Claim Number 4/18 ONTARIO SUPERIOR COURT OF JUSTICE Chatham-Kent Small Claims Court 425 Grand Avenue West, Chatham, Ontario BETWEEN: John Michael McCruden and Adriana McCruden Plaintiffs and Daniel Nead and MedviewMD Inc. Defendants DECISION INTRODUCTION This matter came before me for trial on November 21, 2018. John Michael McCruden (‘John’) appeared in person and represented himself as well as his wife, Adriana McCruden ("Adriana") who was not present. No one appeared for the defendants, Daniel Nead ("Daniel") and MedviewMD Inc. (‘MedviewMD"), although properly served with the Notice of Trial The Claim alleges breach of contract or unjust enrichment, misrepresentation, breach of g004 faith and negligence and was prepared by a paralegal who no longer represents the plaintiffs. The amount claimed is $25,000.00 but as will be seen below that amount 's claimed by each of the plaintifs individually. The Defence, prepared by a lawyer, merely makes the bald statement that the defendants deny the plaintiffs’ allegations and Put them to the strict proof thereof. The lawyer has since then withdrawn from the litigation In view of the defendants failure to attend for trial, | struck the Defence and proceeded to hear evidence from the plaintiffs in accordance with Rule 17.01(2)(b).The plaintiffs are not required to prove liability against the defendants but must only prove the amount 1of the claim. | treated all of the allegations made in the Claim as being admitted; however, despite the fact that the plaintiffs are not required to prove liability, itis necessary, in my opinion, in this case with multiple causes of action, to ensure that the admitted facts support an award of damages with respect to each cause of action. For example, the rule was not intended to allow the court to give damages where the cause of action is not known to law. FACTUAL BACKGROUND John and Daniel had been friends for approximately 27 years. John and Adriana reside in Calgary, Alberta. Daniel has his official residence in Chatham, Ontario and the registered office for MedviewMD is 8 Tasan Crescent, Chatham, Ontario. Daniel is named as the Administrator of the corporation on the corporate profile report, and was at all times the founder, Chief Executive Officer, Chief Financial Officer, Chief Operating Office and majority shareholder of MedviewMD. MedviewMD is a telemedicine provider. MedviewMD sold equipment to individual pharmacies for $76,000.00 to allow them to set up a telemedicine studio in the pharmacy and provided a nurse practitioner to consult, assess and diagnose patients remotely from the studio. A doctor was available to oversee the nurse practitioners and to consult with if necessary. By 2015 MedviewMD was only operating in Ontario. In November 2015, Daniel proposed to John that he act in a business-development and sales capacity to expand MedviewMD’s operations in western Canada. Daniel advised John that MedviewMD had a billing number which enabled MedviewMD to bill the Ontario Health Insurance Plan (“OHIP") for the consultations performed by the nurse practitioners. In December 2015, based on Daniel's representations, John commenced employment with MedviewMD. On June 13, 2016, Daniel contacted John asking for a loan to MedviewMD in the amount of $67,000.00 as otherwise the company would be short of payroll that month. John and Adriana initially declined to lend the money. Danie! pleaded with John, stating or implying that if the payroll was deficient there would be issues in the operation of MedviewMD which could affect John’s work, Daniel further assured John that the reason for the deficiency in funds was a glitch with the OHIP billable receivables which issue would be rectified within a week. Based on those assurances, John and Adriana advanced $87,000.00 to MedviewMD on June 13, 2016 from their joint home equity line Of credit. No interest rate was agreed upon as the loan was to be for only a week or less. Medview has failed to repay any of the loan despite repeated requests by the plaintiffs to do so. Subsequent to the loan, John and Adriana became aware that OHIP was nolonger honouring billings from MedviewMD as OHIP had realized that billings for consultations with nurse practitioners were not covered by OHIP. Nurse practitioners must be employed by a doctor and perform certain delegated services in his/her office. Without funding from OHIP, MedviewMD’s business model was not viable BREACH OF CONTRACT | find that the loan was a contract between John and Adriana as lenders and MedviewMD as borrower and that the contract has been breached by the failure of MedviewMD to repay the loan. Each of John and Adriana claim the sum of $33,800.00 (one-half the amount of the loan) on the basis that each has a separate cause of action against MedviewMD. In paragraph 79 of the Claim they waive any damages in excess Of the Court's monetary jurisdiction of $25,000.00. “A cause of action has been defined as a factual situation the existence of which entitles one person to obtain from the court a remedy against another person” as per Lord Justice Diplock in Letang v. Cooper, [1964] All E.R. 929 (C.A.) at page 934. This. definition has been accepted by Canadian courts many times. The loan funds came from a joint line of credit for which the plaintiffs would be jointly and severally liable. They have separate causes of action both arising from the same factual situation. Each could have separately brought an action in this court for $25,000.00 for breach of contract without infringing Rule 6.02 which provides that a cause of action shall not be divided into two or more actions for the purpose of bringing itinto the court’s jurisdiction. To commence separate actions, however, would cause a multiplicity of proceedings which is, in the interest of justice, to be avoided In Lock v. Waterloo (Regional Municipality) (c.0.b. Grand River Transit) [2011] O.J. No.4898, Deputy Judge Winny, in an action for damages based on personal injury to the two plaintiffs, found that each of the plaintiffs was entitled to claim damages up to the court’s monetary limit as they had two separate causes of action {mn the case of Kent v. Conquest Vacations, 2005 CanLII 2321, the Divisional Court on appeal from the Small Claims Court decided that each of the plaintiffs was entitled to assert his/her cause of action for damages for breach of contract against the defendant in the same action. | therefore find that each of John McCruden and Adriana McCruden are entitled to judgment against MedviewMD in the amount of $25,000.00 each. MISREPRESENTATION John and Adriana each pleads misrepresentation by MedviewMD and Daniel which misrepresentation induced them to enter into the loan agreement. They submit that the» defendants either knew or ought to have known on June 13, 2016, when Daniel fequested the loan for MedviewMD that OHIP. would no longer be funding the nurse Practitioner consultations. In fact, by a letter dated January 4, 2017 from Daniel to the MedviewMD physicians Daniel stated that in March 2016 MedviewMD and he were aware that OHIP had ceased to fund their nurse practitioners In Hayat v. Raja, [2016] O.J. No. 5718 (ONSC) Justice Stinson reviewed the law of fraudulent misrepresentation as follows: (ihe definitive statement of the test for fraudulent misrepresentation in contract law in Canada was established by Lord Atkinson in United Shoe Machinery Co of Canada v. Brunet, [1909] A.C. 330, at para. 12 (J.C.P.C.). The test can be summarized, in the language of Professor Fridman in The Law of Contract in Canada (Toronto: Thomson Carswell, 2011) at 285, as follows: (1) That the representations complained of were made by the wrongdoer to the victim; (2) That these representations were false in fact: (3) That the wrongdoer, when he made them, either knew that they were false or made them recklessly without knowing whether they were false or true: (4) That the victim was thereby induced to enter into the contract in question.” He then found the defendant Raja had made fraudulent representations in order to obtain a loan from the plaintiff paid to a corporation which he controlled and found Raja Personally liable, together with the corporation for the damages suffered by the plaintiff Daniel made certain representations to John and Adriana to induce them to loan money to MedviewMD, namely that the issue with OHIP would be sorted out in a week's time He knew, in fact, that these statements were false as he was acutely aware that OHIP had stopped paying his nurse practitioners and the reason why. John and Adriana, who had been reluctant to lend this large amount of money, were induced by these false statements to enter into the loan agreement. | therefore find that fraudulent misrepresentation has been established against Daniel in his personal capacity and that he is liable, jointly and severally with MedviewMD, to each of John and Adriana for the sum of $25,000.00 BREACH OF.GOOD FAITH, NEGLIGENCE, UNJUST ENRICHMENT The plaintiffs raised the issues of breach of good faith and negligence in their Claim with respect to both of the defendants. These issues were not pursued in evidence or argument and | dismiss the claims relating to these causes of action. It is unnecessary fo consider the claim for damages for unjust enrichment in view of the fact that | have found that a contract existed between the plaintiffs and the defendants.GENERAL DAMAGES FOR EMOTIONAL INJURIES GENERAL DAMAGES FOR EMOTIONAL INJURIES ‘The plaintiffs each seek damages in the amount of $10,000.00 each for the emotional inluries caused by the default of the payment of the loan, including anxiety, aggravation, initation and upset among other reasonable and usual expected emotional reactions. Although the failure of the defendants to repay the loan, has, no doubt, been stressful to {he Plaintfs, there was little evidence proffered to allow an assessment of damages to be made under this heading in relation to either defendant. PUNITIVE DAMAGES ‘The plaintiffs each seek punitive damages against both Daniel and MedviewMD in the amount of $10,000.00 for the conduct of Daniel on behalf of MedviewMD, in particular the breach of good faith when entering into the contract with John and Adriana, For an award of punitive damages to be made, the defendant must have committed an independent or separable actionable wrong causing damage to the plaintiff. Beaird v Westinghouse Canada Inc. (1999) 43 0.R.(3d) 581 ONCA. A claim for punitive damages is not a cause of action. The actionable wrong here is breach of contract or misrepresentation. I find that if such damages were to be awarded, they would be in excess of this court's monetary Jurisdiction when added to the damages awarded above. Accordingly, the claim for Punitive damages is dismissed ORDERS {jhe pleintif, John Michael McCruden, shall have judgment jointly and severally against the defendants, Daniel Nead and MedviewMD Inc. in the amount of $25,000.00 together with pre-judgment interest at the Courts of Justice Act rate from June 20, 2016 to date of judgment and post-judgment interest at the Courts of Justice Act rate. The plaintif, Adriana McCruden, shall have judgment jointly and severally against the defendants, Daniel Nead and MedviewMD Inc. in the amount of $25,000.00 together with pre-judgment interest at the Courts of Justice Act rate from June 20, 2016 to date of judgment and post-judgment interest at the Courts of Justice Act rate costs As the successful parties, the plaintiffs are entitled to their costs of the action, They have claimed as part of their costs, interest on the line of credit which was the source of the loan, in-the amount of $6,730.43, This is not a cost of conducting the litigation and that claim is disallowed. They were also represented at the commencement of the proceedings by a paralegal and have claimed as costs the sum of $3,379.83 paid to theparalegal. A reasonable representation fee can only be paid when the paralegal represents the party at the trial or assessment hearing. This claim is also denied. am satisfied that, in the circumstances, the plaintiffs are entitled to the following disbursements and compensation: Preparation of Claim $100.00 Issue Claim 95.00 Serve Claim (x2) 120.00 Set action down for trial 145.00 Issue summons (x2) 60.00 Serve summons (x2) 120.00 Courier/registered mail/stationary 247.30 TraveVAccommodation Flights 388.29 Hotel 230.26 Car rental 69.18 Gas 99.00 Meals 67.93 SUBTOTAL $1,738.96 Compensation for inconvenience and expense-Rule 19.05 500.00 Penalty ~ Rule 19.06 1,000.00 TOTAL costs $3,239.96 Mr. MeCruden travelled from his home in Calgary, Alberta to Chatham, Ontario to attend this trial. The defendants’ rudimentary Defence disclosed no defence. The defendants failed to take any action to avoid a trial and, in the end, failed to appear. They acted unreasonably and the plaintiffs are entitled to additional compensation pursuant to Rule 19.06. The plaintiff, John Michael McCruden, shall have his costs of this action against the defendants in the amount of $1,619.98 together with post-judgment interest at the Courts of Justice Act rate. ‘The plaintiff, Adriana McCruden, shall have her costs of this action against the defendants in the amount of $1,619.98 together with post-judgment interest at the Courts of Justice Act rate November 29, 2018 Deputy Judge Gienn C. Walker