Court File and Parties
CITATION: Cardtronics Canada ATM Management Partnership v. Dawson, 2024 ONSC 6591
OSHAWA DIVISIONAL COURT FILE NO.: DC-22-1497
DATE: 20241126
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
CARDTRONICS CANADA ATM MANAGEMENT PARTNERSHIP and CARDTRONICS CANADA HOLDINGS INC.
Plaintiffs (Respondents on Appeal)
– and –
CHAD DAWSON carrying on business as DUAL FINANCE
Defendant (Appellant)
Miranda Spence, for the Plaintiffs (Respondents on Appeal)
Alfred Schorr, for the Defendant (Appellant)
HEARD: November 20, 2024
REASONS FOR DECISION
CHARNEY J.:
[1] The Defendant (Appellant), Chad Dawson, appeals from the decision of Deputy Judge O’Connor of the Small Claims Court in Barrie, Ontario in which the Court awarded judgment to the Respondent, Cardtronics Canada ATM Management Partnership (Cardtronics ATM), in the amount of $35,000.00 together with costs fixed at $3,500.00 and pre-judgment interest at 1.5% per month from April 8, 2018 to October 5, 2022 and post-judgment interest at the rate of 1.5% per month from October 6 2022.
[2] The Plaintiffs (Respondents on Appeal) brought an action against the Appellant for failure to pay an invoice from the Respondent Cardtronics ATM dated March 9, 2018. The Respondent claimed that the Defendant had ordered ten automatic teller (ATM) machines from a related company (Cardtronics Canada Ltd.) and that the ten ATM machines were delivered to the Defendant, who had failed to pay the invoice.
[3] The Defendant raised four defences: i) it did not owe any money; ii) the limitation period expired before the action was commenced; iii) the action had to be brought in Alberta, and iv) the identity of the contracting party.
[4] When the case was argued, the Defendant elected not to call evidence, but brought a motion for a non-suit, which was dismissed by the trial judge.
The Decision Below
Limitation Period
[5] With respect to the limitation period, the Court below found that the action was commenced within the required time. The Defendant had argued that the action was commenced more than two years after the March 8, 2018 invoice. The action was not commenced until March 13, 2020, more than two years after the date of the invoice. The Court held that it was not the date of the invoice that “started the clock”, but the date on which the payment was defaulted: April 8, 2018. As such, the Court rejected the limitation period defence.
Jurisdiction
[6] The Defendant argued that para. 9 of the original agreement – the ISO Transaction Processing Agreement dated June 15, 2015 - provided that “all disputes shall be resolved in the Courts of Alberta”. As such, the Ontario courts had no jurisdiction over the claim.
[7] The trial judge applied the law as set out in the Supreme Court of Canada’s decision in Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, which held that the courts may refuse to enforce a forum selection clause where there is a “strong cause” to do so. The trial judge found that there was strong cause in this case. He stated:
In the initial Statement of Defence filed September 21, 2020 by the defendants, there is no objection to the jurisdiction of this court and no invocation of the terms of the ISO Transaction Processing Agreement paragraph 9, dated June 15, 2015. It was only when it filed the Amended Defence July 29, 2021 that the defence raised the issue. In addition, there are compelling reasons for the case to be heard by this court. The defendant is here, the defendant’s business is locate here, the transaction took place here, the ATMs were shipped here, the salesperson for Cardtronics is located here. Almost all the evidence is here. It is for all intents and purposes, an Ontario matter.
In addition, the Sales of Goods Act in Ontario and Alberta are virtually the same…
The delay by the defence, in raising the jurisdictional issue, suggests that the issue of jurisdiction was raised merely for seeking a procedural advantage, as there is no legal difference between the jurisdiction of Ontario and Alberta on this issue.
The Merits
[8] As indicated, only the Plaintiff called evidence.
[9] The Plaintiff called one witness, the Manager for Inside Sales at Cardtronics. He was the person with whom the Defendant placed the order, and he sent the invoice from Cardtronics ATM to the Defendant. His name appeared on the invoice. The trial judge held that the invoice established the debt of the Defendant to the Plaintiff Cardtronics ATM, and that the Manager’s evidence established the content and delivery of the ATMs to the Defendant. The trial judge also relied on the Purchase Order, which contained the product description, the number of units and the price per unit, as well as the total price of $32,450 (before shipping and tax). The trial judge concluded that he had “no doubt that the invoice … shows a debt owed to the Plaintiff by the Defendant as per the Purchase Order which the Defendant signed”.
[10] The Plaintiff’s witness testified that payment for the ATMs was still outstanding on the date of trial. The trial judge held that this was “uncontroverted evidence”. Given that the Defendant elected to call no evidence, this conclusion was hardly surprising.
[11] The trial judge found that the Plaintiff had proven its case and that the Defendant breached it contract with the Plaintiff and was liable for the damages claimed in the amount of $35,000 (the maximum monetary jurisdiction of Small Claims Court exclusive of interest and costs: s. 23(1)(a) of the Courts of Justice Act).
[12] Pre and post-judgment interest were awarded at the rate of 1.5% per month (18% per year) in accordance with the terms of the unpaid invoice.
Standard of Review
[13] The standard of review on an appeal from the order of a judge is correctness for a question of law and palpable and overriding error for findings of fact. A question of mixed fact and law is subject to a standard of palpable and overriding error unless it is clear that the trial judge made some extricable error in principle which may amount to an error of law (Housen v. Nikolaisen, 2002 SCC 33).
Analysis
[14] On this appeal, the Appellant raises three issues: Jurisdiction, identity of the corporate defendant, and the applicable interest rate. The Appellant’s factum also raised issues regarding the limitation period and the Evidence Act, but these were abandoned at the hearing of the appeal.
[15] First, the Appellant argue that the trial judge erred in law in failing to find that Ontario did not have jurisdiction as the parties contractually selected Alberta as the forum for any dispute.
[16] As indicated above, the trial judge correctly identified the “strong cause” test from Pompey as the applicable legal test.
[17] Pompey set out the two-part “strong cause” test, which was summarized by the Ontario Court of Appeal in Loan Away Inc. v. Facebook Canada Ltd., 2021 ONCA 432, at para. 21:
Courts apply a two-step approach in determining whether to enforce a forum selection clause and stay an action brought contrary to it:
At the first step, the party seeking a stay must establish that the forum selection clause is valid, clear, and enforceable, and that it applies to the cause of action before the court. The court makes this determination based on the principles of contract law. The plaintiff may resist the enforcement of the forum selection clause by raising defences such as, for example, unconscionability, undue influence, or fraud. If the party seeking the stay establishes the validity of the forum selection clause, the onus shifts to the plaintiff: Douez, at paras. 28-29; Pompey, at para. 39.
At the second step, the plaintiff must establish “strong cause” not to enforce the forum selection clause. A court exercising its discretion at this step must consider all the circumstances, including the convenience of the parties, fairness between the parties, the interests of justice, and public policy. The list of “strong cause” factors is not closed and provides a court with some flexibility in exercising its discretion. In the commercial context, the “strong cause” factors have been interpreted and applied restrictively. Forum selection clauses are encouraged and generally enforced because they promote order and fairness by providing stability and foreseeability to international commercial relations: Douez, at paras. 29-31; Pompey, at paras. 19, 30-31; and GreCon Dimter inc. v. J.R. Normand inc., 2005 SCC 46, [2005] 2 S.C.R. 401, at para. 22.
[18] In my view, the trial judge appropriately considered all of the relevant circumstances in exercising his discretion not to enforce the forum selection clause in this case. There was absolutely no prejudice to the Defendant in having this Small Claims Court case heard in Ontario, where the Defendant resides and his business is located. Indeed, the Defendant would be prejudiced by having this action proceed in Alberta. The trial judge considered that the law in Ontario and Alberta was virtually the same. I see no basis to interfere with the trial judge’s exercise of discretion in this matter.
[19] The Appellant also contends that his contract, the ISO Transaction Processing Agreement dated June 15, 2015, was with Cardtronics Canada Ltd., which was not a party to this action. The only witness called by the Plaintiff was unable to explain the corporate structure and how Cardtronics Canada Ltd. was related to Cardtronics ATM, which sent out the invoice upon which the action was based.
[20] The ISO Transaction Processing Agreement was only one document that was an Exhibit at the trial. There was also the Purchase Order dated March 1, 2018, which was signed by the Defendant Dawson. This Purchase Order was the document by which Dawson ordered the 10 ATM machines. The Vendor is referred to only as “Cardtronics”. There was also an ATM Shipping Confirmation, which confirmed that “Cardtronics” had shipped the 10 ATM machines on March 7, 2018, and a Purolator Bill of Lading, a Purolator Shipping Confirmation and a Purolator Freight Proof of Delivery dated March 16, 2018. Finally, there was the Invoice sent from Cardtronics Canada ATM Management Partnership dated March 9, 2018.
[21] In my view, there was sufficient evidence upon which the trial judge could conclude that the Defendant purchased and took delivery of the ATM machines, and that the debt was owed to the corporate entity – Cardtronics ATM – that sent the invoice. It was not necessary for the Plaintiff’s witness to understand the intricacies of the corporate structure; the fact that the invoice went out from Cardtronics ATM was sufficient to prove that the debt was owed to that Plaintiff. The trial judge could reasonably infer from the evidence given that the ISO Transaction Processing Agreement signed by Cardtronics Canada Ltd. was assigned to Cardtronics ATM for collection, as alleged by the Plaintiff in its Statement of Claim. This was a finding of fact, and the trial judge did not make a palpable and overriding error in making this finding. Indeed, no other reasonable inference is available.
[22] The Appellant argues that the interest rate ordered by the trial judge of 1.5% per month (18% per year) was inconsistent with s. 4 of the Interest Act, R.S.C. 1985 c. I-15, s. 4 which provides:
Except as to mortgages on real property or hypothecs on immovables, whenever any interest is, by the terms of any written or printed contract, whether under seal or not, made payable at a rate or percentage per day, week, month, or at any rate or percentage for any period less than a year, no interest exceeding the rate or percentage of five per cent per annum shall be chargeable, payable or recoverable on any part of the principal money unless the contract contains an express statement of the yearly rate or percentage of interest to which the other rate or percentage is equivalent.
[23] The interest rate in the invoice relied on by the trial judge to set the pre and post-judgment interest rate was stated to be 1.5% per month, but it did not express the yearly rate of interest to which the monthly rate was equivalent. As such, no interest rate above 5% is chargeable.
[24] Section 4 of the Interest Act does not appear to have been raised before the trial judge, and it is not referenced as a ground of appeal in the Notice of Appeal. Nor was it referenced in the Appellant’s factum. That said, the Respondent did not contest the Appellant’s right to raise this ground of appeal. The Respondent conceded that the Appellant’s position on this issue was correct, and that the appeal should be allowed to the extent that the pre and post-judgment interest rate should be reduced to 5% per annum. I agree.
Conclusion
[25] Based on the foregoing, the appeal is dismissed, with the exception of the pre and post-judgment interest rate, which is reduced to 5%.
[26] The Respondents were substantially successful on this appeal. While the Appellant was successful on the interest rate, that issue was not raised in the Notice of Appeal, and the Respondents conceded the point in argument. Accordingly, the Respondents are entitled to their costs on a partial indemnity basis.
[27] The Respondents claim partial indemnity costs in the amount of $8,155. Given the result in this case, including the fact that the Appellant was successful on the interest rate issue, costs are fixed on a partial indemnity basis at $7,000, payable by the Appellant to the Respondents within 30 days.
Justice R.E. Charney
Released: November 26, 2024
CITATION: Cardtronics Canada ATM Management Partnership v. Dawson, 2024 ONSC 6591
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CARDTRONICS CANADA ATM MANAGEMENT PARTNERSHIP and CARDTRONICS CANADA HOLDINGS INC.
Plaintiffs (Respondents on Appeal)
– and –
CHAD DAWSON carrying on business as DUAL FINANCE
Defendant (Appellant)
REASONS FOR DECISION
Justice R.E. Charney
Released: November 26, 2024