CITATION: Pond v. Taylor, 2020 ONSC 7765
COURT FILE NO.: DC-17-90-00
DATE: 20201214
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
RIO LANCEY POND
W.G. Punnett, for the Appellant
Appellant
- and -
MELINDA TAYLOR
M. Grossman, for the Respondent
Respondent
HEARD: October 9, 2020, at Brampton
REASONS FOR JUDGMENT
[On appeal from a Decision of Deputy Judge Twohig of the Small Claims Court at Brampton dated June 30, 2017]
ANDRÉ J.
[1] The Appellant, Rio Lancey Pond, appeals the June 30, 2017 decision of Small Claims Court Deputy Judge Twohig granting judgment to the Respondent, Melinda Taylor, in the amount of $25,000 with costs of $3,750 and disbursements of $175. The Appellant submits that Deputy Judge Twohig erred by failing to take into consideration evidence that he repaid part of the money he owed to the Respondent.
SUMMARY OF THE EVIDENCE
[2] The Respondent sued the Appellant to recover monies she claimed the Appellant owed her while they lived together from March 2011 to July 7, 2012. She claimed the following: $8,000 for general, special, and punitive damages based on the tort of assault and battery; $22,082.92 for money she loaned the Appellant’s business; a further $10,536.73 she loaned him for his personal expenses; and, $3,005 for belongings left at his residence. She waived the excess over $25,000 to bring her claim within the jurisdiction of the court: Reasons for Judgment, dated June 30, 2017. The Appellant brought a claim against the Respondent to recover $25,000 which he claimed she owed him for living expenses, for money she took from him and for money he gave her.
[3] The Respondent experienced financial difficulty and filed a consumer proposal under the Bankruptcy and Insolvency Act on September 12, 2013 indicating that she owed $26,755. The trustee in bankruptcy accepted her proposal to repay $9,000 in full satisfaction of her debts. The Respondent also initiated a Small Claims action on March 11, 2013, to recover the money which the Appellant owed her. She sued him for a total amount of $25,000 but, reduced the amount claimed to $22,305.00.
POSITION OF THE APPELLANT
[4] The Appellant submits that the trial judge erred in ruling that he owed the Respondent $25,000, given the following evidence:
(1) The Respondent reduced her claim to $22,305.00.
(2) The trial judge did not give the Appellant credit for the following:
a) $1,371 he paid to the Respondent for car payments and expenses after they separated;
b) The Respondent’s admission that she used the Appellant’s bank card following separation in the amount of $200;
c) The Respondent’s testimony that she charged the Appellant for her son’s dental expenses in the amounts of $197 and $188.70 for a total of $385.70;
d) The Respondent’s testimony that she used the Appellant’s bank card to withdraw $200 from his account;
e) The Appellant made five car payments of $240 each for the Respondent’s car, or $1,200 in total;
f) The Respondent admitted that she charged the Appellant $415 for garbage collection fees at her former residence;
g) The trial judge therefore erred in not giving the Appellant credit for the following amounts which the Respondent admitted to during the trial:
i) car payments in the amount of $1,200
ii) debit card use $ 200
iii) payment of garbage bill $ 415
iv) oil cost $ 450
v) dental payments $ 385.70
TOTAL $2,543.70
h) The Respondent made a consumer proposal to pay one third of the total debts of $27,000 which she owed her creditors, a proposal that was accepted by the trustee. However, she never identified the Appellant as owing her any money.
RESPONDENT’S POSITION
[5] The Respondent submits that following:
(1) The trial judge accepted the Respondent’s trial testimony that she loaned the Appellant $22,082.92 for his business and $10,536.72 for his personal use, at a total of $32,619.65. She also found that the Appellant only repaid $2,013 of the money loaned to him.
(2) Even if the appeals court finds that the learned trial judge should have given the Appellant credit for an additional $2,543.70 that he claims, and the appeals court deducts that amount from the $28,619.50 owed to the Respondent, the Appellant would still have owed the Respondent $26,075.80. This amount therefore justifies the learned Small Claims Court judge’s decision that the total amount which the Appellant owed to the Respondent was $25,000. The Respondent repeatedly testified that her claim was not limited to $22,082.92: Transcript of the Evidence dated October 20, 2016, at pp. 11, 13, 19, 37, 39.
(3) The Appellant’s obligation to repay the Respondent should not be reduced by reason of the compromise the Respondent reached with the trustee. The Respondent’s failure to reveal her contingent asset, namely her lawsuit against the Appellant, to her creditors is irrelevant to her claim against the Appellant.
FINDINGS OF THE TRIAL JUDGE
[6] Deputy Judge Twohig found as a fact, based on the Respondent’s testimony and admissions made by the Appellant, that the Respondent advanced $30,633.11 to the Appellant with the expectation of repayment: Reasons for Judgment, at para. 35. She also found that the Appellant repaid $2,013.00 of this amount, leaving a balance of $28,619.50.
[7] At para. 5 of her Reasons for Judgment, Deputy Judge Twohig found that during their cohabitation, the Respondent contributed the sum of $42,929.65 towards the living expenses of the Appellant, Respondent, and three children while the Respondent contributed $7,788.57. Even if the Appellant had received credit for the $8,000 rent which he claims that he did not receive credit for from the trial judge, he would still have owed her in excess of $25,000.
[8] In response to the Appellant’s claims that the Respondent owed him $25,000 for rent and living expenses, Deputy Judge Twohig noted the following at paras. 37-44:
Mr. Pond alleges in relation to set off for debts that he and Ms. Taylor had a verbal agreement whereby she would pay half of the rent and all living expenses and that she breached the agreement by failing to pay her share. In order to establish an oral contract for the payment of rent and living expenses, the party alleging the contract must prove on a balance of probabilities that the parties intended to create legal relations, that they agreed on the essential terms of the contract and that the terms were clear and certain.
In this case, Ms. Taylor’s evidence was that she agreed to pay half the rent and that she and Mr. Pond would both contribute to household expenses according to their means. Mr. Pond’s evidence was that before Ms. Taylor moved in with him, they each agreed to pay half of the rent and household expenses.
Ms. Taylor did not know how much the rent was each month. Mr. Pond testified that the rent was $1100 per month, but he did not produce any evidence of a lease or any receipts of statements showing the amount of rent paid, nor did he produce any evidence that Ms. Taylor failed to pay her share of rent.
I find that Ms. Taylor and Mr. Pond had a general understanding that each would contribute to the rent, but this did not rise to the level of an enforceable legal contract as the essential terms were not clear and certain.
Furthermore, Mr. Pond has not discharged his onus of proving on a balance of probabilities that Ms. Taylor owed him rent.
I find that Mr. Pond has also failed to prove a legally enforceable oral contract regarding the payment of household or living expenses. The parties were certainly not of one mind as to the arrangement. Ms. Taylor thought she and Mr. Pond had, at best, an informal agreement to share expenses from time to time according to their means. Mr. Pond believed they had agreed to share expenses equally, but again, he made no list of expenses to be shared, kept no accounts, rendered no invoices and gave no notice of default. Ms. Taylor and Mr. Pond had very different expectations of how expenses were to be shared. It is not for the court to fashion a contract for the parties: see Brownlee v. Kashin, 2015 ONSC 1035 at paras. 43-52 and authorities cited therein.
I note that in written submissions, Mr. Pond claims that Ms. Taylor owes $300 per month for board for her son while he was living at Mr. Pond’s house. There was no evidence of any agreement or expectation by Ms. Taylor that she would pay board for her son, nor was there any evidence that Mr. Pond had incurred expenses specifically for Ms. Taylor’s son.
It find that Ms. Taylor did not owe Mr. Pond any money for rent or living expenses at the time their relationship ended on July 7, 2012. There was no written or verbal contract regarding the payment of these expenses and both parties had a different understanding of the arrangement. However, they had both hoped their relationship would become more permanent and they each contributed to the rent and living expenses by making payments to third parties and by transferring money to each other at different times. They accepted the risks and benefits of this arrangement. Mr. Pond has not proven that Ms. Taylor was indebted to him for living expenses, …
[9] The Judge also concluded at para. 55, after analyzing the evidence of both parties, that $2,013 of the $30,633.11 loaned to or for the benefit of PRSS had been repaid, leaving a balance of $28,619.50.
ANALYSIS
[10] This appeal raises the following issues:
(1) What is the standard of appellate review?
(2) Did the Deputy Judge err by awarding the Respondent damages in excess of the $22,082.92 she claimed?
(3) Did the Deputy Judge err by failing to give the Appellant credit for the Respondent’s use of his credit card after the parties separated?
(4) Should the Respondent’s claim against the Appellant have been reduced on account of the agreements he made with her creditors?
ISSUE ONE: What is the standard of appellate review?
[11] The standard of review to apply to a decision of the Small Claims Court is determined by the principles outlined by the Supreme Court of Canada in Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33.
[12] On pure questions of law, the standard of review is correctness. Findings of fact or mixed law and fact, including inferences drawn by the learned trial judge based on the facts before him or her, are reviewable only for “palpable and overriding errors”. A “palpable and overriding error” is one that is clear to the mind or plain to see”. The error must be “so obvious that it can easily be seen or known”: Housen, at para. 5.
[13] Appellate courts must treat a trial judge’s findings of fact with great deference. The purpose of the appellate level courts is to provide a litigant with the ability to have an arguable ground of appeal reviewed. An appellate court is prohibited “from reviewing a trial judge’s decision if there was some evidence upon which he or she could have relied to reach that conclusion”: Housen, at para. 1.
ISSUE TWO: Decision to award damages in excess of the $22,082.92 claimed by the Respondent.
[14] The Respondent repeatedly testified that her claim against the Appellant exceeded $22,082.92. There is no suggestion that the Appellant was either misled or prejudiced by the Respondent’s testimony about the amount of money she was claiming from the Appellant. Given the fact that there was some evidence that supported the trial judge’s finding that the total amount owed to the Respondent was $25,000, this ground of appeal is dismissed.
ISSUE THREE: Did the Deputy Judge err by failing to give the Appellant credit for the Respondent’s use of his credit card after the parties separated?
[15] The trial judge made a factual finding that the Appellant had repaid $2,013 to the Respondent rather than a total of $3,771.70 that the Appellant claims.
[16] Even if the trial judge had given the Appellant an additional credit of $1,758.70, the amount owed to the Respondent would still have exceeded $25,000. To that extent, the trial judge did not err in finding that the amount owed by the Appellant to the Respondent is $25,000.
ISSUE FOUR: Should the Respondent’s claim against the Appellant have been reduced on account of the agreement she made with her creditors?
[17] The Appellant submits that he should only have been ordered to pay one third of any debt found that he owed to the Respondent because of the debt repayment arrangement she made with her creditors. However, the Respondent gave uncontradicted evidence that she advised the trustee in bankruptcy that the Respondent owed her more than $32,000: Transcript of the Evidence, October 16, 2016, at pp. 5-6. It was therefore within the discretion of the trustee to accept or reject the Respondent’s offer to repay only one third of the cumulative debt she owed to her creditors. The fact that the Respondent made this arrangement with the trustee had no bearing on the case before Deputy Judge Twohig. Furthermore, it would be unfair to reduce any indebtedness which the Appellant has to the Respondent given the latter’s testimony that the Appellant’s failure to honour his debt to her caused the financial difficulties she experienced. Reducing the Appellant’s indebtedness to her by two thirds or any other amount would be tantamount to rewarding him for his failure to honour his debt to her. For these reasons, this ground of appeal must be dismissed.
[18] Additionally, Deputy Judge Twohig relied on the following passage in K.M.J. v. J.H.D.N., 2014 BCSC 1895, at paras. 150-51, concerning the effect of a consumer proposal on family debt, to conclude that the Appellant’s debt to the Respondent should not be reduced by 60%:
There are potential financial and other related consequences that flow from the fact of the proposal and additional consequences if [the parties who made the proposal] defaults. These include negative impact on credit rating. If [the party] defaults on the proposal terms, it can be annulled and the creditors are at liberty to pursue collection of what they are owed. The [opposing party] is not exposed to these consequences or risks.
The reduction in the debt … is a contingent reduction. In my view, the value of the debt has not therefore changed.
[19] Based on this decision, Deputy Judge Twohig concluded at para. 58 that the value of the Appellant’s debt to the Respondent should not be changed. I find no error in this decision.
CONCLUSION
[20] The appeal is dismissed.
COSTS
[21] The Appellant seeks costs, disbursements, and HST in the amount of $11,760.33 on a partial indemnity basis and $16,648.71 on a substantial indemnity basis, while the Respondent seeks costs of $5,039.44 inclusive, presumably on a partial indemnity basis.
[22] In assessing what amount of costs are fair and reasonable in this matter, I take the following factors into consideration:
a) The Respondent was substantially successful in the appeal;
b) The appeal was not complex and was substantially based on a challenge of the trial judge’s factual findings;
c) There was no step in the proceeding that was improper, vexatious, unnecessary or taken through negligence, mistake or excessive caution; and,
d) The Respondent’s counsel has been in practice since 1983 and his hourly rate of $450 is not unreasonable.
[23] Based on these factors, I find that costs fixed in the amount of $4,000 inclusive are fair and reasonable in this matter.
[24] Order to go that the Appellant pay costs, fixed in the amount of $4,000 inclusive, to the Respondent within ninety (90) days of today’s date.
André J.
Released: December 14, 2020
CITATION: Pond v. Taylor, 2020 ONSC 7765
COURT FILE NO.: DC-17-90-00
DATE: 20201214
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
RIO LANCEY POND
Appellant
- and –
MELINDA TAYLOR
Respondent
REASONS FOR JUDGMENT
ANDRÉ J.
Released: December 14, 2020