Executive Summary: Key Legal and Evidentiary Issues

• Timeliness of service of motion materials and compliance with procedural rules under the Rules of the Small Claims Court.

• Authority of the Deputy Judge to impose a payment into court as a condition of granting an adjournment.

• Allegations of improper seizure and sale of the vehicle by Sava Motor Works Inc.

• Discretion of the Divisional Court to grant or refuse judicial review relief, even where procedural irregularities are found.

• Impact of party conduct, including delay and failure to comply with court orders, on the exercise of judicial discretion.

• Determination of costs and entitlement to partial indemnity in favor of the successful party.

Facts of the case

Sava Motor Works Inc. (“Sava”), operating as Select Fix Auto, is an automotive repair company. The owner, Ferhat Yilmaz, borrowed funds from the National Bank of Canada (“NBC”) to purchase an automobile. After defaulting on the loan in March 2024, Sava requested a lien release from a collection company acting for NBC, which had initiated repossession proceedings. Subsequently, Sava sold the vehicle to Humberview Chevrolet Buick GMC for $27,000 plus HST.

NBC responded by commencing proceedings in Brampton Small Claims Court, seeking, among other remedies, repayment of the vehicle’s value from Sava. NBC’s motion, scheduled for May 8, 2025, was served on Sava 22 minutes after the deadline stipulated by Rule 15.01(3) of the Rules of the Small Claims Court, which requires service at least seven days before the hearing.

Procedural history and adjournment issues

At the May 8, 2025 hearing, Sava requested an adjournment, arguing that late service of the motion materials left insufficient time to prepare a response. The Deputy Judge granted the adjournment but imposed conditions: Sava was ordered to produce specific documents related to the vehicle’s storage and repairs within 30 days and to pay the sale proceeds of $30,510 into court as a condition of the adjournment.

Sava initiated an application for judicial review, challenging the Deputy Judge’s authority to require payment into court and alleging a breach of natural justice and procedural fairness due to the late service of motion materials. Sava argued that the order was punitive and beyond the court’s jurisdiction.

Subsequent proceedings and judicial review application

NBC’s motion was adjourned to September 9, 2025, but was further postponed to November 22, 2025. The court noted that Sava had not complied with the previous order, had not filed responding materials, and was using the judicial review application as a means to delay the proceedings. The Deputy Judge emphasized that a 22-minute delay in service did not justify ignoring the court’s order and that Sava’s actions appeared to be aimed at delaying resolution rather than addressing the substantive issues.

Discussion of policy terms and legal principles

The case involved the application of the Repair and Storage Liens Act (RSLA), specifically regarding entitlement to a possessory or non-possessory lien on the vehicle. NBC claimed a perfected Purchase Money Security Interest and sought to discharge any RSLA liens held by Sava. The court also referenced the discretionary nature of judicial review, citing Supreme Court of Canada authority that relief may be refused based on party conduct, delay, or the existence of alternative remedies, even where procedural errors are established.

Ruling and outcome

The Divisional Court declined to grant any relief to Sava, finding that its conduct—particularly the unnecessary judicial review application and failure to comply with court orders—had delayed the resolution of NBC’s claim. The court held that even if Sava’s arguments had merit, the discretionary nature of judicial review and Sava’s actions justified refusing relief. Sava was ordered to pay NBC’s partial indemnity costs of $6,473.55, inclusive of disbursements and HST, within 30 days. The successful party in this matter was the National Bank of Canada, and the specific monetary award determined was for costs, as the underlying dispute regarding the sale proceeds remained pending further hearing.