CITATION: Capital One Bank v. Bartley, 2017 ONSC 2180
COURT FILE NO.: DC-16-104-00
DATE: 20170407
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
CAPITAL ONE BANK (CANADA BRANCH)
R. Christensen, for the Appellant
Appellant
- and -
DWAYNE BARTLEY a.k.a. DWAYNE L. BARTLEY
D. Bartley, on his own behalf
Respondent
HEARD: March 17, 2017, at Brampton
REASONS FOR JUDGMENT
[On appeal from a Decision of Deputy Judge Richardson of the Small Claims Court at Brampton dated September 2, 2016]
ANDRÉ J.
[1] The appellant Capital One Bank (“Capital One”) appeals the decision of the Honourable Deputy Judge Richardson of the Ontario Superior Court of Justice (Small Claims Court Division), dated September 2, 2016, following a trial. Deputy Judge Richardson ordered the respondent Dwayne Bartley to pay Capital One the sum of $1,700 and costs of $250, in satisfaction of his credit card debt. Capital One submits that Deputy Judge Richardson erred in excluding business records which had been served on Mr. Bartley over a year prior to the trial.
BACKGROUND FACTS
[2] Capital One issued a Statement of Claim against Mr. Bartley on March 16, 2015 for $5,783.97, along with pre and post judgment interest at a rate of 19.8% annually in accordance with a credit card agreement between the parties.
[3] Mr. Bartley denied liability and demanded that Capital One provide proof of his indebtedness to it. Capital One brought a motion to strike the defence as disclosing no defence in law. Mr. Bartley failed to serve or file any responding materials.
[4] A court dismissed Capital One’s motion on December 10, 2015 after Mr. Bartley testified that the matter had been previously settled with a collection agency. The court permitted Mr. Bartley to amend his defence by December 31, 2015 to include his position that he had settled his debt to Capital One. Mr. Bartley failed to do so. (Transcripts of the Trial dated September 2, 2016, page 30, lines 25-30)
TRIAL
[5] During the Small Claims Court trial, counsel for Capital One called no viva voce evidence but tendered an affidavit of Deborah Forrest which had been sworn on August 2, 2016 (the “Affidavit”). Counsel advised the court that the Affidavit had been mailed to Mr. Barley on August 3, 2016 and therefore deemed to be served on August 10, 2016. Counsel for Capital One also advised the court that the original bank statements and credit card agreement that were attached to Ms. Forrest’s Affidavit as exhibits had originally been served on Mr. Bartley on June 9, 2015. Counsel for Capital One submitted to Deputy Judge Richardson that pursuant to Rule 18.02 of the Small Claims Court Rules, the records were admissible under section 27 of the Courts of Justice Act.
[6] Mr. Bartley testified that he owed $5,900 on the credit card he obtained from Capital One. (Transcript of the Evidence, p. 8, lines 24-26; p. 10, lines 16-17; p. 14, lines 11-22; p. 15, lines 20-27)
DEPUTY JUDGE’S DECISION
[7] Deputy Judge Richardson held that the Affidavit was inadmissible because it had not been served 30 days prior to the trial. She also held the business records attached to the Affidavit to be inadmissible because they had not been qualified as such “as required by the Evidence Act”. (Transcript of the Evidence, p. 31, lines 23-32)
[8] Deputy Judge Richardson also concluded that Rule 18.02 does not apply to affidavits and that the Affidavit tendered by counsel for Capital One during the trial did “not indicate the name, address, phone number and contact information of the person” who authored it, pursuant to Rule 18.02(3). (Transcript of the Evidence, p. 31, lines 23-33, p. 32, lines 1-3)
ANALYSIS
[9] This appeal raises the following issues:
(1) What is the appropriate standard of review on appeal?
(2) Did the learned Deputy Judge err in fact and in law in excluding the Affidavit presented by counsel for Capital One during the trial?
(3) Did the learned Deputy Judge err in law in holding that the business records tendered by counsel for Capital One were inadmissible?
ISSUE NO. ONE: What is the appropriate standard of review on appeal?
[10] The standard of review of a trial judge’s factual findings is “palpable and overriding error: Huisman v. McDonald, 2007 ONCA 391, 280 D.L.R. (4th) 1. The standard of review regarding a trial judge’s interpretation of the law is one of “correctness”.
ISSUE NO. TWO: Did the learned Deputy judge err in fact and in law in excluding the Affidavit presented by counsel for Capital One during the trial?
[11] Rule 18.02(1) of the Small Claims Court Rules (the “Rules”) states that:
A document or written statement … that has been served, at least 30 days before the trial date, on all parties who were served with the notice of trial, shall be received in evidence, unless the trial judge orders otherwise.
[12] Rule 18.02(2) states that Rule 18.02(1) applies to “the signed written statement of any witness” and any “other document, including but not limited to … a financial record, a receipt, or a bill”.
[13] Rules 2.01 and 2.02 indicate that non-compliance with the Rules is only an irregularity, and that the court may dispense with compliance “if necessary in the interest of justice”.
[14] Rule 3.02 provides a Deputy Judge with the discretion to lengthen or shorten any time prescribed by the Rules. Finally, Rule 18.02(4) indicates that a person served with a statement of a witness may serve that person with a subpoena if he or she wishes to cross-examine that witness.
Analysis
[15] Deputy Judge Richards held that the affidavit evidence was inadmissible.
[16] To reverse this discretionary decision, I must find that the Deputy Judge misdirected herself or arrived at a decision that was so clearly wrong that it amounts to an injustice or gave no weight or insufficient weight to relevant considerations: Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, at para. 27; Cho v. Middleton, 2016 ONSC 7251, at para. 15.
[17] In my view, Deputy Judge Richardson’s decision to exclude the Affidavit is a palpable and overriding error for the following reasons.
[18] First, she mistakenly held that the Affidavit did not indicate the name, address, phone number and contact information of the person. This information appears in fact at the end of the Affidavit.
[19] Second, her decision that the 30-day requirement in Rule 18.02 “is not intended for affidavit (sic) but intended for written documents” is incorrect given that the rule applies to the “signed written statement of any witness”.
[20] Third, she failed to consider that while the Affidavit was deemed to have been served 23 days, rather than 30 days before the trial, Mr. Bartley expressed no desire to cross-examine the affiant. He did not challenge the information provided in the Affidavit. Rather, his defence was based on his contention that he had settled the issue of his indebtedness to Capital One with an unknown party. Mr. Bartley could have summoned the affiant if he so desired. It therefore cannot be said that the admission of the evidence would have resulted in an injustice to him.
[21] Fourth, the Deputy Judge did not appear to consider the discretion under Rule 3.02 which enabled her to lengthen or shorten the time period set out in Rule 18.02 or the discretion conferred upon her by Rule 2.02, that in appropriate cases, a court may dispense with compliance, “if necessary in the interest of justice”. In my view, admission of the affidavit and exhibits were necessary to secure a just determination of the matter in dispute.
[22] Finally, Deputy Judge Richardson held that the Affidavit was inadmissible because it contained hearsay information. This hearsay information, however, pertained to statements from employees of a law firm which were only relevant to Mr. Bartley’s settlement defence, a defence that was rejected on other grounds. Given that the hearsay statements were not relevant to the issues of the amount of money owed by Mr. Bartley to Capital One and the interest rate he agreed to, this did not justify excluding the entire Affidavit from the trial.
ISSUE NO. THREE: Did the learned Deputy Judge err in law in holding that the business records tendered by counsel for Capital One were inadmissible?
[23] The Deputy Judge held the banks statements and cardholder agreement which collectively set out the amount owed to Capital One by Mr. Bartley and the rate of interest, 19.8% per annum, on any outstanding balance, to be inadmissible because the plaintiff failed “to qualify the business records as required by the Evidence Act”.
[24] In my view, the Deputy Judge erred in holding the records to be inadmissible. First, s. 2 and s. 35 of the Ontario Evidence Act, which deal with the admissibility of business records as an exception to the hearsay rule, is not contingent on a finding that the requirements of s. 35 must be complied with, before a business record may be admitted into evidence in a Small Claims trial: VFC Inc. v. Balchand, 2008 CarswellOnt 909, at paras. 20-21 (Ont. Div. Ct.).
[25] Second, the bank statements and credit card agreement were served on Mr. Bartley approximately one year before the trial; this factor should have been considered by the Deputy Judge as there was no real prejudice to the defendant if it were to be admitted 7-days late. The defendant would have reasonably expected the plaintiff to rely on these statements to prove the outstanding debt and contractual interest rate.
[26] Third, Mr. Bartley took no issue with the information contained in the records, particular the amount owing or the interest rate on any outstanding balance on the card. The significance of this is reflected in the decision of Justice M.L. Edwards in Capital One Bank v. Wright (sub. nom. Capital One Bank v. Toogood), 2013 ONSC 5440, at para. 27 that:
The cardholder agreement makes clear that unless the cardholder contests a particular statement, the cardholder is deemed to have accepted the balance claimed as of the date of the statement.
[27] For these reasons, the Deputy Judge erred in failing to apply the contract rate of interest to the outstanding balance owed by Mr. Bartley to Capital One.
CONCLUSION
[28] The appeal is allowed. The order of Deputy Judge Richardson is varied to state:
Judgment for the plaintiff in the amount of $3,206.15 plus costs of $250 inclusive of court costs and disbursements.
[29] If Mr. Bartley does not pay this amount by June 30, 2017, there will be post-judgment interest at the rate of 19.8% annually from July 1, 2017.
Interest Between the Trial and the Appeal
[30] Capital One has waived accrued interest for this period.
COSTS
[31] Capital One has waived costs resulting from its appeal of the Deputy Judge’s decision.
André J.
Released: April 7, 2017
CITATION: Capital One Bank v. Bartley, 2017 ONSC 2180
COURT FILE NO.: DC-16-104-00
DATE: 20170407
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
CAPITAL ONE BANK (CANADA BRANCH)
Appellant
- and –
DWAYNE BARTLEY a.k.a. DWAYNE L. BARTLEY
Respondent
REASONS FOR JUDGMENT
ANDRÉ J.
Released: April 7, 2017