In an Alberta Court of Appeal decision, the court had to determine whether consumer protection legislation applied to a moving company that had allegedly damaged a couple’s property during a move.
Couple Sues Moving Company Over Alleged Damage
In the fall of 2015, a couple hired a moving company to move a house, gazebo, and a garage roof from a property near Leduc, Alberta to their property near Sherwood Park, Alberta.
Each structure was delivered separately and there were allegations that the structures were damaged in the process.
As a result, the couple claimed that the move was done in breach of their contract, negligently, in breach of the Consumer Protection Act (“CPA”). They also alleged that there had been negligent misrepresentations that caused damages of nearly $1.5 million.
In response, the moving company denied the claims and has brought its own claim against the couple alleging that they failed to pay the balance of their invoice and certain third-party disbursements. It claimed that as a result of the couple’s conduct and failure to comply with the agreement, the company had incurred extra costs in their attempt to fulfill the contract. In total, the company claimed approximately $150,000 in damages.
Court Must First Decide Whether Legislation Applies
The first issue to be decided by the court was whether the couple could pursue their claim under the CPA in order to define the bounds of the parties’ consolidated proceedings.
The moving company argued that because the couple’s intention was to rent the house to tenants following the move, they had a business purpose and were therefore excluded from the definition of “any service offered or provided primarily for personal, family or household purposes …”. Further, it argued that moving a house was not covered by the definition of services which refers to “… the addition to or maintenance, repair or alteration of goods or any residential dwelling”.
The couple argued that it was their intention to live in the house on retirement and the fact that they may rent it out in the interim did not make it a business or commercial transaction. Further, they argued that their specific intention was irrelevant; rather, it was the inherent nature of the service that must be considered and whether the house-moving services were offered primarily for personal, family or household purposes.
Lower Court Rules That Consumer Protection Act Applied to Transaction
At trial, the court stated that the underlying issue was whether the house-moving transactions were subject to the CPA. The moving company claimed that because the couple had intended to rent the house to tenants, it was a business transaction, rather than a consumer transaction, and was thus not subject to the CPA.
The court explained that its decision would turn on s. 1(1)(k) of the CPA which sets out the definition for “services” as follows:
(k) “services” means, subject to the regulations under subsection (2), any service offered or provided primarily for personal, family or household purposes, including
(i) a service offered or provided that involves the addition to or maintenance, repair or alteration of goods or any residential dwelling,
(ii) a membership in any club or organization if the club or organization is a business formed to make a profit for its owners,
(iii) the right to use property under a timeshare contract, and
(iv) any credit agreement[.]
Specifically, the court had to determine whether the house-moving services had been “offered or provided primarily for personal, family or household purposes”, regardless of how the house was actually intended to be used.
Ultimately, the court concluded that the moving company’s residential house moving fell under the definition of a service “offered or provided primarily for personal, family or household purposes” as set out in s. 1(1)(k)(i).
As such, the court held that the CPA applied to the transaction between the parties.
The moving company appealed the decision to the Alberta Court of Appeal.
Court of Appeal Dismisses Appeal on Consumer Protection Act
At the outset, the court stated that the primary question was to determine if the service was primarily for personal, family, or household purposes under the CPA.
The court stated that, in this case, it was possible to infer the primary purpose from the nature of the service. It observed that because the contract was to move a gazebo, garage roof, and residential home to the couple’s farm, it had been made for the purpose of a residential home. It then stated:
“A residential home is primarily used for people to live in. No evidence is required to make this common-sense inference. This is a personal, family or household purpose. Moving a house to a new location does not change the primary purpose. Houses are primarily lived in by a family or household, whether stationary or moved. Just because a house may sometimes be used for business purposes, does not displace the primary purpose of a house – to be used as a home for an individual or family. As such, the trial judge’s interpretative approach was correct; the CPA applies to this transaction of moving a residential home.”
Further, the court held that even if it accepted the moving company’s argument about the couple’s intention to rent out the property, the CPA would still apply for numerous reasons, including the court’s determination that renting a part of a home or a second home to help defray family or household expenses does not transform it into a commercial operation.
As such, the court concluded that the CPA applied and dismissed the moving company’s appeal.
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