CITATION: Ontario Football Conference v. Brampton Minor Football Association, 2020 ONSC 1061
COURT FILE NO.: DC-18-0050-00
DATE: 2020 02 20
ONTARIO SUPERIOR COURT OF JUSTICE – DIVISIONAL COURT
RE: Ontario Football Conference, Plaintiff (Respondent, Cross-Appellant)
AND:
Brampton Minor Football Association, Defendant (Appellant, Respondent to Cross-Appeal)
AND:
Ian Smith, Defendant (Respondent, Cross-Appellant)
BEFORE: Conlan J.
COUNSEL: David J. McGhee, Counsel for the Ontario Football Conference, Plaintiff (Respondent, Cross-Appellant)
Sean Carter, Counsel for the Brampton Minor Football Association, Defendant (Appellant, Respondent to Cross-Appeal)
Steven K. Stauffer, Counsel for Ian Smith, Defendant (Respondent, Cross-Appellant)
HEARD: February 14, 2020
APPEAL BOOK ENDORSEMENT
I. Introduction
The Nature of this Proceeding
[1] The Defendant, Brampton Minor Football Association (“BMFA”), appeals to the Divisional Court from the Judgment (a final order) of the Honourable Deputy Judge of the Small Claims Court dated May 22, 2018.
[2] Although the Notice of Appeal seeks other relief, in oral argument at Brampton on February 14, 2020, counsel for the BMFA clarified that the remedy sought is a new trial.
[3] This is a relatively rare instance where the other two parties to the litigation, (i) the Plaintiff, Ontario Football Conference (“OFC”), and (ii) the added Defendant or Third Party, Ian Smith (“Smith), also agree that the Judgment cannot stand, though for different reasons than those advanced by the BMFA. The OFC and Smith have both cross-appealed on the issue of costs in the Court below.
The Nature of the Litigation
[4] In July 2015, the OFC sued the BMFA in Small Claims Court. The OFC sought damages in the amount of $25,000.00, plus interest and costs. The substance of the Claim was that the BMFA owed money to the OFC on account of unpaid fees.
[5] The BMFA defended the action and raised several arguments including that any alleged debt owed to the OFC was not the responsibility of the BMFA because it was incurred by a separate legal entity, the Brampton Bears (“Bears”), a football club.
[6] The BMFA also issued its own Defendant’s Claim against Smith (“Third Party Claim”). The BMFA sought full contribution and indemnity from Smith in the event that the BMFA was found liable in conjunction with the OFC’s Claim. The crux of the Third Party Claim on behalf of the BMFA was an allegation that Smith, as an officer of the BMFA, had exceeded his authority in guaranteeing that the BMFA would be responsible for paying the debt owed by the Bears.
[7] Smith defended the Third Party Claim and denied any wrongdoing.
The Trial in the Small Claims Court
[8] The Trial in the Small Claims Court in Brampton took place over four non-consecutive days commencing November 28, 2016 and ending almost one year later on November 8, 2017. All three parties were represented by counsel. According to the transcripts, 16 exhibits were filed, and well more than ten witnesses testified.
[9] The subject matter of the trial was advertised by all concerned to be an important matter for minor football across Ontario. The trial was hard-fought and raised numerous factual and legal issues that the Deputy Judge had to wrestle with.
[10] Not surprisingly, therefore, at the conclusion of the trial, the Deputy Judge requested that each party file written submissions in closing argument. All three parties did so.
The Judgment in the Court Below
[11] The Deputy Judge, several months after the conclusion of the trial, on May 22, 2018, released a handwritten Endorsement. The parties have kindly reduced that to a typed version which is just shy of 1.5 pages in length.
[12] The Deputy Judge’s Endorsement opens with this paragraph: “[a]t the close of trial, I asked for written submissions. I appear to have submissions from the Plaintiff Ontario Football (OFC) and the added defendants from Smith (Smith) but not Brampton Minor Football Association (BMFA)”.
[13] On the next page of the typed version, the Endorsement closes with this paragraph: “[i]n light of all the circumstances, I grant judgment for the Plaintiff as against the defendant BMFA in the amount of $25,000. Given the crippling nature of this judgment on the football club, and the fact that I have no information if the Club had directors and officers insurance to indemnify them against the action of Smith while President, I decline to award interest or costs”.
The Grounds of Appeal
[14] The BMFA argues that the Deputy Judge (i) denied it procedural fairness and natural justice in deciding the case in the absence of considering its lengthy written closing submissions dated December 20, 2017 and (ii) delivered insufficient reasons.
[15] Although the Notice of Appeal raises other grounds, counsel for the BMFA in oral submissions in this Court narrowed the argument to the two points outlined above.
[16] Interestingly, the OFC and Smith also argue that they were denied procedural fairness and natural justice in that they, though completely successful at trial, were deprived of any costs and any opportunity to address costs.
The Appeal Hearing
[17] The Appeal was heard in Brampton in about one hour of Court time on February 14, 2020. I am indebted to all counsel, Mr. Carter for the BMFA, Mr. McGhee for the OFC, and Mr. Stauffer for Smith, for their professionalism and candour in Court and for their very helpful written materials filed on behalf of their respective clients.
II. Analysis
[18] With much respect for the Deputy Judge, and acknowledging the indispensable service of all Small Claims Court judges who face voluminous dockets every day in this Province, the Appeal must be allowed. A new trial must occur. The Judgment simply cannot stand.
Denial of Procedural Fairness
[19] There is no question that the BMFA, through its counsel, filed lengthy written closing submissions well in advance of the Deputy Judge deciding the case.
[20] There is no question that those closing submissions were not considered by the Deputy Judge. They were, in fact, not read at all.
[21] I repeat, there is no question that the unsuccessful party, the BMFA, had none of its closing argument on any of the issues to be decided considered in any way before it lost the case entirely.
[22] This was not a short trial. It was also not a simple trial. The closing submissions on behalf of the BMFA were dense and included references to transcripts, exhibits, jurisprudence, and complex legal issues. None of that was considered by the Deputy Judge.
[23] The fundamental principles associated with the administration of justice and civil procedure include the need to ensure that justice not only be done but be seen to be done, following a procedure that is just and fair. The duty of procedural fairness requires that litigants have the opportunity to present their case fully and fairly. Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817 (S.C.C.), at paragraph 28; Ariston Realty Corp. v. Elcarim Inc., [2007] O.J. No. 1497 (S.C.J.), at paragraph 29.
[24] None of us really knows what happened here. It was, undoubtedly, an innocent mishap that may have been contributed to by the manner in which the BMFA’s closing submissions were filed, or an incorrect court file number attached to those submissions, or something else. It matters not. Though entirely unintentional, there was a clear and serious denial of procedural fairness.
[25] Any reasonable observer would lose confidence in the administration of justice if she was told that a losing party, following a lengthy and complicated trial, had its entire closing argument go unread before the trier of fact ruled against that party.
[26] The Deputy Judge did the honourable thing in trying to correct the situation. About two months after the Judgment was rendered, on July 13, 2018, the Deputy Judge released a six-line handwritten Endorsement saying, in part, “[h]aving reviewed the submissions [those of the BMFA, dated December 2017] I decline to change my decision”.
[27] Assuming without deciding that the Deputy Judge could have changed the decision, the said Endorsement does little to nothing to cure the denial of procedural fairness.
[28] The Appeal by the BMFA must be granted on this ground alone.
[29] If not for the need for a new trial, the Cross-Appeals by the OFC and Smith would also have had to be granted on this ground alone. They were entirely successful at trial and presumed to be entitled to some costs. They were denied any costs. The OFC was further denied any interest on its Judgment. Those decisions were made without any opportunity for the parties to say anything about costs and/or interest. Those decisions were made even though the Deputy Judge had stated on the record earlier that “I’ll render the decision and then invite submissions on the costs” (see the transcript excerpt at tab 4 of the OFC’s Appeal Book & Compendium). Finally, those decisions were made for reasons that are unclear to me. The issue of officers’ and directors’ insurance was irrelevant as the Judgment for $25,000.00 was against the BMFA and not against any individual officer or director. And the ability of the BMFA to pay the Judgment and any costs that would be awarded was only one factor to consider on quantum of costs.
Insufficiency of Reasons
[30] The BMFA’s Appeal must be granted on this ground as well.
[31] It is trite law that the reasons for any decision are not to be judged by their length or on a standard of perfection. They need simply be adequate and provide for meaningful appellate review. As the OFC submits at paragraph 25 of its factum, the reasons need only be “sufficiently clear in the context of the pleadings, issues, evidence and submissions”.
[32] I have read the brief Endorsement of the Deputy Judge, dated May 22, 2018, several times. From the reasons given, with much respect for the Deputy Judge, I simply cannot understand why the case was decided the way that it was.
[33] In the said Endorsement, the Deputy Judge identities the key issue as whether the Bears were a stand-alone entity. There is then a more lengthy paragraph that seems to imply that the answer is yes, the Bears are indeed a stand-alone entity, although there exists a “number of commonalities between the two entities”, the two separate entities being the Bears and the BMFA.
[34] As the Deputy Judge observes, “[l]ines are blurred” between the two entities, and “it is simply not plausible to assert that BMFA was unfamiliar with what either Smith or the Bears were doing”.
[35] The penultimate finding by the Deputy Judge is that “the Bears/BMFA operated under what can only be seen as a joint endeavour”.
[36] Understood, but why is the BMFA legally responsible for the Bears’ unpaid fees? Other than through conclusory remarks (“Smith represented that BMFA would be responsible”; and “the Plaintiff had already relied on Smith’s representations and assurances, as President of the Board of BMFA”), the Deputy Judge never deals adequately with the whole legal basis for the Claim by the OFC as expressed at paragraph 29 of its pleading – that Smith held out to the OFC that he had authority to bind the BMFA as being liable to pay the Bears’ fees specifically, and that the OFC reasonably relied on that, and that, therefore, the BMFA is legally responsible for the Bears’ debt.
[37] Looking at the Deputy Judge’s Endorsement as a whole, there is no discernible pathway in the reasons to the conclusion that the BMFA, while separate from the Bears, is responsible in law to pay the Bears’ fees owing to the OFC.
[38] In addition, the Endorsement leaves the reader wondering what happened with the Third Party Claim. There is no express disposition of it, whether allowed or dismissed. More important, the comments of the Deputy Judge suggest that there was assumed to be a requirement that Smith intentionally and knowingly acted beyond his authority with the BMFA. The Deputy Judge makes comments like “[i]t is not implausible in the circumstances that Smith was mistaken and acted beyond his jurisdiction as President of BMFA”, but “he believed he was acting as President of BMFA”, and regardless “[n]othing in the evidence suggests Smith ever intended to take on the Bears or other liabilities (or profits for that matter) personally”.
[39] With much respect for the Deputy Judge, there was no requirement that Smith intentionally and knowingly acted beyond his authority. The principal basis for the Third Party Claim, as drafted, was that Smith simply did in fact exceed his authority.
[40] Further, there was never any requirement that Smith intended to be personally liable for the Bears’ debt. That was irrelevant to both the Claim and the Third Party Claim.
[41] Given the reasons as they are, I am not able to determine whether the Deputy Judge erred in the conclusions that were reached, both with regard to the Claim and the Third Party Claim. The reasons are not capable of meaningful appellate review. They are, in my opinion, insufficient in these circumstances.
III. Conclusion
[42] For all of the aforementioned reasons, the Appeal is allowed. A new trial is ordered.
[43] I know that this is not the ideal result because of the time and expense involved in having another trial. To try to help the parties streamline the process, I would offer to case manage the file and direct an expedited trial to take place before the Superior Court of Justice. I am not sure, however, if I have the authority to do that. I would welcome the thoughts of counsel on that. A teleconference could be arranged through the trial office in either Brampton (where this file is currently) or Milton (where I customarily sit). I leave that offer with counsel.
[44] For the costs of this Appeal, I will entertain submissions but not in writing. Written submissions would be too expensive and too time-consuming for the parties. We will do it by a recorded teleconference with counsel. That can be arranged as outlined above.
[45] I thank all counsel for their able assistance with this matter.
Conlan J.
Date: February 20, 2020