CITATION: Ghazanfari v. Haditalab, 2015 ONSC 5214
DIVISIONAL COURT FILE NO.: DC-13-00629-00
DATE: 2015-08-19
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Abasgholi Ghazanfari Plaintiff/Respondent
– and –
Yousef Haditalab Defendant/Appellant
Abasgholi Ghazanfari, Self-Represented
Yousef Haditalab, Self-Represented
HEARD: August 12, 2015
RULING ON APPEAL
On Appeal of the decision of Deputy Judge Bortolussi dated November 22, 2013
Vallee J.:
Nature of the Appeal
[1] The appellant borrowed money from the respondent to purchase a house. The dispute between the parties concerned the amount of money that the respondent alleged was owing pursuant to promissory notes which stipulated an interest rate. The appellant carried out certain renovations on the house with the intention of selling it and making a profit. The respondent also carried out certain renovation work. The appellant disputed the amount claimed by the respondent for his work.
[2] The trial judge determined that the respondent advanced $70,000 to the appellant at an interest rate of 35% pursuant to promissory notes signed by the appellant. She held that a further $15,000 was lent; however, there were no notes to support this amount. Accordingly, the 1.3% interest rate set out in the Courts of Justice Act, R.S.O 1990, c C. 4 applied. The respondent also alleged that he lent $3,000 in cash. The trial judge disallowed this, finding that there was no evidence to support it.
[3] The trial judge determined that the respondent originally quoted $3,500 for work that he was to do outside of the house. The respondent carried out nine additional items of work for which he claimed $9,600. The trial judge accepted the respondent’s testimony with respect to the work done and the value of it.
[4] The trial judge found that the appellant owed the respondent $97,475.78 for the money lent, including interest. The appellant owed the respondent $9,600 for the additional work. The appellant had already paid $90,000 leaving a balance owing of $17,075.78, inclusive of prejudgment interest. No costs submissions were made.
Grounds of Appeal
[5] The appellant appeals this decision on the following grounds:
(a) The trial judge erred in finding that the appellant owed the respondent $9,600 for additional work because the respondent provided no documentary evidence to support his oral testimony regarding the value of the work.
(b) The trial judge erred in failing to consider that the amount claimed by the respondent at trial was less than the amount set out in his statement of claim.
(c) The trial judge erred in failing to consider that the appellant paid for certain items in the respondent’s work, such as purchasing stone and paying for garbage removal.
(d) The trial judge made mathematical errors in calculating interest on $3,500. She determined that the interest rate of 35% did not apply to this amount because there was no related promissory note; however, she added interest of $325.55 which represents interest at 35%. She also added interest of $71.55 which represents 1.3% interest, the correct amount. Therefore, the amount of $325.55 should be subtracted from any amount owing.
(e) The trial judge erred in failing to take into account the fact that the appellant signed the promissory notes in urgent circumstances. She erred in allowing the 35% interest rate which is unreasonable and unconscionable.
Standard of Review
[6] The standard of review for a decision of a Deputy Judge of the Small Claims Court is set out in Housen v. Nikolaisen, 2002 SCC 33, 2002 S.C.C. 33. On a pure question of law, the standard of review is correctness. Findings of fact or mixed fact and law are reviewable only for palpable and overriding error.
Did the trial judge err in finding that the appellant owed the respondent $9,600 for additional work when the respondent provided no documentary evidence to support his oral testimony?
[7] At trial, the respondent testified that he provided an original quote to the appellant for certain work in the amount of $3,500. The appellant accepted this. This amount is not in dispute. The respondent testified at trial regarding nine other items of work that he carried out, which were not included in the $3,500 quote, and the cost related to them. The appellant did not dispute that the work was done; however, he disputed the amount claimed by the respondent for the work. The appellant stated that the initial quote of $3,500 was to carry out certain work for three days. Another half day of work was done, which could not reasonably be valued at $9,600.
[8] The respondent testified that the quote of $3,500 was for outside work. Subsequently, the scope changed. For example, initially the respondent was to level the interlocking stone at the front door and on the walkway. The appellant decided he wanted new interlocking stone. Furthermore, work on the driveway was added. The respondent removed the asphalt and put down gravel. Interior work was also added, including removing baseboard and a stair railing, tearing up carpet and under-pad, removing all of the carpet nails, tearing out the basement carpet and removing a kitchen cabinet. In addition, drywall work was done over several days. The respondent required a helper for this work.
[9] I find that the respondent provided evidence of extra work that was done and evidence of the amounts that were charged through his oral testimony at trial. He did not provide receipts for materials purchased or the cost of his labour. Many contractors do not disclose their cost of labour or materials. There was no indication that the respondent performed the work on a cost plus basis. It was open to the trial judge to accept the respondent’s evidence regarding the additional work done and the related cost. She made findings of fact that the work was done and accepted the evidence with respect to cost of it. I find that she made no palpable and overriding errors with respect to her findings of fact in this regard.
Did the trial judge err in failing to consider that the amount claimed by the respondent at trial was less than the amount set out in the statement of claim?
[10] It is not uncommon for a party to claim a higher amount in pleadings in comparison to what that party claims at trial. The appellant suggested that this discrepancy somehow impacted on the respondent’s credibility. I do not agree with the appellant’s position on this issue. The trial judge made no palpable and overriding error in failing to consider this issue.
Did the trial judge err in failing to consider that the respondent did some of the work, such as purchasing stone and paying for garbage removal?
[11] Exhibit 3 at trial is comprised of three invoices from Mammone Disposal Systems Limited and three invoices from Beaver Valley Stone. The respondent testified at trial that the appellant may well have paid to remove some garbage from the site; however, this would not have been the garbage resulting from the respondent’s work. The appellant stated that he carried out work at the property for several months. The respondent stated that the appellant would have generated his own garbage. The cost to remove the respondent’s garbage was included in the amounts for the various items of work that the respondent undertook.
[12] At trial, the respondent did not take issue with the fact that the appellant purchased some stone; however, he stated that his additional work also required stone and the cost of that was included in the amounts charged for the additional work.
[13] I find that there was an evidentiary basis to support the trial judge’s findings of fact that the amounts the appellant paid for garbage removal and for stone did not impact on the amounts claimed by the respondent for the additional work. I find that she made no palpable and overriding error with respect to that issue.
Did the trial judge make mathematical errors in calculating the interest owing on $3,500?
[14] It appears that the trial judge did make an error in this regard. She found that the respondent advanced $3,500 to the appellant by way of cash, receipt of which was acknowledged by the appellant. She stated that there was no promissory note relating to that amount that set out an interest rate. Accordingly, she determined that the interest rate pursuant to the Courts of Justice Act applied.
[15] In her calculations, regarding item 5 on page 2 of her decision, she added $325.55 as interest applicable to $3,500. The appellant states that the trial judge adopted this amount from the respondent’s claim, which represented interest at 35%. This was an error. In addition, she separately calculated interest on $3,500 at 1.3% from April 24, 2012 to November 18, 2013 at $71.55. The appellant states that this is the correct amount.
[16] The trial judge found that with respect to the amount of $10,000 advanced, the respondent was entitled to interest pursuant to the Courts of Justice Act from April 24, 2012 to November 18, 2013; however, the trial judge did not calculate the amount. Even though it is to his detriment, the appellant stated that the correct amount is $204.09.
[17] I find that the trial judge did make an overriding error with respect to the interest calculation. The amount of $325.55 must be deleted and $204.09 must be added. The net result is that $121.46 should be subtracted from the trial judge’s award.
Did the trial judge err in failing to take into account the fact that the appellant signed promissory notes in urgent circumstances and err in allowing the interest rate of 35% as set out in those promissory notes?
[18] The promissory notes were exhibits at the trial. There were three different notes for amounts totaling $70,000, which stated that interest at the rate of 35% would apply. The trial judge found that the stated interest rate applied to amounts set out in the promissory notes. This was a contractual issue. Clearly the appellant signed the notes. While 35% is a high rate of interest, there was evidence before the trial judge that the appellant agreed to the interest rate. There was no evidence at trial that the appellant was coerced into signing the notes. The trial judge made a finding of fact, based on the evidence before her, that interest at 35% applied.
[19] I find that trial judge did not make any palpable or overriding error in concluding that the rate of 35% applied to the amounts that the respondent lent to the appellant as evidenced by the promissory notes.
Summary
[20] In conclusion, I find that the only errors made by the trial judge were with respect to her calculation of interest on the sum of $3,500, and her failure to calculate the interest owing pursuant to the Courts of Justice Act on the amount of $10,000 from April 24, 2012 to November 18, 2013. As noted above, $121.46 shall be subtracted from the trial judge’s award, being $17,075.78. Accordingly, the amount of $16,954.32 is the correct amount that is owed by the appellant to the respondent.
Post-Judgment Interest
[21] The respondent submitted that he is entitled to post-judgment interest on the amount of the judgment. The trial judge was silent as to this issue. Pursuant to s.127 of the Courts of Justice Act, the respondent is entitled to post-judgment interest being 1.3% from November 22, 2013, the date of the judgment.
Costs
[22] The respondent has been the successful party on this appeal. He retained a paralegal and a lawyer at different times to assist him with the preparation of the appeal documents and argument. He requested reimbursement for these fees. The respondent provided an account dated July 24, 2014 from a paralegal in the amount of $847.50. He also provided an account dated October 31, 2014 from a lawyer in the amount of $2,257.99. The lawyer’s account includes disbursements which total $70.06, including HST. The fees are $2,187.93, including HST.
[23] The respondent also requested $2,000 as an allowance for his own time in attending court three times with respect to this matter.
[24] I find that the respondent is entitled to legal fees on a partial indemnity basis in the amount of $1,312.76, together with the applicable disbursements in the amount of $70.06. With respect to costs for the respondent’s attendance, a self-represented party is entitled to a reasonable allowance for the loss of his time to attend court. (See: Miller v. Taylor et al. 2013 ONSC 6791). I find that an appropriate allowance for the respondent in these circumstances is $200.
VALLEE J.
Released: August 19, 2015