Abdossamadi v. TD Insurance Direct Agency Inc., 2016 ONSC 1363
CITATION: Abdossamadi v. TD Insurance Direct Agency Inc., 2016 ONSC 1363
DIVISIONAL COURT FILE NO.: 266/15
DATE: 20160324
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
Mohammad-Hadi Abdossamadi Appellant
– and –
TD Insurance Direct Agency Inc., Monex Insurance Broker A.K.A. Security Nation Insurance Co. A.K.A. TD Insurance Meloche Monnex A.K.A. Meloche Monnex A.K.A. Meloche Monnex Financial Service Inc., Benny Stark Limited A.K.A. Stark Iron and Metal Co. A.K.A. 812366 Ontario Ltd A.K.A. Stark Auto Sales, 812367 Ontario Ltd A.K.A. Stark Auto Sales, Stephen Stark, Martin Gollan A.K.A. Marty Gollan, Marwan Zaatri A.K.A. Marvin Zaatri Respondents
COUNSEL:
Behrouz Amouzgar, for the Appellant
Brandon Straitman and David Lipkus, for the Respondents
HEARD at Toronto: February 23, 2016
Stewart J.
Nature of the Appeal
[1] This is an appeal from the decision of Deputy Small Claims Court Judge McNeely dated April 28, 2015. McNeely, J. dismissed the Appellant’s action as against all defendants on a motion brought pursuant to Rule 12 of the Small Claims Court Rules.
Jurisdiction
[2] An appeal lies to the Divisional Court from a final order of the Small Claims Court pursuant to s.31 and s.21(2) of the Courts of Justice Act, R.S.O. 1990, C. C. 43. Such an appeal is heard by a single judge of the Divisional Court.
Standard of Review
[3] The standard of review applicable in appeals from judges’ orders is stated in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. On questions of law, the standard is correctness. On questions of fact, the standard is palpable and overriding error. On questions of mixed fact and law, the Court stated that there is a spectrum. Where there is an extricable legal principle, the standard of review is correctness. However, with respect to the application of the correct legal principles to the evidence, the standard is palpable and overriding error.
[4] With respect to findings of fact, an appellate court may substitute its own view of the evidence and draw its own inferences of fact where the trial judge is shown to have committed a palpable and overriding error or made findings of fact that are clearly wrong, unreasonable or unsupported by the evidence (H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401 at para. 4). The language of “palpable and overriding error” and “clearly wrong” found in the case law encapsulate the same principle: an appellate court will not interfere with the trial judge’s findings of fact unless it can plainly identify the imputed error, and the error is shown to have affected the result.
Analysis and Discussion
[5] Stark Auto Sales (“Stark”) is a motor vehicle dealer that has operated in Toronto for many years. Stark purchases vehicles from insurance companies, such as the co-defendant TD Insurance, and then resells them to the public in an “as is” condition.
[6] When vehicles are damaged, insurance companies assesses the damage to the vehicle and determine which Ontario Ministry of Transportation brand the vehicle falls under based on the severity of the damage. Brand “salvage” vehicles can only be used for parts or scrap and cannot be driven again in Ontario. Brand “none” vehicles can be repaired and may return to Ontario roads.
[7] Neither Stark nor any other vendor has nput into the branding of a vehicle. The brand is determined by the insurance company in accordance with criteria set by the Ministry and then permanently associated with that vehicle’s Vehicle Information Number.
[8] On March 27, 2013, Stark offered for sale a 2013 Mercedes Benz C300. The vehicle was to be sold by Stark in a live auction with bidders participating both in person and online.
[9] The vehicle had been involved in a collision and suffered damages estimated by TD Insurance in the amount of $42,578.25. TD Insurance determined that the vehicle’s brand was “none”.
[10] The auction occurred on April 1, 2013 at Stark’s business premises in Toronto. Prior to the auction, the Appellant inspected the vehicle, assisted by his mechanic.
[11] The auction involved several bidders in person and several bidders online. The Appellant attended in person, and won the auction with a bid of $17,000.00.
[12] As part of the purchase, the Appellant signed an agreement stating that purchase of the vehicle was “as-is”, and in it acknowledged that the vehicle had been declared a total loss and that Stark made no representations that the vehicle was “in road worthy condition, mechanically sound or maintained at any guaranteed level of quality.”
[13] The Appellant was also provided with a Vehicle History Report confirming the estimated cost of repairing damages as $42,578.25. He signed a release acknowledging receipt of this report, and releasing Stark from any disclosure obligations in regard to the information contained in the report.
[14] On December 12, 2014, the Appellant issued a claim against the Defendants seeking $25,000 in damages plus interest and costs. The Appellant alleged that the vehicle was not brand “none” but brand “salvage” and that consequently the vehicle was diminished in value. He claimed he suffered emotionally and psychologically as a result and also incurred unexpected and unanticipated financial pressures as a result.
[15] Stark defended the action on the basis that the vehicle was brand “none” as it had been informed and that the Appellant had received a copy of the report indicating extensive damages to the vehicle. Even if the vehicle was not brand “none”, Stark maintained that the Appellant had no cause of action against it because Stark specifically made no misrepresentations regarding the value or condition of the vehicle and therefore could not be liable for any damages thereof.
[16] The TD Defendants also defended the action. TD’s principal relevant defences were that it had no privity of contract with the Appellant and had not made any misrepresentation to him.
[17] Stark and the TD Defendants brought motions to strike the Appellant’s claim pursuant to Rule 12.02(a) and (c) of the Rules of the Small Claims Court on the grounds that it disclosed no reasonable cause of action and was inflammatory, a waste of time, a nuisance and/or an abuse of the court’s process.
[18] In reasons released on April 28, 2015, the motion judge granted the Defendants’ motions and dismissed the Appellant’s claims as against all Defendants. She found that the Appellant’s claims had no prospect of success and were therefore a waste of time. As a result, the claims were dismissed in their entirety against all parties.
[19] Did the motion judge err in striking the Appellant’s claim pursuant to Rule 12 without a trial?
[20] Rule 12.02 provides as follows:
12.02 (1) The court may, on motion, strike out or amend all or part of any document that,
(a) discloses no reasonable cause of action or defence;
(b) may delay or make it difficult to have a fair trial; or
(c) is inflammatory, a waste of time, a nuisance or an abuse of the court’s process.
(2) In connection with an order striking or amending a document under subrule (1), the court may do one or more of the following:
In the case of a claim, order that the action be stayed or dismissed.
In the case of a defence, strike out the defence and grant judgment.
Impose such terms as are just.
[21] A motion under Rule 12.02 falls between a Rule 20 and a Rule 21 motion when compared to the Rules of Civil Procedure (see: Van de Vrande v. Butkowsky, 2010 ONCA 230). Rule 12.02 functions as a method by which claims lacking in merit may be assessed by a motion judge and determined without the expense of a full trial. It is a motion that is brought in the spirit of the summary nature of Small Claims Court proceedings.
[22] In this case, the Appellant alleged that, as a result of the misrepresentation as to the branding of the vehicle by Stark and TD, the vehicle he purchased had a lesser retail value than the Appellant had anticipated.
[23] To succeed in his claims, the Appellant would have to make out each element of the tort of misrepresentation as against each of Stark and TD as follows:
(d) a duty of care based on a “special relationship” between the representor and the representee;
(e) a representation that was untrue, inaccurate, or misleading;
(f) that the representor acted negligently (or fraudulently) in making said misrepresentation;
(g) that the representee relied in a reasonable manner on said negligent misrepresentation; and
(h) that the reliance was detrimental to the representee.
[24] The motion judge found that the Appellant’s claim for misrepresentation would inevitably fail, based on fourth branch of the test, because he could not prove that he reasonably relied on the brand of the vehicle in purchasing it. Even if he could succeed in proving actual reliance on any alleged misrepresentation, the motion judge found that such reliance would not have been reasonable in the circumstances.
[25] The motion judge found that the Appellant would not be able to demonstrate necessary reasonable reliance at trial for several reasons. The sale agreement and advertisements contained lengthy, comprehensive and clear disclaimers as to any representations as to quality or condition or roadworthiness, state of repair or possible intended use of the vehicle. It could not have been any clearer that the Appellant knew he was buying the vehicle on the express understanding that he was not entitled to rely on Stark Auto Sales to tell him what the car was worth. In addition, the Appellant brought his own mechanic to the auction to help him inspect the car and to decide whether to buy it. The Appellant was relying on his mechanic to advise him as to the state of the vehicle. Both men had access to the vehicle to inspect it prior to bidding on the car
[26] Further, the motion judge found that the estimated cost to repair the vehicle (said to have been discovered by the Appellant only in December 2013) was that same repair cost estimate set out in the March 27, 2013 Report of which the Appellant had acknowledged receipt and said he understood when he finalized the sale on April 2, 2013.
[27] In dismissing the Appellant’s claim, the motion judge thereby relied primarily on uncontested facts. On that evidence, she found that, even if reliance by the Appellant on any alleged misrepresentation could be proven, such reliance would not have been reasonable when measured on an objective standard as the law requires.
[28] Because there was no prospect of the Appellant’s being able to provide reasonable reliance, the motion judge found that his claim had no reasonable possibility of success and was therefore a waste of time within the meaning of Rule 12. Accordingly, she found that she did not have to consider the question of the vehicle’s brand was or whether that brand was improper or incorrect.
[29] The Appellant makes several submissions in an effort to attack the motion judge’s determination.
[30] In my view, the Appellant’s submission that the motion judge erred in her assessment of the TD Insurance Damage Report is not relevant to the result. Even if the precise branding of the car could be shown to be erroneous, such error did not give rise to the necessary elements of the tort alleged nor was it the cause of any damages.
[31] The Appellant also alleges that the motion judge erred in describing the mechanic who assisted him in the purchase as being licensed. The motion judge found that the “active involvement” of a mechanic made it doubtful that the Appellant relied on the term brand “none” in determining the value of the vehicle. Regardless of the formal qualifications of the mechanic, it is clear that his presence was some evidence that there was no actual reliance on the brand of the vehicle.
[32] The motion judge also considered and rejected the Appellant’s claim that he could pursue damages under the Highway Traffic Act for the alleged incorrect branding of the vehicle. He argued that, because the Respondents breached Ministry standards regarding vehicle branding, he was entitled to damages.
[33] The motion judge rejected this argument for two reasons. While the HTA does make it an offense sanctionable by fines not to report a salvage or irreparable brand vehicle, a failure to report is not automatically a basis for a civil claim or a cause of action. In addition, even if a breach of the Act’s reporting obligation might, in theory, be argued as giving rise to some duty to report, there is no reasonable causal connection between the alleged incorrect branding and the financial losses said to arise from the purchase of the car.
[34] The Appellant further submits that the motion judge erred in not allowing him to advance evidence from the MTO as to the vehicle’s branding. The motion judge held that she did not require such evidence because it was not necessary for her to decide the question of the vehicle’s branding. Even if the vehicle’s branding were to be held to be a misrepresentation, no damages could flow due to lack of reasonable reliance.
[35] On this basis, the motion judge found that proceeding to trial in Small Claims Court was a “waste of time” within the meaning of Rule 12.02 and dismissed the action.
[36] Having regard to the full circumstances, I can discern no palpable and overriding error in the motion judge’s assessment of the evidence and the applicable legal considerations. I see no error that affected the result or that would justify appellate intervention.
Conclusion
[37] For these reasons, the appeal is dismissed.
COSTS
[38] The parties have agreed on the disposition of costs. The Appellant shall pay to each Respondent the sum of $5000.00, all-inclusive, and shall do so in equal monthly installments over a period of 12 months, commencing May 1, 2016.
___________________________ Stewart J.
Released: March 24, 2016
CITATION: Abdossamadi v. TD Insurance Direct Agency Inc., 2016 ONSC 1363
DIVISIONAL COURT FILE NO.: 266/15
DATE: 20160324
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Mohammad-Hadi Abdossamadi Appellant
– and –
TD Insurance Direct Agency Inc., Monex Insurance Broker A.K.A. Security Nation Insurance Co. A.K.A. TD Insurance Meloche Monnex A.K.A. Meloche Monnex A.K.A. Meloche Monnex Financial Service Inc., Benny Stark Limited A.K.A. Stark Iron and Metal Co. A.K.A. 812366 Ontario Ltd A.K.A. Stark Auto Sales, 812367 Ontario Ltd A.K.A. Stark Auto Sales, Stephen Stark, Martin Gollan A.K.A. Marty Gollan, Marwan Zaatri A.K.A. Marvin Zaatri, Respondents
REASONS FOR JUDGMENT
Stewart J.
Released: March 24, 2016