Wiles Welding Limited v. Solutions Smith Engineering Inc., 2012 NSSC 255

SUPREME COURT OF NOVA SCOTIA Citation: Wiles Welding Limited v. Solutions Smith Engineering Inc., 2012 NSSC 255 Date: 20120712 Docket: Hfx. No. 363640A Registry: Halifax Between: Wiles Welding Limited Appellant v. Solutions Smith Engineering Inc. Respondent Judge: The Honourable Justice Arthur W.D. Pickup Heard: July 3, 2012, in Halifax, Nova Scotia Counsel: Kathryn M. Dumke, for the Appellant Corey Smith, Self-Represented, for the Respondent By the Court : [ 1 ] This is an appeal by Wile ’ s Welding Limited from an order made by an adjudicator of the Small Claims Court on September 28, 2011.

The hearing was held over three days, on June 20 th , August 15 th and 28 th , 2011. Background: [ 2 ] The dispute initially arose out of an unpaid mechanical design and fabrication drawing service that the respondent had provided for the appellant. The respondent, an engineering corporation, had consented through verbal agreement to create designs for a painted trailer at an estimated cost of between $10,000.00 and $12,000.00 plus HST. [ 3 ] Partway through the design process, it was determined that a galvanized trailer would be required as opposed to a painted trailer.

This required changes in the design and would alter the initial cost estimate provided by the respondent.

[ 4 ] The appellant claims that the respondent did not provide proper designs in a timely manner, and opted to hire a new engineer. The new engineer, Mr. Doucette, testified that he had made several substantial alterations to the designs of the respondent in order to meet their specifications. [ 5 ] In rebuttal evidence, an associate legal counsel was called as a witness by counsel for the respondent to testify about a conversation he had with Mr. Doucette, whereby Mr. Doucette had told him that there was nothing wrong with the design prepared by the respondent. The adjudicator awarded the respondent $20,180.70.

In his decision, he stated: ...The engineer hired by the defendant said he disputed "that I said there is nothing wrong". However, as indicated he did say there was nothing major to be changed. As it turned out Adam Crane, a member [of the ][sic] law society and doing the leg work for the claimant contracted Mr. Francis Doucette to ask him questions about the design structure that was completed by the claimant. According to Mr. Crane's evidence Mr.

Doucette told him that there was nothing wrong with the design it just required practical changes… [ 6 ] Pursuant to s. 32(4) of the Small Claims Court Act , R.S.N.S. 1989, c. 430, the adjudicator submitted a

summary report of the findings of law and fact made in the case. At para. 10 of his

summary report he states: With respect to the two points raised in the notice of appeal I make the following comments:

A) The decision was not based on the credibility of any of the witnesses including the credibility of the appellant's witness Francis Doucette. Mr. Doucette's evidence was in unison with the evidence of Adam Crane, counsel who testified as to discussions he had with Mr. Doucette.

B) Both parties are advised at the beginning of the hearing as to the procedure to be followed in the Small Claims Court, if they had any questions or preliminary matters they wish to raise with the court they may do so and if they had any concerns about the matter or way they should proceed they could ask the court for direction. In addition, basic rules of evidence particularly with respect to hearsay was proved to both parties. [ 7 ] The appellant submits that in allowing Mr. Crane to testify, the adjudicator relied on Mr. Crane's evidence which reduced the actual impact of Mr. Doucette's statement.

They now seek to have the matter sent for re-hearing before a different Small Claims Court Adjudicator. The Appeal: [ 8 ]

Section 32 of the Small Claims Court Act, R.S.N.S. 1989, c. 430 sets out the powers of the Supreme Court in an appeal as follows: A party to proceedings before the court may appeal to the Supreme Court from an order or determination of an adjudicator on the ground of: (

a) jurisdictional error; (

b) error of law; (

c) failure to follow the requirements of natural justice,

by filing with the prothonotary of the Supreme Court a notice of appeal. [9] The appellant filed a notice of appeal dated October 28, 2011, appealing on the grounds of error or law, and failure to followthe requirements of natural justice. The particulars of the error or failure were stated in the grounds of appeal as follows: (

i) the adjudicator erred in law by failing to explain to the appellant his right to object to the associate of counsel for the respondenttestifying on contentious matters of credibility; and (ii) the adjudicator erred in law by permitting counsel for the respondent to testify for the respondent on a significant question ofcredibility.

Standard of Review: [10] It does not appear to be in dispute that the standard of review, where a ground of appeal raises an error of law, is correctness.The second ground of appeal, which is failure to follow requirements of natural justice, does not engage the standard of review analysisin the traditional sense (Sackville Trenching Inc. v. Nova Scotia (Occupational Health and Safety Appeal Panel), 2012 NSCA 39, 2012 N.S.C.A. 39). The burden for the court is to determine if the process was fair to the claimant. [11] Did the adjudicator fail to follow the requirements of natural justice?

Was the process fair to the claimaint? [12] While the failure to follow the requirements of natural justice does not engage a standard of review analysis, the court is taskedwith determining if the process was fair to the respective parties. The requirements of natural justice are complicated by the fact that theappellant was self-represented. [13] Counsel for the respondent called a witness to rebut the statements of Francis Doucette, the witness for the appellant.

Mr.Crane was apparently an associate of the solicitor for the respondent. [14] Rule 4.02(1) of the Nova Scotia Barrister's Society Code of Professional Conduct states: A lawyer who appears as advocate must not testify or submit his or her own affidavit evidence before the tribunal unless permitted to doso by law, the tribunal, the rules of court or the rules of procedure of the tribunal, or unless the matter is purely formal or uncontroverted. [15] While this Code is not binding on this court, it can be a consideration in determining whether or not the adjudicator followedthe requirements of natural justice. [16] It is clear from the file materials that Mr.

Crane’s evidence largely contradicts Mr. Doucette’s testimony and it is difficult toconclude that Mr. Crane’s testimony would be considered purely formal or uncontroverted as set out in Rule 4.02(1) above. [17] The adjudicator stated in his decision and order: ... However, as indicated he did say there was nothing major to be changed. As it turned out Adam Crane, a member [of the ][sic] lawsociety and doing the leg work for the claimant contracted Mr. Francis Doucette to ask him questions about the design structure that wascompleted by the claimant. According to Mr. Crane's evidence Mr.

Doucette told him that there was nothing wrong with the design itjust required practical changes and went on to explain those changes which I have previously noted.

[18] Of importance is that Mr. Crane’s evidence was referred to in the reasons for decision and, in the absence of information to thecontrary, it would be logical to assume it was considered by the adjudicator in reaching his conclusion. There is no evidence that theappellant was advised of the issue of Mr. Crane testifying. [19] I am satisfied that allowing Mr.

Crane to testify, at the very least, had the appearance of a conflict and, with deference to theadjudicator, it is reasonable to conclude that his responsibility was to provide a reasonably minimal level of guidance on procedural andevidentiary rules to the respondent. [20] Here the adjudicator allowed the evidence and, as best I can determine from the information provided, did not explain thesignificance of an associate of legal counsel for the respondent testifying. [21] In Clayton v.

Earthcraft Landscape, 2002 NSSC 259 , 2002 N.S.S.C. 259, Justice LeBlanc allowed an appeal from theSmall Claims Court on the grounds that the adjudicator had failed to follow the requirements of natural justice. The adjudicator hadfailed to fulfill his duty to assist unrepresented litigants, a duty which is relevant where there is a relevant legal or procedural rule ofwhich the party is unaware. This failure, in and of itself, was sufficient to constitute a denial of natural justice.

At para. 28 of thedecision Justice LeBlanc noted: It seems clear from the cases that the requirements of natural justice create a duty for a small claims adjudicator to assist unrepresentedparties, particularly where a legal or procedural issue of which the party may not be aware is relevant in assessing the merits. I concludethat, while the learned adjudicator did not disregard the letter of Mr. Nortje as the appellant alleges, he did have a duty to explain to thethen - unrepresented appellant that it would receive less weight than would oral evidence from Mr. Nortje.

Failing to warn the witnessof this constituted a denial of natural justice. [22] Similarly, in this proceeding, the fact that the issue of Mr. Crane testifying does not appear to have been brought to theattention of the appellant, who was self-represented, is in my view, a denial of natural justice and unfair to the self-represented appellant. [23] Accordingly, I allow the appeal and remit this matter back to the Small Claims Court for a new trial before a differentadjudicator. Pickup, J.