CITATION: Drizen v. Capital One Bank et al., 2024 ONSC 3402
COURT FILE NO.: DC-23-00000025-0000
DATE: 2024 06 21
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Kevin Drizen
Self Represented Applellant (Defendant)
Appellant
- and –
Capital One Bank (CANADA BRANCH)
Todd R. Christensen, for the Respondent (Plaintiff)
Respondent
HEARD: June 12, 2024 in person
REASONS FOR JUDGMENT
LeMay J.
[1] The Appellant, Mr. Kevin Drizen (“the Appellant) obtained a credit card from the Respondent, Capital One Bank (Canada Branch) (“the Respondent”). The Appellant made his last payment on the outstanding balance on the credit card in March of 2019. In January of 2021, the Respondent brought a claim in the Small Claims Court against the Appellant for the outstanding amount plus interest. The claim was not served in time, and the Respondent brought a motion to have the time for serving the Statement of Claim extended by the Court and to permit service by e-mail on the Respondent. That motion was granted by Kidd D.J. on November 4th, 2021.
[2] The Appellant then received the claim in November of 2021 and defended it. His defence to the claim is, essentially, that the claim was not brought within the limitations period as set out in the Limitations Act 2002, S.O. 2002, c. 24, Sch. B. Having reviewed the Statement of Claim, it does not appear to me that there was any other defence. In particular, there was no dispute over either the interest rate or the amount owing.
[3] The Respondents brought a motion to strike the Appellant’s Statement of Claim on the basis that there was no defence. The Appellant resisted this motion on the basis that the Respondent had improperly obtained the order to extend the time for service and had gone through various machinations in order to try and make it look like it was difficult to serve him with the Statement of Claim. This request was denied by Deputy Judge McLean and judgment was granted in the Respondent’s favour.
[4] At the conclusion of the hearing on June 12th, 2024, I advised that this appeal was being dismissed for written reasons to follow. These are those reasons.
Background
a) The Parties and the Action
[5] The Appellant is a businessperson who has lived at the same address in Halton Hills for the last twenty years. He owns and operates his own business and, according to his materials, has some experience with litigation.
[6] The Respondent is a finance company that is in the business of providing financial services to individuals and businesses. It is based in Toronto, is a Schedule “B” bank and is part of a multinational company.
[7] In September of 2016, the Appellant obtained a credit card from the Respondent. He last made a payment on that credit card in March of 2019, so any limitations period would have begun to run in April of 2019. As of May 22nd, 2019, the amount owing on the credit card was $2,980.32. The interest rate on the credit card was 19.8 percent per annum.
[8] The Respondent’s prepared a Statement of Claim in this matter in April of 2020, during the COVID pandemic. At that time, the limitations periods under the Limitations Act 2002 had been suspended by operation of Regulation 73/20. The suspension of the limitations period lasted until September 14th, 2020. The Statement of Claim was ultimately issued by the Court office in Milton in January of 2021. There is no dispute that the claim was issued within two-year limitations period under the Limitations Act 2002. Indeed, once the suspension of the limitations provisions is considered, the Statement of Claim could have been issued as late as October of 2021. I now turn to the events that are in dispute.
b) The Events Giving Rise to the Granting of the Respondent’s Claim
[9] The Respondent made numerous efforts to serve the Appellant during the time period between January of 2021 and November of 2021. Those efforts included sending a copy of the claim by Canada Post to the address where the Appellant lives in February of 2021. That document was returned by Canada Post in March of 2021 as unclaimed.
[10] After the Canada Post documentation was unclaimed, the Respondent had process servers make several efforts to serve the claim on the Appellant. Those efforts were carried out during April of 2021. They were not successful as no one answered the door.
[11] After these efforts were unsuccessful, the Respondent conducted further electronic searches to determine whether they had the right address for the Appellant. Those searches involved trying a number of iterations of the Appellant’s name. They all indicated that the Appellant lived at the address where the Respondent had been attempting to serve him.
[12] Ultimately, the Appellant brought a motion seeking both substituted service and an extension in the time limits for serving the Statement of Claim. That motion was brought ex parte, as the Appellant had not yet been served with the Statement of Claim. That motion was granted by Deputy Judge Kidd on November 4th, 2021. The Statement of Claim was then sent by mail to the Appellant.
[13] The Appellant served a Statement of Defence, which was largely focused on his assertions that the November 4th, 2021 motion was improperly brought and granted. It was his view that the claim had expired as a result of the limitations period. The Appellant took no steps to attempt to set aside the Order of Deputy Judge Kidd.
[14] The Respondent then brought a motion to have the Statement of Defence struck as disclosing no reasonable defence to the claim and granting judgment to the Respondent. This motion was heard by Deputy Judge McLean on April 4th, 2023. The motion was granted and judgment was given in favour of the Respondent on April 19th, 2023.
The Proceedings in Divisional Court
[15] The appeal has been perfected. This matter was originally listed for hearing during the week of April 2nd, 2024. On March 19th, 2024, the Appellant wrote to the Court office and sought an adjournment of the hearing on the basis of “a family health issue of the Appellant”. This request for an adjournment was consented to by the Respondent as long as the next date for hearing was marked as peremptory.
[16] Emery J. viewed the request as a reasonable one and noted that “[t]he appeal must be heard the next time up to provide finality to the parties one way or another.” The matter was adjourned to a date to be fixed by the trial coordinator. On April 15th, 2024, the Trial Office advised the parties by e-mail that the date fixed for the hearing was the week of June 10th, 2024 and that the parties were expected to be available for the entire week. The dates were peremptory on the Appellant. No issues in respect of the date were raised by any party at this point.
[17] On June 11th 2024 at around 2:45 p.m., the Trial Coordinator advised the parties that the appeal would be heard on June 12th, 2024. The Appellant advised that “we won’t be able to attend, we are dealing with a personal health issue.” The Respondent confirmed that it was not consenting to the adjournment.
[18] I was advised of this sequence of events, and directed the Trial Coordinator to advise the Appellant that the hearing would proceed on June 12th, 2024. The Appellant responded and advised that he was dealing with a personal health issue of his mother and would be unable to attend the hearing. No additional information was provided.
[19] On the day of the hearing, Respondent’s counsel attended. The Appellant did not attend, and I confirmed with the trial office that the Appellant had provided no further communications to the Court about his absence. As a result, I have a date that is peremptory on the Appellant and the Appellant has not attended and has not provided the Court with any documentation to support his request for an adjournment. Accordingly, the adjournment request was denied. The Respondents are entitled to have this matter adjudicated in a prompt fashion and the appeal has been before the Court for many months at this point.
[20] Since denying the Appellant’s adjournment request, the Court of Appeal’s decision in Glyco BioSciences Inc. v. Industria Farmaceutica Andromanco, S.A. 2024 ONCA 481 came to my attention. That was a motion heard June 11th, 2024, the day before this hearing was heard. The Appellant attended at that hearing with no issues. This raises questions for me about the legitimacy of the Appellant’s reasons for seeking an adjournment.
[21] We also waited at Court until 10:20 a.m. and paged the Appellant to the Court. He did not attend at Court and the Court has had no communication with him since the day before the appeal. However, I have a record that is sufficient for me to consider the merits of this appeal. In particular, I have both the Appellant’s factum and his arguments as made to the Deputy Judge below. As a result, as I indicated to counsel for the Respondent in Court, I was prepared to render a decision on this record rather than dismissing the appeal as abandoned.
Positions of the Parties
[22] In essence, the Appellant asserts that the appeal should be granted for the following reasons:
a. The argument that the Respondent had difficulty serving the Appellant is bogus, and this order was not within the authority of the Deputy Judge who made it.
b. The Respondent obtained the Order extending the time for serving the Statement of Claim beyond the limitations period.
c. Deputy Judge McLean erred in not reconsidering Deputy Judge Kidd’s order, or at least reviewing the facts underlying that order.
[23] The Respondent rejects all these arguments. Instead, the Respondent argues that Kidd D.J.’s interlocutory order granting substituted service and an extension of time for service was not subject to an appeal. The Respondent also argues that the limitation period is determined by when the claim is issued and not when it is served.
[24] The Appellant disagrees with the Respondent’s position. He argues that their position is, in essence, a claim that he could have challenged the order granting an extension of time at any point between when he received the Order on November 19th, 2021 and the hearing of the motion for judgment on April 4th, 2023 but did not do so. He argues that the Respondent took advantage of his failure to advance that argument in order to have his defence struck. The Appellant argues that this is a “got you” practice and should be discouraged by the Courts.
Analysis and Decision
[25] I begin by noting that the Rules of the Small Claims Court O. Reg. 258/98 are different from the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The Small Claims Rules contain the following provisions in respect of the service of plaintiff’s claims:
8.01 (1) A plaintiff’s claim or defendant’s claim (Form 7A or 10A) shall be served personally as provided in rule 8.02 or by an alternative to personal service as provided in rule 8.03. O. Reg. 258/98, r. 8.01 (1).
Time for Service of Claim
(2) A claim shall be served within six months after the date it is issued, but the court may extend the time for service, before or after the six months has elapsed.
[26] As a result, the default position for serving a Statement of Claim is by personal service. Alternatives to personal service are also permitted under Rule 8.03(2). However, those alternatives require either leaving the document with an adult member of the household or sending a copy by courier.
[27] In this case, the Respondent attempted to serve the Complainant by registered mail (which is a form of courier) and by personal service. Both methods were unsuccessful. The Respondent also made numerous efforts to demonstrate to the Court that they had the correct information for the Appellant. Those steps appear to be reasonable to me.
[28] I would also note that this is an appeal of a discretionary, facts-based order, and the standard that I should apply to the findings of both Kidd D.J. and McLean D.J. is quite high. Given my view that both D.J. Kidd and D.J. McLean were correct in their decisions and the fact (as set out at para. 33 below), that there is no appeal from an interlocutory order in any event, it is not necessary to resolve the issue of standard of review.
[29] I should also briefly address the Appellant’s assertion that a trial would have given him an opportunity to cross-examine the process servers and other Affiants about their efforts to serve the Statement of Claim on him. There are two problems with this argument. First, I do not see what cross-examination would have accomplished. The Appellant was not home and the door was not being answered when people attempted to serve him. Second, and more importantly, cross-examination on a motion such as this is neither necessary nor desireable. The question for the Deputy Judge to determine is whether it is reasonable to order substituted service and extend the time for service. Permitting cross-examination on an issue of this nature as a matter of course would be a waste of resources.
[30] This brings me to the Appellant’s final point on this submission. He argues that the Respondent made overly complicated efforts to serve him when it was clear that simply mailing the Statement of Claim to him would have resulted in him receiving it. Those allegedly overly complicated efforts include referring to him by multiple names and using A.K.A. in the searches for his address.
[31] There are three problems with this argument. First, simply mailing a copy of the Statement of Claim to the Appellant would not have been in accordance with the Small Claims Rules. Second, the Respondent had attempted to courier the claim to the Appellant by registered mail, but the Appellant never picked it up. This second point suggests that the Statement of Claim might not have come to the Appellant’s attention if it had been mailed to him without an order permitting the Respondent to do so. Finally, although the use of different iterations of the Appellant’s name was in the end not necessary, it was a reasonable precaution to take to ensure that the search for the Appellant was complete. As a result, there is no merit to the Appellant’s argument that the extension of time was sought on bogus grounds.
[32] This brings me to the Appellant’s second argument, which is that the Respondent obtained the Order beyond the limitations period. This argument can be briefly dealt with. Section 4 of the Limitations Act, 2002 states that a proceeding “shall not be commenced” after the second anniversary of the day on which the claim was discovered. The key word in the section is commenced. In this case, the claim was commenced well within the two-year period, even before the COVID delay is considered. As a result, this argument also has no merit.
[33] Finally, there is the argument that D.J. McLean erred by not reconsidering either the decision of D.J. Kidd or at least looking at the facts. This argument fails for two reasons. First, there is no appeal from an interlocutory order of a Deputy Judge. Courts of Justice Act, R.S.O. 1990, c. C.43 (section 31), Grainger v. Windsor-Essex Children’s Aid Society (2009) 2009 34987 (ON SC), 96 O.R. (3d) 711 It would be an abuse of process to permit the Appellant to challenge the decision of Kidd D.J. indirectly when he could not challenge it directly.
[34] Second, the Appellant had a method by which he could have challenged the decision of Kidd D.J. Where a motion is made without notice (as this one was), Rule 15.03(3) of the Small Claims Court Rules allows the other party to move to set aside the motion within thirty (30) days of receiving notice of the motion. The Appellant did not avail himself of that right.
[35] This brings me to the Appellant’s assertion that requiring him to move to set the Order aside would be “got you” litigation. I disagree with that assertion. Once the Appellant became aware of Kidd D.J.’s order in November of 2021, he was responsible for protecting his own rights. It is not up to the Respondent to tell him what those rights are. In this respect, the decision in Summit Leasing Corporation v. Westshore Towing Ltd, 2019 BCSC 1058 is of no assistance to the Appellant. Summit concerned a case about setting aside a noting in default. The legal principles cited in Summit have no application to this case.
[36] For these reasons, the Appellant’s appeal was dismissed.
Costs
[37] The Appellant did not attend at the hearing. The Respondent has filed a bill of costs and, after the appeal was dismissed orally, made submissions on costs. The Respondent asserts that costs should be paid on a full indemnity basis as the Appellant has been engaged in an abuse of process. The full indemnity costs in this case are $16,115.79 inclusive of HST and disbursements.
[38] The Respondent points to three facts supporting this submission. First, counsel directs my attention to a Statement of Claim that was issued by the Appellant on March 4th, 2020 and served on the Respondent shortly thereafter. I reach no final conclusion about that Statement of Claim, but it does appear to plead precisely the same facts as the facts forming the basis of this Appeal.
[39] Second, counsel directs my attention to the fact that the Appellant suggested that there be a global settlement of both his statement of claim and this appeal. Counsel suggests that the Appellant’s conduct, when taken as a whole, shows that he is engaged in an abuse of process. Counsel points to the decisions in Shier v. Fiume, (1991) 6 O.R. (3d) 759, 1991 7188 (Ont. Gen. Div.), Banihashem-Bakhtiari v. Axes Investments Inc (2004) 2004 36112 (ON CA), 69 O.R. (3d) 671, rev’g in part (2003) 2003 32527 (ON SC), 66 O.R. (3d) 284.
[40] Finally, counsel points to the fact that the Appellant was warned, in an email on March 21st, 2024, that the Respondent would be seeking its entire costs on the basis that this appeal was abusive. In support of this assertion, counsel directed the Appellant’s attention to the decision in Minniti v. Canadian Tire Bank 2018 ONSC 3106
[41] The decision in Shier stands for the proposition that a party who insists on their day in Court, even where they have a meritless case, should be required to indemnify the other party for their costs in responding to their intransigence. That line of reasoning found some support in the Banihashem decision.
[42] In respect of the Shier case, however, I would note that it speaks to awarding costs where the unsuccessful party had no arguable case. See also Doolittle v. Overbeek et. al. 2015 ONSC 719 at para. 101. In this case, the Appellant had arguments about the process of the Small Claims Court. While there was no merit to those arguments, it would be difficult to find that they were abusive.
[43] In Minitti, De Sa J. found that there was a difference between a party that had engaged in a misguided process and one who had engaged in an abusive process. He concluded that a party who had engaged in a process that was merely misguided should not face the “harsh” sanctions that a party who had engaged in an abuse of process should face.
[44] However, the facts of MInitti are also instructive. The appellant in that case was appealing an order requiring the payment of a credit card balance in the sum of approximately $20,000. The Court still ordered costs in the sum of $9,500. This was viewed as proportional to the amount that had been claimed.
[45] In this case, I am of the view that this appeal on its own was not abusive. The Appellant’s Statement of Claim, and any Rule 25 motion that the Respondent may bring in respect of that claim, are not before me. I expressly make no comment on whether the new Statement of Claim, when considered together with this appeal and its disimissal, might cause a Court to conclude that the Appellant’s new claim is an abuse of process.
[46] However, that does not end the matter. The Respondents direct my attention to the decision in Lahrkamp v. Metropolitan Toronto Condominium Corporation No. 932. That case was a motion for leave to appeal the costs award of a Deputy Judge. The value of the claim was $1,500.00, but there had been a 12 day trial at the Small Claims Court. In that case, the Defendants sought more than $150,000. In costs, but were awarded $15,000. The Plaintiff appealed that Order on the basis that it was not proportional to the amount in dispute. The Court denied leave to appeal on the basis that the Deputy Judge had considered the principle of proportionality.
[47] In this case, I acknowledge that I must consider the issue of proportionality in deciding the costs of this appeal. However, I must also consider the fact that the matter was moderately complex, the fact that the Appellant sought an adjournment and then failed to attend at the subsequent hearing, and the fact that (as counsel for the Respondent submitted), it was difficult to understand the basis for the Appellant’s position. It is also important to remember that the Respondent was entirely successful because this appeal had no merit whatsoever.
[48] Given all of these points, I am of the view that costs in the sum of $10,000 inclusive of HST and disbursements are to be paid by the Appellant to the Respondent. Given the delays in this case, the costs are to be paid forthwith after the release of these reasons.
Conclusion
[49] For the foregoing reasons, the appeal is dismissed.
[50] For clarity, I note that I see no reason to disturb the post-judgment interest rate as set by the Deputy Judge, and the judgment continues to accrue interest at that rate until it is paid.
[51] The costs of the appeal are fixed in the sum of $10,000.00 inclusive of HST and disbursements and are payable by the Appellant to the Respondent forthwith upon the release of these reasons.
[52] The Appellant’s approval as to the form and content of the order flowing from these reasons is dispensed with.
LeMay J.
Released: June 21, 2024
CITATION: Drizen v. Capital One Bank et al., 2024 ONSC 3402
COURT FILE NO.: DC-23-00000025-0000
DATE: 2024 06 21
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Kevin Drizen,
Appellant
- and –
Capital One Bank (CANADA BRANCH),
Respondent
REASONS FOR JUDGMENT
LeMay J.
Released: June 21, 2024