CITATION: Roberts v. 603418 Ontario Inc., 2014 ONSC 6240
DIVISIONAL COURT FILE NO.: DC-14-105-00
DATE: 20141027
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
F. Dawson J., Sitting as a Single Judge of the
Divisional Court
B E T W E E N:
BARBARA ROBERTS
Gregory W. Roberts, for the Plaintiff/Respondent
Plaintiff/Respondent
- and -
603418 ONTARIO INC. c. o. b. J.P. MOTOR SALES
Matthew A. Caldwell, for the Defendant/Appellant
Defendant/Appellant
HEARD: October 22, 2014, at Brampton
[1] The appellant seeks an extension of time in which to file an appeal to the Divisional Court from a trial judgment of the Small Claims Court. As the factual background is unusual I will set it out in some detail after briefly reviewing the governing legal principles.
The Governing Legal Principles
[2] In determining whether to extend the time for filing a notice of appeal the court should generally consider the following factors:
(1) whether the appellant formed an intention to appeal within the relevant period;
(2) the length of the delay and the explanation for the delay;
(3) any prejudice to the respondent; and
(4) the merits of the appeal.
The court also considers whether the justice of the case requries the granting of the extension: Mignacca v. Merck Frost Canada Ltd. (2009), 2009 ONCA 393, 96 O.R. (3d) 164 (C.A.) per Rouleau J.A. (In Chambers), at para. 11; Kefeli v. Centennial College of Applied Arts and Technology, [2002] O.J. No. 3023, 23 C.P.C. (5th) 35 (C.A.), per Simmons J.A. (In Chambers), at para. 14; Rizzi v. Mavros (2007), 2007 ONCA 350, 85 O.R. (3d) 401, [2007] O.J. No. 1783 (C.A.), per Gillese J.A. (In Chambers), at para. 16.
[3] In Kefeli, Simmons J.A. stated at para. 14: “The general rule that the appellant must have formed an intention to appeal within the relevant time period and must provide a reasonable explanation for any subsequent delay is subject to the broader principle that an extension should be granted if the justice of the case requires it.”
[4] In Petrykowski v. Bell Cartage and 55263 Ont. Ltd., 2011 ONSC 1101, at para. 28, a panel of the Divisional Court rejected a submission that an extension should be granted even if there is no merit to the proposed appeal, where there is no prejudice to the respondent. This finding has particular application in the case at bar.
Factual Background
[5] The appellant operates a car dealership that sold the respondent, then 80 years of age and now 84, a used automobile which the dealership had purchased at an auction in the United States. The vehicle had previously been declared a “lemon” under certain U.S. legislation.
[6] When the respondent learned that the vehicle had a considerably reduced value by virtue of this history she complained to the dealership. The respondent eventually commenced an action against the appellant in the Superior Court. The original purchase price of the car exceeded $30,000.
[7] In due course the action was settled, or so it seemed. The appellant offered to pay the respondent $20,500 if she returned the vehicle, which by then had been driven by the respondent for some time. The appellant was provided with an opportunity to inspect the vehicle prior to making the offer to settle. After the offer to settle was accepted on June 12, 2012 the appellant inspected the vehicle again and then refused to honour the original settlement, offering only $18,000 for the vehicle on the grounds that it needed a number of repairs.
[8] As a result of the foregoing the respondent was forced to keep the vehicle and brought a motion to enforce the settlement. That motion came before Morawetz J. on October 31, 2012. By then counsel appearing on the motion had agreed the matter had previously been settled but a dispute remained as to the extent to which the settlement amount needed to be adjusted. Justice Morawetz made the following endorsement:
Both sides acknowledge that this is a settlement. The outstanding issue is whether the settlement figure should be adjusted to take into account certain “repair issues”. The amount at issue is relatively minor (less than $2,500). In my view, the outstanding issues should be resolved in Small Claims Court and I direct that matter to be transferred to Small Claims Court in Burlington or Toronto.
[9] The order taken out by the parties pursuant to this endorsement recites that the motion before Morawetz J. was for judgment on an accepted offer to settle for $20,500, judgment for the cost to insure the motor vehicle for the period of time during which the appellant had reneged on the settlement, for repairs to the brakes and the clutch of the vehicle, pre and post-judgment interest and costs. The operative part of the entered order simply states that “this action be transferred to the Small Claims Court at Burlington or Toronto for resolution of the outstanding issues” (emphasis added).
[10] It is apparent that the order contemplated that the respondent might be compensated for costs incurred by the respondent after the date of the original settlement. The reference to insurance in the recitals is an obvious example.
[11] Significantly, the recitals in the order indicated that the motion was also for an order that the vehicle would not be returned to the appellant until the amounts owing had been paid by bank draft or certified funds.
[12] Unfortunately, the Small Claims Court trial was delayed until May 6, 2014. An earlier trial date had been arranged but had to be adjourned to accommodate the principal of the appellant corporation’s desire to spend a portion of the winter in Florida.
[13] After a full day of trial in the Small Claims Court on May 6, 2014 Deputy Justice L. Payne gave judgment for the respondent who was the plaintiff in the action. The court confirmed the original settlement. The court found that the original offer to settle had not been contingent upon or subject to reduction in relation to any subsequent or second inspection as contended by the appellant. In addition, the court found as a fact that there had been no material change in the condition of the vehicle between the first and second inspections. The trial judge also found as a fact that the settlement for $20,500 was reached on June 12, 2012 and that the respondent had expended the amount of $3,732.22 “that she would not have had to expend had the defendant honoured its settlement offer” (Transcript, May 6, 20414, p. 212). Consequently, the court ordered that the appellant pay the amount of $24,232.24 immediately following return of the vehicle.
[14] The appellant does not seek to challenge any of these findings of fact but, as I will explain, wishes to raise what is characterized as a “jurisdictional” argument.
[15] The Deputy Judge also awarded costs of $4,035, which included $400 in disbursements, as well as pre and post-judgment interest.
Failure to File the Notice of Appeal
[16] On May 8, 2014, two days after the judgment, the respondent’s counsel notified the appellant’s counsel (not counsel now appearing for the appellant) by e-mail that he had returned the car to J.P. Motors that day but that Mr. Pattinson, the appellant’s principal, had refused to take the car. Nonetheless, the car was left on the lot and the keys were left on a desk in the showroom. Appellant’s trial counsel responded by e-mail that the previous day Mr. Pattinson had told him that “he was considering” an appeal. I note he did not say his client intended to appeal.
[17] Next, on May 23, 2014 counsel for the appellant wrote to counsel for the respondent offering to settle for $20,500 all inclusive. The offer was to remain open to May 26, 2014. In the last line of the two page letter appellant’s trial counsel wrote: “If I do not hear from you, or you do not accept the offer, then my instructions are to file an appeal, which we will prepare and serve upon you in due course”.
[18] Appellant’s trial counsel received a response from the respondent’s counsel rejecting the offer. On May 26, 2014 an assistant in the appellant’s trial counsel’s office forwarded that rejection to Mr. Pattinson and to another representative of the appellant. Contrary to the statement made by appellant’s trial counsel in his letter of May 23, 2014 that he already had instructions to appeal, the May 26, 2014 e-mail to the appellant said “[counsel] would like your instructions because if you want to go ahead with an appeal it must be done soon”.
[19] There is no evidence before me that the appellant provided such instructions to his counsel prior to the expiry of the 30 day time limit to file an appeal. Based on the evidence, those instructions were not received until the respondent threatened garnishment the day after the appeal period expired. Three days later, on Monday, June 9, 2014, appellant’s trial counsel advised he would be proceeding with an appeal and later wrote seeking consent to an extension of time. That consent was not forthcoming. A draft Notice of Motion to extend the time to file a Notice of Appeal was forwarded to counsel for the respondent on June 24, 2014.
The Grounds for the Proposed Appeal and the Positions of the Parties
[20] I have not been provided with a draft notice of appeal. The only reference to grounds of appeal appears in the appellant’s Notice of Motion, as follows:
The Appellant seeks to raise a genuine issue on appeal, namely whether the Order of Deputy Justice L. Payne exceeded the jurisdiction granted to the Burlington Small Claims Court by way of the Order of Justice Morawetz, which transferred the matter from Ontario Superior Court of Justice to Small Claims Court for the resolution of specific issues.
[21] The appellant does not address the merits of the proposed appeal in its factum or in the affidavit material filed on its behalf. However, in oral submissions the appellant contends that all that was contemplated by the order of Morawetz J. was a downward adjustment of the settlement amount of $20,500. Consequently, the appellant submits that the trial judge erred by awarding the respondent an additional $3,732.22. In oral submissions the appellant also submits that the trial judge erred by awarding costs of $3,635 ($4,035 less $400 in disbursements). The appellant submits that this is very close to 15% of the total damages exclusive of costs. Fifteen percent is a figure often used to calculate costs in Small Claims Court. The appellant submits that, in view of Justice Morawetz’s order, the trial judge had no jurisdiction to base costs on anything other than the adjustments to the settlement amount.
Analysis
[22] As the parties have focused their arguments on the issue of whether there is merit in the appeal I will deal with that consideration first.
[23] In my view there is no merit in the proposed appeal. In reaching this conclusion I appreciate that the standard to be met is simply that the appeal be arguable. I reach my conclusion for a number of reasons.
[24] First, I note that the central submission is that the endorsement and order of Morawetz J. restricted the jurisdiction of the Small Claims Court. I reject this submission.
[25] I would observe that pursuant to s. 22 of the Courts of Justice Act, R.S.O. 1990, c. C.43 the Small Claims Court is “a branch of the Superior Court of Justice”. Section 23(2) of the Courts of Justice Act provides that an action in the Superior Court may be transferred to the Small Claims Court by the local registrar of the Superior Court with the consent of the parties. A number of cases hold that a judge of the Superior Court has the inherent jurisdiction to transfer a Superior Court action to the Small Claims Court without the consent of the parties: Shoppers Trust Co. v. Mann Taxi Management Ltd. (1993), 16 O.R. (3d) 192 (Gen. Div.); Graves v. Avis Rent a Car System Inc. (1993), 21 C.P.C. (3d) 391 (Gen. Div.).
[26] Whether transferred pursuant to s. 22 or the inherent jurisdiction of the court, what is transferred from one branch of the court to the other is the whole action. In addition, as already mentioned, the operative part of the order taken out pursuant to the endorsement of Morawetz J. specifically stated that it was the “action” that was transferred.
[27] I was not referred to any authority for the proposition that a judge of the Superior Court can restrict the jurisdiction of the Small Claims Court judge once an action is transferred. Clearly, a transfer should not be made unless the amount in issue and the subject matter of the action falls within the jurisdiction of the Small Claims Court. Here they did, and Morawetz J. made that clear by indicating that the amount in issue was “relatively minor”. Justice Morawetz added in parenthesis “less than $2,500”, which was an approximation of the anticipated range of adjustments at that time.
[28] However, as I have indicated, the trial in the Small Claims Court was delayed to convenience the appellant’s principal. During that time the respondent was forced to keep the car, which she wanted to return pursuant to the settlement the appellant had reneged on. During that time she was required to maintain insurance on the vehicle and to have the transmission repaired. The transmission repair was a major component of the upward adjustment made by the trial judge.
[29] Second, Justice Morawetz’s endorsement indicates that the Small Claims Court will have to consider whether the settlement figure should be adjusted. It does not say adjusted only downward. The circumstances were such that it was apparent to all concerned that the respondent was required to maintain and insure the car until such time as the appellant would take it back. In addition, the recitals in the order the parties approved and had issued and entered specifically referred to insurance expenses incurred after the date of the original settlement. This is completely inconsistent with the intent that adjustment of the $20,500 settlement figure could be only in a downward direction.
[30] Third, counsel for the respondent has not been able to refer me to any portion of the trial transcript where the appellant’s trial counsel objected to the jurisdiction of the Small Claims Court on the basis the appellant now wishes to assert on appeal. The transcript reflects that evidence was led that addressed such things as the transmission repair and insurance expenses that occurred subsequent to the settlement date. No objection was taken to any of that evidence. In short, the trial was conducted without any suggestion that the court’s jurisdiction was restricted to determining only a downward adjustment of the settlement amount.
[31] Fourth, I note that counsel for the appellant on this motion agrees that he does not seek to challenge any of the findings of fact made by the trial judge. One of those findings was that there had been no decline in the condition of the vehicle between the first inspection, prior to the offer to settle, and the subsequent inspection that led to the ongoing dispute. The trial judge also found that a second inspection was not a condition of the appellant’s original offer to settle. Given these unchallengeable findings of fact there could be no downward adjustment. As I have already held, nothing in the order of Morawetz J. prevented an upward adjustment.
[32] Finally, even if it were to be held that the Small Claims Court was restricted by the order of Morawetz J. to an adjustment one way or the other of $2,500, I note that the amount awarded for additional damages exceeded that amount by only $1,232.22. This amount is below the $2,500 threshold that must be exceeded before an appeal is possible: Courts of Justice Act, s. 31 and O. Reg. 244/10.
[33] For the foregoing reasons I am not persuaded that there is any merit to the appeal on the jurisdictional issues raised by the appellant.
[34] I have not been referred to any provision permitting an appeal from the Small Claims Court on the issue of costs alone. However, even assuming that costs alone may be appealed with leave, for essentially the same reasons I have already given I find there is no merit in the appellant’s argument that the Small Claims Court had no jurisdiction to award costs based on the whole amount of the judgment. The order taken out transferred the “action” to the Small Claims Court. Costs had not been dealt with up to that point. As it was the action that was transferred I conclude there was no need to reserve costs to the trial judge. Consequently, the Small Claims Court Judge had the jurisdiction to deal with costs on the basis that she did.
[35] In view of the all of the foregoing I conclude that an extension of time will not be granted.
[36] However, I would also add that I am not satisfied on the basis of the material filed that the appellant has met his onus to demonstrate that the appellant had an intention to appeal during the 30 day period. Nor am I satisfied that an adequate explanation has been given as to the reasons for the delay. No affidavit has been provided by Mr. Pattinson or any other officer of the corporate appellant. I have only an affidavit from trial counsel which exhibits a number of e-mails and makes conclusory statements that there was a “miscommunication” between counsel and client. I have already noted that certain inconsistencies are inherent in the material filed and there is a substantial absence of detail.
[37] In some other circumstances the shortcomings in the material just referred to might be overlooked if it was in the interest of justice that the extension be granted. Having reviewed the entire history of this matter, however, I conclude it cannot be said that the interest of justice requires an extension in this case.
[38] As to the consideration of prejudice, I can only say that it would clearly be prejudicial to the respondent to grant an extension of time to the appellant to pursue an unmeritorious appeal. Beyond that I see no prejudice to the respondent. The delay was short.
[39] However, as I have held, I am not satisfied the appellant had an intention to appeal until after the time limit had expired and garnishment was threatened. Most significantly, I find the jurisdictional error alleged to be completely without merit.
[40] The motion is dismissed.
Costs
[41] If the parties are unable to agree on costs they should exchange costs outlines and brief written submissions and provide them to me within 15 days.
F. Dawson J.
Released: October 27, 2014
CITATION: Roberts v. 603418 Ontario Inc., 2014 ONSC 6240
DIVISIONAL COURT FILE NO.: DC-14-105-00
DATE: 20141027
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
F. Dawson J., Sitting as a Single Judge of the
Divisional Court
B E T W E E N:
BARBARA ROBERTS
Plaintiff/Respondent
- and –
603418 ONTARIO INC. c.o.b. J.P. Motor Sales
Defendant/Appellant
REASONS FOR JUDGMENT
Released: October 27, 2014