Coats, Crooks and Compensation

Your coat’s been stolen at a club or restaurant. Does that establishment owe you anything? Do businesses have a duty of care over guests’ belongings? And does that equation change if they have a coat check (and does it change more if you pay for the coat check)?

Certificate in Law Academic Director Morgan Jarvis and Corporate Law instructor Christian Hurley explore legal concepts like bailment, duty of care, contracts, and liability through the lens of what seems to be a universal fact of Canadian life: getting your stuff jacked when you’re out on the town.

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Theme music for Fundamentals by Megan Hamilton. Art for the podcast by Valérie Desrochers.  

Transcript:

00:04 Matt Shepherd: Welcome to Fundamentals of Canadian Law. I’m Matt Shepherd and, hey, have you seen my coat? I know I wore it in here. Oh, man, someone has stolen my coat. This happens a lot. It happens especially in the winter and especially to students. But when it happens, and you’re out and about, what does that mean? If someone steals your stuff while you were at a restaurant or at a club, did that establishment have a duty to look after your belongings? We brought in two people to help us answer that exact question. Morgan Jarvis is the academic director of the Certificate in Law program and also the architect of a new version of our Introduction to Canadian Law course starting this May. Christian Hurley teaches Law 204/704: Corporate Law, and is bringing his expertise in contracts to the table. And may be worth mentioning that this podcast is for informational purposes only and does not constitute legal advice. This podcast is brought to you by the Queen’s Certificate in Law, the only online certificate in law offered by a law faculty in Canada. You can find out more at takelaw.ca. Let’s see if we can find my coat, or at least find some answers. We’ll start with Morgan Jarvis.

01:23 MS: Someone goes out for the night, they’re enjoying a very responsible evening out on the town, and they leave their coat somewhere in the establishment, and at some point in the night, their coat is stolen. And this seems to be almost a right of passage for university students. It happens a lot in campuses all over the country, I’d imagine campuses all over the world. So, there’s just a broad question here about, is there anything that is the establishment’s responsibility when it comes to things like people’s stuff getting stolen when they’re out for the night?

01:55 Morgan Jarvis: Yes, it is certainly a problem. And I was surprised that there weren’t more cases of this. But, of course, you have to remember that the law is only worth as much as you are financially and, of course, at coat check, nobody’s gonna bother going to court over their coat, unless it’s a fur coat. I did actually find a case about a fur coat, disappearing from a coat check situation, but before we go down that road, it’s worth thinking about… You mentioned the different ways that your coat might go missing, ’cause that is where it all hinges on. If the coat is still within your possession, you’re in the bar, whatever, the coat is maybe on a coat hook behind you or it’s on your chair, and it goes missing, it’s probably your problem. You didn’t do what you could have done to keep your coat safe. But then we get into a bit of another situation where there’s the coat check or there is somewhere provided by the establishment that you’re in, which is an invitation to hang your coats here. There’s a restaurant downtown in Kingston that I go to a lot and in thinking about this, I realize why they do this, they have the coat rack right in front of the bar or reception area, so there’s always a staff person there watching that coat rack. So, it would be difficult for somebody to come in there and steal everybody’s coats.

03:23 MS: If we can just take a quick step back, just to put a pin in the first point, if there’s no place to put your coat, if there’s no obvious area where there’s any kind of implication that your coat is going to be safe, that’s on you. At that point, your stuff is your responsibility.

03:39 MJ: That’s my thinking. I obviously haven’t spent a huge amount of time… If you were really going to court on this, I’m sure they would be able to argue, they would be able to find ways to argue that an establishment would still… ‘Cause what it comes down to, I’m gonna get to is it comes down to, is there a duty of care? Does the establishment… It’s that torts concept through negligence, does the establishment owe you a duty to look after your belongings? And I think normally the answer would be not in the situation where the coat is with you. And so, yeah, it might be smart for them to not provide an option to store your coat because then they’re taking on the responsibility of looking after it, or they make you just keep it. Arguably, I’m sure someone would have put more thought into it and make it a case otherwise, but that’s what I’m thinking.

04:30 MS: This notion of duty of care, this is a legal term that’s basically someone’s responsibility toward you.

04:35 MJ: Yeah.

04:36 MS: Especially in the context of torts, which is basically people suing each other.

04:40 MJ: Exactly. And in this case, if they’ve offered a way to look after your belongings, then it gets to this concept, this old English common Law concept, of bailment, and it still applies. It’s like when you drop your clothes off at the dry cleaner, or your car at the mechanic, or you check your coat at a coat check, you’re handing over possession of your belongings under a certain understanding there’s a service they’re gonna provide. They’re supposed to look after things and provide them back to you in the same condition as you left them, or better if it’s a repair or cleaning situation. It’s this bit of a contract around that, I guess. So, there’s this duty of care then, when you look at it from a negligent perspective, they’ve put themselves out to look after your stuff for a period of time. And then if they’re negligent in doing that and your stuff goes missing, then they could be responsible for it, whether it’s a paid coat check or not. And there were some fun cases of different situations around that, and the one I ended up just finding at the top of the results when I searched was actually a… It was an employee of a restaurant, and they had been providing… She had this lovely fur coat, it was $1200 in the 1980s, so in today’s dollar it’ll be a fair bit more. So, it was worth going to court for, I guess.

06:06 MJ: And they had been providing storage for their… Secure storage for the employees’ belonging, and nothing went missing. And then they changed to this less secure shared lockers, and all of a sudden this staff lady left her fur coat like usual, of course, in February, in Saskatchewan, and it went missing. So, then she’s suing for it.

06:27 MJ: And it was because they had this… They’ve kind of done the reasonable thing of providing secure storage for a while in this bailment situation where they’re looking after… They are providing some safekeeping for people’s belongings, and then they went to unsecure, and then they were negligent, they breached their duty of care and the standard of care, and they had to pay damages to this lady for her lost coat and her car keys. And then one of the cases that they cited was another case of a patron to a restaurant, and that was the analogy of if the gentleman had brought the coat with them to the table and hung it on a hook right beside him, then maybe he would have been responsible for it, but because he had hung it on the hook at the front that was provided for him by the restaurant, an invitation to “hang your coat here,” suggesting, “We’ll look after it for you,” then the restaurant was responsible for it.

07:20 MS: There’s a few ideas here. One is “bailment,” which is a term in property law, which is basically that the temporary surrendering of something on the condition that you’re supposed to get it back in the same condition. And then there’s duty of care, which seems to come in to play more in torts, in which if you have a duty of care and you don’t provide it, you’re being negligent, which basically means you’re responsible.

07:40 MJ: Yeah. Well, so it opened… They’re all kind of connected. It’s a little bit difficult to pull them apart because that bailment situation then contractually puts you in a position where you can be held responsible if you’re negligent. And so contracts, which Christian will get into, are often worded so that they’re contemplating not only breach of contract, and you could have a bit of a contract around this, too, and then to be a breach of contract action. But there’s also, if you go down the negligent side, it’s not so much about the contract, it’s just that you’ve put yourself through this contract relationship, you’ve said you’re gonna look after stuff and then you didn’t, so then you’re negligent. So, you can go down a couple of different routes from this bailment relationship.

08:25 MS: Just to go off on a quick tangent, in an earlier podcast we did cover how people can look stuff up on CanLII and find their own cases. So, if people wanted to fine this case, this specific case on CanLII, they can look it up and they can read this themselves. Right?

08:37 MJ: Yeah. I literally went to CanLII.org, I typed in “coat check,” and the first result… ‘Cause I wasn’t gonna spend more time going through them, so I was lucky the first result was this case of a fur coat went missing in a restaurant.

08:50 MS: And that’s at Tremear v Park Motor Hotels?

08:52 MJ: Park Town Motor Hotels, from Saskatchewan Court of Queen’s Bench, I think, in the 1980s.

09:00 MS: So, is this a good time to switch, and Christian can talk to us a bit about contracts?

09:04 Christian Hurley: Yeah, for sure. Well, we’ve sort of… Morgan has talked about the situation where you go in, there’s a bailment, you pass your coat off to the venue. On my side, I’m thinking of a situation that’s more akin to a traditional coat check. Most people have gone through this process. You enter into a venue, you hand your coat over to the clerk, you tender payment, if required, and you’re given a ticket with a number on it that will help identify the coat at the end of the night. From my perspective, we’re trying to see whether or not the venue can do anything to limit or exclude their liability for lost or damaged items better handed to their possession.

09:49 CH: To start off, it’s fair to say there’s nothing inherently offensive about clauses that seek to limit or exclude the liability of a party to a contract. These types of clauses appear quite commonly, but definitely not exclusively in standard form contracts. So, the traditional coat check falls under a category of standard form contracts. And when we were studying back in Contracts 101, we called them “ticket cases.” Ticket cases, they’re one of the earliest uses of standard form contract. They arose in situations where business people were engaging in many different transactions in a short period of time, and typically these would be contracts for carriage, a taxi or a ride, or situations like a coat check, which would be a bailment.

10:38 CH: So, there were people who were willing to do business on a fixed set of terms, and they didn’t have the desire to negotiate the terms of each individual contract. Customers, on the other hand, they rarely gave the matters much thought. They’re either too rushed to negotiate the terms, or they weren’t concerned enough to object to the terms that were insisted upon, or maybe it was just such that they were passive as a result of the fact that they said, “The party that we’re dealing with, they’re not gonna vary these terms or the terms that are typically insisted upon by businesses in a similar line of work.” It’s essentially a take it or leave it situation. And you know what? That’s beneficial for both sides, because you can think about when you’re going to a bar and you’re looking to get your coat to the coat check, that line moves all too slow. You’re there long enough, you just wanna get up there and hand your coat over. You can imagine the nightmare that will result if you get to the front, and all of a sudden you’re trying to hash out very specific terms about how your coat is to be handled by the coat check clerk. It’s rather absurd.

11:44 CH: So, these contracts, they’re formed quickly, casually, there’s no real discussion of terms. A ticket is handed over, it may have a brief set of terms on the back or maybe it will incorporate some terms by reference, maybe it might advise the customer to, “Please see notice posted in the premises.” That’s typically what happens, so I guess what we need to look at is try to understand how these exclusionary or limitation clauses that may be found on a sign or on a ticket that you’re given are treated in Canadian law. The first is, does the clause apply at all? Was the clause effectively included as a term of the contract that you’ve entered into? Most often, this will turn on whether or not the clause was brought to the attention of the contracting party that’s now challenging the cause. So, if I’m passing over my coat to you, was I properly advised? Was I notified that there are terms limiting or excluding liability of the venue with respect to my property that I’m now passing over to that? The courts have typically said that the more unusual or onerous a clause is, the more steps that need to be taken to bring the attention of the party to those classes.

13:04 CH: So, you can see at an operation, any time you look at a typical standard form contracts, pick up a terms of use for a product or service that you’re dealing with and read through, and nobody does this, lawyers included. But read on down through, and inevitably you’re gonna get to a section that deals with liability. And all of a sudden, you’ll see that the font will switch from maybe a standard small font, and all of a sudden, the font is capitalized, and it’s bolded, and it’s underlined. And what’s happening here is that’s reflecting the effort of the party who’s drafted this contract. It’s reflecting their effort and trying to bring the attention of the other party to the language in this contract, because they view it as unusual, as onerous.

13:51 CH: In the case of a coat check ticket, I don’t know, most coat check tickets that I see, I get them, there’s a number on the front. Full stop, the end. In doing a little bit of looking into this, I’ve come across a few cases where, on the back of a ticket, there might be a couple of short clauses purporting to limit liability. But for the typical person who’s passing the coat over, they look at these tickets simply as proof that I’ve given you my coat and the number is going to help you in finding it in that closet, in the back there. We’re not typically expecting contractual language to be included on the back of the ticket. So, there needs to be something done by the venue to really make that obvious.

14:37 CH: Switch it from the situation where we’ve got the ticket with a notice to perhaps there’s a sign close to the coat check that advises of a fee for service. Say, what if the sign also clearly stated that the venue is not responsible for lost or stolen items. Well, maybe it could be argued in this instance that the clause was sufficiently brought to the attention of the customer prior to the contract being entered into, which would satisfy the notice requirement, because, again, you think about the process of how the contract was entered into. When I approached the coat check, I pay my money, I pass over my coat, I receive the ticket. If I’ve paid my money, if I’ve given the coat, and there are terms on the back of that ticket that I don’t see till after the fact, have I sufficiently been notified upfront of these exclusionary clauses? And maybe I’d suggest that, no, I haven’t.

15:34 CH: So, it would probably be a good idea, if I’m the venue, to take extra steps to notify the customer that there is a limitation of liability or an exclusion of liability that applies to this particular situation. If at the end of the day, we’ve determined that the clause does apply, then how should it be interpreted or trying to determine what the class actually means? And in Canadian Common Law limitation or exclusion clauses, they’re narrowly interpreted, and any ambiguity in the language is going to be construed against the party who drafted the language.

16:10 CH: This is justified in a couple of different ways, but first is that the party who’s drafting the language had the opportunity to ensure that the wording was clear. And second, now you’re seeking to take away some of the benefit of a contract that would otherwise extend to me, the customer, who’s challenging the clause. For example, if the establishment had a sign at the entry that stated, “All personal property here is at the risk of the patron,” this is as I walk in the door, say, to the bar. Is that sufficient to limit or exclude liability if there’s not a similar notice posted near or around the coat check? If I was the customer, I would state, “No, it’s a little bit ambiguous.” I would think that sign, as I’m entering the venue, that’s going to apply to situations where I’m not conveying possession of my property to you, the venue. That’s where I’m gonna retain it. I may have laid it on the chair next to me or I’ve hung it on a hook somewhere.

17:07 CH: But if I go down to the coat check and all of a sudden I’m paying for a service, I’m paying for somebody to watch my coat, if there’s no notice posted there and there’s nothing on the ticket, that would purport to limit that liability, is it a reasonable interpretation that limitation exclusion doesn’t apply in that situation, I’d suggest that there’s an argument to be made subject to, pursuant to the doctrine of contra proferentem, then you could make an argument that that ambiguity should be construed against the venue which drafted that language.

17:40 CH: And finally, you can look to see are there any reasons of public policy that would motivate a court to strike down the applicability of that clause. And courts had, time and again, shown they’re unwilling to allow a party to rely on an exclusion clause where it’s not merited. So, if the party doesn’t take reasonable steps or they’re sharp dealing… So if I pass my coat to the coat check clerk and they just throw it in a pile and they can’t see where it is, it’s out of their line of sight, it’s easily accessed by other patrons of the venue, then you could make an argument that they’re not taking reasonable steps that would be expected of the venue in those circumstances to properly care for the customer’s possession. In that case, the court may choose to not uphold the exclusion or limitation clause.

18:33 CH: But from a public policy perspective, these clauses are pretty legitimate. You think about, if I’m passing my coat to you, you’re typically paying a very modest amount. On the other side of that, the benefit that I should be realizing from that, it’s pretty modest. It would be pretty unfair if I was to pass a coat over to a venue, and I had it stuffed with diamonds and Rolex watches, and I gave it to the coat check clerk and gave my $2, and when I came back at the end of the day, it’s missing and now I’m trying to claim thousands and thousands of dollars. It’s not within a reasonable expectation of the parties entering into the contract. If the fee is modest, then it’s reasonable for people, I think, to come to the conclusion that the risk assumed by the venue should also be modest. Otherwise, they have to really charge a ludicrous amount for what’s really a modest service, and that would really be to the deterrent not only of the venue but also to the public who are looking to available of those services as well.

19:41 CH: So, at the end of the day, the person who’s passing possession of the coat over to the coat check still has the ability, notwithstanding the limitation clauses, to sue for the contract price. If we say that this clause is valid and it can be upheld, there is still a remedy available, though, given the amount you’re paying to have your coat stored, that contract price is gonna be pretty modest, so you’re probably not likely to come across any case law on that point as you did with the fur coat in Saskatchewan.

20:17 MS: Right. I feel like I should probably mention at this point, none of this is legal advice, nor should it be construed as such. This is just general information. At the end of the day, venues should exercise some caution, protecting themselves, by making sure there’s language around the limitations of what the coat check service is going to do. But by and large, it’s not prudent for a consumer to ever expect that there would be recompense if their stuff is stolen, period, coat check or no.

20:46 MJ: Yeah. I think, from the venue’s perspective, they need to get out in front of the… They need to properly notify the public what it is we’re offering and what it is we’re not agreeing to. And if that’s clear and makes sense from every party’s perspective, then you get what you bargained for at the end of the day.

21:09 MS: Right. And I guess I just go back to my original point. Like anything, unless you’ve got $10,000 in your pocket for legal fees, you may as well not really expect to be able to exploit the law to your benefit, regardless of what we’ve concluded today.

21:22 MJ: Right.

21:23 MS: All right. I guess the burning question for me is, it seems like other than it’s a nice service and I guess there’s some small marketing value in terms of being the kind of establishment that has that service, it seems like, for the venues, coat checks are nothing but trouble.

21:38 MJ: Yeah. I would say they are putting themselves out there to… But at the same time, like this case that I was looking at, discusses this part of the business transaction that they’re offering, they want customers who come to their venue, something they choose to offer as an attractive incentive to attract customers, is, “We’re gonna look after your coat if you come and spend time here in the winter.” I think it does need to be like any business calculation or any… Yeah, any business venture, there needs to be calculations of your risks and liabilities versus the cost and revenue, including, of course, the legal risks. And I was finding articles in the States, I’m sure in Canada, too, businesses can buy coat check insurance. So, that’s one way you can mitigate your risk, you’re knowingly taking on some risks and you buy insurance to back it up, and you try and do your best to minimize where you might fail and be exposed to liability and the consequences, and you might buy some insurance just for that extra protection and hope they’ll pay out when they’re asked to.

22:50 MS: The key advice to consumers here is do not stuff your coat with diamonds and Rolexes.

22:56 MJ: Yes, it’s probably not a good idea.

22:56 CH: That’s the important takeaway. And it’s worth noting, too, there’s a bit of a difference between risk and liability. So, sure, there might be some liability on the part of the venue in accepting and caring for the customer’s coat, but at the end of the day, what’s the true risk? And you can see by the lack of availability of ready case on the subject, there’s not many people who are going to be willing to take an establishment to court to have my old surf style windbreaker returned. Maybe the risk isn’t really there, but there’s certainly liability to think about.

23:27 MS: All right. Morgan, academic director, with a Certificate in Law, and the developer of the new version of Law 201 coming up this summer, and the director of the Queen’s Business Law Clinic, and Christian, instructor of our Law 204/704: Corporate Law course, with a Certificate in Law, thank you both very much.

23:45 MJ: Thank you.

23:45 CH: Thanks a lot.

23:48 MS: Thanks to Morgan and Christian. You can check out Introduction to Canadian Law, Law 201/701, and Corporate Law, Law 204/704, at takelaw.ca. Fundamentals of Canadian Law is recorded at Queen’s University, situated on traditional Anishinaabe and Haudenosaunee territory. Our theme music is by Megan Hamilton, who is also a staff member here at Queen’s Law. You can find out more about her music at meganhamiltonmusic.wordpress.com. Original illustrations for this podcast are by Valerie Desrochers. You can find her work at vdesrochers.com. Thanks for listening.

You Don’t Really Own “Your” Land – Fundamentals of Canadian Law 10

Bayeux tapestry - Norman invasion of England

What does William the Conqueror have to do with property law in Canada? A lot! Find out more in this podcast.

Property law is complex — fee simple, escheats, and William the Conqueror all come into play when we’re talking about ownership of property in Canada. Fortunately, the Dean of Queen’s Law, Bill Flanagan, took some time out of a busy schedule to drop by and shed some light on both the laws governing land, and the “finders keepers” principle of personal property.

Join us for a fascinating conversation about history, the Crown, property ownership, playground rhymes, and more!

What Kind of Property Rights Can I Hold?

Property as a legal concept is best understood not as an object, but as a bundle of rights that a legal person possesses. The pertinent legal question isn’t what you “own” but what you have the right to do with it. We are going to focus on “real property”, which is a type of property that is associated with land and things that are attached to it (e.g. a house). The law on this is different from “personal property”, which is property not attached to land—like your laptop.

You can have many different types of interest in real property. They are different not because the type of property is different (e.g. house versus farm), but because of what the person who holds the property has the legal right to do. There are many different rights that attach to real property interests—they are wide ranging and will vary depending on the nature of the proprietary interest.

Fee Simple

The most basic kind of proprietary interest is an interest in fee simple—this is what most people are referring to when they say they “own” a house, a cottage, or a farm.

Cottag with for sale sign

“Owning” property in Canada actually means having certain rights over it. Your grandpa’s cottage is governed by the rights your grandpa has over that property…

A fee simple estate is the highest and most complete interest in the land that can be recognized by law. The owner of the fee simple estate can exercise all rights of ownership over the land infinitely.

For example, my great-grandfather owned a cottage on a piece of land up near Algonquin Park. In legal terms, what he had was a fee simple estate.

With the fee simple estate, he had a bundle of rights. For example, he held the right to:

  • Occupy the property;
  • Exclude others from the property;
  • Sell the property;
  • Rent the property (we will discuss leaseholds and residential tenancy in another post);
  • Divide the property into smaller fee simple estates;
  • Destroy the property;
  • Use the property as security, for example, by taking out a second mortgage; and
  • Will the property to his children after he died.

Unless he granted anyone else any rights, he was the only person who held these rights. His rights under fee simple were complete and indefinite.

In 2005, he passed away. What happened to his fee simple interest in that land and cottage after that? A fee simple interest has no end date— it is indefinite, meaning that it survives even after a person dies, which means that it can be willed to another person who will possess all the same rights. Even where a fee simple estate is not willed, it still exists and descends intestate to the owner’s heirs—again, this is because it is indefinite.

My great-grandfather willed the property to my great-uncle, who decided to sell it. When he sold the property, he sold the fee simple—he didn’t just sell the cottage and the land, he sold all the rights that attached to it. Because the fee simple is absolute, it means that he no longer held any rights to the property.

This is just fee simple, we’ll look at other property rights in future posts!

— Isabelle Crew, Queen’s Law’18