THE OWNERS, STRATA PLAN VIS 87 CLAIMANT AND: STEEPLE-JACK ROOFING LTD. v. PATRICK HAUSER, 2020 BCPC 191

Citation: The Owners, Strata Plan VIS 87 v. Steeple-Jack Roofing Ltd. 2020 BCPC 191 Date: 20201007 File No: C-190434 Registry: Victoria IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Small Claims Court BETWEEN: THE OWNERS, STRATA PLAN VIS 87 CLAIMANT AND: STEEPLE-JACK ROOFING LTD. and PATRICK HAUSER DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE L. MROZINSKI Counsel for the Claimant: T. Morley, by telephone Counsel for the Defendants: A. Bookman, by telephone Place of Hearing: Victoria , B.C. Date of Hearing: September 11, 2020 Date of Judgment: October 7, 2020 I.

Introduction [ 1 ] In November 2019, the claimant, The Owners, Strata Plan VIS 87, filed an action in this court against the defendants, Steeple- Jack Roofing Ltd. and Patrick Hauser, for damages for breach of contract and/or negligent installation of a roof leading to mould growth and other property damage. At the time of filing, the claimant abandoned any claim to any amount of damages over $35,000 - the monetary limit in Small Claims court. Since then, the claimant says it has become apparent that its damages will be nearly double the Small Claims limit.

In addition, the litigation has involved a significant amount of counsel work. In the result, the claimant now wants

this matter moved to the British Columbia Supreme Court (“BCSC”). It brings this application, pursuant to Rule 7.1 of the Small Claims Rules , for an order transferring this matter to the BCSC. [ 2 ] The defendants strongly oppose this application. They submit that it is not apparent the claimant’s damages may exceed $35,000. Even if that is the case, the defendants note that the claimant has already abandoned any claim to damages over $35,000: they submit that Rule 7.1(2) prohibits a transfer to the BCSC once the “election” to this court is made.

Alternatively, the defendants submit that various orders have now been made, effectively binding the claimant to the jurisdiction of this court. Finally, the defendants submit the claimant has failed to comply with the Small Claims Rules and an order of the settlement conference judge. They seek an order that the claim be dismissed for that reason alone. II. Issues [ 3 ] These applications raise several issues. The first is whether this court can be satisfied the monetary outcome of the claim may exceed $35,000.

Secondly, the court must consider whether a transfer is precluded by Rule 7.1(2) given the “election” at the time of filing. Finally, this court must consider whether the claimant has failed to comply with the Small Claims Rules or any order of the settlement judge and, if so, whether the appropriate remedy is to strike the claim, or, alternatively require the claimant to litigate in this court. III.

Application to Transfer the Claim [ 4 ] The claim, which I have outlined briefly, is one for damages for breach of contract – that is to say, for the defendant’s alleged refusal to fulfil the warranty provisions of its contract with the claimant. Alternatively, it is a claim for damages caused by the defendants’ negligent installation of a roof. Clearly, the claim is one for property damages, requiring either that the defendants make good on their warranty to repair the damage, or alternatively that they pay for the cost of those repairs.

Repairs are alleged to be necessary to remediate the development of mould and damage to drywall, as well as restoration, repair or replacement of all damaged property, “including direct damage to the insulation and structure of the Strata.” [ 5 ] The claimant does not particularize its exact damages in the claim, nor, as the defendants note, has the claimant carried out any repairs. In terms of the actual quantum of damage alleged in the claim, it is apparent only that the claimant intended to abandon any amount greater than $35,000.

This suggests the claimant expected, at least at the time of filing, that the cost of repair of the alleged damages would exceed the monetary limit of this court. [ 6 ] This application is brought under Rule 7.1 of the Small Claims Rules . The portions of Rule 7.1 relevant to these proceedings, provide as follows:

(1) If satisfied that the monetary outcome of a claim (not including interest and expenses) may exceed $35 000, a judge must transfer the claim to the Supreme Court (

a) on application at any time, or (

b) on the judge's own motion at the settlement conference or trial.

(2) Despite subrule (1), a claim must not be transferred to the Supreme Court if the claimant chooses to abandon the amount over $35,000 so that the claim may be heard in the Provincial Court.

(3) Before transferring a claim for personal injury to the Supreme Court, a judge must consider any medical or other reports filed or brought to the settlement conference by the parties. [ 7 ] In Rosenthal v. Burchell , [1999] B.C.J. No. 633 , Judge Bruce, as she then was, considered the newly enacted s. 7.1 transfer provisions, as well as Rule 7.1(3). The court held at paras. 13 and 14 of the Reasons as follows: 13 …Rule 7.1(1) requires the court to transfer this claim to the Supreme Court where the judge is satisfied on the balance of probabilities that the monetary outcome of the claim may exceed $10,000.

Once the requirements of Rule 7.1(1) have been met there is no discretion to refuse an application by either party to transfer the file. Further, the inquiry under Rule 7.1(1) does not include an assessment of the credibility of witnesses or a determination of the legal issues in dispute.

The court must examine the pleadings, and in a claim for personal injuries, the medical and other reports filed at the time of the settlement conference, to assess whether it is more probable than not that the claim may exceed the monetary jurisdiction of the court. 14 It is also apparent that at this stage in the proceedings it is not incumbent upon the applicant to establish, on the balance of probabilities, that the claim will exceed $10,000.

It is sufficient for the applicant to prove there is at least a prima facie case that the monetary outcome will exceed the jurisdiction of the Court. [ 8 ] Rosenthal is cited in the authority relied on by the defendants in this application, Karrys v. Abrams , 2016 BCSC 408 . There the question was whether the lower court acted unreasonably in retaining jurisdiction in Provincial Court of a personal injury claim. In my view, Karrys v. Abrams is relevant in this case only in that it confirms the test set out in Rosenthal ; a test that has been applied in numerous cases, including Homelife Glenayre Realty v. F.V.

Real Estate Board , 2013 BCPC 198 ; Henderson & Jinkerson v. Bakken , 2008 BCPC 407 ; and finally, Miller and Harvey v. Walters , 2008 BCPC 292 . Notably in Millers and Harvey at para. 11, the court writes that “Before making an order under Rule 7.1 transferring this action to the Supreme Court, the Claimants must show, on a balance of probabilities, that there is a prima facie case that the monetary limit of their claim will exceed $25,000” (the limit as it then was). [ 9 ] The threshold required for what is a mandatory or non-discretionary transfer to the BCSC provided by Rule 7.1 is low and easily met.

In all but personal injury cases, it appears the court need consider only the pleadings. As the court in Rosenthal writes, in considering a transfer under Rule 7.1, the court cannot engage in as assessment of credibility or in a determination of the legal issues – at least not beyond a prima facie review at most. Outside of personal injury cases, Rule 7.1 appears to preclude an examination of any

materials other than the pleadings. Moreover, the court only has to be satisfied the claim may exceed the monetary limit – not that it willdo so, or by how much. There is, for example, no requirement that the claim substantially exceed the monetary limit. [10] Once that low threshold is met, the court must transfer the claim except unless Rule 7.1(2) applies, and I will return to that issueshortly. [11] As for Rule 7.1(1), in ascertaining whether there is a prima facie case that the claim may exceed $35,000, Rosenthal does suggestthat except in personal injury cases, the court can look only at the pleadings.

Assuming that to be the case, and bearing in mind the lowthreshold, I find I can be satisfied the claim may exceed the monetary limit of this court. In the first instance, as noted, the claimant’sabandonment of any amount over $35,000 suggests this in any event. Secondly, the claim is for damages caused by water infiltration intoa strata unit causing mould and other damages. As pled, and leaving aside the question of liability for the moment, it is not difficult toimagine the cost of repair exceeding $35,000.

The relief sought by the claimants at paras. 20 to 22 include roof repairs, the costs ofrestoration, repair or replacement of all damaged property, including structural and insulation damages, and finally, the costs ofalterations required to return the property to the level of function it had prior to the defendants’ work. [12] In Miller and Harvey, Judge Skilnick declined an application to transfer finding at para. 11 that the claimants had “….offered noevidence supporting their assertion that their damages exceed $25,000 (the then limit)”.

In that case, the claimants – property purchasersseeking damages from the vendor for a number of alleged defects – had provided an estimate of damages, which the court found entirelywanting. [13] In this instance, the claimant has similarly produced an estimate in support of this application. The estimate is a lengthydocument setting out many, many steps that it suggests ought to be taken to deal with the water damage in the strata unit at issue.Ultimately, the estimate suggests the repairs and restoration will cost approximately $60,444.79.

Moreover, the estimate, attached asExhibit A to the Affidavit of Matthew Dolmage, indicates that it is but a budget price for the mould remediation and repairs. Thecontractor notes that costs could change based on findings that arise as a result of the work. The defendants submit that as this documentis but an estimate, the cost of repair might well be lower than the estimated cost, or it might in some other way be inaccurate.

Again,bearing in mind the low threshold for transfer under Rule 7.1, I find it unlikely the costs for repair will fall below the estimated price.The wording specifically puts the claimant on notice that the cost will, if anything, rise once work is underway. Moreover, I find it is notopen to this court to scrutinize the evidence at this point beyond questioning whether it establishes a prima facie case.

In this instance,the evidence reaches that threshold. [14] If, as the reasoning in Miller and Harvey suggests, this court can go beyond the pleadings in a case other than a personal injurycase to consider evidence, I am entirely satisfied the evidence in this case demonstrates that the value of the claim, if successful, mayexceed the monetary limit of this court at the present time.

If this kind of evidence cannot be considered, I am satisfied based on thepleadings in any event that the test for transfer under Rule 7.1(1) has been met. [15] The defendants made brief submissions regarding the merits of the claim for damages, specifically on the matter of liability andcausal connection. In short, the submission is that there is no evidence connecting their allegedly faulty work with the alleged damages.If this court is limited to the pleadings, that is of no moment. As Judge Bruce holds in Rosenthal, it is not open to this court to assess thelegal case beyond a prima facie review at most.

On a prima facie basis, the pleadings disclose allegations that, if proven, could lead to afinding of liability. I accept that is the case even though the claimant has yet to provide the defendants with an expert report concerningthe nature and cause of the alleged water damage. Rule 7.1 in no way, in my view, requires a claimant to disclose the whole of its casebefore seeking a transfer to the BCSC. Of course the pleadings need not include such evidence; but nor do I find the claimant mustadduce such evidence at this juncture. IV.

Rule 7.1(2) and the Claimant’s Abandonment [16] Being satisfied the claim may exceed $35,000, Rule 7.1(1) would require that I transfer this matter to the BCSC. However, Rule7.1(2) provides that a claim must not be transferred if the claimant chooses to abandon any claim over $35,000. Here the defendantssubmits the court is precluded from transferring the claim because the claimant has abandoned its claim over $35,000. This, in turn,raises the question of the meaning and legislative intention of Rule 7.1(2). [17] As the defendants note, there is no case authority on this point. The

interpretation of this statutory provision is a matter of firstimpression. As the court holds in Rizzo & Rizzo Shoes Ltd. (Re:), (1998) (SCC), 1 S.C.R. 27 at para. 21: today there is only one approach to statutory

interpretation, that is that the words of

an Act are to be read in their entire context and intheir grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. [18] The overall purpose of Small Claims court is set out in the Small Claims Act at s. 2. It provides that: 2

(1) The purpose of this Act and the rules is to allow people who bring claims to the Provincial Court to have them resolved and tohave enforcement proceedings concluded in a just, speedy, inexpensive and simple manner. [19] On a plain reading, Rule 7.1(2) enables a claimant to withstand an application to transfer a claim that might well exceed $35,000;the Rule gives the claimant an option to stay in Provincial Court. It does not, on its face, preclude a claimant from ever resiling from thatposition, particularly when the “election” to abandon is made early in the litigation process. Bearing in mind that many litigants in thiscourt are self-represented, such a strict and inelastic

interpretation of rule 7.1(2) seems inconsistent with function of this court and itspurpose. To hold any litigant, including the claimant in this case, to an early decision to abandon a claim over the limit placesunnecessary risk at the feet of persons who are often least able to appreciate it. It might well discourage persons from litigating in thiscourt. In my view, Rule 7.1(2) cannot be interpreted so as to preclude the claimant in this case from resiling from a decision to abandon aportion of its monetary claim. [20] For these reasons, and accepting that the claimant no longer intends to abandon its claim over $35,000, I am compelled by Rule

7.1 to transfer this matter to the BCSC. However, the defendants have made other submissions, which, if accepted, could preclude the transfer: this includes the defendants’ application to strike the claim for what is in essence an allegation of contempt. V. Abuse of Process and/or Contempt [ 21 ] On May 14, 2020, the parties attended a settlement conference. In that conference, the settlement judge had before her an inspection report dated February 3, 2019, prepared for the claimant, concerning the alleged mould issue.

Privileged discussions would have ensued, but at the end of the conference, the settlement judge ordered the claimant to retain an expert within 90 days to inspect the mould. The order further provided the defendants with an opportunity to attend at the inspection with its own expert. The defendants were to be given notice of the time and date of the inspection.

Ultimately, once the claimant received a written opinion, it was to file the opinion with the court and serve it on the defendants. [ 22 ] The defendants filed affidavit evidence outlining the various communications between counsel around the inspection, much of which concerned timing and schedules. Ultimately, due to miscommunication, the claimant’s expert conducted a site visit without including the defendants or their expert. A second site visit was organized and attended by both parties, as well as their respective experts.

Before providing a copy of a written report to the defendants, the claimant filed this application to transfer to the BCSC. [ 23 ] The defendants submit firstly that by failing to bring all relevant documents to the settlement conference, the claimant has not complied with the Small Claims Rules . They say the claimant even now refuses to provide the same relevant document – that is, the written expert report on mould the claimant may or may not yet have commissioned. Secondly, the defendants charge the claimant has not complied with the order of the settlement conference judge by: (

a) failing to provide counsel with notice of the first site visit; and (

b) refusing to file and serve its expert report. Finally, the defendants submit the purpose of the order at the settlement conference is to compel production of a written expert report. It is submitted that it is an abuse of process to refuse to serve this report while at the same time seeking to transfer this matter to the BCSC. [ 24 ] Each of these submissions share one common objection: the claimant’s refusal to provide the defendants with a copy of a written opinion regarding mould growth as referenced in the order of the settlement judge.

The submissions seem to suggest the opinion ought to have been available at the settlement conference; failing that, once the inspection was ordered, that it is incumbent on the claimant to have a report prepared and served and ready for a subsequent settlement conference. [ 25 ] The claimant has chosen not to serve a report, assuming one yet exists.

Rather, it seeks to transfer this claim and to continue the litigation in the BCSC. [ 26 ] I agree with the defendants that, despite some awkward wording, the intention of the order made at the settlement conference is for the claimant to return to a subsequent settlement conference with a written report prepared by an expert. Had the claimant failed to bring such a report to the subsequent conference, the defendants might well have sought an order of dismissal.

In my view, however, there is nothing in the order or in the Small Claims Rules preventing this or any claimant from seeking a transfer order at any time in the process. Among other things, information obtained at a settlement conference could well drive a claimant in that direction. [ 27 ] Obviously, the order of the settlement conference judge is intended to facilitate the settlement process. However, the order does not and cannot preclude a litigant from availing itself of the remedy offered by Rule 7.1(1).

Such an application, even in the face of the order at the settlement conference, does not constitute an abuse of process, nor is it a breach of the order. The fact the order was made is not sufficient reason for this court to maintain jurisdiction over this litigation once the claimant meets the test for a transfer under Rule 7.1(1). [ 28 ] Finally, it is the case that through miscommunication and computer error the defendants missed the opportunity to attend with their expert at the first site inspection. That was remedied.

In any event, I would not strike the claim on that ground alone. [ 29 ] For these reasons, I would dismiss the application to strike. The matter is transferred to the British Columbia Supreme Court pursuant to Rule 7.1(1) of the Small Claims Rules . _____________________________ The Honourable Judge L. Mrozinski Provincial Court of British Columbia