nunavuumi iqkaqtuijikkut

NUNAVUT COURT OF JUSTICE

La Cour de justice du Nunavut

Citation: Swoboda v. Government of Nunavut, 2017 NUCJ 7

Date of Judgement: 2017-01-18

File Number: 08-16-523 SCU
Registry: Iqaluit

Plaintiff (Respondent): Irene Gail Swoboda

-and-

Respondent (Applicant): Her Majesty the Queen in right of

Government of Nunavut Department of
Health and Department of Medical
Travel

________________________________________________________________________

Before: The Honourable Mr. Justice Sharkey

Counsel (Plaintiff/Respondent): Self-Represented

Counsel (Respondent/Applicant): A. Silk

Location Heard: Iqaluit, Nunavut

Date Heard: December 12, 2016
Matters: Small Claims Rules of the Nunavut Court of Justice,
Nu. Reg. 023-2007; Small Claims; Application to
set aside default judgment

REASONS FOR JUDGMENT

(Delivered Orally)

(NOTE: This document may have been edited for publication)

A. INTRODUCTION

[1] The Small Claims Rules of the Nunavut Court of Justice, Nu. Reg.
023-2007 [Small Claims Rules] allow for claims of up to twenty
thousand dollars ($20, 000).

[2] This is a motion by the Government of Nunavut [GN] to set aside a

default judgment made under the Small Claims Rules in favor of
Irene Swoboda in the amount of $9,969.79.

[3] Ms. Swoboda claimed the GN owed her this amount for medical
travel to Ottawa which she paid for herself. And she was issued a
default judgment because the GN did not file any defence to her
claim within the time limits allowed under the Small Claims Rules.

[4] The GN now wants Ms. Swobodas case to be re-opened, and to

have it taken out of small claims court completely. The GN wants the
case to be transferred to the Nunavut Court of Justice for what is
called a judicial review of the Governments decision to deny Ms.
Swobodas original claim for medical travel.

B. BACKGROUND

[5] Irene Swoboda is a resident of Arctic Bay. In the years prior to 2016
she had made annual trips from Arctic Bay to Ottawa for a medical
diagnostic procedure which was paid for by the GN. She had an
appointment for this same procedure scheduled for January 2016.

[6] However, in December 2015 Ms. Swoboda was told that her
upcoming travel for the Ottawa appointment would not be approved
because the diagnostic procedure could be performed in Iqaluit, and
that only her travel to Iqaluit would be paid for.

[7] Ms. Swoboda disagreed with the Governments position. She

believed that it was necessary for her to have this procedure in
Ottawa andso she travelled to Ottawa at her own expense.

[8] In March 2016, Ms. Swoboda used the GNs internal appeal process
and appealed the decision not to pay for these travel expenses. This
internal appeal was denied in April 2016.
[9] In August 2016, Ms. Swoboda filed a claim against the GN in Small
Claims Court for reimbursement on the basis that the GN had
breached her entitlements under the Health Services Medical Travel
Policy made pursuant to the Hospital Insurance and Health and
Social Services Administration Act, RSNWT (Nu) 1988, c T-3
[Hospital Insurance Act].

[10] She claimed $ 9, 969.79 for her travel expenses: This included
hotels, airfare, lost wages, per diems for meals, ground
transportation, seven hours in wages for time dealing with the GN
for approval and appeal, and $75 in small claims filing fees.

[11] I should point out from the outset that the medical procedure
involved in this case is not relevant to my decision. Similarly, the GN
rules about medical travel are not relevant to my decision.

[12] This is not a case about medicine or medical travel. It is not a

case about the decision making power of the Minister of Health or
his officials to administer the GN Medical Travel Policy.

[13] This is a case about time limits, rules, and dates for filing full
stop. It is about whether one party to a law suit should be allowed
back in the game (so to speak) when they miss a time limit. It is a
case about the impact of time limits in the context of the Small
Claims Rules and what impact that should have.

[14] Small Claims Court has its own set of Small Claims Rules
which are simplified to make the processes more accessible, but still
follow the same principles as the Nunavut Rules of Court which
govern larger or more complex claims.

[15] Pursuant to Rule 6.1 of these Small Claims Rules, the GN had
thirty (30) days to reply to the claim and file a basic defence. Failing
the filing of such a Reply, the Rules would permit Ms. Swoboda to
note the GN in default after those 30 days.

[16] Ms. Swoboda served her claim on the GNs legal department
on October 19th 2016. Consequently, as of 9:00am on Monday, the
21st of November 2016, with no Reply from the GN, the Rules
permitted her to obtain a Judgment on a default or uncontested
basis.
 [17] Ms. Swoboda applied for that judgment in default on the 21st
of November and on November 22nd 2016 a Certificate of Judgment
was issued in her favor against the GN in the amount of her claim,
namely $ 9,969.79.

[18] This was not a decision by the Court validating her claim or
commenting on medical travel, it was simply a procedure by a Clerk
which approves Claims when no defence has been filed. In the
everyday work of the Court, this happens reasonably often.

C. REASONS GIVEN FOR DEFAULT BY GOVERNMENT

[19] The Nunavut Governments explanation for failing to file a

statement of defence in a timely fashion is before the Court in the
form of an Affidavit from the Director of the Legal Division for the
Nunavut Department of Justice.

[20] In this affidavit, the Director says that due to a high turnover
and a shortage of lawyers the Swoboda file was not assigned to a
specific lawyer until early November 2016. Instructions were given to
prepare a draft Statement of Defence for the Directors review upon
completion. This draft was eventually sent to the Director on
November 15th 2016. At the time the file was assigned to counsel
the Director had incorrectly flagged the default date or time limit for
filing a defence as December 2nd 2016, and so had incorrectly
diarized the filing date.

[21] In the interim, on November 17th 2016, the Director left

Nunavut on duty travel and did not return until the evening of
Monday, November 21st 2016 at which time she realized that the
statement of defence should have been filed with the court on
Friday, November 18th 2016.

[22] The Director says that she immediately finalized the statement
of defence and shortly thereafter presented it to the Clerk of the
Small Claims Court indicating that it was being filed late. It is
perfectly permissible to file a Reply after the default date but only if
no Default has been requested and issued by the Clerk.

[23] The Director completed the Small Claims Reply Form on

November 21st 2016. Attached to the Reply Form is a nine point
Statement of Defence summarizing the GNs position respecting Ms.
 Swobodas claim. This Statement of Defence was dated as signed
by the Director on November 23rd 2016.

[24] The two documents (the Small Claims Reply Form & the
attached Statement of Defence) were presented by the Director
personally to the Clerk of the Court on November 23rd 2016.

[25] The GN Director also says that when she filed these
documents she enquired as to whether there had been any
communication from Ms. Swoboda requesting that the GN be found
in default, and was told (in error, as it turns out) that there had not
been any such request.

[26] It is clear that the Small Claims Clerk received and stamped
the GN documents in error on November 23rd 2016 because the
default judgment had already issued the previous day, on November
22nd 2016. It was now too late to simply file a Reply and Defence.

[27] Similarly, it is clear that the Clerk erred in telling the Nunavut
Department of Justice Director on November 23rd that no request
had been made to note the GN in default. However, none of these
after-the-fact errors by the Clerk are material to this case.

[28] The current Motion before me to set aside the default

judgment was filed by the Nunavut Government with the Court on
December 6th 2016 and an amended Motion was filed the next day
on December 7th 2016.

D. THE GOVERNMENTS MOTION TO SET ASIDE DEFAULT

JUDGMENT

[29] The Government argues that the default judgment should be

set aside on two grounds:

a. First, because the judgment should have never been issued in

the first place that it was improperly or irregularly entered;
and

b. Second because the Government has met the test or criteria

set out in the Small Claims Rules which would allow a default
judgment to be set aside.
 i. The Governments first argument the Judgment was
irregular

[30] Regarding the first ground of whether the default judgment

should have issued in the first place, the GN relies on Rule 12.1 (1)
(a) & (2) (a) of the Small Claims Rules.

[31] This rule says that if a defendant [here, the GN] does not file
a Reply within 30 days.a claimant [Ms. Swoboda] may request the
Clerk to note the defendant in default, and if the claim is for a debt or
a specific sum of money fixed by the terms of a contractafter
noting the defendant in default, the Clerk shall.enter a judgment in
the amount claimed and issue a Certificate of Judgment. [emphasis
added.]

[32] The GN says that Ms. Swobodas claim is not one for a debt
or a specific sum of money fixed by the terms of a contract, and
therefore is not a claim for which a default judgment may issue.

[33] The GN draws the Courts attention to cases from other

jurisdictions which have dealt with the question of irregularly
entered judgments. In my view, however, these cases are easily
distinguishable from the case before me.

[34] In the Ontario case of Lewis v. General Accident Assurance

Company (1997), 1997 CanLII 12189 (ON SC), 36 O.R. (3d) 604,
[1997] 0.J. No 4971 [Lewis], a default judgment was set aside where
the defendant brought their motion to do so after the judgment was
signed by the Court Registrar but before the Registrar had actually
entered the judgment into the court record. It is clear in Lewis that
the entry of the judgment was a two-step process, and the defendant
company was successful in getting the judgment set aside because
it filed its motion before the second step had been completed:
before the formal entry of the judgment. In the case before me the
formal judgment had been entered by the Clerk before the GN filed
or attempted to file its Statement of Defence.

[35] In the Manitoba case of Limneos v. Knispel et al, 2004 MBQB

118 (CanLII) [Limneos] a default judgment was set aside, at least in
part, on the basis that it had been irregularly entered by the Clerk.
Limneos was a complicated case where the defendants had paid
 insurance monies to themselves instead of to the plaintiffs as the
contract between the parties required.

[36] The judge in Limneos concluded that the default judgment had
not been regularly entered and set aside the plaintiffs entire default
judgment because a portion of the money awarded was not clearly
for a debt or for a liquidated fixed sum as required by the Manitoba
Queens Bench Rules.

[37] In my view, however, and despite the similarity between the

Queens Bench Rules of Manitoba and our own Small Claims Rules,
the Limneos case is not particularly helpful in deciding the case
before me.

[38] It appears in Limneos the defendants made a decision that

they did not need to file a Defence, but subsequently changed this
view (for reasons which are not clear) and made a request for an
extension of time, which was denied, resulting in the default
judgment being issued.

[39] The judge in Limneos viewed the reasons given by the

defendants as a satisfactory explanation behind why a defence was
not filed within time. Evidence of requests for extensions also
assisted the defendants in establishing, once they realized a
judgment would in fact negatively impact them, that they had a
legitimate intent to defend the claim.

[40] I am not persuaded, however, in this case that the default

judgment in favor of Ms. Swoboda was somehow irregularly entered.

[41] Rule 1.1 of the Small Claims Rules says, quite clearly that the
small claims rules are intended to provide for the just determination
of small claims, and shall be liberally construed to ensure simplicity
in procedure, fairness in administration and the elimination of
unjustifiable expense and delay.[emphasis added]

[42] In my view Small Claims Court is a venue designed for

unrepresented individuals to access justice. It is not intended to
serve as a regulator of pleading standards.

[43] Indeed, under in the Small Claims Rules the word plaintiff is
replaced by the word claimant. Further, the standard Notice of
 Claim has only a four (4) or five (5) line box where the claimant can
write out why they feel that money is owed to them.

[44] The Small Claims Rules thus allow for a lower or less legal
standard within which a person may frame their claim.

[45] And while Rule 12.1 (1) (a) and (2) (a) only allows for a default
judgment in cases of debt or contract, I must pursuant to Rule 1.1
put a liberal and fair construction on what is a debt or contract in
applying this rule to the facts of Ms. Swobodas claim.

[46] In her claim, Ms. Swoboda has claimed reimbursement from

the GN. She has articulated why she feels she feels the GN is
indebted to her owes her debt - for the expenses she has claimed.

[47] I am of the view there is nothing irregular about Ms.

Swobodas claim. To the contrary, in my view Ms. Swoboda has
pleaded or made an ordinary matter of fact claim for moneys she
believed were owing to her, for which a judgment was properly
issued and entered into the record based on the Small Claims Rules
and the GNs default in filing a Reply.

ii. The Governments second argument the three criteria of

Rule 12.6

[48] This takes me to the second ground put forward by the GN to

have the default judgment set aside: namely, that they have met the
requirements for doing so set out in the Small Claims Rules.

[49] Small Claims Rule 12.6, states a defendant applying to set

aside a default judgment must establish (on a balance of
probabilities) the following three (3) things:

a. First, that there is meritorious defence to the claim;

b. Second, that there is a reasonable explanation for the default;

and

c. Third, that the motion to set aside the noting of default was
filed as soon as practicable in all the circumstances.

[50] I note in particular that Rule 12.6 requires that the defendant
(Applicant) must establish each of these three criteria. Accordingly, if
 the defendant falls short on any one of these criteria then the default
judgment will not be set aside.

E. THE TEST TO BE APPLIED

i. Is there a meritorious defence?

[51] Regarding the first criteria of meritorious defence, the

defendant in this case the GN needs only to show that it has a
legitimate, arguable defence to the claim.

[52] GN counsel asserts that the law is well settled and that Courts
are generally loathe to uphold default judgments where a legitimate
defence has been presented. They are more inclined in such
circumstances to allow cases to be reopened and heard on the
merits.

[53] In this case the GNs assertion that there is an arguable

defence on the merits is a fairly compelling one within either a
judicial review or trial venue:

a. First, the GN could provide expert medical evidence to

suggest that the diagnostic procedure involved was available
to the required standard in Iqaluit.

b. Second, the GN could show that the officials in the

Department of Health who examined and denied Ms.
Swobodas claim for medical travel (both at the initial and
appeal stages) did so in accordance with criteria set out in the
Department of Healths Medical Travel Policy.

c. Third, in terms of the decision making power of the Minister

whether measured by a standard of reasonableness or
correctness the GN would argue that the Minister (through
these same officials) acted within the jurisdiction created by
section 5 (b) of the Health Insurance Act to determine
eligibility and entitlement to insured services.

[54] Accordingly, I find GN has thus met the first criteria required to
set aside a default judgment. There is a reasonable argument for
them to advance that the funds were not owing.
 ii. Was the request to set aside filed promptly?

[55] I also find that the GN has met the third criteria required to set
aside the default judgment: The judgment was entered on November
22nd2016 and the motion to set the judgment aside was filed
December 6th, 2016. Accordingly, there is no question that the
motion to set aside the judgment was filed as soon as reasonably
practicable.

iii. Was there a reasonable explanation for the

default?

[56] This case then turns on the second of the three criteria
namely, on the question of whether the GN has provided a
reasonable explanation for not filing a Statement of Defence or
Reply to Ms. Swobodas claim within the prescribed time.

[57] Counsel says that this case has raised issues respecting the
proper administration of the Health Insurance Act, the level of
medical services provided in Nunavut, and the question of when
patients may be sent south for services. The GN says bluntly that
the issue of medical travel raised by this case is a highly
contentious and not uncontroversial matter and suggests that this
case raises important public policy considerations which should
compel me to set aside the judgment and allow the case to be heard
on the merits.

[58] In my view there is no such consideration. As I stated earlier,

this is not a case about medical travel. It is a case about time limits
and only time limits. A default judgment is not in any way a
precedent for the substance of the claim made.

[59] Indeed, if the GN had considered that Ms. Swobodas claim

had raised important policy matters, then that is all the more reason
the GN lawyers should have mustered a substantive defence in a
timely fashion. The opposite appears to have been the case.

[60] During the hearing of this motion GN counsel was quite

forthright in acknowledging that the GN, in effect, dropped the ball,
and was candid in explaining that the file bottlenecked with one
person when it sat in their in-box.
[61] GN counsel characterizes the default as occurring because of
a solicitors inadvertence namely, the initial mistake about the
proper default date as December 2nd instead of November 21st, and
that once this error was discovered, there was an attempt to quickly
rectify the situation. The Directors initial mistake in incorrectly
flagging the default date when the file was assigned to a staff lawyer
could be viewed, as counsel suggests, as a simple inadvertence.
The Government was only two (2) days late in attempting to file its
defence and it clearly had an intention to do so.

[62] At the same time, I do not accept the notion of a high turnover
and shortage of lawyers in the Government legal department as an
acceptable reason for why the file did not get proper attention or why
the file was bottlenecked at one persons in box. Many law firms in
Canada are busy and many have a shortage of lawyers.

[63] The Swoboda claim which was served on October 19th did not
get assigned to a lawyer until early November at least ten days
later, when the time limit to file a reply was only twenty days away.

[64] While the Director had mistakenly flagged the default date, the
lawyer who was assigned to the file (and who actually prepared the
draft statement of defence) did not independently identify the correct
default date and bring this to the Directors attention. The Director
left town for duty travel on November 17th, but this is not relevant in a
system where other lawyers are present and are assigned files.

[65] Default dates are a vital aspect of any litigation, particularly in

Small Claims Court with an unrepresented claimant, where all
lawyers know that the time frames are short. And particularly, as I
alluded earlier, if Ms. Swobodas claim raised an important issue
respecting the powers of the Minister, then I would think this would
be all the more reason her file would be carefully handled and
monitored.

[66] The case of Janssen-Ortho Inc. v. Novopharm Ltd., [2005] 1

S.C.R. 776, 2005 SCC 33 [Janssen-Ortho] is a 2005 decision from
our Supreme Court of Canada where LeBel J. refused an application
to extend time of an application for leave to appeal. Respecting time
limits he said:

Time limits should mean something. Valid reasons should be

given to explain the delay. Our Court must be flexible and fair.
 Fairness is owed not only to the applicants but also to the
respondents who may very well be significantly
inconvenienced by undue or unexplained delays. (Janssen-
Ortho at para 4)

[67] The case of Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd.

87 OR (3d) 479; [2007] OJ No 1685 (QL); 2007 ONCA 333 (CanLii)
[Peterbilt] illustrates this flexible approach to time limits outlined by
LeBel in Janssen-Ortho, above.

[68] In Peterbilt the Ontario Court of Appeal allowed a default

judgment to be set aside. The Court ruled that the original motion
court had erred in finding the defendants (appellants) had not shown
they had an adequate defence. The Court found that the defendants
had been prejudiced by the previous refusal to set aside the default
judgment in that they were deprived of the opportunity to present a
defence on the merits.

[69] The Court of Appeal did, however, confirm the motion Courts
view that the defendants had offered a valid reason for their default,
which was satisfactorily explained and attributable to a
miscommunication between counsel.

[70] The Court of Appeal in Peterbilt also made some general

comment, as follows, respecting motions to set aside a default
judgment:

The motion judge must, however, ultimately determine

whether the interests of justice favor an order setting aside the
judgment. In doing so, the motion judge will have regard to the
potential prejudice to the moving party should the motion be
dismissed, the potential prejudice to the respondent should
the motion be allowed, and the effect of any order the motion
judge may make on the overall integrity of the administration
of justice. (Peterbilt at para 2)

[71] It would appear that the GN is advancing the argument that a

busy office and simple oversight is a sufficient and satisfactory
explanation for their default in not responding to Ms. Swobodas
claim. While it is an explanation, within the context of Small Claims
Court and a self-represented litigant, inattentive legal work falls short
of being a satisfactory excuse for a default.
 F. CONCLUSION

[72] I am not persuaded that the GN has provided a reasonable

explanation for their default, as required by Rule 12. 6 (2).
Accordingly, and on this basis the GNs motion to set aside the
default judgment in favor of Ms. Swoboda must fail.

[73] Further, in my view it would not be in the overall interests of

justice, nor would it promote the integrity of the administration of
justice, within this limited context, to allow the GNs motion.

[74] I confirm the default judgment in favor of Ms. Swoboda in the

amount of $ 9,969.79. I also re-confirm that this is a default
judgment, and in no way expresses any opinion of the Court
regarding medical travel rules.

[75] I award $100 in costs to Ms. Swoboda which is in the amount

fixed by the Small Claims Rules.

Dated at the City of Iqaluit this 18th day of January, 2017

___________________
Justice N. Sharkey
Nunavut Court of Justice