Civil Litigation
Our former partner, the Honourable Mr. Justice Kurz strikes again
Suing in Superior Court when you should be in Small Claims Court is an abuse of process

Our former and greatly missed partner, the Honourable Mr. Justice Marvin Kurz of the Ontario Superior Court of Justice continues to make important decisions, which have ramifications for the entire Province of Ontario. 

In his July 8, 2021 decision, Canaceede Credit LP v. Schulz, he stopped a common strategy used by collection firms.

Large institutions such as banks rather than dealing with the collection of small debts would simply sell them for pennies on the dollar to another company.  In this case, Canaceede bought debts owed to various banks.  The amounts involved were all far below the $35,000.00 limit of Small Claims Court.  Canaccede, even though it was located in London, Ontario, had a strategy whereby it would commence an action in Milton in the Superior Court of Justice.   Superior Court as one can imagine has far more complicated rules, amongst them, generally not permitting a party to be represented by a paralegal in contrast to Small Claims Court.  Small Claims Court is also strongly tilted in favour of parties litigating on their own behalf in an effort to make justice more accessible. 

Canaceede, taking advantage of the fact that what they were doing was not prohibited would ignore the Small Claims Court alternative and simply sue everyone in Superior Court out of Milton.  One can assume that they chose Milton as they felt it was a jurisdiction in which the backlogs were less than others.  It mattered not to Canaceede where the defendant lived (an option not granted in Small Claims Court) all of their defendants were sued in Milton. 

Canaceede applied for the court’s permission for substituted service.  A plaintiff may ask the court for permission to serve a defendant by an alternate means when they cannot easily be found or served.   Unfortunately for Canaceede, three of such requests all found their way to Justice Kurz’s desk simultaneously. 

Justice Kurz in a lengthy decision decided that this process of suing in Superior Court for matters clearly within the jurisdiction of Small Claims Court was an abuse of process.  The strong supposition was that this course of action was being undertaken to make it difficult for a defendant to fight the claim. 

Canaceede indicated that what they did was extremely common throughout the credit collection industry. 

Justice Kurz in a detailed and lengthy fashion wagged his finger no no no.  Justice Kurz reiterated that the Superior Court has inherent  jurisdiction to manage its own process unless there was a statutory reason for them not to do so. 

Justice Kurz ordered that all three lawsuits be transferred to the appropriate Small Claims Court jurisdiction where the defendants lived.

From Canaceede’s perspective, they are faced with an interesting dilemma and one will have to see how this develops.  If they live with this decision, it is simply made at a trial judge level.  It is persuasive but not binding.  If they appeal and win, then they will have clearly re-established the existing strategy that they have been using successfully.  However, if they appeal and lose, then there will an appellant decision which indeed will be binding upon trial judges and no doubt will come to the wide spread attention of court clerks and judges across the Province and will put an end to this practice. 

As is often the case, judges lead the way in making decisions that really should have been made by the legislature.  This decision alone may very well cause a change in the rules that will bring an end to this collection strategy.  Canaceede admitted that it had presently before the court in Milton 109 similar cases. 

An important decision for defendants of modest means across the Province and the collection industry as a whole. 

A case recently crossed our desks that I simply had to comment on. The Ontario Court of Appeal in the recent case of Rutman v. Rabinowitz set a very high watermark by awarding $700,000.00 in damages for Internet Defamation. The Defendants’ were found to have mounted a lengthy defamatory internet campaign against the plaintiff. Despite the fact that the plaintiff was not able to prove any specific injury to his reputation in the community, the court still hit the defendants on the head with one of the largest defamation awards ever granted.

The court felt that the very nature of internet defamation in which information is widely, instantly and permanently spread needed to attract the court’s heavy handed condemnation.

The case was also interesting in that one of the defendants did not actually partake in the defamation but was aware of it and did nothing to stop and indeed facilitated the process. The court held that one does not have to directly participate in making the defamatory statements to be found to be an equally liable party.

Interesting stuff as the internet, which has already revolutionized all of our lives is magnifying a very ancient area of law and the damages awarded under it.

The government and the courts have been striving with limited success to reduce legal fees and to shorten the court process.

There has been available for a long time, the ability of a litigant to bring a motion for summary judgment. It gives any party to a civil litigation action, the opportunity to ask the court before trial, to make a final decision on all or part of a law suit. As an example, a frivilous lawsuit brought with no foundation could be successfully defended at an early stage by bringing a motion for summary judgment seeking to have the Plaintiffs case dismissed. Alternatively, a Plaintiff who has a rock solid case, such as the collection of debt to which only a paper thin defence filed solely to delay matters has been filed. In those circumstances, a party can ask the court in the context of a motion for summary judgment, to grant a Judgment on a motion (almost always based solely upon written material and argument by lawyers), rather than at trial.

Recently, Rule 20 of the Rules of Civil Procedure was dramatically changed and the Ontario Court of Appeal recently released its decision in five cases heard simultaneously. All of these cases dealt with the court’s interpretation of the new Rule 20. The test that the court imposed as to whether or not a motion for summary judgment should be granted, turned upon the phrase, the full appreciation test, expanded by the court asking, can the full appreciation of the evidence and issues as required to make dispositive findings be achieved by way of summary judgment or can this full appreciation only be achieved by way of summary judgment or can this full appreciation only be achieved by way of a trial?

To clarify a not particularly clear direction, would the motion judge be satisfied that there is no need for this matter to proceed onto trial, that the judge feels that he or she has all of the facts and a solid understanding of a case that does not require the time and expense of a trial.

While summary judgment motions have existed for a long time, the recent rule change and the Court of Appeal’s decision, generally referred to as Combined Air Mechanical Services Inc. v. Flesch, represents a fresh page in this evolving area of law.

Dale, Streiman Law LLP has appeared numerous times, both prosecuting and defending motions for summary judgment

It was like having the life having sucked out of you. It’s just sliding down a cable. Maybe without a tour group, it’d be kind of fun. Maybe.

Stan, South Park, TV: South Park 16.6 I Should Have Never Gone Zip lining

When Deanna Loychuk and Danielle Westgeest booked their zip line adventure at Cougar Mountain in Whistler, British Columbia, they were eagerly looking forward to their exhilarating cable line expedition through the forest. They made a reservation and followed through, ready to embark on their adventure. They were asked by Cougar Mountain to sign a release and signed it without thinking twice.

We have all done that at one point in time, foolishly, thinking we are invincible and there would be no need to worry about lawsuits and court actions when you could be the next Evel Knievel. They saw the usual title and words release of liability, waiver of claims please read carefully and nonetheless submitted the form before their excursion. They were not forced to go zip lining. No one from Cougar Mountain coerced them to engage in this thrill seeking behaviour.

The ride began and the two women collided as a result of miscommunication between the guides in control of the rides resulting in injuries to both women. Together they sued Cougar Mountain but lost at trial (2011 BCSC 193, 81 C.C.L.T. (3d) 89 and the decision was upheld at the British Columbia Court of Appeal (2012 BCCA 122 (CanLii))

Cougar Mountain admitted the accident was caused by the negligence of their staff but argued that the women had waived their cause of action by signing a valid release. The two Plaintiffs unsuccessfully argued that the release was unenforceable as it was not explained to them, unconscionable, was invalid under the BC Consumer Protection Act due to the deceptive acts of Cougar Mountain and invalid because there was no consideration. The trial judge rejected these arguments and dismissed the action.

Upon appeal, the court found that it was not unconscionable for an operator of a facility at which participants engage in inherently risky recreational activities to require that person to sign a release barring future claims citing the fact that such participation is voluntary, not mandatory.

The Judge held that the release was not unconscionable or deceptive and that the consideration for signing the release was the ability to participate in the activity, whether or not they read or understood the true meaning of the release they were giving.

Although a British Columbia case, the effects of this decision are far reaching and likely to be adopted in Ontario in similar circumstances.

What does this mean for the everyday thrill seeker? It means that one who engages in objectively dangerous activities and signs a release gives up their right to sue if something goes wrong or damage occurs, even if the fault lays with another party.

In other words, when you sign a release, you are contracting out of negligence claims, thereby giving up your common law rights without even perhaps realizing this is the case. It is only in significant circumstances will a release be set aside to restore a cause of action.

The message seems to be very clear if you participate in a risky activity, sign a waiver which has clear terms, is legible and understandable you will have no rights against a party and assume the risks yourself if an injury or damage ensues.

This case should cause people to think twice about whether or not the activity they want to engage in such as zip lining, horseback riding, sky diving or bungee jumping is really worth the risk in the long run.