Tuesday, December 18, 2012

Judicial Assistance of Self-Represented Litigants

In January, I made an entry about a Small Claims Court decision which received some media coverage, where a self-represented plaintiff, Natasha Mitchell, pursued a claim against a moving company, a franchise of Two Small Men With Big Hearts.

In what I remarked is a rare occurrence for a self-represented litigant versus a represented party, Ms. Mitchell succeeded at trial.  TSM appealed, and Justice Gordon recently released his decision on the appeal.

The Facts

Ms. Mitchell is a single mother, and hired TSM when she was going to move.  In essence, she needed her property to be moved out of her old residence and stored for about a month before being moved into her new residence.  On the first moving day, she paid for that day's move and storage fees.

Prior to the second move, Mitchell discussed the cost with TSM.  Her evidence was that she was quoted a fixed price for $500.  TSM claimed that it never gives fixed prices, and only estimates, and bills based on a formula for moving time and personnel.  (The trial judge accepted Mitchell's evidence on the point.  At the time, Mitchell was an Ontario Works recipient, and TSM knew her financial situation.)

On moving day, however, as they were loading some of her belongings onto her new driveway from the truck, TSM presented her with an invoice for about $890, and insisted on cash.  She didn't have enough, and TSM wouldn't accept a cheque for the excess amount...

...so TSM loaded up her belongings back onto the truck and drove away.

That night, TSM told her that they would give her back her belongings if she paid about $1245.  The next day, TSM sent her OW caseworker a demand saying that they had "all of her stuff" and would return it if paid $1901.78 by the following day, failing which the price would go up to $2529.68.

The Deputy Judge's Findings

Deputy Judge Winny was not impressed by TSM's conduct.  At trial, it appears that there was no justification advanced for assertion of a security interest - i.e. for the defendant to be able to hold onto her property pending payment, and he characterized the escalating sums as "simply unilateral demands".

He referred to TSM's conduct as theft and extortion among other things, and said that it was fortunate for the defendants that "this is not a criminal court".  (Incidentally, I am advised that there are criminal proceedings underway at this time.)

He awarded judgment to Mitchell, accepted her list of the property which was retained, accepted that her estimated values for them were "fair and conservative", and also awarded her a modest sum representing her rental costs for basic household items for a short time - total damage award:  $22,419, plus costs.

The Appeal

TSM hired a new lawyer and appealed the decision and raised several issues on the appeal:

  1. Whether or not $500 was a fixed price for the contract;
  2. Whether or not TSM was entitled to insist on cash;
  3. Whether or not TSM could hold the property until paid;
  4. Whether or not the damage award was excessive; and
  5. Whether the trial judge showed bias.

The challenge on such an appeal is that the trial judge's findings of fact are entitled to significant deference, and the nature of the contract entered into was a pure finding of fact.  In general, the trial judge believed Mitchell over TSM's witnesses, and that is something the trial judge is quite entitled to do, and with which appellate courts seldom intervene.

I have had the pleasure of appearing before Justice Gordon.  He is an experienced no-nonsense judge who I have found to be very practical and professional.  Whether or not there was a fixed price contract was a pure question of fact, entitled to deference, and Justice Gordon rejected TSM's arguments on that point:  "It was open to the trial judge to make a finding of fixed price contract.  The appellant simply disagrees.  There is no overriding and palpable error."

From that finding, the second and third grounds became moot.  Mitchell had enough cash to pay $500, but TSM would not accept that in full payment, and even if a lien could attach for unpaid invoices, Mitchell was offering payment in full.

As for TSM's damages argument, Justice Gordon reviewed the trial transcript and concluded that TSM's trial counsel hadn't made any real attacks on the amount of damages (except for a dispute as to how much property was retained, which the judge considered in detail).  As the argument was not made at trial, Justice Gordon did not permit it on appeal.


Bias was a more interesting issue:  TSM pointed to two alleged indicia of bias, firstly that the trial judge assisted Mitchell with the trial process, and secondly that the trial judge made 'disparaging remarks' about TSM.

The first argument is actually one with relatively far-reaching impact.  It's a discussion which has been going on for years at all levels - how do you balance the need for trial fairness for self-represented litigants who don't understand the process, against the right for procedural fairness and compliance of the other parties.

In this case, however, TSM was concerned about the asymmetry:  The trial judge guided Mitchell through the process of presenting her own case, including entering her exhibits.  He gave no such assistance to TSM. TSM, remember, was represented by a lawyer.

Accordingly, it is not a problem that the trial judge gave guidance to Mitchell, and there was no reciprocal obligation to help TSM's counsel.

Justice Gordon made a rather interesting observation:  "The appellant, in my view, is attempting to argue its counsel at trial was not competent.  Indeed, a review of the transcript is suggestive.  However, that is not a ground for appeal.  The appellant’s remedy, if available, lies elsewhere."

Regarding the disparaging remarks, Justice Gordon agreed that "strong language" had been used, but found that they were findings of credibility, and were attracted by the escalating demands, particularly in light of the fixed price contract.

Further Comments: Should Moving Companies Assert Liens?

The third ground of appeal, in my mind, is one which deserves some further discussion:  Whether or not it is open to a moving company to hold the goods pending payment is certainly not an obvious question.

There are old cases recognizing common law liens for commercial shipping scenarios:  So if I own a freighter and take a shipment of your coal across the Atlantic, I am entitled at common law to insist on payment prior to releasing the coal to you.  In all of these cases, it is also quite clear that, without clear contractual language to the contrary, the lien does not extend to storage charges - if I am incurring storage charges to maintain my secured interest, that's for my own benefit, not for yours, so I remain obligated to provide you with your coal on payment of the original shipping price, and can land myself in hot water for insisting on payment of storage prices before releasing your goods.

However, there's another line of cases, such as the 1920 decision of the British Columbia Court of Appeal in Welch v. Scott:  The defendant had been hired to move furniture, including a piano, from the plaintiff's former residence to her new residence.  After the move was completed, there was a dispute as to the contract price, so the movers went back in and took the piano back, claiming a possessory lien.  They argued that it was a "custom and usage" - i.e. a practice so common that everyone can be considered to know about it - that movers could claim a possessory lien for unpaid accounts.

There were four judges on the B.C.C.A., and all four rejected the notion:  Chief Justice MacDonald concluded that, even if one assumes that there is such a custom which might justify the possessory lien "which I should properly characterize as absurd if I were called upon to express an opinion of it", such a lien would have been lost when the movers parted possession with the piano.  The remaining three concluded that there was no lien, with one of them remarking that "absurd" would be a mild term.

And looking at that case, one can come to understand why domestic moving companies are very different from commercial shippers:  When I ship your coal across the Atlantic, and you're ready to take delivery in port, my work is substantially done.  I have completed my services and am therefore in a position to demand payment while still in possession.

However, when I hire a domestic mover, the actual transportation from Point A to Point B is a relatively small part of the services for which I am contracting:  What I'm actually paying for is the manual labour of moving the goods out of the old place and into the new, the heavy lifting, stairs, navigating large furniture around narrow corners.  So unless I've expressly agreed to provide payment in full prior to completion of the move, I would argue that the mover is not entitled to insist on full payment until it has relinquished possession (and by extension, any possessory lien it may hold).

This, of course, compounds the obvious policy concerns associated with an unregulated industry which is regularly entrusted with substantially all the earthly possessions of its customers - it creates a rather immense imbalance of bargaining power.

The Consumer Protection Act has a thing or two to say about some of these cases - there have been instances of charges laid under the CPA arising from movers trying to "renegotiate" the terms of the deal using their possession of consumer goods as leverage.  But that's only going to assist in certain cases - the burden of proof for a charge under the CPA is "beyond a reasonable doubt", and if there's some uncertainty about the terms of the contract to begin with, or a flexible pricing formula, then a conviction may be relatively difficult to obtain, not to mention being of limited assistance for the consumer.

What's striking is that, while the language in Welch v. Scott is so archaic as to be largely unrecognizable to non-lawyers, we're still having almost the exact same debate nearly a hundred years later.  By no means is this settled law.  And it makes sense that they would seldom be litigated.  Indeed, in Welch v. Scott the Chief Justice noted how 'scandalous' it is for such low-value cases ($14 in 1920 dollars - about $150 today) to be heard at that level.  Think about it:  Most people, faced with the option of paying an extra $400, or sleeping on the floor until they can replace their furniture, would just pay the extra $400...and it likely wouldn't be worth hiring a lawyer to fight about after the fact.  Those people who can't afford to do so, the Natasha Mitchells of the world, can't afford a lawyer to help them.

So there are compelling policy reasons to avoid finding that movers are entitled to a possessory lien.

The question, of course, becomes more complicated when we start dealing with written contractual terms which may give rise to possessory liens.  It is perfectly conceivable that a written contract could generate an entitlement to demand money at a particular time, and a right to assert a possessory lien failing payment.  For a fixed-price contract, that might actually be an acceptable and justifiable result.

However, for formulaic contracts, based on the actual time it takes to complete the move (such as what TSM claimed this contract was), it strikes me that a term requiring payment in full prior to completion of the move would be incoherent, because the final contract price would not yet be established until the move was complete.  (At which point, again, a possessory lien could not be asserted.)

Which leads me to propose a reasonable compromise solution:  A written contract should only (maybe) grant an entitlement to a lien for a moving company where the contract is for a fixed price - at a bare minimum, it should never be possible to hold a consumer's goods ransom in a case where the consumer did not know the ransom price at the time the contract was entered into.

But the law is so unsettled in this area that my thoughts are entirely speculative.  This appeal was decided on narrow factual grounds, and leaves us with a broader and unanswered question as to the state of the law for moving companies generally, in an area of commercial enterprise where there are countless transactions every day.  Whether from the Courts or the Legislature, we need bright-line rules regarding how moving companies can - and can't - protect their fees.  We need to lay down clear rules so that movers themselves know what lines they can't cross, and so that their customers can easily know their rights as well.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

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