Kutvonen v. Gelter, 2021 BCPC 343

Citation: Kutvonen v. Gelter 2021 BCPC 343 Date: 20210129 File No: 52274 Registry: Vernon IN THE PROVINCIAL COURT OF BRITISH COLUMBIA SMALL CLAIMS DIVISION BETWEEN: KARI KUTVONEN and RIITA KUTVONEN CLAIMANTS AND: COLLETTE GELTER and STEPHEN GELTER DEFENDANTS RULING ON APPLICATION OF THE HONOURABLE JUDGE J. GUILD Appearing on their own behalf: K. Kutvonen and R. Kutvonen Appearing for the Defendants: D. Draht Place of Hearing: Vernon, B.C. Date of Hearing: September 28, and November 26, 2020 Date of Judgment: January 29, 2021

Introduction [ 1 ] The Kutvonens purchased a lot in a local strata development in 2015, relying on various building plans. After construction started, they found out that their unit’s location and their building’s construction had changed, and believed it was to their detriment. They concluded that the lot, and what they could build, did not match what they had bargained for and they suffered a loss as a result.

Resolution discussions were unsuccessful, leading the Kutvonens to file a claim on February 12, 2020, against the Gelters, who were developers and sellers of the strata. [ 2 ] The Kutvonens filed a Certificate of Service that the Gelters were personally served on April 4, 2020, at their residence in the development. In addition, they had sent the requisite documents for service by registered mail to the Gelters three times – on February 21, February 28, and March 6 of 2020. [ 3 ] On July 24, 2020, the Kutvonens filed an application for a default order, as no Reply had been filed.

At the hearing on August 13, 2020, a default order was entered. On August 19, 2020, the Kutvonens obtained an order for seizure and sale [i] and served the Gelters. Also on that date, the Gelters filed an application to set aside the default order. Mr. Gelter filed a certificate of service with respect to that application on August 27, 2020. In that Certificate of Service, he stated that he had served the Kutvonens “by hand at their residence in their courtyard deck witness by #14 residents/owner Darcy/Husband Marke”. The Kutvonens’ residence was #12 – 7373 Brooks Lane, Vernon, B.C.

The Gelters residence as listed on the application and Certificate of Service was 1-7373 Brooks Lane, Vernon. [ 4 ] The Gelters’ application to set aside the default order was initially scheduled for a hearing in August 2020. Both parties did not have a lawyer. After some discussion, it was adjourned and re-scheduled for September 28, 2020. The Gelters appeared with their lawyer, who presented their case. The Kutvonens were unrepresented and sought an adjournment so that they could consult a lawyer before they responded to the application.

That was granted, and the matter was scheduled before me for further argument on November 26, 2020, when the hearing resumed and concluded. These are my reasons on the Gelters’ application to set aside the default order. Law [ 5 ] The Gelters submitted that Paolucci Holdings Ltd. v Girard Insurance & Financial Service Inc., [ii] set out the test to succeed on an application to set aside a default judgment: [14] The defendants further argued that, in the circumstances where a default judgment is regularly obtained, the court will consider the following factors, as set out in Miracle Feeds [1979] B.C.J.

No. 1965 : i. whether the defendant has a reasonable explanation why no defence was filed; ii. whether the defendant acted promptly in setting aside or applying to set aside the default judgment after obtaining knowledge of it; and iii. where the defendant has shown a meritorious defence or at least a defence worthy of investigation. [ 6 ] The fourth part of the test in Miracle Feeds was that those requirements must be established to the satisfaction of the court through affidavit material filed by or on behalf of the defendant. [iii] [ 7 ] In fact, Rules [iv] 17(2) and (4) govern this application, the relevant parts being:

(2) A judge may cancel a dismissal order or default order if (

a) the order was made … (ii) for failing to file a reply, and … (

b) the party applies (see Rule 16(7)) and attaches to the application an affidavit containing (

i) the reason the party did not file a reply … (ii) the reason for any delay if there has been delay in filing the application, and (iii) the facts that support the claim or the defence. …

(4) In making an order under these rules, a judge may impose any condition or give any direction that the judge thinks is fair. [ 8 ] These provisions virtually mirror the test in Miracle Feeds . Our Court of Appeal has held that the enumerated conditions in Miracle Feeds are simply factors to be considered when a judge exercises a discretion to set aside an order made in the Supreme Court pursuant to its rules [v] .

The relevant rule in that case was: “The court may set aside or vary any judgment entered pursuant to this rule.” Rule 17(2) does not set out a specific test for exercising the discretion, only pre-requisites before I may do so. In my view, Ismail applies to Small Claims proceedings. [vi] I will proceed with my analysis on the basis argued by the Gelters, as well as Rule 17(2). Parties’ Positions and Analysis

[ 9 ] Mr. Gelter filed two affidavits in support of the application to set aside the default order, one on August 27, 2020 (August Affidavit) and the second on September 18, 2020 (September Affidavit). The September Affidavit was prepared with the assistance of their lawyer. In the September Affidavit, Mr. Gelter listed his address as “1-737 Brooks Lane”. I view that as a typographical error and I take nothing from it. [ 10 ] Some aspects of the Miracle Feeds/ Small Claims Rules tests are more readily dealt with than others.

For convenience in my analysis, I will address the factors in a different order than that set out above. The Application to Set Aside Default Judgment was Made Promptly [ 11 ] In the August Affidavit, Mr. Gelter deposed that they were first notified of the default judgment when the Kutvonens sent an email on August 19, 2020, asking to be paid. Mr.

Gelter and his wife, the co-defendant, immediately went to the courthouse and filed the application to set aside the default order. [ 12 ] In his September Affidavit, he reiterated that immediately after he learned of the default judgment, he drove to the Vernon Courthouse to file the application to set aside the default order. [ 13 ] I am satisfied that the Gelters applied to set aside the default judgment as soon as reasonably possible after they knew of it. A Meritorious Defence or Defence Worthy of Investigation [ 14 ] The Kutvonens submitted that the defences were not set out in Mr. Gelters’ affidavits.

I disagree. One of the potential defences is that the claim was statute barred. That is set out in Mr. Gelter’s August Affidavit. He also asserts that the claim contains false declarations and that the Kutvonens were wrong about their assertions in the claim and attached exhibits in support of his defence. [ 15 ] In the September Affidavit, there is further reference to the claim being statue barred. Some submissions focussed on that issue, including reference to various exhibits attached to the September Affidavit in support of that point. In that affidavit, Mr.

Gelter also deposed that he was not aware that the Gelters had breached any of the Kutvonens’ rights, contractual or otherwise. Although that awareness may not in itself constitute a defence, the Gelters’ lawyer made submissions with respect to more substantive defences, relying on the affidavits and attached exhibits. [ 16 ] I am satisfied that there is a defence worthy of investigation. Whether the Gelters Have a Reasonable Explanation why no Reply was Filed The Test [ 17 ] In Miracle Feeds , the test was articulated as follows: [vii] 1.

That he did not wilfully or deliberately fail to enter an appearance or file a defence to the plaintiff's claim. [ 18 ] In GO2 D4 Construction v. Hrychiw , [viii] this part of the test was framed as whether “the Defendant [did] not willingly allow the judgment to be entered.” It is clear that the Gelters wilfully and deliberately failed to respond to the claim, but it would be unfair to use the Miracle Feeds formulation literally. In this case, the real issue is why they failed to file a Reply - and whether that amounts to a reasonable explanation in all of the circumstances.

I will use the test as set out in the Rules and expanded in Paolucci : whether the defendant has a reasonable explanation why no defence was filed. [ 19 ] The Gelters relied on Paolucci and GO2 for the proposition that all Mr. Gelter had to show is that he had a subjective belief that the courts were closed and that they would be called by the court and told when they could file a reply. [ 20 ] Paolucci involved an application to set aside a default judgment against the defendants, Maioha Aroha Productions Inc. and Jordan Corrigal. One issue was whether the test in Miracle Feeds was met.

Affidavits were filed with respect to what had transpired and led to each party’s position on the application. The defendants argued that they did not formally defend the claim based on their understanding that, after a meeting in January of 2016, the plaintiffs would hold off in pursuing their claim while the defendants explored payment options. [ 21 ] The application judge, Mr. Justice Tindale, stated: [ix] [39] It is difficult to assess the credibility of witnesses based on affidavit evidence only.

The court does not have an opportunity to observe the witness nor does the court have the advantage of cross-examination. [40] Assessing the credibility of a witness is not as simple as determining who is telling the truth or not. Often people are mistaken about what occurred and are, therefore, not necessarily reliable in their recounting of an incident.

Witnesses may also have different perceptions of what occurred during a particular event. [41] In this case, it is not incongruent to accept the evidence on behalf of the plaintiff that no agreement was reached at the January 2016 Meeting while accepting the evidence of Mr. Corrigal and Mr. Girard that they thought there was an agreement to hold off on any court action while Mr. Corrigal explored payment options. [42] While it is now clear that there was not a meeting of the minds in January 2016, Mr. Corrigal believed that he had an agreement that the plaintiff would not take any steps in the litigation process.

I accept that the defendants have a reasonable explanation as to why no defence was filed. [ 22 ] Tindale J. clearly found that the defendants’ subjective belief provided a reasonable explanation as to why they did not take any steps to defend the action. No test is set out, nor is there any detailed analysis as to what made it reasonable. Her Honour Judge Frame

followed a similar line of reasoning in GO2 , with no explicit test set out. I do not criticize either judge; they were not required to adjudicate upon the issue. I refer to these cases as they were provided, but note I was not provided with any case where the nature of the test was a live issue. It may be there are none, and these cases are the next best thing - examples of the test in action. [ 23 ] In my view, a mere subjective belief is insufficient.

If that were the test, then all a defendant would have to do is set out in an affidavit what they believed, and the first part of Miracle Feeds would be satisfied. Assuming the other criteria were met, no default judgment would ever survive a challenge based on a failure to file a reply. Similarly, if all an applicant had to do to obtain an order is comply with the Rules and set out any reason for not filing a Reply, then there would be no need for a judge to exercise a discretion.

And that exercise of discretion is required. [ 24 ] The exercise of discretion hinges on whether there is a reasonable explanation for failing to respond to the claim. Reasonableness is an objective test - a subjective belief is measured objectively. There are two requirements: first, the subjective belief must be honestly held; second, the subjective belief must be objectively reasonable in all the circumstances. Those are criteria used in the criminal context for assessing whether a state actor acted reasonably.

Adopting that paradigm for a similar analysis is legally consistent, and consistent with the exercise of judicial discretion. All of the circumstances includes all of the information the person knew, or ought to have known, at the time they came to their stated belief. The Affidavits [ 25 ] In the August Affidavit, Mr. Gelter stated that they were “served a Notice of Claim on or about March 20th 2020” (a Friday).

He deposed that he called the court the week after and asked what they should do, and the court clerk indicated that the courthouse was closed for an indeterminate amount of time as a result of the COVID-19 pandemic. Mr. Gelter understood that the claim was suspended until further notification and assumed that the court would contact them when the time to proceed with the next step occurred. [ 26 ] In the September Affidavit, Mr. Gelter deposed that, around March 7 to 14, after receiving the Notice of Claim, his wife asked him to find out what to do in response to it and to act on her behalf.

Apparently pursuant to that instruction, he took some steps (what he did was not set out in the affidavit) and concluded that “[o]n or about March 20, 2020” the courthouse was closed and that he could not attend to find out how to proceed. He deposed that belief was based on a notice from the Provincial Court of British Columbia issued on March 19, 2020.

He attached as Exhibit B, the NP 19 Notice to the Profession and the Public (Notice) revised on April 2, 2020, issued by the Chief Judge of the Provincial Court of British Columbia. [ 27 ] He deposed that instead of attending the courthouse, he telephoned and had the conversation referred to above, that he could not recall exactly what was said, but as a result of that conversation his understanding was that: he knew he had to file a reply; they were not late in doing so; he could not take any steps because the courthouse was shut down; he would have to wait until it opened to file a reply; when it would open was uncertain; and a note would be placed on his file that he was to receive notice from the court when it reopened.

He also deposed that he had health issues; was required to self-quarantine in March; that the court did not notify him when it re-opened; and that until August 19, 2020, “to the best of my knowledge and belief”, the courthouse remained closed. He did not state why he knew or believed on that date it was no longer closed. The Submissions and Analysis [ 28 ] As noted by Tindale, J., it is difficult to assess credibility based solely on affidavits, but that is what I must do. An affidavit is a document setting out what a person swears is true. It is equivalent to sworn testimony. Mr.

Gelter’s September Affidavit stated that he understood that a note would be placed on their file, that they would be notified by the court registry when it re-opened, and that the courthouse was closed. There was no suggestion that there was any error induced by the registry staff. It appears on its face that he honestly held that belief. On the other hand, in the August Affidavit, Mr. Gelter deposed that he assumed the courthouse would contact them. [ 29 ] The Kutvonens did not make any specific submission that Mr.

Gelter did not honestly hold his beliefs, but some aspects of their submissions touched on that point. The Kutvonens focussed on the second part of the test: whether that asserted belief was reasonable, and in support of their submission it was not, they provided material showing that the Gelters are very experienced in litigation. [ 30 ] In an affidavit filed August 27, 2020, a Mr.

Urquhart deposed that he had bought a home in the same strata development from the Gelters, and filed a claim against them in the Vernon Registry of the Provincial Court of British Columbia - the same as this litigation - on August 16, 2017. He deposed that the Gelters were well-versed in the court system and procedures, and filed a two-page Reply to his claim on August 29, 2017. I note the Reply form is only one page, indicating the Gelters made a significant and detailed response. Mr.

Urquhart’s matter proceeded through the small claims process, resulting in a trial date being scheduled for January 2020, but the parties settled in December 2019. Mr. Urquhart also deposed that the Gelters’ defence tactics included delay when it suited them, and that he had witnessed the harm to the Kutvonens from the Gelters’ delay tactics in this matter. His affidavit was unopposed, and nothing in Mr. Gelter’s affidavits contradicted or denied the truth of what was said by Mr.

Urquhart. [ 31 ] The Kutvonens also supplied and referred to, without objection, a printout from British Columbia’s Court Services Online. That is a publicly available system operated by the provincial government. It would qualify as a source suitable for judicial notice. That document listed 23 different civil cases involving the Gelters in Supreme Court and Provincial Court, mostly from the Vernon Registry. There were 10 matters, including this and Mr. Urquhart’s claim, in Provincial Court. In almost all of them, if not all, the Gelters, or at least one of them, were defendants.

Those claims were filed between 1991 and 2020. There was also a civil claim from Quebec where at least Mr. Gelter was a defendant. Although that has limited weight in assessing familiarity with the precise process in small claims matters in British Columbia, it is more evidence of his involvement in litigation. [ 32 ] I have no hesitation in concluding that at the time the Kutvonens filed their claim, the Gelters were fully aware of the civil litigation process - a claim is made and there is a time limit for filing a response by the defendant if they wish to dispute the claim.

I also have no hesitation in concluding that the Gelters were also very aware of the specific process in small claims court applicable to the Kutvonens’ claim. Apart from the numerous claims they had been through before, they had just concluded being involved in small claims litigation and had filed an extensive Reply at the end of the time permitted by the Small Claims Rules . That alone demonstrated

their knowledge of the process in February 2020. [ 33 ] Mr. Gelter’s statement in his September Affidavit that he has no formal legal training rings hollow. That assertion by itself has no value. On its face it does not tend to prove any fact in issue. It is the inference to be drawn from it that matters.

I find the inference he seeks the court to draw is that because of the lack of legal training, he would be unaware of the court process and therefore should not be faulted for failing to file a Reply, misunderstanding what was said to him or misreading Notices from the court. [ 34 ] The inference that he had no knowledge of the process would clearly be incorrect. One does not have to have a legal education to be experienced and knowledgeable in the conduct of small claims matters.

In fact, it is far more likely that those who have been involved in numerous small claims matters, like the Gelters, would know more than most lawyers about it. His statement is misleading, although perhaps factually accurate. [ 35 ] In paragraph 8 of the September Affidavit, Mr. Gelter set out what he says he learned from the conversation with the court staff. The first point he deposed to is that: “In the course of the Conversation and as a consequence of it, I understood the following: a.

I was obliged to provide a response to the Notice of Claim known as a Reply.” [ 36 ] The Gelters both knew well before then that the response to a “Notice of Claim” was termed a “Reply” and Mr. Gelter knew that he was obliged to provide a response if he wished to contest the claim. The excerpt from paragraph 8 is an untrue statement because he was not aware of that as a consequence of the conversation . Since that affidavit was prepared with the assistance of counsel, I do not conclude that it was a careless inaccuracy. I also find Mr.

Gelter would have known those facts before the August Affidavit, given his litigation experience. [ 37 ] I will continue to assess the information in the affidavits. I previously noted a difference between the assumption of being notified and Mr. Gelter’s later “understanding”, which is far more specific and not an assumption. However, it is possible to reconcile the two statements, so I do not conclude that there is necessarily a substantive difference. [ 38 ] In the August Affidavit, Mr.

Gelter deposes that they were served the Notice of Claim “on or about March 20 th 2020.” That is an unusual phrase, but there was nothing significantly uncertain about that date. It would not be reasonable to think it extended into April. He deposed he called the court the next week, which would have been between March 23 and 27, and “asked what we do with” the Notice of Claim.

He deposed that the court clerk “indicated that the court house was closed for indeterminate amount of time due to Covid 19” and he understood that “this action was suspended until further notification, we provided our contact information assuming that the court house would contact us when the time to proceed with the next step occur.” [ 39 ] The affidavit was in the form of a letter, in both the Gelters’ names, and indicated that both had prepared it, although only Mr. Gelter swore to it before a notary public.

In it, he asks the court to forgive him for not following procedures during the pandemic because he just did not know. He did know the procedures, but perhaps not those that operated during the pandemic - assuming they were different. [ 40 ] In the September Affidavit he used far more sophisticated language, and specific phrases such as “verily believe” as well as “on or about”. The word “verily” is not something an unsophisticated layperson would use, nor is the phrase “on or about”. Either those words were used by counsel and adopted, or Mr. Gelter was familiar with them and meant to use them.

Neither option is beneficial to him. If he adopted what was prepared for him by counsel, that makes assessment of reliability and credibility very difficult, [x] and I have no doubt the content was in accordance with instructions counsel received from Mr. Gelter. [ 41 ] However, since he used “on or about” in the August Affidavit, that was a phrase he used, and whose meaning he presumably knew.

That use tends to show he is more sophisticated than what might be inferred from the form of the August Affidavit, which is in accord with the Kutvonens’ submission. [ 42 ] In the September Affidavit, he deposed that he was not sure of the exact date he was served the Notice of Claim, but recalled being handed something personally by a woman he believed was a process server. In the court file, there is an invoice from a process server, Jenna Van Bodegom, which is the name on the Certificate of Service. He was served at the same time as Mrs. Gelter.

Given the Certificates of Service, the personal service he refers to in his affidavit was on Saturday, April 4. [ 43 ] In the next paragraph he deposed that he was not certain of the date on which he “received service” but that his wife informed him that it was “likely within one or two weeks of March 20, 2020” and that he believed that was a reasonable estimate. He did not state it was one or two weeks after service. It seems, in context, he meant the personal service on April 4. Why he would refer to March 20, when service was in April, is unclear. I conclude March 20 th was a significant date for him and Mrs.

Gelter. That is consistent with a belief that the time limit for filing a Reply was about to expire. [ 44 ] In the next paragraph he deposed that “on or about March 7 or 14, 2020” (they were both a Saturday), after receiving the Notice of Claim (I note he did not refer to “service”), Mrs. Gelter told him to act as her agent and “to find out what to do in response to the Notice of Claim”, and he intended to “respond appropriately” to it.

If he is referring to the claim he received in April, he mis-stated the month of March and meant April 7 or 14, and was therefore at the least very careless in deposing as to what was written. April 7 th and 14 th were a Tuesday. April 20 th was a Monday. The time limit for filing a Reply for a service date of April 4 had expired, [xi] or at best it was the last date for responding, which he would have known.

If he meant all of the dates to be in April, that was inconsistent with his August Affidavit, and there was no explanation for that inconsistency. [ 45 ] The other possibility is he meant what he stated: March 7 or 14. He referred to “receiving” the Notice of Claim, rather than being served. The Notice of Claim was sent to him on three dates, including March 6. Taking all matters into account including his litigation experience, I conclude he did not mis-state the month, meant to depose it was March, and conclude he knew of the claim on or before

March 14. [ 46 ] Although no proof of service was filed showing service was effected in March, there is no doubt that the Gelters knew of the claim and considered that they had been effectively served, because that was the explanation given for Mr. Gelters’ telephone call - to find out how they could respond. There is no doubt they believed the time for filing a Reply had at least started to run when he called the registry, and that they knew of the claim at the latest on March 14. Despite Mrs. Gelter asking her husband to take responsibility to reply and Mr.

Gelter’s stated intent to “respond appropriately”, he did nothing for one to two weeks, depending on whether March 7 or 14 is used. There was no explanation for that delay. If a reasonable person was truly concerned about how to respond, did not know what to do and wanted to dispute the claim, they would not wait to act. [ 47 ] The time limit for filing a Reply is set out in bold in the Notice of Claim form and the consequences of failing to do so are in simple English.

The Reply form the Gelters received with the Notice of Claim also includes a full page of instructions on how to respond, again in clear simple English. It sets out the options for a defendant and refers to the time limit set out in the Notice of Claim. If they were served on March 6, they were at the end of the time limit and they knew it. It would be unreasonable to conclude they did not know that and did not know how to respond.

A reasonable person without any litigation experience would know of the time limits. [ 48 ] Since the Gelters knew of the claim by Friday, March 20, they would have been served by registered mail [xii] sent on March 6, if not earlier. I will use March 6, as that is to their benefit. They would have had 14 days after that to file a reply - Friday, March 20, possibly extended to the next business day, March 23. That is why March 20 was a significant date – it was the end of the time limit for filing a Reply.

I conclude that the Gelters considered that they had been validly served through registered mail in March, and knew that the time limit was about to expire. [ 49 ] If my conclusion regarding the date of service is incorrect and Mr. Gelter meant to refer to April, not March, the best that can be said for Mr. Gelter is that he is quite careless with sworn evidence, despite his litigation experience. That would put into serious question his other assertions - for example, that he honestly believed the courthouse was closed and that he could not file a reply.

If he meant April, I would not rely on those assertions, and his claim would fail. [ 50 ] I have found that Mrs. Gelter was aware of the steps to be taken to respond to a Notice of Claim. The assertion that she did not know and asked Mr. Gelter to find out what to do is not credible. At the least, Mr. Gelter clearly knew, Mrs. Gelter would have known that, and he would have told her of the next steps. That narrative in the affidavit makes no sense. [ 51 ] Mr.

Gelter deposed that “[o]n or about March 20, 2020” he believed the courthouse was closed due to the Covid 19 pandemic, and he “was not permitted to attend to find out how to proceed in response to the Notice of Civil Claim”.

Although I have concluded he knew very well how to respond, if his belief was honestly held that the courthouse was closed, it is not inconsistent for him to indicate he did not know how to proceed in light of that belief. [ 52 ] He then deposed that “[t]his belief was formed based on the Provincial Court’s Notice to the Profession and Public issued on March 19, 2020 stating, amongst other things, that “In person filings at all Court locations are suspended.” The pandemic was more in the news by March 20, and it would be reasonable to have concerns about court. Since Mr.

Gelter said he thought the court was closed, he must have looked at that notice on the Provincial Court of British Columbia website and viewed the NP 19 in effect at the time – March 20. He then deposed that attached to the affidavit as Exhibit B was “a copy of the Notice to the Profession and Public that I obtained from the Provincial Court of British Columbia issued on March 19, 2020.” [ 53 ] It is not clear when Mr. Gelter obtained that copy. He did not state who he received it from, or how he received it.

Given his stated belief that the courthouse was closed, the fact that non-urgent attendance was discouraged, and that it was not part of his August Affidavit, I conclude he obtained it between August 27 and September 18, 2020, the date the September Affidavit was sworn, from a provincial courthouse, likely the one in Vernon. [ 54 ] He did not depose that the Notice to the Profession and Public (NP 19) in Exhibit B was the same as the one he reviewed in March. Although there was one Notice “issued” on March 19, it was revised on March 23 and again on April 2 [xiii] , both of which retained the same “issued” date.

Exhibit B was the April 2 version. That also leads me to conclude Exhibit B was obtained well after he looked at the Notice. Since he referred to the NP 19 issued March 19, in both affidavits March 20 was a significant date, and he called the courthouse then or the next week, I conclude in all the circumstances that the NP 19 he actually looked at, and from which he concluded the courthouse was closed, was the initial March 19 version, or perhaps the revision on March 23.

In any event, the actual relevant content of the NP 19 was consistent, as will be seen. [ 55 ] The Gelters argued that the NP 19 he reviewed in conjunction with his belief or understanding as to what he had been told by registry staff, made it reasonable for Mr. Gelter to believe that there was no way to respond to the claim at that time, and he would have to wait for court to reopen.

In short, his failure to file a Reply as a result of the COVID-19 pandemic was very reasonable. [ 56 ] The relevant parts of NP 19 issued March 19 included: Date Issued: 19 March 2020 Effective Date: 25 March 2020 (unless otherwise stated in this Notice) NP 19 NOTICE TO THE PROFESSION AND PUBLIC COVID-19: SUSPENSION OF REGULAR COURT OPERATIONS This direction replaces the Court’s March 17, 2020 COVID-19 Update Announcement .

Notice Effective March 25, 2020 (unless otherwise stated in this Notice), the Honourable Chief Judge Gillespie has suspended regular operations of the Provincial Court of British Columbia at all of its locations to protect the health and safety of court users and to help contain the spread of COVID-19. In light of the extraordinary circumstances during the current public health emergency, members of the public who do not have urgent business before the Court are discouraged from attending any courthouse.

In person and by video in-custody criminal trials, bail hearings during Court sitting hours, urgent out of custody criminal trials, and other urgent trials or hearings as ordered by a judge will only be heard at one of the below Hub Court locations, unless otherwise ordered by the Regional Administrative Judge or their designate. For these matters, a victim or witness may apply to appear by videoconference from another Court location. You may contact the Judicial Case Manager (for criminal matters) or the court registry (for small claims matters or family matters) at the designated Hub Court Location to

schedule your telephone application before a judge. REGION DESIGNATED HUB COURT LOCATION JUDICIAL CASE MANAGER (Criminal Matters) Fraser Surrey Surrey.Scheduling@provincialcourt.bc.ca Interior Kelowna Kel.Scheduling@provincialcourt.bc.ca OCJ Robson Square Robson.Scheduling@provincialcourt.bc.ca Northern Prince George PG.Scheduling@provincialcourt.bc.ca Vancouver Robson Square Robson.Scheduling@provincialcourt.bc.ca Vancouver Island Victoria Vic.Scheduling@provincialcourt.bc.ca In person filings at all Court locations are suspended.

The procedure is set out below for urgent filings for each division of the Court. … II. SMALL CLAIMS Small claims settlement conferences and small claims trial conferences scheduled between March 16 and May 4, 2020 will not proceed so the parties should not attend Court. The parties will receive notification by May 4, 2020 regarding the next date they must attend Court. All non-urgent small claims matters, including trials and Rule 9.1 Simplified Trials , scheduled to proceed between March 18, 2020 and May 16, 2020 are adjourned without the parties having to attend Court.

See Appendix “A” - Adjournment Details for more information. Only urgent small claims matters as determined by a judge on the record will be heard, including applications: a. regarding outstanding warrants; b. to preserve limitation periods; c. to extend the time for filing pleadings where permitted under the Small Claims Rules ; and d. to renew notices of claim.

PROCEDURE FOR DETERMINING URGENT SMALL CLAIMS MATTERS Applications to a judge for determining if a matter is urgent can be sent: a. electronically (where able) using Court Services Online ; b. by email, phone or mail to the applicable local court registry ; or, c. by fax to fax filing registries (see GEN 01 Practice Direction) . No new non-urgent small claims filings will be accepted by the Provincial Court registries submitted between March 18, 2020 and May 16, 2020. … THE FOREGOING IS SUBJECT TO CHANGE, ANY UPDATED DIRECTIONS WILL BE POSTED ON THE COURT’S WEBSITE. History of Notice to the Profession and Public

• Original Notice to the Profession and Public issued on March 19, 2020, and effective March 25, 2020 (unless otherwise stated in the Notice). [ 57 ] The first point of note is the effective date in the heading: March 25. In the body of the NP 19 it also clearly states that it would only be on March 25 that regular court operations were suspended. It does not state that the courthouses were closed; it only stated that people who did not have urgent business were discouraged from attending. That clearly indicates that courthouses were open. So does the next paragraph.

Missing from the part quoted by and relied on by the Gelters in the September Affidavit was a direction as to how filing could be accomplished for urgent matters. [ 58 ] If Mr. Gelter accessed the NP 19 Notice on Friday, March 20, the practice directive limitations were not in effect and would not be for six more days. The usual time limit for filing a Reply under the Small Claims Rules - 14 days after service - would apply. He was able to go to the courthouse. [ 59 ] The language in the Notice is not complicated. It is very plain.

It specifies that non-urgent small claims matters “ scheduled to proceed ” between certain dates were adjourned. Obviously nothing was scheduled for the Gelters. They did not suggest there was or that that was their understanding. Given their knowledge of court proceedings, they could not reasonably have that understanding. Even if they did, Appendix “A” to the NP 19 directed them to email or telephone the Judicial Case Manager and provided that contact information.

That telephone number is not the same as the registry number. [ 60 ] There were four specific items deemed urgent that were specifically set out in the NP 19, two of which a reasonable person without litigation experience might think would apply to the Gelters: preserving a limitation period, and extending the time for filing pleadings. Specific clear instructions - three options - were provided to apply to a judge to see if a matter was urgent. A reasonable person would think, if in doubt, apply. Mr. Gelter did not depose that his telephone call to the court registry was to apply to a judge.

It clearly was not. [ 61 ] I also note that in bold, red-coloured font and all capitals to highlight the importance of it, the following was written: “THE FOREGOING IS SUBJECT TO CHANGE, ANY UPDATED DIRECTIONS WILL BE POSTED ON THE COURT’S WEBSITE.” That would put anyone on notice that even if some information was received on March 20, it could change at any time and that the most current information would be on the website. [ 62 ] The next NP 19 update was issued on Monday, March 23 – still with an effective date of March 25. All changes to the March 20 NP 19 were in red coloured font.

The only relevant change in the March 23 revision was that urgent applications for small claims would be heard “by telephone”. It indicated just as clearly that the court was open for business, and catered to any concerns about contracting COVID-19 by having to attend a courthouse.

It was clearly noted, as in the March 19 NP 19, that there would be continual updates and revisions. [ 63 ] I conclude that on or about March 20, 2020, based on the NP 19, it would have been clear to anyone with litigation experience who could read and understand English that the court was not closed, that they could attend in person at any time, that any restrictions would not be in effect until March 25, and that filing a Reply was an urgent matter that would be dealt with by the court, including by a telephone appearance before a judge, if an extension was needed.

There was no suggestion made that the Gelters did not understand English. At the first hearing on August 28, Mr. Gelter spoke English well and appeared to understand the entire approximately 20 minutes of proceedings. And of course there is their extensive litigation experience. [ 64 ] Mr. Gelter simply asserted in his September Affidavit he “verily believed” the courthouse was closed on March 20 as a result of the NP 19 Notice. One could only conclude he did not read any NP 19 fully and did not take care when doing so to come to his stated belief. At best, he took from the NP 19 what he wanted.

That is not reasonable. [ 65 ] Given his knowledge of the litigation process and the clear wording of the NP 19, it was not reasonable for him to have his asserted belief on March 20 th , or even on the 23 rd . It is far from certain that he honestly held that belief, given his untruths and carelessness in his sworn evidence. The court clerk with whom Mr. Gelter conversed was not called upon to provide her recollection of the conversation, if any. Since Mr.

Gelter has no accurate recollection of what was said, and given his untruthfulness and carelessness in his affidavits, I cannot assess what was actually said in the conversation that led to his purported beliefs, nor can I find that his purported beliefs were objectively reasonable, based on his affidavits as required by Miracle Feeds/ Small Claims Rules , or in all of the circumstances. [ 66 ] I have found that the Gelters were served with the claim in March and believed that they were validly served. Mr. Gelter referred to what would have been the current NP 19 he read that he says led him to his beliefs.

He stated that was issued March 19, perhaps as modified on March 23. He referred to all important dates as being in March. I have found he did not mis-state the month. Even if Mr. Gelter meant April, then it was “on or about” April 20 when he would have looked at the website. There were of course many other public announcements readily viewable on the Provincial Court website landing page. One such announcement was this e-news excerpt, which is still on the website. [xiv] What's happening in the BC Provincial Court during COVID-19? Posted to: Court l 14/04/2020 BC courts are not closed.

In fact, we cannot close our courts because they are an essential component of our democratic system. … [ 67 ] Mr. Gelter appears to have not bothered to check the official source for updates on the impact the pandemic was having on the court’s operations, as suggested by the bold notice. Had he done so, he would have continued to find information contrary to his asserted belief that the courthouse was closed. [ 68 ] On April 28, an NP 19 update was posted to the Provincial Court of British Columbia website, effective that date. That Notice was headed as follows:

Effective Date: 28 April 2020 (unless otherwise stated in this Notice) NP 19 This Notice to the Profession (NP 19) replaces Notice to the Profession and Public COVID-19: Suspension of Regular Court Operations (NP 19) NOTICE TO THE PROFESSION AND PUBLIC COVID-19: COMMENCING RECOVERY OF SOME COURT OPERATIONS [ 69 ] The heading says it all.

First, it was issued on April 28; second, it replaced the prior NP 19 notices suspending court operations; and third, it clearly stated court operations were resuming. [ 70 ] In other words, whatever suspensions there were with respect to filing, as of April 28, the court would be resuming some operations. And each of the April 2 and April 14 NP 19 revisions were clear - courthouses remained open, even permitting in-person attendance.

They contained the same directions as the previous NP 19 notices regarding different ways to deal with urgent small claims matters, and they all specifically referred to extending time for filing pleadings as an urgent matter. [ 71 ] Mr. Gelter did not say anywhere in an affidavit he understood filing a Reply was not urgent, as was argued he believed. He filed two affidavits, one with the assistance of counsel. He had every opportunity to state that belief. Based on the affidavits, it would be speculation to conclude that was his understanding.

Given his experience in litigation, and in all the circumstances, there is not even a remote possibility he was not aware that it was an urgent matter. He did not argue that the suspension of limitation periods that became effective on March 26 [xv] was relevant or applied. In any event, that Order only suspended time limits for commencing a proceeding – not responding to one. [ 72 ] I also consider the implications of Mr.

Gelter’s position: if his asserted belief that the registry would contact him was correct, then throughout the province in all matters, no one would have to do anything until they received a call, because he was no different than anyone else. In 2018 - 2019, there were 112,427 cases initiated in provincial court, not including matters usually dealt with by judicial justices, and 10,854 new small claims filed. [xvi] According to Mr. Gelter, it would be reasonable to think that the provincial court would be contacting twice as many people – because each case has at least two parties.

Even without the actual numbers, it would be obvious to anyone that there would be a huge number of telephone calls, emails or notices that would have to be made and given, well beyond what would be reasonable to expect. That would have at least put a reasonable person on notice that perhaps they were incorrect in their belief that they would be given notice by the registry. [ 73 ] Without discredit to any court clerk, and specifically noting that the Gelters do not allege that the court clerk in fact misled them, a reasonable person would take the NP 19 as important and accurate.

If told something different from what was in the notice, a reasonable person would at least refer to it and question any information to the contrary. There is no suggestion Mr. Gelter did that. [ 74 ] I also note the Gelters acted very promptly when there was actual jeopardy. The same day they received notice of garnishment, they completely understood what they had to do. Mr. Gelter deposed in both affidavits that they drove directly to the courthouse and filed their application as soon as they learned of the default judgment.

They did not call the courthouse first, look at any website or go elsewhere to find any information. When they wanted to, they acted quickly and without any need for more information or clarification. I infer from that that they were acutely aware of and knew that the courthouse was open, despite the stated belief it was not. [ 75 ] I conclude that Mr. Gelter’s purported understanding was not reasonable and that he has not shown he honestly held his beliefs.

It was not reasonable for these very experienced and sophisticated litigants to believe courts were closed and to take no action at all until they were forced into action by the collection process. The Gelters’ lack of action was consistent with delay tactics, as stated by Mr. Urquhart and submitted by the Kutvonens. [ 76 ] In my view, the Gelters are similar to the defendants in Rudrakumar & Pawar v.

FIC Investments et al ., [xvii] where the applications to set aside default judgments were denied: [38] This is not a situation wherein procedural notice was not given to a party; rather the defendants’ position here is that the notice, properly sent, was not seen by them. They have only themselves to blame for that. But what is more significant in my opinion, is that despite the passage of a considerable amount of time, neither Lathigee or Pasquill did anything at all to check on the status of these court cases.

Both men are reasonably sophisticated litigants and familiar with court processes and legal matters due to their corporate work and the real estate investigation. Consequently, they had to have known that by failing to make any inquiries at all into the claims brought by Rudrakumar and Pawar, they were avoiding the processes of the court at their peril. [ 77 ] In all of the circumstances, I dismiss the Gelters’ application to set aside default judgment. They have not provided a good reason for failing to file a Reply.

It is more likely than not they did so as a delay tactic. _________________________ The Honourable Judge J. Guild Provincial Court of British Columbia

[i] Small Claims Rules , BC Reg 261/93, Rule 11 [ii] 2018 BCSC 1810 , at para 14 [iii] Miracle Feeds v. D & H Enterprises Ltd, [1979] BCJ No 1965 [iv] Small Claims Rules , BC Reg 261/93 [v] H.M.T.Q. In Right Of The Province of British Columbia v. Ismail, 2007 BCCA 55 , at para. 11 [vi] See also Passero v.

Cupo , 2010 BCSC 1667 , at para. 21 [vii] At para. 5 [viii] 2016 BCPC 135 [ix] Paolucci, at para’s 39-42 [x] Nguyen v Dang , 2017 BCSC 1409 , at paras 17-19 [xi] Rule 3(4) [xii] Pursuant to Small Claims Rules, Rule 2(2) [xiii] https://www.provincialcourt.bc.ca/archive#GPArchive accessed January 13, 2021 [xiv] Accessed December 24, 2020 [xv] Ministerial Order No. MO86 [xvi] Provincial Court of BC Annual Report, 2018/2019, as found on the BC Provincial Court website, downloaded on December 21, 2020. [xvii] 2011 BCPC 46