COURT FILE NO.: 564/03
DATE: May 12, 2005
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
SHUI YING MAK
Plaintiff/Appellant
- and -
TD WATERHOUSE CANADA
Defendant/Respondent
Shui Ying Mak, in person
Gavin Tighe, for the Defendant/Respondent
HEARD: April 20, 2005
MOLLOY J.
REASONS FOR JUDGMENT
A. INTRODUCTION
[1] This is an appeal from the decision of Deputy Judge Wolfe of the Superior Court of Justice (Toronto Small Claims Court) dated August 5, 2003, dismissing the plaintiff’s claim. The plaintiff had been a client of TD Waterhouse. Her claim arises from actions taken by TD Waterhouse in connection with her account in December 2000. TD Waterhouse issued a margin call on Mrs. Mak’s account in late November 2000 and subsequently liquidated her investment trading accounts to cover that call. Mrs. Mak alleges that a computer error by TD Waterhouse triggered all of the events that followed and that the liquidation of her accounts by TD was therefore unjustified. She claims damages for the financial losses she sustained.
[2] Both the plaintiff and the defendant were unrepresented by counsel at the Small Claims Court trial. However, Mrs. Mak was assisted at trial by her friend, Mr. Giora Moore. The defence was put forward by Steve Sims, a compliance officer for TD Waterhouse. Neither Mr. Moore nor Mr. Sims has any legal training.
[3] On the appeal before me, the defendant TD Waterhouse was represented by counsel. However, the plaintiff was again unrepresented. She requested leave to permit Mr. Moore to speak on her behalf, which I granted. Mr. Moore was obviously familiar with the background of the proceeding and had himself prepared all of the material for the appellant’s appeal. In addition to having little comprehension of the issues on the appeal, Mrs. Mak had limited facility in the English language. She required assistance to present her case and advised me that she could not afford legal counsel. Counsel for the respondent did not object to Mr. Moore’s participation. Accordingly, I granted the leave requested. In the course of the argument of the appeal, it became apparent that Mr. Moore was quite knowledgeable about stock options. In response to a question from the bench about his educational background, Mr. Moore advised that he has a PhD in Economics and Finance from New York University and has published articles on stock option liability.
[4] The main argument advanced on behalf of Mrs. Mak is that she was denied a fair trial. I agree with that submission. It is therefore not necessary to deal in any depth with the merits of the plaintiff’s case, other than to consider whether the result was inevitable such that there would be no substantial miscarriage of justice if the appeal were dismissed.
B. ANALYSIS
Antagonism and Interventions by the Trial Judge
[5] I must acknowledge at the outset that the trial judge was faced with a difficult situation. The plaintiff has no legal knowledge and very limited ability to communicate in English. She was assisted at trial by Mr. Moore, but he also has no legal expertise. Although Mr. Moore’s English is quite good, it is not his native tongue and his accent can be difficult to understand at times. Further, the subject matter of the trial itself is not free from complexity, involving trading stock options and the operation of margin brokerage accounts.
[6] In a trial where both parties are unrepresented by counsel, it is common, and often necessary, for the trial judge to intervene in the conduct of the trial more than would otherwise be the case. This is particularly true in the Small Claims Court: Garry v. Pohlmann (c.o.b. Bro Bros Roofing) [2001] B.C.J. No. 1804 (B.C.S.C.) and cases referred to therein; E. Manoni Construction Ltd. v. Kalu, [1997] O.J. No. 5880 (Ont.Ct.Gen.Div.) However, in my opinion, the interventions by the trial judge in this case went beyond what was necessary to assist the parties in presenting the case. He virtually took over the examination of witnesses.
[7] The trial judge was also unduly antagonistic towards Mr. Moore, who was appearing as agent for Mrs. Mak. At the beginning of the trial, Mr. Moore made an opening statement, setting out a chronology of the events over the course of one week in 2000 which gave rise to Mrs. Mak’s cause of action. Mr. Moore briefly recounted events that occurred on November 30, December 1, December 2 and December 4: Transcript of Proceedings pp. 4-5. At that point, the trial judge interrupted and told Mr. Moore to call his witnesses. Mr. Moore replied that he still had two more days of the story to relate, but the trial judge told him, “I get the picture” and Mr. Moore was obliged to begin calling evidence.
[8] Mr. Moore called the plaintiff Mrs. Mak as his first witness. His first question was to ask her what happened on November 13. The trial judge interrupted to ask what year and Mr. Moore replied, “2000.” The trial judge then responded, “I am not asking you sir.”: Transcript, p. 7. The trial judge then proceeded to take over the examination in chief of Mrs. Mak. From pp. 7-23 of the transcript, every question was asked by the trial judge. Mr. Moore attempted to interject. At one point, Mrs. Mak was testifying as to the contents of a letter she received from TD Waterhouse on December 4, 2000 and the trial judge asked to see the letter. Mrs. Mak said she no longer had it. Mr. Moore then attempted to explain to the trial judge that this point was conceded and that there was no dispute that the letter was sent (which was indeed the case). However, the trial judge stated, “No, no, I’m not asking you to give evidence. That’s what your client is supposed to be doing.”: Transcript, p. 12. Further, the trial judge did not seek clarification from the defence as to whether this was in fact conceded. He merely continued with his own examination of Mrs. Mak.
[9] This proceeded for another five pages of the transcript, when the following exchange occurred (at page 17 of the transcript) :
THE COURT: Just a moment – Mr. Moore you keep lifting up your hand. Do you want to ask this witness any questions?
MR. MOORE: You want me to ask?
THE COURT: I do not want you to do anything, except what you are supposed to be doing in this court, which I have been doing on your behalf.
[10] The trial judge then again continued to question Mrs. Mak for another six pages, when the following exchange occurred (at p. 23 of the transcript):
THE COURT: Just a minute. Mr. Moore, what is it? Do you…
MR. MOORE: Because – you know—I was supposed to present the case, and you took it over, and I don’t want to offend the Court, and you know it’s become a mess. The figure, the date that you put are totally wrong. The number that you put, like, $50, came now totally wrong. I wanted to present the case in sequence so you can understand, give you the document, and it’s become totally mess. You know, I, I …
THE COURT: Well, all right. I am not sure how proficient you are in examining witnesses. At this point, you said you wanted to present everything in chronological order.
MR. MOORE: Yes.
THE COURT: So, we’ve gone from November 30th to December 3rd, December 4th, December 5th, December 6th, and if that is not chronological order, I do not know what is. Now, if you want to ask your witness any questions, you are free to do so, but I still am trying to understand her language. So, just let me finish this, and then I will get back to you.
[11] It is worth noting that at this point Mr. Moore had only asked a single question, back at p. 7 of the Transcript. Mr. Moore’s examination in chief of Mrs. Mak commenced at page 25 of the transcript and continued to p. 43. There were many interjections by the trial judge, although a good number of those were for clarification and are not objectionable. Some of the questions put by Mr. Moore were of a leading nature, a not uncommon mistake even for lawyers, but a particularly difficult concept for many lay people to grasp. A number of times the trial judge objected to Mr. Moore “giving evidence” rather than questioning, or telling the witness what the answer was. However, at no time did he explain to Mr. Moore the difference between examination and cross-examination or the difference between a leading and non-leading question. After one such objection (at p. 35 of the Transcript) the trial judge stated, “Perhaps, now you understand why I ask the questions because you are obviously incompetent to deal with an examination-in-chief as it should be conducted in this court.” At pp. 42-43 of the Transcript, Mr. Moore read a clause from the agreement between the parties (which was an exhibit at trial) and then stated “It’s implied that TD Waterhouse …” The trial judge then interrupted stating, “Mr. Moore, I am not going to let you proceed any further. You simply do not know how to conduct an examination. So, just sit down.” The trial judge then proceeded again to examine the witness himself. A little later in the examination (at p. 47 of the Transcript), the trial judge was obviously having difficulty understanding the nature of a document he had marked as an exhibit. Mr. Moore asked, “Can I explain what the relevance…”, but was cut off by the trial judge who stated:
No you cannot. You do not give evidence in this court, Mr. Moore. You are an agent. I have already indicated to you that I find it difficult, on the basis of what I heard this morning, to understand what your competency is to conduct this trial. I am trying to help your witness. You do not help by giving her the answers in advance and then putting them in the form of a question. …And I do not what [sic] you to instruct the witness when she is in the witness box. If you continue to do this, I will ask you to leave the courtroom.
[12] The examples of the trial judge’s hostility I have noted are solely from the examination in chief of the plaintiff. However, the tone of the trial judge’s interventions continued throughout the trial. He was openly hostile and critical of Mr. Moore. He appears to have formed the view early on that Mr. Moore was incompetent and he took over the trial from the outset. That attitude towards Mr. Moore continued throughout the trial. After delivering his reasons for dismissing the plaintiff’s case, the trial judge stated (at p. 188 of the transcript), “I must say by way of obiter, and I found that the presentation of the Plaintiff’s case bordered on the incompetent, on incompetence [sic], that Mr. Moore certainly had indicated no experience as an examiner, and I find it almost unacceptable to have him appear in my court again on behalf of any client.”
[13] It is clear Mr. Moore has no legal training and did not understand the problem of leading questions. However, he was courteous to the trial judge throughout and any difficulty he had in properly phrasing the questions did not appear to be deliberate. Further, the case turned primarily on documents and the evidence of the defence witnesses. The area in which Mr. Moore asked leading questions was therefore not as problematic as might otherwise be the case. The trial judge never properly explained the process to Mr. Moore. In any event, some latitude is necessary in a trial of this nature. The trial judge was in my view unnecessarily harsh in his dealings with Mr. Moore. In my view, the trial judge’s antagonistic attitude and constant interventions interfered with the right of the plaintiff to a fair and impartial trial.
Right to Cross-Examine Adverse Witnesses
[14] Following the testimony of Mrs. Mak, the plaintiff called three further witnesses, all of whom were employees of the defendant. Mr. Moore examined the witnesses, often asking leading questions. There was no objection to this by the defence. However, Mr. Moore’s examination was repeatedly interrupted by the trial judge who told him that he was not permitted to cross-examine his own witness. At one point, Mr. Moore attempted to put to a witness a prior inconsistent statement given to the ombudsman about the matters at issue, but was prevented from doing so by the trial judge on the grounds it was cross-examination and also not relevant.
[15] Had this trial been conducted in the Superior Court of Justice there would have been a clear right to cross-examine these three witnesses. Rule 53.07(4) provides that a party may call as a witness at trial an employee of an adverse party unless that person has already testified or the adverse party’s counsel undertakes to call that witness as part of its case. Rule 53.07(5) provides that when a party calls the employee of an adverse party as a witness, the party calling the witness is entitled to cross-examine.
[16] There is no specific provision to this effect in the Rules applicable to the Small Claims Court. However, the procedure in Small Claims Court is meant to be more, rather than less, flexible than that which is applicable to superior court trials. In my view, that requires considerably more latitude than was given to Mr. Moore in this case. The three witnesses he called as part of the plaintiff’s case were current employees of TD Waterhouse who had handled, or had knowledge of, Mrs. Mak’s account. His examination of those witnesses was unduly hampered by the requirement that he was not permitted to ask them leading questions.
[17] This is particularly the case with respect to the attempt by Mr. Moore to cross-examine one of the witnesses based on prior inconsistent statements. If the witness gave a different explanation to the ombudsman about what happened with Mrs. Mak’s account, the interests of justice and getting at the truth would support putting that discrepancy to the witness. If she is unable to explain the difference this is a matter that may influence findings of credibility. However, Mr. Moore was prevented from putting such questions to the witness based on the trial judge’s ruling that he could not cross-examine his own witness.
Evidence of Share Prices
[18] Mr. Moore attempted to place before the court some printouts from Yahoo which he downloaded from the Internet showing the prices at which Mrs. Mak’s stocks were trading during the crucial times. The trial judge refused to permit him to file the document and refused to allow him to question witnesses about the document. Again, it must be remembered that a flexible approach is typically taken to the rules of evidence in a Small Claims Court trial. I will refrain from expressing an opinion as to whether the trial judge ought to have admitted the Yahoo printouts as evidence at the trial. However, in my view, he ought not to have simply dismissed that possibility out of hand. At the very least, Mr. Moore should have been permitted to examine the witnesses as to the reliability of this type of information and ask them if they accepted the accuracy of the numbers he had obtained. This particular information was key to the plaintiff’s case. The trial judge permitted the defendant’s employees to give impressionistic evidence about what was happening in the stock market without any back-up documentation, but would not permit Mr. Moore to challenge those assertions by putting to them the information he had obtained from the Internet. This was not, in my view, even-handed and contributed to the overall unfairness of the trial.
Non-Suit
[19] At the end of the plaintiff’s witnesses, the trial judge advised the defendant that it was not necessary to call a defence. He stated, “I can move on my own volition for non-suit.” He did this without warning to the plaintiff and without allowing the plaintiff or her agent to make submissions. He cited two bases for his decision to dismiss the case at this stage. First, he found that the plaintiff had failed to establish that she had lost any money as a result of anything the defendant had done. Second, he noted that the defendant had advised Mrs. Mak in writing that she had until December 13 to cover the margin call, but that if her position deteriorated further TD would move without further notice to liquidate sufficient of her securities to cover the margin call. He further noted that Mrs. Mak’s own witness had testified the account had deteriorated and therefore held that TD was entitled to take the steps it did.
[20] It is clear the trial judge committed a fundamental error in declaring a non-suit on his own motion without even giving the plaintiff an opportunity to make submissions: Felker v. Felker, [1946] O.W.N. 368 (C.A.); Carrier v. Cameron, [1985] O.J. No. 1357 (Div.Ct.).
[21] On this appeal, counsel for the defendant argued that notwithstanding this error, the trial judge’s determination should be allowed to stand because the result was inevitable and there was therefore no substantial wrong or miscarriage of justice. He relies in this regard on Carrier v. Cameron, supra, in which the Divisional Court found a Small Claims Court judge had erred but that his decision should nevertheless be permitted to stand. Callaghan A.C.J.H.C. held at para 7:
On an appeal such as this, a new trial should not be directed unless some substantial wrong or miscarriage of justice has occurred. . . . While the trial judge, in my view, clearly did err in failing to call on the parties for argument, that error in the circumstances of the case, did not result in a substantial wrong or miscarriage of justice. He considered the issue raised by the plaintiff and rejected it because there was no admissible evidence upon which to act and that absence of evidence could not have been cured by argument. Therefore, notwithstanding the error of the learned trial judge, there has been no such miscarriage and the appeal must be dismissed with costs.
[22] In this case, it is not possible to say that there has been no miscarriage of justice. On the contrary, if the trial had been permitted to proceed in the normal course without the interventions of the trial judge, with Mr. Moore being given appropriate latitude to cross-examine witnesses and with the defence being called upon to present its case, the result might well have been different. The state of the market at the relevant times was a crucial point upon which Mr. Moore was not permitted to cross-examine and which could have changed the result on the second point raised by the trial judge (as to whether TD was entitled to take the steps it did on December 5). With respect to the issue of damages, Mr. Moore was prejudiced in the presentation of his case by the trial judge’s precipitous finding of a non-suit. There were four key employees of the defendant who Mr. Moore indicated had the information necessary to prove the plaintiff’s case. He called three of those witnesses as part of the plaintiff’s case, having subpoenaed them to attend and paid them conduct money. In the course of their evidence they made many references to the fact that certain information would only be known by the TD credit department. In his argument on this appeal, Mr. Moore pointed out in excess of a dozen examples from the transcripts where a witness indicated particular information sought could only be provided by the credit department witness. Mr. Moore did not issue a subpoena to the fourth witness, who was an employee of the TD credit department, because Mr. Sims (the defendant’s agent) told him that he would be calling that witness as part of the defence case. The credit department witness was in fact in court. Thus, it was the shared expectation of both parties that the credit department witness would be testifying at trial on behalf of the defence, and Mr. Moore intended to elicit information from that witness to establish Mrs. Mak’s losses. This plan was short-circuited when the trial judge declared a non-suit without giving Mr. Moore any opportunity to make submissions.
[23] It is not possible to say at this point that Mrs. Mak’s cause of action has no chance of success. Mr. Moore presents a compelling argument that there would not have been a margin call but for the initial computer error of the defendant and that the defendant cannot take steps to the plaintiff’s disadvantage based on its own error. If he is right that the deterioration in Mrs. Mak’s account between December 1 and December 5 was not caused by any decline in the value of her share holdings on the stock market, then there is a good argument that TD did not have justification in taking the steps it did. Although there is not a sufficient evidentiary basis on the record of the trial proceedings to permit those conclusions in favour of the plaintiff to be drawn, it is by no means clear that the evidence would not have been adduced if the trial had been permitted to proceed in the normal course. Accordingly, I find that the trial judge’s error in dismissing the case when and in the manner he did, resulted in a miscarriage of justice. The plaintiff is entitled to a new trial.
Conclusions and Order
[24] Given that result, it is not necessary for me to decide whether the trial judge’s conduct was sufficient to create a reasonable apprehension of bias that would, in and of itself, warrant ordering a new trial.
[25] In the result, the appeal is allowed, the decision of the trial judge is set aside and a new trial is directed. The plaintiff is entitled to reasonable costs for this appeal. Mr. Moore sought costs of $1500.00, which is reasonable given that the transcripts alone cost $900.00. Mr. Tighe, for the defendant, fairly did not quibble about the quantum of the costs but argues the costs should only be recoverable if Mrs. Mak is ultimately successful in the trial of her action. The defendant submits that it did not create the problem that resulted in a new trial being ordered and therefore should not bear the costs of the appeal unless the plaintiff’s cause of action is ultimately shown to be meritorious. I do not agree. It is frequently, indeed typically, the case that an appeal is allowed and new trial directed because of an error by the trial judge. Nevertheless, it is not usual to deny costs to a successful appellant, nor to delay recovery of costs until the outcome of the new trial. In this case, I see no reason to depart from the usual practice. The plaintiff has been successful on the appeal and is entitled to her costs, those costs being fixed at $1500.00 and payable in 30 days.
[26] However, with respect of the costs of the first trial, I agree with Mr. Tighe’s position. If the plaintiff is successful in her second trial, she shall be entitled to costs from the first trial as well, the quantification of which I will leave to the trial judge hearing the new trial.
MOLLOY J.
Released: May 12, 2005
COURT FILE NO.: 564/03
DATE: May 12, 2005
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
SHUI YING MAK
Plaintiff/Appellant
- and -
TD WATERHOUSE CANADA
Defendant/Respondent
REASONS FOR JUDGMENT
MOLLOY J.
Released: May 12, 2005