Court File and Parties

COURT FILE NO.: DC-15-125-00 DATE: 2017 04 25

SUPERIOR COURT OF JUSTICE – ONTARIO

(DIVISIONAL COURT)

RE: JULIE HOFFMAN, Plaintiff by Defendant’s Claim / Respondent AND: 2229152 ONTARIO LIMITED o/a “ROYAL WINDSOR COLLISION CENTRE”, Defendant by Defendant’s Claim / Appellant

BEFORE: EMERY J.

COUNSEL: Lisa Carr, for the Plaintiff by Defendant’s Claim / Respondent Tristen Audet, for the Defendant by Defendant’s Claim / Appellant

HEARD: April 7, 2017

DECISION ON APPEAL

[1] The appellant 2229152 Ontario Ltd., operating as Royal Windsor Collision Centre (“Royal Windsor”), appeals the judgment of Deputy Judge L. E. Payne dated July 26, 2016. Royal Windsor seeks an order to set aside that judgment and to enter a dismissal of the defendant’s Claim in its place, or alternatively to order a new trial.

Background

[2] The judgment under appeal was given on the defendant’s Claim made by Julie Hoffman, the owner of a 2012 Jeep Wrangler (the “Hoffman vehicle”). The Hoffman vehicle was damaged in an accident in Mississauga on June 11, 2012.

[3] The Hoffman vehicle was insured by Intact Insurance Company. The vehicle was towed from the scene of the accident to the Halton pound shortly thereafter, and towed to the Royal Windsor yard the following day.

[4] A dispute arose between Ms. Hoffman directly or through her fiancé, Lance Bezusko with Royal Windsor about repairing her vehicle. Ms. Hoffman and Mr. Bezusko gave evidence at trial that they insisted the Hoffman vehicle be repaired at an authorized dealer to protect warranty coverage. Royal Windsor gave evidence that the authorization to repair the Jeep Wrangler was given by Mr. Bezusko or by Intact after Intact had prepared a preliminary estimate for repair work. Royal Windsor gave evidence that a cheque for the estimated repair work in the amount of $5,769.16 had in fact been issued by Intact to make those repairs.

[5] The cheque from Intact was payable to both Royal Windsor and Julie Hoffman. There were no facts in dispute at trial that Royal Windsor negotiated that cheque without the knowledge or consent of Ms. Hoffman.

[6] Royal Windsor would not release the Hoffman vehicle without further payment. Funds totalling $7,000.00 were ultimately paid into court and a final certificate under section 24 of the Repair and Storage Liens Act was issued to obtain its release. Royal Windsor finally released the Hoffman vehicle on July 17, 2012 and subsequently issued a Claim in Burlington Small Claims Court against Ms. Hoffman for $1,869.15 (the plaintiff’s Claim). Ms. Hoffman defended that Claim by filing a defence to the plaintiff’s Claim dated September 4, 2012.

[7] Ms. Hoffman subsequently issued a defendant’s Claim to make her own claim against Royal Windsor on May 23, 2013. Royal Windsor filed a defence to Ms. Hoffman’s Claim. This defence was later amended on June 18, 2014.

[8] The plaintiff’s Claim made by Royal Windsor was ultimately settled. The defendant’s Claim made by Ms. Hoffman was therefore the only Claim that proceeded to trial before Deputy Judge Payne. The trial of this Claim took three days to hear over a 22 month period on July 21, 2014, October 2, 2015 and May 6, 2016.

The Decision Below

[9] Deputy Judge Payne granted judgment on the defendants Claim in the amount of $7,626.49. This judgment consisted of an award to Ms. Hoffman in the amount of $5,769.16 to repay her for repairs not authorized, and $1,857.33 for the cost of the rental vehicle she had incurred during the time her own vehicle was held by Royal Windsor.

[10] Deputy Judge Payne dismissed Ms. Hoffman’s Claim relating to court disbursements and process server fees, as well as the expense to have the Jeep Wrangler moved to Erin Dodge in the amount of $370.00.

[11] At the hearing of the appeal, counsel for Royal Windsor confirmed that the appeal is limited only to that part of the judgment relating to the award of $5,769.16 for repairs not authorized by Ms. Hoffman.

[12] In her reasons for awarding damages to Ms. Hoffman for repairs to her vehicle that the court found she did not authorize, the deputy judge made the following findings:

a. That Mr. Bezusko and Ms. Hoffman gave no authorization to Royal Windsor to carry out any repairs to the Hoffman vehicle

b. On June 12, 2012, Mr. Bezusko advised Royal Windsor to stop working on the Hoffman vehicle. The deputy judge found that it was clear on the evidence that Mr. Bezusko wanted the repairs done at Erin Dodge, not at Royal Windsor.

c. No estimate was provided by Royal Windsor to Ms. Hoffman that met the prescribed requirements of section 8 of Ontario Regulation 17/05 under the Consumer Protection Act, 2002. In that event, Royal Windsor is precluded by section 56 of the Consumer Protection Act, 2002 from charging Ms. Hoffman for any work or repairs.

[13] The deputy judge disagreed with Royal Windsor’s argument that the defendant’s Claim pleaded the tort of conversion by making the allegation in paragraph 6 of the defendant’s Claim that Royal Windsor had cashed the cheque for $5,769.16 without authorization from Ms. Hoffman. That cheque was payable to both parties. This was an important point on appeal as Royal Windsor took the position that the allegations of cashing the cheque amounted to a claim for conversion. Royal Windsor argues that although the defendant’s Claim was based on conversion, the deputy judge found for Ms. Hoffman on a different cause of action.

[14] The deputy judge further found that Julie Hoffman was the proper party to seek the recovery of funds paid by Intact for repairs not authorized or repairs made without first receiving a prescribed estimate by virtue of section 278 of the Insurance Act.

Issues on Appeal

[15] Royal Windsor brings its appeal on the following grounds:

1. The deputy judge failed to exercise her discretion in a reasonable way when she denied the request of Royal Windsor to adjourn the trial to enable it time to defend the claim of making repairs to the Hoffman vehicle without authorization;
2. The deputy judge erred in law by granting judgment for the repayment of funds received by Royal Windsor for repairs not authorized as a cause of action not pleaded; and
3. If it is found by this court that the tort of conversion was pleaded by Ms. Hoffman, that Ms. Hoffman did not suffer a loss because Intact issued the cheque for $5,769.16.

1. The Adjournment Request

[16] A trial judge is entitled to the deference of an appellate court for the reasonable exercise of discretion on a request for an adjournment. The Court of Appeal in the case of Toronto Dominion Bank v. Hylton, 2010 ONSC 752 adopted the principles relevant to an adjournment request set out in the dissenting reasons given by Justice Laskin in Khimji v. Dhanani (2004), 69 O.R. (3rd) 790. Those reasons read as follows:

[14] A trial judge enjoys wide latitude in deciding whether to grant or refuse the adjournment of a scheduled civil trial. The decision is discretionary and the scope for appellate intervention is correspondingly limited. In exercising this discretion, however, the trial judge should balance the interests of the plaintiff, the interests of the defendant and the interests of the administration of justice in the orderly processing of civil trials on their merits. In any particular case, several considerations may bear on these interests. A trial judge who fails to take account of relevant considerations may exercise his or her discretion unreasonably and if, as a result, the decision is contrary to the interests of justice, an appellate court is justified in intervening. In my opinion, that is the case here.

[17] The appeal panel in Toronto Dominion Bank v. Hylton also directed the trial court to consider the following factors when exercising the appropriate judicial discretion to grant or refuse an adjournment:

a. the strength of the evidence on the reason for the adjournment request; b. the history of the case including any deliberate delay or misuse of the court process; c. the prejudice to the party opposing the adjournment; and d. the consequences to the party requesting the adjournment if the request is refused.

[18] I was directed to the transcript of the proceedings before Deputy Judge Payne where the adjournment was discussed. On the first day of trial, Mr. Jarvis, who was counsel for Royal Windsor at trial, had made his position known from the outset that Royal Windsor was attacking Ms. Hoffman’s pleadings on the basis that he had not been provided with particulars. Later, in the course of the plaintiff’s evidence, it became apparent that there were two distinct issues the plaintiff had brought before the court. The first involved allegations that Royal Windsor had cashed the cheque without the authorization of Ms. Hoffman. The other asserted that Royal Windsor had made repairs to the Hoffman vehicle without prior authorization. Mr. Jarvis had this to say at page 115 about the possibility of an adjournment:

MR. JARVIS: Because I have a problem then, if we’re converting or changing the pleading to be an issue about what was authorized, what wasn’t authorized and whether Royal Windsor was entitled to the funds based on the initial transaction, then we need an adjournment to change our litigation strategy, because we take the position this is an amendment of the pleading occurring midway through a trial. We have paragraph six squarely in front of Your Honour, This is again paragraph 6 of the defendant’s Claim which deals with the issue of conversion. If my friend is seeking an adjournment so she can review caselaw and the Bills of Exchange Act I will gladly provide her with that adjournment, but that is her pleading and it’s on the issue of Tort of Conversion.

[19] It is not clear from the statement made by Mr. Jarvis and by the exchange between counsel and the court that a request for an adjournment was actually made. In that event, the deputy judge did not exercise any discretion to grant or refuse an adjournment request at the time.

[20] The transcript of proceedings at trial shows that Deputy Judge Payne exercised her discretion by allowing the trial to proceed on the basis that particulars had been provided by Ms. Carr to Mr. Jarvis at that time. The question about the adequacy of the Ms. Hoffman’s pleadings was left for closing arguments.

[21] The discussion of an adjournment occurred on the first day of trial in the course of the plaintiff’s evidence. The plaintiff’s Document Brief had been served along with a Supplementary Document Brief on counsel for Royal Windsor prior to trial. One of those document briefs contained a copy of the towing receipt for West Side Towing and Recovery dated June 11, 2012 and a copy of the estimate from Intact Insurance dated June 19, 2012 as well as the supplemental estimate from Intact Insurance. Neither document showed an authorization in writing for repairs to be made to the Hoffman vehicle.

[22] I consider the course of the trial itself to be relevant with respect to the issue of prejudice. The evidence of Ms. Hoffman was given on the first day. The trial did not resume after the first day on July 21, 2014 until October 2, 2015. Dragon Tomic, the senior appraiser at Intact on the Hoffman Claim, was not called as a witness until the second day of trial. Royal Windsor had 14 months between those dates to determine what documents it wished to seek leave from the court to introduce. Royal Windsor had the same time to prepare for Mr. Tomic’s cross-examination, and to call any witness on behalf of the defence.

[23] I have considered the strength of the evidence and the reason for adjournment request, as well as the absence of any deliberate delay or misuse of the court process. I have reached the conclusion that Deputy Judge Payne exercised her discretion reasonably by allowing the trial to proceed on July 21, 2014. I find that Royal Windsor suffered minimal prejudice, if any, by allowing the trial to proceed on the first day. Royal Windsor had the time and opportunity to answer Ms. Hoffman’s entire body of evidence on the repair without authorization issue over the course of the trial to overcome any prejudice.

2. Judgement Granted on the Pleadings

[24] This brings me to the second ground of appeal. Royal Windsor submits that the defendant’s Claim did not plead the repair without authorization issue as a cause of action. Therefore, that cause of action was not available as a basis to grant judgment.

[25] In my view, the adequacy of pleadings is a question of law. The standard of appellate review on a question of law is one of correctness: Housen v. Nikolaisen, 2002 SCC 33.

[26] There is no doubt that pleadings are important. It is a matter of fairness that legal actions are to be decided on the allegations of fact made, and issues raised in the pleadings between the parties: Bulut v. Carter, 2014 ONCA 424. A party to a legal action has a right to know the case it has to meet, and to have the opportunity to meet that case: Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3rd) 74.

[27] The courts have also held that a party will be denied procedural fairness if and when that party is taken by surprise, or is unable to prepare adequately or to call evidence to address certain issues at trial. Any such denial of procedural fairness can amount to a miscarriage of justice. A miscarriage of justice can form the basis to set aside the judgment and order a new trial: Watterson v. Canadian EMEU, 2016 ONSC 6744 and Garcia v. Cheng, 2014 ONSC 5520.

[28] Royal Windsor submits that the claim it repaired the Hoffman vehicle without authorization is a cause of action that would give effect to section 58 of the Consumer Protection Act, 2002. Section 58 provides that no repairer shall charge for work or repairs unless the consumer authorizes the work or repairs. Royal Windsor argues that this ground was not a cause of action pleaded in the defendant’s Claim. A review of the pleadings will determine whether it was, or it was not.

[29] It is important to remember that Royal Windsor first brought the plaintiff’s Claim against Julie Hoffman under the Repair and Storage Liens Act. In the plaintiff’s Claim, Royal Windsor alleged at paragraph 7 that Ms. Hoffman consented to, and specifically authorized the towing services of West Side Towing by signing and receiving a copy of the tow receipt. In paragraphs 9 and 10, Royal Windsor states that Intact conducted an appraisal of the damage to the Hoffman vehicle. Royal Windsor alleges that Intact authorized or approved repair work on the Hoffman vehicle by providing an “authorized estimate” and an “authorized supplemental estimate”.

[30] Royal Windsor also pleaded the Repair and Storage Liens Act and the Consumer Protection Act, 2002, among other statutes in the plaintiff’s Claim.

[31] Ms. Hoffman pleaded the following allegations of fact in paragraph 4 and 5 in her defence to the plaintiff’s Claim:

4. At all material times, Intact Insurance Company (“Intact”) insured the Hoffman motor vehicle pursuant to a standard form Ontario Automobile Policy. At no time did Intact communicate, agree and/or authorize the fees Claimed for the Hoffman motor vehicle.
5. The Hoffman motor vehicle was involved in a motor vehicle accident on Monday, June 11, 2012 on Southdown Road and Bromsgrove Road in the City of Mississauga, Ontario. An unknown tow company towed the Hoffman motor vehicle to Royal Windsor Collision Centre at 2239 Royal Windsor Drive, Oakville, Ontario. Julie Hoffman and Lance Bezusko deny authorizing the fees Claims, authorizing the Plaintiff to pay the fees Claimed or authorizing the Plaintiff to perform any repair work on the Hoffman motor vehicle.

[32] In her defendant’s Claim, Ms. Hoffman states at paragraph 2 that:

2. The plaintiff by defendant’s Claim adopt and rely on the facts and allegations set out in the defence to plaintiff’s Claim.

[33] In my view, paragraph 2 of the defendant’s Claim incorporates paragraphs 4 and 5 of Ms. Hoffman’s defence to the plaintiff’s Claim as part of her pleading. It is clear from the wording of paragraphs 4 of the defence that Intact did not agree with or authorize the fees claimed for repair to the Hoffman vehicle. In paragraph 5 of the defence, Ms. Hoffman pleads that she and Lance Bezusko deny authorizing the fees Claimed or authorizing Royal Windsor to perform any repair work to her motor vehicle. The allegations made in paragraphs 4 and 5 of the defence to the plaintiff’s Claim therefore put the authorization for Royal Windsor to make repairs squarely in dispute.

[34] It cannot be said that Royal Windsor was taken by surprise that the Claim to recover funds for repairs not authorized was an issue going to trial. In its own amended defence to the defendant’s Claim, Royal Windsor pleads at paragraph 8(a) that Ms. Hoffman’s vehicle required vital and necessary collision services which were contracted, authorized and performed by Royal Windsor. The amended defence further pleads that all material times, Royal Windsor relied solely upon the verbal and written consents and authorizations received directly from Ms. Hoffman’s or her agents. These allegations of material fact pleaded by Royal Windsor stand in stark contrast to the allegations made in the defendant’s Claim expressly or incorporated by reference from Ms. Hoffman’s defence to the plaintiff’s Claim.

[35] I conclude the defendant’s Claim included the cause of action that repairs were made by Royal Windsor to the Hoffman vehicle without authorization to give effect to Ms. Hoffman’s Claim. That cause of action was available as a basis for the deputy judge to make findings of fact. The deputy judge was correct in her determination that the pleadings were sufficient to grant judgment on that basis. This ground of appeal therefore fails.

3. Was Conversion Pleaded?

[36] The third and final ground for appeal revolves around paragraph 6 of the defendant’s Claim. The appellant argues that if this Claim raises conversion as a cause of action, Ms. Hoffman was not the proper claimant as Intact had issued the cheque for $5,769.16.

[37] This ground of appeal presupposes a finding by this court that the deputy judge erred in considering the pleadings to include the repair without authorization issue as a proper cause of action for trial.

[38] I also consider as a matter of law that Intact was entitled under section 278 of the Insurance Act to bring an action in the name of its insured, Julie Hoffman, to recover the funds paid out to Royal Windsor if the court had found that conversion was the basis to grant judgment for the repayment of funds.

[39] I find it unnecessary to determine this issue for the purpose of the appeal. However, if this were the only issue between deciding whether the appeal succeeds or fails, I consider the language used in paragraph 6 adequately supports Ms. Hoffman’s Claim that the cheque was cashed by Royal Windsor without her knowledge or consent as much as the claim that work was done to her vehicle without authorization.

[40] The deputy judge concluded in any event that, although clause 6 of the Claim is imperfectly worded, there is nothing in it to suggest that the plaintiff based her claim on the tort of conversion.

[41] Justice Iacobucci in Boma Manufactoring Ltd. v. Canadian Imperial Bank of Commerce, [1996] 3 S.C.R. 727 explained that the tort of conversion involves wrongful interference with goods owned by another in a manner inconsistent with the owner’s right to possession of those goods.

[42] Nowhere in paragraph 6 or elsewhere in the defendant’s Claim does the word “conversion” or any derivative of that term appear. Not only was the term conversion not used in paragraph 6 of the defendant’s Claim, the claim contains no allegation that the cheque belonged to Ms. Hoffman, or that Royal Windsor wrongfully interfered with her ownership of that cheque by cashing it. The basis for the judgment granted by the deputy judge does not involve the wrongful interference or conversion of the cheque as property owned by Ms. Hoffman.

[43] I find that the deputy judge is entitled to deference by this court to conclude as a matter of fact that there was nothing in the defendant’s Claim or in the evidence presented by Ms. Hoffman to suggest that she was alleging the tort of conversion in her pleading, or at trial.

[44] The appeal is therefore dismissed.

[45] The parties have agreed that the successful party on this appeal shall be entitled to costs in the amount of $4,500.00, all inclusive. Accordingly, the respondent Julie Hoffman is awarded the costs of the appeal in this amount, payable by Royal Windsor Collision Centre within 30 days.

Emery J

DATE: April 25, 2017