936464 Ontario Ltd. v. Mungo Bear Ltd., 2003 CanLII 72356 (ON SC)

936464 Ontario Limited c.o.b. as Plumbhouse Plumbing &
Heating v. Mungo Bear Limited
[Indexed as: 936464 Ontario Ltd. v. Mungo Bear Ltd.]

 

74 O.R. (3d) 45

[2003] O.J. No. 3795

Court File No. 1368

 

Ontario Superior Court of Justice

Divisional Court

Heeney J.

September 23, 2003*

*This judgment was recently brought to the attention of the editors.

Courts -- Jurisdiction -- Small claims court -- Deputy Judge not lacking jurisdiction to award damages based on quantum meruit -- Quantum meruit constituting common law rather than equitable remedy -- Even if quantum meruit is equitable remedy, Small Claims Court is specifically empowered to grant equitable relief in forms of orders for payment of money and orders for recovery of possession of personal property -- Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 23(1), 96(1), (3). [page46]

The plaintiff brought an action in the Small Claims Court on an unpaid invoice. The deputy judge found that there was no contract between the parties but awarded the maximum allowable amount of $10,000 to the plaintiff on a quantum meruit basis. The defendant appealed, arguing that the deputy judge lacked jurisdiction to award damages based on quantum meruit because that is an equitable form of relief, the jurisdiction over which is given only to the Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, pursuant to s. 96(3) of the Courts of Justice Act. The defendant also argued that the deputy judge erred in considering a claim based on quantum meruit when it was not raised as a cause of action by the plaintiff in its pleadings.

Held, the appeal should be dismissed.

Quantum meruit is a common law remedy, not an equitable remedy. It has its roots in quasi-contract, which constitutes a third class of the common law distinct from contract or tort. Accordingly, s. 96(3) did not come into play.

Even if quantum meruit is an equitable remedy, the deputy judge had jurisdiction to award damages based on quantum meruit. Section 96(1) of the Act provides that "Courts shall administer concurrently all rules of equity and the common law." The Small Claims Court is a branch of the Superior Court of Justice, and is, therefore, a "court" for the purposes of s. 96(1). Section 96(3) provides that the Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, have jurisdiction to grant equitable relief, "unless otherwise provided". Section 23(1)(a) of the Act gives the Small Claims Court jurisdiction to deal with any action for the payment of money, so long as the amount claimed does not exceed $10,000. "Any action" encompasses equitable as well as common law claims. Section 23(1)(b) gives the Small Claims Court jurisdiction in any action for the recovery of possession of personal property worth $10,000 or less. The remedy of an order for the delivery up of possession of personal property is clearly equitable in nature. The Small Claims Court is, therefore, authorized to grant equitable relief in two forms only: orders for the payment of money, and orders for the recovery of possession of personal property.

The deputy judge did not err in granting judgment based on quantum meruit when the claim, as pleaded, was one for breach of contract. The same evidence that relates to an action in contract for moneys owed for work done applies where the claim is based on quantum meruit for the same work. More importantly, the higher standards of pleading in the Superior Court are unworkable in the Small Claims Court, where litigants are routinely unrepresented and where legal concepts such as the many varieties of causes of action are completely foreign to the parties. Essentially, the litigants present a set of facts to the Deputy Judge, and it is left to the Deputy Judge to determine the legal issues that emerge from those facts and bring his or her legal expertise to bear in resolving those issues.

 

APPEAL from a judgment for the plaintiff in a Small Claims Court action.

Caranci v. Ford Credit Canada Leasing Ltd., unreported, Docket No. 1280, November 14, 2002, London (Ont. Div. Ct.); Kalkinis (Litigation Guardian of) v. Allstate Insurance Co. of Canada (1998), 1998 CanLII 6879 (ON CA), 41 O.R. (3d) 528, [1998] O.J. No. 4466 (C.A.) [Leave to appeal to S.C.C. dismissed (2000), reflex, 255 N.R. 199n]; Peter v. Beblow, 1993 CanLII 126 (SCC), [1993] 1 S.C.R. 980, [1993] S.C.J. No. 36, (1993), 77 B.C.L.R. (2d) 1, 101 D.L.R. (4th) 621, 48 E.T.R. 1, 150 N.R. 1, 44 R.F.L. (3d) 329, [1993] 3 W.W.R. 337; Popular Shoe Store Ltd. v. Simoni, 1998 CanLII 18099 (NL CA), [1998] N.J. No. 57, 503 A.P.R. 100, 163 Nfld. & P.E.I.R. 100, 24 C.P.C. (4th) 10 (Nfld. C.A.); Prtenjaca v. Fox, reflex, [2001] O.J. No. 1901, 9 C.L.R. (3d) 141 (S.C.J.); Szeib v. Team Truck Centres - Freightliner, reflex, [2001] O.J. No. 2208, [2001] O.T.C. 439 (S.C.J.), consd [page47] Other cases referred to Dewhurst v. McCoppin, reflex, [1870] O.J. No. 288, 17 G.R. 572 (Ch. Ct.); Duke of Somerset v. Cookson (1973), reflex, 3 P. Wms 390, 24 E.R. 114; General & Finance Facilities Ltd. v. Cooks Cars, reflex, [1963] 2 All E.R. 314, [1963] 1 W.L.R. 644; Kupchuk v. Dayson Holdings Co. (1965), reflex, 53 D.L.R. (2d) 482, 53 W.W.R. 65 (B.C.C.A) (sub nom. Dayson Holdings Co. v. Palms Motel Ltd.); Wait (Re), [1927] 1 Ch. 606, [1926] All E.R. Rep 433 Statutes referred to Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 22(1) [as am.], 23,96(1) [as am.],(3) [as am.], 97 [as am.] Small Claims Act, R.S.N.L. 1990, c. S-16, s. 3(1) [as am.] Authorities referred to Halsbury's Laws of England, 4th ed. Maddaugh, P.D., and J.D. McCamus, The Law of Restitution (Aurora: Canada Law Book, 1990) Perell, P., The Fusion of Law and Equity (Toronto: Butterworths, 1990) Spry, I.C.F., The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 4th ed. (Toronto: Carswell, 1990)

Barry C. Fick, for plaintiff/respondent.

Sandra L. Monger, for defendant/appellant.

[1] HEENEY J.: -- This appeal raises a fundamental question as to the jurisdiction of the Small Claims Court. The central issue is whether that court has jurisdiction to consider and apply principles of equity as it dispenses justice to the many litigants who come before it, or is instead confined to the rules and remedies that have their origins in the common law.

Facts

[2] In the fall of 1997, the plaintiff provided Martin Bitz, a representative of the defendant, with an estimate for the repair of a boiler. The estimated price was between $25,000 and $30,000, but according to the evidence called by the plaintiff, the precise price would not be known until the boiler was disassembled and fully inspected. The plaintiff's representative also testified that, once the boiler was stripped down, it was explained to Mr. Bitz that there would be additional costs of approximately $15,000.

[3] The work proceeded. An invoice dated November 28, 1997 in the amount of $30,000 was rendered by the plaintiff and immediately paid. An additional invoice dated December 16, 1997 [page48 ]was subsequently rendered for the "extras" in the amount of $14,500. That invoice was never paid, and formed the subject matter of the lawsuit before the Small Claims Court.

[4] Martin Bitz died in 2000, and was not, therefore, available to testify as to what was or was not agreed upon with the plaintiff. The defendant's bookkeeper was unable to locate a copy of the second invoice.

[5] Deputy Judge MacDonald, in her oral reasons for judgment, made an express finding that "we do not have a contract". However, she went on to say the following:

. . . but in fact, courts have and do where they are unable to find a contract in either [sic] in writing because it isn't clear, or verbal, award monies on a quantum meruit basis when you can not find a contract. So the fact that there is or is not a contract, is not necessarily -- a written contract -- is not necessarily fatal to his claim that he did the work.

[6] She went on to find that the work was, in fact, done by the plaintiff, and noted that the account for that work was not challenged in any meaningful way. Since the account for that work exceeded the monetary jurisdiction of the Small Claims Court, she awarded the maximum allowable amount of $10,000 to the plaintiff.

[7] Three grounds of appeal were argued:

(1) That the deputy judge lacked jurisdiction to award damages based on quantum meruit, because that is an equitable form of relief, the jurisdiction over which is given only to the Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, pursuant to s. 96(3) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the "Act");

(2) That the deputy judge erred in considering a claim based on quantum meruit when it was not raised as a cause of action by the plaintiff in its pleadings;

(3) That the deputy judge erred in failing to find that the defendant was prejudiced by the death of Martin Bitz.

[8] I will deal with these issues in numerical order.

Issue #1: Jurisdiction over Claims in Equity

[9] The defendant's jurisdictional argument is based on s. 96(3) of the Act, which reads as follows:

(3) Only the Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, may grant equitable relief, unless otherwise provided. [page49 ]

[10] The defendant submits that quantum meruit is an equitable claim, and that jurisdiction over the granting of equitable relief is expressly outside the jurisdiction of the Small Claims Court pursuant to this section.

[11] Reliance is placed on the decision of Desotti J. in Caranci v. Ford Credit Canada Leasing Ltd. (November 14, 2002), London, Docket No. 1280 (Div. Ct.). At para. 1 of that decision, Desotti J. says the following:

The learned Small Claims Court judge has made a palpable error in granting an equitable remedy of unjust enrichment and then confused this equitable relief with the law of damages. Section 96 of the Courts of Justice Act precludes a Small Claims Court from granting equitable remedies. Unjust enrichment and the law of restitution are both equitable remedies.

[12] The problem with the defendant's argument is that it proceeds on the erroneous assumption that quantum meruit is an equitable remedy. While some types of unjust enrichment are equitable in origin (such as constructive trust, which has undergone rapid growth in family law in recent years), quantum meruit is in fact derived from the common law.

[13] The remedy of quantum meruit has its roots in quasi- contract, which constitutes a third class of the common law distinct from contract or tort, as is made clear at para. 630 of Halsbury's Laws of England (4th ed.):

Any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit from, another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract or in tort, and are now recognized to fall within a third category of the common law which has been called quasi-contract or restitution.

For historical reasons, quasi-contract has traditionally been treated as part of, or together with, the law of contract. Yet independently, equity has also developed principles which are aimed at providing a remedy for unjustifiable enrichment. It may be that today these two strands are in the process of being woven into a single topic in the law, which may be termed "restitution."

(Footnotes omitted)

[14] The precise origin for the remedy of quantum meruit is traced by Peter D. Maddaugh and Prof. John D. McCamus in their work The Law of Restitution (Aurora: Canada Law Book, 1990). In Chapter 4, entitled "Common Law Remedies", the authors discuss the remedies made available at common law that were pursued through the common counts of indebitatus assumpsit. At p. 68 those remedies are summarized: [page50]

The process whereby the common counts of indebitatus assumpsit came to be utilized to grant quasi-contractual recovery for the value of benefits conferred in cases where there was no contractual relationship between parties, either express or implied-in-fact, has been described in an earlier chapter. The four principal counts employed for this purpose were the claims for money had and received, money paid, quantum meruit and quantum valebat.

[15] This represents a complete answer to this ground of appeal. In granting relief based on quantum meruit, the deputy judge was utilizing a common law remedy, not an equitable one, so that s. 96(3) of the Act does not come into play.

[16] While this analysis is sufficient to dispose of this ground of appeal, it is not entirely satisfactory because it fails to answer the important question that was argued on this appeal. Do deputy judges have access to the large and well- developed body of equitable principles in deciding cases that come before them? Will they be required, in the heat of a long trial list, to consult dusty textbooks to determine the precise lineage of any particular legal concept before they can confidently apply it?

[17] The potential for confusion and uncertainty if such were to be the case is enormous. The case at bar provides a good example. While I have concluded that quantum meruit is derived from the common law, it forms part of a larger body of remedies under the category of unjust enrichment, which has both equitable and common law roots. Given the extent to which principles of equity and common law have merged in modern times, reconstructing the family tree for some legal remedies could be very difficult.

[18] Even with respect to quantum meruit itself, the authorities are often contradictory as to its nature. The term is defined in Black's Law Dictionary, 7th ed. (St. Paul: West 1999) as follows: "At common law, a count in an assumpsit action to recover payment for services rendered to another person." However, the term is further defined as follows:
"Quantum meruit is still used today as an equitable remedy to provide restitution for unjust enrichment. It is often pleaded as an alternative claim in a breach-of-contract case so that the plaintiff can recover even if the contract is voided."

[19] In the leading constructive trust case of Peter v. Beblow, 1993 CanLII 126 (SCC), [1993] 1 S.C.R. 980, [1993] S.C.J. No. 36, at p. 987 S.C.R., McLachlin J. (as she then was) considered quantum meruit to be an equitable remedy:

"Unjust enrichment" in equity permitted a number of remedies, depending on the circumstances. One was a payment for services rendered on the basis of quantum meruit or quantum valebat. Another equitable remedy, available traditionally where one person was possessed of legal title to property in which another had an interest, was the constructive trust. [page51 ]

[20] It is, therefore, worthwhile to pose the following question: if I am wrong and quantum meruit is an equitable remedy, does it lie outside the jurisdiction of the Small Claims Court to award the payment of money based on that ground of relief?

[21] The answer, in my view, can be found in the words of the Act.

[22] I begin with s. 96(1), which reads as follows:

96(1) Courts shall administer concurrently all rules of equity and the common law.

[23] The word "court" is not defined in the Act, but s. 22(1) provides that the Small Claims Court is continued as a branch of the Superior Court of Justice. It is, therefore, clearly a court and thus, pursuant to s. 96(1), it is empowered and directed to administer concurrently all rules of equity and the common law. If the legislature intended to exclude the Small Claims Court from the operation of this subsection, they would have done so, as they did in s. 96(3).

[24] I then move to a consideration of s. 96(3), which was reproduced earlier. That section says that only the Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, have jurisdiction to grant equitable relief, unless otherwise provided. It is these final three words that are of critical importance to the question under consideration. There is not a blanket prohibition against the Small Claims Court granting equitable relief, but instead a qualified one that will permit the exercise of that power if it is otherwise provided.

[25] Finally, I move to a consideration of s. 23 of the Act, which reads as follows:

23(1) The Small Claims Court,

(a) has jurisdiction in any action for the payment of money where the amount claimed does not exceed the prescribed amount exclusive of interest and costs; and

(b) has jurisdiction in any action for the recovery of possession of personal property where the value of the property does not exceed the prescribed amount.

[26] The prescribed amount in this jurisdiction is $10,000. Thus, s. 23(1)(a) gives the Small Claims Court jurisdiction to deal with any action for the payment of money, so long as the amount claimed does not exceed $10,000. In my view, the legislature has, in this section, "otherwise provided" as contemplated in s. 96(3). The words "any action" could not be more broadly written, and on their plain meaning encompass both common law claims and equitable claims. There is no reason to restrict the interpretation of these words to include common law claims only. The only [page52] restriction is that the relief claimed in any action founded in equity must be the payment of money only, and not some other form of equitable relief, such as an injunction, rectification, and so on.

[27] This view is reinforced by considering s. 23(1)(b), which expressly gives jurisdiction to the Small Claims Court to make orders for the recovery of possession of property worth $10,000 or less. The remedy of an order for the delivery up of possession of personal property is clearly equitable in nature:
see I.C.F. Spry, The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 4th ed. (Toronto: Carswell, 1990), at p. 52; Duke of Somerset v. Cookson (1753), reflex, 3 P. Wms 390, 24 E.R. 114; In Re Wait, [1927] 1 Ch. 606, [1926] All E.R. Rep 433; Dewhurst v. McCoppin, reflex, [1870] O.J. No. 288, 17 G.R. 572 (Ch. Ct.). In the common law action in detinue, a court could order that the defendant pay the value of a chattel wrongfully retained or deliver the chattel itself, at the defendant's option, but if the plaintiff was not interested in monetary compensation and insisted on restitution of the chattel itself, he had to seek such relief from the courts of equity: General & Finance Facilities Ltd. v. Cooks Cars, reflex, [1963] 2 All E.R. 314, [1963] 1 W.L.R. 644 (C.A.), at p. 318 All E.R.

[28] However, through s. 23(1)(b), the legislature has chosen to bestow this equitable jurisdiction on the Small Claims Court, so long as the value of the property is within its monetary jurisdictional limits. In so doing, the legislature has once again "otherwise provided" as contemplated in s. 96(3).

[29] This interpretation allows s. 96(1), s. 96(3) and s. 23 to operate as a coherent package. To restate, the courts are authorized under s. 96(1) to concurrently administer all rules of equity and the common law. This would not make sense as applied to the Small Claims Court if s. 96(3) represented a blanket prohibition against hearing equitable claims. It does, however, make sense when s. 96(3) is interpreted to mean that the Small Claims Court may grant equitable relief where otherwise provided. This consistent package of legislation is completed by s. 23, which authorizes the Small Claims Court to deal with all claims, both at common law and equity, but limits its ability to grant equitable relief to two forms only: orders for the payment of money, and orders for the recovery of possession of personal property. The Small Claims Court is not empowered to grant any other form of equitable relief, such as injunctions, declarations and specific performance (unless, perhaps, the performance involves nothing beyond the payment of money or the delivery of possession of personal property, within the applicable limits). [page53]

[30] To complete the picture, one might also consider s. 97 of the Act, which reads as follows:

97. The Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, may make binding declarations of right, whether or not any consequential relief is or could be claimed.

[31] Notable by their absence are the words "unless otherwise provided". It is clear that, unlike s. 96(3), the legislature did here intend to create a blanket prohibition against the Small Claims Court making declaratory judgments. Thus, if a claim for the payment of money depended on the court first making a declaration of right, such a claim would be outside the jurisdiction of the Small Claims Court even if the amount claimed was within its monetary jurisdiction.

[32] Deputy Judge Searle arrived at a similar conclusion to the one I have arrived at in two separate decisions, although his reasoning differs in some respects. In the first, Prtenjaca v. Fox, reflex, [2001] O.J. No. 1901, 9 C.L.R. (3d) 141 (S.C.J.), the plaintiff's claim was based on unjust enrichment, which the deputy judge considered to be an equitable claim. He noted that, by virtue of s. 96(1), he was required to administer all rules of equity, but felt that he was precluded by s. 93(3) from granting equitable relief. He proceeded to draw a distinction between "rules" and "relief" and concluded that the Small Claims Court could make an award of damages without granting equitable relief.

[33] As already discussed, the assumption that unjust enrichment is an equitable claim is one that is open to debate. In addition, it is unnecessary to draw the distinction deputy judge Searle has drawn between rules and relief to justify making a monetary award. If an equitable claim is allowed and money is awarded, it is artificial to suggest that the award is "damages" (presumably common law in origin) and not "equitable relief". If the claim is equitable in nature, surely the relief that flows from allowing that claim would retain the same character.

[34] While awarding damages is usually a common law form of relief, it must be recognized that ordering the payment of money is also one form of equitable relief, among many. For example, courts of equity can award money to supplement the equitable remedies of specific performance and rescission: Paul Perell, The Fusion of Law and Equity (Toronto: Butterworths, 1990), at p. 75; Kupchak v. Dayson Holdings Co., sub nom. Dayson Holdings Co. v. Palms Motel Ltd. (1965), reflex, 53 D.L.R. (2d) 482, 53 W.W.R. 65 (B.C.C.A.). Another example is found in Peter v. Beblow, supra, where the court considered two equitable options for compensating [page54 ]the appellant for her moneys- worth contributions: a monetary award or an interest in property.

[35] It appears that Deputy Judge Searle made the distinction he did because he felt that s. 96(3) restricted him to awarding common law damages only. As noted above, however, s. 96(3) is not a blanket prohibition against granting equitable relief. The legislature has authorized the Small Claims Court to grant the equitable relief of a monetary payment, so long as it is within the prescribed limits.

[36] The second decision is Szeib v. Team Truck Centres - Freightliner, reflex, [2001] O.J. No. 2208, [2001] O.T.C. 439 (S.C.J.). Here Deputy Judge Searle relied on s. 23 of the Act to conclude that he had jurisdiction to grant relief from forfeiture of a deposit, placing specific emphasis on the broad phrase "any action" as I have done above. He also postulates several interesting hypotheticals, such as where a party pays the sum of $450 to the wrong recipient under a mistake of fact. He suggests that it could not have been the intention of the legislature that the payor must claim the return of that small sum by action in the Superior Court of Justice merely because the power to relieve against the unjust enrichment of the recipient is equitable in origin. I agree with those comments.

[37] Counsel were unable to find any cases on point other than the three that have been referred to above. In my own research, I did discover one additional case from the Newfoundland Court of Appeal that dealt with somewhat similar issues, Popular Shoe Store Ltd. v. Simoni, 1998 CanLII 18099 (NL CA), [1998] N.J. No. 57, 503 A.P.R. 100 (C.A.). While the facts are somewhat complicated, the issue relevant to the case at bar was whether the Small Claims Court had jurisdiction to order the return of a quantity of shoes, as opposed to granting monetary relief only.

[38] Green J.A., speaking for the court, referred to s. 3(1) of the Small Claims Act, R.S.N.L. 1990, c. S-16, which conferred jurisdiction to adjudicate "upon a claim for debt, whether payable in money or otherwise, or for damages, including damages for breach of contract, where the amount claimed does not exceed $3,000 ...". He noted that this section did not include a jurisdiction to grant non-monetary remedies, such as specific relief in the form of the transfer or return of property. Since the Small Claims Court was a creature of statute, without the inherent jurisdiction of a superior court, he concluded that, in the absence of an express conferral of jurisdiction, it must be concluded that it did not exist. Thus, the court had no jurisdiction to order the return of the shoes.

[39] Since the issues in both Popular Shoes and the case at bar are statute-driven, and since the statutes are markedly different, [page55] this case is of little assistance. One obvious difference is that the Small Claims Courts in Ontario have express jurisdiction to make orders for the possession of property. Two other differences are, however, equally compelling. The first is that s. 3(1) of the Newfoundland Small Claims Act sets out the specific types of claims that the court has jurisdiction over, whereas our s. 23 gives it jurisdiction over "any action for the payment of money". The other is that there is nothing comparable in their Act to our s. 96(1), authorizing and directing the court to concurrently administer all rules of common law and equity.

[40] I cannot leave this section of my reasons without referring back to the decision of Desotti J. in Caranci v. Ford Credit Canada Leasing Limited, supra. It is apparent from his endorsement that Desotti J. was not referred to s. 23 of the Act, which has played a pivotal role in the analysis I have undergone. For that reason, I respectfully decline to follow that decision.

Issue #2: Granting Relief on a Cause of Action not Pleaded

[41] The defendant submits that it is an error in law for the deputy judge to have granted judgment based on quantum meruit when the claim, as pleaded, was one for breach of contract. Reliance is placed on Kalkinis (Litigation Guardian of) v. Allstate Insurance Co. of Canada (1998), 1998 CanLII 6879 (ON CA), 41 O.R. (3d) 528, [1998] O.J. No. 4466 (C.A.). In that case, the insured had coverage of $500,000. The insured accepted the recommendation of the agent to increase coverage to $1 million but there was also a written request, in the agent's handwriting, requesting a cancellation of the increase in coverage. Thus, the only live issue was whether the insurer had received and acted upon instructions to cancel the increase, and the trial judge found in favour of the insurer on this issue. However, the trial judge went on to find the insurer liable on the basis that the agent was negligent in not advising the insured that the cancellation was not in his best interests.

[42] Finlayson J.A., speaking for the court at pp. 533-34 O.R., noted that the action had proceeded, and the record had been developed, within the confines of an action in contract on the insurance policy. It was, therefore, "impermissible for the trial judge to entertain an argument founded on totally different legal principles". He went on to say:

The trial judge cannot make a finding of liability and award damages against a defendant on a basis that was not pleaded in the statement of claim because it deprives the defendant of the opportunity to address that issue in the evidence presented at trial. [page56]

[43] It is easy to see that the evidentiary record in that case would have been substantially different had the negligence of the agent been put in issue in the pleadings. For example, evidence dealing with the standard of care of a reasonably prudent agent would have been called that would have had no relevance in an action based on breach of contract alone.

[44] The same cannot be said for the case at bar. The same evidence that relates to an action in contract for moneys owed for work done applies where the claim is based on quantum meruit for the same work. The evidentiary record would have been the same irrespective of whether quantum meruit had been pleaded or not.

[45] More important, though, is the fact that the case at bar was litigated in the Small Claims Court. The higher standards of pleading in the Superior Court are simply unworkable in the Small Claims Court, where litigants are routinely unrepresented, and where legal concepts such as the many varieties of causes of action are completely foreign to the parties. Essentially, the litigants present a set of facts to the deputy judge, and it is left to the deputy judge to determine the legal issues that emerge from those facts and bring his or her legal expertise to bear in resolving those issues.

[46] The Newfoundland Court of Appeal dealt with this very issue in Popular Shoes, supra. At paras. 24 and 25, Green J.A. had this to say:

Particularly in Small Claims Court, where claimants, as here, are often unrepresented, a liberal approach ought to be taken to the pleadings that are presented so as to ensure that access to proper adjudication of claims is not prevented on a technicality. Even in superior court, the basic rule of pleading is that a party must plead material facts and is not required, as a condition of relief, to be correct in fitting those facts, as a matter of pleading, into a particular legal pigeon-hole. This is particularly appropriate for litigation in the Small Claims Court where technicalities are to be avoided and unrepresented parties (as Popular and Mrs. Claeys were in this case) are required to express their claims in their own words. If a claimant by his or her pleading or evidence states facts which, if accepted by the trier of fact, constitute a cause of action known to the law, the claimant should prima facie be entitled to the remedy claimed if that is appropriate to vindicate that cause of action. The only limitation would be the obvious one that if the case takes a turn completely different from that disclosed or inferentially referenced in the Statement of Claim, thereby causing prejudice to the other side in being able properly to prepare for or respond thereto, the court may either decline to give relief or allow further time to the other side to make a proper response.

A Small Claims Court judge has a duty, on being presented with facts that fall broadly within the umbrella of the circumstances described in the Statement of Claim, to determine whether those facts constitute a cause of action known to the law, regardless of whether it can be said that the claimant, as a [page57] matter of pleading, has asserted that or any other particular cause of action. Subject to considerations of fairness and surprise to the other side, if a cause of action has been established, the appropriate remedy, within the subject-matter jurisdiction of the court, ought to be granted.

[47] This passage commends itself to me as a practical approach to the manner in which justice is and must be dispensed on a day-to-day basis in our Small Claims Court, and I adopt it. In my view, the deputy judge was presented with facts, broadly within the umbrella of the circumstances described in the claim, which constituted a cause of action in quantum meruit. As such, she was entitled to grant a remedy on that basis. I would not, therefore, give effect to this ground of appeal.

Issue #3: Prejudice to the Defendant

[48] I confess to some difficulty in understanding this ground of appeal. Ms. Monger, for the defendant, argued that the deputy judge erred in failing to find that the defendant was prejudiced by the death of Martin Bitz. It was not made clear, however, how prejudice or the lack of it is in any way relevant to the decision under appeal. The cases cited in the defendant's factum relate to dismissal for delay, but the defendant did not assert a defence of laches or prejudice in its defence, nor is there anything in the record that indicates that a motion to dismiss for delay was brought orally at trial. Certainly the deputy judge made no ruling on any such motion. She did make passing reference to the fact that the defendant was disadvantaged due to Mr. Bitz's passing, but went on to note that the actual premises are within the control of the defendant, and the defendant could have retained an expert to look at the furnace and produce evidence in that regard.

[49] The cause of action in this case arose in or about December 1997. Mr. Bitz died in October 2000. The claim was issued in June 2001, well within the six-year limitation period applicable to claims of this kind.

[50] Taking the defendant's case at its highest, and assuming that a request was made to dismiss the case for delay due to the prejudice that arose from the death of Mr. Bitz which was denied by the deputy judge, I would not give effect to this ground of appeal. The authorities that the defendant relies upon where cases were dismissed for delay relate to the delay that occurs after the statement of claim is issued, in circumstances where the plaintiff is slow to bring the matter from commencement of the action to trial to the prejudice of the defendant. The delay in the case at bar occurred before the claim was issued. No authority was cited that would empower a judge to dismiss a claim for [page58] delay occurring prior to the issuance of the statement of claim, where the statement of claim was issued well within the limitation period.

[51] The power to dismiss for delay is, in any event, a matter within the discretion of the deputy judge, and no error in principle has been demonstrated on the record before me.

[52] Accordingly, the appeal is dismissed.

[53] If the parties cannot agree on costs, I will entertain brief written submissions within 30 days.

Appeal dismissed. 

 

Provided by CanLII and retrieved on October 14, 2014.

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Testimonials

I supervised the legal work of Todd Christensen for The Bank of Nova Scotia’s Regional Collection Centre in Ottawa, Ontario back in 1994-1995. . . . The collection agencies we usually used for the files assigned him regularly settled the claims for a discount and often generated complaints from our customers whose business we hoped to win back when times were better for them. On files agencies would have compromised, Todd recovered not only 100 percent of the amount owing, but also collection costs. And we had not one complaint from our customers about how he treated them.

- Robert Kirby