October 10, 2013
Two recent decisions from the Nova Scotia Supreme Court may re-shape practice in the Nova Scotia Small Claims Court – and parties who appear as agents in the Small Claims Court should adjust their approach as a result:
HEARSAY EVIDENCE: THE “INVISIBLE WITNESS”
In Towle v. Samad, the Supreme Court dealt with how the Small Claims Court should consider the evidence of “invisible” witnesses: “witnesses” who submit evidence in writing, but whom the party does not call to testify, and the opposing party cannot cross-examine – in other words, “hearsay” evidence.
Before Towle, the Supreme Court was divided on how the Small Claims Court should treat such evidence: the Small Claims Court routinely admitted it, and considered only how much weight to give it, but at least one Supreme Court decision was highly critical of that approach.
In Towle, a contractor sued a house owner in Small Claims Court for payments related to house renovations. The owner denied the claims, and counter-claimed alleging deficiencies in the renovations. The contractor’s claim failed, but the owner’s claim succeeded; the Small Claims Court assessed most of the damages based on the estimates of witnesses who were not called to testify (“hearsay estimates”). The contractor appealed the Small Claims Court decision to the NS Supreme Court. The Supreme Court focused on the Small Claims Court’s reliance on the “hearsay estimates” to calculate the counterclaim damages:
LIMITED APPEAL ROOM
In Hoyeck v. Maloney, the Supreme Court focussed on the approach it should take to appeals of Small Claims Court decisions.
In Hoyeck, the claimant bought a used car and later sued the seller in the Small Claims Court. In the Claim Form, the buyer alleged that the seller was Mr. Hoyeck. No Defence was filed, but Mr. Hoyeck appeared at the Small Claims Court hearing and argued against the claim. The Small Claims Court made a decision on the issue and gave judgment against Mr. Hoyeck. Mr. Hoyeck did not challenge the seller’s identity at the hearing and the Small Claims Court’s decision did not expressly address the issue; its determination that Mr. Hoyeck was the seller was implicit in its judgment against him. Mr. Hoyeck appealed – and challenged the factual decision that he was the seller.
The Supreme Court rejected his argument on two grounds – including that the seller’s identity was a factual decision requiring significant deference to the original decision-maker (here, the Small Claims Court). The Supreme Court took the opportunity to clarify the appeal court’s role and the basis on which it will – and will not – review Small Claims Court decisions:
LESSONS FOR SMALL CLAIMS COURT PARTIES
Many parties – and in particular, parties like insurers that are regularly involved in litigation – represent themselves in Small Claims Court matters. In Towle and Hoyeck, the Supreme Court delivered some important lessons to all counsel – and self-represented litigants – who appear in Small Claims Court:
Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper Insurance Defence Team to discuss this topic or any other legal issue.
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