r v. Hodgins, 2011 ONCA 72

Grover et al. v. Hodgins et al. [Indexed as: Grover v. Hodgins] 103 O.R. (3d) 721 2011 ONCA 72 Court of Appeal for Ontario, Doherty, Watt and Epstein JJ.A. January 27, 2011 Courts -- Jurisdiction -- Small claims court -- Small Claims Court having jurisdiction to grant equitable relief when order involves returnof personal property or monetary payment within limits of Small Claims Court.

Equity -- Unjust enrichment -- Plaintiffs and defendants retaining British Columbia lawyer to initiate action for damages arising out ofmismanagement of condominium complex in which they owned units -- Defendants declining to sign letter indicating that they wishedlawyer to continue to act for them -- Action resulting in removal of management of condominium complex -- Plaintiffs seeking torecover portion of legal fees from defendants -- Trial judge erring in finding that defendants were liable to plaintiffs for share in legalfees based on unjust enrichment -- Defendants not enriched and plaintiffs suffering no deprivation -- Retention by defendants of benefitnot unjust in any event as they did not request or otherwise indicate that they wanted legal services in question.

The plaintiffs and the defendants were Ontario residents who owned condominium units in British Columbia. They and other Ontario-resident owners retained a British Columbia lawyer to initiate an action for damages arising out of the mismanagement of thecondominium complex. The lawyer sent the owners a letter explaining the potential conflicts of interest involved in a joint retaineragreement and asking them to sign and return a duplicate copy of the letter if they wished the lawyer to continue to act for them. Thedefendants did not sign the letter.

The other owners agreed to share the costs of the action and each ultimately contributed $7,750. Theaction resulted in the removal of the condominium complex management. The plaintiffs brought an action against the defendants inSmall Claims Court claiming $7,550 as damages arising from the breach of an alleged agreement to contribute to the legal costs incurredin prosecuting the B.C. action. Alternatively, they claimed entitlement to the money on the basis of unjust enrichment.

The Small ClaimsCourt judge rejected the claim in contract but found that the defendants were liable to the plaintiffs for a share in the legal fees, based onunjust enrichment. That decision was affirmed by the Divisional Court. The defendants appealed and the plaintiffs cross-appealed. Held, the appeal should be allowed; the cross-appeal should be dismissed. The Small Claims Court has jurisdiction to grant equitable relief when the order involves the return of personal property or a monetarypayment within the limits of the Small Claims Court. The trial judge erred in granting judgment based on unjust enrichment.

The defendants did not receive a benefit. The provision of serviceswill constitute a benefit in two situations: (

a) where they were performed at the request of the defendant; or (

b) where the defendant hasbeen incontrovertibly benefited. There was no evidence that the defendants asked that the plaintiffs subsidize their contribution to thelegal services or that they requested the legal services themselves. [page722] Based on the trial judge's conclusion that there was no clearevidence of a direct link between the departure of the former managers and an increase in the value of the units, it could not be said thatthe defendants received any demonstrably apparent benefit. The plaintiffs suffered no deprivation. They paid for legal services, and theyreceived those services.

Even if there was a benefit conferred and a corresponding loss, it would not be unjust for the defendants to retainthe benefit given that there was nothing in the record to support a conclusion that they requested or otherwise indicated that they wantedthe service. The trial judge's finding that the defendants had not contractually obligated themselves to contribute to the legal costs of the B.C. actionwas supported by the evidence.

APPEAL AND CROSS-APPEAL from the order of McNamara J. of the Superior Court of Justice, sitting as a single judge of theDivisional Court, dated July 20, 2009 dismissing an appeal from the judgment of the trial judge allowing the plaintiffs' action. Cases referred to936464 Ontario Ltd. v. Mungo Bear Ltd. (2003), (ON SCDC), 74 O.R. (3d) 45, [2003] O.J. No.3795, 258 D.L.R. (4th) 754, 143 A.C.W.S. (3d) 102 (Div. Ct.), consd Other cases referred to 311874 Ontario Ltd. (c.o.b. GrossiPlumbing & Heating) v. 1461763 Ontario Ltd. (c.o.b. Per Bacco Ristorante), [2006] O.J.

No. 2779 (S.C.J.); 1346597 Ontario Ltd. v.Riddiford, [2007] O.J. No. 5502 (Sm. Cl. Ct.); Bell, Baker v. Wong, [1996] O.J. No. 5443 (Sm. Cl. Ct.); Canada Post Corp. v. Asquith,[1999] O.J. No. 5583 (Sm. Cl. Ct.); Causeway View Road South Assn. v. Foster, [2009] O.J. No. 3496, 91 R.P.R. (4th) 314 (Sm. Cl.Ct.); Gula v. Ontario Hydro, [1995] O.J. No. 2392 (Sm. Cl. Ct.); Michael Davies Plymouth Chrysler Ltd. v. Shabsove, [1995] O.J. No.5017 (Sm. Cl. Ct.); Moore v. Canadian Newspapers Co. (1989), (ON SC), 69 O.R. (2d) 262, [1989] O.J.

No. 948, 60D.L.R. (4th) 113, 34 O.A.C. 328, 37 C.P.C. (2d) 189, 16 A.C.W.S. (3d) 26 (Div. Ct.); P & G Electronics Ltd. v. Scottish and YorkInsurance Co., [1992] O.J. No. 2707 (Sm. Cl. Ct.); Peel (Regional Municipality) v. Canada; Peel (Regional Municipality) v. Ontario, (SCC), [1992] 3 S.C.R. 762, [1992] S.C.J. No. 101, 98 D.L.R. (4th) 140, 144 N.R. 1, J.E. 92-1756, 59 O.A.C. 81, 12M.P.L.R. (2d) 229, 36 A.C.W.S. (3d) 881; Pettkus v. Becker, (SCC), [1980] 2 S.C.R. 834, [1980] S.C.J. No. 103, 117D.L.R. (3d) 257, 34 N.R. 384, 8 E.T.R. 143, 19 R.F.L. (2d) 165, 6 A.C.W.S. (2d) 263; R. v.

Brown (2002), (ONCA), 61 O.R. (3d) 619, [2002] O.J. No. 3882, 165 O.A.C. 36, 170 C.C.C. (3d) 37, 7 C.R. (6th) 129, 55 W.C.B. (2d) 363 (C.A.); Rizzo &Rizzo Shoes Ltd. (Re) (1998), (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, 154 D.L.R. (4th) 193,221 N.R. 241, J.E. 98-201, 106 O.A.C. 1, 50 C.B.R. (3d) 163, 33 C.C.E.L. (2d) 173, 98 CLLC Â210-006, 76 A.C.W.S. (3d) 894;Sharwood & Co. v. Municipal Financial Corp. (2001), (ON CA), 53 O.R. (3d) 470, [2001] O.J. No. 927, 197 D.L.R.(4th) 477, 142 O.A.C. 350, 12 B.L.R. (3d) 219, 104 A.C.W.S. (3d) 6 (C.A.); Szeib v.

Team Truck Centres -- Freightliner, [2001] O.J.No. 2208, [2001] O.T.C. 439, 105 A.C.W.S. (3d) 1048 (Sm. Cl. Ct.); Tang v. Jarrett, (ON SCDC), [2009] O.J. No.

1282, 251 O.A.C. 123, 176 A.C.W.S. (3d) 694 (Div. Ct.) Statutes referred to

An act for the more easy and speedy recovery of small debts, 1792 (Upper Canada), 32 Geo. III, c. 6

An Act to amend the Courts of Justice Act and to make related amendments to the Freedom of Information and Protection of Privacy Act and the Justices of the Peace Act, S.O. 1994, c. 12

An Act to amend the Courts of Justice Act, 1984, S.O. 1989, c. 55 Courts of Justice Act , 1984, S.O. 1984, c. 11, ss. 109(1), (3), 114(1) Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 23 [as am.], (1)(a) 96 [as am.], (1) [as am.], (3) [as am.], 97 [as am.], 101(1) Judicature Act, R.S.O. 1980, c. 223 [rep. S.O. 1984, c. 11] [page723] Authorities referred to Maddaugh, Peter D., and John D.

McCamus, The Law of Restitution, looseleaf (Aurora, Ont.: Canada Law Book, 2010) Ontario, Legislative Assembly, Standing Committee on Administration of Justice, Transcripts of Meetings (July 31, 1989) (Steven Offer) Ontario Civil Justice Review, First Report (Toronto: Ministry of the Attorney General, 1995) Watson, Garry D., and Michael McGowan, Ontario Civil Practice, 1990 (Toronto: Carswell, 1990) Watson, Garry D., and Michael McGowan, Ontario Civil Practice, 1996 (Scarborough, Ont.: Carswell, 1995) Yavar Hameed, for appellants/respondents by way of cross- appeal.

Kellie Stewart, for respondents/appellants by way of cross- appeal. The judgment of the court was delivered by [ 1 ] EPSTEIN J.A.: -- This appeal and cross-appeal involve a decision of a deputy judge of the Small Claims Court granting judgment in favour of the respondents (the appellants in the cross-appeal). The deputy judge's order was for a portion of the legal fees that the respondents and other plaintiffs in a law suit in British Columbia paid to prosecute an action relating to a condominium complex in which they were all owners.

The Small Claims Court action was based in contract or, in the alternative, unjust enrichment. The claim in contract failed as the trial judge held that the appellants had not agreed to contribute to the legal costs of the British Columbia law suit. However, he did find the appellants (the respondents in the cross-appeal) liable to the respondents for a share in the legal fees, based on unjust enrichment. [ 2 ] In this appeal, the appellants challenge the trial judge's unjust enrichment analysis.

The respondents cross- appeal on the basis that the trial judge erred in finding that the appellants were not contractually bound to contribute to the costs of the British Columbia action. [ 3 ] A further, and arguably more important, issue is also raised in this matter: namely, the jurisdiction of a deputy judge of the Small Claims Court to grant equitable relief. Before this court, the parties addressed their arguments only to the issues [page724] involving the respondents' claims in contract and unjust enrichment.

However, during oral argument, counsel were asked to make written submissions on the extent, if any, of the jurisdiction of the Small Claims Court to grant equitable relief. The court was concerned with the issue of whether the trial judge had the power to grant relief based on unjust enrichment. [ 4 ] In their submissions, both parties took the position that the Small Claims Court has jurisdiction to grant such relief when the order involves the return of personal property or a monetary payment within the limit of the Small Claims Court. [ 5 ] For the reasons that follow, I agree with this position.

As for the substantive issues, in my view the respondents' claims both in contract and in unjust enrichment must fail. I would therefore allow the appeal and dismiss the cross-appeal. I. Background 1. The British Columbia action [ 6 ] At the relevant time, the appellants, Chander Grover and Tabassum Grover, and the respondents, John Hodgins and Ann Dorans, lived in Ontario and owned condominium units in a complex located in British Columbia. Concerns arose over the majority owners' management of the condominium complex.

The Ontario owners believed that the value of their units was depressed due to the poor management of the complex. As a result, a group of 12 Ontario-based owners, including the respondents, retained a British Columbia lawyer. The lawyer was asked to initiate an action for, among other relief, damages arising out of the mismanagement of the condominium complex. [ 7 ] On July 5, 2004, the lawyer sent a letter to the Ontario- based condominium owners, including the appellants and the respondents, explaining the potential conflicts of interest involved in a joint retainer agreement.

The closing sentence of the letter read as follows: "If you are satisfied that you wish us to continue to act for you on the basis outlined above, please sign the enclosed duplicate copy of this letter and return it to us." [ 8 ] The appellants did not sign the letter.

The other 12 condominium owners in the Ontario group, including the respondents, agreed to share the legal costs of the British Columbia action and each ultimately contributed his or her share, which amounted to $7,550 each. [ 9 ] In August 2005, the Supreme Court of British Columbia appointed an administrator to exercise the powers of the council of condominium owners and to prepare an expert report to the court on the financial management of the complex. Subsequently, [page725] the majority investors sold most of their units and ceased their management of the complex.

The litigation effectively came to an end. 2. The Ontario proceedings [ 10 ] In April 2006, the respondents brought this action against the appellants in the Ontario Small Claims Court, claiming $7,550 as damages arising from the breach of an alleged agreement to contribute to the legal costs incurred in prosecuting the British Columbia action. In the alternative, the respondents claimed they were entitled to the money on the basis of unjust enrichment. [ 11 ] The trial judge dismissed the claim in contract.

Although he found that the appellants were aware of the litigation and interested in its result, there was no "meeting of the minds" that would have formed a contract whereby they agreed to share legal costs. With respect to the claim in unjust enrichment, the trial judge found that the appellants had been enriched by the efforts of the respondents, as, following the removal of the management under which the problems had developed, they had sold their condominium unit at a significantly higher value.

He also found that the respondents had suffered a corresponding deprivation by paying their $7,550 share of the legal costs. Finding no juristic reason for the enrichment, he granted judgment in favour of the respondents.

[12] The appellants' appeal to the Divisional Court was dismissed on July 20, 2009, by way of a brief endorsement, as follows: This is an appeal and cross-appeal from the decision of Deputy Judge Stauffer of the Small Claims Court at Ottawa dated June 22/07 andreleased July 10/07. The standard of review in an appeal from such a judgment requires, if I am to overturn it, a finding that the Deputy Judge made anoverriding & palpable error, that he misapplied the law, or that he misapprehended the evidence. I have carefully considered the materials, the submissions of counsel & the decision of the Trial Judge.

I am not [persuaded], based onthat review, that Judge Stauffer made either an error in law nor a palpable & overriding error in coming to the factual conclusions. A Trial Judge is only required to give sufficient reasons to permit appellate review and to allow the parties to know why the decision wasas it is. He or she is not required to comment on all issues at the trial, nor on each and every argument presented to him or her.

It is alsonot required that the Judge explain their entire thought process in arriving at their decision as long as there is a logical connectionbetween the decision and the grounds for reaching that decision. [page726] In this case I had no difficulty in terms of the logical connection between the Trial Judge's decision & his grounds for reaching same. In the circumstances the Appeal and cross-appeal are both dismissed. As success was divided, each side will bear its own costs. [13] By order dated February 22, 2010, this court granted leave to appeal. II. The Issues

(1) Does a deputy judge of the Small ClaimsCourt have jurisdiction to grant equitable relief?

(2) Did the deputy judge err in granting judgment on the basis of unjust enrichment inthis case?

(3) Did the deputy judge err in finding that the appellants were not bound by contract to contribute to the legal costs of theBritish Columbia action? III. Analysis [14] I will first deal with the decision of the Divisional Court. The reasons, set out above in their totality, contain no reference to the casebeing decided. As such, they do not permit any meaningful appellate review and therefore constitute legal error: see R. v. Brown (2002), (ON CA), 61 O.R. (3d) 619, [2002] O.J. No. 3882 (C.A.), at para. 30.

I must therefore approach my analysis on thebasis of its being a review of the decision of the trial judge. [15] It is logical to start with the issue raised by this court concerning the scope of the equitable jurisdiction of the Small Claims Court. 1.Does the Small Claims Court have jurisdiction to grant equitable relief? a. The legislation [16] The Small Claims Court is a statutory court that derives its jurisdiction solely through the Courts of Justice Act, R.S.O. 1990, c.C.43.

Section 23 is of primary relevance in this appeal, while s. 96 is also informative to the analysis. [See Note 1 below] [page727] [17]

Section 23 is the

section of the Act that sets out the jurisdiction of the Small Claims Court: 23(1) The Small Claims Court, (

a) has jurisdiction in any action for the payment of money where the amount claimed does not exceed the prescribed amount exclusiveof interest and costs; and (

b) has jurisdiction in any action for the recovery of possession of personal property where the value of the property does not exceed theprescribed amount. [18]

Section 96, in dealing with the equitable jurisdiction of all courts, provides as follows: 96(1) Courts shall administer concurrently all rules of equity and the common law.

(2) Where a rule of equity conflicts with a rule of the common law, the rule of equity prevails.

(3) Only the Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, may grant equitable relief, unlessotherwise provided. b. The jurisprudence (

i) The Superior Court [19] The case most often cited in support of the proposition that the Small Claims Court has jurisdiction to grant equitable relief is thedecision of the Divisional Court in 936464 Ontario Ltd. v. Mungo Bear Ltd. (2003), (ON SCDC), 74 O.R. (3d) 45,[2003] O.J. No. 3795 (Div. Ct.), in which a remedy based on quantum meruit was in issue.

Heeney J., at paras. 12-15, concluded thatnotwithstanding that quantum meruit is part of the restitutionary group of remedies, its origins can be found in the common law andtherefore the court does not need equitable jurisdiction to award it. [20] However, in extensive obiter dicta, Heeney J. went on, in paras. 20-40, to canvass the equitable jurisdiction of the Small ClaimsCourt. [21] Heeney J. noted [at para. 9] that while s. 96(3) specifically excludes the Small Claims Court from the list of courts able to grantequitable relief, it does so with the proviso found in the words "unless otherwise provided".

He reasoned that s. 23(1)(

a) providesotherwise in the words "any action" -- wording sufficiently broad so as to encompass both common law claims and equitable claims. Hetherefore concluded that the only meaningful restriction on the jurisdiction of the Small Claims Court was that the relief claimed must befor the payment of money or the [page728] return of property, the value of which falls within the monetary limit prescribed byregulation. [22] Two subsequent decisions adopted the reasoning of Heeney J. in relation to the jurisdiction of the Small Claims Court to grant

equitable relief, although, as in the case of Mungo Bear, the analysis was not necessary for either decision: 311874 Ontario Ltd. (c.o.b.Grossi Plumbing & Heating) v. 1461763 Ontario Ltd. (c.o.b. Per Bacco Ristorante), [2006] O.J. No. 2779 (S.C.J.); and Tang v. Jarrett, (ON SCDC), [2009] O.J. No. 1282, 251 O.A.C. 123 (Div.

Ct.). [23] While a number of other decisions of the Superior Court have implicitly and explicitly held that the Small Claims Court hasjurisdiction to consider equitable claims for relief, there appears to be no binding authority for that proposition. [See Note 2 below] (ii) The Small Claims Court [24] A review of Small Claims Court decisions suggests that the court has been operating on the basis that it has jurisdiction to considerclaims for equitable relief and, in appropriate cases, to grant it. [25] In Szeib v. Team Truck Centres -- Freightliner, [2001] O.J. No. 2208, [2001] O.T.C. 439 (Sm. Cl.

Ct.), Searle Deputy J. specificallyconsidered the jurisdictional issue and held that the Small Claims Court has jurisdiction to grant relief from forfeiture, a form of equitablerelief. In a myriad of other cases, the Small Claims Court has, without any analysis of jurisdiction, considered and awarded (or rejectedafter consideration) remedies in equity, particularly based on unjust enrichment: see, for example, P & G Electronics Ltd. v. Scottish andYork Insurance Co., [1992] O.J. No. 2707 (Sm. Cl. Ct.); Gula v. Ontario Hydro, [1995] O.J. No. 2392 (Sm. Cl. Ct.); Michael DaviesPlymouth Chrysler Ltd. v.

Shabsove, [1995] O.J. No. 5017 (Sm. Cl. Ct.); Bell, Baker v. Wong, [1996] O.J. No. 5443 (Sm. Cl. Ct.);Canada Post Corp. v. Asquith, [1999] O.J. No. 5583 (Sm. Cl. Ct.); 1346597 Ontario Ltd. v. Riddiford, [2007] O.J. No. 5502 (Sm. Cl.Ct.); Causeway View Road South Assn. v. Foster, [2009] O.J. No. 3496, 91 R.P.R. (4th) 314 (Sm. Cl. Ct.). [page729] c. Analysis of theequitable jurisdiction of the Small Claims Court [26] Strictly speaking, my determination set out below that the respondents' claims in contract and in unjust enrichment must fail issufficient to dispose of the matter.

However, the law concerning the jurisdiction of the Small Claims Court to grant equitable relief isunsettled [and] is a matter of some importance. Furthermore, decisions of the Small Claims Court infrequently reach our court.Therefore, in my view, it is appropriate to provide an analysis of the issue. [27] The resolution of whether the Small Claims Court has jurisdiction to grant equitable relief involves basic statutory

interpretation.According to the well-known case of Rizzo & Rizzo Shoes Ltd. (Re) (1998), (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R.27, [1998] S.C.J. No. 2, at para. 21, the analysis must focus on the words of the relevant statutory provisions, read in their entire contextand in their grammatical and ordinary sense and interpreted harmoniously with the scheme and the object of the Act and with thelegislature's intention. [28] I start with the wording of the relevant statutory provisions, taken in context. [29] As stated above, s. 23 of the Courts of Justice Act is the

section that delineates the jurisdiction of the Small Claims Court. It givesthe court jurisdiction in any action for the payment of money or the recovery of possession of personal property with a value within theprescribed limit. This is a wide grant of jurisdiction. I agree with Heeney J. in Mungo Bear that the wording "any action" is sufficientlybroad so as to encompass both common law and equitable claims. [30] But, this observation begs the very question at issue -- whether this wording is also broad enough to include jurisdiction to grantequitable remedies.

In my view, it is. [31] I agree with Heeney J., at para. 29 of Mungo Bear, that s. 23, s. 96(1) and s. 96(3) are to be read as a "coherent package". Asdiscussed above, s. 23 of the Act is broad enough to allow the Small Claims Court to deal with claims in common law and equity.

Unders. 96(1), the courts, including the Small Claims Court, are authorized to concurrently administer all rules of equity and the common law.It would be irrational for the legislators to give the Small Claims Court authorization to administer rules of equity and deal with claims inequity and then specifically preclude the court from granting any equitable relief.

It only makes sense if the wording "where otherwiseprovided" in s. 96(3) is interpreted to mean that the Small Claims Court is [page730] able to grant equitable relief within the limits of itsjurisdiction set out in s. 23: namely, to order the payment of money or the return of personal property. [32] Notwithstanding the availability of this

interpretation of the plain language of the Courts of Justice Act, it is clear from thejurisprudence that there has been some uncertainty involving the reconciliation of the broad wording in s. 23 of the Act with the apparentlimitation expressed in s. 96(3). [33] This takes me to legislative intent. [34] The legislative history of the relevant provisions of the Courts of Justice Act, particularly ss. 96(3) and 96(1), is available as a toolfor determining the intention of the legislature: Rizzo (Re), at para. 31. [35] In 1984, the Courts of Justice Act, 1984, S.O. 1984, c. 11 replaced the Judicature Act, R.S.O. 1980, c. 223.

In Ontario Civil Practice,1996 (Scarborough, Ont.: Carswell, 1995), Watson and McGowan usefully provide Ministry commentary that accompanied changes tothe Courts of Justice Act.

In the commentary accompanying the 1984 Act, the Attorney General clarified that the statement in s. 109(1)(now s. 96(1)) "courts shall administer concurrently all rules of equity and the common law" was intended to encompass the meaning ofthe statement in the Judicature Act that courts shall recognize all claims and defences, whether arising under the common law or equity.This means that all courts, including the Small Claims Court, have the ability to consider equitable claims, such as a claim based onunjust enrichment. [36] Section 96(3) grants the superior court broad jurisdiction to award equitable relief.

When the Courts of Justice Act was enacted in1984, the Small Claims Court was part of the provincial court system. Section 109(3) (now s. 96(3)), which granted equitable jurisdictionto the superior courts of the province, did not apply to the Small Claims Court. However, in 1989, important changes were made to theorganization of the Ontario court system. With the passage of Bill 2,

An Act to amend the Courts of Justice Act, 1984, S.O. 1989, c. 55,2d Sess., 34th Leg., Ontario, 1989 (assented to November 15, 1989), the Small Claims Court became a branch of the newly createdOntario Court (General Division), part of the province's superior court.

[ 37 ] Of particular interest in terms of the 1989 legislative changes is that the first version of Bill 2 included a provision that "the Court of Appeal, the Unified Family Court and the Ontario Court (General Division), excluding the Small Claims Court, may grant equitable relief, unless otherwise provided" (emphasis added). [page731] [ 38 ] However, the Standing Committee on Administration of Justice approved an amendment to Bill 2 striking out the words "excluding the Small Claims Court".

The representative of the Attorney General explained to the Committee that the reference to the Small Claims Court was being removed because it was unnecessary (Ontario, Legislative Assembly, Standing Committee on Administration of Justice, Transcripts of Meetings (July 31, 1989) at J-5 (Steven Offer)): As members of the committee will be aware, the jurisdiction of the Small Claims Court is limited to two aspects: first, for the payment of money and, second, for the return of personal property. Having said that, we have an amendment before us to

section 15, which speaks to subsection 109(3) [now s. 96(3)] of the Courts of Justice Act . Basically, this amendment talks to the granting of equitable relief. This amendment is saying that we want to exclude the Small Claims Court's jurisdiction from subsection 109(3), which talks to the granting of equitable relief.

We believe that that is not necessary, because the Small Claims Court does not have jurisdiction under that matter. [ 39 ] The Standing Committee similarly amended the proposed s. 110 (now s. 97) (declarations of right) and s. 114(1) (now s. 101(1)) (interlocutory injunctions, mandatory orders and receivers) by removing the words "excluding the Small Claims Court".

The rationale for these amendments was the same: the Small Claims Court has not been provided the jurisdiction in s. 23(1) to grant declarations of right or injunctive relief so it was considered unnecessary to specifically exclude the court from these provisions. [ 40 ] Despite the government's assertion that the words "excluding the Small Claims Court" were unnecessary, the 1989 amendments created some confusion as to whether the Small Claims Court had been provided with jurisdiction to grant equitable relief. [ 41 ] This confusion is reflected in Ontario Civil Practice, 1990 (Toronto: Carswell, 1990), where Watson and McGowan queried whether the Small Claims Court had been given equitable jurisdiction by the 1989 changes, in the following observations: Apparently the rationale for the amendment [to Bill 2] (deleting the specific exclusion with regard to the Small Claims Court) was that since the Small Claims Court is a court of limited jurisdiction, it has only that jurisdiction which is conferred on it by statute, and the relevant statutory provision does not confer general equitable jurisdiction on the Small Claims Court: see s. 22 [now s. 23].

The competing argument is that by s. 21(1) [now s. 22(1)] the Small Claims Court is made a branch of the General Division and as such is now one of the courts enumerated in s. 109(3) [now s. 96(3)]. [ 42 ] The second change of significance took place in 1994, when Bill 136, [page732]

An Act to amend the Courts of Justice Act and to make related amendments to the Freedom of Information and Protection of Privacy Act and the Justices of the Peace Act, S.O. 1994, c. 12, 3rd Sess., 35th Leg., Ontario, 1994 (assented to June 23, 1994), amended both ss. 96(3) and 97 by inserting the words "exclusive of the Small Claims Court".

There was no discussion of these changes in either the legislative or committee debates. [ 43 ] This insertion appears to have prompted Watson and McGowan to remove their earlier comment about the potential ambiguity concerning whether the Small Claims Court could grant equitable relief in Ontario Civil Practice, 1996 (Scarborough, Ont.: Carswell, 1995).

In its place, they provided Ministry commentary from the 1994 amendments saying that "sections 96(3) and 97 of the Act were amended to make it clear that the Small Claims Court cannot give equitable relief or a declaratory judgment". [ 44 ] In my opinion, the series of changes to s. 96(3) and s. 97 in which the reference to the Small Claims Court was proposed to be included, removed and then later inserted demonstrate that the legislative drafters struggled with how to make it clear that the Small Claims Court, once it became part of the superior court with the 1989 reorganization, did not acquire that court's broad jurisdiction to grant equitable relief.

It follows that the ultimate decision to include the words "exclusive of the Small Claims Court" in ss. 96(3) and 97, was to clarify that the Small Claims Court's becoming a part of the superior court did not alter the court's jurisdiction. [ 45 ] This conclusion is reinforced by an examination of the purpose of the Small Claims Court itself. [ 46 ] The history of the Small Claims Court is one of progressive development toward providing increased access to justice.

The origins of the Small Claims Court in Ontario may be found in 1792, when the first provincial Parliament of Upper Canada determined that to "contribute to the conveniency of the inhabitants of this province, to have an easy and speedy method of recovering small debts", a separate court was required (An act for the more easy and speedy recovery of small debts, 1792 (Upper Canada), 32 Geo. III, c. 6). Courts of Request were established and empowered to hear and determine matters of debt up to 40 shillings, and to "decree as to them should seem just in law and equity".

Thus, right from the inception of the Courts of Request, it is clear that the legislature, in establishing the Small Claims Court, intended to provide "conveniency" -- increased access to justice. [ 47 ] In the report by Ontario Civil Justice Review, First Report (Toronto: Ministry of the Attorney General, 1995), the authors [page733] noted the following: "Frequently referred to as the 'people's court', today's Small Claims Court in Ontario is seen as the one place where a private citizen can have ready and inexpensive access to civil justice." The Small Claims Court is more hospitable to the ever- increasing number of self- represented litigants.

Procedures are simpler in the Small Claims Court; matters are decided in a

summary way under relaxed rules of evidence. There are limits on the costs that may be recovered by a successful party in the Small Claims Court. These features contribute to an increase in the accessibility of our system of justice. [ 48 ] Interpreting the words of the Courts of Justice Act in such a way as to restrict the jurisdiction of the Small Claims Court in a manner that would preclude it from awarding equitable relief in resolving claims properly before it would run counter to this important objective. [ 49 ] It follows that the

interpretation of the Courts of Justice Act provisions relevant to the jurisdiction of the Small Claims Court that is in keeping with the wording of the Act and is consistent with the intent of the legislature, apparent not only from the legislative amendments but also from the rationale behind establishing the court itself, is that the Small Claims Court has jurisdiction to award legal

or equitable relief where the relief requested is a monetary payment under the limit of $25,000 or the return of personal property valuedwithin that limit. 2.

Did the trial judge err in granting judgment based on unjust enrichment? [50] Having determined that the trial judge had jurisdiction to grant relief based on a claim of unjust enrichment, the next question iswhether he erred in doing so on the facts of this case. [51] I now therefore turn to the trial judge's conclusion that, based on unjust enrichment, the respondents were entitled to judgment in theamount of the contribution paid by each member of the Ontario-based group of condominium owners to the legal fees of the BritishColumbia action. [52] As the trial judge correctly stated, the cause of action for unjust enrichment has three elements: (1) an enrichment of the defendant;(2) a corresponding deprivation of the plaintiff; and (3) an absence of any juristic reason for the enrichment: Pettkus v.

Becker, (SCC), [1980] 2 S.C.R. 834, [1980] S.C.J. No. 103, at p. 848 S.C.R. [53] The trial judge held that the respondents established each of these requirements. I respectfully disagree.

In my view, the respondentsmet none of the requirements and the claim in unjust enrichment must therefore fail. [page734] [54] First, the trial judge erred in holding that the appellants were enriched through the efforts of the respondents and the expenses theyincurred to fund the British Columbia litigation. [55] The trial judge found that the appellants received a benefit because their condominium unit increased in value following the removalof the old management through the B.C. litigation.

Thus, he held that the appellants were enriched by the respondents' litigation that wasultimately to the advantage of the appellants. I disagree. [56] What the trial judge overlooked is the difference between unjust enrichment through the provision of money and unjust enrichmentthrough the provision of services. This difference was explained by Laskin J.A. in Sharwood & Co. v. Municipal Financial Corp. (2001), (ON CA), 53 O.R. (3d) 470, [2001] O.J. No. 927 (C.A.), at para. 26: "The receipt of money is always a benefit to thedefendant.

The receipt of services may not be a benefit because the defendant may not have wanted the services or may not have wantedthem if it had to pay for them." [57] The provision of services will constitute a benefit in two situations: (

a) where they were performed at the request of the defendant,or (

b) where the defendant has been "incontrovertibly benefited": see Maddaugh and McCamus in their text The Law of Restitution,looseleaf (Aurora, Ont.:Canada Law Book, 2010), at p. 3-17. [58] There is no evidence that the appellants requested that the respondents subsidize their contribution to the legal services or that theyrequested the services themselves, so the issue of whether the appellants were enriched comes down to whether they were"incontrovertibly benefited". [59] In Peel (Regional Municipality) v. Canada; Peel (Regional Municipality) v. Ontario, (SCC), [1992] 3 S.C.R. 762,[1992] S.C.J.

No. 101, McLachlin J. explained the basic concept of an "incontrovertible benefit", at p. 795 S.C.R.: An "incontrovertible benefit" is an unquestionable benefit, a benefit which is demonstrably apparent and not subject to debate andconjecture.

Where the benefit is not clear and manifest, it would be wrong to make the defendant pay, since he or she might well havepreferred to decline the benefit if given the choice. (Emphasis added) [60] Here, based on the trial judge's conclusion that "the evidence is far from clear to draw a direct link between the departure of theformer managers [and] an increase in value of the units", it cannot be said the appellants received any demonstrably apparent benefit.[page735] [61] For these reasons, I cannot accept the finding of an enrichment or a benefit. [62] Nor can I agree with the trial judge's finding of a corresponding deprivation.

He found the deprivation to be the $7,550 therespondents paid toward the legal costs of the British Columbia action. This finding fails to take into account the benefit the respondentsreceived themselves. They paid for legal services. They received the services. They suffered no deprivation. Given the trial judge'sfinding that the appellants did not agree to share costs, each plaintiff paid no more, and no less, than he or she agreed to pay. [63] Even if I were to accept that there had been a benefit conferred and a corresponding loss, the respondents have not met the thirdrequirement for unjust enrichment.

Simply put, it would not be unjust for the appellants to retain the benefit given there is nothing in therecord to support a conclusion that the appellants requested or otherwise indicated that they wanted the service. 3. The cross-appeal --Did the trial judge err in holding that the appellants were not bound by contract to contribute to the legal costs? [64] The respondents submit that the trial judge erred in concluding that the appellants had not contractually obligated themselves tocontribute to the legal costs of the British Columbia action. This finding was clearly supported by the evidence.

I would not interfere. IV.Disposition [65] For these reasons, I would allow the appeal and dismiss the cross-appeal. I would set aside the decision of the Divisional Court andthe judgment of the deputy judge of the Small Claims Court and dismiss the action. [66] The appellants are entitled to their costs of the trial that were fixed in the amount of $500, and their costs of the appeal to theDivisional Court that I would fix in the amount of $3,000, and their costs of this appeal, which I would fix at $4,000. Appeal allowed; cross-appeal dismissed.

Notes ---------------- Note 1:

Section 97, which is briefly referenced in these reasons, addresses the jurisdiction of all courts to grant declaratory relief. Itcontains the identical words "exclusive of the Small Claims Court" that appear in s. 96(3) and has undergone similar amendments at thesame time as s. 96(3). Note 2: In Moore v. Canadian Newspapers Co. (1989), (ON SC), 69 O.R. (2d) 262, [1989] O.J. No. 948 (Div. Ct.),Rosenberg J. analyzed the jurisdiction of the Small Claims Court to award equitable relief and determined that there was none. However,this case was decided before the legislative changes in 1989 and 1994 (discussed below).

Also, the remedy at issue in Moore wasinjunctive relief, not a monetary payment. ----------------