CITATION: Bennett v. Fresh Air Inc., 2019 ONSC 3469
DIVISIONAL COURT FILE NO.: DC-17-009
DATE: 2019-06-05
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
TAYLER BENNETT
Self-represented, Plaintiff (Appellant)
Plaintiff (Appellant)
- and -
FRESH AIR INC.
Mr. G. Freitag, for the Defendant (Respondent)
Defendant (Respondent)
HEARD: May 24, 2019
Madam Justice H.M. Pierce
Reasons for Appeal
Introduction
[1] The appellant, Tayler Bennett, appeals the Small Claims Court decision of Deputy Judge R. A. Evans dated October 20, 2017. Both parties were self-represented at trial. At the close of the appeal, the respondent’s name was amended, nunc pro tunc, to “Fresh Air Inc.”
[2] The appellant entered into an agreement to purchase a bicycle from the respondent, which operates a business in the City of Thunder Bay. The respondent sells and services bicycles and deals in other sporting goods.
[3] At trial, the appellant contended that the contract between the parties was reduced to writing and signed by both parties but that the signed version had been lost. The Deputy Judge found that there was an oral agreement.
[4] The appellant purchased the bicycle on November 1, 2014. The purchase price was never disclosed at trial.
[5] No issue arose at trial with respect to the purchase of the bicycle itself. The bicycle remains in the appellant’s possession. He rode it once in the three year interval between purchase and trial.
[6] The appellant raised issues over the frequency and extent of free lifetime tune-ups and the discount applicable to the purchase of certain bicycle accessories, both of which he alleged were part of the transaction. The appellant sued the defendant for breach of contract, seeking damages of $9,096.89, a sum which included HST.
[7] After hearing testimony and considering the documentary evidence, the Deputy Judge gave the following judgment in favour of the plaintiff:
The Defendant [Fresh Air Inc.] shall provide the Plaintiff with a 15% discount from the in-store price (further reduced in the case of items already discounted) for bicycle accessory products until (and including) Nov. 30, 2017.
One full [sic] annual tune-up (not “pit stop” tune up) for the bicycle which he purchased, for the life cycle of the bicycle, shall be provided at no charge by the Defendant to the Plaintiff (This does not include providing free labour/materials for work recommended above and beyond a “full tune up”).
The Defendant shall give the Plaintiff, at no cost, one 4-pack of SRAM Powerlinks.
Alternatively, the Plaintiff may return the bicycle to the store, on or before November 10, 2017, without having used it in the interim period, and in good and complete repair, as would be fitting for a once-ridden bicycle, for a full refund of the purchase price.
Issues on Appeal
[8] The appellant submits that the Deputy Judge made the following errors:
The Small Claims Court judge erred in law by ordering specific performance or rescission for which the Small Claims Court has no jurisdiction and which are unsuitable remedies on the facts.
The Deputy Judge erred in law in finding that the respondent had not engaged in unfair business practices pursuant to the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A.
The Deputy Judge erred in finding as a fact that the respondent’s obligation to service the appellant’s bike was limited to once per year when there was evidence to the contrary.
The Deputy Judge erred in fact and law by failing to award costs in her judgment.
[9] Mr. Bennett asks that this court set aside the judgment of the Small Claims Court and award him damages of $9,096.89 plus “costs and disbursements incurred directly or indirectly on a substantial or alternatively full indemnity basis, as a result of the trial and proceedings following.”
Equitable Relief
[10] Did the Deputy Judge err in ordering specific performance or rescission at the appellant’s discretion?
[11] On appeal, the standard of review for a pure question of law is correctness: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8. Jurisdiction is an example of a pure question of law. A trial judge must correctly determine his or her jurisdiction failing which the reviewing court may substitute its decision for that of the trial judge. There is a low degree of deference afforded the trial court when it is incorrect in law about its jurisdiction.
[12] The Small Claims Court derives its jurisdiction from s. 23 of the Courts of Justice Act, R.S.O. 1990, c. C.43, which reads as follows:
Jurisdiction
23 (1) The Small Claims Court,
(a) has jurisdiction in any action for the payment of money where the amount claimed does not exceed the prescribed amount exclusive of interest and costs; and
(b) has jurisdiction in any action for the recovery of possession of personal property where the value of the property does not exceed the prescribed amount.
[13] The principal issue on this appeal is whether a Deputy Judge of the Small Claims Court has jurisdiction to order equitable relief in the nature of specific performance or rescission. Mr. Bennett states that he did not seek orders for either type of relief.
[14] The parties agree that, while the Small Claims Court can grant equitable relief within the scope of its statutory authority pursuant to s. 23 of the Courts of Justice Act, a Deputy Judge does not have jurisdiction to grant equitable relief outside the scope of s. 23 and, therefore, cannot grant specific performance or rescission, which is what occurred in this case. This became an issue after the trial judge released her decision.
[15] The appellant also submits that an order for equitable relief is unsuitable because he believes that the respondent will not perform vehicle maintenance to an acceptable standard. There is no evidence that the appellant presented his bicycle for a tune-up at the respondent’s shop or that he was refused service.
[16] The seminal case dealing with the Small Claims Court’s jurisdiction to order equitable relief is Grover v. Hodgins, 2011 ONCA 72, 103 O.R. (3d) 721. The case dealt with a claim for unjust enrichment. The appellants argued on appeal that the Small Claims Court judge had no jurisdiction to order damages for unjust enrichment. Epstein J.A. disagreed.
[17] In Grover, Epstein J.A. traced the legislative history of the Small Claims Court’s jurisdiction to award equitable relief within its monetary jurisdiction and considered various amendments to the Courts of Justice Act.
[18] At para. 29 of Grover, Epstein J.A. adopted Heeney J.’s reasoning in 936464 Ontario Ltd. v. Mungo Bear Ltd. (2003), 2003 72356 (ON SCDC), 74 O.R. (3d) 45. Heeney J. concluded that the term “any action” found in s. 23 of the Courts of Justice Act was broad enough to encompass both common law and equitable claims.
[19] Epstein J.A. observed, at para. 31:
It would be irrational for the legislators to give the Small Claims Court authorization to administer rules of equity and deal with claims in equity and then specifically preclude the court from granting any equitable relief. It only makes sense if the wording “where otherwise provided” in s. 96 (3) is interpreted to mean that the Small Claims Court is able to grant equitable relief within the limits of its jurisdiction set out in s. 23: namely, to order the payment of money or the return of personal property.
[20] At paras. 45-49 of Grover, Epstein J.A. considered the purpose of the Small Claims Court in relation to the scope of its jurisdiction. She commented that the court exists to decide disputes in a summary way under relaxed rules of evidence.
[21] At para. 49, she concluded:
It follows that the interpretation of the Courts of Justice Act provisions relevant to the jurisdiction of the Small Claims Court that is in keeping with the wording of the Act and is consistent with the intent of the legislature, apparent not only from the legislative amendments but also from the rationale behind establishing the court itself, is that the Small Claims Court has jurisdiction to award legal or equitable relief where the relief requested is a monetary payment under the limit of $25,000.00 or the return of personal property valued within that limit.
[22] Read closely, the decision in Grover means that, in awarding equitable relief, the Small Claims Court must confine its awards to money judgments or the return of property within its $25,000.00 monetary jurisdiction.
[23] Deputy Judge J.S. Winny also considered the nature of the Small Claims Court’s jurisdiction in Hradecky v. Hydro One Networks Inc. (2014), 238 A.C.W.S. (3d) 635 (Ont. Sm. Cl. Ct.). Hradecky concerned a Small Claims Court action where the plaintiff sought a declaratory judgment that his hydro bill was less than the amount claimed by the defendant.
[24] Deputy Judge Winny determined that the Small Claims Court had no jurisdiction to issue declaratory relief because it was not relief in the form of money damages. The action was stayed.
[25] Citing Grover, Deputy Judge Winny observed that the Small Claims Court does not share the Superior Court of Justice’s general and inherent jurisdiction: at para. 13. He reasoned, at para. 14:
Section 96(3) [of the Courts of Justice Act] provides that the Small Claims Court cannot grant equitable relief, unless otherwise provided. This means that while as a general proposition the Small Claims Court applies the rules of law and equity concurrently under s. 96 (1), it cannot entertain claims arising in equity unless they are claims falling within its jurisdiction under s. 23 (1): see Hodgins v. Grover (2011), 2011 ONCA 72, 103 O.R. (3d) 721 (Ont. C.A.), leave to appeal denied (2012), [2011] S.C.C.A. No. 142 (S.C.C.).
[26] At paras. 15 and 22 of Hradecky, Deputy Judge Winny pointed out that the Small Claims Court also lacks jurisdiction to grant injunctive relief such as a mandatory order for publication of a retraction in a defamation case or for an accounting.
[27] It is apparent from these authorities that, unless the relief is expressed as a money judgment within the Small Claims Court’s jurisdiction or relates to the return of personal property, a Deputy Judge does not have jurisdiction to order other equitable remedies. Consequently, the trial judge erred in law by granting specific performance or rescission. The judgment for equitable relief is therefore without jurisdiction and is set aside.
Tune-ups
[28] The principal issue at trial was the number and extent of tune-ups the respondent was to provide to the appellant annually. The appellant submits that the Deputy Judge erred in finding that full tune-ups must be provided annually instead of six times a year. In interpreting the contract between the parties with respect to tune-ups, the Deputy Judge engaged in fact-finding.
[29] Apart from the jurisdictional error, the appellant argues that the trial judge made errors in fact-finding, specifically with respect to the frequency of tune-ups, and asks for a money judgment of $9,096.89 in lieu of specific performance. It is also convenient to deal with this ground of appeal for the appellant’s information.
[30] Before a reviewing court overturns findings of fact made by a trial court, it must be satisfied that the trial judge made a palpable and overriding error: Housen, at para. 10. As Iacobucci and Major JJ. explain, fact-finding by a trial judge attracts a high degree of deference: Housen, at para. 10.
[31] The trial judge can and does weigh evidence heard at trial, assessing credibility, conflicts or gaps in evidence, and other factors. She may accept some, all, or none of a witness’ evidence. In this case, the Deputy Judge did not agree that the appellant’s bicycle required six tune-ups per year.
[32] The Deputy Judge found as a fact that the appellant rode the bicycle only once between the date of purchase and trial, a period of three years. She found that the appellant had stored the bicycle while the matter was ongoing. There was no palpable or overriding error in that finding.
[33] The appellant alleges that a term of the contract was that the respondent would service his bicycle six times a year at no cost for the life of the bicycle. He testified about costs for tune-ups at other bike shops. This evidence was hearsay. It was also irrelevant. What was relevant was the cost of a full tune-up at the respondent’s shop. However, there was no evidence adduced by either party at trial as to the cost of a full tune-up performed by the respondent.
[34] The onus is on the plaintiff to prove his damages. He has not done so. He had the bicycle in his possession for three years to the date of trial but only rode it once. There is no evidence that he presented it for a tune-up at the defendant’s shop or at any other bike shop during that time. Consequently, there is no evidence that the respondent breached the contract for tune-ups upon which a money judgment could rest.
Discounted Merchandise
[35] The Deputy Judge delivered judgment following trial on October 20, 2017. She ordered that the appellant was entitled to purchase discounted bicycle accessories, discounted by 15 percent to and including November 30, 2017. She also ordered the respondent to deliver to the appellant one four-pack of SRAM Powerlinks.
[36] For the reasons set out above, the Small Claims Court has no jurisdiction to order specific performance. If specific performance is not available as a remedy, it is not possible to quantify what is in effect a hypothetical: future bicycle accessories to be purchased by the appellant. This term of the judgment is not only without jurisdiction, but there is no evidence upon which the judgment can rest. It is unenforceable.
[37] However, the Deputy Judge determined that Powerlinks were valued at $4.99 each in a package of four or $19.96 in total. She accepted the respondent’s evidence at trial that it would give a package to the appellant.
[38] If the appellant had purchased this item in accordance with the parties’ agreement, it would have been discounted by 15 percent. The value of the Powerlinks would therefore be $19.96 minus 15 percent for a total of $16.97.
[39] Section 134(1) of the Courts of Justice Act provides that, unless otherwise provided, the court to which an appeal is taken may exercise the following powers on appeal:
(a) make any order or decision that ought to or could have been made by the court or tribunal appealed from;
(b) order a new trial;
(c) make any other order or decision that is considered just.
[40] I exercise this discretion under s. 134(1)(a): the appellant shall have judgment in the amount of $16.97 for the Powerlinks.
Unfair Business Practices
[41] On the evidence at trial, the Deputy Judge declined to find that the respondent had engaged in unfair business practices pursuant to the Consumer Protection Act, 2002. The appellant did not make submissions on appeal as to why this finding of fact amounted to a palpable and overriding error.
[42] Even if the evidence had warranted such a finding, this ground of appeal is without merit. For the reasons set out above, the Small Claims Court lacks jurisdiction to make a declaratory judgment.
Costs of the Trial
[43] As I have said, each party was self-represented at trial. Neither party requested costs in closing submissions or following judgment. The judgment is silent as to costs.
[44] Costs are in the discretion of the trial judge, and costs decisions are afforded a high degree of deference.
[45] The appellant contends that he was “fundamentally successful” at trial. I do not agree. The judgment has been set aside on appeal and is limited to judgment in the amount of $16.97. It is reasonable that there be no costs given the size of the recovery on appeal compared to the amount of the claim and the respondent’s proposal at trial concerning tune-ups and accessories.
Judgment
[46] For reasons set out above, the judgment of Deputy Judge R.A. Evans dated October 20, 2017, is set aside except for judgment to the appellant in the amount of $16.97.
[47] This ground for appeal is dismissed.
Costs on Appeal
[48] If the parties cannot agree on the costs of the appeal, either may apply to the trial coordinator within 30 days of the release of these reasons for an appointment to argue costs. Submissions are not to exceed five pages.
“original signed by”
The Hon. Madam Justice H.M. Pierce
Released: June 5, 2019
CITATION: Bennett v. Fresh Air Inc., 2017 ONSC 3469
DIVISIONAL COURT FILE NO.: DC-17-009
DATE: 2019-06-05
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
TAYLER BENNETT
Plaintiff (Appellant)
- and -
FRESH AIR INC.
Defendant (Respondent)
REASONS FOR APPEAL
Pierce J.
Released: June 5, 2019
/lvp