Hydro One Networks Inc. v. Yakeley, 2010 ONSC 4770
CITATION: Hydro One Networks Inc. v. Yakeley, 2010 ONSC 4770
NEWMARKET COURT FILE NO.: DC-08-90890
DATE: 20100831
SUPERIOR COURT OF JUSTICE – DIVISIONAL COURT - ONTARIO
RE: Hydro One Networks Inc., Plaintiff (Appellant)
AND:
Paul Yakeley and Jo-anne Yakeley, Defendants (Respondents)
BEFORE: The Hon. Mr. Justice G.M. Mulligan
COUNSEL: A.M. Tomasovic, Counsel, for the Plaintiff (Appellant)
T.A. Pochmurski, Counsel, for the Defendants (Respondents)
HEARD: August 25, 2010
ON APPEAL FROM THE DECISION OF DEPUTY JUDGE STABILE DATED JULY 16, 2008
ENDORSEMENT
[1] The appellant Hydro One Networks Inc. appeals from the judgment of Deputy Judge Stabile dated wherein he dismissed the plaintiff’s claim for in contract for $8,763.30. He found that the plaintiff was entitled to judgment in that amount but the defendant had a setoff for an equivalent amount. In the result the plaintiff’s claim was dismissed.
[2] The grounds for appeal as argued by the appellant were as follows:
(a) Did the trial judge err in law by applying the principle of set off when it had not been pleaded by the respondents;
(b) Did the trial judge err in fact and law by finding that there was a negligent misrepresentation on which the respondents reasonably relied;
(c) Did the trial judge err in law by accepting the respondent’s allegations of loss without evidence to substantiate the claim.
THE FACTS
[3] A brief review of the facts will help to put this appeal in context. Mr. Yakeley wished to move his home, which was a two storey structure, from a lot that he was selling, to another location. Because of the proximity of hydro wires he was required to obtain the consent and approval of Hydro One in connection with such a move. About two years prior to the move he called Hydro One and arranged a site visit with one of its representatives. Because of the internal intake information from Mr. Yakeley’s original call it appears that the Hydro One representative believed that the move would take place in the Fall. At the site visit the building was measured and it was determined that the house could be moved on a flat-bed truck intact. Mr. Yakeley was required to make a formal application in due course when he was ready to move the house.
[4] Mr. Yakeley then made all the necessary arrangements to move the house including engaging a mover, removing the brick from the house and all of the other necessary permits. About one month before the move he contacted Hydro One for its formal permit. As a result of this formal application it was determined that the house could not be moved intact. Mr. Yakeley learned for the first time that hydro wires can sag considerably in summer months and a move in August would not allow the necessary clearance for this house. He was then faced with three choices. The first choice was to remove the roof of the house to allow an appropriate clearance. The second choice was to try and contact an adjacent land owner for an alternate route through a field or by building a road. The third choice was to wait until later in the year when the sagging of the wires would no longer be an issue. Because he had made commitments and a deposit and was required to vacate the property he proceeded to sign the contract on the basis that he would remove the roof so that the structure could be moved as soon as possible.
[5] He therefore removed the roof, moved the structure and replaced and re-shingled the roof at its new location. The deputy Small Claims Court judge accepted his evidence that he incurred costs of $80,000 for so doing.
[6] After the move he was invoiced by Hydro One but did not pay the invoice. As a result, Hydro One commenced action against him for the full amount of the invoice plus interest and costs. Mr. Yakeley filed a defence but did not file a counter-claim.
THE DEFENCE
[7] Mr. Yakeley acted on his own and was not represented. In his defence he disputed the claim by Hydro One and stated at paragraph 4 of his dispute:
A number of situations were created as a result of this last minute change in pricing and conditions. First we are already committed to the cost of preparing the house for the move, we were already committed to the cost of moving the house with the house movers since the house was already loaded for the move and sitting at the end of the driveway and we had a $25,000 deposit with the purchasers of our property to have the house removed from the property by August 31, 2001 which we were not prepared to extend without forfeit of our deposit. Since there was no time to negotiate with property owners under the high-voltage wires or to build a road the only option to us was to proceed with the move was to cut the top of the entire roof off to lower the overall height of the house for the move.
… We were left with extensive cost to rebuild the roof of the house to its pre-existing condition not to mention costs to repair damage to the home from the elements. [emphasis added]
[8] In the Small Claims Court trial the deputy Small Claims Court judge had a dialogue with Mr. Yakeley during his examination-in-chief. As set out at page 55 of the transcript:
THE COURT: It is perhaps a legalese question but I know that it was raised at the Settlement Conference held March 17, 2008. In essence what you’re seeking, in part of your defence, is a set off but there is no claim by you as against Hydro One which would have been referred to as the defendant’s claim? I know that it was discussed because there was a note in that memorandum about it and I just want it on the record. I mean, I do not care about the discussions per se but there is no such claim advanced by you?
THE WITNESS [MR. YAKELEY]: That’s right.
THE COURT: Just so that I am clear, to repeat the obvious, your position is, but for some caution from the plaintiff, and particularly Shane Deugo, [Hydro One witness] to you in your initial meeting that the height might have been changed because of, depending on temperature and depending on time of year, you would have done differently?
THE WITNESS: That’s right.
THE COURT: And because of the time and shortness of notice and all the commitments you had made it, ended up costing you $80,000 more?
THE WITNESS: That’s right.
THE COURT: Do you want to say anything more?
THE WITNESS: I considered making a counter-claim to Hydro to offset this argument but I decided not – that I wasn’t going to put – the resources and the effort into the –
[9] Mr. Yakeley was not cross-examined as to his allegation of the $80,000 in additional costs or with respect to the set off issue reflected in the judge’s questions during examination-in-chief.
[10] At trial, evidence for Hydro One was given by Shane Deugo who was the representative who met Mr. Yakeley on the ground at the preliminary meeting. In cross-examination, when questioned about the measurement on the first visit, he stated at page 41:
QUESTION: And you commented that the house would fit through. But you agreed that you didn’t make any comment to say that, “well, it will fit through in November in the cold weather but it won’t fit through in the summer”? Like, there was no comment made - - -
ANSWER: I would agree I didn’t make that comment at the time, yes. I believe at that time of year, those conductor heights on the high-tension line would have been well in excess of – of your – your anticipated loaded height of the house and, you know, I would agree I probably did not make any mention of them being that much lower in the summer, yes, I agree.
THE TRIAL DECISION
[11] It is clear from the transcript that there was no discussion between Hydro One and Mr. Yakeley at the initial meeting about a seasonal sag in the hydro lines which would have an effect on the ability to move the house. As the deputy judge stated in his reasons for judgment:
The key component missing, though, from the discussions was the expected sag of the tower conductors in the summer and that is the critical aspect, as I find it.
[12] In view of this finding the deputy Small Claims Court judge then moved to the issue of set off. He noted that Mr. Yakeley’s evidence was that his additional costs were $80,000 but that in the Small Claims Court the defendants’ claim was, at that point in time, limited to the monetary jurisdiction of the court of $10,000. He noted that had there been a defendants’ claim he would have awarded Mr. Yakeley $10,000. He then turned to the issue of set off. As he stated in his judgment:
In my view, set off is available to the defendant, notwithstanding that there is no defendants’ claim. In my view, that is still available to him. Given the specific facts of this case, there is no doubt that in law Mr. Yakeley is responsible to the plaintiff on the contract that he signed and so on that issue and that part of the issue alone, I find that the defendant is liable to the plaintiff in contract but is also entitled to rely on the principle of set off because of the representations or omissions that he did not get from Mr. Deugo relating to the sag issue.
[13] Set off is available to defendants by way of a defence. Section 111(1) of the Courts of Justice Act R.S.O. 1990, c. C.43 provides:
In an action for payment of a debt, the defendant may, by way of defence, claim the right to set off against the plaintiff’s claim a debt owed by the plaintiff to the defendant.
[14] The Courts of Justice Act R.S.O. 1990 c.C43 at para. 25 provides the following overarching comments as to proceedings in Small Claims Court:
The Small Claims Court shall hear and determine in a summary way all questions of law and fact and may make such order as is considered just and agreeable to good conscience.
[15] As Karakatsanis, J. noted in Kulman v. Elio [2009] 10676 (O.N.S.C.D.C.) at para. 7:
The proceedings in the Small Claims Court are informal and parties are often unrepresented. The trial judge has some latitude to adapt the process provided it is fair to both parties.
[16] With respect to the formalities required in pleadings in Small Claims Court Heeney, J. stated in 936464 Ontario Ltd. v. Mungo Bear Ltd. (2003) 2003 72356 (ON SCDC), 74 O.R. (3d) 45 at para. 45:
More important though is the fact that the case at bar was litigated in the Small Claims Court. The higher standards of pleading in the Superior Court are simply unworkable in a Small Claims Court, where litigants are routinely unrepresented, and where legal concepts such as the many varieties of cause of action are completely foreign to the parties. Essentially, the litigants present a set of facts to the Deputy Judge, it is left to the deputy judge to determine the legal issues that emerge from those facts and bring his or her legal experience to bear in resolving those issues.
[17] It is clear from the reasons of the deputy Small Claims Court judge that the representative of Hydro One was well aware of the effect of sagging wires at different times of the year. This was knowledge known to him and it is plain and obvious that the deputy Small Claims Court judge found a negligent misrepresentation with respect to this issue. It would have been a simple matter for the Hydro One representative to point out the serious consequences of a move of a structure such as this at certain times of the year. With no further information available to him Mr. Yakeley went ahead with his plans and incurred costs. The judge accepted his evidence that these costs could not be reversed or eliminated and he accepted Mr. Yakeley’s evidence that these costs were in the order of $80,000. Those costs were determined not for purposes of a counter-claim but informed the judge’s decision with respect to set off.
[18] In my view the issue of set off was raised sufficiently in the pleadings when Mr. Yakeley talked about the expenses he incurred. The plaintiff, which is a large corporation, with an in-house legal department, could have anticipated that these issues would be raised at trial based on the information in the pleadings. Furthermore, the deputy Small Claims Court judge flagged the issue of set off in his questions to Mr. Yakeley. Clearly the issue of set off was on the table and available for cross-examination by the plaintiff Hydro One. Questions about set off or his expenses were not pursued by the plaintiff nor did the plaintiff request an adjournment with respect to Mr. Yakeley’s evidence about his additional costs and expenses.
[19] There is no magic in the requirement to use the words “set off” in pleadings in Small Claims Court. To require a strict adherence to the rules of pleadings would be contrary to the role of the Small Claims Court in the administration of justice. In my view there was no error in law in applying set off principles based on the evidence which the deputy judge considered and accepted.
[20] In addition there were sufficient facts before the deputy Small Claims Court judge to find negligent representation based on the evidence of Hydro One’s own witness. A significant piece of information was not provided to the defendant and the defendant was not able to make a fully informed decision as to the best time of year to move the house.
[21] For these reasons the appeal is dismissed.
[22] If the parties cannot agree on costs the responding party may make written submissions as to costs not exceeding five pages within 20 days of the release of this endorsement. Thereafter the appellant shall have ten days to reply.
MULLIGAN, J.
Date: August 31, 2010