Qairrulik Outfitting Ltd. v. Scholz, 2018 NUCJ 17

Nunavunmi Maligaliuqtiit NUNAVUT COURT OF JUSTICE Cour de justice du Nunavut Citation: Qairrulik Outfitting Ltd. v. Scholz, 2018 NUCJ 17 Date: 20180712 Docket: 08-18-004-CAC Registry: Iqaluit Applicant: Peter Samuel Scholz -and- Respondent: Qairrulik Outfitting Ltd. ________________________________________________________________________ Before: The Honourable Mr. Justice Paul S.

Rouleau Counsel (Applicant): Self-represented Counsel (Respondent): James Morton Location Heard: Iqaluit, Nunavut Date Heard: In writing Matters: Request for leave to appeal from the Small Claims Court judgment of Justice Paul Bychok of the Nunavut Court of Justice, dated March 16, 2018, with reasons reported at 2018 NUCJ 7 . REASONS FOR JUDGMENT (NOTE: This document may have been edited for publication)

I. OVERVIEW [ 1 ] The applicant seeks leave to appeal from a Small Claims Court judgment against him in the amount of $1,438.50. [ 2 ] Leave to appeal is required pursuant to section 5(3) the Rules of the Court of Appeal Respecting Civil Appeals , Nu Reg 023-2011 [“ Civil Appeal Rules ”], because the matter in controversy is less than $20,000. [ 3 ] Section 5(3) does not list any criteria to be considered in granting leave to appeal. Nor is there any reported decision that interprets section 5(3), or indicates what factors are to be considered. [ 4 ] In my view, the test should be as follows.

In order to obtain leave to appeal from a judgment of the Small Claims Court under section 5(3), the applicant must show that: 1. there is a reasonable chance of success on appeal, having regard for the standard of review; and 2. there is a question of law or jurisdiction that is of importance to the public; or 3. the expense of a further appeal is commensurate with the value to be gained from the appeal. [ 5 ] These three factors further the purposes underlying the leave requirement in section 5(3) in relation to judgments of the Small Claims Court. [ 6 ] As will be explained below, I find that the applicant has not met the test for leave to appeal.

Accordingly, the request for leave to appeal is dismissed. II. FACTS [ 7 ] The applicant, Peter Scholz, rented a snow machine from the respondent corporation, Qairrulik Outfitting Ltd., in Iqaluit. The company is owned and operated by Guy Vachon. [ 8 ] Mr. Scholz told Mr. Vachon that he intended to use the snow machine to travel to Ward Inlet the next day. Mr. Scholz agreed to pay $341.25, and signed a contract that read as follows: Rental For Tomorrow 1 Bear Cat from 9 – 5 p.m. Damages Lost Injuries

Your Responsibility [ 9 ] Mr. Scholz also understood that he was required to return the snow machine with a full tank of gas. [ 10 ] The following day, Mr. Scholz picked up the snow machine and departed for Ward Inlet on a full tank of gas. When he reached the end of Ward Inlet and started to return up Frobisher Bay, he came upon a polynya, a patch of open water surrounded by sea ice. The snowmobile path had deteriorated as it was low tide, and he could not get around it. He drove around for one hour unsuccessfully trying to find a route back to Iqaluit.

He then abandoned the snow machine, with only one-eighth of the gas tank remaining, and was later picked up by a helicopter. [ 11 ] The respondent brought a claim for $1,438.50 in Small Claims Court for the losses incurred in locating and retrieving the snow machine and for loss of use. The parties testified by phone and gave conflicting evidence. Mr. Scholz testified that he requested an extra tank of gas three times but Mr. Vachon declined, saying that an extra tank was not necessary for the route Mr. Scholz planned to take to Ward Inlet. Mr. Vachon testified that, to the contrary, he suggested that Mr.

Scholz take extra gas, and further informed him that the trip he was taking was not safe to undertake alone. Mr. Vachon’s employee witnessed the interaction and largely confirmed Mr. Vachon’s account. [ 12 ] In the judge’s view, this was a simple contract case. He acknowledged that he was unable to resolve the inconsistencies in the parties’ evidence by making findings as to reliability and credibility, because they had testified by phone and there had been no opportunity for cross-examination. However, it is implicit in the judge’s reasons that, in his view, resolving the inconsistencies was not necessary.

The respondent’s obligation under the rental contract was to provide a working snow machine with a full tank of gas. Mr. Scholz’s obligation was to return the machine in the same condition by 5 p.m. Mr. Scholz breached the contract when he abandoned the snow machine on the land. The judge concluded that Mr. Scholz was therefore liable to compensate the respondent for the loss suffered as a result of the breach, in the amount of $1,438.50. III. ISSUES [ 13 ] This request for leave to appeal raises two issues:

(1) What test should be applied to determine whether to grant leave to appeal from a Small Claims Court judgment under section 5(3) of the Civil Appeal Rules ?

(2) Should leave to appeal be granted in this case? IV. ANALYSIS [ 14 ] The matter in controversy in the proposed appeal is $1,438.50.

Leave to appeal is therefore required pursuant to section 5(3) of the Civil Appeal Rules , which provides as follows: 5(3) Where the matter in controversy in the appeal can be estimated in money and does not exceed the sum of $20 000, exclusive of costs, no appeal lies without the leave of a judge of the Court or of the court before which the matter was heard. [ 15 ] As already mentioned, there are no statutory criteria for leave listed in section 5(3) and there are no reported decisions establishing a framework for granting leave under section 5(3).

I will begin, therefore, by outlining the test that, in my view, must be satisfied to obtain leave to appeal from a Small Claims Court judgment pursuant to section 5(3). A. Issue One: What test should be applied to determine whether to grant leave to appeal from a Small Claims Court judgment under section 5(3) of the Civil Appeal Rules ?

[ 16 ] In my view, the process of devising a test must focus on furthering the purposes of the leave requirement in section 5(3) in relation to Small Claims Court judgments. [ 17 ] In Jeerh v Yorkton Securities Inc ., 2005 ABCA 64 , 363 AR 333 [ Jeerh ] , Wittmann ACJ was faced with a similar task. In Jeerh , the issue was whether leave to appeal from an order allowing an extension of time to file an expert report should be granted.

At that time, Part J 3(a)(ii) of the Practice Notes in the Alberta Rules of Court , Alta Reg 390/1968, specified that leave was required to appeal “any case management or pre-trial order directing adjournments, time periods or time limits”. [ 18 ] In Jeerh , as in this case, there were no statutory criteria and no reported decisions interpreting the requirements for leave. As a preliminary step, Wittmann ACJ carried out a review of factors considered by courts in determining whether leave should be granted.

Some of these factors were expressly listed in the statutory provision imposing the leave requirement, and others were read-in by courts interpreting leave provisions without any express criteria, such as the Bankruptcy and Insolvency Act , RSC 1985, c B-3, and the Companies’ Creditors Arrangement Act , RSC, 1985, c C-36.

Wittmann ACJ identified the following list of generalized factors considered by courts in granting leave to appeal, at paragraph 21: 1) whether there is an arguable case (having regard to the standard of review on appeal); 2) whether there is a question of law or jurisdiction at issue; 3) whether the law or precedent is of importance to others or the public; 4) the practical effect on the parties and the result in the particular case; 5) whether there will be undue prejudice to a party; 6) whether there is a bar to the appeal (i.e. would the appeal be nugatory or moot); 7) whether the expense of a further appeal is commensurate with the value to be gained from the appeal; and 8) the standard of review on the appeal if leave was to be given. [ 19 ] Wittmann ACJ then turned to consider which factors should be considered in granting leave under Part J 3(a)(ii).

In his view, the test had to incorporate the factors that furthered the purposes of Part J. [ 20 ] I propose to take a similar approach. First, I will consider whether there is any statutory or jurisprudential guidance as to the requirements for leave in Nunavut. Next, I will consider the purposes of the leave requirement in section 5(3) in relation to Small Claims Court judgments. Finally, I will consider which among the factors listed in Jeerh should be considered where leave to appeal from a Small Claims Court judgment is sought under section 5(3). i.

Statutory and jurisprudential guidance [ 21 ] There are no reported cases granting or denying leave to appeal from a Small Claims Court judgment under section 5(3). The Planning Act , RSNWT 1988, c P-7 [ Planning Act ], as duplicated for Nunavut by

section 29 of the Nunavut Act , SC 1993, c 28, appears to be the only statute with a leave requirement that has been addressed by the court. Section 51(2) of the Planning Act imposes a general requirement that leave be obtained for appeals under the Act . Section 51(1) specifies that, subject to section 51(2), an appeal lies from certain enumerated decisions made by an appeal board or by the Minister, if they raise a question of law or jurisdiction. In Dimitrik v Hamlet of Cambridge Bay ( Municipal Corporation of ), 2009 NUCJ 17 , [2009] Nu J No 18 (QL) , the Court was satisfied that the issue

raised “could qualify” as an issue of natural justice and was therefore a question of law for the purposes of

section 51. However,

section 51 has only marginal relevance to this case as it deals with leave to appeal from an administrative decision. ii. Purpose of section 5(3) in relation to Small Claims Court judgments [ 22 ] As I will explain, in my view, there are three central purposes underlying section 5(3) in relation to Small Claims Court judgments: finality, access to justice, and the elimination of unjustifiable expense and delay. [ 23 ]

Section 1.1 of the Small Claims Rules of the Nunavut Court of Justice , Nu Reg 023-2007, articulates two of the purposes that the Court’s rules seek to advance. That provision reads as follows: These Rules are intended to provide for the just determination of small claims, and shall be liberally construed to ensure simplicity in procedure , fairness in administration and the elimination of unjustifiable expense and delay . [Emphasis added.] [ 24 ] The simplified procedures of the Small Claims Court enhance access to justice for unrepresented litigants. As the Court explained in Swoboda v.

Nunavut ( Department of Health ), 2017 NUCJ 7 , [2017] Nu J No 9 (QL) , at paragraphs 14 and 42 , reversed on other grounds, 2017 NUCA 6 , [2017] Nu J No 24 (QL) : Small Claims Court has its own set of Small Claims Rules which are simplified to make the processes more accessible … In my view Small Claims Court is a venue designed for unrepresented individuals to access justice. [ 25 ] The very fact that a leave requirement is imposed signals the intent that Small Claims Court judgments are, in principle, to be final.

Rather than providing a statutory right of appeal, a party wishing to appeal must seek leave and establish why it is warranted. iii.

Proposed test for leave to appeal from Small Claims Courts judgments under section 5(3) [ 26 ] In my view, a party seeking leave to appeal from a Small Claims Court judgment should be required to show that: 1. there is a reasonable chance of success on appeal, having regard for the standard of review; and 2. there is a question of law or jurisdiction that is of importance to the public; or 3. the expense of a further appeal is commensurate with the value to be gained from the appeal [ 27 ] These factors, working together, further the three purposes identified above. [ 28 ] The requirement of a reasonable chance of success on appeal is, in my view, central to any test on leave.

This factor ensures that appeals that are frivolous or unlikely to succeed are barred and prevented from extending uncertainty and increasing expense and delay. This helps achieve all three objectives I have identified – finality, access to justice and the elimination of unjustifiable expense and delay. A party to a Small Claims Court matter should expect that the decision likely ends the matter. The goal of providing simplified and expedited procedures in Small Claims Court would be undermined if self-represented parties are exposed to frivolous appeals.

Where the party proposing to appeal cannot show that there is a reasonable chance of success on appeal, leave will be denied. [ 29 ] However, if the party proposing to appeal can satisfy this threshold, then the court will go on to consider whether either of the other two factors are also satisfied. Where the proposed appeal raises a question of law that is important to the public, there is a public interest in the matter being decided. An appellate court will have the opportunity to resolve confusion or uncertainty in the law. In this sense, granting leave furthers the goal of finality.

Given the public importance of the appeal, and the guidance it will provide to future litigants, the expense is not considered unjustified.

[ 30 ] Where there is no question of law or jurisdiction that is of importance to the public, the intent to limit appeals from Small Claims Court is to be given effect by denying leave where the expense of the appeal, to the court system and to the parties, far exceeds the value of the claim at issue. B. Issue Two: Should leave to appeal be granted in this case? [ 31 ] Mr. Scholz submits that he should be granted leave to appeal because the judge erred in failing to resolve the inconsistencies in the parties’ evidence, when their testimony was in direct conflict such that only one account could be true.

The onus was on the respondent to establish a contractual breach, and if the respondent’s evidence was untruthful, then the action should have been dismissed. Mr. Scholz also asserts that the judge ignored inconsistencies in the respondent’s evidence, and that the judge demonstrated bias against him. [ 32 ] In my view, the test for leave to appeal has not been met. There is no reasonable chance of success on appeal, particularly in light of the standard of review. The judge’s

interpretation of the rental contract involved a question of mixed law and fact, which attracts a deferential standard of review on appeal: Sattva Capital Corp. v Creston Moly Corp ., 2014 SCC 53 , [2014] 2 SCR 633 , at paragraphs 50 to 52 . The judge acknowledged the parties’ conflicting evidence regarding their discussions prior to signing the contract, but concluded that it was not necessary to resolve the inconsistencies in order to interpret the contract. The judge concluded that the contract, by its terms, was clear. The applicant does not point to any palpable and overriding error in the trial judge’s

interpretation of the terms of the contract, nor does his submission that the trial judge failed to resolve the inconsistencies in the evidence seriously undermine the trial judge’s conclusion as to the breach. [ 33 ] Further, the proposed appeal does not engage a question of law or jurisdiction that transcends the interests of the parties. This matter turned on the

interpretation of the specific contract between Mr. Scholz and the respondent. As for the allegation of bias, there is no support in the record for the suggestion that the judge approached the case with bias or prejudice, and certainly no evidence capable of displacing the strong presumption of judicial impartiality: Cojocaru v British Columbia Women’s Hospital and Health Centre , 2013 SCC 30 , [2013] 2 SCR 357 , at paragraph 22 .

There is no broader legal question or issue of public interest engaged by the proposed appeal. [ 34 ] I am also of the view that the expense of an appeal – both to the court system and to the parties – is disproportionate to the amount at issue in the proposed appeal. [ 35 ] Granting leave to appeal in this case would subject both parties to further costs and delay with little prospect that the result would be different, and would undermine the purposes of section 5(3) in relation to Small Claims Court judgments. I have concluded, therefore, that Mr. Scholz has not satisfied the test for leave to appeal. V.

DISPOSITION [ 36 ] I would dismiss the applicant’s request for leave to appeal. I would make no order as to costs as neither party has requested them. Dated at the City of Iqaluit this 12th day of July, 2018 ___________________ Justice P.S. Rouleau Nunavut Court of Justice