COURT FILE NO.: 635/03

DATE: 20031112

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

CIT FINANCIAL LTD.

Plaintiff

(Respondent in Appeal)

• and -

MANAGEMENT GRAPHICS INC., 1385838 ONTARIO LIMTED c.o.b. MANAGEMENT GRAPHICS 2000 and GEORGE KLEIN

Defendants

(Appellants)

Arthi Sambasivan, for the Respondent

Barbara Frederikse, for the Appellants

HEARD: November 12, 2003

THEN J.: (Orally)

1CIT Financial applies for an extension of time to appeal in circumstances where the judgment was rendered on August 13th, 2003 by Day J. and the notice of appeal was sought to be filed on September 15th, 2003.

2The applicant explained through the affidavit of its counsel that although instructions were given to appeal within the 30 day period, the notice of appeal was not attempted to be filed until September 15th, one business day late through counsel’s inadvertence. There was no cross-examination of counsel’s affidavit. The respondent filed an affidavit suggesting that the appeal was attempted to be filed on September 15th, 2003 in reaction to an angry exchange between the parties on that date and therefore not as a result of a firm intention to appeal.

3The test under Rule 3.02 is set out in a decision of MacPherson J.A., in the case of Duca Community Credit Union Ltd. v. Giovannoli 2001 24017 (ON CA), [2001] O.J. No. 36, wherein he concludes that what must be shown before an extension to appeal is permitted is as follows:

(i) a firm intention to appeal together with a reasonable explanation for the delay;

(ii) no prejudice to the respondent, and

(iii) the “justice of the case” which requires a consideration of the merits of the appeal not with a view to determine whether the appeal will succeed but to determine whether there is so little merit as to enable the Court to deny the important right of appeal.

4With respect to the first two factors, I have no difficulty in concluding on the basis of the affidavit filed by applicant’s counsel (which was not cross-examined), that there was a firm intention to appeal and also a reasonable explanation for the delay. Nor is there, in my view, any prejudice to the respondent in granting an extension of time in which to file the notice of appeal.

5In the absence of cross-examination the affidavits stands unchallenged and the assertions therein need not be confirmed by evidence extrinsic to the affidavit. Also, in my view, the Court is not entitled to make an adverse finding of credibility on the basis of inferences that may or may not be gleaned from the material filed by the respondent.

6With respect to the third factor, that is, the “justice of the case” which involves a consideration of the merits, the trial judge referred to the following passage in his reasons for judgment from the decision of the Supreme Court of Canada in Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce 1996 149 (SCC), [1996] 3 S.C.R. 727, par. 30:

“The tort of conversion involves a wrongful interference with the goods of another, such as the taking, using or destroying the goods in a manner inconsistent with the owner’s right of possession. The tort is one of strict liability, and accordingly, it is no defence that the wrongful act was committed in all innocence.”

7Day J. in applying Boma to the facts of this case stated:

“The defence states that it had no responsible alternative but to take the Laminator rather than abandon it and thereby hold it as bailee for CIT. If that were so, I would be inclined to agree. However, Newco at the direction of Mr. Klein, has continued to use the Laminator, falling into the language of the Supreme Court of Canada in Boma, above quoted.

Applying that language I have no hesitation in concluding that Newco and Mr. Klein denied the plaintiff’s title by unilaterally applying the Laminator for their own use.

Clearly, Newco, at the direction of Mr. Klein, and thus both Newco and Mr. Klein have engaged in wrongful acts of conversion of the plaintiff’s Laminator.

The law is clear that damages for conversation constitutes a value of the asset at the date of conversation.”

8The grounds of appeal are as follows:

(i) the learned trial judge erred in finding that the use of the equipment in question in and of itself constituted a conversion thereof;

(ii) the learned trial judge erred in failing to consider the appellant’s various acknowledgements of the plaintiff’s entitlement and ownership to the equipment in determining whether the equipment had been converted, and

(iii) the learned trial judge erred in his calculation of damages.

9In my respectful view, in the circumstances of this case, it is obvious that the grounds of appeal have so little merit that leave to extend the time should not be granted. The grounds of appeal appear to posit the defence that the defendant may use the plaintiff’s goods without the plaintiff’s permission as long as the defendant continues to admit the goods belong to the plaintiff. I cannot accept that, if as Boma states, it is no defence to the wrongful use of the plaintiff’s goods that the defendant was innocent of the knowledge that the goods belonged to the plaintiff, it can nevertheless be a defence to the wrongful use of the plaintiff’s goods that the defendant did so deliberately with full knowledge that the goods belonged to the plaintiff.

10Accordingly, the application is dismissed.

11The parties have made submissions as to costs and the respondent submits that an order in the amount of $400 is appropriate in the circumstances. I agree and costs will be ordered in that amount to the respondent, payable forthwith.

THEN J.

Date of Reasons for Judgment: November 12, 20023

Date of Release: November 24, 2003

COURT FILE NO.: 635/03

DATE: 20031112

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

CIT FINANCIAL LTD.

Plaintiff

(Respondent in Appeal)

• and -

MANAGEMENT GRAPHICS INC., 1385838 ONTARIO LIMTED c.o.b. MANAGEMENT GRAPHICS 2000 and GEORGE KLEIN

Defendants

(Appellants)