Hoffart v Carteri, 2019 SKCA 23

Court of Appeal for Saskatchewan Docket: CACV3323 Citation: Hoffart v Carteri , 2019 SKCA 23 Date: 2019-03-08 Between: Justin Hoffart and Amy Cisek Applicants/Prospective Appellants (Defendants) And Giuseppe Carteri and Rosa Carteri Respondents/Prospective Respondents (Plaintiffs) Before: Barrington-Foote J.A. (in Chambers) Disposition: Application granted On Application From: 2018 SKQB 150 , Regina Application Heard: February 13, 2019 Counsel: Patrick Hopf for the Applicants Sean P. Watson for the Respondents Jared D. Epp for Saskatchewan Mutual Insurance Company Barrington-Foote J.A. I.

Introduction [ 1 ] The applicants, Justin Hoffart and Amy Cisek, have applied pursuant to s. 9(6) of The Court of Appeal Act, 2000 , SS 2000, c C-42.1 [ Act ], and Rule 71 of The Court of Appeal Rules to extend the time to serve and file their notice of appeal of a May 11, 2018, judgment of a Queen’s Bench Chambers judge [QB decision]. In that decision, the Chambers judge granted

summary judgment in the amount of $179,043 against the applicants for damages suffered by the respondents, Giuseppe and Rosa Carteri, as a result of a fire in residential premises owned by the respondents and occupied by the applicants [premises]. [ 2 ] For the reasons that follow, the application is allowed. II. Background: The Queen’s Bench Actions [ 3 ] The underlying claims at issue on this appeal relate to a March 31, 2009, fire that resulted in the complete loss of the premises.

The respondents commenced an action (QBG 515 of 2011) against the applicants in the Court of Queen’s Bench March 21, 2011, claiming damages resulting from that loss [QB action]. The statement of claim alleges the applicants and the respondents were parties to a “residential rental agreement” and that the applicants occupied the premises at the time of the fire. It also says this: 5.

The Carteris state that the Defendants owed a duty of care to the Plaintiffs to ensure that the Residence was properly maintained and to take all reasonable measures to ensure the Residence remained in a good state of repair, and the duty that was owed was breached and damages arose as a direct result of the Defendants’ negligence. 6. The particulars of the Defendants’ negligence include the using of flammable substances in such a manner so as to cause an explosion in the Residence. 7.

The Carteris say that the losses they have suffered were avoidable and a reasonable and foreseeable consequence of the negligence of the Defendants. [ 4 ] The respondents also commenced an action (QBG 424 of 2010) against Saskatchewan Mutual Insurance Company [SMI] challenging SMI’s denial of coverage for the losses caused by the fire under a $175,000 insurance policy [SMI action]. That denial was based on a clause that excluded coverage for property used for illegal drug activities [drug exclusion].

A Queen’s Bench judge ordered that the QB action and the SMI action be tried one immediately after the other. [ 5 ] SMI applied for

summary judgment in the SMI action and the respondents applied for

summary judgment in the QB action. The Chambers judge heard both applications at the same time, resulting in the QB decision. He held that both actions could be summarily determined. He found the fire was “a result of efforts to produce a substance derived from cannabis marijuana” and that the drug exclusion applied. In the result, he granted SMI’s application and dismissed the SMI action. [ 6 ] The Chambers judge also granted the respondents’ application for

summary judgment. He did not find that either Mr. Hoffart or Ms. Cisek were negligent. He found there was a written tenancy agreement between the applicants and respondents. He held that the obligations set out in ss. 49(5) and (6) of The Residential Tenancies Act, 2006 , SS 2006, c R-22.0001 [ RTA ], “are incorporated by reference into the tenancy agreement … [and] … that, based on my earlier finding as to the cause of the explosion and fire, that the tenants were in breach of these obligations and are liable in damages for the resulting loss” (at para 114). Those subsections of the RTA are as follows: 49

(5) A tenant must maintain reasonable health, cleanliness and sanitary standards throughout the rental unit.

(6) A tenant must repair damage to the residential property or services and facilities that is caused by the actions or neglect of the tenant or a person permitted on the residential property by the tenant. [ 7 ] Having determined liability on this basis, the Chambers judge dealt with damages, finding as follows: [142] Given the absence of evidence on the Carteris’ costs of carrying on the rental home, I am not comfortable in directing an order that a final monetary judgment be entered. That matter can still be determined through a reference under Rule 7-5(5).

Until that is done, I am satisfied that, aside from lost rental income, the Carteris’ judgment against the tenants shall include: • Loss of house at 4108 Princess Street: $171,795.00; • Demolition costs: $5,670.00; • City of Regina (fire security costs): $685.00; and • McGinn inspection and report: $893.00. [ 8 ] He then reached the following conclusion as to the QB action: [145] The plaintiffs’ claim against the tenants is also appropriately determined by

summary judgment, and the plaintiffs’ action is allowed. The formal entry of judgment in this action is adjourned sine die , pending a reference under Rule 7-5(5) and receipt of further affidavit evidence as to the costs the plaintiffs expected to incur in renting a rebuilt home at 4108 Princess Street. In this respect, I hope to receive evidence of monthly costs actually incurred at the home before the fire or costs incurred at other rental homes owned by the plaintiffs with the 13-month period after the fire.

Of course, it will also be necessary to identify and single out those costs that the plaintiffs continue to incur after the fire. [ 9 ] The claim for rental costs was never decided. There were settlement negotiations between the applicants and the respondents relating to the judgment in the QB decision. Those negotiations began in June 2018. The respondent, Rosa Carteri, became ill and passed away July 4, 2018, which delayed the negotiations. The negotiations ended in September 2018 when the applicants rejected a counter- offer from the respondents.

The respondents then abandoned their claim for lost rental income and instructed their counsel to pursue judgment and enforcement against the applicants. Final judgment was issued by Queen’s Bench October 12, 2018. [ 10 ] The respondents then took steps to enforce the judgment. On October 15, a paraprofessional employed by then counsel for the respondents registered the judgment in the personal property registry. On October 17, the paraprofessional received confirmation the judgment had been registered against land owned by Mr. Hoffart.

On October 18, she sent enforcement instructions to commence wage seizure against Mr. Hoffart, and on January 2, 2019, the Sheriff served a notice of seizure on Mr. Hoffart and his employer. [ 11 ] There were also negotiations between the respondents and SMI in relation to the costs award in the SMI action. Those negotiations were successfully concluded in September, resulting in the payment of $10,000 to SMI by Mr. Carteri on September 26, 2018. There is no other evidence as to the terms of that settlement. III.

Notice of Appeal and Application to Extend Time [ 12 ] The applicants were advised October 9, 2018, that the respondents would not pursue the claim for lost rental income and would seek issuance of the judgment. The applicants instructed their counsel to appeal. Counsel served a notice of appeal October 26 and attempted to file that notice in this Court October 31. Counsel was advised November 1 by the Registrar’s Office that an application to extend the time to appeal was required. [ 13 ] The applicants provided some evidence of the reasons for the delay in filing and serving the notice of appeal.

Counsel for the applicants says both he and counsel for the respondents understood the QB decision was not effective and that time to appeal would not run until the formal judgment was entered. Counsel for the respondents denies that allegation. I am unable to resolve that conflicting evidence. I accept the evidence that counsel for the applicants believed time did not run from the date of the QB decision. I am not persuaded counsel for the respondents was of the same view or so advised counsel for the applicants. [ 14 ] Mr.

Hoffart deposes that he understood counsel had agreed time would run from the date the Chambers judge finally determined damages. He does not say when he was so advised. Both he and Ms. Cisek say that after the Registrar’s Office advised this application was required, they attended on their lawyer as soon they were “able” to execute their affidavits. Those affidavits were executed January 8, 2019.

The application was served on counsel for the respondents the same day, returnable January 23. [ 15 ] Counsel for the applicants advised at the hearing of this application that the delay from November 1 to mid-December was attributable to his firm. He made rather vague references to issues arising as a result of a change in domain names. Counsel also said the applicants were on holiday in late December. [ 16 ] The notice of appeal lists twelve grounds of appeal. In his memorandum of argument and submissions, the applicant referred only to the following alleged errors: (

a) The matter was not properly determined by

summary judgment; (

b) The Chambers judge misapprehended the evidence by accepting evidence from an expert in drug production regarding the origins of the fire and from an expert in fire reconstruction on drug use and production, which resulted in an erroneous finding that Mr. Hoffart was a proximate cause of the fire; (

c) The Chambers judge erred by finding Ms. Cisek liable based on an implied covenant in the tenancy agreement. This cause of action was not pled and Ms. Cisek had no opportunity to present evidence or give instructions with respect to this cause of action; and

(

d) The Chambers judge erred in calculating damages. [17] SMI also appeared on this application. It argued SMI’s interests should be taken into account, as the finding by the Chambersjudge that the fire was caused by the production of illegal drugs was necessary to dispose of the SMI action. It submitted that if thatfinding of fact is ultimately reversed, the decisions in the QB action and the SMI action would be inconsistent. Further, if a courtultimately fails to find the fire was caused by illegal drug activity, the applicants could renew their insurance claim against SMI.

In SMI’sview, if leave to extend the time to appeal is granted, it should not relate to the issue of whether the fire was caused by the illegal drugactivity. Counsel for SMI also advised that his client may apply to be a party to the appeal if this application is granted. [18] The applicants took the position that there were two actions and that SMI should not be a party to this appeal. They did not takethe position I should not hear SMI’s submissions.

I was, given the connection between the SMI action and the QB action and thesettlement of the SMI action in reliance on the QB decision, prepared to hear SMI’s submissions despite the fact that the proposed appealrelates only to the QB action. IV. Analysis [19] At the hearing of this application, the applicants submitted that the “date of the decision being appealed from” in s. 9(2) of theAct and “the date of the judgment or order being appealed from” in Rule 9(2) is October 9, the date the applicants were advised therespondents would proceed to take judgment.

If that is so, this application was not necessary as the applicants filed and served the noticeof appeal within the time specified. [20] Although it is my view the applicants are likely correct, I am not prepared to decide on that basis. The applicants did notsuggest their application was filed in time prior to the hearing. They proceeded on the basis this application was required. In the result, Iwill proceed on the basis that the appeal period began to run May 11, 2018, the date the Chambers judge issued the QB decision.

As such,the delay was just short of seven months. [21] The four factors to be considered on an application to extend the time to serve and file a notice of appeal were reiterated inDutchak v Dutchak, 2009 SKCA 89, 337 Sask R 46. As Jackson J.A. said: [12] … [I]n determining whether leave should be granted the applicant must persuade the Court that: (

i) there is a reasonableexplanation for the delay; (ii) he or she possessed a bona fide intention to appeal within the time limited for appeal; (iii) there is anarguable case to be made to a panel of the Court; and (iv) there will be no prejudice to the respondent, if leave is granted beyond whatwould be incurred in the usual appeal process. In any given case, one or more factors may be more important than another. [22] A prospective appellant need not establish all of these factors in order to succeed.

Rather, they must establish, taking thesefactors into account, that it is just and equitable to extend the time for appeal: Treeland Motor Inn Ltd. v Western Assurance Company(1983), (SK CA), 4 DLR (4th) 370 (Sask CA) at para 9; Taheri v Vujanovic, 2018 SKCA 40 at para 21 [Taheri]; andSparvier v Lac La Ronge Indian Band, 2011 SKCA 115 at para 8. A. Reasons for Delay [23] The appeal period in this case is fixed by s. 9(2) of the Act.

Section 9 of the Act provides as follows: 9(1) In this section, “date” means, with respect to a decision: (

a) the date of filing of the written reasons for the decision with the registrar, local registrar or chambers clerk of the Court of Queen’sBench, as the case may be; or (

b) where the decision has been pronounced in court or chambers with no provisions for written reasons to follow, the date of the oralpronouncement.

(2) Subject to this section, a notice of appeal must be served within 30 days after the date of the decision being appealed from. [24]

Section 2 of the Act provides as follows: 2 … “decision” includes any judgment, order, decree, verdict or finding; … [25] The Court of Appeal Rules provide as follows: 9(2) The notice of appeal shall be served within 30 days after the date of the judgment or order being appealed from, except whereotherwise provided by these rules and subject to the provisions of any statute governing the appeal.… 10(1) The notice of appeal shall be filed, with proof of service, within 10 days after service upon the last of the parties to be served, and incases where service is not required, the notice of appeal shall be filed within 30 days after the date of the judgment or order appealed from.

(2) A notice of appeal shall not be filed after the expiration of the time period prescribed in this rule without an order of a judge. [26] The mere fact a decision by a Chambers judge leaves an issue unresolved does not necessarily mean it is not a decision orjudgment that triggers the appeal period. Holmes v Jastek Master Builder 2004 Inc., 2017 SKCA 50, 11 CPC (8th) 293 [Holmes], ishelpful in this context. In that case, a Queen’s Bench judge had granted

summary judgment but reserved the matter of costs for furthersubmissions. A notice of appeal was filed within 30 days of the date of that decision. The judge then made the costs decision. In Holmes,Ottenbreit J.A. followed Riley v Riley, 2010 SKCA 88, 359 Sask R 128 [Riley], finding as follows:

[20] … Mr. Holmes and Mr. Bichel are required to file a separate notice of appeal for the costs decision because it is a separate decision. This approach in Riley is consistent with s. 7(2) of The Court of Appeal Act, 2000 , SS 2000, c C-42.1 , which allows an appeal from a “decision”. It would be somewhat incongruous to graft onto an existing appeal an appeal of a decision which did not exist at the date the existing appeal was filed. … [ 27 ] In Riley , a judgment dividing matrimonial property was granted March 12, 2009. A notice of appeal was filed April 8, 2009.

The judgment provided that “either party has leave to speak to the issue of costs”. The parties made representations and a judgment on costs was granted March 12, 2010. As in Holmes , the appellant sought to amend the notice of appeal to include the costs judgment. Justice Sherstobitoff held the notice of appeal could not be amended for two reasons. The second was as follows: [4] The second reason is that the Judgment on the Issue of Costs is clearly a separate judgment from the Judgment after trial. The trial judgment did not decide costs.

Since it was a separate judgment, the costs judgment required a separate Notice of Appeal that is governed by the time provisions of the Court of Appeal Rules. … To proceed, the applicant will have to get an order extending the time for appeal, if the necessary grounds for it can be established. [ 28 ] Riley and Holmes both related to decisions which left costs to be decided. However, the same principle may apply when an issue other than costs is left to be decided. In my view, the question turns on the facts. What did the Chambers or trial judge decide and what was left undecided?

Is the later decision fairly characterized as a separate decision? [ 29 ] In this case, the Chambers judge expressly stated that he awarded judgment. He finally decided in relation to both liability and the bulk of the damages issue. However, he did not finally decide damages. He adjourned the “formal entry of judgment” sine die . Damages, unlike costs, were an essential element of the claim asserted by the applicants.

The Chambers judge was not prepared to finally dispose of that claim against either defendant, or as he put it, to see a “final monetary judgment” entered, pending a reference or the receipt of further evidence. [ 30 ] It is, in light of these principles, the nature of the claim, what the Chambers judge decided and the language he used, understandable why applicants’ counsel concluded time would not run until the Chambers judge disposed of the issue of damages, and so advised their clients. The significance of that advice was addressed in Taheri .

There, the Chambers judge made three separate decisions relating to separate applications to strike which were heard together. Counsel erroneously advised the prospective appellant he should wait until receiving all three decisions before launching appeal. Justice Ryan-Froslie held as follows: [32] While legal counsel erred by advising Mr. Taheri that he should wait until receiving all three judgments before launching an appeal, legal counsel’s approach had practical merit as it enabled Mr. Taheri to globally assess the merits of his appeal and limit costs by filing only one notice of appeal. Mr.

Taheri is entitled to rely on his lawyer’s advice and, in the circumstances of this case, his reliance provided a reasonable explanation for the delay, which was relatively short – just three weeks. [ 31 ] As in Taheri , the applicants were entitled to rely on their lawyer’s advice. That reliance constitutes a reasonable explanation for the delay in pursuing an appeal prior to October 9, 2018: Taheri at paras 27–30 . In the result, the delay that requires further explanation is that from November 8, 2018, to January 10, 2019. More than half of that delay is attributable to applicants’ counsel.

That leaves a relatively brief delay of approximately three weeks – including the Christmas season – for which no satisfactory explanation has been provided. This factor weighs slightly against the applicants. B. Bona Fide Intention to Appeal [ 32 ] The applicants understood, based on the advice of counsel, that they did not have to appeal pending the outcome of the negotiations between counsel. In these circumstances, the question relating to this factor is whether the appellants had a bona fide intention to appeal after they were advised on October 9 that the negotiations were concluded.

Given that they decided to appeal shortly after October 9 and served and attempted to file their notice of appeal within 30 days, they demonstrated a bona fide intention at the relevant time. This factor weighs in favor of the applicants. C. Arguable Case [ 33 ] In my view, there is an arguable case the Chambers judge committed an error in principle by finding the applicants liable for breach of an implied term in the residential tenancy agreement. The statement of claim cast the claim in negligence. It did not assert a claim under the tenancy agreement or refer to the RTA at all.

Indeed, although the respondents referred to ss. 49(5) and (6) of the RTA in their brief and submissions to the Chambers judge, they never asserted a claim based on a breach of the tenancy agreement. The Chambers judge described their position as follows: [106] In their submissions to the court, the Carteris did not base their claim on the tenancy agreement or on the tort of negligence.

Rather, their position is based entirely on ss. 49(5) and (6) of the RTA . … [107] As I heard counsel’s submissions, the Carteris contend that ss. 49(5) and (6) provide the foundation for a landlord to pursue a claim for damages against tenants who have failed to meet the obligations described therein.

Counsel did not address the issue as to whether these provisions are regarded as implied terms of the tenancy agreement, or give rise to an independent and statutory cause of action. … [ 34 ] The Chambers judge was fully alive to the deficiencies in the pleadings and to the potential prejudice to the applicants of deciding on the basis of a different cause of action. He dealt with those concerns as follows: [111] Despite the lack of specific pleading in the statement of claim, the tenants did not assert any prejudice or misapprehension about the case they are expected to meet.

Although the tenants strenuously opposed a

summary disposition of this matter, for a number of reasons, none of those reasons referenced the deficient statement of claim. Under the circumstances, I am satisfied that it is appropriate for me to address the argument presented by counsel for the Carteris.

[ 35 ] It is arguable this reasoning is in error. It is clear the applicants knew the Chambers judge might award damages for breach of the RTA provisions. However, it is not clear they knew he might do so on the basis of a breach of an implied term of the tenancy agreement. It is arguable the Chambers judge should not have made this decision without seeking further submissions from counsel. Counsel for the applicants noted, for example, that Ms. Cisek could take the position she was not a tenant. That suggestion has some foundation in the evidence, as she did not sign the written tenancy agreement.

As he also noted, there may be an issue as to the responsibility of one tenant under a tenancy agreement for the actions of another. [ 36 ] Counsel for the respondents and counsel for SMI argued that there is, at least, no arguable case as to whether the fire was caused by Mr. Hoffart processing illegal drugs. They submit leave to extend the time should not be granted in relation to that issue. As I read the QB decision, the Chambers judge did not decide that Mr. Hoffart caused the fire.

In any event, it is sufficient for purposes of the arguable case element of the test that the applicants have identified an arguable case in relation to liability. It is not necessary that I deal separately with each ground of appeal: Taheri at para 46 . D. Prejudice [ 37 ] As noted above, the prejudice at issue on this application is not the prejudice that would be incurred in the usual appeal process. It is as Ryan-Froslie J.A. said in Taheri : [49] … prejudice, either actual or inferred, that would result if the period of appeal were extended.

A good example, though by no means the only one, is where a respondent has taken steps to enforce the judgment or otherwise acted in reliance on it such that he or she would be prejudiced if the appeal were allowed to proceed. [ 38 ] Here, the respondents took steps to enforce the judgment. However, those steps were limited and there is no evidence as to the cost, other than the minimal disbursements they incurred. As the respondents and SMI note, Ms. Carteri has passed away.

However, there is no evidence that would affect the ability of the respondents to present their case. [ 39 ] Both SMI and the respondents submit they will be prejudiced because the Chambers judge’s decision that the fire was caused by illegal drug activity may be overturned. The fact the respondents would no longer have judgment against the applicants as a result of such a decision does not constitute prejudice for the purposes of this application. Further, the issue on this application is not prejudice to SMI, but prejudice to the respondents.

Accordingly, the possibility that SMI may be “prejudiced” by having to face a further claim by the respondents is not relevant. Indeed, the possibility that the respondents might be able to pursue a claim against SMI does not constitute prejudice to the respondents, but a potential benefit. The respondents submit they would have no recourse against SMI in any event, as they do not meet the criteria to extend the time. However, that is not clear.

If the respondents choose to seek an extension of the time to appeal the SMI decision, I have no doubt they will argue that this decision is an important consideration. [ 40 ] Finally, as both SMI and the respondents note, it appears the applicants will face an uphill battle in their attempt to attack the decision of the Chambers judge that the fire was caused by illegal drug activity.

For that reason, it is unlikely SMI or the respondents will need to deal with the consequences of such a ruling. [ 41 ] In the result, it is my view that potential prejudice weighs only slightly in favour of refusing the order sought, and only in relation to the agreement to pay costs. V. Conclusion [ 42 ] Taking all of these factors into account, I am satisfied it is just and equitable to grant an order extending the time to serve and file the notice of appeal.

Given that the notice of appeal was served in October and submitted for filing November 1, it is not necessary that the applicants take those steps again. [ 43 ] The costs of this application shall be reserved to the panel hearing the appeal. “Barrington-Foote J.A.” Barrington-Foote J.A.