agency or the Consumer Taxation branch of the provincial government in response to an audit she was undergoing as a result of complaints made against her by Ms. Zachariuk. Ms. Gareau testified that she had not kept a copy of these documents for use in court in answer to Ms.

Zachariuk’s claims. [ 29 ] Although it would have been nice to confirm the accuracy of “the yellow sheets” from the original documents, I bear in mind the fact that Ms. Gareau has about 6 years of experience selling on consignment, that she has developed a system for keeping track of her consignors’ inventory which, while not sophisticated, seems to have allowed her to stay in business for some years. I have also heard from two of her consignors, Ms. Webber and Mr. Birchwater. Both appear to trust Ms. Gareau and feel that she has accounted to them fairly over the years. For these reasons I do find that Ms.

Gareau has established on a balance of probabilities that “the yellow sheets” are a reasonably accurate

summary of what is owed to Ms. Zachariuk for items belonging to herself and to her consignors that sold through the Christmas store. [ 30 ] Having found that “the yellow sheets” are reasonably accurate, I will go on, in the remainder of my decision, to consider the question of whether Ms. Zachariuk has, or has not, been paid in full for the sales of hers’ and her consignors’ inventory at the Christmas store. As I said at the beginning I have concluded that the evidence establishes that Ms. Gareau owes Ms. Zachariuk an additional sum of $548.05. [ 31 ] I have reviewed each of “the yellow sheets” in Exhibit 11 and agree with the figures shown on Ms. Zachariuk’s

summary sheet entitled “Sales and Payment Log Provided by Bill and Mary” found at the front of Exhibit 11. I find that the total owing for sales of Ms. Zachariuk’s inventory and the inventory of her consignors is, as shown, the sum of $3,550.05. [ 32 ] This figure includes the HST and I conclude from the evidence that it is the obligation of Ms. Zachariuk to remit the tax owing on the sales of her merchandise and on behalf of her consignors unless the consignor has his or her own tax number. [ 33 ] The final step is to determine how much Ms.

Zachariuk has already been paid and deduct that sum off the total owing of $3,550.05. [ 34 ] The ladies agreed that Ms. Zachariuk would receive all the money from credit card sales at the Christmas store because she was the holder of the account with Global Payments. On her

summary sheet Ms. Zachariuk has listed a total of $1,602.00 received into her account from credit card sales. Unfortunately, Ms. Zachariuk did not file her Global Payments account statements as an exhibit, but she did refer to them in her testimony. This aspect of her evidence was not challenged on cross examination. I have therefore decided that I will accept the figure of $1,602.00 as being the amount she has already received from credit card sales. [ 35 ] Ms. Zachariuk claims a 4% user fee (4% of $1,602.00 = $64.08) for the use of her Global Payments account. I have decided not

to permit this aspect of her claim because it is not clear to me from the evidence whether it is fair to charge to Ms. Gareau the user fee on all the credit card sales from the Christmas store, even those involving Ms. Zachariuk’s merchandise. [ 36 ] Finally, there is the difficult question of cash payments received by Ms. Zachariuk. There are no receipts for any cash payments made by Ms. Gareau to Ms. Zachariuk for the purpose of “settling up” or for any other reason. Ms. Zachariuk says that she received two separate cash payments from Ms. Gareau.

One was in the amount of $600 and this is documented in a note at the bottom of “the yellow sheet” containing entries for December 22 nd to 26 th . I am not clear on whether the note is in Ms. Gareau’s or Ms. Zachariuk’s handwriting. The other payment, Ms. Zachariuk says, was in the amount of $800. She says Ms. Gareau handed her this sum in an envelope as they were closing up the store. There is no notation of this payment on “the yellow sheets”. [ 37 ] Thus, Ms. Zachariuk admits to receiving a total of $1,400.00 in cash from Ms. Gareau. [ 38 ] Did Ms.

Zachariuk receive other cash payments which she has not admitted? Ms. Gareau testified that Ms. Zachariuk was in the habit of just opening up the till and taking cash out of it and this was just one of the reasons why she (Ms. Gareau) did not want Ms. Zachariuk to use the till at the Christmas store. Although Ms. Gareau made this allegation about Ms. Zachariuk removing cash from the till more than once she gave no detail about what date or dates this happened, nor did she say how much money she believes Ms. Zachariuk took in this way. Ms.

Gareau also made no note of this on “the yellow sheets”. [ 39 ] I have concluded that there is simply insufficient evidence to determine how much cash, if any, Ms. Zachariuk helped herself to from the till. I will therefore not deduct anything from the amount owing to Ms. Zachariuk on this basis. [ 40 ] I find that the total amount of money Ms. Zachariuk has already received is $3,002.00 ($1,602.00 credit card sales + $1,400.00 cash). [ 41 ] In final

summary, the total amount still owing to Ms. Zachariuk for the sale of her and her consignors’ inventory is $548.05 ($3,550.05 total owing for sales - $3,002.00 already received). [ 42 ] I grant judgment to Ms. Zachariuk in the amount of $548.05 plus the court filing fee of $100.00 for a total of $648.05. Ms. Gareau must pay this sum to Ms. Zachariuk by April 3 rd , 2015 at 4 pm. Post-judgment interest under the Court Order Interest Act of B.C. will begin to accrue as of February 16 th , 2015. In other words, if the judgment is paid in full prior to February 16 th no interest will be payable.

As of February 16 th interest on any sum still outstanding will begin to accrue and will continue accruing until the sum is paid in full. Collection action may begin after April 3 rd if the judgment has not been paid. __________________________ E. L. Bayliff Provincial Court Judge