The Apple Canada Decision
In an unsurprising decision, the Ontario Court of Appeal has upheld a Divisional Court ruling upholding a decision of the Small Claims Court to allow Apple Canada Inc. to inspect a claim arising out of an alleged faulty iPhone.
Mr. Riddell argued that the inspection order undermined the Small Claims Court’s ability to address cases in a summary fashion.
However, the Court of Appeal reasoned that although the Rules of the Small Claims Court do not explicitly provide jurisdiction to Deputy Judges to order inspection of property prior to trial, it was merely a “gap” in the Rules which ought to be corrected. (I note that in a recent Law Times article, I am on record calling it a “gap” in the Rules.)
In addressing this gap, the Court made reference to Rule 1.03(2) of the Rules which allow analogy to the Rules of Civil Procedure (in this case, Rule 32.01) when matters are not adequately covered by the Rules.
Although summery judgement is not covered by the Rules and was the subject of a recent decision, the Court found that this was an “intentional omission” as opposed to a “gap”.
I understand the motivation for the Court of Appeal. Indeed, it makes sense that if a party such as Mr. Riddell is going to make allegations about a defective iPhone, Apple should have the right to inspect that property.
However, I have concerns over where this leaves future disputes over matters not raised in the Rules. Will it be considered a “gap” or an “intentional omission”? One will find it impossible to know, and no doubt there will be more litigation over this issue in the future.
Moreover, and more consequential as far as Small Claims Court goes, parties with deep pockets can now bring motion for inspection of property prior to trial. Whereas the Small Claims Court is already a lengthy process with the average case dragging on for at least a year, not parties face the prospect of dealing with motions for inspection.
In short, I agree with Mr. Riddell in the sense that in many future decisions, the Small Claims Court’s ability to determine matters in a summary fashion will indeed be undermined vis-a-vis pre-trial inspection motions.
And the worst part? The maximum costs allowed under the Rules is a mere $100! So, even if you win the motion, you lose!
What can the Small Claims Court do? In the very least, it can raise the costs jurisdiction on motions to reflect what it really costs to defend a motion. The court has been stuck in the 1960s regarding what it awards costs, and a good start now following this Apple decision is to take a hard look at what it actually costs parties to litigate and up the costs awarded on success at motions.
Alternatively, simply bar lawyers from attending Small Claims Court like many other jurisdictions and I am sure alot of the backlog will magically disappear!