Two customers of a Richmond safety deposit box business have been given the green light to pursue claims against its owners for allegedly removing gold and other contents from their boxes.
Terence Dilan Kulanayagam and Michael Dale Hsu each filed a civil claim against International Private Vaults Inc. (IPV) at the B.C. Supreme Court in 2022 and 2023, respectively.
IPV, which was owned and operated by Katherine Thomas and William Thomas, offered safety deposit rental for boxes located in a secret vault in its office at 120-8160 Park Rd.
Security measures for accessing the boxes included a security key card, an iris scan and two keys, one held by IPV and the other by the renter, according to a judgment by B.C. Supreme Court associate judge John Bilawich on Feb. 28.
In their lawsuits, Kulanayagam and Hsu claimed they rented a safety deposit box anonymously to store contents valued at about $116,000 and $176,557, respectively. Contents included coins, gold, platinum and silver bars and international currency.
In January 2020, contents of IPV's office were seized by the landlord because "IPV failed to keep its office rent in good standing," wrote Bilawich
Katherine and William Thomas filed a joint consumer proposal in June to bar creditors from pursuing legal action to recover a claim unless the court decided otherwise.
The landlord terminated IPV's lease in the same month and IPV was allowed to drill out the safety deposit boxes, remove their contents and take them to a new location for safekeeping.
When Kulanayagam and Hsu demanded IPV return the contents of the boxes, IPV denied them access, claiming they failed to show IPV they were the renter, Bilawich wrote.
According to William Thomas' affidavit sworn in Kulanayagam's lawsuit, all security and computer equipment in IPV's former office — including a server that stored iris scan data — was destroyed during the distraint or re-letting process and impaired IPV's ability to identify customers.
Kulanayagam alleged IPV, Katherine and William Thomas removed and converted the contents of his box and "wrongfully conspired to take possession and control of the contents without lawful authority" and sought the return of the contents among other remedies.
Meanwhile, Hsu, who initially sued only IPV, alleged the defendants removed and converted the contents of his box and IPV breached its trust obligations. He later applied to add Katherine and William Thomas as defendants, which Bilawich granted in the Feb. 28 judgment, and alleged they knowingly assisted IPV in the breach.
Hsu sought the return of the box contents, claiming any money or assets unaccounted for are subject to a remedial constructive trust and damages.
Items missing from boxes when inventoried
Both Kulanayagam and Hsu's boxes were ordered by the court to be inventoried.
Kulanayagam originally applied for a default judgment against IPV in May 2023 but IPV ultimately filed a response to his civil claim. The court later issued a consent order in November 2023 for the contents of his box to be inventoried by counsel or a mutually agreeable third party.
On June 2, 2023, Hsu obtained a default judgment against IPV after IPV failed to respond to his lawsuit. IPV was required to deliver the items listed by Hsu or pay him their value.
When IPV applied to set aside the default judgment, a B.C. Supreme Court justice declined the request but allowed the parties to retain a third party to inventory the contents of Hsu's box before they were delivered to Hsu's counsel.
Kulanayagam's box was empty when inventoried and only silver items were found in Hsu's box, which Hsu's lawyer suggested had a collective estimated value of about $2,500.
Stays of proceedings would prejudice claimants, says judge
To pursue legal action against Katherine and William Thomas, Kulayanagam and Hsu sought permission from the B.C. Supreme Court to lift the stay of proceedings from the consumer proposal.
Bilawich sided with the customers in his decision. If Katherine and William Thomas are found to have knowingly assisted IPV in breaching a trust or are knowingly in receipt of trust property, it would be a debt that would not be affected by a bankruptcy discharge, and the property would not be a part of assets divisible among creditors, he wrote.
He added he was satisfied Kulanayagam and Hsu would suffer "material prejudice" if the stays of proceedings continued.
Although Katherine and William Thomas argued it was inappropriate to lift the stay because other customers' claims have been stayed, Bilawich disagreed.
"Failure on the part of other plaintiffs to apply to lift the stays does not prevent Mr. Kulanayagam and Mr. Hsu from doing so," he wrote.
None of the claims against Katherine and William Thomas in the original lawsuits have been proven in court.
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