Telus Services Inc. v. Hussey Date:, 2016 BCPC 41

Citation: Telus Services Inc. v. Hussey Date: 20160216 2016 BCPC 0041 File No: 51176 Registry: Vernon IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Small Claims Court BETWEEN: TELUS SERVICES INC. CLAIMANT AND: DAVID HUSSEY DEFENDANT RULING ON APPLICATION OF THE HONOURABLE JUDGE D.M. MCKIMM Counsel for the Claimant: A. Martin Counsel for the Defendant: No Appearance Place of Hearing: Vernon , B.C. Date of Hearing: November 25, 2015 Date of Judgment: February 16, 2016

Summary [ 1 ] This is an application by Telus Services Inc, the claimant, for an order for judgment in default of appearance by David Hussey, the Defendant. For the reasons that follow the claimant may have judgment in the amount of $25,000.00 plus expenses of $176.00 for a judgment of $25,176.00. The claimant seeks interest in the amount of $18,324.00 which is the amount of interest under the contract for services. While the defendant is liable for that quantum of interest pursuant to the contract, as a matter of jurisdiction, that relief is not available in this Court.

Furthermore, they are not entitled to pre-judgment interest either under the contract for services, nor pursuant to the Court Order Interest Act B.S.B.C. 1996 Ch. 79 . Facts [ 2 ] The claimant is a telecommunications company that provides internet services to customers. The defendant operated an internet company that required enormous amounts of data for its operations. In March 2009 the claimant and defendant entered into a contract for services according to which the claimant would provide internet services to the defendant for a fixed price of $2,040 per month.

As a term of that contract the defendant agreed to pay 24% per annum on all outstanding accounts. [ 3 ] By the time the claimant had stopped providing service to the defendant in November of 2012 the defendant had accumulated an outstanding account balance well in excess of $25,000.00. The last invoice dated November 1, 2012, showed an outstanding balance of $95,379.26.

It is not possible from the materials filed to determine how much of the $95,379.26 then outstanding was for services as opposed to late charges or interest under the contract, but there is no question that the amount outstanding for services alone was well in excess of the $25,000.00 jurisdiction of this court. [ 4 ] The claimant proceeded in this Court and expressly abandoned any amounts in excess of the monetary jurisdiction of the Court.

In the application for default judgment the claimant seeks judgment of $25,000.00 plus interest pursuant to the contract at a rate of 2% per month or 24% per annum for a total of $18,394.62 in interest plus costs. The claimant relies for this position on the language of

section 3 of the Small Claims Act R.S.B.C. 1996 Ch. 430 which provides that the Court may hear cases in the amount claimed or the value of the services provided, excluding interest and cost Act. S-s 3(1). Issue [ 5 ] Does this court have jurisdiction to award interest under a contract in excess of the monetary jurisdictional limit proscribed by the

section 3 of the Small Claims Act or its regulations? Discussion [ 6 ] The monetary jurisdiction of this Court is limited to certain monetary amounts as proscribed by regulation.

Section 3 of the Act provides: 3

(1) The Provincial Court has jurisdiction in a claim for (

a) debt or damages, (

b) recovery of personal property, (

c) specific performance of an agreement relating to personal property or services, or (

d) relief from opposing claims to personal property if the amount claimed or the value of the personal property or services is equal to or less than an amount that is prescribed by regulation, excluding interest and costs. [ 7 ] The regulation in question provides: For the purposes of

section 3 of the Small Claims Act , the prescribed amount is $25 000 B.C. Regulation 179/2005 (made pursuant to

section 21 of the Act ). [ 8 ] The claimant argues that they are entitled to their contractual claim in the amount of $25,000.00 but that the Act also provides that that amount is exclusive of interest and costs. That being the case, they are entitled to their judgment of $25,000.00 for services and the additional $18,394.00 being interest at 24% per annum on the jurisdictional limit of the Court. [ 9 ] They rely for this position on the decision of 32262 B.C. Ltd vs. Karobi, Afsin d.b.a. Saba Convenience Store and Ayne [2004] B.C.J. No. 2478 (B.C.P.C.) . In that case the claimant sued on a lease which provided that interest accrued to outstanding balances under

the lease at a rate of 26.8% per annum. At the time of the default there was a balance owing in excess of the Court’s then jurisdictional limit of $10,000.00. The claimant sought the jurisdictional limit of $10,000.00 plus interest in the amount of $11,145.00. In dismissing the claim for interest over the jurisdictional limit of the Court the Court writes: 27 The interest clamed is contract interest and arises only because of the contract between the parties. As with any debt arising from contract, the jurisdiction of this Court is limited to the amount of $10,000.

Court ordered interest and expenses or costs, can be ordered in excess of the $10,000 debt or damage jurisdiction of the court… 28 ...by choosing to file this case in the Provincial Court of B.C., the Claimant is not entitled to receive judgment for breach of contract amounts which exceed $10,000.00 except in the case of court ordered interest and/or expenses. 29 The Claimant is entitled to judgment against Azam Karobi in the amount of $10,000 plus expenses in the amount of $246.00. [ 10 ] This decision was not appealed and, while the analysis is not apparent, I agree with the conclusion that contractual interest is not available in excess of the jurisdictional limit of the court.

It is impossible to imagine how the Claimant understands this decision supports their position. [ 11 ] I accept that the exclusion in

section 3 of the Act of interest from the monetary jurisdiction of the Court may be seen as inconsistent with this

interpretation. On the other hand, as a matter of statutory

interpretation the Act must be read in context and in a manner that avoids inconsistency. The purpose of the Act is found in

section 2 which provides that, The purpose of the Act and rules is to allow people who bring claims to the Provincial Court to have them resolved and to have enforcement proceedings concluded in a just, speedy, inexpensive and simple manner. [ 12 ] The Act is noteworthy for its failure to provide for even modestly complex and expensive discovery processes such as are found in the rules of our Superior Court.

This failure, combined with the requirement for just and speedy resolution of cases, suggests that the legislature intended that cases below a certain monetary threshold could be resolved in a just and speedy way without the necessity of discovery processes. Reading the sections together suggests that the claim in contract is limited in its entirety to the monetary limit, be it for the quantum due under the contract or the interest due in default. [ 13 ] The apparent inconsistency may also be understood by reference to the Court Order Interest Act R.S.B.C. 1996 Ch. 79.

Parties are entitled to interest on a pecuniary judgment under that Act which provides: 1

(1) Subject to

section 2, a court must add to a pecuniary judgment an amount of interest calculated on the amount ordered to be paid at a rate the court considers appropriate in the circumstances from the date on which the cause of action arose to the date of the order. [ 14 ] In my view, this is the interest to which the Small Claims Act refers in

section 3. Read in this way the two acts are not inconsistent. A litigant is entitled both to the benefit of the full monetary jurisdiction of this Court as well as the benefits of the Court Order Interest Act . Such an

interpretation also avoids any inconsistency between the Acts. Construction of Statutes, Driedger 2 nd Ed. 1983 p. 48. [ 15 ] The Court Order Interest Act , however, also provides that interest under that act is not available in cases where the parties have agreed to contractual interest. 2 The court must not award interest under

section 1… (

b) if there is an agreement about interest between the parties, [ 16 ] As a result, where the action sounds in contract and the contract provides for interest payable on outstanding amounts, the successful claimant is not also entitled to interest under the Court Order Interest Act . In the case at bar they are entitled to only their $25,000.00 contractual claim plus costs or expenses. [ 17 ] Understood another way, the “claim”, as that term is used in

section 3 of the Small Claims Act in this case is a claim under the contract and that contract is for both services and interest. It is the entirety of the claim that is limited by the courts monetary jurisdiction and that includes both principal and interest. To do otherwise would allow the claimant to split his cause of action, this too is inconsistent with affecting resolution in the just, speedy, inexpensive and simple manner mandated for the Court.

See: Kids Only Market Ltd. vs.Chan [1993] B.C.J. 2728 (B.C.P.C.) [ 18 ] Finally, in this case the Claimant pleads in his Notice of Claim, Wherefore the Plaintiff [sic] seeks the relief as set out above and in addition requests court costs, legal fees, late payment charges and interest at a rate of 2% per month and 24% per the contract between the parties. The Plaintiff [sic] agrees to abandon any amount in excess of the monetary jurisdiction of this Honourable Court. He asks for $25,000.00 plus $156.00 for filing fees and $20.00 for service fees for a total of $25,176.00. The Defendant has not filed a

Reply though properly served and the Claimant asks for default judgment. [ 19 ] The request for legal fees, late payment charges and interest are all specifically provided for in the contract. Since the claimant has abandoned any amounts over and above the courts $25,000.00 limit, as they must do under Rule 1(5), in my view they have also abandoned their claim for contractual interest. The Defendant is entitled to rely on their pleadings and this is particularly so when the judgment is taken in default. Order [ 20 ] The Claimant shall have judgment in the amount of $25,000.00 plus $156.00 for filing fees and $20.00 for service fees for a total of $25,176.00. THE HONOURABLE JUDGE D.M. MCKIMM