Law Times

Page 4 June 12, 2017 • Law Times www.lawtimesnews.com NEWS NEWS NEWS Summary judgment shows 'new rules can work' BY DALE SMITH For Law Times A n Ontario Superior Court judge issued a summary judgment against Bell Mobility in favour of one of its independ- ent dealers, finding against Bell's claims to a $77,528 debt. Lawyers say that the case, Starcall Wireless Communica- tions Inc. v Bell Mobility Inc, 2017 ONSC 2813, shows how summary judgment can be a useful tool when there is limited evidence available. "In my experience, it's fair- ly rare to have a case like that decided without any cross- examinations," says Thomas Conway, partner with Conway Baxter Wilson LLP in Ottawa, who acted for Starcall in the case. "The one thing that counsel did agree on was that the trial process and cross-examinations on affidavits was not going to make the court's task any easier." Starcall Wireless Communi- cations was an independent dealership of Bell wireless de- vices in Smiths Falls, Barrhaven and Stittsville, Ont., which signed agreements with Bell Mo- bility in 2004 and again in 2011. Starting in 2003, Bell began special promotions for custom- ers who bought and activated devices in dealer stores, where the dealers would discount the phones at the point of sale and Bell would refund the discount to them. Because it could take up to a month to be reimbursed, Bell offered advance payments as credits to the price reductions, which would be clawed back when commission statements were reconciled. When Starcall decided to make an asset sale of its busi- nesses in February 2014, it re- quired the consent of Bell, at which point Bell informed Star- call of an outstanding debt of $77,528, which its internal ac- counting traced to two cheques issued in November 2004 relat- ed to advances. Bell's only proof was screen- shots from its internal account- ing archives, and it could offer no other proof that the debts had been clawed back per the signed agreements. Likewise, Starcall no long- er had any records from that period to indicate whether the money had been repaid. In order to facilitate the sale, Starcall paid Bell the outstand- ing amount under protest and then took Bell to court to repay the amount, where both sides opted for summary judgment. "The judge mused about whether she should order a trial of an issue because she wasn't certain whether the evidentiary record could be improved, but when she heard both counsel say that this is the best both sides can come up [with], we're asking you to decide it on this record, she agreed," says Conway. "Some of the evidence that was on the record dated back over a dozen years ago." Conway says it was the pos- ition on both sides that the case was amenable to summary judg- ment because the evidence wasn't going to get any better with a trial or cross-examination. That left Justice Giovanna Toscano Roccamo to hear the best evidence that both parties were able to provide and applied the law of limitations as it ap- plied to that evidence. The lack of evidence as to the existence of the debt left it to Jus- tice Toscano Roccamo to decide that there wasn't one based on the balance of probabilities, cit- ing the clawback provisions in the agreements signed between Starcall and Bell. "In support of Bell's assertion of a debt, there is insufficient evi- dence supporting the carry for- ward of any advances not already clawed back against commis- sions as would be expected, such as notices to the Starcall Com- panies of the overdue amount, or correspondence confirming the debt," wrote Toscano Roccamo in her decision. "That Bell would simply waive its right to set off the outstanding advances against commissions regularly paid to the Starcall Companies over the timeframe in question and carry forward any debt interest-free makes little commercial sense." Conway says the judge was appropriately following direc- tion from the Supreme Court of Canada in Hryniak v. Mauldin, which said that summary mo- tions must be granted when there is no genuine issue requir- ing a trial. "She did what the Supreme Court has said that judges have to do now, which is to interpret contracts against the factual matrix in which they're [entered into] and try to come to a com- mercially reasonable conclu- sion," says Conway. "It was an interesting ex- ample of how well the new rules can work when judges take them seriously." Conway says the process was, therefore, very efficient, with the statement of claim being issued in March 2016, followed by a hearing on March 30, 2017 and a decision released on May 15, 2017. "The biggest delay was just getting a hearing date," says Conway. "I wish all cases could be dealt with that way." Conway gives full credit to Bell's counsel for agreeing to a cost-effective process. Toscano Roccamo grant- ed summary judgment in the amount of $77,528 plus prejudg- ment interest against Bell. Noel Peacock, senior legal counsel for Bell Canada, did not respond to a request for com- ment, citing a need for instruc- tions. While the summary judg- ment issues were a "textbook case" of how the system can work, some of the other issues explored in the decision were of interest to litigators, particularly whether the debt could be con- sidered a demand obligation, and if it was, whether it was stat- ute-barred by Ontario's Limita- tions Act, 2002. "Those were alternative argu- ments in the end because the judge found that there was no debt," said Shantona Chaud- hury, partner with Pape Barris- ters PC in Toronto. "She had a cascading analysis of the possible arguments." While Toscano Roccamo found that there was no demand obligation, if there had been, would it have been subject to the statutory limitations? "That's really complicated legally because, if it's a demand obligation, the Limitations Act that was in force at the time [means] the time starts to run when the loan itself is made," Chaudhury says. "If that's the case, then the limitation period would start in 2004 when the loan was made and it would be over two years later. However, the legislature amended the Limitations Act in 2009 with retroactive effect." The retroactive aspect of the legislation backdated the lim- itation period to Jan. 1, 2004, which would have affected the Bell cheques, which were issued in November of that year. Chaudhury notes that while most legislation does not have retroactive effect, the legislature does have the ability to do it. "The judge finds in this case it's very clear that [the legisla- ture] did intend to do it, so it would have retroactive effect, and if it was a demand obliga- tion, it was the new limitations period that would apply," says Chaudhury. LT Thomas Conway says a case he recently acted in was amenable to summary judg- ment because the evidence wasn't going to get any better with a trial or cross- examination. © 2017 Thomson Reuters Canada Limited 00244SZ-A87345-CE Start stronger. Finish faster. SECONDARY SOURCES ON WESTLAWNEXT® CANADA Confidently take on complicated matters and leverage the topical expertise from world-class authors, including practitioners, law professors, and judges, who know and shape the law to quickly get the answers you need. Explore what's new to Secondary Sources on WestlawNext Canada. westlawnextcanada.com/secondary-sources In support of Bell's assertion of a debt, there is insufficient evidence supporting the carry forward of any advances not already clawed back against commissions as would be expected. Giovanna Toscano Roccamo

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