March 28, 2025 • 22 mins
The latest Legally Speaking segment with Michael Mulligan takes listeners on a fascinating journey through British Columbia's alternative dispute resolution landscape, revealing both promising innovations and concerning pitfalls in our justice system.
The conversation begins with an extraordinary Civil Resolution Tribunal case in which a woman abandoned $95,000 of her $100,000 claim to proceed in a forum designed for minor disputes—only to lose everything. This cautionary tale illustrates the critical importance of forum selection and the permanent consequences of claim abandonment. Mulligan explains how the tribunal determined responsibility in a sophisticated WhatsApp fraud case, applying the principle of "who most enabled the third-party fraud" to conclude that ignoring explicit financial institution warnings proved fatal to the claim.
Equally compelling is the examination of a Vancouver tenant's fight for $82,380 in compensation (twelve months' rent) from a landlord alleged to have never moved into a property after eviction. This high-stakes dispute raises constitutional questions about provincial tribunal jurisdiction while highlighting fundamental procedural fairness requirements that cannot be circumvented. When an adjudicator dismissed a key witness, imposed arbitrary time limits of just minutes for closing arguments, and failed to provide adequate hearing time, the Supreme Court intervened despite high thresholds for judicial review.
These cases reveal the complex tensions within our legal system as it attempts to balance accessibility, efficiency, and fundamental fairness. Mulligan's expert analysis shows how legislative interventions in contractual relationships, particularly between landlords and tenants, have created increasingly fractured relationships, leading to novel litigation that tests the boundaries of our justice system.
Ready to learn more about navigating legal disputes effectively? Subscribe to catch future episodes of Legally Speaking with Michael Mulligan, where complex legal concepts become accessible wisdom you can use to protect yourself in an increasingly complicated world.
Follow this link for a transcript of the show and links to the cases discussed.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Adam Stirling (00:00):
It's time for our regular segment, joined as
always by barrister andsolicitor with Mulligan Defense
Lawyers.
Michael Mulligan with LegallySpeaking on CFAX Afternoon.
Michael, how are we doing?
Hey, good afternoon, I'm doinggreat, always good to be here.
Some interesting items on theagenda today.
I'm just reading it saysabandoning $95,000 of a $100,000
claim to proceed in the CivilResolution Tribunal and then
(00:22):
losing.
There's a lot there.
What's happening?
Michael Mulligan (00:24):
proceed in the Civil Resolution Tribunal and
then losing.
There's a lot there.
What's happening?
There is a lot there.
That's a bad day in the CivilResolution Tribunal if you're
the person making the claim forthe $100,000.
So probably as a place to start, we'd just be to mention again
what the Civil ResolutionTribunal is, because I think
some people may not even befamiliar with what it is, and
it's a thing which was set up anumber of years ago, initially
to deal with a combination ofminor strata disputes you know,
(00:47):
people having a dispute aboutwhether they can have a barbecue
on their patio or whatever itmight be or very small claims
matters.
And it has jurisdiction to dealwith claims up to $5,000, so
very small claims.
The government later addedother things, like disputes with
(01:07):
ICBC, which, as we've spokenabout before, in my judgment are
not appropriate because thepeople who make the decisions
for the Civil ResolutionTribunal are on short-term
renewable government contractsand so it's not really an ideal
entity to decide disputes withthe government.
Right, you don't want yourneighbor's employee to be
(01:27):
deciding your dispute with theneighbor, but certainly for
things like tiny or small smallclaims disputes, I think it's a
good format and the idea is that, rather than having people go
to court even small claims court, which can deal with claims up
to $35,000.
For very small claims, the ideais they can be dealt with more
(01:49):
efficiently, like using thingslike email or a telephone call
or video connection, things likethat, and so they have a lot of
flexibility to sort outdisputes in that way, which I
think makes a lot of sense, sothat the resolution process kind
of accords with how much moneypeople are fighting over.
Right, you know, if you have totake the day off work for your
claim for $500, it may not beworth taking the day off work
(02:12):
and so it goes unresolved.
Now the interesting thing aboutthis case is it's a case
involving a woman who isclaiming that she lost what
amounted to $102,000 Canadian,544,000 RMB, chinese currency.
And, just like in a smallclaims court, if somebody
(02:33):
decides, hey, I want to sue.
You know, let's say, in a smallclaims court I've got a claim
that could be worth $40,000, butit's not worth going to Supreme
Court with more procedure andso on, they might say, well,
I'll just abandon the extra$5,000 and I'll just sue for the
$35,000,.
Right, fair enough, that wouldmake sense in some cases like
that, or a person who says look,I've got a claim.
(02:53):
I say that you owe me $6,000,but I don't want to have to take
the day off work to go to court.
I'll try that in the CivilResolution Tribunal and I'll
just give up the other thousand,right?
The unusual thing about thiscase is that the woman who was
suing and she was suing acurrency exchange company had
this claim.
She alleged to have lost$102,000 Canadian, but she
(03:15):
started the thing in the civilresolution tribunal, and so the
first order of business for theperson hearing it was well, hold
on a minute, I can't doanything about the $95,000 plus
above what the jurisdiction is,and the woman responded she
wanted to continue there.
Now, the other thing about thatis that if you abandon part of
(03:36):
your claim, whatever amount itmight be to get yourself into
sort of a quicker process,that's it.
If you lose, you can't go backlater and try again, and so she
was told that, but nonethelessshe decided to continue, and so
the fact pattern here involvedthis woman who wanted to.
She was from China.
She wanted to transfer 540,000RMB into a roughly $102,000
(04:02):
Canadian.
She went into a currencyexchange place to talk about
that, and they discussed withher the process and forms and
things.
They require ID and things tobe filled out and so on.
But, more importantly, sheneeded to have a Canadian bank
account and she didn't have oneset up at the time, and so the
person at the store sent heraway to go and get what she
(04:23):
needed and set up the bankaccount, but also added the
woman to their WhatsApp accounttheir private one to further
communicate if there werefurther questions or whatnot.
And, very unfortunately, itwould appear that a hacker got
control of the WhatsApp accountfor the employee that worked at
the currency exchange place, andthat appears to be common
(04:44):
ground.
For the employee that worked atthe currency exchange place,
and that appears to be commonground.
The woman didn't challenge thefact that this wasn't ultimately
the currency store employeethat was communicating with her,
but the person who hacked intothe account wound up
communicating with the woman andeventually asked her if she
still wanted to do thetransaction and discussion about
what the exchange rate would be, and eventually the hacker gave
(05:06):
the woman instructions aboutwhere to transfer the 544,000
RMB to a numbered bank account,and the woman did it and,
surprise, surprise, no moneycame right and so the woman
tried suing the currencyexchange place saying well,
(05:29):
they're responsible for all ofthis because your employee's
account got hacked and that'swhat allowed me to be defrauded
and lose all this money.
And so that was the issue thatthe adjudicator then had to
consider well, who's responsiblefor this right?
(05:50):
And this is another generalthing people should know about
who's on the hook when you windup being defrauded in this way?
Resolution tribunal adjudicatorlooked to a previous BC Supreme
Court case, which stands for theproposition that where there is
(06:11):
a fraud that occurs between youknow, involving a third party,
like a fraud artist, theapproach to look at it is who
most enabled that third partyfraud.
That's one of the primaryconsiderations, and there can be
other considerations.
Like you know, one of theparties sort of do something
(06:32):
that would have facilitated it.
So here the adjudicator lookedat things like well, you know,
was the company somehow, youknow, negligent in terms of how
they were, for example, dealingwith their accounts?
You know, let's say, they lefttheir password on a sticky note
for anyone to see in the store,or something right?
Adam Stirling (06:49):
Yeah.
Michael Mulligan (06:50):
And there was no indication of that.
Nor was there any indicationthat the currency company had
somehow condoned communicationin that way, like if the
currency place had said, ok,well, we'll finalize everything
by text message then orsomething.
Right, you might say, ok, well,you've kind of accepted that
that might not work out too well, but again, there was no
(07:12):
evidence of any willful activityon the part of the currency
company, nor was there anyevidence they did anything to
facilitate the account gettinghacked.
Nor was there anything toindicate they had kind of okayed
yeah, you can just set this upon WeChat.
And in fact, the currencycompany and it was accepted
explained to the woman that, inorder to do this transaction,
(07:33):
they required things like a copyof a passport, a driver's
license, bank statements, theyneed to know information about
the source of funds, a bunch ofregulatory things, and none of
that happened in terms of thisWeChat conversation that wound
up with the money being sent.
Moreover, the adjudicatorpointed to the fact that I think
this is not an uncommon thingin China, because there's, quite
(07:55):
frankly, a lot of fraud thatgoes on, including organized
fraudulent activity trying todefraud people of money, and we
see that in Canada and elsewhere, but there's a lot of that
where Chinese citizens are alsothe victim of that kind of sort
of online fraud effort, and oneof the things that that's
prompted and it occurred in thiscase is that when somebody in
(08:17):
China tries to transfer asubstantial amount of money by
way of electronic transfer, theyget sent a warning from the
financial institution, and thiswoman got the warning.
It was sort of a warning youknow, sending money by way of
wire transfer is an indicationof fraud.
You should verify this.
You know, sending money by wayof wire transfer is an
indication of fraud, you shouldverify this.
And the woman ignored thewarning and carried on with what
(08:38):
she was doing, despite thewarning.
And so, given that combinationof things, the adjudicator found
that it wasn't the currencyexchange company that was
somehow more responsible here,the woman who sent the money.
Essentially, she just wasn'tprudent and careful with what
(08:59):
she was doing, despite having anexpress warning from her
financial institution and thefact that the process ultimately
, that was followed here didn'taccord with what the currency
company told her would need tobe done to make this transfer
happen.
They told her look, we needpaperwork, documentation,
passport, driver's license, allthat info, all of which just
(09:22):
seemed to get, of course,bypassed by the fraud artists
that got control of the account.
They weren't asking for proofof source of funds, it was just,
you know, go ahead and quicklytransfer your money to whatever
account number they provided,and so the net result of that
was that not only did the womanabandon the $95,000 plus of her
claim and in a way that shecan't go back and try again but
(09:46):
she was also unsuccessful in theclaim that she did advance.
Another thing to comment on hereis that the currency company
was countersuing for defamationon the basis that the woman had
posted things claiming badthings about the currency
company.
That counterclaim was alsodismissed because the Civil
Resolution Tribunal, in additionto having a $5,000 cap, has no
(10:09):
authority to deal with claimsinvolving allegations of libel
and slander, and so that couldnot be considered either.
That was rejected.
Another important thing forpeople to know about you can't
sue in this online disputeresolution process over claiming
libel or slander.
Another interesting point isthat the legislation dealing
with and setting up the CivilResolution Tribunal requires it
(10:33):
to receive evidence in Englishor translated to English, and in
this case, one of the thingsthat the woman was suing for she
claimed to have a recording ofa conversation with the employee
over the phone, but it was notin English nor was it translated
to English, and so, because ofthat, the adjudicators were like
(10:54):
I can't consider this thingwhich is presented not in
English.
On the other hand, the currencycompany had the WeChat exchange,
which they did have translatedto English, and the woman
accepted that the translationwas accurate, and so the
adjudicator was able to considerthat, at the end of it, I
should say the currency company,even though they won, they
(11:16):
asked for their costs, includinga $375 cost to translate the
weak chat conversation, and theadjudicator declined to provide
that on the basis that, well,there was some evidence that the
currency exchange at least hada system that was vulnerable to
hacking, and, given how muchmoney this woman had lost, the
(11:38):
adjudicator wasn't going to pileon with the $375 bill for the
translation.
So that's the latest out of theCivil Resolution Tribunal, what
you can and cannot sue forthere, and also that just
information about how it workswhen you abandon a claim and
what that means.
So that's latest on currencyexchanges, the Civil Resolution
(11:58):
Tribunal and who's on the hookfor fraud.
Adam Stirling (12:00):
Michael Mulligan with Mulligan Defense Lawyers.
Legally Speaking, will returnin just a moment.
Legally Speaking continues onCFAX 1070 with Michael Mulligan
from Mulligan Defense Lawyers,michael up next.
I'm reading.
Michael Mulligan (12:11):
It says more litigation over 12 month rent
awards for a landlord whoallegedly didn't move into a
property after an eviction yeah,this is an interesting one and
it's a trend, which is to say,not a not a great trend, uh, but
the?
Uh, the provincial adpintroduced a provision that, uh,
(12:33):
if a landlord uh evicts atenant for the purpose of moving
into a property and thendoesn't, in a reasonable time,
move into the property, theformer tenant may be able to get
an award for 12 months rent, tobe a substantial amount of
(12:55):
money.
And it's led to a trend oflitigation, not only by way of
the adjudication but in theSupreme Court fighting over it,
because in some cases there's somuch money at stake and it's
sort of a function of, as wetalked about before, contracts
are usually don't wind up incourt because usually they are
things that both parties wantand have kind of agreed to.
You know, I agreed to buy yourcar, you wanted to sell the car,
we agreed on the amount ofmoney, we're both happy, right.
But because residential tenancyhas been so modified by statute
(13:20):
to try to quote, protect, close, quote tenants, many of those
contracts are now not thingsthat the people are mutually
agreeing to, it's things they'rebeing ordered to do, and so
they result in litigation.
That's what's happening, and sothis is one of those cases and
it's interesting in severalrespects.
First of all, one of theinteresting things is the amount
(13:41):
of money involved here.
This is a rent in Vancouver nota cheap place to rent anything
and it was apparently a verynice house.
It was a house which wasrenting for $6,865 a month and
so if you do the math there, 12months rent is $82,380.
(14:01):
That's a lot of money.
Now I should pause just for amoment on that fact, and it
relates to the other story wetalked about the Civil
Resolution Tribunal and how muchyou can sue for in small claims
court right Civil ResolutionTribunal $5,000.
Small claims, small claimscourt right Civil Resolution
Tribunal 5,000.
Small claims court, provincialcourt those are judges.
35,000.
Why not more?
It can't just be an unlimitedamount because we have a Supreme
(14:24):
Court in British Columbia andthe judges there are appointed
federally under Section 96 ofthe Constitution Act and they
enjoy protections as a result ofthat.
They can't just be firedbecause you don't like their
decision.
It's only on joint resolutionof the House and Senate.
And for that section to bemeaningful, you can't just have
the province creating some youknow, inferior court and then
(14:45):
just giving them all the powerof the Supreme Court and getting
rid of the Supreme Court right.
That's why that can't happen.
And so if you have somethinglike large civil disputes over
things like property, you can'tjust have an unlimited amount of
money in some provincialtribunal or it may be
unconstitutional.
Now, it wasn't argued in thiscase probably.
(15:06):
I don't know why it wasn'targued, but there'd be a very
live question about whether youcould have a residential tenancy
adjudicator grant an award for$82,000 on.
The landlord gave notice,saying I want to move in.
And then the person who wasrenting the $82,000 a year house
(15:37):
with a pool and also a coachhouse, it would seem continued
to live in the same area andnotice they thought things.
They didn't think anyone hadmoved into the house.
They didn't think anyone hadmoved into the house and so they
saw things like the garbagecans hadn't moved for some
period of time and the poolbecame murky and so on.
So they started a claim for the$82,000.
(15:58):
And there was a hearing, andwhen there's a hearing for a
residential tenancy dispute itdoesn't have all of the
accoutrements of a trial, but inthis case apparently even fewer
of the accoutrements that mightexist in the Civil Resolution
Tribunal, for the adjudicationwas carried out by phone.
The adjudicator announced atthe beginning of the hearing you
only got one hour, that's it.
(16:20):
And then, also troublingly, atthe beginning of the hearing,
there was a witness for thehomeowner and the adjudicator
said well, you know, we don'tneed this person right now.
If we need them, we'll get themreconnected and it's going to
rush them off.
And so they were never heardfrom and so the hearing went on.
(16:44):
The landlord claimed that shedid live in the house.
She claimed that she lived inthe coach house for part of the
period of time while they werepainting and renovating and
changing appliances and so on,and then claimed that she was
later living in the house themain house and submitted
photographs and utility billsand food takeout orders and
various things.
The former tenant disagreed,pointing to the murky pool and
the unmoved garbage containersand so on, and one of the
(17:05):
interesting points that thetenant made was that the
landlord also incorrectlyidentified the number of
bathrooms on the main floor ofthe giant house.
Adam Stirling (17:14):
Oh dear.
Michael Mulligan (17:15):
So that was some evidence that she hadn't
lived there.
So, anyway, I guess the problemis to have you've lost track of
how many bathrooms on one floorof your giant house.
But anyways, the adjudicatorfound for the former tenant,
ordering this very large award Ithink it was $82,380.
And there was then an appeal ofthat by way of a judicial
(17:38):
review to the BC Supreme Courtand the review was really there
were two arguments made.
One was an argument aboutwhether the decision was
patently unreasonable, andthat's the threshold for this
kind of a judicial review,because there's a privative
clause, like a clause in thelegislation that allows
(17:59):
adjudicators to decide thesethings, which sets a higher
standard for judicial review.
And the other thing about it isboth parties tried to then give
extra evidence on the judicialreview, going to court like
other people who were in thehouse saying, hey, I guess I saw
her there, I came over for aparty or whatever it was.
On that ground, the judgehearing the judicial review had
(18:22):
to go through an analysis ofwhether you can give this kind
of fresh evidence on a review,and the judge ordered for both
parties, the former tenant andthe owner.
The answer was no, becausethere's an idea there that you
can't, on an appeal or a review,show up with a bunch of new
evidence that you could havepresented earlier but didn't.
(18:42):
And the argument is, hey, ifyou've got something and you
could reasonably get thatevidence, get it out there at
the original hearing.
Don't try with some stuff andthen come along later with more.
And so that got a big raspberryon both sides from the judge
that was reviewing this order.
But the other part of it andthis is important for people to
(19:03):
know and this is an element ofone of the reasons why we have
judicial reviews and why youcan't just order, like the, you
know, no court review of somethings, because there's also a
requirement that there be what'scalled procedural fairness at a
hearing, and there's some basicelements to procedural fairness
(19:24):
.
They would include things likegiving each side an opportunity
to be heard.
Procedural fairness.
They would include things likegiving each side an opportunity
to be heard.
Right, you know things likethat.
Most things, I think, when yousort of look at what it would
require, would be sort of thingspeople would say, yeah, that
seems only fair.
Right, you should hear fromboth sides before you make a
decision and on that ground.
Despite that privative clauseright that has that high
(19:47):
standard of review on the meritsof it, there is always a
requirement that the hearing beconducted fairly, and fairness
can take a whole bunch ofdifferent forms, like not
everything has to be in acourtroom, just like the Civil
Resolution Tribunal could have afair hearing by video
conference, or they could getsome things by email or talk on
the phone.
That's fine, but you do have tohave, at the end of the day,
(20:08):
basic fairness.
And one of the things which thejudge focused on on the review
was he said look, it's troublingthat the landlord's witness,
cynthia, was excused at thebeginning of the call by the
arbitrator.
The arbitrator provided noreasons why the witness should
be excluded and just said if weneed her, we can then call her
back in and concluded probablythe arbitrator just forgot about
(20:31):
her at the end of it and youknow the time provided for
things like they allowed eachside the adjudicator two minutes
to make a closing submission,and so the judge ultimately
found yeah, appreciate, this isa privative clause, I get all
that, but you know, a basicprinciple of fairness is that
(20:52):
you give both sides anopportunity to be heard and call
their witnesses and said look,it's not a quote line by line
treasure hunt for errors, butyou've got to be basically fair.
Apparently forgot about thewitness person was there ready
to testify?
And there's a substantialamount of money at stake here.
The judge found that there justwasn't that basic procedural
(21:15):
fairness and so for that reason,rather than taking into account
the new evidence themselves,ordered back for a new hearing.
Go try again.
And unfortunately we're justseeing all kinds of these things
because of how fractured thoserelationships have become
between landlords and tenantsbecause of how much we've mucked
around with the contractualrelationship.
(21:36):
So we'll go and see this onedone again, and it'll also be
interesting to see whetheranyone makes that argument about
hey, does the arbitrator haveany jurisdiction to deal with
that kind of a big claim at all?
And so that's the latest fromthe BC Supreme Court and dispute
with the landlord of the gianthouse.
Adam Stirling (21:53):
We'll wait and see what happens, michael
Mulligan, with Mulligan DefenseLawyers, legally speaking,
during the second half of oursecond hour every Thursday.
Thank you so much.
Pleasure as always.
Thanks so much.
Always great to be here.
All right, we'll take a quickbreak.
News is next.
It's time for our regular segment, joined as
always by barrister andsolicitor with Mulligan Defense
Lawyers.
Michael Mulligan with LegallySpeaking on CFAX Afternoon.
Michael, how are we doing?
Hey, good afternoon, I'm doinggreat, always good to be here.
Some interesting items on theagenda today.
I'm just reading it saysabandoning $95,000 of a $100,000
claim to proceed in the CivilResolution Tribunal and then
(00:22):
losing.
There's a lot there.
What's happening?
Michael Mulligan (00:24):
proceed in the Civil Resolution Tribunal and
then losing.
There's a lot there.
What's happening?
There is a lot there.
That's a bad day in the CivilResolution Tribunal if you're
the person making the claim forthe $100,000.
So probably as a place to start, we'd just be to mention again
what the Civil ResolutionTribunal is, because I think
some people may not even befamiliar with what it is, and
it's a thing which was set up anumber of years ago, initially
to deal with a combination ofminor strata disputes you know,
(00:47):
people having a dispute aboutwhether they can have a barbecue
on their patio or whatever itmight be or very small claims
matters.
And it has jurisdiction to dealwith claims up to $5,000, so
very small claims.
The government later addedother things, like disputes with
(01:07):
ICBC, which, as we've spokenabout before, in my judgment are
not appropriate because thepeople who make the decisions
for the Civil ResolutionTribunal are on short-term
renewable government contractsand so it's not really an ideal
entity to decide disputes withthe government.
Right, you don't want yourneighbor's employee to be
(01:27):
deciding your dispute with theneighbor, but certainly for
things like tiny or small smallclaims disputes, I think it's a
good format and the idea is that, rather than having people go
to court even small claims court, which can deal with claims up
to $35,000.
For very small claims, the ideais they can be dealt with more
(01:49):
efficiently, like using thingslike email or a telephone call
or video connection, things likethat, and so they have a lot of
flexibility to sort outdisputes in that way, which I
think makes a lot of sense, sothat the resolution process kind
of accords with how much moneypeople are fighting over.
Right, you know, if you have totake the day off work for your
claim for $500, it may not beworth taking the day off work
(02:12):
and so it goes unresolved.
Now the interesting thing aboutthis case is it's a case
involving a woman who isclaiming that she lost what
amounted to $102,000 Canadian,544,000 RMB, chinese currency.
And, just like in a smallclaims court, if somebody
(02:33):
decides, hey, I want to sue.
You know, let's say, in a smallclaims court I've got a claim
that could be worth $40,000, butit's not worth going to Supreme
Court with more procedure andso on, they might say, well,
I'll just abandon the extra$5,000 and I'll just sue for the
$35,000,.
Right, fair enough, that wouldmake sense in some cases like
that, or a person who says look,I've got a claim.
(02:53):
I say that you owe me $6,000,but I don't want to have to take
the day off work to go to court.
I'll try that in the CivilResolution Tribunal and I'll
just give up the other thousand,right?
The unusual thing about thiscase is that the woman who was
suing and she was suing acurrency exchange company had
this claim.
She alleged to have lost$102,000 Canadian, but she
(03:15):
started the thing in the civilresolution tribunal, and so the
first order of business for theperson hearing it was well, hold
on a minute, I can't doanything about the $95,000 plus
above what the jurisdiction is,and the woman responded she
wanted to continue there.
Now, the other thing about thatis that if you abandon part of
(03:36):
your claim, whatever amount itmight be to get yourself into
sort of a quicker process,that's it.
If you lose, you can't go backlater and try again, and so she
was told that, but nonethelessshe decided to continue, and so
the fact pattern here involvedthis woman who wanted to.
She was from China.
She wanted to transfer 540,000RMB into a roughly $102,000
(04:02):
Canadian.
She went into a currencyexchange place to talk about
that, and they discussed withher the process and forms and
things.
They require ID and things tobe filled out and so on.
But, more importantly, sheneeded to have a Canadian bank
account and she didn't have oneset up at the time, and so the
person at the store sent heraway to go and get what she
(04:23):
needed and set up the bankaccount, but also added the
woman to their WhatsApp accounttheir private one to further
communicate if there werefurther questions or whatnot.
And, very unfortunately, itwould appear that a hacker got
control of the WhatsApp accountfor the employee that worked at
the currency exchange place, andthat appears to be common
(04:44):
ground.
For the employee that worked atthe currency exchange place,
and that appears to be commonground.
The woman didn't challenge thefact that this wasn't ultimately
the currency store employeethat was communicating with her,
but the person who hacked intothe account wound up
communicating with the woman andeventually asked her if she
still wanted to do thetransaction and discussion about
what the exchange rate would be, and eventually the hacker gave
(05:06):
the woman instructions aboutwhere to transfer the 544,000
RMB to a numbered bank account,and the woman did it and,
surprise, surprise, no moneycame right and so the woman
tried suing the currencyexchange place saying well,
(05:29):
they're responsible for all ofthis because your employee's
account got hacked and that'swhat allowed me to be defrauded
and lose all this money.
And so that was the issue thatthe adjudicator then had to
consider well, who's responsiblefor this right?
(05:50):
And this is another generalthing people should know about
who's on the hook when you windup being defrauded in this way?
Resolution tribunal adjudicatorlooked to a previous BC Supreme
Court case, which stands for theproposition that where there is
(06:11):
a fraud that occurs between youknow, involving a third party,
like a fraud artist, theapproach to look at it is who
most enabled that third partyfraud.
That's one of the primaryconsiderations, and there can be
other considerations.
Like you know, one of theparties sort of do something
(06:32):
that would have facilitated it.
So here the adjudicator lookedat things like well, you know,
was the company somehow, youknow, negligent in terms of how
they were, for example, dealingwith their accounts?
You know, let's say, they lefttheir password on a sticky note
for anyone to see in the store,or something right?
Adam Stirling (06:49):
Yeah.
Michael Mulligan (06:50):
And there was no indication of that.
Nor was there any indicationthat the currency company had
somehow condoned communicationin that way, like if the
currency place had said, ok,well, we'll finalize everything
by text message then orsomething.
Right, you might say, ok, well,you've kind of accepted that
that might not work out too well, but again, there was no
(07:12):
evidence of any willful activityon the part of the currency
company, nor was there anyevidence they did anything to
facilitate the account gettinghacked.
Nor was there anything toindicate they had kind of okayed
yeah, you can just set this upon WeChat.
And in fact, the currencycompany and it was accepted
explained to the woman that, inorder to do this transaction,
(07:33):
they required things like a copyof a passport, a driver's
license, bank statements, theyneed to know information about
the source of funds, a bunch ofregulatory things, and none of
that happened in terms of thisWeChat conversation that wound
up with the money being sent.
Moreover, the adjudicatorpointed to the fact that I think
this is not an uncommon thingin China, because there's, quite
(07:55):
frankly, a lot of fraud thatgoes on, including organized
fraudulent activity trying todefraud people of money, and we
see that in Canada and elsewhere, but there's a lot of that
where Chinese citizens are alsothe victim of that kind of sort
of online fraud effort, and oneof the things that that's
prompted and it occurred in thiscase is that when somebody in
(08:17):
China tries to transfer asubstantial amount of money by
way of electronic transfer, theyget sent a warning from the
financial institution, and thiswoman got the warning.
It was sort of a warning youknow, sending money by way of
wire transfer is an indicationof fraud.
You should verify this.
You know, sending money by wayof wire transfer is an
indication of fraud, you shouldverify this.
And the woman ignored thewarning and carried on with what
(08:38):
she was doing, despite thewarning.
And so, given that combinationof things, the adjudicator found
that it wasn't the currencyexchange company that was
somehow more responsible here,the woman who sent the money.
Essentially, she just wasn'tprudent and careful with what
(08:59):
she was doing, despite having anexpress warning from her
financial institution and thefact that the process ultimately
, that was followed here didn'taccord with what the currency
company told her would need tobe done to make this transfer
happen.
They told her look, we needpaperwork, documentation,
passport, driver's license, allthat info, all of which just
(09:22):
seemed to get, of course,bypassed by the fraud artists
that got control of the account.
They weren't asking for proofof source of funds, it was just,
you know, go ahead and quicklytransfer your money to whatever
account number they provided,and so the net result of that
was that not only did the womanabandon the $95,000 plus of her
claim and in a way that shecan't go back and try again but
(09:46):
she was also unsuccessful in theclaim that she did advance.
Another thing to comment on hereis that the currency company
was countersuing for defamationon the basis that the woman had
posted things claiming badthings about the currency
company.
That counterclaim was alsodismissed because the Civil
Resolution Tribunal, in additionto having a $5,000 cap, has no
(10:09):
authority to deal with claimsinvolving allegations of libel
and slander, and so that couldnot be considered either.
That was rejected.
Another important thing forpeople to know about you can't
sue in this online disputeresolution process over claiming
libel or slander.
Another interesting point isthat the legislation dealing
with and setting up the CivilResolution Tribunal requires it
(10:33):
to receive evidence in Englishor translated to English, and in
this case, one of the thingsthat the woman was suing for she
claimed to have a recording ofa conversation with the employee
over the phone, but it was notin English nor was it translated
to English, and so, because ofthat, the adjudicators were like
(10:54):
I can't consider this thingwhich is presented not in
English.
On the other hand, the currencycompany had the WeChat exchange,
which they did have translatedto English, and the woman
accepted that the translationwas accurate, and so the
adjudicator was able to considerthat, at the end of it, I
should say the currency company,even though they won, they
(11:16):
asked for their costs, includinga $375 cost to translate the
weak chat conversation, and theadjudicator declined to provide
that on the basis that, well,there was some evidence that the
currency exchange at least hada system that was vulnerable to
hacking, and, given how muchmoney this woman had lost, the
(11:38):
adjudicator wasn't going to pileon with the $375 bill for the
translation.
So that's the latest out of theCivil Resolution Tribunal, what
you can and cannot sue forthere, and also that just
information about how it workswhen you abandon a claim and
what that means.
So that's latest on currencyexchanges, the Civil Resolution
(11:58):
Tribunal and who's on the hookfor fraud.
Adam Stirling (12:00):
Michael Mulligan with Mulligan Defense Lawyers.
Legally Speaking, will returnin just a moment.
Legally Speaking continues onCFAX 1070 with Michael Mulligan
from Mulligan Defense Lawyers,michael up next.
I'm reading.
Michael Mulligan (12:11):
It says more litigation over 12 month rent
awards for a landlord whoallegedly didn't move into a
property after an eviction yeah,this is an interesting one and
it's a trend, which is to say,not a not a great trend, uh, but
the?
Uh, the provincial adpintroduced a provision that, uh,
(12:33):
if a landlord uh evicts atenant for the purpose of moving
into a property and thendoesn't, in a reasonable time,
move into the property, theformer tenant may be able to get
an award for 12 months rent, tobe a substantial amount of
(12:55):
money.
And it's led to a trend oflitigation, not only by way of
the adjudication but in theSupreme Court fighting over it,
because in some cases there's somuch money at stake and it's
sort of a function of, as wetalked about before, contracts
are usually don't wind up incourt because usually they are
things that both parties wantand have kind of agreed to.
You know, I agreed to buy yourcar, you wanted to sell the car,
we agreed on the amount ofmoney, we're both happy, right.
But because residential tenancyhas been so modified by statute
(13:20):
to try to quote, protect, close, quote tenants, many of those
contracts are now not thingsthat the people are mutually
agreeing to, it's things they'rebeing ordered to do, and so
they result in litigation.
That's what's happening, and sothis is one of those cases and
it's interesting in severalrespects.
First of all, one of theinteresting things is the amount
(13:41):
of money involved here.
This is a rent in Vancouver nota cheap place to rent anything
and it was apparently a verynice house.
It was a house which wasrenting for $6,865 a month and
so if you do the math there, 12months rent is $82,380.
(14:01):
That's a lot of money.
Now I should pause just for amoment on that fact, and it
relates to the other story wetalked about the Civil
Resolution Tribunal and how muchyou can sue for in small claims
court right Civil ResolutionTribunal $5,000.
Small claims, small claimscourt right Civil Resolution
Tribunal 5,000.
Small claims court, provincialcourt those are judges.
35,000.
Why not more?
It can't just be an unlimitedamount because we have a Supreme
(14:24):
Court in British Columbia andthe judges there are appointed
federally under Section 96 ofthe Constitution Act and they
enjoy protections as a result ofthat.
They can't just be firedbecause you don't like their
decision.
It's only on joint resolutionof the House and Senate.
And for that section to bemeaningful, you can't just have
the province creating some youknow, inferior court and then
(14:45):
just giving them all the powerof the Supreme Court and getting
rid of the Supreme Court right.
That's why that can't happen.
And so if you have somethinglike large civil disputes over
things like property, you can'tjust have an unlimited amount of
money in some provincialtribunal or it may be
unconstitutional.
Now, it wasn't argued in thiscase probably.
(15:06):
I don't know why it wasn'targued, but there'd be a very
live question about whether youcould have a residential tenancy
adjudicator grant an award for$82,000 on.
The landlord gave notice,saying I want to move in.
And then the person who wasrenting the $82,000 a year house
(15:37):
with a pool and also a coachhouse, it would seem continued
to live in the same area andnotice they thought things.
They didn't think anyone hadmoved into the house.
They didn't think anyone hadmoved into the house and so they
saw things like the garbagecans hadn't moved for some
period of time and the poolbecame murky and so on.
So they started a claim for the$82,000.
(15:58):
And there was a hearing, andwhen there's a hearing for a
residential tenancy dispute itdoesn't have all of the
accoutrements of a trial, but inthis case apparently even fewer
of the accoutrements that mightexist in the Civil Resolution
Tribunal, for the adjudicationwas carried out by phone.
The adjudicator announced atthe beginning of the hearing you
only got one hour, that's it.
(16:20):
And then, also troublingly, atthe beginning of the hearing,
there was a witness for thehomeowner and the adjudicator
said well, you know, we don'tneed this person right now.
If we need them, we'll get themreconnected and it's going to
rush them off.
And so they were never heardfrom and so the hearing went on.
(16:44):
The landlord claimed that shedid live in the house.
She claimed that she lived inthe coach house for part of the
period of time while they werepainting and renovating and
changing appliances and so on,and then claimed that she was
later living in the house themain house and submitted
photographs and utility billsand food takeout orders and
various things.
The former tenant disagreed,pointing to the murky pool and
the unmoved garbage containersand so on, and one of the
(17:05):
interesting points that thetenant made was that the
landlord also incorrectlyidentified the number of
bathrooms on the main floor ofthe giant house.
Adam Stirling (17:14):
Oh dear.
Michael Mulligan (17:15):
So that was some evidence that she hadn't
lived there.
So, anyway, I guess the problemis to have you've lost track of
how many bathrooms on one floorof your giant house.
But anyways, the adjudicatorfound for the former tenant,
ordering this very large award Ithink it was $82,380.
And there was then an appeal ofthat by way of a judicial
(17:38):
review to the BC Supreme Courtand the review was really there
were two arguments made.
One was an argument aboutwhether the decision was
patently unreasonable, andthat's the threshold for this
kind of a judicial review,because there's a privative
clause, like a clause in thelegislation that allows
(17:59):
adjudicators to decide thesethings, which sets a higher
standard for judicial review.
And the other thing about it isboth parties tried to then give
extra evidence on the judicialreview, going to court like
other people who were in thehouse saying, hey, I guess I saw
her there, I came over for aparty or whatever it was.
On that ground, the judgehearing the judicial review had
(18:22):
to go through an analysis ofwhether you can give this kind
of fresh evidence on a review,and the judge ordered for both
parties, the former tenant andthe owner.
The answer was no, becausethere's an idea there that you
can't, on an appeal or a review,show up with a bunch of new
evidence that you could havepresented earlier but didn't.
(18:42):
And the argument is, hey, ifyou've got something and you
could reasonably get thatevidence, get it out there at
the original hearing.
Don't try with some stuff andthen come along later with more.
And so that got a big raspberryon both sides from the judge
that was reviewing this order.
But the other part of it andthis is important for people to
(19:03):
know and this is an element ofone of the reasons why we have
judicial reviews and why youcan't just order, like the, you
know, no court review of somethings, because there's also a
requirement that there be what'scalled procedural fairness at a
hearing, and there's some basicelements to procedural fairness
(19:24):
.
They would include things likegiving each side an opportunity
to be heard.
Procedural fairness.
They would include things likegiving each side an opportunity
to be heard.
Right, you know things likethat.
Most things, I think, when yousort of look at what it would
require, would be sort of thingspeople would say, yeah, that
seems only fair.
Right, you should hear fromboth sides before you make a
decision and on that ground.
Despite that privative clauseright that has that high
(19:47):
standard of review on the meritsof it, there is always a
requirement that the hearing beconducted fairly, and fairness
can take a whole bunch ofdifferent forms, like not
everything has to be in acourtroom, just like the Civil
Resolution Tribunal could have afair hearing by video
conference, or they could getsome things by email or talk on
the phone.
That's fine, but you do have tohave, at the end of the day,
(20:08):
basic fairness.
And one of the things which thejudge focused on on the review
was he said look, it's troublingthat the landlord's witness,
cynthia, was excused at thebeginning of the call by the
arbitrator.
The arbitrator provided noreasons why the witness should
be excluded and just said if weneed her, we can then call her
back in and concluded probablythe arbitrator just forgot about
(20:31):
her at the end of it and youknow the time provided for
things like they allowed eachside the adjudicator two minutes
to make a closing submission,and so the judge ultimately
found yeah, appreciate, this isa privative clause, I get all
that, but you know, a basicprinciple of fairness is that
(20:52):
you give both sides anopportunity to be heard and call
their witnesses and said look,it's not a quote line by line
treasure hunt for errors, butyou've got to be basically fair.
Apparently forgot about thewitness person was there ready
to testify?
And there's a substantialamount of money at stake here.
The judge found that there justwasn't that basic procedural
(21:15):
fairness and so for that reason,rather than taking into account
the new evidence themselves,ordered back for a new hearing.
Go try again.
And unfortunately we're justseeing all kinds of these things
because of how fractured thoserelationships have become
between landlords and tenantsbecause of how much we've mucked
around with the contractualrelationship.
(21:36):
So we'll go and see this onedone again, and it'll also be
interesting to see whetheranyone makes that argument about
hey, does the arbitrator haveany jurisdiction to deal with
that kind of a big claim at all?
And so that's the latest fromthe BC Supreme Court and dispute
with the landlord of the gianthouse.
Adam Stirling (21:53):
We'll wait and see what happens, michael
Mulligan, with Mulligan DefenseLawyers, legally speaking,
during the second half of oursecond hour every Thursday.
Thank you so much.
Pleasure as always.
Thanks so much.
Always great to be here.
All right, we'll take a quickbreak.
News is next.
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