Rowling v Martin, 2017 ABQB 603

Court of Queen’s Bench of Alberta Citation: Rowling v Martin, 2017 ABQB 603 Date: 20171010 Docket: 1603 14999 Registry: Edmonton Between: Rachel Rowling, Dillion Rowling, Dallas Rowling, Gorgeous Getaway Inc. and Medaway Health Inc. Appellants - and - Melinda Martin Respondent _______________________________________________________ Reasons for Decision of the Honourable Madam Justice D.A. Sulyma _______________________________________________________

Appeal from the Order of The Honourable Judge K. Haymour Dated the 20 th day of July, 2016 ( Docket: P1490301275) Introduction [ 1 ] The appellants, Rachel Rowling, Dillion Rowling, Dallas Rowling, Gorgeous Getaway Inc. (Gorgeous), and Medaway Health Inc (Medaway) appeal from a consent order that sets out the terms of a settlement Rachel and the respondent, Melinda Martin, reached. [ 2 ] The appellants argue that the consent order is invalid because: (

i) Rachel did not have the authority to consent to it on Dallas and Dillion’s behalf; (ii) Rachel consented to it under duress; and (iii) it was beyond the jurisdiction of the Provincial Court. [ 3 ] For the reasons that follow, the appeal is dismissed.

Litigation History [ 4 ] On March 17, 2014, Melinda filed a civil claim against Rachel, her sons Dillion and Dallas, and their companies Gorgeous and Medaway, for unpaid wages and expenses. [ 5 ] Rachel filed a dispute note, on behalf of all the appellants, on March 31, 2014; and an amended dispute note and counterclaim, also on behalf of all the appellants, on June 5, 2014. [ 6 ] Melinda filed a dispute note to the appellants’ counterclaim on July 10, 2014. She retained counsel sometime after that. [ 7 ] On October 14, 2014, Melinda, her counsel, and Rachel attended a pre-trial conference with Judge Holmstrom.

Following the pre-trial conference, Judge Holmstrom issued an order requiring Rachel to deliver certain records, including financial records for Gorgeous and Medaway, to Melinda’s counsel. [ 8 ] Melinda’s counsel filed an amended civil claim, on Melinda’s behalf, on February 4, 2015. [ 9 ] On July 20, 2016, Melinda, her counsel, and Rachel appeared before Assistant Chief Judge Young for a trial. Before the trial started, they heeded Assistant Chief Judge Young’s advice and agreed to meet with another judge to see if they could reach a settlement: July 20, 2016 Hearing Transcript at 9/18-40.

Parties’ Settlement and the Order Appealed From [ 10 ] Melinda, her counsel, and Rachel then met with Judge Haymour for a pre-trial conference. They reached a settlement during the pre-trial conference, and then participated in a court proceeding to record the terms of their settlement. [ 11 ] The transcript of the court proceeding (at 18/16-25) shows that Judge Haymour and Rachel had this exchange: THE COURT: So you’re here on behalf of Gorgeous Getaways Inc., Medaway Health Inc., yourself, Rachel Rowling, Dillion Rowling, and Dallas Rowling. Is that correct, ma’am? MS. ROWLING: That’s correct.

THE COURT: And you have authority to settle on behalf of those -- all those parties? MS. ROWLING: Yes. [ 12 ] Judge Haymour then recited the terms of the parties’ settlement, as they would appear in his order. After reciting the terms, he had this exchange with Rachel (at 21/41-22/6): THE COURT: Ma’am, you’ve heard me recite the terms of the order. Are those terms acceptable and satisfactory to the defendants?

MS. ROWLING: Yes. THE COURT: Thank you. This order will be prepared by Mr. Clerk. It will be signed by me. It will be mailed out to all parties. Congratulations. ... [ 13 ] The order was prepared; signed by Judge Haymour; and filed on July 21, 2016 (the July 2016 Order). Among other things, it provides that: ... 3. The Defendants shall cause a Notice of Withdrawal of their Counterclaim against the Plaintiff to be filed forthwith. 4. The Defendants shall pay the Plaintiff the sum of $17,900.00, inclusive of interest and costs in full and final settlement of the Plaintiff’s claim.

This amount shall be paid by the Defendants to the Plaintiff by way of monthly instalments of $200.00 commencing on August 1, 2016 and continuing on the 1 st day of each month thereafter. ... 7. Upon payment of the entire balance as specified in paragraph 4 of this Order, the Plaintiff shall cause a Notice of Withdrawal to be filed with the Clerk of the Court of her Civil Claim. 8. In the event that the settlement proceeds are not paid as specified in paragraph 4 of this Order or any payment is missed by the Defendants, the Plaintiff shall be entitled to apply for

Summary Judgment against all the Defendants ... for the sum of $17,900.00 minus any payments made by the Defendants, plus pre-judgment interest, plus costs by way of desktop application with Affidavit attached. [ 14 ] In accordance with the terms of the parties’ settlement, and the July 2016 Order, Rachel filed a notice of withdrawal of the appellants’ counterclaim on July 20, 2016, and began making monthly payments to Melinda. Appeal and Application to Adduce New Evidence [ 15 ] The appellants subsequently retained counsel and, on August 19, 2016, they filed an appeal from the July 2016 Order, pursuant to

section 46 of the Provincial Court Act , RSA 2000, c P-31. [ 16 ] The appellants’ notice of appeal claims that Judge Haymour: (i) “erred in inferring an agency agreement between Rachel” and Dillion and Dallas, and “therefore erred in granting the judgement without the consent of Dillion ... and Dallas”; (ii) “erred in granting the order despite [Rachel’s] obvious duress”; and (iii) “erred in granting judgment against [Rachel, Dillion and Dallas] in their personal capacity” as “the Provincial Court ... lacks jurisdiction to make such an order.” [ 17 ] The appellants filed two affidavits in support of their appeal.

Both were sworn by Rachel after the appeal was filed and, therefore, constitute new evidence. The appellants seek to have me consider this new evidence on appeal. [ 18 ] Melinda objects to me considering the new evidence, arguing that this appeal should be heard as an appeal on the record.

Relevant Legislation [ 19 ] The Provincial Court Act provides that: 46(1) Any party may appeal a decision of the Provincial Court to the Court of Queen’s Bench ... ... 51 An appeal is to be heard as an appeal on the record unless, on application by a party, the Court of Queen’s Bench orders the appeal to be heard as a trial de novo. Issues [ 20 ] These are the issues I must determine: (

i) Can I consider the appellants’ new evidence on appeal? (ii) Did Rachel act as Dallas and Dillion’s agent in the Provincial Court? (iii) Did Rachel consent to the July 2016 Order under duress? (iv) Did Judge Haymour exceed his jurisdiction?

Analysis Can I consider the appellants’ new evidence on appeal? [ 21 ] The July 2016 Order is a consent order. It arose from the settlement Rachel and Melinda reached, not as a result of any adjudication or pronouncement by Judge Haymour: Gingrich v Gingrich , 2012 ABCA 371 at para 9 , [2012] AJ No 1214 (QL) [ Gingrich ]. [ 22 ] In these circumstances (where there has been no adjudication or pronouncement by the Provincial Court), it is questionable whether

section 51 can be relied on to admit new evidence on appeal. As Melinda’s brief quite properly points out (at para 23), this appeal cannot be heard as “a trial de novo”, as there was no trial, nor even a contested hearing, in the Provincial Court. [ 23 ] That said, in my view, fairness dictates that I must consider the appellants’ new evidence on this appeal.

This is because the new evidence challenges the validity of the settlement that led to the July 2016 order, and the Provincial Court record only provides limited information about how the settlement was reached. [ 24 ] Accordingly, in deciding this appeal, I will consider the Provincial Court record and Rachel’s affidavit evidence.

Did Rachel act as Dallas and Dillion’s agent in the Provincial Court? [ 25 ] It is clear from the transcript of the court proceeding before Judge Haymour that Rachel approved the July 2016 Order on behalf of all the appellants, after confirming that she had the requisite authority. [ 26 ] Rachel’s confirmation that she appeared before Judge Haymour on behalf of all the appellants, and had the authority to settle the parties’ dispute on their behalf, is supported by the affidavits of service Melinda filed, the pleadings filed on behalf of the appellants, and Rachel’s other court attendances. [ 27 ] The affidavits of service show that each of the appellants was properly served with a copy of Melinda’s civil claim on March 19, 2014, when five copies of the claim were personally delivered to Rachel at her residence: Provincial Court Act , s 29.

The affidavits of service state that Rachel’s residence was also Dallas and Dillion’s “most usual place of residence”, and that Rachel was a director of Gorgeous and Medaway. [ 28 ] The only pleadings filed by the appellants are the dispute note filed on March 31, 2014; and the amended dispute note and counterclaim filed on June 5, 2014.

Both indicate they were prepared by Rachel “on behalf of” all the appellants, and provide only a single address for service for the appellants. [ 29 ] And, finally, Rachel was the only appellant to appear before Judge Holmstrom for the October 14, 2014 pre-trial conference; and before Assistant Chief Judge Young for the July 20, 2016 trial (which did not end up proceeding). [ 30 ] In these circumstances, the appellants’ argument that the July 2016 Order is invalid because Rachel did not have the authority to consent to it on Dallas and Dillion’s behalf must fail.

Rachel’s affidavit evidence suggesting that the situation was something other than what she consistently represented to the Provincial Court is unpersuasive.

That is, it does not persuade me that Rachel lacked the authority to act on behalf of all the appellants, including Dallas and Dillion, to resolve the parties’ dispute. [ 31 ] Rachel’s affidavits do not say: • that she failed to pass Dallas and Dillion’s copies of Melinda’s civil claim on to them; • that Dallas and Dillion did not give her permission to act on their behalf in the Provincial Court litigation; • the Dallas and Dillion did not give her permission to act on their behalf to settle the parties’ dispute; • that she was mistaken about the authority she had to act on Dallas and Dillion’s behalf; nor • that she misled Melinda and the Provincial Court into believing that she was Dallas and Dillion’s agent, with the authority to settle the parties’ dispute on their behalf. [ 32 ] Instead, they simple state: I attended trial in Provincial Court for this matter on July 20, 2016.

I appeared on behalf of all named Defendants. I had authority to act for the corporate Defendants as a director. However, my sons were unaware of the proceedings. As they are legal adults, I had no authority to act or settle on their behalf: January 19, 2017 Affidavit at para 6. [ 33 ] It is unclear what “proceedings” Rachel is referring to. It seems likely that she is only referring to the July 20, 2016 proceedings, and not suggesting that Dillion and Dallas did not receive notice of Melinda’s action.

Moreover, Rachel admits that she appeared in court on behalf of all the appellants, including Dallas and Dillion. And, finally, the only basis Rachel provides for her claim that she “had no authority to act or settle” on Dallas and Dillion’s behalf is that her sons “are legal adults”, which is no basis at all given that an adult is entitled to be represented by an agent in Provincial Court proceedings: Provincial Court Act , s 62(1)(b). [ 34 ] It is also noteworthy that the appellants did not seek to adduce any evidence from Dallas or Dillion on this appeal.

Surely they would have been in the best position to say what authority they gave, or did not give, Rachel to act on their behalf.

[ 35 ] Based on the Provincial Court record, and having considered Rachel’s affidavit evidence, I am satisfied that the situation was what Rachel consistently represented to the Provincial Court (in the pleadings she filed and during her court attendances). That is, I am satisfied that Rachel had the authority to act on Dallas and Dillion’s behalf in the Provincial Court litigation, and settle the parties’ dispute on their behalf. Accordingly, the appellants’ first ground of appeal is dismissed.

Did Rachel consent to the July 2016 Order under duress? [ 36 ] Regarding Rachel’s agreement to the terms of the July 2016 Order, there is nothing in the record to support the appellants’ claim that she was under duress at the relevant time.

To the contrary, the record shows that: • Rachel appeared before Assistant Chief Judge Young to conduct a trial on behalf of the appellants; • before the trial commenced, she heeded Assistant Chief Judge Young’s advice and agreed to meet with another judge to try to settle the matter; • then she participated in a pre-trial conference with Judge Haymour; • she reached a settlement with Melinda during the pre-trial conference; • then she participated in a court proceeding to record the terms of the settlement; and, • during the court proceeding, she clearly indicated to Judge Haymour that she consented to the terms he recited (which are the terms of the July 2016 Order). [ 37 ] Nothing in the record suggests that Rachel was anything but composed during the court proceedings before Assistant Chief Judge Young and Judge Haymour.

One would have thought that, if Rachel was “visibly distraught, crying, and overly emotional”, as the appellants claim on this appeal, there would be some indication of that in the record: Appellants’ Brief at para 40. [ 38 ] The reasonable payment plan in the July 2016 Order also goes against the appellants’ claim that Rachel was under duress at the relevant time.

The fact that Melinda agreed to accept low monthly payments ($200 per month) from the appellants indicates that Rachel was a competent and active participant in the settlement negotiations that led to the July 2016 Order. [ 39 ] It is also noteworthy that Rachel complied with the July 2016 Order immediately after consenting to its terms, by filing a notice of withdrawal of the appellants’ counterclaim that day (on July 20, 2016). Rachel also made monthly payments to Melinda, although her affidavit evidence suggests she did so “under protest”: January 19, 2017 Affidavit at para 15.

These actions indicate that Rachel understood the terms she agreed to, and what they obliged her to do. [ 40 ] I am not persuaded by Rachel’s affidavit evidence suggesting that she consented to the July 2016 Order under duress.

That is, I am not persuaded by Rachel’s bald assertions (in her January 19, 2017 Affidavit): • that she was fearful, distraught, “not thinking straight”, and “just want[ing] it to end”, during the July 20, 2016 pre-trial conference with Judge Haymour (para 11); • that she “believed that consenting to the July 2016 Order “was [her] only way out” (para 12); and • that she “was not aware what exactly [she] was consenting to” and “blindly consented because [she] thought [she] had no other options” (para 13). These assertions fly in the face of the Provincial Court record.

They also fly in the face of the appellants’ admission (at para 45 of their Brief) that Melinda’s counsel and Judge Haymour never “acted maliciously”. [ 41 ] There is no suggestion in Rachel’s affidavit evidence, or the appellants’ arguments, that Melinda, her counsel, or Judge Haymour acted anything but appropriately during the July 20, 2016 pre-trial conference.

That is, there is no suggestion in the materials before me that anyone unfairly wielded any power to compel Rachel to agree to anything during the parties’ settlement negotiations. [ 42 ] The appellants’ claim that there was an imbalance of power between the parties, because Melinda was represented by counsel and Rachel was not, is insufficient (in and of itself) to establish duress. It is clear from the Provincial Court record, and Rachel’s affidavit evidence, that she “ elected to self-represent”: January 19, 2017 Affidavit at para 7 (emphasis added).

It is unreasonable for her to now claim that, as a result of her own election (and not due to any fault on the part of Melinda, her counsel, or Judge Haymour), she felt “that she was being coerced into consenting” to the July 2016 Order: Appellants’ Brief at para 45. [ 43 ] What Rachel’s affidavit evidence suggests is that, with the benefit of after-the-fact legal advice and hindsight, she is unhappy with the bargain she struck on behalf of the appellants.

This is insufficient to invalidate the July 2016 Order. [ 44 ] Based on the Provincial Court record, and having considered Rachel’s affidavit evidence, I am not satisfied that Rachel consented to the July 2016 Order under duress. The appellants have failed to persuade me that Rachel did not freely and willingly agree to the terms of the parties’ settlement, and consent to the July 2016 Order. Accordingly, the appellants’ second ground of appeal is dismissed.

Did Judge Haymour exceed his jurisdiction? [ 45 ] Finally, the appellants’ jurisdictional argument fails because it is premised on a mischaracterization of the July 2016 Order. As I said earlier, the July 2016 Order is a consent order. It arose from the settlement Rachel and Melinda reached, not as a result of any

adjudication or pronouncement by Judge Haymour. [ 46 ] The only jurisdiction Judge Haymour exercised was his jurisdiction to make an order setting out the results of the July 20, 2016 pre-trial conference (that is, the terms of the parties’ settlement), and the parties consented to the terms he set out: Provincial Court Act , s 64(2)(b). Judge Haymour did not exercise the jurisdiction the appellants say he lacked. That is, he did not make any decision on Rachel, Dallas and Dillion’s personal liability as directors of Gorgeous or Medaway. Accordingly, the appellants’ third ground of appeal is dismissed.

Result [ 47 ] The appeal is dismissed in its entirety and the July 2016 Order is confirmed. Costs [ 48 ] Melinda is entitled to costs in the sum of $1,000.00. Heard on the 10 th day of March, 2017. Dated at the City of Edmonton, Alberta this 10 th d ay of October, 2017. D.A. Sulyma J.C.Q.B.A. Appearances: Jeffery P. O'Brien of Combe & Kent for the Appellants Bradley J. Smith of McLennan Ross LLP for the Respondent