2017 NUCJ 7, 2017 NUCJ 7

nunavuumi iqkaqtuijikkut NUNAVUT COURT OF JUSTICE La Cour de justice du Nunavut Citation: Swoboda v. Government of Nunavut, 2017 NUCJ 7 Date of Judgement: 2017-01-18 File Number: 08-16-523 SCU Registry: Iqaluit Plaintiff (Respondent): Irene Gail Swoboda -and- Respondent (Applicant): Her Majesty the Queen in right of Government of Nunavut Department of Health and Department of Medical Travel ________________________________________________________________________ Before: The Honourable Mr. Justice Sharkey Counsel (Plaintiff/Respondent): Self-Represented Counsel (Respondent/Applicant): A.

Silk Location Heard: Iqaluit, Nunavut Date Heard: December 12, 2016 Matters: Small Claims Rules of the Nunavut Court of Justice , Nu. Reg. 023-2007; Small Claims; Application to set aside default judgment REASONS FOR JUDGMENT (Delivered Orally) (NOTE: This document may have been edited for publication)

A. INTRODUCTION [ 1 ] The Small Claims Rules of the Nunavut Court of Justice , Nu. Reg. 023-2007 [ Small Claims Rules ] allow for claims of up to twenty thousand dollars ($20, 000). [ 2 ] This is a motion by the Government of Nunavut [GN] to set aside a default judgment made under the Small Claims Rules in favor of Irene Swoboda in the amount of $9,969.79. [ 3 ] Ms. Swoboda claimed the GN owed her this amount for medical travel to Ottawa which she paid for herself.

And she was issued a default judgment because the GN did not file any defence to her claim within the time limits allowed under the Small Claims Rules . [ 4 ] The GN now wants Ms. Swoboda’s case to be re-opened, and to have it taken out of small claims court completely. The GN wants the case to be transferred to the Nunavut Court of Justice for what is called a judicial review of the Government’s decision to deny Ms. Swoboda’s original claim for medical travel. B. BACKGROUND [ 5 ] Irene Swoboda is a resident of Arctic Bay.

In the years prior to 2016 she had made annual trips from Arctic Bay to Ottawa for a medical diagnostic procedure which was paid for by the GN. She had an appointment for this same procedure scheduled for January 2016. [ 6 ] However, in December 2015 Ms. Swoboda was told that her upcoming travel for the Ottawa appointment would not be approved because the diagnostic procedure could be performed in Iqaluit, and that only her travel to Iqaluit would be paid for. [ 7 ] Ms. Swoboda disagreed with the Government’s position.

She believed that it was necessary for her to have this procedure in Ottawa andso she travelled to Ottawa at her own expense. [ 8 ] In March 2016, Ms. Swoboda used the GN’s internal appeal process and appealed the decision not to pay for these travel expenses. This internal appeal was denied in April 2016. [ 9 ] In August 2016, Ms.

Swoboda filed a claim against the GN in Small Claims Court for reimbursement on the basis that the GN had breached her entitlements under the Health Services Medical Travel Policy made pursuant to the Hospital Insurance and Health and Social Services Administration Act , RSNWT (Nu) 1988, c T-3 [ Hospital Insurance Act ]. [ 10 ] She claimed $ 9, 969.79 for her travel expenses: This included hotels, airfare, lost wages, per diems for meals, ground transportation, seven hours in wages for “time dealing with the GN for approval and appeal,” and $75 in small claims filing fees. [ 11 ] I should point out from the outset that the medical procedure involved in this case is not relevant to my decision.

Similarly, the GN rules about medical travel are not relevant to my decision. [ 12 ] This is not a case about medicine or medical travel. It is not a case about the decision making power of the Minister of Health or his officials to administer the GN Medical Travel Policy. [ 13 ] This is a case about time limits, rules, and dates for filing – full stop. It is about whether one party to a law suit should be allowed back in the game (so to speak) when they miss a time limit. It is a case about the impact of time limits in the context of the Small Claims Rules and what impact that should have.

[ 14 ] Small Claims Court has its own set of Small Claims Rules which are simplified to make the processes more accessible, but still follow the same principles as the Nunavut Rules of Court which govern larger or more complex claims. [ 15 ] Pursuant to Rule 6.1 of these Small Claims Rules , the GN had thirty (30) days to reply to the claim and file a basic defence. Failing the filing of such a Reply, the Rules would permit Ms. Swoboda to note the GN in default after those 30 days. [ 16 ] Ms. Swoboda served her claim on the GN’s legal department on October 19 th 2016.

Consequently, as of 9:00am on Monday, the 21 st of November 2016, with no Reply from the GN, the Rules permitted her to obtain a Judgment on a default or uncontested basis. [ 17 ] Ms. Swoboda applied for that judgment in default on the 21 st of November and on November 22 nd 2016 a Certificate of Judgment was issued in her favor against the GN in the amount of her claim, namely $ 9,969.79. [ 18 ] This was not a decision by the Court validating her claim or commenting on medical travel, it was simply a procedure by a Clerk which approves Claims when no defence has been filed.

In the everyday work of the Court, this happens reasonably often. C. REASONS GIVEN FOR DEFAULT BY GOVERNMENT [ 19 ] The Nunavut Government’s explanation for failing to file a statement of defence in a timely fashion is before the Court in the form of an Affidavit from the Director of the Legal Division for the Nunavut Department of Justice. [ 20 ] In this affidavit, the Director says that due to a high turnover and a shortage of lawyers the Swoboda file was not assigned to a specific lawyer until early November 2016.

Instructions were given to prepare a draft Statement of Defence for the Director’s review upon completion. This draft was eventually sent to the Director on November 15 th 2016.

At the time the file was assigned to counsel the Director had incorrectly flagged the default date or time limit for filing a defence as December 2 nd 2016, and so had incorrectly diarized the filing date. [ 21 ] In the interim, on November 17 th 2016, the Director left Nunavut on duty travel and did not return until the evening of Monday, November 21 st 2016 at which time she realized that the statement of defence should have been filed with the court on Friday, November 18 th 2016. [ 22 ] The Director says that she immediately finalized the statement of defence and shortly thereafter presented it to the Clerk of the Small Claims Court indicating that it was being filed late.

It is perfectly permissible to file a Reply after the default date but only if no Default has been requested and issued by the Clerk. [ 23 ] The Director completed the Small Claims Reply Form on November 21 st 2016. Attached to the Reply Form is a nine point Statement of Defence summarizing the GN’s position respecting Ms. Swoboda’s claim.

This Statement of Defence was dated as signed by the Director on November 23 rd 2016. [ 24 ] The two documents (the Small Claims Reply Form & the attached Statement of Defence) were presented by the Director personally to the Clerk of the Court on November 23 rd 2016. [ 25 ] The GN Director also says that when she filed these documents she enquired as to whether there had been any communication from Ms.

Swoboda requesting that the GN be found in default, and was told (in error, as it turns out) that there had not been any such request. [ 26 ] It is clear that the Small Claims Clerk received and stamped the GN documents in error on November 23 rd 2016 because

the default judgment had already issued the previous day, on November 22nd 2016. It was now “too late” to simply file a Reply andDefence. [27] Similarly, it is clear that the Clerk erred in telling the Nunavut Department of Justice Director on November 23rd that norequest had been made to note the GN in default. However, none of these after-the-fact errors by the Clerk are material to this case. [28] The current Motion before me to set aside the default judgment was filed by the Nunavut Government with the Court on December 6th 2016 and an amended Motion was filed the next day on December 7th 2016. D.

THE GOVERNMENT’S MOTION TO “SET ASIDE” DEFAULT JUDGMENT [29] The Government argues that the default judgment should be set aside on two grounds: a. First, because the judgment should have never been issued in the first place – that it was improperly or “irregularly” entered; and b. Second because the Government has met the test or criteria set out in the Small Claims Rules which would allow a default judgmentto be set aside. i.

The Government’s first argument – the Judgment was irregular [30] Regarding the first ground of whether the default judgment should have issued in the first place, the GN relies on Rule 12.1(1) (a) & (2) (

a) of the Small Claims Rules. [31] This rule says that “if a defendant [here, the GN] does not file a Reply within 30 days….a claimant [Ms. Swoboda] mayrequest the Clerk to note the defendant in default, and if the claim is for a debt or a specific sum of money fixed by the terms of acontract…after noting the defendant in default, the Clerk shall….enter a judgment in the amount claimed and issue a Certificate ofJudgment.” [emphasis added.] [32] The GN says that Ms.

Swoboda’s claim is not one for a debt or a specific sum of money fixed by the terms of a contract,and therefore is not a claim for which a default judgment may issue. [33] The GN draws the Court’s attention to cases from other jurisdictions which have dealt with the question of ‘irregularly’entered judgments. In my view, however, these cases are easily distinguishable from the case before me. [34] In the Ontario case of Lewis v. General Accident Assurance Company (1997), (ON SC), 36 O.R. (3d)604, [1997] 0.J.

No 4971 [Lewis], a default judgment was set aside where the defendant brought their motion to do so after the judgmentwas signed by the Court Registrar but before the Registrar had actually entered the judgment into the court record. It is clear in Lewisthat the entry of the judgment was a two-step process, and the defendant company was successful in getting the judgment set asidebecause it filed its motion before the second step had been completed: before the formal entry of the judgment.

In the case before me theformal judgment had been entered by the Clerk before the GN filed or attempted to file its Statement of Defence. [35] In the Manitoba case of Limneos v. Knispel et al, 2004 MBQB 118 [Limneos] a default judgment was set aside, atleast in part, on the basis that it had been irregularly entered by the Clerk. Limneos was a complicated case where the defendants hadpaid insurance monies to themselves instead of to the plaintiffs as the contract between the parties required.

[ 36 ] The judge in Limneos concluded that the default judgment had not been regularly entered and set aside the plaintiff’s entire default judgment because a portion of the money awarded was not clearly for a debt or for a liquidated fixed sum as required by the Manitoba Queen’s Bench Rules . [ 37 ] In my view, however, and despite the similarity between the Queen’s Bench Rules of Manitoba and our own Small Claims Rules , the Limneos case is not particularly helpful in deciding the case before me. [ 38 ] It appears in Limneos the defendants made a decision that they did not need to file a Defence, but subsequently changed this view (for reasons which are not clear) and made a request for an extension of time, which was denied, resulting in the default judgment being issued. [ 39 ] The judge in Limneos viewed the reasons given by the defendants as a satisfactory explanation behind why a defence was not filed within time.

Evidence of requests for extensions also assisted the defendants in establishing, once they realized a judgment would in fact negatively impact them, that they had a legitimate intent to defend the claim. [ 40 ] I am not persuaded, however, in this case that the default judgment in favor of Ms.

Swoboda was somehow irregularly entered. [ 41 ] Rule 1.1 of the Small Claims Rules says, quite clearly that the small claims 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] [ 42 ] In my view Small Claims Court is a venue designed for unrepresented individuals to access justice.

It is not intended to serve as a regulator of pleading standards. [ 43 ] Indeed, under in the Small Claims Rules the word “plaintiff” is replaced by the word “claimant.” Further, the standard Notice of Claim has only a four (4) or five (5) line box where the claimant can write out why they feel that money is owed to them. [ 44 ] The Small Claims Rules thus allow for a lower or ‘less legal’ standard within which a person may frame their claim. [ 45 ] And while Rule 12.1 (1) (

a) and (2) (

a) only allows for a default judgment in cases of “debt or contract,” I must – pursuant to Rule 1.1 – put a liberal and fair construction on what is a “debt or contract” in applying this rule to the facts of Ms. Swoboda’s claim. [ 46 ] In her claim, Ms. Swoboda has claimed “reimbursement” from the GN. She has articulated why she feels she feels the GN is indebted to her – owes her debt - for the expenses she has claimed. [ 47 ] I am of the view there is nothing “irregular” about Ms. Swoboda’s claim. To the contrary, in my view Ms.

Swoboda has pleaded or made an ordinary matter of fact claim for moneys she believed were owing to her, for which a judgment was properly issued and entered into the record based on the Small Claims Rules and the GN’s default in filing a Reply. ii.

The Government’s second argument – the three criteria of Rule 12.6 [ 48 ] This takes me to the second ground put forward by the GN to have the default judgment set aside: namely, that they have met the requirements for doing so set out in the Small Claims Rules . [ 49 ] Small Claims Rule 12.6, states a defendant applying to set aside a default judgment must establish (on a balance of probabilities) the following three (3) things:

a. First, that there is meritorious defence to the claim; b. Second, that there is a reasonable explanation for the default; and c. Third, that the motion to set aside the noting of default was filed as soon as practicable in all the circumstances. [ 50 ] I note in particular that Rule 12.6 requires that the defendant (Applicant) must establish each of these three criteria. Accordingly, if the defendant falls short on any one of these criteria then the default judgment will not be set aside. E. THE TEST TO BE APPLIED i.

Is there a meritorious defence? [ 51 ] Regarding the first criteria of ‘meritorious defence,’ the defendant – in this case the GN – needs only to show that it has a legitimate, arguable defence to the claim. [ 52 ] GN counsel asserts that the law is well settled and that Courts are generally loathe to uphold default judgments where a legitimate defence has been presented.

They are more inclined in such circumstances to allow cases to be reopened and heard on the merits. [ 53 ] In this case the GN’s assertion that there is an arguable defence on the merits is a fairly compelling one within either a judicial review or trial venue: a. First, the GN could provide expert medical evidence to suggest that the diagnostic procedure involved was available to the required standard in Iqaluit. b. Second, the GN could show that the officials in the Department of Health who examined and denied Ms.

Swoboda’s claim for medical travel (both at the initial and appeal stages) did so in accordance with criteria set out in the Department of Health’s Medical Travel Policy. c. Third, in terms of the decision making power of the Minister – whether measured by a standard of reasonableness or correctness – the GN would argue that the Minister (through these same officials) acted within the jurisdiction created by

section 5 (

b) of the Health Insurance Act to “ determine eligibility and entitlement to insured services .” [ 54 ] Accordingly, I find GN has thus met the first criteria required to set aside a default judgment. There is a reasonable argument for them to advance that the funds were not owing. ii. Was the request to set aside filed promptly? [ 55 ] I also find that the GN has met the third criteria required to set aside the default judgment: The judgment was entered on November 22 nd 2016 and the motion to set the judgment aside was filed December 6 th , 2016. Accordingly, there is no question that the motion to set aside the judgment was filed as soon as reasonably practicable.

iii. Was there a ‘reasonable explanation’ for the default? [ 56 ] This case then turns on the second of the three criteria – namely, on the question of whether the GN has provided a “reasonable explanation” for not filing a Statement of Defence or Reply to Ms. Swoboda’s claim within the prescribed time. [ 57 ] Counsel says that this case has raised issues respecting the proper administration of the Health Insurance Act, the level of medical services provided in Nunavut, and the question of when patients may be sent south for services.

The GN says bluntly that the issue of medical travel raised by this case is “ a highly contentious and not uncontroversial matter” and suggests that this case raises important public policy considerations which should compel me to set aside the judgment and allow the case to be heard on the merits. [ 58 ] In my view there is no such consideration. As I stated earlier, this is not a case about medical travel. It is a case about time limits – and only time limits. A default judgment is not in any way a precedent for the substance of the claim made. [ 59 ] Indeed, if the GN had considered that Ms.

Swoboda’s claim had raised important policy matters, then that is all the more reason the GN lawyers should have mustered a substantive defence in a timely fashion.

The opposite appears to have been the case. [ 60 ] During the hearing of this motion GN counsel was quite forthright in acknowledging that the GN, in effect, dropped the ball, and was candid in explaining that “the file bottlenecked with one person when it sat in their in-box.” [ 61 ] GN counsel characterizes the default as occurring because of a solicitor’s inadvertence – namely, the initial mistake about the proper default date as December 2 nd instead of November 21 st , and that once this error was discovered, there was an attempt to quickly rectify the situation.

The Director’s initial mistake in incorrectly flagging the default date when the file was assigned to a staff lawyer could be viewed, as counsel suggests, as a simple inadvertence. The Government was only two (2) days late in attempting to file its defence and it clearly had an intention to do so. [ 62 ] At the same time, I do not accept the notion of a high turnover and shortage of lawyers in the Government legal department as an acceptable reason for why the file did not get proper attention or why the file was ‘bottlenecked’ at one person’s in box.

Many law firms in Canada are busy and many have a shortage of lawyers. [ 63 ] The Swoboda claim which was served on October 19 th did not get assigned to a lawyer until early November – at least ten days later, when the time limit to file a reply was only twenty days away. [ 64 ] While the Director had mistakenly flagged the default date, the lawyer who was assigned to the file (and who actually prepared the draft statement of defence) did not independently identify the correct default date and bring this to the Director’s attention.

The Director left town for duty travel on November 17 th , but this is not relevant in a system where other lawyers are present and are assigned files. [ 65 ] Default dates are a vital aspect of any litigation, particularly in Small Claims Court with an unrepresented claimant, where all lawyers know that the time frames are short. And particularly, as I alluded earlier, if Ms. Swoboda’s claim raised an important issue respecting the powers of the Minister, then I would think this would be all the more reason her file would be carefully handled and monitored. [ 66 ] The case of Janssen-Ortho Inc. v.

Novopharm Ltd., [2005] 1 S.C.R. 776 , 2005 SCC 33 [ Janssen-Ortho ] is a 2005 decision from our Supreme Court of Canada where LeBel J. refused an application to extend time of an application for leave to appeal. Respecting time limits he said: Time limits should mean something. Valid reasons should be given to explain the delay. Our Court must be flexible and fair. Fairness is owed not only to the applicants but also to the respondents who may very well be significantly inconvenienced by undue or unexplained delays.” ( Janssen-Ortho at para 4 )

[67] The case of Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd. 2007 ONCA 333 , 87 OR (3d) 479; [2007] OJ No1685 (QL); 2007 ONCA 333 [Peterbilt] illustrates this flexible approach to time limits outlined by LeBel in Janssen-Ortho,above. [68] In Peterbilt the Ontario Court of Appeal allowed a default judgment to be set aside. The Court ruled that the original motioncourt had erred in finding the defendants (appellants) had not shown they had an adequate defence.

The Court found that the defendantshad been prejudiced by the previous refusal to set aside the default judgment in that they were deprived of the opportunity to present adefence on the merits. [69] The Court of Appeal did, however, confirm the motion Court’s view that the defendants had offered a valid reason for theirdefault, which was satisfactorily explained and attributable to a miscommunication between counsel. [70] The Court of Appeal in Peterbilt also made some general comment, as follows, respecting motions to set aside a defaultjudgment: The motion judge must, however, ultimately determine whether the interests of justice favor an order setting aside the judgment.

Indoing so, the motion judge will have regard to the potential prejudice to the moving party should the motion be dismissed, the potentialprejudice to the respondent should the motion be allowed, and the effect of any order the motion judge may make on the overall integrityof the administration of justice. (Peterbilt at para 2) [71] It would appear that the GN is advancing the argument that a busy office and simple oversight is a sufficient andsatisfactory explanation for their default in not responding to Ms. Swoboda’s claim.

While it is an explanation, within the context ofSmall Claims Court and a self-represented litigant, inattentive legal work falls short of being a satisfactory excuse for a default. F. CONCLUSION [72] I am not persuaded that the GN has provided a reasonable explanation for their default, as required by Rule 12. 6 (2). Accordingly, and on this basis the GN’s motion to set aside the default judgment in favor of Ms.

Swoboda must fail. [73] Further, in my view it would not be in the overall interests of justice, nor would it promote the integrity of theadministration of justice, within this limited context, to allow the GN’s motion. [74] I confirm the default judgment in favor of Ms. Swoboda in the amount of $ 9,969.79. I also re-confirm that this is a defaultjudgment, and in no way expresses any opinion of the Court regarding medical travel rules. [75] I award $100 in costs to Ms. Swoboda which is in the amount fixed by the Small Claims Rules. Dated at the City of Iqaluit this 18th day of January, 2017 ___________________

Justice N. Sharkey Nunavut Court of Justice