CITATION: Reid’s Country Wide Furniture v. Maki Bay Enterprises, 2016 ONSC 7938
DIVISIONAL COURT FILE NO.: DC-15-013
DATE: 2016/12/16
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Reid’s Country Wide Furniture
Appellant
– and –
Maki Bay Enterprises
Respondent
Jordan Lester, for the Appellant
Mike Maher, for the Respondent
HEARD: December 5, 2016 (Thunder Bay)
REASONS FOR JUDGMENT
[1] The issue on this appeal is a narrow one:
Is a Small Claims Court Judge functus when she delivers her decision and awards costs to the Defendant in the absence of either party making submissions on costs?
Overview
[2] The Plaintiff/Respondent issued a claim in Small Claims Court for an unpaid invoice for work done by them for the Defendant/Appellant. The Defendant filed a response to the Plaintiff’s claim and also filed its own action in negligence for other work done by the Plaintiff.
[3] The matter went to trial in January 2015 and the Plaintiff’s claim was heard. The Deputy Judge decided the Defendant’s claim should be heard on another date to be set by the court.
[4] Before the trial started but in accordance with the rules, the Defendant filed an offer to settle. The offer was to have both claims dismissed without costs. The Plaintiff did not accept the offer.
[5] In March 2015, the Deputy Judge released her written decision. She dismissed the Plaintiff’s claim and indicated ‘court costs’ payable to the Defendant. The judge did not ask for any input from either party on the issue of costs.
[6] In September 2015, the Defendant’s claim was to be heard by the same judge. However, the matter was settled. It was at that point in time the Defendant advised the judge there had been an offer to settle and it asked to make submissions on the issue of costs. The Plaintiff objected and indicated that in its view, the judge was functus. The judge agreed.
[7] Leave to appeal the decision on costs was granted.
[8] A preliminary issue was raised by the Defendant given the Plaintiff failed to file any materials on this appeal. The Defendant argued the Plaintiff ought not to be heard. The Plaintiff, while agreeing that materials ought to have been filed, argued that it could address matters raised by the Defendant and/or make reference to the materials filed by the Defendant. I gave the parties extra time to research this point and ultimately found that the Plaintiff could be heard, albeit only on issues raised and materials filed by the Defendant.
Positions of the parties
[9] The Defendant argues that the term ‘court costs’ has no clear meaning and in any event, the judge ought to have permitted submissions on the issue of costs whether orally or in writing. In failing to do so, the judge never gave the Defendant an opportunity to address the offer to settle.
[10] The Respondent contends that the trial judge was correct in indicating that she was functus and in any event the meaning of ‘court costs’ is clear: it means filing fees.
Analysis
[11] R. 14.04 of the Small Claims Court Rules states,
If an offer to settle is not accepted, no communication about it or any related negotiations shall be made to the trial judge until all questions of liability and the relief to be granted, other than costs, have been determined.
[12] In the circumstances of this case, the earliest opportunity the Defendant would have had to advise the Deputy Judge of the fact of the offer to settle was in March 2015. However, by that time, the Deputy Judge had already made a determination on costs.
[13] In Bougadis v. 1231238 Ontario Inc., the Small Claims Court judge had indicated as part of his decision on a motion to dismiss that, ‘Costs are discretionary to the motions judge. I would therefore exercise my discretion and award no costs in this matter’. Neither party was given an opportunity to address the issue of costs. The Divisional Court refused to grant leave to appeal, but noted that,
In my view, the appropriate response is not to grant leave to appeal, but rather to leave it to the defendant to seek a determination of the costs of the claim by the Deputy Judge on the basis of submissions from the parties. The Deputy Judge is in the best position to assess the parties’ submissions on costs of the claim.[^1]
[14] Although this decision did not deal directly with the issue, it is implicit in the endorsement that the Deputy Judge was not functus and that he ought to have heard the parties’ submissions on the issue of costs.
[15] I find this decision provides a complete answer to this appeal. The Deputy Judge erred in law in finding she was functus given she had not heard any submissions from counsel on the issue of costs. Pursuant to R. 14.04, the Defendant could not have made submissions on costs prior to the release of the judge’s decision. Once the decision was released, the Deputy Judge had already ruled on costs. There remained several issues to be determined. First, what was meant by ‘court costs’? The Defendant did not know what was meant by ‘court costs’ and the Plaintiff could not provide me with any authority to support its claim that it meant only filing fees. Second, the existence of an offer to settle could have an impact on the quantum of any costs order. Finally, the judge’s decision was made without input from the parties. Fairness dictates that the parties ought to have been heard.
[16] The Defendant argues that I should make a determination of costs in this matter. However, I agree with the view expressed in Bougadis that the Deputy Judge is in the best position to assess what costs, if any, should be awarded to a party. Consequently, I remit this matter to the Deputy Judge in order to determine costs.
Justice Julianne Parfett
Released: December 16, 2016
CITATION: Reid’s Country Wide Furniture v. Maki Bay Enterprises, 2016 ONSC 7938
DIVISIONAL COURT FILE NO.: DC-15-013
DATE: 2016/12/16
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Reid’s Country Wide Furniture
Appellant
– and –
Maki Bay Enterprises
Respondent
REASONS FOR JUDGMENT
Parfett J.
Released: December 16, 2016
[^1]: 2012 ONSC 6409 at para. 8.