Court of Appeal of Quebec

Domtar inc. c. Axa Assurances inc.

500-09-026927-178

Gagnon, Mainville, Cotnam

Appeal from a judgment of the Superior Court dismissing an action for damages. Allowed in part.

The claims of the appellants, Domtar Inc. and its insurer, Chubb Canada, insurance company, arise from the thefts of paper rolls stored in the respondent 177333 Canada Inc.’s warehouse. The thefts were committed by a Domtar manager, the impleaded party Lafontaine, aided by his accomplice, the respondent Ricard, who acted through the impleaded corporation, 6550461 Canada Inc. (Transfert Outaouais). The trial judge held Lafontaine and Transfert Outaouais liable, but not 177333 Canada or its insurer Axa.

Deposit is a contract by which the depositor hands over movable property to another person, the depositary, who undertakes to keep custody of it for a certain time and to restore it to him (art. 2280 of the Civil Code of Québec (S.Q. 1991, c. 64) (C.C.Q.)). A lease of premises for storage purposes allows a person to use an immovable or part of an immovable to store property. The owner of the immovable, the lessor, therefore undertakes to provide the owner’s co-contractor, the lessee, in return for a rent, with the enjoyment of that immovable for a certain time for storage purposes (art. 1851 C.C.Q.). Thus, it is a contract of deposit if the purpose of that contract is to ensure custody of the stored property. If, on the other hand, custody is assumed by the person storing the property or a third party acting under his direction, the contract is a lease of premises for storage purposes.

In this case, the judge held that the power to supervise, control and direct the paper rolls stored in 177333 Canada’s warehouse had at all times been exercised by Domtar, through its manager Lafontaine, to whom this responsibility had been delegated. The judge also concluded that the terms of the contract were consistent with those of a contract to lease premises for storage purposes, as it did not stipulate that 177333 Canada was responsible for the custody of the stored property.

The judge also found that the evidence did not establish a connection between the thefts and any insufficiency or deficiency in the security measures taken by 177333 Canada. Given that the thefts were committed by persons who were authorized by the parties to access the premises, these thefts would have occurred regardless of the security measures put in place. In addition, 177333 Canada could not be held liable as principal of Ricard and Transfert Outaouais because it exercised no control or direction over the warehouse activities.

Last, the judge did not rule on Ricard’s liability because he had assigned his property in accordance with the Bankruptcy and Insolvency Act (R.S.C. 1985, c. B-3) and a notice to stay the proceeding against him had been filed in the record. In a letter written by his counsel and sent to the Court several weeks before the trial, Ricard confessed judgment, thereby implicitly acknowledging that the stay of proceedings had been lifted. Consequently, the Court should intervene to condemn Ricard solidarily with Lafontaine and Transfert Outaouais.

*Summary by SOQUIJ
Text of the decision: Http://citoyens.soquij.qc.ca

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