Stealth Web Designs Inc. - v. -, 2012 SKPC 73

Editor ’s Note: Corrigendum released on July 5, 2012. Original judgment has been corrected with text of corrigendum appended. IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2012 SKPC 073 Date: May 7, 2012 File: SC#380 of 2012 Location: Saskatoon _____________________________________________________________________________ Between: Stealth Web Designs Inc. - and - Melanie Wildman Mr. Ryan Yedersberger and Ms. Cara Cote For the Respondent (Plaintiff) Mr. Robert Affleck, Student-at-Law For the Applicant (Defendant) _____________________________________________________________________________ DECISION ON AN APPLICATION UNDER

SECTION 37 OF THE SMALL CLAIMS ACT D.C. SCOTT , J _____________________________________________________________________________

[ 1 ] The applicant (defendant) Melanie Wildman applies to set aside a judgment granted October 27, 2011 in favour of the respondent (plaintiff) Stealth Web Designs Inc. [ 2 ] The respondent commenced an action against Ms. Wildman claiming payment of its invoice for website design and maintenance services performed for Ms. Wildman in relation to her business. On October 3, 2011, Ms. Wildman was personally served with a summons to appear on October 27, 2011 at a case management conference, but she failed to do so. [ 3 ]

Section 7.1 of The Small Claims Act gives authority to a judge to make any appropriate order or give judgment against a party who does not attend a case management conference. [ 4 ] At the case management conference on October 27, 2011, pursuant to

section 7.1, this Court awarded judgment in favour of the respondent in the amount of $6,017.83, along with pre-judgment interest in the amount of $63.36 and costs of issuing and serving the claim in the amount of $230.00, for a total of $6,311.19. [ 5 ] Ms. Wildman received notice of the writ of execution and judgment by letter from a collection agency on December 30, 2011. [ 6 ] On January 27, 2012, an application was filed by Ms. Wildman, seeking to set aside the October 27, 2011 judgment. The matter was heard April 5, 2012 and reserved to allow Ms.

Wildman the opportunity to file supplementary information requested by this Court, which was received April 13, 2012. [ 7 ] The respondent opposes Ms. Wildman’s application, alleging she is attempting to further delay or thwart the court proceedings. [ 8 ]

Section 37 of The Small Claims Act , 1997 c. S-50.11 sets out the requirements for an application to set aside a judgment and provides in part as follows:

(1) Subject to subsection (2), if there has been no appeal from a judgment pursuant to this Act, any party to the action may, within 90 days after the date of judgment , apply to the court for a summons to set aside the judgment and rehear the matter if: (

a) the party applying to set aside the judgment did not appear at: (

i) the case management conference at which the judge gave judgment;... (

b) the party applying to set aside the judgment submits an affidavit setting out: (

i) the party ’ s reasons for not appearing; and (ii) if the party is a defendant...that the party has a valid defence to the claim...; and (

c) in the opinion of the judge: (

i) the party applying to set aside the judgment has a reasonable excuse for not appearing ; and (ii) if the party is a defendant..., the party has a valid defence to the claim.

(2) The Court may, in exceptional circumstances , allow an application to be made pursuant to subsection (1) after the expiry of 90 days from the date of judgment. (emphasis added)

[ 9 ] This Court must determine whether the applicant has complied with the provisions of

section 37 of The Small Claims Act in making her application to set aside the October 27, 2011 judgment. More particularly, did she apply within the specified time allowed for such applications? If not, are there exceptional circumstances upon which the Court may allow her application to be made? If so, did the applicant have a reasonable excuse for not appearing at the case management conference and does she have a valid defence to the plaintiff’s claim? Did the applicant bring her application to set aside the judgment within the time specified in

section 37 of The Small Claims Act ? [ 10 ]

Section 37 is clear that a party applying to set aside a judgment must do so within 90 days after the date of the judgment. No doubt, the purpose of this provision is to afford a party, in whose favour a judgment has been granted, certainty with respect to the finality of the proceedings and the ability to enforce the judgment. [ 11 ] In calculating the time, the Court refers to The

Interpretation Act , 1995 c. I-11.2 at

section 24 :

(3) In calculation of time not expressed as a number of clear days, weeks, months or years or as “at least ” or “not less than ” a number of days, weeks, months or years: (

a) the first day shall be excluded; and (

b) the last day shall be included. (emphasis in original) [ 12 ] In this case, the judgment was granted on October 27, 2011 and the application to set aside the judgment was filed in the Provincial Court on January 27, 2012. Applying

section 24 of The

Interpretation Act to this case, the Court shall not count the date of judgment but shall count the date the application for a summons under

section 37 was filed in Court by Ms. Wildman. According to the Court’s calculation, the application was made 92 days after the date of judgment. [ 13 ] Section 37(2) of The Small Claims Act provides that after the expiry of 90 days from the date of judgment, the Court may allow an application to be made to set aside the judgment, in exceptional circumstances.

The term “exceptional” is defined in the Canadian Oxford Dictionary (2d ed.) as: “(1) forming an exception; (2) unusual; not typical (exceptional circumstances).” [ 14 ] The applicant’s affidavit sworn January 26, 2012, does not address the matter of “exceptional circumstances” but attests to a number of circumstances related to the operation and management of her business as the reasons for her failing to attend the case management conference.

These include the failure of her assistant to record the court date in her electronic calendar; increased workload; patient complications; a staff person’s medical leave; and the pursuit of a designation of excellence for her business. One further reason was given: the applicant and her husband were participating in consultations with specialists in and out of the province related to surgery for their daughter.

I will consider these reasons in assessing whether there are “exceptional circumstances” to allow her application to proceed even though it was made after the expiry of 90 days. [ 15 ] The business-related reasons cannot be characterized as unusual or atypical. It is common for parties seeking to set aside a judgment in this Court to cite distraction due to their employment or business endeavours as the reason for missing a court date. Workload, personnel and deadline-tracking issues are routine matters for a businessperson.

These day-to-day work pressures cannot be viewed as exceptional such that they would justify the expansion of the time for applying to set aside the judgment provided by the statute. It is the Court’s view that they would not be sufficient to meet the test of “exceptional circumstances” as required by section 37(2). Something more or different must be demonstrated to allow an application to proceed after 90 days has expired. [ 16 ] Furthermore, the workplace issues arose at the end of October 2011, some preceding the date of the judgment.

There is no rational basis in this case for relying on circumstances which occurred prior to the judgment to extend the time beyond 90 days after the date of judgment. [ 17 ] With respect to her daughter’s surgery, the Court asked the applicant to provide substantiation from medical practitioners regarding the nature and timing of the consultations. The Court received records from physicians and health institutions in Mexico, Saskatoon, Regina and Calgary referencing appointments on September 20, 2011, October 6, 2011, November 2, 2011, December 16, 2011 and April 13, 2012 in relation to the applicant’s daughter.

[ 18 ] The applicant has demonstrated that on a number of occasions during a period of time which included the 90 days following the date of judgment, she was attending to the matter of her daughter’s surgery. Such a circumstance is not usual or typical and could reasonably distract a party from attending to their court obligations in a timely manner. The Court is satisfied there were exceptional circumstances in this case which justify allowing the application to proceed after the expiry of 90 days from the date of judgment.

Did the applicant have a “reasonable excuse ” for not attending the case management conference? [ 19 ] Once the Court has allowed the application to proceed, the applicant must satisfy the Court that she had a reasonable excuse for failing to attend the case management conference and that she has a valid defence to the respondent’s claim. [ 20 ] The applicant’s affidavit indicates she fully intended to defend the respondent’s claim and sets out a number of reasons for her failure to attend Court.

It is difficult to understand how the court proceeding would have completely escaped the applicant’s attention until she was served with notice of the writ of execution and judgment, particularly when the respondent had made several attempts to resolve the matter of the unpaid invoice with the applicant. The Court finds that the business-related reasons are not sufficient to justify the applicant’s non-attendance. Workloads and unforeseen circumstances are a normal part of doing business and on their own would not justify the applicant’s failure to meet her court obligations in this case.

However, those circumstances coupled with her daughter’s medical needs preceding the court date amount to a reasonable excuse. Does the applicant have a “valid defence ” to the plaintiff ’s claim? [ 21 ] Section 37(3) of The Small Claims Act provides:

(3) For the purpose of subclause (1)(c)(ii), the defence is not valid if the judge considers that the defence: (

a) is without reasonable grounds; (

b) discloses no triable issue; or (

c) is frivolous, vexatious or an abuse of the court’s process. [ 22 ] The respondent’s claim is in relation to the non-payment of its invoice dated August 31, 2010 for website design and maintenance services rendered to the applicant, pursuant to two contracts between the parties dated February 12, 2010. Ms. Wildman does not dispute the contract, but takes issue with the amount the respondent claims is owing.

The applicant alleges she was invoiced for work not authorized by her and that overpayments were charged to her credit card by the respondent. [ 23 ] The objective at this stage of the inquiry is not to make a determination on the merits of the original claim, but rather to assess whether the proposed defence meets the requirements of section 37(3). In the present case, there is a dispute between the parties regarding the amount owing to the respondent. That matter cannot be resolved other than by settlement between the parties or a trial of the issue.

The Court is of the view that the defence is valid, in that it discloses a triable issue and is not without reasonable grounds, frivolous, vexatious or an abuse of the court’s process. [ 24 ] I have found the applicant had a reasonable excuse for not attending the case management conference and has a valid defence. Conclusion [ 25 ] Section 37(4) of The Small Claims Act provides: (4) ...the judge may set aside the judgment on any terms as to costs that the judge considers appropriate and give any directions that the judge considers necessary respecting the rehearing of the matter.

[26] Such terms may include orders for costs or the payment of funds into Court to ensure the timely resolution of the matter andto compensate the respondent for its thrown-away costs (see Horosko v. Huber, [1993] S.J. No. 183 (Sask. Q.B.); Selte v. McKercher etal, [2005] S.J. No. 807 (Sask. Q.B.); Osowsky v. General Refrigeration & Air Conditioning Inc., [1999] S.J. No. 787 (Sask. Q.B.);Shindle v. Luciw, [2000] S.J. No. 379 (Sask. Q.B.); Lal v. Desormeau, [1993] S.J. No. 718 (Sask. Q.B.); Parenteau v. Michayluk andSembalerus, [1990] S.J. No. 260 (C.A.)).

While the cases cited were appeal decisions, to avoid further costs and delays, the Courtconsidered the appeals as if brought by way of an application to set aside (Midwest Driveways Ltd. v. Trull, 2004 SKQB 528 ,[2004] S.J. No. 800 (Sask. Q.B.)). [27] The respondent’s principals attended the case management conference and complied with all procedural and statutoryrequirements. There were difficulties serving the summons on the applicant; several attempts were made at her place of business andhome before the bailiff was successful.

In addition to the amount of the respondent’s invoice, the Court granted judgment for the cost ofissuing the claim in the amount of $80.00 and the cost of serving the summons and claim on the applicant in the amount of $150.00. [28] At the time of issuing the original summons, the applicant was ordered to file and serve upon the respondent a dispute noteand relevant documents no later than ten days prior to the case management conference. That was not done.

However, the affidavit ofpersonal service upon the applicant does not specifically refer to service of the order and she denies having received it. [29] Fundamental to our system of justice is the principle that parties to a dispute have the opportunity to be heard. However, the Court recognizes the hardship that further delay of these proceedings poses to the respondent, a small, fledgling business. According to the claim, the respondent’s account has been outstanding since September 2010. This matter needs to proceedexpeditiously. The delay may be addressed, in part, through an order for costs.

I direct that a case management conference be scheduledat the earliest possible date agreeable to the respondent. [30] Having found the applicant had a reasonable excuse for not attending the case management conference and has a validdefence, I will set aside the judgment dated October 27, 2011 and direct that a new case management conference be scheduled on thefollowing terms and conditions: 1.

The applicant shall within 30 days of this decision pay the thrown-away costs of the respondent respecting the unnecessary casemanagement conference which I fix at $300.00, such costs to be paid at the respondent’s current place of business; 2. The applicant shall within 30 days of this decision pay the costs of the respondent respecting the return date of this applicationwhich I fix at $300.00, such costs to be paid at the respondent’s current place of business; 3.

The applicant shall within 30 days of this decision pay into the Small Claims Court, Saskatoon Provincial Court, to the credit ofthe action, the full amount of the judgment awarded to the respondent, being $6,311.19, such amount to be held and eventually disposedof by the Small Claims Court pending the outcome of the new case management conference or trial; 4.

The applicant will file with the Court and serve upon the respondent a statement of defence and all documents supportingthat defence no later than 10 days prior to the date of the new case management conference. [31] If the above amounts are not paid within the times stipulated, this application will be deemed dismissed, the judgment ofOctober 27, 2011 will be confirmed and judgment will issue in the amount of the costs ordered in this decision. _____________________________ D.C. Scott, J

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2012 SKPC 073 Date: July 5, 2012 File: SC#380 of 2012 Location: Saskatoon _____________________________________________________________________________ Between: Stealth Web Designs Inc. - and - Melanie Wildman Mr. Ryan Yedersberger and Ms. Cara Cote For the Respondent (Plaintiff) Mr. Robert Affleck, Student-at-Law For the Applicant (Defendant) _____________________________________________________________________________ CORRIGENDUM D.C. SCOTT, J _____________________________________________________________________________

Paragraph 30 (4) of the Judgment dated May 7, 2012 is amended to read as follows: 30 ... 4. The applicant will file with the Court and serve upon the respondent a statement of defence and all documents supporting that defence no later than 10 days prior to the date of the new case management conference. _________________________ D.C. Scott, J