CITATION: Shvartsman v. Liquor Control Board of Ontario, 2016 ONSC 5948
DIVISIONAL COURT FILE NO.: 16-000000088-00 DATE: 20160921
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
SWINTON, SACHS and PATTILLO JJ.
BETWEEN:
MICHAEL SHVARTSMAN Plaintiff (Appellant)
– and –
LIQUOR CONTROL BOARD OF ONTARIO a.k.a. the LCBO Defendant (Respondent)
Glen Perinot, for the Plaintiff (Appellant)
Eric Adams, for the Defendant (Respondent)
HEARD at Toronto: September 21, 2016
L.A. PATTILLO J. (Orally)
[1] Michael Shvartsman (“Shvartsman”) appeals the decision of Stewart J. (the “Trial Judge”) dated June 3, 2015, dismissing his action against the Liquor Control Board of Ontario (“LCBO”) for damages for conversion.
[2] Circa Nightclub (“Circa”) was an LCBO licensee. The LCBO permits licensees, including Circa at the time, to make online or telephone purchases of alcohol using a credit card. To order product by phone, the LCBO requires a valid license number, the credit card number connected to the account, the expiry date, and the 3-digit security code. An online purchase requires a valid username and password.
[3] In July 2009, Shvartsman’s Royal Bank visa card was used to place three orders with the LCBO totaling $22,618.34. In November 2009, two further orders were placed totaling $14,665.69. In total, purchases were $37,284.03. All of the orders were delivered to Circa and signed for by a person at Circa.
[4] Shvartsman denied placing the orders or that he received the product. He did not discover the issue until early in 2010. He did not notify RBC about the alleged improper charges on its credit card within 30 days from the date of the last relevant credit card statement period as was provided in his Visa Agreement with RBC.
[5] Shvartsman’s claim was based on conversion. In total, he sought damages of $42,283.99 (inclusive of consequential damages) as well as pre and post judgment interest. The facts, as found by the Trial Judge, were primarily based on an agreed statement of facts. The claim is therefore less than $50,000 and within the Divisional Court’s jurisdiction: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19(1.2)(c).
[6] In dismissing the action, the Trial Judge set out the elements of conversion as provided for in Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce, 1996 149 (SCC), [1996] 3 S.C.R. 727 (S.C.C.): a wrongful act; involving a chattel; consisting of handling, disposing of or destroying the chattel; and with intent or effect of denying or negating the title of another person to such chattel to the true owner.
[7] The Trial Judge held that the facts of the case did not support a claim in conversion. In that regard, she concluded at para. 28 of her reasons that there was insufficient evidence to establish that the LCBO had engaged in any deliberate wrongful act, that such act involved a chattel; that it destroyed or disposed of the chattel; or that it had any intent to negate Shvartsman’s title.
[8] Shvartsman submits before us that the Trial Judge erred in law in misinterpreting the scope of the tort of conversion. He submits that conversion applies to credit card debts. Further, Shvartsman submits that the Trial Judge erred in law by holding that he failed to report the charges to Visa.
[9] The Trial Judge correctly in our view set out the elements of the tort of conversion. The issue on this appeal concerns the application of facts to legal principle. The standard of review is therefore palpable and overriding error: Housen v. Nikolaisen, 2002 SCC 33 at para. 36.
[10] Shvartsman submits that conversion applies to credit card debts because intangible property can be the subject of an action for conversion when it is represented by documents. Given the Trial Judge’s finding as noted above, it is not necessary to deal with that issue. By concluding that Shvartsman had not established that the LCBO engaged in any wrongful act, the tort of conversion could not be made out.
[11] Based on the agreed facts, I agree with the Trial Judge’s finding that the evidence was insufficient to establish an intentional or wrongful act on the part of the LCBO. The wrongful act for the purposes of this tort involves any intentional dealing or interference with the chattel inconsistent with the rights of the person entitled to possession: 2934752 Canada Inc. v. W. Pickett & Bros. Customs Brokers, [1999] O.J. No. 5435 at para. 30. The LCBO’s actions in charging Shvartsman’s credit card for payment for goods delivered was not an intentional interference with Shvartsman’s rights given it had no knowledge that he had not authorized the charges.
[12] Shvartsman further submits that the Trial Judge erred in law when she stated in para. 29 of her reasons that if the claim was framed in negligence, she would have found Shvartsman to have been wholly responsible for the losses he sustained due to his failure to monitor his credit card charges, alert Visa of the problem and oversee his agents. It is submitted such a finding raises the bar for an innocent party to meet the test for conversion and further that contributory negligence is not a defence to a claim for conversion.
[13] It is clear from reading the entire paragraph that the comments by the Trial Judge in para. 29 were obiter and in response to submissions by Shvartsman that the LCBO’s conduct was negligent, which as she noted, was not pleaded. In my view, her comments had no impact on her decision regarding conversion which she had previously dealt with on the basis of the evidence before her.
[14] Shvartsman has failed to establish that the Trial Judge made a palpable and overriding error in dismissing the action. For the above reasons therefore, the appeal is dismissed.
COSTS – SWINTON J.
[15] I have endorsed the Appeal Book and Compendium as follows: “Amended Notice of Appeal is accepted. The appeal is dismissed for oral reasons delivered today by Pattillo J. Costs to respondent fixed at $5,000.00 all in.”
___________________________ L.A. PATTILLO J.
SWINTON J.
SACHS J.
Date of Reasons for Judgment: September 21, 2016
Date of Release: September 22, 2016
CITATION: Shvartsman v. Liquor Control Board of Ontario, 2016 ONSC 5948
DIVISIONAL COURT FILE NO.: 16-000000088-00 DATE: 20160921
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SWINTON, SACHS and PATTILLO JJ.
BETWEEN:
MICHAEL SHVARTSMAN
Plaintiff
(Appellant)
– and –
LIQUOR CONTROL BOARD OF ONTARIO a.k.a. the LCBO
Defendant
(Respondent)
ORAL REASONS FOR JUDGMENT
L.A. PATTILLO J.
Date of Reasons for Judgment: September 21, 2016
Date of Release: September 22, 2016