Manarin v. Stelmaschuk Doucette Realty Ltd. et al. Date:, 2010 BCPC 332

Citation: Manarin v. Stelmaschuk Doucette Realty Ltd. et al. Date: 20101217 2010 BCPC 0332 File No: 0729046 Registry: Prince George IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: RODNEY J. MANARIN CLAIMANT AND: JAROSLAW STELMASCHUK DOUCETTE REALTY LTD. HELEN LECKIE DEFENDANTS REASONS FOR JUDGMENT WITH REGARD TO FEES, EXPENSES AND PENALTY OF THE HONOURABLE ASSOCIATE CHIEF JUDGE M.J. BRECKNELL Appearing on his own behalf: R. Manarin Counsel for the Defendants Doucette Realty Ltd. and Helen Leckie: J. Clee Place of Hearing: Prince George, B.C.

Date of Hearing: October 26, 2010 Date of Judgment: December 17, 2010 INTRODUCTION [ 1 ] Subsequent to a trial in which they successfully defended themselves against claims of professional negligence, the Defendants, Doucette Realty Ltd. (Doucette) and Helen Leckie (Ms. Leckie) (collectively the Realtors) seek fees, expenses, and a penalty against the Claimant, Rodney Manarin (Mr. Manarin) as provided for in Rule 20 of the Small Claims Rules . [ 2 ] Mr. Manarin opposes the Realtors application for any of fees, expenses or a penalty. [ 3 ] The other Defendant, Jaroslaw Stelmaschuk (Mr. Stelmaschuk) against who Mr.

Manarin was partially successful in the trial, was not further involved in these proceedings. THE TRIAL [ 4 ] Mr. Manarin sued the Realtors alleging that Ms. Leckie, a real estate agent employed by Doucette, was professionally negligent due to a misrepresentation of the square footage of the home she listed on behalf of Mr. Stelmaschuk which Mr.

Manarin and his wife purchased. [ 5 ] The evidence at the trial was heard over six days commencing on February 11, 2008 and ending on April 2, 2009. [ 6 ] All the parties provided written submissions including extensive case authority between July 3, 2009 and October 22, 2009. [ 7 ] The Judgment was reserved and extensive written reasons were delivered on February 19, 2010. The trial decision can be found at 2010 BCPC 81 (CanLII) , 2010 BCPC 0081 .

[ 8 ] In the decision I referred to the parties’ submissions on Costs as follows: COSTS [142] Mr. Manarin submissions on these issues can be summarized as follows: Realtors’ counsel did not prepare an Agreed Statement of Facts after requested to do so by the Court; Realtors’ counsel subpoenaed witnesses who she did not call; Realtors’ counsel made bare allegations without providing evidence in support; Realtors’ counsel alleged on several occasions that she had provided documents to Mr.

Manarin which was not true; Realtors’ counsel was coaching witnesses during the trial; The actions of Realtors’ counsel contributed to additional hearing dates being required and as such costs should not be awarded to them. [143] Neither Ms. Clee on behalf of the Realtors or Mr.

Stelmaschuk addressed the issue of costs in detail in their written submissions. [ 9 ] However, the Realtors’ counsel did mention the issues of costs and penalty in her September 23, 2009 written submissions. [ 10 ] Under the heading Discussion and Decision and the sub-heading General Comments, I made the following observations: [144] This case took six days, largely as a result of poor cooperation and organization by the parties and counsel, and a demonstrable misunderstanding of what evidence may be permitted in a Small Claims proceeding particularly on the part of Mr. Manarin and Ms.

Clee. [145] The Small Claims Act clearly provides for procedure which permits evidence that would otherwise be hearsay to be accepted in appropriate circumstances. [146]

Section 16 of the Act says: 16.

(1) The Provincial Court may admit as evidence in a proceeding under this Act or the rules any oral or written testimony, record or other thing that the court considers is credible or trustworthy and is relevant to the matter being heard, even though the testimony, record or other thing is not admissible as evidence in any other court under the laws of evidence. [147] Rule 10 of the Small Claims Rules says in part: How evidence will be heard at a trial 1) A judge may conduct a trial without complying with the formal rules of procedure and evidence, and in doing so may (

a) ask the parties to explain their cases, to respond to each other and to call witnesses (see Rules 7(15)(

b) and 7.5(15)(b)), or (

b) receive evidence in any other way the judge thinks is appropriate (see Rules 7(15)(

b) and 7.5(15)(b)). [148] All of the parties are guilty of failing to cooperate with regard to the production of documentary evidence much of which was either duplicated, disorganized or in the case of photocopied photographs of limited assistance. [149] It would have been most preferable for the parties to agree on a common book of documents, subdivided into documents of a particular type or nature, properly numbered and if necessary with a brief explanation [150] Failing such cooperation even if each party who relied on photographs had taken the time to include only colour pictures properly organized and numbered with a brief description of the date the pictures were taken and what was being depicted, it would have been of great assistance. [151] Unfortunately, neither of these courses of action were taken leaving the Court with a largely disorganized array of evidence requiring many hours of collating, cross-referencing and review before fact finding could even begin. [152] In their submissions, all the parties mistakenly ascribed to witnesses certain points of evidence which those witnesses did not give.

This failure to accurately summarize the evidence in submissions required further review of the many volumes of transcripts to confirm what the witnesses actually said. [153] In addition, all the parties pointed to circumstances that arose after the events in issue before the Court asking that the Court take note of or rely on those later circumstances which, for the most part, is something the Court is unable to do. [ 11 ] After dismissing Mr.

Manarin’s claim against the Realtors, I again referred to Costs as follows: COSTS [216] Unless there are matters of which I am not aware, such as formal offers to settle, I do not award costs or penalties in favour of or against any party. Mr. Manarin’s success was nominal at best. All of the parties share some responsibility for the protracted length of the proceeding. [217] If there are matters concerning offers to settle, costs or penalties that must be determined, the parties should make their intention

known to the registry by March 19, 2010. THE LAW [ 12 ] The relevant portions of Rule 20 of the Small Claims Act with regard to this application are: Successful party to receive filing and service fees

(2) An unsuccessful party must pay to the successful party the following expenses, unless a judge or registrar orders otherwise: (

a) any fees the party paid for filing any documents; (

b) reasonable amounts the party paid for serving any documents; (

c) any other reasonable charges or expenses that the judge or registrar considers directly related to the conduct of the proceeding. Determination of expenses

(3) A judge may determine the amount of the expenses that are payable under sub rule (2) or refer the matter to the registrar. A judge may order a penalty

(5) A judge may order a party to pay the other party up to 10% of the amount claimed or the value of the claim or counterclaim if the party made a claim, counterclaim or reply and proceeded through trial with no reasonable basis for success. Compensation for unnecessary expenses

(6) A judge may order a party or witness whose conduct causes another party or witness to incur expenses to pay all or part of those expenses. [ 13 ] In support of their application for fees, expenses and a penalty, the Realtors’ counsel referred the Court to the following decisions: 1. Ciappara v. Rover et al, Unreported, July 9, 2001, Provincial Court of British Columbia, Action No. C5882, Courtenay Registry 2. King v. Bruce et al, Unreported, February 17, 2003, Provincial Court of British Columbia, Action No. C01-1093, Victoria Registry (page 6) 3. Johnston v.

Morris et al, Unreported, July 16, 2004, Provincial Court of British Columbia, Action No. C5229, Campbell River Registry, Order made May 31 , 2003 re: Costs and supporting documents 4. Hodges v. Wilson et al, Unreported, March 25, 2009, Provincial Court of British Columbia, Action No. C5755, Campbell River Registry: Ruling re Cost 5. Lintotts Holdings Corp. v. Kim 2003 BCPC 66 6. Hebert v. Bunt 2001 BCPC 217 7. Philion v. Jeeves et al, Unreported, 100 Mile House Registry No. 94-2123, September 14, 1994 (B.C.P.C.) 8. Sheridan v. British Columbia Rapid Transit Co. (Skytrain) et al 9. Braithwaite v.

Duncan Summer Swim Club 2008 BCPC 68 [ 14 ] Mr. Manarin did not provide any case law or take any issue with the cases presented by the Realtors’ counsel, save and except that he submitted they did not apply to this proceeding. SUBMISSIONS Introduction [ 15 ] Written submissions were provided as follows:

a) Mr. Manarin – May 11, 2010

b) The Realtors – June 2, 2010

c) Mr. Manarin – October 13, 2010

d) The Realtors – October 22, 2010 [ 16 ] Brief oral submissions were made on October 26, 2010. [ 17 ] In support of their position concerning fees and expenses the Realtors submitted a

summary of expenses incurred and documentation to verify those expenses.

Realtors Position [ 18 ] The Realtors specifically rely only on Rule 20. They acknowledge that there was no offer to settle provided for under Rule 10.1. [ 19 ] It is clear from the Realtors’ June 2, 2010 submissions, that their counsel put Mr. Manarin on specific notice that if they were successful in defending his claims against them they would seek costs (more properly referred to in the Small Claims Rules as Fees and Expenses) and a penalty as provided for under Rule 20. [ 20 ] The Realtors also maintain that Mr.

Manarin’s case did not have a “reasonable chance of success” based on the case law the Court eventually relied on at trial. [ 21 ] In support of their claims for various types of fees and expenses, the Realtors referred the Court to case law in which various types of fees and expenses were awarded. The Realtors do acknowledge that the award of fees and expenses under Rule 20 (2) is discretionary. [ 22 ] On the matter of a penalty, the Realtors also relied on the case law provided urging the Court to award the full 10% penalty to each of Ms. Leckie and Doucette. Mr. Manarin’s Position [ 23 ] Mr.

Manarin’s position in opposition to the Realtors claim for fees, expenses and a penalty, can be summarized as follows: a. The trial decision and in particular the paragraphs I have quoted above have dealt with the issue; b. There was no formal offer to settle under Rule 10.1; c. The fact that his claim against the Realtors made to the Real Estate Council has no relevance to the proceedings before the Court; d.

The Realtors referred briefly to costs and penalty in the written submissions of September 23, 2009, and based on the comments in the trial decision they should not be permitted to raise those issues again; e. The Court found the trial was prolonged by the actions of all the parties including the Realtors and their counsel; f. The Court should hold the Realtors’ counsel, Ms. Clee, to a higher standard with a regard to the prolonged length of the trial and the unnecessary expenses she incurred; g. The Realtors have professional insurance. Under that insurance if they are sued they are represented by counsel.

There was no evidence presented that the Realtors actually incurred any expenses themselves; h. Many of the expenses claimed by the Realtors are as a result of them retaining out of town counsel who was as much at fault as the other parties for the complications and protracted nature of the proceedings and as such the Realtors should not be compensated for the misconduct of their counsel; i. If the Realtors were so certain his case was without merit they could have applied to have it summarily dismissed; j. The actions of the Realtors’ counsel caused Mr.

Manarin to incur further expenses which would not have otherwise been incurred. DISCUSSION [ 24 ] It is clear from my comments in the trial decision that I concluded that all the parties bore significant responsibility for the protracted time this case took and for the disorganized fashion in which the exhibits and other evidence was presented. [ 25 ] Those observations will apply to many of the claims for fees and expenses claimed by the Realtors.

Had the matter had been properly organized and presented it could easily have been concluded in much less time and if the estimate of time had been properly made at the outset, it could have been concluded in one continuous sitting thereby negating the need for additional travel and accommodation or the ordering of transcripts. [ 26 ] Furthermore, I was well aware of the anticipated expenses the Realtors were incurring, having observed the trial as it winded its way through the court process and in the comments and concerns I raised during the trial. [ 27 ] In light of those comments I am not persuaded by the Realtors’ submissions that I should resile from my determination on fees and expenses in the trial decision and, as such, their claims in those areas are dismissed. [ 28 ] That analysis does not apply to the issue of a penalty however.

As set out in Rule 20 (5) a penalty may be awarded if a party proceeds to trial with no reasonable basis for success. [ 29 ] Even though I agreed with Mr. Manarin that Ms. Leckie’s actions were not to the standards most people would expect from a professional realtor, I also agree with the Realtors’ counsel that Mr. Manarin should have recognized that he had very little chance of success in his claim because of the strict

interpretation of what a Claimant must prove in such a law suit. [ 30 ] At the time Mr. Manarin commenced this proceeding he was a person with much more experience concerning the real estate market than the average citizen, both from his own past work experience and being married to a lawyer who, at one point in time, practiced conveyancing law. [ 31 ] At the time of the trial decision I was not aware of the extensive and earnest efforts made by the Realtors’ counsel to deter Mr.

Manarin from his misguided course of action, including her urging of him on more than one occasion to obtain appropriate legal advice. [ 32 ] Having now been made aware of that information, I conclude that based on the case law provided and Rule 20 (5) that a penalty is appropriate in this case. [ 33 ] The original claim against the Realtors by Mr. Manarin was for damages in the amount of $21,675.00. [ 34 ] Rule 20 (5) allows for a maximum penalty of 10% or $2,167.50. [ 35 ] Based on Philion , Sheridan and Braithwaite , cited by the Realtors’ counsel the Court may award a penalty to each of the Defendants, Ms.

Leckie and Doucette, individually. [ 36 ] That is what the Realtors seek, the sum of $2,167.50 for each of Ms. Leckie and Doucette for a total of $4,335.00. [ 37 ] Rule 20 (5) provides for a maximum penalty of 10% of the claim. In paragraph 16 of Braithwaite , Palmer PCJ, set out when a maximum penalty should be imposed: 16 It must be understood by those who use the justice system that its “heavy hammer” must be used fairly, cautiously and only as a last resort to solve a dispute. It must never be used – or abused – as a tool of revenge or with the sole purpose of salving and imaginary slight or insult.

The machinery of this system must not be employed solely to create stress, inconvenience or unnecessary expense. Those who ignore this caution do so at their peril and, where they persist even in the face of warnings, they must be prepared to compensate those from whom they seek to extract concessions, financial or otherwise. [ 38 ] Although Mr. Manarin pursued a course of action in these proceedings with no reasonable basis for success.

However, I am unable to conclude that he used the proceedings as a tool of revenge which would require the maximum rebuke as described in Braithwaite . [ 39 ] Although represented by the same counsel through their insurer, both Ms. Leckie and Doucette were put to the inconvenience and expense when they had what turned out to be an unassailable defence to Mr. Manarin’s claims and for that they are entitled to be compensated. [ 40 ] Mr.

Manarin shall pay a penalty to each of Helen Leckie and Doucette Realty Ltd. the amount of $1,500.00 for a total of $3,000.00 or approximately a 7% penalty payable to each. [ 41 ] Unless Mr. Manarin applies for a payment hearing under Rule 12, the penalties shall be paid in full to each of Ms. Leckie and Doucette Realty Ltd. no later than June 30, 2011. ______________________ M. J. Brecknell Associate Chief Judge of the Provincial Court