FACTS:

Exhibit 1 is a Document Brief which the Plaintiffs filed as part of the Plaintiffs' case. The Plaintiffs themselves did not testify. However, the Plaintiffs, Robert and Mary Steffen, did file an affidavit found at Exhibit 1, Tab 5. In addition, two witnesses gave evidence on behalf of the Plaintiffs.

Two witnesses testified on behalf of the Defendant in each action, the first witness being the Defendant himself and the second witness being his wife.

The following facts are not in dispute:

William Dankwardt, the Defendant, testified. On January 4, 1996, being the day before the fire, Mr. Dankwardt was working on a friend's truck. The truck was being repaired because there was dampness when the fuel tank was full. At approximately 11:30 pm, he stopped working on the truck for the night, leaving the truck in the workshop overnight. Mr. Dankwardt then shut the thermostat back and left the building. He does not recall anything unusual in the workshop that night.

At approximately 5:30 am on January 5, 1996, Mr. Dankwardt went into his shop. He did not touch the thermostat. He lay down on the dolly and slid under the truck to assess what he had to do to finish the repair job. He did not smell anything or notice anything unusual in the building. As he rolled out from under the truck, Mr. Dankwardt heard a click that he believes was caused by the arcing of the ignition to fire up the oil furnace. A wall of flames immediately followed. Eventually Mr. Dankwardt was taken to the hospital, suffering from second and third degree burns.

Mr. Dankwardt's uncontradicted evidence was that:

A copy of the Fire Investigation Report prepared by J.C. Fox of the Office of the Ontario Fire Marshal as a result of the fire on the Defendant's premises was filed with the consent of all parties as part of Exhibit 1, being Tab 10. Some of the details concerning the building are contained in the Fire Investigation Report.

Mr. Dankwardt disagrees with some of the comments made by Mr. Fox in his Report. While Mr. Fox stated in his Report that the furnace was not sheltered or partitioned off from the remainder of the building in any fashion whatsoever, Mr. Dankwardt testified that he had a huge, heavy shield in front of the furnace. This shield was not referred to by Mr. Fox at all. Freda Dankwardt, the wife of William Dankwardt, testified that there was a shield around the furnace, which shield was not visible after the fire.

Mr. Dankwardt testified that the lids were on the cans referred to in paragraph 5 on page 3 of Exhibit 1, Tab 10 under Description of Scene prior to the fire. In fact, Mr. Dankwardt said that the flammable material still remained in the building after the fire. After he was discharged from hospital, Mr. Dankwardt attended at the scene and discovered that the storage lockers which contained some of the material in his workshop were totally destroyed by the explosion and fire. He testified that there were no flammables or solvents left in the open area of the shop outside the storage lockers at the time of the fire. Mr. Dankwardt described the construction of the storage lockers. From the evidence, it seems that they were secure and solid. Mrs. Dankwardt testified that her husband was very careful with the storage of lacquers, paint and other items in his workshop.

On page 4 of his Report, Mr. Fox stated that Mr. Dankwardt had severe problems with his nasal area becoming plugged and that Mr. Dankwardt was forced to frequently use "Otravin" in order to keep his sense of smell functional. Both Mr. Dankwardt and his wife testified that there was nothing wrong with Mr. Dankwardt's sense of smell. In addition, the Defendant filed, as Exhibit 7, a Report dated February 17, 1998 from Dr. Martin Bokhout, who has been Mr. Dankwardt's doctor since 1990. This report says (in part): "To the best of my knowledge, [William Dankwardt] has a normal sense of smell".

While Mr. Dankwardt was both examined and cross-examined at length, unfortunately Mr. Fox did not testify. Therefore, while we have his Report, we do not have the benefit of his evidence on cross-examination. Because of Mr. Dankwardt's hospitalization, Mr. Fox never had the opportunity to speak to him and to obtain information directly from him. I have had the benefit to observe the manner in which both Mr. and Mrs. Dankwardt gave their evidence. Where there are differences between the Fire Investigation Report (Exhibit 1, Tab 10) and the evidence presented on behalf of the Defendant, I prefer the evidence of Mr. and Mrs. Dankwardt for the reasons stated earlier in this paragraph.

Mr. Dankwardt testified that he did not have an explanation for the cause of the explosion and resulting fire.

Mr. Leslie, on page 2 of his REPLY SUBMISSIONS ON BEHALF OF THE PLAINTIFF, says that "Mr. Fox, in his report, points directly to the "gasoline leak" as the most probable source [of the vapours ], followed by the "mixed solvents and liquids" as the next most likely [ source ]." (The emphasis is mine.) With the greatest respect for Mr. Leslie, I do not read that anywhere in the Report of Mr. Fox.

On page 1 of the Fire Investigation Report, Mr. Fox showed the Fire Cause as "Accidental". At the conclusion of his Report, Mr. Fox stated (in part):

(The emphasis is mine.)


DAMAGES:

The first witness to testify on the issue of damages was Ron Lipskie, who was called by the Plaintiffs. Mr. Lipskie is an appraiser of motor vehicles with over twenty years experience. In addition to his oral evidence, Mr. Lipskie prepared reports which were filed as Exhibits (Exhibit 1 - Tabs 6, 7, 8 and 9).

Mr. Lipskie testified that the Gibson vehicle was a total loss since the damages to it were more than the value of the motor vehicle. He stated that the Gibson vehicle was an unusual vehicle. Therefore, it took more time than normal to conduct the appraisal of it. Initially on January 30, 1996, Mr. Lipskie provided a report (which is found at Tab 6) indicating a value in the amount of $ 2,800.00 - 3,000.00 plus the applicable taxes. As part of the report found at Tab 6, Mr. Lipskie also provided a "TOTAL LOSS REPORT" (found at Tab 8) which shows the detail of how he arrived at his figures. On February 26, 1996, Mr. Lipskie provided a further report (which is marked as Exhibit 4). In Mr. Lipskie's evidence, and in the report marked Exhibit 4, he testified that the value of the Gibson vehicle could be as high as $ 4,000.00 plus applicable taxes. Under cross-examination, Mr. Lipskie admitted that he had not appraised very many Austin Mini automobiles. However, he looks at approximately 1000 cars of all makes each year.

The claim being made by the Plaintiff Steffen involves a claim for damage to auto parts for a 1967 Volkswagen Beetle. The vehicle itself (which was parked outside the building that was destroyed by the fire) was not damaged. However, auto parts that had been brought by the Plaintiff Steffen to the Defendant's place of business were heavily damaged in the fire since most of those parts were inside the building.

Mr. Lipskie prepared a report outlining the cost to replace the parts which were destroyed. That report is found at Tab 7 of Exhibit 1. Mr. Lipskie testified that one of the Plaintiffs, Mr. Steffen, owned a parts supplies store and therefore could obtain the parts at a lower price. Thus, in Mr. Lipskie's appraisal, he showed the parts at cost, without any allowance for a mark-up.

Mr. Lipskie calculated the loss of the Plaintiff Steffen in the amount of $ 1,427.78 without any allowance for taxes. (The evidence indicates that it is not necessary to factor in an amount for provincial sales tax because of the manner in which Steffen is able to purchase the parts.)

When conducting both appraisals, Mr. Lipskie found the Defendant to be very helpful.

For the major items, Mr. Lipskie did not see any discrepancies between the list that Mr. Steffen had given him for the parts that he had purchased and what the Defendant pointed out to Mr. Lipskie. All of the parts were new. All suffered heat damage.

I found Mr. Lipskie to be a very straightforward, honest witness. He is experienced and I accept his evidence.

The next witness to testify on behalf of the Plaintiffs was Kay Lavery. Ms. Lavery is a claims representative with the Zurich Insurance Company, the insurer for all Plaintiffs. She was able to confirm ownership of the vehicle and parts by the Plaintiffs together with payments being made to the Plaintiffs for the damages sustained. (What we have in both cases is a subrogated claim being made through each Plaintiff - as the insured - by Zurich Insurance Company.) She further testified that there was no salvage money received on either claim.

Nothing that was said or produced on behalf of the Defendant changed the evidence led by the Plaintiffs in each action which would effect the evidence I heard concerning the quantum of damages.

I, therefore, find that the amounts of damages suffered by the Plaintiffs are as follows:

LIABILITY:

Now I come to the issue of whether the Defendant is required in law to pay any or all of the damages suffered by the Plaintiffs.

Bailment

Does the doctrine of bailment apply in these cases ? If it does, was the Defendant a bailee for reward or a gratuitous bailee ? What is the standard of care for a bailee and does it differ between a bailee for reward and a gratuitous bailee ? Who assumed the risk for the Gibson vehicle ? Who assumed the risk for the Steffen auto parts ? These are the first issues that I must address when considering the question of liability.

As stated by Mr. Justice Cory (as he then was) of the Ontario Court of Appeal in Punch v. Savoy's Jewellers Ltd. et al (1986), 54 O.R. (2nd) 383 at page 388:

The courts throughout Canada have made it clear that the standard of care and diligence imposed on a gratuitous bailee is lower than that required of a bailee for reward. (Price v. Leblanc, [1957] 7 D.L.R. (2nd) 716 (New Brunswick C. A.); MacDonald v. Pro-Line Trailers Ltd., [1996] M.J. No. 318 (Manitoba Court of Queen's Bench); Davis v. Henry Birks and Sons Ltd., [1981] 5 W.W.R. 559 (British Columbia S.C.).)

In fact, various Canadian courts have held that a gratuitous bailee is liable only if gross negligence is proven. (Melburn Truck Line Inc. v. Plastmo Ltd., [1992] O.J. No. 209 (Ont. Court of Justice - Gen. Div.); Ginsberg v. Vanstone Motors Ltd., [1949] O.W.N. 345 (Ont. H.C.J.); Carlisle v. G.T.R. (1912), 25 O.L.R. 372; Degrace v. Central Garage Sales & Service Ltd. (1979), 24 N.B.R. (2nd) 557 (New Brunswick C.A.); Piper v. Geldart, [1954] 2 D.L.R. (2nd) 97 (New Brunswick C.A.); Arrow Transportation Systems Inc. v. Quadra Cartage Ltd., [1997] B.C.J. No. 3036 (British Columbia Prov. Court); Polish Fraternal Aid Society v. Kapusta, [1938] 3 W.W.R. 433 (Manitoba C.A.); Martin v. Town N'Country Delicatessen Ltd. (1963), 45 W.W.R. 413 (Manitoba C.A.); Munroe v. Belinsky, [1995] M.J. No. 168 (Manitoba Court of Queen's Bench); Queen's Sales and service Ltd. v. Smith, [1963] C.C.S. 317 (Nova Scotia S.C.); Rondeau v. Chief, [1992] Y.J. No. 107 (Yukon Territorial Court); Guenther v. Melfort Housing Authority, [1993] S.J. No. 95 (Sask. Prov. Court)

Based on the evidence, I find that the Defendant was in possession of the Gibson motor vehicle as a gratuitous bailee.

Before I decide whether the Defendant was negligent (either grossly or ordinarily), I am aware that the uncontradicted evidence of the Defendant was that the vehicle was left on the Defendant's premises at the sole risk of the Plaintiff Gibson. Therefore, the Defendant is not liable for any damage that the Gibson motor vehicle sustained in the fire and explosion.

I further find, also based on the evidence, that the Defendant was not in possession of the parts for the Steffen motor vehicle as a bailee of any kind. Instead, the Defendant had only granted a licence to the Plaintiff Steffen to leave the auto parts on the Defendant's property for the assistance and convenience of the Plaintiff Steffen. In any event, the uncontradicted evidence of the Defendant was that the auto parts were left on the Defendant's premises at the sole risk of the Plaintiff Steffen. Therefore, the Defendant is not liable for any damage that the Steffen auto parts sustained in the fire and explosion.

The Accidental Fires Act

In the event that I have misapplied the law which I have expressed above on the issue of bailment and duty of care, I want to comment on the Accidental Fires Act and the doctrine of res ipsa loquitur as they apply to this case.

The Accidental Fires Act, R.S.O. 1990, c. A. 4, has only one section. Section 1 provides (in part) as follows:

(The emphasis is mine.)

The most recent interpretation of the Accidental Fires Act by our Ontario Court of Appeal is found in Neff v. St. Catharines Marina Ltd. (1998), 37 O.R. (3d) 481. Mr. Justice Carthy (at page 483 of that decision) said that " an accidental fire is not one that is proved to have been accidental, rather it is one that cannot, on a balance of probabilities, be traced to a particular cause."

The Ontario Court of Appeal also considered the Accidental Fires Act in 1981 in the decision of Paquette v. Labelle, 33 O.R. (2nd) 425. In both the Neff and Paquette decisions, the applicability of the doctrine of res ipsa loquitur was also considered.

Mr. Justice Carthy, in the Neff case, said at page 486:

In Neff, the Ontario Court of Appeal goes on to reconcile the broad liability of a bailee against the language of the Accidental Fires Act. Mr. Justice Carthy says on page 487 that:

Mr. Justice Carthy continues on page 488 of the Neff case by saying:

How does what Mr. Justice Carthy said differ from the facts of this case ? As I stated earlier, Mr. Fox from the Office of the Fire Marshal stated in his Fire Investigation Report (Exhibit 1, Tab 10) that the cause of the fire was "Accidental" with the source of the vapours coming from various possible places, including "…some other undetermined source." That statement is uncontradicted. Therefore, it would seem to me that the Defendant (if he was a bailee) has established that any failure on his part to care for the goods did not contribute to the loss that was suffered by either the Plaintiff Gibson or the Plaintiff Steffen.

Thus, the Accidental Fires Act provides a complete defence to the Defendant in the circumstances of this case.

I would further add in any event that, based on the evidence in this case, I would not attribute any gross negligence to the Defendant. Thus, because I have already found, based on the evidence, that the Defendant was a gratuitous bailee at best (as I earlier stated), the Defendant would not be liable to either of the Plaintiffs.


CONCLUSION:

Therefore, while I find that the Plaintiffs suffered damages in the amounts that I earlier indicated, being $ 3,780.00 in the case of Mr. and Mrs. Gibson and $ 1,427.78 in the case of Mr. and Mrs. Steffen, I find that the Defendant is not liable to either Plaintiff. Accordingly, the Defendant does not have to pay any money to either Plaintiff for damages.


COSTS:

At the conclusion of the evidence, when it became evident that written argument was being requested, both sides requested an opportunity to deal with the issue of costs by way of a conference telephone call after this decision has been released to all parties. Accordingly, if the parties are unable to agree on the costs, they may make arrangements with the Court Clerk for a telephone conference call, during which I will entertain submissions on the issue of costs (including the quantum if the costs are found to be payable by anyone).


Dated at Goderich, Ontario this 13th day of July, 1998


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Norman B. Pickell, Deputy Judge