ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 878/11 TT
DATE: 20120217
B E T W E E N:
ANDRE RIEL MATTEAU
MICHEAL J. DOUPE, for the Appellant
Appellant
- and -
TRACEY MAY JOHNSON
Unrepresented
Respondent
HEARD: February 10, 2012
D E C I S I O N
WILCOX, J.
[1] The Respondent appealed from the order of Deputy Judge Judith Munn made on March 17, 2011 in the Small Claims Court at Haileybury, Ontario.
[2] BACKGROUND
[3] The parties were not married but lived together from October 31, 2005 to July 5, 2008. After separation, the Respondent brought a claim against the Appellant in the Small Claims Court. The claim was for payment of moneys allegedly owed by the Appellant to the Respondent under an oral agreement between them, together with some living expense debts.
[4] The Appellant’s defence was based solely on procedural grounds. He submitted that the claim should be dismissed in that it was a Family Law proceeding and the Small Claims Court had no jurisdiction to deal with it.
[5] The Appellant then brought a motion to have the claim dismissed for want of jurisdiction. On April 8, 2010, Deputy Judge P. Cassidy granted that relief in the absence of the Respondent. Subsequently, the Respondent moved to dismiss Cassidy D. J.’s order on the grounds that she had not received notice of the Applicant’s motion. Deputy Judge J. Munn set aside Cassidy D. J.’s order on December 2, 2010 and put the matter on the list for March 17, 2011.
[6] On March 17, 2011, Munn D. J. re-heard the motion.
[7] L. Neil, agent for counsel for the Appellant, argued that the case was not properly brought in the Small Claims Court for four reasons:
It should be in the family law courts.
The claim disclosed no common law cause of action.
The claim appeared to be for equitable relief, which the Small Claims Court was not permitted to grant.
There may be remedies available under the Family Law Act Rules(sic) that are not available in Small Claims Court.
[8] DECISION ON MOTION
[9] Munn D. J. found that the Small Claims Court did have jurisdiction to hear this case, commenting as follows, starting at page 5, line 22:
“In regard to her suggestion that the claim is in the wrong court, I disagree. The Supreme Court of Canada has made it clear that there is no family property in common law relationships. The only claim for property or debt the common law partners can rely on appears to be a trust claim. I do not believe that a common law partner should be forced to bring a trust claim in a different court. I believe they have the choice of courts. If they choose to sue on a debt, they’re entitled to do it in the Small Claims Court.
Paragraph two, as the second point was that the claim does not disclose a cause of action. As indicated by the plaintiff, she is alleging there was a promise of repayment of moneys lent. That is a cause of action in itself and she does to some extent clarify the agreement that she says they reached together with the amount of moneys owing. So I’m satisfied for the purposes of the Small Claims Court that there is sufficient information in the claim to be a cause of action.
Secondly, I was very interested in your argument about equitable relief because a case has just been released saying the Small Claims Court does have equitable relief, which makes a lot of sense, because the Small Claims Court is a court for the people, and its aim is to bring justice effectively and cost-effectively to people. So I am very pleased to see that judgment, so I disagree that the court has no equitable relief.
In view of my decisions on points 1, 2, and 3, point 4 is really not relevant. So she is entitled to proceed.”
[10] The case was adjourned for trial at a later date.
[11] APPEAL
[12] The appeal of Munn D. J.’s ruling of March 17, 2011 was heard on February 10, 2012.
[13] Appellant’s counsel had filed a notice of appeal stating a number of grounds of appeal, but, at the hearing, he expressly limited the appeal to the issue of the Small Claims Court’s jurisdiction.
[14] Appellant’s counsel submitted that the Respondent’s claim is based on either constructive trust principles or on an alleged oral cohabitation agreement.
[15] Dealing firstly with constructive trust, he said that it is an equitable remedy created by the courts for common law relationships where the separating parties’ affairs are not covered by written agreements or statutory protections. He pointed out that, under s. s. 96(3) of the Courts of Justice Act, the Small Claims Court lacks jurisdiction to grant equitable relief. Munn D. J. had found that the Small Claims Court does have equitable relief(sic), based on an unnamed case which she said had just been released.
[16] Regarding the alleged oral cohabitation agreement, Appellant’s counsel pointed out that s. s. 1(1) of the Family Law Act says that “cohabit” means to live together in a conjugal relationship, whether within or outside marriage. He pointed to the Respondent’s description of the relationship, found in the transcript of the March 17, 2011 proceedings, which suggests that the parties were cohabiting in a common law relationship. The Respondent had made the argument then and again at the appeal hearing that she was not in a common law relationship with the Appellant because she remained married to another man and it is against the law to have two spouses. Appellant’s counsel correctly pointed out that this is a false statement of the law. He noted that the Family Law Act’s definition of “spouse” at s. 29 includes either two persons who are not married to each other and have cohabited continuously for a period of not less than three years, without the exclusion that the Respondent suggested.
[17] The Respondent’s problem, then, he submitted, was that her claim would be based on an alleged oral cohabitation agreement as defined in s. 53 of the Family Law Act, but that it would not meet the formal requirements of s. 55 and would be unenforceable because it was not made in writing, signed and witnessed. The Respondent was, he suggested, trying to get around the Courts of Justice Act and the Family Law Act by saying that she was not a spouse so that she could go to Small Claims Court. Clearly, in his submission, the parties were spouses and the Family Law Act applied.
[18] In response, the Respondent admitted living with the Appellant but, as noted above, denied that they were cohabiting as spouses, based on her apparent misunderstanding of the law on point. She likened the transaction in question to a loan to a friend.
[19] Appellant’s counsel also made an argument based on s. 21.8 of the Courts of Justice Act that the Small Claims Court did not have jurisdiction. That section creates a branch of the Superior Court known as the Family Court. S. 21.8(1) says that, in the parts of Ontario where the Family court has jurisdiction, proceedings referred to in the schedule to that section, except appeals and prosecutions, shall be commenced, heard and determined in the Family Court. The schedule includes proceedings under the Family Law Act and, more specifically, the following:
Proceedings for the interpretation, enforcement or variation of a marriage contract, cohabitation agreement, separation agreement, paternity agreement, family arbitration agreement or family arbitration award.
Proceedings for relief by way of constructive or resulting trust or a monetary award as compensation for unjust enrichment between persons who have cohabited.
[20] DECISION ON APPEAL
[21] The Appellant’s factum relies on the decision of McCrone and McCrone, [2008] O.J. No. 3127 in support of the proposition that the Small Claims Court lacks jurisdiction in family matters. That case is distinguishable. In the case at hand, the issue of the debt between the unmarried parties is a discrete one. In the McCrone case, the parties were married and separated. The claim is characterized as one for support, for division of family property or as incidental to the sale of the matrimonial home. No common law cause of action was pleaded. The deputy judge also foresaw the need for a divorce and that there may or may not be a domestic contract and child custody or access or support issues or other spousal support issues . However, the deputy judge explicitly stated that she was not saying that the Small Claims Court can never hear any case involving any issue that could be characterized in one way or another as a family law issue.
[22] The same deputy judge found that the Small Claims Court did have jurisdiction over a matter similar to the one at hand, but having even more family law aspects, in Hipwell and Agnew [2010] O.J. No. 984 . In that case, the parties had cohabited in a conjugal relationship without being married. After their separation, they initiated family law proceedings in the Superior Court of Justice. A settlement was reached and apparently recorded in a separation agreement. However, there was a prospect of further proceedings over child support. In the action in the Small Claims Court, the father claimed that the mother owed him moneys outstanding on a loan. As the only issue before the court was whether the moneys constituted a loan or merely assistance given with no expectation of repayment, the deputy judge found that the Small Claims Court had jurisdiction to hear the matter.
[23] Without deciding whether or not the Respondent’s claim is one that might be framed in equity, I will deal with the issue of whether the Small Claims Court has jurisdiction to give equitable relief. In the case of Grover and Hodgins, 103 O.R. (3d) 721, a decision of the Court of Appeal for Ontario dated January 27, 2011, Epstein J. A., writing for the court, after a lengthy analysis concluded that the Small Claims Court does have jurisdiction to award legal or equitable relief where the relief requested is a monetary payment under the limit of $25,000 or the return of personal property valued within that limit.
[24] The Appellant’s argument based on s. 21.8 of the Courts of Justice Act fails for the following reasons. Firstly, s. s. 21.1(4) and (5) set out the areas where the Family Court branch of the Superior Court of Justice has jurisdiction. The Temiskaming District, where the Haileybury court is, is not a Family Court jurisdiction. Secondly, as noted elsewhere in these reasons, the Family Law Act requires that there be certain formalities in the making of domestic contracts which are not found in the alleged agreements between the parties here. So, these parties apparently do not have a cohabitation agreement. Finally, it is not certain that the Respondent’s claim against the Appellant is limited to seeking relief by way of constructive or resulting trust or on the basis of unjust enrichment.
[25] Finally, I agree with Deputy Judge Munn that the claim discloses a common law cause of action. The claim could be characterized as one based in contract for the repayment of moneys lent. The Respondent appears to have waived the excess in order to bring the claim within the monetary jurisdiction of the Small Claims Court.
[26] The appeal is dismissed.
[27] The Respondent shall have her costs of the appeal, fixed at $750 payable by the Appellant.
Justice James A. S. Wilcox
Released: Feb 17, 2012