CITATION: Evergreen Solutions v. Depositario, 2015 ONSC 6664
DIVISIONAL COURT FILE NO.: 375/14 DATE: 20151126
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
EVERGREEN SOLUTIONS CA INC. Plaintiff (Respondent)
– and –
GEMMA DEPOSITARIO Defendant (Appellant)
Brad Teplitsky, for the Defendant/Appellant Michael Hassel, as a friend of the Court
HEARD at Toronto: September 30, 2015
Reasons for decision
M.A. SANDERSON J.:
Introduction
[1] The Defendant/Appellant, Gemma Depositario (“Depositario”), appeals to a single judge of the Divisional Court from the Judgment of Deputy Judge Prattas in the Small Claims Court dated January 24, 2014, with reasons reported at Evergreen Solutions CA Inc. v. Depositario, [2014] O.J. No. 3557. Prattas D. J. granted the motion of the Plaintiff/Respondent, Evergreen Solutions CA Inc. (“Evergreen”), and issued a Small Claims Court Judgment in the amount of $5,757.75 to enforce an arbitration award in the same amount.
[2] At the hearing, counsel for the Plaintiff/Respondent did not appear to make submissions.
[3] However, with Mr. Teplitsky’s consent, I did grant leave to Mr. Michael Hassel to make submissions as a friend of the Court.
Chronology
[4] In 2012, the Plaintiff and Defendant commenced claims for damages against each other in the Small Claims Court.
[5] By agreement dated July 3, 2013, they then agreed to a private arbitration pursuant to the Arbitration Act, 1991, S.O. 1991, Ch. 17 (the "Act").
[6] The arbitrator awarded $5,757.75 to Plaintiff/Respondent Evergreen, who then brought a motion to enforce the arbitration award in the Small Claims Court.
[7] The Defendant/Appellant opposed Evergreen’s motion on the basis that a Small Claims Court Judge has no jurisdiction to enforce an arbitration award.
[8] Deputy Judge Prattas held that he did have jurisdiction to enforce the arbitrator’s award. He granted judgment in the amount of $5,757.75, to be enforced using Small Claims Court procedures.
[9] This is an appeal from that judgment.
The Reasons of Deputy Judge Prattas
[10] Deputy Judge Prattas held that the Small Claims Court has jurisdiction to enforce the award by granting judgment under Arbitration Act s. 6 and, additionally or in the alternative, as a statutory court pursuant to Courts of Justice Act (“CJA”) s. 23.
Jurisdiction under Arbitration Act s. 6
[11] Deputy Judge Prattas considered sections 6 and 50 of the Arbitrations Act, including:
No court shall intervene in matters governed by this Act, except for the following purposes, in accordance with this Act:
To assist the conducting of arbitrations.
To ensure that arbitrations are conducted in accordance with arbitration agreements.
To prevent unequal or unfair treatment of parties to arbitration agreements.
To enforce awards.
(1) A person who is entitled to enforcement of an award made in Ontario or elsewhere in Canada may make an application to the court to that effect.
(3) The court shall give a judgment enforcing an award made in Ontario unless,
(a) the thirty-day period for commencing an appeal or an application to set the award aside has not yet elapsed;
(b) there is a pending appeal, application to set the award aside or application for a declaration of invalidity;
(c) the award has been set aside or the arbitration is the subject of a declaration of invalidity; or
(d) the award is a family arbitration award.
(8) The court has the same powers with respect to the enforcement of awards as with respect to the enforcement of its own judgments.
[12] The Act defines “court” in s. 1:
“court”, except in sections 6 and 7, means the Family Court or the Superior Court of Justice.
[13] Deputy Judge Prattas concluded that the Small Claims Court has jurisdiction at paras. 19-23:
[19] Section 6 provides that “no court shall intervene in matters governed by this Act”, except for the purposes of enforcing an arbitration award. Since a section 6 “court” is accepted from the definition of “court” of section 1, it follows that the section 6 “court” encompasses and includes a much broader array of “court” and is not confined or limited solely to the “Family Court” or the “Superior Court of Justice”.
[20] In other words, by allowing any court to act and have jurisdiction for the purposes of enforcing an arbitration award, section 6 bestows the requisite jurisdiction on the SCC as well.
[21] The question then becomes: which court is contemplated in section 50, the one in the definition or the one in section 6?
[22] In my view, since section 6 specifically allows “any court” to act to enforce an arbitration award, then, by that very fact, section 50(1) must be read so that an “application” can be made to any section 6 court, and is not necessarily confined to the two courts set out in the definition.
[23] This view is reinforced by subsection 50(8) which provides that “the court”, that is, the section 6 court, “has the same powers with respect to the enforcement of awards as with respect to the enforcement of its own judgments”.
Jurisdiction under Courts of Justice Act
[14] Section 23 of the Courts of Justice Act sets out the jurisdiction of the Small Claims Court and Section 22 provides that it is a branch of the Superior Court of Justice:
- (1) The Small Claims Court,
(a) has jurisdiction in any action for the payment of money where the amount claimed does not exceed the prescribed amount exclusive of interest and costs; and
(b) has jurisdiction in any action for the recovery of possession of personal property where the value of the property does not exceed the prescribed amount.
- (1) The Small Claims Court is continued as a branch of the Superior Court of Justice under the name Small Claims Court ...
[15] The mandate of the Small Claims Court is set out in the Courts of Justice Act s. 25. Rule 1.03 is also relevant:
s. 25 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.
r. 1.03 These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every proceeding on its merits in accordance with section 25 of the Courts of Justice Act.
[16] Prattas D.J. interpreted the ambit of jurisdiction under Courts of Justice Act s. 23, at para. 26, relying on Grover v. Hodgins (2011), 2011 ONCA 72, 103 O.R. (3d) 721, para 21, and 936464 Ontario Ltd. v. Mungo Bear Ltd. (2003), 2003 72356 (ON SCDC), 74 O.R. (3d) 45, para. 26:
[26] This section gives the SCC jurisdiction in any action for the payment of money or the recovery of possession of personal property with a value within its prescribed limit, currently set at $25,000. This is a wide grant of jurisdiction, with the words “any action” being sufficiently broad to encompass both common law and equitable claims.
[17] Prattas D.J. held at paras. 28-31:
[28] The SCC, as a branch of the SCJ, is not excluded by the Act from granting the relief sought by the plaintiff. And in my view, there is no common sense reason to interpret the statute so as to deprive the SCC from jurisdiction in these circumstances.
[30] In my view it would be irrational for the legislators to give the SCC authorization to deal with “any action for the payment of money…” as set out in section 23 of the CJA within its monetary jurisdiction and then preclude it from granting judgment within section 50 of the Act, especially when the amount of money involved in the arbitration award is within the monetary jurisdiction of the SCC.
[31] This conclusion is reinforced by an examination of the purpose of the SCC itself. From its origins as a Court of Request in 1792, the history of the SCC can be characterized as one of progressive development toward providing increased access to justice, through a speedy and inexpensive process. It is not surprising that the SCC has often been called the “people’s court” where citizens themselves can bring their civil disputes in a more friendly environment with simpler procedures, relaxed rules of evidence and where matters are decided in a summary way with lesser costs. (See Grover paras. 46-49)
[18] He added that this conclusion is reinforced by the purpose of the SCC to provide “increased access to justice, through a speedy and inexpensive process”, and “where citizens themselves can bring their civil disputes in a more friendly environment with simpler procedures, relaxed rules of evidence and where matters are decided in a summary way with lesser costs” (para. 31). He went on to add, at paras. 32-33:
[32] Just like the SCC, the arbitration process also offers a speedy and inexpensive method of resolving disputes and providing access to justice. One should therefore not impose a more rigorous and possibly more expensive and more lengthy process through the SCJ, when both the arbitration and SCC offer a more speedy and inexpensive method of resolution of civil disputes.
[33] The best way to continue to ensure easy access to justice is by enforcing an arbitration award through the speedier and less expensive process of the SCC for amounts within its jurisdiction. The framework of the SCC is such as to provide such easy and speedy access to justice and for citizens to be able to seek redress to their civil disputes. I see no reason why the SCC should be prohibited from enforcing an arbitration award pursuant to section 50 of the Act
[19] He concluded, at para. 35:
[35] Both the claims commenced in the SCC and the arbitration are private civil disputes. The parties have voluntarily chosen both fora in resolving their disputes. To force the parties to go to the more expensive and at times more lengthy process of the SCJ for enforcement of arbitration awards for matters which have been commenced in the SCC and which have been arbitrated for amounts within the monetary jurisdiction of the SCC makes no rational sense to me.
The Issue on this Appeal
Does the Small Claims Court have Jurisdiction to Enforce an Arbitrator’s Award of less than $25,000?
Appellant Depositario’s submissions
[20] Counsel for the Appellant submitted that the powers of the Small Claims Court are limited to those set out in s. 23 of the Courts of Justice Act and that it was not the intention of the Legislature to grant jurisdiction to the Small Claims Court to enforce arbitral awards.
[21] Counsel for the Appellant submitted that the motion judge did not engage in any analysis or provide any reasons to support his finding that the Small Claims Court has the jurisdiction under s. 23 of the Courts of Justice Act to enforce an arbitral award. His statement “[a]s a statutory court pursuant to the CJA, the SCC has the requisite jurisdiction for the enforcement of arbitration awards under s. 23 of the CJA” was merely conclusory.
[22] While s. 23 provides that the Court may deal with claims for the payment of money, the enforcement of an arbitral award is not a claim for the payment of money within the meaning of s. 23. Rather, it is a method by which a pre-existing cause of action (or claim), that has already been adjudicated may be enforced.
[23] Counsel for the Appellant submitted that the Plaintiff had the option either of having the claim resolved and enforced in the Small Claims Court or of having it arbitrated and enforced in the Superior Court. It abandoned the Small Claims Court process and opted for private arbitration.
[24] Counsel for the Appellant/Defendant submitted that his Honour’s comment that it would have been “irrational” for the legislators not to give the Small Claims Court authorization under s.50 of the Act presupposed that the Small Claims Court was a more desirable venue for enforcement of an arbitral award under $25,000 that the Superior Court. There was no evidence that litigants can arbitrate for less than it costs them to resolve their matters in a Small Claims Court trial. To allow Small Claims Court Judges to enforce arbitration awards under $25,000 would not serve the purpose of speedy less complicated and expensive litigation.
[25] His comment that an application in the Superior Court is a longer process than in the Small Claims Court is also incorrect. An application in the Superior Court can be heard just as quickly as an action in the Small Claims Court.
[26] Since there are no applications in Small Claims Court, counsel for the Appellant relied on the Legislature’s use of the word “application” in s. 50 as an indication that the Legislature intended that arbitration awards are enforced only in the Superior Court.
Mr. Hassel’s Submissions
[27] Mr. Hassel submitted that enforcement of judgments in the Small Claims Court is less expensive than enforcement in the Superior Court. In Small Claims Court, to issue a Writ of Seizure and Sale costs $35. In the Superior Court to file a Writ with the Sheriff costs $100. Small Claims Court enforcement forms are more user friendly than Superior Court forms. Paralegals can appear in Small Claims Court enforcement proceedings, but not in Superior Court enforcement proceedings.
[28] In this case, a paralegal represented the Plaintiff, both on the arbitration and on the motion to enforce the arbitration award before Prattas D.J.
[29] If arbitration awards of less than $25,000 must be enforced in the Superior Court, paralegals will be precluded from assisting their clients to enforce such awards.
Analysis
[30] I accept the submission of Counsel for the Appellant that the fact that the Small Claims Court is a branch of the Superior Court is not determinative. The Superior Court, a Court of inherent jurisdiction, has broader powers than the Small Claims Court, a statutory Court. Under s.23 of the Courts of Justice Act, the jurisdiction of the Small Claims Court limited to the powers provided to it.
[31] I also accept his submissions that the definition of “Court” under the Act does not include “any” Court.
[32] I agree that the absence in s.23 of an express prohibition against the Small Claims Court enforcing an arbitral award is not determinative.
[33] However, I am of the view that the Deputy Small Claims Court judge did not err in holding that he had jurisdiction to enforce an arbitration award here. The parties had brought actions against each other in the Small Claims Court for the payment of money where the amounts claimed did not exceed $25,000.
[34] In Hodgins v. Grover, Epstein J.A. considered whether the Small Claims Court had jurisdiction to grant equitable relief. She noted that as a statutory court, it derives its jurisdiction under s. 23 of the CJA.
[35] She wrote:
[29] As stated above, s. 23 of the Courts of Justice Act is the section that delineates the jurisdiction of the Small Claims Court. It gives the court jurisdiction in any action for the payment of money or the recovery of possession of personal property with a value within the prescribed limit. This is a wide grant of jurisdiction. I agree with Heeney J. in Mungo Bear that the wording "any action" is sufficiently broad so as to encompass both common law and equitable claims.
[31] I agree with Heeney J., at para. 29 of Mungo Bear, that s. 23, s. 96(1) and s. 96(3) are to be read as a "coherent package". As discussed above, s. 23 of the Act is broad enough to allow the Small Claims Court to deal with claims in common law and equity. Under s. 96(1), the courts, including the Small Claims Court, are authorized to concurrently administer all rules of equity and the common law. It would be irrational for the legislators to give the Small Claims Court authorization to administer rules of equity and deal with claims in equity and then specifically preclude the court from granting any equitable relief. It only makes sense if the wording "where otherwise provided" in s. 96(3) is interpreted to mean that the Small Claims Court is [page 730] able to grant equitable relief within the limits of its jurisdiction set out in s. 23: namely, to order the payment of money or the return of personal property.
[33] This takes me to legislative intent.
[34] The legislative history of the relevant provisions of the Courts of Justice Act, particularly ss. 96(3) and 96(1), is available as a tool for determining the intention of the legislature: Rizzo (Re), at para. 31.
[46] The history of the Small Claims Court is one of progressive development toward providing increased access to justice. The origins of the Small Claims Court in Ontario may be found in 1792, when the first provincial Parliament of Upper Canada determined that to "contribute to the conveniency of the inhabitants of this province, to have an easy and speedy method of recovering small debts", a separate court was required (An act for the more easy and speedy recovery of small debts, 1792 (Upper Canada), 32 Geo. III, c. 6). Courts of Request were established and empowered to hear and determine matters of debt up to 40 shillings, and to "decree as to them should seem just in law and equity". Thus, right from the inception of the Courts of Request, it is clear that the legislature, in establishing the Small Claims Court, intended to provide "conveniency" -- increased access to justice.
[47] In the report by Ontario Civil Justice Review, First Report (Toronto: Ministry of the Attorney General, 1995), the authors [page 733] noted the following: "Frequently referred to as the 'people's court', today's Small Claims Court in Ontario is seen as the one place where a private citizen can have ready and inexpensive access to civil justice." The Small Claims Court is more hospitable to the ever-increasing number of self- represented litigants. Procedures are simpler in the Small Claims Court; matters are decided in a summary way under relaxed rules of evidence. There are limits on the costs that may be recovered by a successful party in the Small Claims Court. These features contribute to an increase in the accessibility of our system of justice.
[48] Interpreting the words of the Courts of Justice Act in such a way as to restrict the jurisdiction of the Small Claims Court in a manner that would preclude it from awarding equitable relief in resolving claims properly before it would run counter to this important objective.
[49] It follows that the interpretation of the Courts of Justice Act provisions relevant to the jurisdiction of the Small Claims Court that is in keeping with the wording of the Act and is consistent with the intent of the legislature, apparent not only from the legislative amendments but also from the rationale behind establishing the court itself, is that the Small Claims Court has jurisdiction to award legal or equitable relief where the relief requested is a monetary payment under the limit of $25,000 or the return of personal property valued within that limit.
[36] Grover v. Hodgins, 2011 ONCA 72, has been followed in several cases including: Matteau v. Johnson, 2012 ONSC 1179, Cedar Sands Roadway Assn. v. Broadfoot, [2015] O.J. No. 3302 (SCJ – Sm. Cl. Ct.), Safety First Consulting Professional Corp. v. Scipione, [2015] O.J. No. 3168 (SCJ – Sm. Cl. Ct.).
[37] In Anton, Campion, MacDonald & Phillips v. Rowat, [1996] Y.J. No. 130 (Sm. Cl. Ct.), the parties submitted to arbitration and asked the arbitrator, on consent, to submit the award to the SCC upon conclusion of the arbitration. The court agreed to file the award as a Small Claims Court judgment, at para. 5:
Both parties requested the mediator to act as an arbitrator and file the arbitration as a judgment of the Small Claims Court. This arbitration award is now filed in Small Claims Court and is a final, binding result of all issues raised by the parties. This decision has the same force and effect as a judgment in Small claims court.
Conclusion
[38] Once the parties had started actions for payment of money in the Small Claims Court within the wording of s. 23 and within the Small Claims Court monetary jurisdiction, the Small Claims Court had jurisdiction in respect of those claims. When all parties agreed to submit to arbitration, the Small Claims Court did not lose jurisdiction over those claims for monetary payment. When there had been no voluntary compliance it had the power to recognize an award made on consensual arbitration and to enforce payment of amounts that had been determined to be owing.
[39] I do not accept the submission of counsel for the Appellant that in passing s. 50 the Legislature intended that only the Superior Court would have jurisdiction to enforce arbitration awards, whatever their quantum.In Hodgins, supra, Epstein J.A. noted that in any action in the Small Claims Court for the payment of money within the prescribed limit, the Small Claims Court has been given “a wide grant of jurisdiction”. The purpose of the Small Claims Court is to provide increased access to justice so that private citizens can have ready and inexpensive access to civil justice. Small Claims Court procedures are simpler and less expensive. Paralegals are allowed to represent litigants. These features make our justice system more accessible.
[40] To apply the words of Epstein J.A. to the circumstances of this case, interpreting the words of s. 23 of the Court of Justice Act in such a way as to restrict the jurisdiction of the Small Claims Court in a manner that would preclude it from [rather than awarding equitable relief], “enforcing arbitration awards made after the parties have brought claims for monetary relief in the Small Claims Court and then have elected to have those claims determined in another parallel process also designed to provide increased access to justice, and to require them to start a completely new more expensive application in another court to enforce the result” would be contrary to the important intended Legislative objective of making our justice system more accessible.
[41] Here in paragraph 31, the trial judge referred to the Small Claims Court as the people’s court and in paragraph 33 he wrote that the best way to continue to ensure easy access to justice is by enforcing an award through the speedier and less expensive process of the Small Claims Court for amounts within its jurisdiction. The framework of the Small Claims Court is such as to provide such easy and speedy access to justice and for citizens to be able to see redress to their civil disputes.
[42] In that context, and having regard to the principles set out in Hodgins, the trial judge did not err in concluding that the Small Claims Court had the requisite jurisdiction.
Disposition
[43] The Appeal is dismissed.
[44] Since the Respondent did not appear, there will be no order as to costs.
___________________________ M.A. SANDERSON J.
Released: November 26, 2015
CITATION: Evergreen Solutions v. Depositario, 2015 ONSC 6664
DIVISIONAL COURT FILE NO.: 375/14 DATE: 20151126
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
EVERGREEN SOLUTIONS CA INC. Plaintiff (Respondent)
– and –
GEMMA DEPOSITARIO Defendant (Appellant)
REASONS FOR DECISION
Sanderson J.
Released: November 26, 2015