-    and –

vijay sachdeva

DEFENDANT

DECISION

Adjudicator:       David T.R. Parker

Decision:     June 9, 2008

Counsel:      Mark S. Freeman represented the Claimant

Bruce W. Evans represented the Defendant

Requirements for substituted service; Obligations of the Small Claims Court ; The Small Claims Court as a statutory court; Civil Procedure Rules in the Small Claims Court; and authority to serve a claim on a Defendant residing outside the Province

Parker:-This matter involves a claim was commenced in the Small Claims Court by way of the Notice of Claim on February 23^rd, 2007.  The subject matter of the claim involved a breach of a commercial lease between the parties to the action.  The Claimant had been trying to serve the Defendant with the Notice of Claim by way of personal service as required by the Small Claims Court Act; however, the Claimant was unsuccessful in this endeavour.  The claim itself was renewed on several occasions and the Claimant eventually appeared before the Small Claims Court by way of an ex parte Application seeking an order for substituted service.  The Application was accompanied by an extensive brief provided to the Court by Counsel Mark S. Freeman and was supported by an affidavit of Rachel Butlin.  Following a hearing on the Application this Court granted an Order for Substituted Service.

The Order for substituted service required the claim to be personally served on one of the Defendant's parents and, as well, the Order stipulated a hearing date for the trial of the matter.  Subsequent to the service of the Order upon the parents, Counsel for the Claimant received correspondence from the Defendant's Counsel, Bruce W. Evans, advising Mr. Freeman that his client's mother was served in New Brunswick with the Notice of Claim on December 23, 2007.  Mr. Evans advised that he would be appearing on the scheduled hearing date of January 31, 2008, for the sole purpose of challenging the jurisdiction of the Small Claims Court to proceed with the hearing of the claim on the basis that service was not effected within the Province of Nova Scotia.

Counsel subsequently appeared before the Small Claims Court to argue as to whether or not this Court had jurisdiction to serve the Notice of Claim outside the Province of Nova Scotia.  Both Counsel were heard and both Counsel submitted briefs, the Claimant on February 29, 2008, and the Defendant on April 14, 2008.

On the hearing date, as well as in Mr. Evans’ submissions to this Court, it was made quite clear that Mr. Evans’ appearance was solely to object to the jurisdiction of the Nova Scotia Small Claims Court and in no way was to be taken as his client’s consent to submit to the jurisdiction of the Small Claims Court.

Arguments and Position of the Defendant

The argument, in a nutshell, was to the effect that the Small Claims Court is a statutory court and all of its authority is derived from statute.  The Small Claims Court Act and its regulations do not give the Court the authority to allow service ex juris.  Any authority the Court has must come from statute for it does not have the inherent jurisdiction such as found with the Superior Courts in this Province.

Counsel for the Defendant on this motion advised the Court that the Defendant resides in Calgary, Alberta, and his parents, who were served with the Order for Substituted Service, reside in New Brunswick and it is there where they were served with the Notice of Claim.

Mr. Evans, Counsel for the Defendant, stated in his argument that the Small Claims Court Act contains no provision authorizing the Defendant to be served outside the Province of Nova Scotia, and further Section 6[5] states that the jurisdiction of the Adjudicator is "throughout the province" of Nova Scotia.

Further, the Defendant's Counsel pointed out that the Nova Scotia Small Claims Court has no inherent jurisdiction like a Superior Court and the Small Claims Court gets its jurisdiction strictly from the wording of the Act.  He referred to the case of Howard E. Little Excavating Limited v. Blair's Custom Metals [2006] N.S.J. No. 359 at paragraph 6 where the Nova Scotia Supreme Court stated the following:

"The Small Claims Court is a creature of Statute.  All of its powers are derived from the provisions of the statute.  It has no inherent jurisdiction as do superior courts in the Province so that its jurisdiction is limited to what is set out in the provisions of the Act.  Nowhere does the statute provide that a court in a county may hear matters that arose in another county where the Defendant does not reside or carry on business.  The legislature of this Province makes the jurisdictional determination. Therefore, it is the Province's responsibility to ensure the administrative functions required to give effect to the legislation or to change the legislation if it so wishes.  It may be that as a practical matter it is convenient to have East Hants Small Claims Court matters dealt with in Colchester but, unfortunately, no provision for such is contained in the relevant legislation."

Mr. Evans goes on to say in his brief that it may or may not be convenient or fair or just to require a Defendant living in another province to defend a claim filed with the Nova Scotia Small Claims Court although the claim is "Small" and the cost of coming to Nova Scotia to defend a claim may be too high compared to the size of the "small" claim to make a defense on the merits feasible.  In the present case circumstances where the Defendant resides in Alberta, the fairness of requiring him to come across country to defend the claim is very much in doubt.  Counsel argues that it does not matter what the Court's view on the fairness or justice might be in requiring a Defendant to defend the claim in Nova Scotia. That decision is solely in the hands of the legislature to determine whether and when the Court should have jurisdiction and in what circumstances it should exercise its jurisdiction to serve a Defendant outside Nova Scotia and to require that Defendant to defend the claim in Nova Scotia.   It is not the proper role of the Court to read into the legislation the jurisdiction to serve ex juris when the Act does not contain any such provision.  This is the role of the legislature.

Counsel pointed out that even the Superior Courts can not rely on their inherent jurisdiction and must have expressed authority to serve outside the province.  He makes reference here to the case that went to appeal in Prince Edward Island Canchip Ltd. v. Henderson Lumber Co. Ltd.[1978] PEIJ No.  80 at paragraph 11 wherein it was stated"

"It is not open to question that the Supreme Court of this Province has no inherent jurisdiction to allow service of any proceeding to be effected out of Prince Edward Island, and that the jurisdiction for that purpose must be conferred by statutory authority"

Counsel in his brief stated "the Nova Scotia Supreme Court is authorized by Section 46[d] of the Judicature Act R.S.N.S. 1989, chapter 242 to make civil procedure rules "providing for service out of all the jurisdiction" and the Civil Procedure Rules which the court is authorized by the Judicature Act to make, provide for personal service in other provinces and in the United States by right and for personal service by leave the court in other places besides the provinces of Canada and the states of the United States."

Arguments and Position of the Claimant

Counsel for the Claimant, Mark S. Freeman, puts forward the following authorities to support the Claimant’s argument that service of the claim in this particular case has been effected in accordance with the Small Claims Court Act and the Civil Procedure Rules

“When interpreted using the" modern approach” the Act and Regulations do allow for service of a Notice of Claim outside of the borders of the province of Nova Scotia.

In accordance with the case law, it would be “anarchic and unfair” to permit a tenant in Nova Scotia to escape his legal obligations to a landlord in this province simply by moving to another province, see:  Morguard v. De Savoye Investments Ltd., [1990] 3 S.C.R. 1102-03; Silverstar Properties Ltd., A Body Corporate v. Veinotte, 1998 Can LII 3947 (BC S.C.); and Almagated Transit Union v. Independent Canadian Transit Union (26 June 1998), Vancouver C973958 (B.C.S.C.) at paras. 13 and 31.

In EMCO Corporation v. Classic Hearth & Leisure Limited, 2007 NSSM 24, Adjudicator Barnett cited several authorities regarding the requirement for personal service and the purpose thereof. He wrote:

11     The requirement for personal service (or service in such other manner as directed by the Court) is not a mere technicality: see North Hills Nursing Home Ltd. v. Roscoe Construction Ltd., [1994] N.S.J. No. 128 (S.C.) at para. 11 and Maloney v. W. & W. Windows International [1989] N.S.J. No. 541 (Co. Ct.). The Small Claims Court Act, R.S.N.S. 1989, c. 430, as amended, and the associated Small Claims Court Forms and Procedures Regulations are quite clear in setting out the requirements respecting service of pleadings: see Section 21 of the Small Claims Court Act and Sections 3 and 5 of the Small Claims Court Forms and Procedures Regulations.

12_         The purpose of service is to ensure that a proceeding has been brought to the attention of the party being sued: Hope v. Hope (1854), 43 E.R. 534 at 539; Vidito v. Venoit, 3 D.L.R. 179 (N.S.S.C.); and Balla v. Fitch Research Corp., [2000] B.C.J. No. 1540 (C.A.).

13_         The requirement for personal service (or service in such other manner as directed by the Court) is not a mere technicality.  The purpose of service is to ensure that a proceeding has been brought to the attendion of the party being sued.

The Small Claims Court Act and Regulations neither explicitly allow nor explicitly prohibit service ex juris.

Therefore, it is necessary to use the rules of statutory interpretation to determine whether the Act and Regulations give the Small Claims Court jurisdiction to effect service ex juris.  The provisions that must be subjected to interpretation are as follows, the Act states:

2. It is the intent and purpose of this Act to constitute a court wherein claims up to but not exceeding the monetary jurisdiciton of the court are adjudicated informally and inespensively but in accordance with established principles of law and natural justice.

[¼]

21(3) Service of of all documents may be by personal service or such other manner of service or substitute service as prescribed by the regulations.

Furthermore, the Regs state:

3(3) Service of a Notice of Claim and a form ofor a Defence/Counterclaim shall be by personal service or such other manner of service as directed by the Court.

In interpreting these sections of the Act to determine whether service ex juris is permitted in the Small Claims Court, one must use the “modern approach” to statutory interpretion.  This approach has been well established.  In Britol-Myers Squibb Co. v Canada (Attorney General), [2005] S.C.J. No. 26, Binnie, J. described it as follows:

95     In his book Construction of Statutes (2nd ed. 1983), at p. 87, E.A. Driedger sets out this often-cited principle:

×    Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

96     It is now well settled in law that this modern approach is the preferred method of statutory interpretation (see Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at para. 21; Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42, at para. 26; H.L. v. Canada (Attorney General), 2005 SCC 25, at paras. 186-87; Marche v. Halifax Insurance Co., 2005 SCC 6, at para. 54; Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45, 2002 SCC 76, at para. 154). However, this framework need not be applied in a formulaic manner. The factors need not be canvassed separately in every case, given that they are very closely related and interdependent: Chieu v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 84, 2002 SCC 3, at para. 28

In Silverstar Properties Ltd, A Body Corporate v. Veinotte,  1998 Can LII 3947 (BC S.C.):

26     ¼ the authority under the Nova Scotia Civil Procedure Rules to effect service ex juris has been analyzed by the Nova Scotia Court of Appeal in Oakley v. Barry (1998), 158 D.L.R. (4th) 679 (N.S.C.A.). Pugsley J.A. made the following observations at p. 686 of his judgment:

×    Nova Scotia ex juris rules are extremely broad, as was noted by Justice La Forest in Morguard, and would appear to be unique in Canada. The Nova Scotia Rules do not specifically deal with service of an originating notice ..., but simply provide that where service of an originating notice is to be effected on a defendant in any other province of Canada or the United States, it may be effected by a person having authority in those jurisdictions (Civil Procedure Rule 10.08). There is no requirement that leave of the Court in such a circumstance be first obtained: see Rule 10.07(1).

27     Thus, the Court of Appeal held in Oakley that, for the purpose of civil proceedings in Nova Scotia, ex juris service can generally be effected upon a defendant in another province of Canada without first securing leave of the court. This is, however, subject to the condition that Nova Scotia courts may exercise jurisdiction over a party situated in another province only where there is a "real and substantial connection" between Nova Scotia and the subject matter of the action.

28_         As Pugsley J.A. discusses in Oakley at pp. 688-90, the "real and substantial connection" test for jurisdiction was adopted by the Supreme Court of Canada as a general principle of the conflict of laws in Morguard v. De Savoye Investments Ltd., [1990] 3 S.C.R. 1077, and was elaborated in both Hunt v. T&N plc, [1993] 4 S.C.R. 289; Tolofson v. Jensen, [1994] 3 S.C.R. 1022; and Lucas (Litigation Guardian of) v. Gagnon, [1994] 3 S.C.R. 1022.

29     In my opinion, the Residential Tenancies Board of Nova Scotia has jurisdiction to effect ex juris service in another province of Canada without leave of a court, subject to the requirement that there is a "real and substantial connection" between Nova Scotia and the subject matter of the dispute as discussed in Morguard, Hunt, Tolofson and Oakley. This must necessarily be the case as the Board's power to effect service ex juris derives from the powers granted to the Nova Scotia Courts under the Nova Scotia Civil Procedure Rules

[¼]

36_         In my opinion, there was a sufficient connection between Nova Scotia and the dispute such that the assumption of jurisdiction by the Board met the requirements of order and fairness as established by Morguard. In fact, it would be "anarchic and unfair" to permit a tenant in Nova Scotia to escape his legal obligations to a landlord in that province simply by moving to another province: see Morguard, supra, at pp. 1102-03; Amalgamated Transit Union v. Independent Canadian Transit Union, [1998] B.C.J. No. 1740, (26 June 1998), Vancouver C973958 (B.C.S.C.) at paras. 13 and 31. [Emphasis Added]

In the case at hand, the leased property upon which arrears owing is located in the Nova Scotia.  The Lease was executed in Nova Scotia.  There is a real and substantial connection to Nova Scotia.

Load Runner Logistics Ltd. v. Transport Seblac Inc., 2003 MBQB 15 (CanLII) was an appeal by the plaintiff (appellant) under the Court of Queen’s Bench Small Claims Practices Act, R.S.M.1987, c. C285 (the Act) from the decision of the Court Officer of the Small Claims Court holding that he had no jurisdiction to hear the plaintiff’s claim or alternatively he declined to hear the plaintiff’s claim on the ground that this Court was not a forum conveniens. The plaintiff was a Manitoba corporation with offices in or near Winnipeg, Manitoba.  The defendant was a Quebec corporation with its sole office in Quebec.  In Load Runner, much like the case at hand, counsel for the defendant appeared before the court solely to argue the jurisdictional question, making it clear that the defendant was not attorning to the jurisdiction of this Court.  On the issue of whether the Small Claims Court action could be served outside Manitoba and whether the hearing would take place in Manitoba the MBQB wrote:

11     The respondent submits that the Queen's Bench Rules under The Court of Queen's Bench of Manitoba Act, C.C.S.M., c. C280 do not apply and more particularly Queen's Bench Rule 17.02 governing service ex juris. The Act has no specific rules in respect to service ex juris. Neither party on this appeal has applied under s. 12(5) of the Act to have the Queen's Bench Rules apply.

12     I agree that the Queen's Bench Rules do not apply, in which case I am mindful of the caution in J.-G. Castel's, Canadian Conflict of Laws, 4th ed. (Toronto and Vancouver: Butterworths) at p. 219:

In cases not expressly provided for by the rules of court, jurisdiction should be exercised over a nonresident defendant only where there is a real and substantial connection between the court, the cause of action, and the defendant, and the court is an appropriate forum to hear the proceeding.

13     Counsel have agreed that analysis of jurisdiction for service ex juris and jurisdiction is a two-stage process. Muscutt v. Courcelles (2002), 60 O.R. (3d) 20 (Ont. C.A.) sets out the two-stage analysis as follows:

... The first question is whether the forum should assert jurisdiction at the suit of the particular plaintiff against the particular defendant. Second, the court considers the discretionary doctrine of forum non conveniens, which recognizes that there may be more than one forum capable of assuming jurisdiction. (headnote)

14     The first stage has been described as jurisdiction simpliciter and the second stage is a question of discretion as to whether the jurisdiction should be exercised in accepting or declining jurisdiction having regard to which is the more appropriate forum. In Muscutt the Ontario Court of Appeal put the second stage thus:

The court may decline to exercise its jurisdiction on the ground that there is another more appropriate forum to entertain the action. The residual discretion provides a significant control on assumed jurisdiction and a rationale for lowering the threshold for the real and substantial connection test. (headnote)

15     The Manitoba Court of Appeal (Helper J.A. for the Court) in Craig Broadcast Systems Inc. v. Frank N. Magid Associates Inc. (1998), 123 Man.R. (2d) 252 in following Amchem Products Inc. v. British Columbia (Workers' Compensation Board), [1993] 1 S.C.R. 897, Sopinka J. for the Court considered the second step of forum conveniens in these terms:

19 Having defined the test for forum conveniens, Sopinka J. went on to discuss the anti-suit injunction. He stated, at p. 931, that the first step in the process conformed to the forum non conveniens test:

Under this test the court must determine whether there is another forum that is clearly more appropriate. The result of this change in stay applications is that where there is no one forum that is the most appropriate, the domestic forum wins out by default and refuses a stay, provided it is an appropriate forum.

. . . . .

21 It is apparent from the above-quoted passage that the words chosen by the motions judge to determine this issue were not without precedent. Nor was Sopinka J. alone in using that phrase. Castel uses the same terminology at p. 241 of his text, ibid:

To conclude, it can be stated with confidence that when there is no one forum that is the most or more appropriate, the domestic forum wins by default and will refuse the stay provided it is an appropriate forum. [underlining omitted]

16     The leading case of Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 has formed the basis of the evolving Canadian jurisprudence and notably has been followed in the cases of Craig and Muscutt.

17     The question must be asked is did the defendant in contracting with the plaintiff, a Manitoba corporation with an office in Manitoba with payment to be made in Manitoba, voluntarily submit itself to the risk of litigation in Manitoba courts. See: J.-G. Castel, Canadian Conflict of Laws, p. 53:

There are constitutional limits to the exercise of jurisdiction against persons outside the province. In Dupont v. Taronga Holdings Ltd., [1987] R.J.Q. No. 124, the Court held that "in the case of service outside the issuing province, service ex juris must measure up to constitutional rules." These rules require the existence of a real and substantial connection between the defendant and the forum province of a kind which makes it reasonable to infer that he or she had voluntarily submitted himself or herself to the risk of litigation in its courts. This approach was found attractive by the Supreme Court of Canada in Morguard Investments Ltd. v. De Savoye, which was of the opinion that the exercise of jurisdiction must not contravene the principles of order and fairness. It hardly accords with principles of order and fairness to permit a person to sue another in any jurisdiction; without regard to the contacts that jurisdiction may have to the defendant or the subject-matter of the suit." (Underling omitted)

18_         It is arguable that the action equally could have on the basis of the two criteria supra been tried in Quebec. However, Manitoba, "the domestic forum wins by default ...."

19     To recapitulate the agreement was arguably made in either Quebec and Manitoba, or both, the performance was in Manitoba, Quebec and Alberta, the payment for the services was to be in Manitoba, the place where the creditor had a place of business and where all or part of the agreement had been made. It was a commercial arrangement resulting in an agreement which was reasonably expected to have, if there was a dispute, the reasonable consequences of the risk of litigation in Manitoba. (see J.-G. Castel supra and paragraphs 14, 15 and 17)

20     Thus I am holding that the Small Claims Court has jurisdiction and it is the appropriate forum in which to have the matter tried.”

Defendant’s Response to Claimant’s Submissions:

Counsel for the Defendant provided six points in response to the Claimant's submissions noted above and which I have considered ultimately in my analysis.  For completeness I shall make reference to the points raised by Counsel.

“(1)  The claimant relies upon the Supreme Court of Canada decision in Morguard Investments Limited v De Savoye [1990] 3 S.C.R. 1077 which dealt with the issue of whether to recognize an Alberta judgment in the province of  British Columbia.

¼the Alberta court had jurisdiction to issue the original order and that service ex juris was effected in accordance with the Alberta court rules for service ex juris.  There was no issue before the Supreme Court of Canada about the jurisdiction of the Alberta Court to proceed upon the basis of service outside Alberta.

It is clear that the Supreme Court of Canada would not have enforced the Alberta judgment in British Columbia if the Alberta judgment had not been made with proper jurisdiction.  The Supreme Court of Canada at page 16 of the report attached to the Claimant’s brief stated:

As I see it, the courts in one province should give full faith and credit, to use the language of the United States Constitution, to the judgments given by a court in another province or a territory, so long as that court has properly, or appropriately, exercised jurisdiction in the action. (emphasis added)

(2)               The claimant relies upon Silverstar Properties Limited v Veinotte, 1998 CanLII 3947 (B.C.S.C.) which refused to enforce a Nova Scotia Residential Tenancies board order in British Columbia. In the course of its decision, the B.C. Supreme Court held that the Nova Scotia Residential Tenancies Board had jurisdiction to effect service in the same manner as the Supreme Court of Nova Scotia because the Residential Tenancies Act stated expressly in section 14 of the Act that one of the prerequisites to the Residential Tenancies Board proceeding was evidence that “the landlord and tenant have been served in a manner provided by the Civil Procedure Rules”  As the Civil Procedure Rules authorized service ex juris, the court held that the Nova Scotia Residential Tenancies board had statutory authority to serve defendants outside the jurisdiction.

(3)             The Claimant relies upon Amaglamated Transit Union v Independent Canadian Transit Union 1998 CanLII 1051 (B.C.S.C.) which is another case dealing with enforcement of an Alberta judgment in British Columbia.  The court at paragraph 9 noted that the defendants had submitted to the jurisdiction of the Alberta Court, so that the issue of jurisdiction to serve the defendants ex juris was not an issue in the case.

(4)             The claimant relies upon EMCO Corporation v Classic Hearth & Leisure Limited 2007 NSSM 24 (CanLII) (N.S. Small Claims Court) which at paragraphs 11-12 stated:

The requirement of personal service (or service in such other manner as directed by the Court) is not a mere technicality¼¼

The purpose of service is to ensure that a proceeding has been brought to the attention of the party being sued¼..

While this statement is correct in law, there is more than one purpose of service and service does not just bring the proceeding to the attention of the party being sued.

Service as authorized by the Small Claims Court Act is required to establish jurisdiction of the Small Claims Court over the person of the Defendant and without proper service, the court does not have jurisdiction.

(5)             The Claimant relies upon the Bristol-Myers Squibb Co. v Canada (Attorney General) [2005] 1 S.C.R. 533 case to support the principle that a “modern approach” to statutory interpretation should apply in this case and that each statutory provision has to be interpreted within the overall text of the statue to reach the proper meaning.

The Bristol-Myers Squibb case involved interpretation of legislation protecting patented drug makers from generic drug manufacturers and there was no issue of interpretation of a court’s statutory jurisdiction involved

The Bristol-Myers Squibb case is not authority for the principle that a court should read into a statute words that are not there, so as to give the court a jurisdiction which is not stated in the words of the statute.

Because of the role of the legislature in deciding the proper jurisdiction of the Small Claims Court, the Small Claims court should follow the principle established in Howard E. Little Excavating Ltd v Blair’s Custom Metals (supra) and let the legislature make its intention clear on jurisdictional issues.

(6)             The Claimant relies upon Lord Runner Logistics v Transport Seblac Inc 2003 MBQB 15 (CanLII) but that case was a conflict of law case determining which of two jurisdictions should exercise their jurisdiction and not a case deciding the issue of jurisdiction to proceed upon service ex juris.  The Defendant submitted not that the Manitoba Small Claims Court had no jurisdiction but rather that the Quebec court had jurisdiction and was the preferred form.  The court held that the Manitoba Small Claims court was the forum conveniens  (ie that the Manitoba court should be preferred over the Quebec court) based on conflict of law principles.”

Analysis

A. Order Providing Substituted Service

Before I deal with the issue of service ex juris in terms of this Court’s authority to allow for such service, I wish to make a few comments on the Order for Substituted Service as it preceded the motion now before this Court and is part and parcel of this decision for if there is no service ex juris in this particular case then there can be no valid Order for substituted service in this case.

In this case the Order for substituted service allowed a copy of the Order and Notice of Claim to be served on one of the Defendant’s parents and, included with that Order, were particulars of the trial’s hearing date.  At the time of the Application Mark S. Freeman, Counsel representing the Claimant/Applicant, outlined the extensive efforts taken to serve the Defendant, illustrated why personal service was impractical and explained why substituted service on the parent would be effective in this particular case.

Instituting a claim and service of the documents is provided by section 21 of the Small Claims Court Act which reads in part as follows:

21 (1) upon a claim being delivered to the prothonotary of the Supreme Court for the county in which an action is commenced, the clerk shall

(a) open a file, affix an identifying number to the file and claim document, date stamp the document, insert the time within which the document is to be served on the defendant, insert the time and place within which any defence or counterclaim is to be filed and served on the claimant, insert the time and place of adjudication in accordance with the regulations ; and

(b) file the original claim document, issue a certified copy to the claimant, issue additional certified copy or copies as required for service by the claimant on the defendant or defendants and a form of defence.

(1A) The claimant shall serve each defendant with a certified copy of the original claim document and a form of defence.

(2) Upon a defence or counterclaim being filed with the clerk of the county court, the clerk shall make certain the correct file number is affixed to the document, date stamp and file the original document, issue a certified copy to the defendant and issue additional certified copy or copies as required for service by the defendant on the claimant or claimants.

(3) Service of all documents may be by personal service or such other manner of service or substituted service as prescribed by the regulations.

The Small Claims Court regulations deal with service in section 3 of the regulations which reads as follows:

3     (1)   The time for serving the Notice of Claim and a form for a Defence/Counterclaim on the defendant shall be within 10 days from the date on which the claim is filed or within any additional time the clerk or adjudicator may allow.

       (2) The claimant shall serve the Notice of Claim and a form for a Defence/Counterclaim at the time of service.

Subsection 3(2) amended: O.I.C. 2005-61, N.S. Reg. 18/2005.

Subsection 3(2l) amended:  O.I.C. 2005-61, N.S. Reg. 18/2005.

       (3)   Service of a Notice of Claim and a form for a Defence/Counterclaim shall be by personal service or such other manner of service as directed by the Court.

Section 3 replaced: O.I.C. 2000-169, N.S. Reg. 58/2000.

Mr. Freeman, in submissions to the Court, references Civil Procedure Rule 10.10 as a guiding point for this Court to allow substituted service.

Rule 10.10 reads as follows:

Originating notice: Substituted service

10.10. (1) where it is impracticable for any reason to serve an originating notice personally, the court may make an order for substituted service.

(2) Substituted service of an originating notice is effected by taking such steps as the court has ordered to bring the notice to the attention of the person to be served. [E. 65/4]

Mr. Freeman, I believe, uses this as a reference point for the jurisprudence which he provides the Court and which he relies on to support the factual basis for his Application.  Counsel references four steps which are necessary in order to allow an application to succeed for an order of substituted service.  The four steps include reasonable efforts taken to effect service, a determination being made as to whether personal service is impractical, the effectiveness of such an order in ensuring service and, finally, a determination of the best method to effect service.

The following are Mr. Freeman's comments on the authorities relating to the above referred to four steps.

“(1) Reasonable Efforts

Efforts undertaken to locate the Applicant must be reasonable in all the circumstances.  Substituted service is not an automatic remedy for “some delay or difficulty in locating a party or effecting personal service” New Brunswick Broadcasting Co. v Nova Scotia (Attorney General), 1989 Carswell NS 230 (S.C.T.D) [New Brunswick Broadcasting] at para 35.  An Order for substituted service should only be granted where fairly extensive efforts have been made to effect personal service.

Investors Group Trust Co. v Ulan, 1992 CarswellNS 75 (S.C.T.D) [Ulan] is this province’s leading authority on applications for substituted service.  In Ulan, supra, Justice Goodfellow offered a detailed list of the methods which the Court expects Plaintiffs to use in locating the Defendant they wish to serve with Court documents.

The Court in Credit Foncier franco-canadien v. McGuire et al., 1979 CarswellBC (S.C.) quoted with approval in Ulan, supra, sets the standard in deciding whether reasonable efforts were made to locate and serve a Defendant.  At paragraph 7, the Court noted:

The Applicant must show that reasonable steps have been taken to locate the party to be served, and if he has been located, that reasonable efforts had been made to effect personal service.  What is reasonable must depend on the circumstances of each case including, for example, the type of relief claimed, the amount involved, the avenues explored to locate the person and the steps taken to effect personal service.

(2)               Personal Service is Impracticable

The affidavit evidence shows that Crombie repeatedly attempted to contact and serve Mr. Sachdeva.  Mr. Sachdeva is likely aware of the Applicant’s attempts at service, but will not cooperate.  Therefore, it is respectfully submitted that personal service on Mr. Sachdeva is impracticable.

In New Brunswick  Broadcasting, supra, the Court noted at paragraph 35 that service need not be “next to impossible” for personal service to be impracticable; rather, personal service will be deemed impracticable if it is “incapable of being performed or accomplished by the means employed or at hand”. Although the method at hand, personal service, cannot be performed, another method will likely accomplish the task of fixing the Defendant with knowledge of the substance of the Applicant’s claim.

(3)             Effectiveness of Substituted Service

Before personal service can be dispensed with, it must be established that it is reasonably possible that substituted service will be effective.  In other words, the Order for substituted service must not be made unless there is some reasonable prospect of the material coming to the attention of the person upon whom it should be served.

The Court in Ulan, supra, established the standard in an Application for Substituted Service at paragraph 22:

The onus or standard, therefore, in an Application for Substituted Service is as such will be granted where the Applicant has made all reasonable efforts in the factual situation to effect personal service, and where personal service is not practicable an alternate Substituted Service will be approved that is likely to bring the matter to the attention of the person to be served.  In other words, a method which is reasonably possible that the proceedings will be brought to the Defendant’s knowledge.

(4)             Method of Substituted Service

An integral part of ensuring that it is reasonably possible that substituted service will be successful is employing effective substituted methods.  Among the accepted methods of substituted service is serving a person’s relatives.”

I mention substituted service as part of this analysis is not only for future reference but also as part of my analysis concerning service ex juris.  That is to say, one of the points in the Claimant's position is that the underlying reason for service on a party is notification and the Court must be satisfied that the party has been notified and in accordance with the Act and its Regulations.  I am of the same view that the Court must be satisfied that the party to an action has been served with the documentation.  The history of the Small Claims Court in this Province reflects this concern.  For the first several years of this Court’s existence, service of the claim could be made by registered mail and further jurisprudence on this determined this also included certified mail.  These methods of service were of some concern to the Court at the time, particularly in collection matters, as to whether or not the Defendant actually received notice.  Ultimately the Act was changed by the legislature which required personal service or such other manner as directed by the Court.  In the latter case, the Court must satisfy itself in accordance with the jurisprudence, which I have outlined above.  In this particular case, based on the facts I have before me and all the facts I had before me at the initial Application supported by sworn affidavits, the evidence led me to believe that the Defendant was notified of the claim.

B. Service outside the Jurisdiction

The question, however, before this Court is still whether this Court has the authority to serve a Defendant outside this jurisdiction.

i. The Small Claims Court as a Statutory Court

It is clear and beyond question that the Small Claims Court is a statutory court and that all of its powers are derived from statute and subsidiary legislation.  This was noted by counsel for the Defendant in the decision Howard E. Little Excavating Ltd. v.  Blair’s  Custom Metals where Justice Tidman said

“all of its [Small Claims Court] powers are derived from the provisions of the Statute.  It has no inherent jurisdiction as do superior courts in the province, and so its jurisdiction is limited to what is set out in the provisions of the Act.” 

Other cases dealing with this issue include: Wexford Communications Ltd. v. Buildrite Centres Inc. [1996 NSJ No.441 where Justice Nathanson stated:

“ A small claims court is a statutory court. It has no inherent jurisdiction. It has only the jurisdiction and powers authorized in the governing Act.

In that particular case Justice Nathanson was referencing the fact that the Small Claims Court could not access discovery proceedings as provided in the Supreme Court proceedings.

Justice Halliburton in Clive Estate v. Rizzi [2002] NSJ  No. 39 stated:

  “¼I accept as correct, the proposition that the Small Claims Court, being a statutory court, is obliged to follow the procedural steps as laid down in the Act.

ii. Use of Civil Procedure Rules in the Small Claims Court:

The Claimant in this action has referred to the Civil Procedure Rules in both its Application for an order for substituted service and also in his brief relating to why this court should accept service ex juris. Counsel correctly points that that the rules may provide guidance to the Small Claims Court. [see Atton v. Malloy, [2004] NSJ No. 217.]

The applicable Civil Procedure Rule relating to service ex juris is 10.07 which read as follows:

Originating notice: Service out of the jurisdiction with leave

10.07. (1) Subject to rule 10.04, where an originating notice is to be served on a person elsewhere than in Canada or one of the states of the United States of America, service of the notice on the person is only permissible with the leave of the court. [E. 11/(1)]

(2) The court may, upon an application under paragraph (1) supported by affidavit or other evidence stating that in the belief of the deponent the plaintiff has a good cause of action and showing in what place or country the defendant is or probably may be found, order that the originating notice be served on the defendant in such place or country and make such other order as it thinks fit. [E. 11/4(1)]

(3) An order made under paragraph (2) shall limit a time, depending upon the place of service, within which the defendant is to file his defence or appear on the application. [E. 11/4(4)]

(5)             Upon service being effected as authorized by an order made under paragraph (2), the court has jurisdiction to proceed and adjudicate in the proceeding to all intents and purposes, in the same manner, to the same extent, and with a like effect as if the defendant had been duly served within the jurisdiction of the court.

Service ex juris may be effected throughout Canada without any special leave of the court provided it is in accordance with the Rule 10.08 and provided service is confirmed by rule 10.09.

If these rules were to apply to the Small Claims Court there is nothing here that requires service to be done in any way different than as allowed by the Small Claims Court Act and its regulations.  That is service is provided by the Small Claims Court Act section 21[3] in regulation 3[3].

The Civil Procedure Rules do not at this stage apply to the Small Claims Court, which is in line with the objectives and stated purpose of the Small Claims Court to allow for the adjudication to be done informally and inexpensively, and in my view expeditiously.  At this stage the Small Claims Court has the sanctioning of the Supreme Court of Nova Scotia to reference the Civil Procedural Rules as a guide but there is no legislative or common law requirement imposing these rules on the Small Claims Court.  This, in my view, keeps with the spirit and the stated purpose of the Small Claims Court without imposing excessive rules which might act as barriers to lay litigants as well as those represented by Counsel, who are attempting to access justice in this Province, informally, inexpensively expeditiously and efficiently all within the overriding principle of Natural Justice.  At the same time, guidelines are there to assist adjudicators to ensure the principles of law and natural justice are upheld.

iii. Obligations of the Small Claims Court

While it is acknowledged that the Small Claims Court is a statutory court, the court, and in particular adjudicators, are charged with the obligation to pursue equitable principles and to comply with the spirit of the law governing its operation.  These obligations are derived in part not only from Section 2 of the Small Claims Court Act which reads as follows:

“Purpose

2 It is the intent and purpose of this Act to constitute a court wherein claims up to but not exceeding the monetary jurisdiction of the court are adjudicated informally and inexpensively but in accordance with established principles of law and natural justice. R.S., c. 430, s. 2.”

but also from the comments of Justice Halliburton in two cases over which he presided.

The first case I refer to it is Gaudet v.  Prudential Assurance Co. 88NSR [2d] 391 wherein Justice Haliburton stated:

“THE JURISDICTION OF THE SMALL CLAIMS COURT

  The Small Claims Court established pursuant to the 1980 Statute is, like the County Court, a Statutory Court. As such, it has only the jurisdiction which is bestowed upon it by Statute. Notwithstanding that restriction, it is well established in our jurisdiction that the Statutory Courts like the Supreme Court of Nova Scotia will pursue equitable principles in their proceedings. I find this view implicit in section 2 of the Small Claims Court Act outlining the intent of the Act to establish a Court wherein

(2) Claims up to but not exceeding the monetary jurisdiction of the court are adjudicated informally and inexpensively but in accordance with established principles of law and natural justice.

Thus, while the jurisdiction is limited to a certain monetary amount and, in other specific ways, the Small Claims Court must "do equity" just as the Supreme Court would be required to do under section 38 of the Judicature Act. Failure to do so would not accord with "established principles of law".

The second case which I reference is Clarke v. PF Collier & Sons Ltd. [1993] NSJ No. 505 Justice Haliburton stated in paragraph 6 of the following:

“The Small Claims Court is now an autonomous, statutory court. Section 3 of the Small Claims Court Act establishes it as a separate "court of law and of record". As such, it has an inherent right to control its own processes. The Court and its Adjudicators must comply with the spirit and/or the law governing its operation. If they do so, then no superior court may interfere, except in accordance with the appeal process established by the Legislature.”

I also reference to a recent case of Justice Scaravelli in Direct Cash ATM Processing Partnership v. Eastside Billiards and Lounge LTD. [2008] NSJ No.91 which deals with the Interpretation Act in reference to the Small Claims Court Act, in particular to section 2 which leads to Justice Scaravelli final comment that the goal of the Small Claims Court is to process claims efficiently and quickly. In that case Justice Scaravelli makes the following comments:

“Section 9(5) of the Interpretation Act, N.S. 1989 236 states:

9(5) Every enactment shall be deemed remedial and interpreted to insure the attainment of its objects by considering among other matters

(a) the occasion and necessity for the enactment;

(b) the circumstances existing at the time it was passed;

(c) the mischief to be remedied;

(d) the object to be attained;

(e) the former law, including other enactments upon the same or similar subjects;

(f) the consequences of a particular interpretation; and

(g)        the history of legislation on the subject.

(h)         

21_        In MacLean v. MacDonald [2002] N.S.J. No. 76, 2002 NSCA 30 Cromwell J.A. stated at paragraph 18:

In attempting to find the correct interpretation of the statutory provisions, the court must determine the meaning of legislation in its total context, having regard to the purpose of the legislation, the consequences of proposed interpretations, the presumption and special rules of interpretation, as well as admissible external aids,': see Ruth Sullivan (ed.), Driedger on Construction of Statutes (3rd, 1994) at 131.

Having considered these matters, the court should adopt the appropriate interpretation. The appropriate interpretation is one which is plausible in the sense that it complies with the text of the Act, which is efficacious, in the sense that it promotes the legislative purpose and that is acceptable in the sense that the outcome is reasonable and just; ibid,

22     The purpose of the Small Claims Court Act is to informally and inexpensively adjudicate claims up to its monetary limits. Section 2 states:

Purpose

2 It is the intent and purpose of this Act to constitute a court wherein claims up to but not exceeding the monetary jurisdiction of the court are adjudicated informally and inexpensively but in accordance with established principles of law and natural justice.

The goal is to process claims efficiently and quickly. It is not a Court of record and there are no pretrial procedures.”

While the Civil Procedure Rules of the Supreme Court of Nova Scotia can be used as a guide in the Small Claims Court they do not apply to the Court and the Court is not compelled to implement those rules.  The Small Claims Court must, however, comply with the Act and its Regulations

Section 21 (3) of the Small Claims Court Act is clear; “Service of all documents may be by personal service or such other manner of service or substituted service as prescribed by the regulations.” This along with Section 3(3) of the Small Claims Court Forms and Procedures Regulations made under Section 33 of the Small Claims Court Act allows for personal service of the Notice of Claim on the defendant or service as the court may direct. This is what happened in this case.

While the Civil Procedure Rules may be used as guidelines, there is really no difference in what the Supreme Court procedure is pursuant to those rules and what the Small Claims Court proceedings are with respect to service of a claim.  There is no special leave required of the Supreme Court at least in Nova Scotia for service on the claim in other provinces of Canada.  Because the Small Claims Court Act is silent on service of documentation or of a claim in another province does not mean, in my view, that service can not occur where the defendant is found in another province. What is required is service pursuant to the Act and its Regulations.

It has been said recently, that the “the Court in and of itself is something of a misnomer nowadays. It is called the Small Claims Court and they have a jurisdiction up to $25,000.00.[ Robicheau v. Fair Trade Community Café Inglis Street [2008] N.S.J. No. 191].  This statement is true in terms of the amount of the claim.  That is to say the amount in the eyes of many, certainly at this point in time, 2008, would not be considered small.  The Court however is not a Superior Court with multiple rules and costly and complex procedures for the average Nova Scotia which may act as bars or barriers to accessing Justice for the greater public of Nova Scotia.  The foundation of the Small Claims Court is built on section 2 which I continually referred to and that is, to adjudicate matters informally and inexpensively.  I would also add this includes a procedure which is expeditious and efficient in resolving disputes.

 The Court does not however have jurisdiction to deal with the matter except as prescribed by section 9 or excluded by section 10 of the Act, but this has nothing to do with service of documents on the parties.  I agree with Justice Halliburton that this Court must pursue equitable principles in their proceedings and one of those equitable principles is that the Court must be satisfied in order to proceed with the claim that the party or parties named by the Claimant have been notified of the claim, be provided an opportunity to file a defense and be notified of the time and place for the hearing on the matter. Once this occurs then the Court can deal with whether or not it is a proper claim before this Court.  Service on the claim on the defendant as it occurred in this situation complies with the spirit and purpose of the Small Claims Court in allowing for informal and inexpensive adjudication of a matter in an expeditious fashion but still in accordance with principles of law and within those principles of natural justice, the latter being the fundamental foundation of this Court. I agree with the sensible and succinct statement of Justice Haliburton in drawing this conclusion:

As such, it has only the jurisdiction which is bestowed upon it by Statute. Notwithstanding that restriction, it is well established in our jurisdiction that the Statutory Courts like the Supreme Court of Nova Scotia will pursue equitable principles in their proceedings. I find this view implicit in section 2 of the Small Claims Court Act outlining the intent of the Act to establish a Court wherein

(2)  claims up to but not exceeding the monetary jurisdiction of the court are adjudicated informally and inexpensively but in accordance with established principles of law and natural justice.

Thus, while the jurisdiction is limited to a certain monetary amount and, in other specific ways, the Small Claims Court must "do equity" just as the Supreme Court would be required to do under section 38 of the Judicature Act. Failure to do so would not accord with "established principles of law".

Once the issue of service has been addressed and dealt with by the court there is a further two pronged test that must be considered.  The first being on whether the court has the statutory authority to deal with the matter  as provided in section 9 and 10 of the Small Claims Court Act and secondly, if this is the correct and also the appropriate forum for the trial of the matter.

Conclusion

Therefore, the motion of a Defendant that this Court does not have jurisdiction to serve the Notice of Claim outside this Province and in the manner in which it was served is denied.  I would ask that the Clerk of the Small Claims Court notify the parties of a date and place for the hearing and that the matter proceed accordingly.

Dated at Halifax this 9^th   day of June A.D., 2008.

David T.R. Parker

Adjudicator of the Small Claims

Court of Nova Scotia