MRSB Chartered Accountants v. Cardinal Packaging Ltd. et al., 2006 PESCTD 16

• Judge: Taylor, J.
• Case Date: February 17, 2006
• Jurisdiction: Prince Edward Island
• Citations: 2006 PESCTD 16;(2006), 256 Nfld. & P.E.I.R. 61 (PEITD)

MRSB Chartered Acc. v. Cardinal (2006), 256 Nfld. & P.E.I.R. 61 (PEITD);

    773 A.P.R. 61

MLB headnote and full text

Temp. Cite: [2006] Nfld. & P.E.I.R. TBEd. AP.003

MRSB Chartered Accountants (plaintiff) v. Cardinal Packaging Limited, Cardinal Manufacturing Inc., Dennis Arsenault, Paul LeBlanc, Wayne Linkletter and Kevin Gallant (defendants)

(S1-SC-25642; 2006 PESCTD 16)

Indexed As: MRSB Chartered Accountants v. Cardinal Packaging Ltd. et al.

Prince Edward Island Supreme Court

Trial Division

Small Claims Section

Taylor, J.

March 27, 2006.

Summary:

The plaintiff brought a small claims action for $8,000 against the defendants, alleging fraud, deceit and bad faith. The action was discontinued following a pretrial conference. Three of the defendants sought their full costs of $25,380.83.

The Prince Edward Island Supreme Court, Trial Division, Small Claims Section, ordered the plaintiff to pay the defendants' costs of $17,983.97.

Courts - Topic 6889

Provincial courts - Prince Edward Island - Small Claims Court - Jurisdiction - Costs - The plaintiff brought a small claims action for $8,000 against the defendants, alleging fraud, deceit and bad faith - The action was discontinued following a pretrial conference - Three of the defendants sought their full costs of $25,380.83 - The Prince Edward Island Supreme Court, Trial Division, Small Claims Section, ordered the plaintiff to pay the defendants' costs of $17,983.97 - Under s. 53 of the Supreme Court Act, the court had the power to award costs - Small claims rule 19.02 limited the quantum of costs in small claims court to 15% of the amount claimed unless it was necessary to penalize a party for unreasonable behaviour - The plaintiff's actions constituted unreasonable behaviour - An award of $8,000 in costs was sufficient to penalize the plaintiff but would not compensate the defendants for the costs they reasonably incurred - While rule 19.02 would not allow an additional amount, s. 53 provided an alternative route - However, the quantum of costs claimed was beyond what was reasonable for the defence - $15,000 was the upper limit for substantial indemnity costs in a case like this - See paragraphs 5 to 9 and 19 to 28.

Practice - Topic 6923

Costs - General principles - Power to award or fix costs - [See Courts - Topic 6889 ].

Practice - Topic 7470

Costs - Solicitor and client costs - Entitlement to - Unproved allegation of fraud - The plaintiff brought a small claims action against the defendants, alleging fraud, deceit and bad faith - The action was discontinued following a pretrial conference - Three of the defendants sought their full costs of $25,380.83 - The Prince Edward Island Supreme Court, Trial Division, Small Claims Section, ordered the plaintiff to pay the defendants' costs of $17,983.97 - It was necessary to penalize the plaintiff for unreasonable behaviour which consisted of (i) making baseless allegations which damaged the defendants' reputations and (ii) leaving the allegations in the public record long after the plaintiff had to know they had no foundation - While policy in the small claims section was to keep costs awards to a minimum, small claims rule 19.02 and s. 53 of the Supreme Court Act allowed the court to award more than usual costs in exceptional cases - An appropriate penalty was substantial indemnity costs - However, the amount claimed was too large - The straightforwardness and simplicity of the defence were what made the plaintiff's conduct so unreasonable - The costs claimed were reduced to reflect unnecessary actions - See paragraphs 10 to 28.

Cases Noticed:

Twaits v. Monk et al. (2000), 132 O.A.C. 180 (C.A.), refd to. [para. 10].

Corfax Benefit Systems Ltd. v. Fiducie Desjardins Inc. (1997), 54 O.T.C. 275; 37 O.R.(3d) 50 (Gen. Div.), refd to. [para. 10].

Bargman v. Rooney (1998), 83 O.T.C. 345 (Gen. Div.), refd to. [para. 10].

Goulin v. Goulin (1995), 26 O.R.(3d) 472 (Gen. Div.), refd to. [para. 10].

Capital City Shopping Centre Ltd. v. 1070080 Ontario Inc. et al., [2000] O.T.C. Uned. 380 (Sup. Ct.), refd to. [para. 10].

Murano v. Bank of Montreal, [1995] O.J. No. 1434 (Gen. Div.), refd to. [para. 10].

Lawyers' Professional Indemnity Co. et al. v. Geto Investments et al., [2001] O.J. No. 2058 (Sup. Ct.), refd to. [para. 12].

Mele et al. v. Thorne Riddell et al. (1997), 26 O.T.C. 119; 32 O.R.(3d) 674 (Gen. Div.), refd to. [para. 12].

Molnar v. Langille et al., [2003] O.T.C. Uned. 178 (Sup. Ct., Small Claims Ct.), refd to. [para. 14].

Biggins v. Boran et al., [2005] O.J. No. 1000 (Small Claims Ct.), agreed with [para. 14].

Jones v. LTL Contracting Ltd. et al., [1995] O.J. No. 4927 (Small Claims Ct.), affd. [1995] O.J. No. 4928 (Gen. Div.), refd to. [para. 14].

Kakamin v. Hasan, [2005] O.J. No. 2778 (Small Claims Ct.), refd to. [para. 14].

Om v. Insurance Corp. of British Columbia, [1999] B.C.J. No. 3077 (Small Claims Ct.), refd to. [para. 25].

Anton, Campion, MacDonald & Phillips v. Rowat, [1996] Y.J. No. 130 (Small Claims Ct.), refd to. [para. 25].

Newfoundland Association of Public Employees v. Drake, [1996] N.J. No. 170 (Nfld. Prov. Ct., Small Claims Ct.), refd to. [para. 25].

Robinson (Ron) Ltd. v. Canadian Indemnity Co. (1984), 2 O.A.C. 359; 45 O.R.(2d) 124 (Div. Ct.), refd to. [para. 25].

Santesso Bros. Iron Works Ltd. v. Forte Construction Corp., [1999] O.J. No. 5365 (Small Claims Ct.), refd to. [para. 25].

Statutes Noticed:

Rules of Court (P.E.I.), Supreme Court Rules, Small Claims Rules, rule 19.02 [para. 8].

Supreme Court Act, R.S.P.E.I . 1988, c. S-10, sect. 53 [para. 5].

Counsel:

Robert I.S. MacGregor, for the plaintiff;

Stephen D.G. McKnight, Q.C., for the defendants, Cardinal Manufacturing Inc., Wayne Linkletter and Kevin Gallant.

This motion was heard on February 17, 2006, in Charlottetown, Prince Edward Island, by Taylor, J., of the Prince Edward Island Supreme Court, Trial Division, Small Claims Section, who delivered the following decision on March 27, 2006.