Sepe v. Monteleone

Indexed as: Sepe v. Monteleone

78 O.R. (3d) 676

[2006] O.J. No. 177

Docket: C42916

Court of Appeal for Ontario, Feldman, Lang and LaForme JJ.A. January 18, 2006

Courts -- Jurisdiction -- Divisional Court -- Plaintiff appealing both dismissal of his claim and award of judgment on defendants' counterclaim -- Each amount under $25,000 but total amount over $25,000 -- Appeal falling within monetary jurisdiction of Divisional Court -- Word "or" in s. 19(1) (a) of Courts of Justice Act to be given its ordinary disjunctive meaning -- Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19(1)(a).

The plaintiff claimed to be owed $18,000 for brickwork on the defendants' home. The defendants counterclaimed for $20,000 for damages suffered because the work was allegedly substandard, and also claimed $3,387.49 by way of set-off. The trial judge dismissed the plaintiff's claim and the defendants' claim for set-off and awarded the defendants $19,260, inclusive of GST, on their counterclaim. The plaintiff appealed both the dismissal of his claim and the award of judgment on the counterclaim. While each of those amounts was under $25,000, together they added up to more than $25,000. The appeal was originally brought in the Divisional Court, but that court ruled that the matter was properly before the Court of Appeal.

Held, the appeal should be allowed in part.

The appeal came within the monetary jurisdiction of the Divisional Court. The word "or" in s. 19(1) (a) of the Courts of Justice Act is to be given its ordinary disjunctive meaning, and not read as if it meant "and/or". The Divisional Court erred in holding that the intent of s. 19(1)(a) is to ensure that the Divisional Court only hears appeals when the total amount in issue is under $25,000.

Given the time and money expended by the parties so far, the panel reconstituted itself as a panel of the Divisional Court for the purpose of hearing the appeal.

The defendants' claim that the brickwork was substandard and that they would incur $18,000 to effect repairs was supported by the evidence. The trial judge erred in failing to set off the defendants' claim against that of the plaintiff.

APPEAL from the judgment of Van Melle J. of the Superior Court of Justice, dated May 16, 2003, dismissing a claim and allowing a counterclaim.

Osovetsky v. Osovetsky, 2004 29709 (ON SCDC), [2004] O.J. No. 2368, 187 O.A.C. 396, 4 R.F.L. (6th) 95 (Div. Ct.), ovruld Other cases referred to McGrath v. Woodrow (2001), 2001 24163 (ON CA), 52 O.R. (3d) 732, [2001] O.J. No. 603, 6 C.P.C. (5th) 29 (C.A.), 40 C.L.R. (2d) 145 (C.A.) [page677] Statutes referred to Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19 [as am.]

Mario Sepe, in person. Mark Penfold, for respondents.

Reasons for Decision

[1] BY THE COURT:-- This appeal was originally brought in the Divisional Court. However, that court ruled that the matter was properly before the Court of Appeal. We disagree. This appeal comes within the monetary jurisdiction of the Divisional Court.

[2] The appellant is a bricklayer who claimed to be owed $18,000 for brickwork on the respondents' home. The respondents claimed that the maximum value of the work was only $12,146.06, but also counterclaimed for $20,000 for damages suffered because the work was allegedly substandard. They also claimed $3,387.49 by way of set-off.

[3] The trial judge denied the appellant's claim as well as the respondents' claim for set-off, and awarded the respondents $19,260, inclusive of GST on their counterclaim. The appellant appeals both the dismissal of his claim and the award of judgment on the counterclaim. Each of those amounts is under $25,000, but together, they add to more than $25,000.

[4] The monetary jurisdiction of the Divisional Court is set out in s. 19(1) (a) of the Courts of Justice Act, R.S.O. 1990, c. C.43, which provides:

19(1) An appeal lies to the Divisional Court from,

(a) a final order of a judge of the Superior Court of Justice,

(i) for a single payment of not more than $25,000, exclusive of costs,

(ii) for periodic payments that amount to not more than $25,000, exclusive of costs, in the twelve months commencing on the date the first payment is due under the order,

(iii) dismissing a claim for an amount that is not more than the amount set out in subclause (i) or (ii), or

(iv) dismissing a claim for an amount that is more than the amount set out in subclause (i) or (ii) and in respect of which the judge or jury indicates that if the claim had been allowed the amount awarded would have been not more than the amount set out in subclause (i) or (ii);

[5] The Divisional Court effectively held that the word "or" when used in s. 19(1)(a) means "and/or", so that any combination [page678] of payments ordered and/or claims dismissed that add to over $25,000 would be beyond the jurisdiction of the Divisional Court and must be appealed to the Court of Appeal. The Divisional Court reasoned that the intent of that section is to ensure that the Divisional Court only hears appeals when the total amount in issue is under $25,000.

[6] We disagree with that analysis. In our view, the purpose of s. 19(1)(a) is to define an easily applied cut-off line for litigants to determine the proper appeal route in any particular case. The line that was drawn by the legislature is the monetary amount of a judgment or dismissed claim of $25,000. The amount chosen does not reflect any concern for the ability of the Divisional Court to properly decide appeals that may involve more than $25,000. It is merely a mechanism for directing appeals involving less than the defined amount to one court, and the balance to the other.

[7] Having said that, the section is worded using the word "or" between clauses. Applying the ordinary disjunctive meaning of that word allows a straightforward application of the section to any particular fact situation. One looks at each subsection individually to determine if the amount of the judgment or dismissed claim is under or over $25,000.

[8] For example, in this case, the amount of the judgment is a single payment under $25,000. Also, the amount of the claim that was dismissed is under $25,000. Therefore, there is no amount under any of the subclauses of s. 19(1)(a) that is over $25,000. Consequently, reading the section disjunctively, the appeal lies to the Divisional Court.

[9] In McGrath v. Woodrow (2001), 2001 24163 (ON CA), 52 O.R. (3d) 732, [2001] O.J. No. 603 (C.A.), this court made it clear that when there is a claim and a counterclaim, and both are successful, the determining figure is the net amount of the judgment. In that case, the trial judge reduced both the original claim and the counterclaim, then netted out the two figures to award the amount of the judgment, which was less than $25,000. As a result, the appeal lay to the Divisional Court. The fact that on the appeal the appellants sought an award of over $25,000 was neither relevant nor determinative. Also, in that case the counterclaim for over $25,000 was not dismissed but was reduced. Had it been dismissed, then because the appeal would have been from a dismissed claim over $25,000, s. 19(1)(a)(iii) would not apply, and the appeal would have been to the Court of Appeal.

[10] In other words, the proper approach to the interpretation of s. 19(1)(a) is not to try to reconcile what may sometimes appear to be anomalous results, but to apply the wording of the section [page679] and to follow the result of that application by appealing to the designated court in each case. For greater certainty, the decisions of the Divisional Court in this case and in Osovetsky v. Osovetsky, 2004 29709 (ON SCDC), [2004] O.J. No. 2368, 187 O.A.C. 396 (Div. Ct.) are overruled.

[11] As this appeal should be heard by the Divisional Court, and as the parties have already expended time and funds to appear in the Divisional Court, we have obtained the authority of the Chief Justice of the Superior Court to constitute this panel as a panel of the Divisional Court for the purpose of hearing this appeal.

[12] We were advised yesterday that counsel for the appellant recently obtained an order to be removed from the record. The appellant appeared in person and advised that he would like to proceed with the appeal today.

[13] On the merits of litigation, the trial judge was faced with a claim by the appellant for at least $12,146 for his work in building a brick home. The respondent cross-claimed for $18,000 to repair the defects to the brickwork allegedly caused by the appellant's substandard work.

[14] There was more than ample evidence to support the respondents' claim that the appellant's brickwork was substandard and that, as a result, the respondents would incur approximately $18,000 to effect repairs. The respondents called no other evidence to support a claim for any increased amount. The trial judge dismissed the appellant's claim and awarded the respondents $18,000.

[15] The difficulty with that result is that if this award were allowed to stand, the appellant would not only receive nothing for his work, but he would be required to pay $18,000 to the respondents and the respondents would receive a fully bricked home for free.

[16] It is our view, accepting the factual findings of the trial judge on the evidence before her, that the trial judge erred in failing to set off the respondents' claim against the claim of the appellant.

[17] On the evidence, the appellant is entitled to $12,146 from the respondents and the respondents are entitled to $18,000 plus GST from the appellant for the cost of the needed repairs. As a result, the appellant owes the respondents the net amount of $7,114.

[18] Accordingly, we would allow the appeal and vary the judgment below to provide that the appellant pay the respondents $7,114.

[19] In light of the fact that the respondents would still have been successful at trial, we do not interfere with the costs award [page680] for the trial. Costs of the appeal are to the appellant fixed at $3,000 inclusive of disbursements and GST.

Appeal allowed in part.