2008 BCSC 970 Hubbard v. Acheson

Before: The Honourable Mr. Justice Williamson

Reasons for Judgment

Counsel for the Appellant/Petitioner	Jeffrey Bryant
Counsel for the Respondents	Kerri D. Duncan
Date and Place of Hearing:	July 17, 2008
	Vancouver, B.C.

[1] The appellant/petitioner, Angela Hubbard (“Hubbard”), is a photographer. She was retained by the respondent, Deborah Acheson (“Acheson”), to take photographs of the wedding of Ms. Acheson’s daughter, the other respondent Clea Adair, on July 8, 2006.

[2] The contract, executed in writing, provided for a deposit with the balance to be paid on the wedding day. It also stated the liability of Hubbard “shall be limited to the refund of the deposits then paid”.

[3] The wedding took place and Hubbard took a number of photographs. However, she was not paid the balance of the contract price on the wedding day.

[4] By the time that the balance was proffered, Hubbard discovered that there was a malfunction or defect in the hard drive of her computer. As these were digital photographs, she was unable to reproduce most of them.

[5] After many failed attempts to retrieve the photographs, the respondents brought a claim in Provincial Small Claims Court. They sought damages for pain and suffering as well as punitive damages.

[6] A number of discussions between the parties ensued. Eventually, as Hubbard did not file an appearance or a defence, the respondents sought and obtained a default judgment and a garnishing order.

[7] On March 18, 2008, Hubbard brought an application in Provincial Court to set aside the default judgment.

[8] During the course of that application, Hubbard informed the court that she did not file an appearance or a defence as she understood that the parties were in negotiations to settle the matter out of court. She said that she did not receive prior notice of the default judgment nor of the garnishing order. She also told the court that she had a signed contract with the respondents that in her view limited her liability.

[9] In brief reasons, the learned Provincial Court judge found that Hubbard’s belief that she was in negotiations to settle the case did not excuse her failure to reply to the court process, and second, that she had failed to establish that there was a defence worthy of investigation.

[10] Hubbard appealed to this Court. However, the proper proceeding in these circumstances is not to appeal, but rather to proceed pursuant to the Judicial Review Procedure Act, R.S.B.C. 1996, c. 241: see Double Eagle Entertainment Corp. v. Doolan, [1995] B.C.J. No. 2157 (S.C.) (Q.L.), a decision of Esson C.J.S.C., as he then was, in which he said that the only avenue to challenge an order refusing to set aside a default judgment is judicial review.

[11] At the commencement of this proceeding, counsel acknowledged this and asked that I continue the application as if Hubbard were a petitioner pursuant to the Judicial Review Procedure Act. Counsel for the respondents agreed with this procedure. Although it is somewhat unusual, in order to convenience the parties and to proceed expeditiously, I agreed to do so.

[12] The March 18, 2008 decision of the learned Provincial Court judge was a discretionary one pursuant to Rule 17(2) of the Small Claims Rules, B.C. Reg. 261/93, which states:

A judge may cancel a dismissal order or default order if

(a) the order was made

(i) in the absence of a party, or

(ii) for failing to file a reply, and

(b) the party applies (see Rule 16 (7)) and attaches to the application an affidavit containing

(i) the reason the party did not file a reply or attend the settlement conference, trial conference or trial,

(ii) the reason for any delay if there has been delay in filing the application, and

(iii) the facts that support the claim or the defence.

[13] The standard of review in these circumstances is reasonableness: see Kohn v. Noble Moving Services Inc., 2008 BCSC 434.

[14] The test for setting aside a default judgment is that set out in Miracle Feeds v. D. & H. Enterprises Ltd. (1979), 10 B.C.L.R. 58 (Co. Ct.). It is a three part test. The applicant must not be guilty of wilful default in respect of a non-appearance, the application must have been made as soon as reasonably possible, and the applicant must show a defence worthy of investigation. There is also appellate authority that the court must be satisfied upon a balance of probabilities that permitting the order to stand would not constitute a miscarriage of justice: Lin v. Tang (1997), 147 D.L.R. (4th) 577, 37 B.C.L.R. (3d) 325 (C.A.).

[15] The learned Provincial Court judge found that the petitioner had wilfully failed to enter an appearance or file a defence, and as well, that the petitioner had failed to establish that there was a defence worthy of investigation. I find these conclusions do not meet the test of reasonableness.

[16] The petitioner deposed, and the transcripts confirm, that she informed the court that the reason she did not file an appearance or a defence was that she understood the parties were in negotiations to settle the matter out of court. I am satisfied that this submission, if accepted, is sufficient. In Anderson v. Toronto-Dominion Bank (1986), 70 B.C.L.R. 267, 9 C.P.C. (2d) 179 (C.A.) at 270:

... In my opinion the phrase “guilty of wilful delay or default” carries with it the sense of a blameworthy action. The word “guilty” likewise emphasizes that the person who delayed or defaulted or both must be one deserving of blame and of the consequent penalty of not being heard on the merits of the application. Among other things, if satisfactory explanations are given for the delay and the default, then it is open to the Court to reconsider whether there is any merit in the defence. The failure may have been “purposeful, deliberate or intentional” but, depending on the circumstance, it may not be blameworthy.

[17] Further, in Brar v. Sahota (1998), 166 D.L.R. (4th) 764, 61 B.C.L.R. (3d) 194 (C.A.), the Court of Appeal stated at para. 8:

I agree with the Chambers judge that what he did was purposeful and intentional in the sense that, believing he had time because of these other proceedings that were underway, he deliberately and purposefully decided not to deal with the writ immediately; but I am not satisfied that it can be said that his actions were deliberate in the sense that he was deliberately ignoring these proceedings. Instead of that, in my view, he thought mistakenly that he had some additional time because of the criminal proceedings in which to respond.

[18] I note that a perusal of the transcript of the proceedings in Provincial Court, and of the reasons for judgment, discloses no reference to these, or any other, authorities. I am satisfied that the petitioner demonstrated that she mistakenly thought that she had additional time because of the ongoing negotiations.

[19] I turn to the question of a meritorious defence. As noted above, the contract executed by Hubbard and the respondent Acheson, a lawyer, set out that the balance of the contract price was due on the wedding day and that the liability of Hubbard was limited to the refund of deposits paid.

[20] I am satisfied that on this evidence, the finding that there was not a defence worthy of investigation was not reasonable.

[21] Turning to remedy, I note that in Michalakis v. Nikolitsas, 2002 BCSC 1708, Rogers J. of this Court said at para. 12:

The Judicial Review Procedure Act limits the remedy that this court may grant. The Act stipulates that the court may direct the tribunal below to reconsider its decision and to determine the whole of any part of the matter that was the subject [of] the review. When a decision is unauthorized or invalid the Act further permits the court to make a declaration to that effect or to order that the decision be set aside. The Act does not permit this court to do what Mr. Michalakis wants, which is to go beyond the learned chambers judge’s decision and set aside the default judgment itself.

[22] In the result, there will be an order remitting the matter to Provincial Court to rehear the application to set aside the default judgment. As in Michalakis, the party who eventually becomes entitled to costs in the small claims action will have the costs of this judicial review.

“Williamson J.”

Citation:	*Hubbard v. Acheson,*
	2008 BCSC 970