The appellant purchased a commercial property from the respondents and gave a vendor take back mortgage.
The respondents remained as tenants.
The appellant sued in Small Claims Court for unpaid rent and property removal costs, while the respondents counterclaimed.
During the trial, the respondents' counsel withdrew, and the Deputy Judge ordered the appellant to pay the outstanding mortgage balance of $59,235.31 into court to obtain a discharge and avoid prejudice from the delay.
The Deputy Judge ultimately awarded the appellant $25,000 plus costs, but ordered the remaining funds in court paid to the respondents, failing to account for agreed-upon rent set-offs that were not formally pleaded.
On appeal, the Divisional Court held that while the Deputy Judge exceeded Small Claims jurisdiction by ordering the $59,235.31 payment, the Superior Court had jurisdiction under s. 134(1) of the Courts of Justice Act to correct the unintended consequences.
The appeal was allowed, and judgment was granted to the appellant for $53,505 plus costs, to be paid from the funds in court.