CITATION: West End Tree Service Inc. v. Danuta Stabryla, 2010 ONSC 68

DIVISIONAL COURT FILE NO.: 451/08

DATE: 20100104

SUPERIOR COURT OF JUSTICE - ONTARIO

(DIVISIONAL COURT)

RE: WEST END TREE SERVICE INC. v. DANUTA STABRYLA

BEFORE: Justice Swinton

COUNSEL: Larry Plener, for the Plaintiff (Appellant)

Danuta Stabryla (Respondent) in person

HEARD at Toronto: December 10, 2009

E N D O R S E M E N T

Swinton J.

Overview

[1] West End Tree Service Inc. ("the appellant") appeals from the judgment of Deputy Judge De Lucia dated July 10, 2008, ordering the appellant to pay the respondent Danuta Stabryla $2,279.55 plus $1,500 in costs.

Background

[2] Around January 2006, the respondent sought an estimate from the appellant for the cost of removing a large tree (with trunk measuring 92 cm.) from her yard. The appellant provided an estimate that began with the words "Tree removal". The form then itemized the following costs: $950 to remove a silver maple and leave all on site, $400 to grade and dispose of debris, $400 to dispose of logs, $100 for an arborist report and $100 for a city permit.

[3] The respondent paid the appellant $214 on February 4, 2006 for the arborist report and permit. The balance was $1,658.50, with the form stating "payment due upon job completion, unless prearranged". The estimate was not signed by the respondent.

[4] The respondent signed a form authorizing the appellant to submit an application to the city. Vince Di Marco for the appellant wrote the necessary report, sent the $100 permit fee, and obtained the permit.

[5] One requirement for the permit was an undertaking by the respondent to the city that she would plant a new tree. Mr. Di Marco met with the respondent at her home to obtain the undertaking. A permit was issued dated April 10, 2006 requiring that a new tree be planted by the fall of 2006.

[6] The tree was cut down and removed on April 20, 2006 by a crew of six using three vehicles. The work took from around 8:30 AM to 2:30 PM.

[7] The respondent testified that she had not authorized the cutting down of the tree, and she refused to pay the appellant, which led to this proceeding.

[8] At one point, the appellant obtained default judgment against the respondent, and monies were paid into court as a result of a Notice of Garnishment. The respondent was successful in having the judgment set aside on January 3, 2008, but the monies had already been paid to the appellant. Deputy Judge Ashby made an endorsement on January 16, 2008 stating, "Provided the defendant complies with my order then on or before 15 February 2008 the plaintiff is ordered to return the monies to the court to be held pending trial". A copy of this order was sent to the plaintiff's counsel on February 22, 2008. He forwarded this letter to the appellant.

[9] The monies had not been paid into court at the time of the trial on July 10, 2008. The trial judge dismissed the appellant's action, finding that there had been a contract to obtain the permit, but there was no contract for the cutting down of the tree. He ordered the appellant to pay the respondent $2,279.55, the amount garnished from her. He also ordered costs of $1,500 against the appellant, because he concluded,

There should be a punitive element against the Plaintiff because there was a Court Order out there since January and even as of this morning there was no monies returned to this Court nor an undertaking to pay.

The Liability Finding

[10] An appeal court should not interfere with a trial judge's findings of fact unless there has been palpable and overriding error. On questions of law, the standard of review is correctness.

[11] The trial judge held that there was a contract to obtain a permit to cut the tree, but there was no contract to cut down the tree, because there was not a meeting of the minds between the parties. He found the respondent to be truthful, and he accepted her evidence that she did not agree to the cutting down of the tree.

[12] In my view, the trial judge erred in law, as he used a purely subjective test to determine whether there was a contract between the parties for the cutting down of the tree. As Professor John McCamus states in The Law of Contracts (Toronto: Irwin Law, 2005) at 497,

Even where a consensus may be said to fail at a subjective level, the consensus may be achieved on an objective basis and the contract so created is an enforceable one.

Contract law protects the reasonable expectations of a promisee. As a result, a party may be bound to a contract, even if she does not intend to be bound, where a reasonable person would believe, based on her conduct and words, that she was assenting to the terms proposed by the other party.

[13] In this case, the trial judge considered only the perspective of the respondent. He erred by failing to examine all the evidence to determine whether a person in the position of the appellant would reasonably expect that there was a contract that included the cutting down of the tree.

[14] The evidence, examined as a whole, does not support the trial judge's conclusion that there was a separate contract for the tree permit and no contract for cutting down the tree. Rather, a reasonable person, having regard to all the circumstances, would conclude that there was a contract between the parties for the cutting down of the tree – a contract that included as one element the steps to obtain the city permit.

[15] Mr. Di Marco testified that he refused to act for customers who wanted him only to obtain a permit, as it was not economical for him to do so. Given the evidence about the amount of work involved in getting the permit (including two visits to the respondent's home), it is improbable that he would have agreed to do only the permit work for the $100 fee for the arborist report.

[16] As well, the written estimate dated February 1, 2006 suggests that there was one agreement contemplated by the parties – an agreement for the tree removal. That agreement included a number of steps, including the arborist report and obtaining the permit.

[17] While the respondent testified that her husband and friends intended to take down the tree, the trial judge never considered the improbability of this occurring. The tree was 92 cm. in diameter at 1.4 metres from grade. It took a six person crew to cut it down and dispose of the wood. This was clearly not a task for amateurs without proper equipment and training.

[18] The trial judge also failed to consider Mr. Di Marco's evidence that the respondent offered him $300 when he went to her home seeking payment for the work done to cut down and dispose of the tree.

[19] In my view, when the correct legal test is applied to the evidence, one must conclude that there was a contract between the parties for the cutting down of the tree. Therefore, the judgment of the trial judge must be set aside, and judgment given in favour of the appellant. Given this conclusion, I need not deal with the argument based on quantum meruit.

The Costs Order

[20] While it is not necessary to deal with the costs issue, I shall do so, as in my view, the trial judge also erred in awarding costs as he did.

[21] Pursuant to s. 29 of the Courts of Justice Act, R.S.O. 1990, c. C.43, an award of costs, other than disbursements, is limited in the Small Claims Court to 15% of the amount claimed or the value of the property to be recovered. There is, however, an exception where the Court "considers it necessary in the interests of justice to penalize a party or a party's representative for unreasonable behaviour in the proceeding".

[22] In order to rely on the exception, the trial judge must determine that there has been unreasonable behaviour in the proceeding on the part of a party or a party's representative that is deserving of sanction. The sanction that can be imposed is a higher award of costs to the other party.

[23] The trial judge relied on the exception because the appellant had not returned the monies in compliance with the January 16, 2008 endorsement. The trial judge stated that there had been no effort to comply with the court order or to give an undertaking to pay the amount. In fact, Vince Di Marco did say in court, at the outset of the trial, "If I do have to pay it back, I will do so today." Therefore, the trial judge appears to have erred in his appreciation of the evidence.

[24] In any event, the trial judge should have examined all the circumstances surrounding the court order in order to determine the extent of misconduct on the part of the appellant. He failed to consider that the endorsement ordered the appellant to pay the funds into court "provided the defendant complies with my order", without specifying what that order was. Moreover, the order required payment into court by February 15, 2008 but was not was sent to the appellant's lawyer sometime until February 22, 2008.

[25] Even if there was a basis to find unreasonable behaviour on the part of the appellant, the trial judge gave no explanation as to how he arrived at the amount of $1,500 as a costs award. I note that s. 29 gives a power to award costs. It is not framed as a general compensation section, nor as a power to award punitive damages to the other party, nor is it a form of contempt power. Therefore, the costs awarded should logically bear some relationship to the costs incurred by the recipient party as a result of the unreasonable behaviour of the party ordered to pay costs.

[26] Absent the trial judge's decision to make a punitive order, the amount of costs in this case would have been around $375.00. The respondent was represented by a paralegal, but there is no estimate from him as to the amount of his fees. The trial was brief. Even if elevated costs were warranted here, there is no principled basis on which the trial judge arrived at the sum he did. Therefore, even if I had not reached the conclusion I did on the merits of the appeal, I would have set aside the costs award.

Conclusion

[27] The appeal is allowed, and the judgment of the trial judge is set aside. The appellant shall have judgment against the respondent for $1,979.50 plus pre- and post-judgment interest at the percentages awarded in the Small Claims Court. The appellant shall also have costs of the appeal in the amount of $1,000.00.

[28] The monies paid into court to the credit of this appeal by order of Ferrier J. ($3,779.00 plus any interest) shall be paid out to the appellant.

Swinton J.

DATE: January 4, 2010