Pross Renovations Ltd. v. Lepa, 2024 BCPC 8

Citation: Pross Renovations Ltd. v. Lepa 2024 BCPC 8 Date: 20240115 File No: 7834 Registry: Western Communities IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: PROSS RENOVATIONS LTD. CLAIMANT AND: PAUL LEPA DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE T. GOUGE Counsel for the Claimant: R. Margetts, K.C. and J. Aiyadurai Appearing in person: P. Lepa Place of Hearing: Colwood , B.C. Dates of Hearing: November 15, 22, 2023, January 10, 2024 Date of Judgment: January 15, 2024

The Issue [ 1 ] The issue now before the court is whether the claim advanced in this action is barred by the either or both of the doctrines of estoppel per rem judicatam or abuse of process. Background [ 2 ] On November 16, 2021, Mr. Lepa issued a Notice of Claim in action #7645 before this court (“the First Action”). In the First Action, Mr. Lepa alleged that: a. he had retained Pross Renovations Ltd. (“Pross”) to perform renovations to his home; b. he had paid Pross a deposit of $10,000 as against the price of the renovations; c. Pross’ performance of the contract had been so deficient as to entitle Mr.

Lepa to treat the contract as repudiated, and he had elected to do so; d. he had incurred damages in the amount of $2,833.50 as a result of the deficiencies in Pross’ work. He sought the return of his deposit and damages in the amount of $2,833.50. [ 3 ] Pross failed to file a Reply within the time limited by the Small Claims Rules BC Reg 261/93 . Mr. Lepa applied for and was granted a default judgment in the amount of $12,833.50 on March 7, 2023. Pross applied to set aside the default judgment. That application was dismissed by the Honourable Judge Munro of this court on March 15, 2023.

In his reasons for that decision, Judge Munro said: I find that [Pross] has purposely attempted to mislead the court as to the matter of having his mail redirected from his old address to his new one in an effort to support an application to set aside the default judgment in this matter. Under such circumstances, I am not prepared to set aside the default judgment in this matter, and this matter should be set down for a payment hearing. [ 4 ] On September 27, 2023, Pross issued the Notice of Claim in this action (“the Second Action”). In the Second Action, Pross alleges that Mr.

Lepa retained Pross to carry out renovations at Mr. Lepa’s residence, that Pross performed those renovations properly, and that the value of the work was $13,552.18. Pross seeks judgment for that amount, and a declaration that it is entitled to set off that judgment against the amount which it owes to Mr. Lepa as a result of the default judgment in the First Action. Legal Principles [ 5 ] Mr. Lepa asserts that: (

i) the claim in the Second Action is barred by the doctrine of estoppel per rem judicatam ; and (ii) in the alternative, the Second Action is an abuse of the process of the court. [ 6 ] The starting point for any discussion of the principles of estoppel per rem judicatam is the following passage from Henderson v.

Henderson (1843) 3 Hare 100 ; 67 ER 313 : The plea of res judicata applies, except in special circumstances, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.

However, there is some difficulty in applying that observation to an estoppel arising from a default judgment, because the court does not, when granting a default judgment, hear any evidence as to the merits of the dispute or form any opinion as to those merits. So, when considering an estoppel arising from a default judgment, different principles apply. In New Brunswick Railway Co Ltd v.

British & French Trust Corporation Ltd. [1949] AC 1 , it was said that the estoppel applies only to preclude a party from “… setting up in a subsequent action a defence which was necessarily, and with complete precision, decided by the previous judgment …”. That statement was considered and adopted by Justice Finch in Harland v. Williams [1993] BCJ No. 1047 . [ 7 ] The central issue in this case is the quality of workmanship delivered by Pross. That issue was not considered on its merits when the default judgment was granted in favour of Mr.

Lepa, and the doctrine of estoppel per rem judicatam cannot be applied to it. [ 8 ] However, the doctrine of abuse of process is an entirely separate subject, governed by different principles, which were reviewed at length in Condominium Corp. No. 0828219 v. Carrington Holdings Ltd. 2022 ABQB 510 ; [2022] A.J. No. 931 ; affirmed at 2023 ABCA 222 ; [2023] A.J. No. 793 .

At paragraph 23 of the trial decision, Justice Burns articulated the applicable principle in the following terms: Abuse of process is a flexible doctrine that ... engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. [ 9 ] In this case, Pross says that the effect of the default judgment is to unfairly deny it the opportunity for a trial on the merits to determine the quality of its workmanship.

Pross points out that it incurred costs for labour and materials, and says that its entitlement to payment should be determined after an assessment of the relevant evidence. But for one factor, that would be a compelling argument.

The countervailing factor is that Pross forfeited its right to a trial on the merits because, as Judge Munro found, Pross attempted to mislead the court on its application to set aside the default judgment. To allow the Second Action to proceed would render nugatory Judge Munro’s decision that there should be no trial on the merits. [ 10 ] I conclude that the Second Action is an abuse of process. Disposition [ 11 ] The Second Action is dismissed. _____________________________ The Honourable Judge T. Gouge Provincial Court of British Columbia