CITATION: Westwood Mall Holdings Limited v. Kapila, 2017 ONSC 5478
COURT FILE NO.: DC-16-150-0000
DATE: 20170914
ONTARIO
SUPERIOR COURT OF JUSTICE
(Small Claims Court Appeal)
B E T W E E N:
WESTWOOD MALL HOLDINGS LIMITED
A. M. Maurer, for the Appellant B. (Defendant)
Appellant
- and -
RAJESH KAPILA
R. Kapila, self-represented Respondent (Plaintiff)
Respondent
HEARD: September 11, 2017, at Brampton
REASONS FOR JUDGMENT
[on appeal from a decision of Deputy Judge Twohig of the Small Claims Court at Brampton released December 2, 2016]
MCSWEENEY J.
OVERVIEW
[1] This is an appeal of the Small Claims Court decision of Deputy Judge Kim Twohig, released December 2, 2016 [the “Decision”].
[2] The Deputy Judge tried the plaintiff’s two claims, SC-16-1070 and SC-16-1073 together. The claims relate to the terms of agreements of purchase and sale [“APS”] for commercial condominium units purchased by the plaintiff from the defendant developer, Westwood Mall Holdings Limited [“Westwood”].
[3] Deputy Judge Twohig described the three grounds in the plaintiff’s claims as:
breach of contract due to a material change in terms to which Mr. Kapila did not consent;
discrimination contrary to human rights legislation; and
breach of a duty to act honestly in the performance of the agreements of Purchase and Sale.
[4] The Deputy Judge heard evidence from both parties. She found against Mr. Kapila on the first two grounds, namely, on the first ground that the evidence disclosed no material changes made to the APS by the defendant; and on the second ground, because there was no evidence of any breach of human rights legislation.
[5] The Deputy Judge allowed the plaintiff’s claim on the third ground. This ground was variously described by the Deputy Judge in her reasons as “a duty to act honestly in the performance of the Agreements of Purchase and Sale” [Decision, para. 1] and “breach of a duty of fair dealing by refusing to reduce the final sale price for Mr. Kapili’s [sic] units when it had reduced the final price for all or most other unit holders to that set out in the APS” [Decision, para 31c].
[6] At issue in this appeal is whether the Deputy Judge erred in law in reaching her decision on this third ground.
[7] The Appellant raises two issues on appeal:
ISSUE 1: Mr. Kapila did not expressly plead “duty to act honestly” or “duty of fair dealing” as a legal basis for his claim, and it was therefore not open to the Deputy Judge to rely on it. Westwood was thereby deprived of the right to know the case it had to meet, and to respond.
ISSUE 2: The Deputy Judge erred in law in her application of the Supreme Court of Canada’s decision in Bhasin v. Hrynew, 2014 SCC 71.
STANDARD OF REVIEW
[8] The standard of review is well established: per Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, the applicable standard of review on questions of law is correctness.
THE TRIAL
[9] The appellant does not dispute the findings of the Deputy Judge. She found as fact that the appellant gave reductions or discounts to many other purchasers in the same circumstances as the plaintiff, but not to the plaintiff.
[10] The plaintiff by his own admission had complained actively about the defendant/appellant. The defendant called no evidence to rebut the plaintiff’s contention that the reason he did not receive the same adjustments on closing as others was that he had complained extensively about the defendant.
[11] On this ground the Deputy Judge made the following finding: “Westwood exercised its discretion capriciously and arbitrarily in refusing to close Mr. Kapila’s purchase at the original price set out in the APS despite having done so for other unit owners in the same condominium.” She further concluded that “this conduct, coupled [with] the failure to provide any explanation or rationale, would be regarded as commercially unacceptable by reasonable and honest people.”
[12] The defendant Westwood pleaded to Mr. Kapila’s claims and called its case on the sole basis that the APS entitled Westwood to adjust the purchase price, and to adhere strictly (which it did with Mr. Kapila) or not to adhere (which it did with other unit purchasers) to the terms of that contract. It did not call evidence to either dispute or explain the differential treatment Westwood gave to Mr. Kapila under his two APS agreements.
ISSUE 1: Did the Deputy Judge introduce “a novel theory of liability”, thereby depriving Westwood of its right to know the case to meet?
[13] I now turn to the appellant’s argument that reliance by the Deputy Judge on the Supreme Court of Canada jurisprudence constituted “Injection of a novel theory of liability into the case via the reasons for judgment”. In so doing, the appellant contends, it was deprived of “the right to know the case [it] had to meet”.
[14] I reject this argument for the following reasons:
a) The defendant knew the case it had to meet; and
b) The trial judge did not raise “a novel theory of liability”.
a) The defendant knew the case it had to meet
[15] The plaintiff claimed he was treated differently from others who closed agreements in the same mall because he had complained about the defendant’s conduct. The first sentence of the “Grounds” section of his claim makes this clear: "There is something called fair dealing and I have been treated unfairly as I have raised the voice [sic] against the builder..."
[16] The plaintiff is self-represented, and his pleadings, although peppered with legal references, are not those of a lawyer. His recitation of the facts of his case, however, was clear, as was the basis of his complaint on the central point that he was treated differently from other purchasers only because he had complained, and that this was not fair.
[17] This is a Small Claims Court matter. The appellant is essentially asking this court to hold an unrepresented party to the standard of pleading of a represented party. I find that the defendant at trial was aware of the substantive case it had to meet, and made its decisions on how to plead and defend with full knowledge of the contention that it had treated the plaintiff differently from other purchasers.
[18] The defendant was aware of this aspect of the plaintiff’s claim, and chose not to rebut it, relying instead on a strict construction of the APS. As stated by counsel at the hearing of the appeal, Westwood’s position was that “comparison between Kapila and everyone else is completely irrelevant, as is the reason Westwood did or did not decide to adhere to the contractual terms we [sic] agreed to.”
[19] This strategic decision was evident in Westwood’s statement of defence, which did not respond to the plaintiff’s unfairness contention, other than with language giving a blanket denial. Similarly, at trial the defendant chose not to call evidence from anyone with knowledge of how or why various reductions in price were given on closing to other purchasers, but not to the plaintiff.
b) The trial judge did not raise a “novel theory of liability”
[20] With respect to the contention that the trial judge introduced a “novel theory of liability”, I reject this argument for the following reasons: First, although the self-represented plaintiff did not cite it specifically, Bhasin v. Hrynew, 2014 SCC 71 is a leading Canadian case on fairness in contractual dealing, which has been cited extensively in the three years since its release. Specifically, it is a leading authority on the common law parameters enforced by Canadian courts regarding questions of conduct in commercial transactions. The appellant’s counsel, as commercial solicitors and litigators, would certainly have been aware of the case. It was open to the defendants to refer to the case themselves, and to make submissions to the Deputy Judge as to why the Bhasin line of cases should be distinguished, or should not be applied in the circumstances of this case. They did not do so.
[21] Second, the allegation of lack of fair dealing was argued at trial. In his argument and evidence, Mr. Kapila pointed to an Ontario Bill which never became law, Bill 79, the Condominiums Owners Protection Act, as authority for the proposition that the developer was required to deal fairly with him. The trial judge agreed with the defendant that the Bill was not a legislative enactment to be relied on as a source of statutory obligation of good faith. She found, however, that the Supreme Court of Canada had recognized a “common law duty of good faith that applies to all contracts as a guiding principle” [Decision, para. 42] in Bhasin, which had been followed in Ontario. Applying the case law in this area, she found on the basis of the evidence that the defendant Westwood had breached its duty of fair dealing with Mr. Kapila, and granted judgment accordingly.
ISSUE 2: Did the Deputy Judge err in her application of the law?
[22] With respect to the Deputy Judge’s reference to the Supreme Court of Canada decision in Bhasin v. Hrynew 2014 SCC 71, I find no error in either her interpretation or application of the law to the facts of the case.
CONCLUSION
[23] On the basis of the foregoing, the appeal is dismissed. The appellant Westwood is therefore required to comply with the decision of Deputy Judge Twohig.
COSTS
[24] Costs were reserved to me of the motion attendances of March 10, June 16 and the motion returned immediately prior to the appeal on September 11, 2017. Mr. Kapila was not successful on March 10, 2017. Success was divided on June 13, 2016. Mr. Kapila was not successful on the motion returned before me at the start of proceedings on September 11, 2017, at which the appellants were granted leave to appeal the second of the claims where were before the trial judge.
[25] In view of the outcome of the appeal, it is appropriate that each party bear its own costs with respect to the motions of March 10, June 16 and September 11, 2017.
[26] With respect to the appeal itself, Mr. Kapila was fully successful and is entitled to his costs.
[27] Although Mr. Kapila represented himself on the appeal, he asked for $23,750 in fees and $2,000 in disbursements for the cost of having a paralegal assist him. He had no documentation to substantiate this figure. I note that this figure is vastly disproportionate to the amount of the judgment.
[28] With respect to time lost from work, Mr. Kapila advised that he charges $150-$175/hour in his self-employment and that he took two days to prepare for the appeal plus a half day in court before me to argue his appeal.
[29] No receipts or other proof of disbursements was provided. I can observe, however, that Mr. Kapila has certainly been required to produce, copy and serve materials for the appeal. In my view $250 is an appropriate figure for his reasonable disbursements.
[30] On the basis of the foregoing I order costs to Mr. Kapila of two days of preparation time (16 hours) and a half day of attendance at court (4 hours), at his median hourly rate of $162.50, for a total of $3,250, plus $250 for disbursements, a total of $3,500 plus H.S.T.
[31] These costs are to be paid by the appellant Westwood to Mr. Kapila within 30 days.
McSweeney J.
Date: September 14, 2017
CITATION: Westwood Mall Holdings Limited v. Kapila, 2017 ONSC 5478
COURT FILE NO.: DC-16-150-0000
DATE: 20170914
ONTARIO
SUPERIOR COURT OF JUSTICE
(Small Claims Court Appeal)
B E T W E E N:
WESTWOOD MALL HOLDINGS LIMITED
C. M. Maurer, for the Appellant
Appellant (Defendant)
- and -
RAJESH KAPILA
Respondent (Plaintiff)
REASONS FOR JUDGMENT
[on appeal from a decision of Deputy Judge Twohig of the Small Claims Court at Brampton, released December 2, 2016]
McSweeney J.
DATE: September 14, 2017