James Judy v. Christine Judy, 2014 SKPC 201

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Date: November 24, 2014 Citation: 2014 SKPC 201 File: File # 89/14 Location: Regina, Saskatchewan Between: James Judy and Christine Judy - and - Olympic Motors Corporation (SK) 1 James Judy and Christine Judy For the Respondents (Plaintiffs) Reginald Watson, Q.C. For the Applicant (Defendant) DECISION ON AN APPLICATION PURSUANT TO

SECTION 37 OF THE SMALL CLAIMS ACT P. DEMONG , J [ 1 ] On December 17, 2013, James and Christine Judy commenced an action against Olympic Motors Corporation (SK) 1 (hereafter “ Olympic ” ) seeking to recover damages in excess of $13,000.00. They allege that they purchased a Subaru Outback from Olympic which had been represented as new, when in fact it was used. They also allege that Olympic failed to point out that the vehicle had previously been involved in two motor vehicle accidents. [ 2 ] The action was commenced in the Judicial Centre of Yorkton.

The matter was set for a first appearance on the 5 th day of March 2014. Olympic applied for and obtained a transfer of this action to the Judicial Centre of Regina. On March 25, 2014, it filed a dispute note generally denying the allegations against it.

[ 3 ] The matter was duly transferred to Regina and a case management conference was set for May 1, 2014. [ 4 ] On April 28, at the request of the Judys and with the consent of Olympic ’ s legal counsel, the case management conference was adjourned to August 7, 2014 at 1:30 p.m. The Judys and Olympic ’ s legal counsel were both orally advised of the adjourn date and a confirmation letter was sent to both of them by the court clerk. That letter was dated May 1, 2014. [ 5 ] Olympic failed to attend the case management conference on August 7, 2014. In the result, Justice of the Peace Kathryn Murchie entered default judgment against Olympic pursuant to her authority to do so under

section 7.1(9) of The Small Claims Act , 1997 cS-50.11 (the “ Act ” ). [ 6 ] Within days of that judgment being served on Olympic ’ s legal counsel, an application was brought by Olympic to set aside that judgment pursuant to section 37(1) of the Act . [ 7 ] Section 37(1) is remedial. It allows the Court to set aside a default judgment entered against a party litigant if, in the opinion of the judge, the party applying to set aside the judgment has a reasonable excuse for not attending the case management conference and also has a valid defence to the claim. [ 8 ] The Act does not define “ reasonable excuse ” .

It does however circumscribe what may constitute a “ valid defence ” . The defence is not valid if it is without reasonable grounds; discloses no triable issue; or if it is frivolous, vexatious, or an abuse of the Court ’ s process. [ 9 ] I have reviewed the dispute note that has been filed by Olympic and I am satisfied that it is not frivolous, vexatious or an abuse of the Court ’ s process. In my view it raises certain triable issues.

As such, the only issues that I am left to determine are whether or not Olympic has provided a reasonable excuse for missing the case management conference, and if it has, what directions I should give respecting the setting aside of the judgment entered against Olympic. [ 10 ] In support of its application, Olympic filed an affidavit signed by Tracey Fraser. The affidavit is deficient. It does not identify who Tracey Fraser is, where she resides, or what her relationship is to the applicant.

In addition, those portions of the affidavit which speak to the failure to attend the case management conference are heresay. It speaks to what Tracey Fraser believes happened. The affidavit does not speak to her personal knowledge. It speaks rather to what she says her legal counsel presumably told her about what transpired. [ 11 ] An application under

section 37 of the Act , if unsuccessful, is in the nature of a final order and as such an affidavit filed in support of such an application must be based on the personal knowledge of the person swearing the affidavit. [ 12 ] Presumably recognizing the deficiencies of the affidavit, Olympic ’ s legal counsel Kevin Mellor took the stand to speak to those circumstances which gave rise to the default judgment. [ 13 ] Simply put, Mr. Mellor takes full responsibility for the failure of his client to attend the case management conference. He says that he is a busy sole practitioner.

His office is comprised of himself and a legal assistant. He keeps track of appointments through an electronic organizer, that he alone updates and on which his legal assistant is reliant. He says that to the best of his recollection he would have inputted this date into his electronic system so that he could advise his client in writing of the August 7 date.

He says, that for reasons beyond his computer expertise, his electronic system failed him not only on this occasion, but at or about the same time failed on other matters. [ 14 ] As a result, he says, he has had his system checked, reviewed and updated by a computer systems company and that he has, in addition, put into place certain other measures to protect against this happening again. He has clearly recognized the potential implications of his error, and has retained legal counsel to assist in the application.

[15] The Judys oppose this application. They assert quite properly, that as an agent for Olympic, Mr. Mellor’s actions, or lack of action,should extend to his client. Citing my sister Judge Donna Scott’s decision in Stealth Designs Inc. v Wildman, 2012 SKPC 73[Stealth] they argue that this kind of excuse should not be accepted by the Court. [16] In Stealth, the defendant failed to attend a case management conference after having been personally served. She was notified of thedefault judgment when she received notice of a writ of execution entered against her.

She delayed almost one month before bringing herapplication. On the return date the matter was adjourned further in order to allow her to file supplementary evidence. She had not, atany time, filed a dispute note in answer to the claim brought against her.

Her affidavit deposed to the fact that the case managementconference escaped her attention, and then went on to list innumerable excuses for her non-attendance, including a failure of her personalassistant to record the court date, increased workload, patient complications, a staff person’s medical leave, and the pursuit of adesignation of excellence for her business. [17] In Stealth, the plaintiff had commenced an action to seek payment of an invoice for web design services rendered.

It was an actionfor liquidated damages, and of course the plaintiff was out of pocket these monies from the date the demand was made for payment untilthe return date of this application and beyond. They opposed the application alleging that the defendant was attempting to delay or thwartthe Court proceedings. [18] It should be noted that in the Stealth case the Court was presented with applications brought under each of section 37(1) andsection 37(2) of the Act.

An application brought under section 37(2) of the Act arises where a defendant seeks to set aside a judgmentafter the expiry of 90 days from the date of judgment. In that event, the Court looks to a different standard of excuse. The test is one ofshowing “exceptional circumstances”. The Judys have referred me to paragraph 15 of the Stealth decision, in support of their oppositionto Olympic’s present application, which reads: The business-related reasons cannot be characterized as unusual or atypical.

It is common for parties seeking to set aside a judgment inthis Court to cite distraction due to their employment or business endeavours as the reason for missing a court date. Workload, personneland deadline-tracking issues are routine matters for a businessperson. These day-to-day work pressures cannot be viewed as exceptionalsuch that they would justify the expansion of the time for applying to set aside the judgment provided by the statute. It is the Court’sview that they would not be sufficient to meet the test of “exceptional circumstances” as required by section 37(2).

Something more ordifferent must be demonstrated to allow an application to proceed after 90 days has expired. [19] With due respect to the Judys, the passage referred to above was dealing with the test for exceptional circumstances under section37(2) of the Act and not the test of “reasonable excuse” as set out in section 37(1). [20] That stated, Judge Scott appears to have reiterated her concerns regarding the applicant’s reasons when she went on to consider thesection 37(1) application that was part and parcel of the application brought in Stealth.

At paragraph 20 of that decision Judge Scottstates: The applicant’s affidavit indicates she fully intended to defend the respondent’s claim and sets out a number of reasons for her failure toattend Court. It is difficult to understand how the Court proceedings would have completely escaped the applicant’s attention until shewas served with notice of the writ of execution and judgment, particularly when the respondent had made several attempts to resolve thematter of the unpaid invoice with the applicant. The Court finds that the business-related reasons are not sufficient to justify theapplicant’s non-attendance.

Workloads and unforseen circumstances are a normal part of doing business and on their own would notjustify the applicant’s failure to meet her court obligations in this case. [21] This Court is regularly faced with applications to set aside default judgments where the excuse is often predicated on the ‘I forgot’line of excuse followed by what purports to be a series of ex post facto justifications along the lines set forth in Stealth.

Invariably theapplications are in response to claims for liquidated damages and the credibility of the applicant is suspect...in the sense that they areseeking to delay the inevitable judgment that will follow their failure to pay their bills in a timely fashion or at all.

And, like theapplication in Stealth, they invariably not only delay their applications, but fail to provide a dispute note or otherwise attend to thelitigation. [22] In my view the test of “reasonable excuse” as set forth in section 37(1) of the Act is to be considered on a case by case basis, havingregard to the context in which the litigation has progressed, and having due regard to the credibility of the party deposing the evidenceupon which the application is brought.

[23] In Honch v Arcand, 2009 SKPC 43 my brother Judge Carter properly pointed out that the reasonableness of an excuse isoften difficult to assess. I agree.

An excuse which takes on the same flavour as another may be treated differently by the Court based onall of the surrounding factors. [24] In Stealth, Judge Scott expressed her concern about the delaying character of the defendant’s actions when she noted: It is difficult to understand how the court proceeding would have completely escaped the applicant’s attention until she was served withnotice of the writ of execution and judgment, particularly when the respondent had made several attempts to resolve the matter of theunpaid invoice with the applicant. [25] I have no doubt that this influenced her discretion when she then went on to note that: Business-related reasons are not sufficient to justify the applicant’s non-attendance.

Workloads and unforeseen circumstances are anormal part of doing business and on their own would not justify the applicant’s failure to meet her court obligations in this case. [26] In Stealth it is apparent that the applicant had not bothered to file a defence. In the instant case, the defence was filed well beforethe settlement conference component of the action was to commence. In Stealth it appears that the defendant did not even bother torecord the case management date.

In the instant case the date was presumably recorded but then lost. [27] In Stealth there appears to have been a multitude of ex post facto justifications forthcoming and these were made only aftersignificant delay. In the instant circumstances, there is a single explainable reason, and Olympic’s application was brought immediatelyafter the mistake was ascertained. [28] With due respect to the Judys’ position, Olympic has brought and presented this application in a manner that is to be commended.

Ithas been brought in a timely fashion and it is brought in acknowledgement of the potential seriousness of the consequences which mayaccrue in the event that the application failed. By this I mean that there is no attempt to side step the misfeasance. Mr. Mellor takes fulland personal responsibility for the mistake. He has attempted to identify and deal with the reason for the mistake. Olympic has offered tocover the reasonable expenses incurred by the Judys as a result of that misfeasance.

Olympic is prepared and has offered to expedite anynew case management conference to the earliest available date, and in addition to accept a direction that the trial date be set on aperemptory basis. All of these considerations run in favour of Olympic’s success on this application. [29] In addition, there is no evidence before me of a material hardship for the respondent should the default judgment be set aside.

I saythis because in the instant circumstances, this is not an action where the Judys are actually out of pocket monies which are due andowing and which they could access but for the actions of Olympic; rather it is a claim which seeks a sum of money for the diminution ofvalue of their vehicle. That loss will crystalize only when they choose to sell it. [30] Having regard to all of these considerations, I am prepared to set aside the default judgment, but on terms.

I order that Olympic payto the Judys jointly and severally those reasonable expenses that they have had to incur as a result of Olympic’s failure to attend the casemanagement conference. This would include their travel costs, parking expenses and meals while in transit to and from the firstscheduled case management conference and this application. I assess that loss in accordance with the per diem schedules set by thePublic Service Commission as follows: a. Round trip travel by car from Broadview to Regina (300 kilometres round trip) on two separate occasions at $.42.27 per kilometre -$253.62; b.

Meals per diem for two ($14.00 per dinner) on two separate occasions - $56.00; c. Parking while at Court ($4.00) on two separate occasions - $8.00

Total - $317.62. [ 31 ] This amount shall be paid by certified cheque and delivered to the Judys on or before December 17, 2014. [ 32 ] Proof of payment shall be filed with the Court on or before December 21, 2014. [ 33 ] Upon proof of payment being received by the Court, the judgment shall be vacated in accordance with section 37(5) of the Act . Immediately thereafter a new summons will issue setting the next available case management conference. [ 34 ] If proof of payment is not filed on or before December 21, 2014, this application will be deemed dismissed and the earlier judgment of this Court shall be confirmed. P. Demong, J