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A couple of interesting cases have come across my desk recently, both from the Ontario Superior Court. Just to get us going on the new server, I thought I would kind of float them out to see if they generate any discussion.

1. Garland v. Consumers' Gas Co. 19 April 2000. Class action for restitution. The plaintiffs' gas bills had a 10-day payment deadline, and if you missed the deadline there was a 5% late payment penalty (LPP). (This is actually extremely common in Canada for utility bills, or at least used to be. I was very surprised to find when I moved to England that if you missed the payment date for your phone bill, you just got another bill for the same amount, on pink paper ...) If you missed the deadline but paid within the next month, the effective rate of interest was over 60% which is a criminal rate of interest in Canada. The class action was to recover LPPs. There was litigation all the way to the Supreme Court of Canada which held that the criminal code offence applied to these facts (the issue being, whether it did not because it was in the control of the debtor to determine whether the LPP was activated). Then back to the trial court for disposition, on motions for summary judgment by both parties. Held, that there could be no restitution. The industry being a regulated one, the LPPs were imposed pursuant to orders of the Ontario Energy Board, which sets rates following hearings etc. This action was a collateral attack on the orders of the Board. Alternatively, the claim was defeated by s 25 of the OEB Act: "An order of the Board is a good and sufficient defence to any proceeding brought or taken against any person in so far as the act or omission that is the subject of the proceeding is in accordance with the order." And for good measure, the OEB orders were "juristic reasons" for the payments of LPPs.

2. Durrani v. Augier. 4 August 2000. Restitution and land titles registry. The Durrani family got on the wrong side of a bad man named Augier. He forged a security agreement which gave him a charge on the Durrani house. He registered the mortgage. He then issued proceedings for foreclosure and a writ of possession, and got a default judgment, without the Durrani's knowledge. (The judge raised a question here about open access to the litigation system. Presumably Augier swore a false affidavit of service to get the default judgment. Is there any way to stop this?) He then went about trying to sell the house. Then he found that Mrs. Durrani had an interest in the house, and he forged an agreement with her, and got another default judgment. About this time the Durranis tried to buy a lawnmower on credit, and when the credit check was run they found out about the six-figure default judgment. Then a real estate agent agreed to buy the house from Augier, taking title in the name of her teenaged daughters. The Royal Bank advanced $87,000 by way of mortgage for this purchase. The bank was not informed of the unusual nature of the agreement for purchase and sale, which was made conditional on the validity of the default judgments etc. The transfer from Augier to the daughters was registered, and the bank registered its mortgage. When the judge came to sort all this out, there was no difficulty in finding that Augier never had any interest in the land, and that neither the real estate agent nor her daughters did either as they had all kinds of reasons to suspect something was wrong. But the bank's registered interest was unimpeachable. The result was an order to rectify the register to show the Durranis as owners. They got punitive damages against Augier of $25,000 with solicitor and client costs. The bank was given a declaration of the validity of its mortgage, but not leave to issue writ of possession. By agreement of the bank, enforcement of the mortgage was stayed pending resolution of the issues by the Director of Titles (who runs the insurance scheme). The bank got judgment on the mortgage against the daughters with solicitor and client costs. The judge presumably hoped that if the bank could not satisfy its judgment against the daughters, the insurance fund would take care of the rest so that the Durranis would not have to get thrown out of their house.

Lionel