2007 S.C.P. No. 289744
Date:20080402
SMALL CLAIMS COURT OF NOVA SCOTIA
Cite as: VFC Inc. v. Coady, 2008 NSSM 18
VFC Inc.
CLAIMANT
and
Vincent R. Coady a.k.a Vince Coady, a.k.a. Vincent Robert Coady
DEFENDANT
DECISION
This is an action by the claimant, VFC Inc., against the defendant for the sum of $4,610.97, comprised of $3,466.96 alleged to be owing under a Conditional Sales Contract, plus $525 for NSF charges plus collection charges of $619.01.
On April 7, 2003, the defendant purchased a 1998, motor vehicle from Central Nova Motors Hyundai, New Glasgow, for the sum of $5,949.00 plus HST. The defendant entered into a Conditional Sales Contract with Central Nova Motors Hyundai for the purchase price plus taxes and administration fees financed over a 54 month repayment period at 24.9 percent per annum.
The Conditional Sales Contract contains the following clause above the purchaser's signature:
"The Purchaser hereby unconditionally agrees to, and acquiesces in the assignment to VFC of all the Vendor's right, title and interest in and to this Contract. The Purchaser acknowledges that it is indebted to VFC with respect to the Indebtedness and undertakes to pay the Indebtedness to VFC as set out in this Contract. All security and any guarantees given to the Vendor by or for the benefit of the Purchaser with respect to the Indebtedness will remain in full force and effect in favour of VFC as if it had been given to VFC instead of the Vendor."
The claimant alleges the defendant has breached the terms of the Conditional Sales Contract and has failed to make the monthly payments.
This matter was scheduled for hearing on February 19, 2006, at Pictou. Prior to the scheduled hearing, the claimant filed an Application for Quick Judgment. Although the defendant had not filed a defence, there were certain questions which needed answers with regards to the transaction history and the claimant's right to bring the action in the Small Claims Court. As a result, the claimant was informed by the Clerk of the Small Claims Court to appear on the scheduled hearing date.
This matter came on for hearing on February 18, 2008. Murray Smith, a Provincial Constable and Agent for the claimant appeared on behalf of the claimant. Mr. Smith informed the Court he had no personal knowledge of the matter and he had not seen the Conditional Sales Contract and that he had no knowledge of paragraph 4(a) set out in Schedule "A" attached to the Statement of Claim which states:
"The defendant agrees to make monthly payments in the amount of $229.36 for 54 consecutive monthly installments commencing on May 8, 2007."
Mr. Smith stated he had no knowledge of what the collection charges of $619.01 represented. The defendant was present at the hearing, he stated that he did not agree with the balance set out in the Schedule of Payments and that it was not consistent with what he stated the claimant informed him in June, or July, of 2007.
Section 5(1) of the Nova Scotia Small Claims Court Act states:
5(1)
To better effect the intent and purpose of this Act and to prevent the procedure provided by this Act being used by corporate person to collect a debt or a liquidated demand where there is no dispute, no partnership within the meaning of the Partnership and Business Names Registration Act no corporation may succeed upon a claim pursuant to this Act in respect of a debt or liquidated demand unless the claimant is one of the original parties to the contract or tort upon which the claim is based or unless the claim is raised by way of set‑off or counter claim."
I find the facts in this case to be as follows:
The defendant entered into a Conditional Sales Contract with Central Nova Motors Hyundai on April 7, 2003. Following the purchase of the motor vehicle by the defendant, Central Nova Motors Hyundai assigned the Conditional Sales Contract to the claimant, VFC Inc. The claimant then registered a lien against the vehicle on or about April 28, 2003. All payments made by the defendant were made directly to VFC Inc.
In this case, and in these circumstances, it is clear that VFC Inc. is not one of the "original parties to the contract" as required by s. 5 of the Small Claims Court Act.
In my opinion, this case is similar to McGraw v. Merchant Retail Services Limited (1990) N.S.R. (2d) p. 240. In that case, the seller, Jim Jer Investments Limited, in accordance with the financing agreement, entered into between Jim Jer Investments Limited, and Merchant Retail Services Limited, assigned the agreement entered into between the defendant (McGraw) and the seller (Jim Jer Investments Limited) to Merchant Retail Services Limited. The defendant made payments on his account with Merchant Retail Services Limited. At trial in the Small Claims Court, the Adjudicator determined that s. 5(1) of the Small Claims Court Act did not preclude the claimant (Merchant Retail Services Limited) from commencing an action against the named defendant to recover the unpaid balance of the defendant's account. This was in the face of the evidence that Merchant Retail Services Limited contended at the hearing that the seller Jim Jer Investments Limited assigned the defendant's charge account to Merchant Retail Services Limited. On appeal, Palmeter, C.J.C.C., as he then was, at p. 243, states:
"The prime question is whether the respondent is 'one of the original parties to the contract'. In considering the terminology of s. 5(1) of the Act, I find that it was not. Black's Law Dictionary (5th Ed.) describes 'parties':
'Parties' The persons who take part in the performance of any act, or who are directly interested in any affair, contract or conveyance¼"
Black's Law Dictionary, supra, also defines 'parties and privies' as follows:
'Parties and Privies' ‑ Parties to a deed or contract are those with whom the deed or contract is actually made or entered into. By the term 'privies' as applied in contract, is frequently meant those between whom the contract is mutually binding, although not literally parties to such contract. Thus, in the case of a lease, the leassor and the leassee are both parties and privies, the contract being literally made between the two, and also being mutually binding; but, if the leasee assigns his interest to a third party then a privity raised between the assignee and the original lessor, although such assignee is not literally a party to the original lease.'
And at p. 8, Palmeter C.J.C.C. states:
"In considering these definitions, it is my opinion, although there is in my mind no question that the respond is privy to the original contract, the respondent is not one of the "original parties to the contract" as envisioned by the Act and I so allow the appeal on the basis that the learned Adjudicator acted in access of the jurisdiction of the Small Claims Court."
I find, in these circumstances, the claimant is not one of the "original parties to the contract" and therefore, pursuant to s. 5(1) of the Act, the Small Claims Court does not have jurisdiction to hear this matter. For these reasons, the claim is hereby dismissed.
GRANTED THIS 2nd day of April, 2008.
ISSUED at Pictou this day of April, 2008.
________________________
Ray E. O'Blenis
Adjudicator