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COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Mullins
v. Levy,
2009
BCCA 6
Date: 20090113
Docket: CA033348
Between:
Stephen Norman Mullins
Appellant/
Respondent by Cross-Appeal
(Plaintiff)
And
Dr. John Mark Levy, Dr. Joelle Materi, Dr. Rua Roxanne
Mercier,
Dr. Soma Ganesan, Vancouver Hospital & Health Sciences Centre,
Western Pacific Security Group Ltd., Geoff Brown, Donna Wright,
Robert Coleman, Raymond Weipprecht, Cyrus Farivar
Respondents/
Appellants by Cross-Appeal
(Defendants)
And
British Columbia
Schizophrenia
Society
Intervenor
And
The Attorney General of British Columbia
Pursuant to Notice of
Constitutional Question
Before:
The
Honourable Madam Justice Kirkpatrick
The
Honourable Mr. Justice Chiasson
The
Honourable Mr. Justice Bauman
N.D.
Mullins, Q.C.
Counsel for the Appellant, Stephen Norman Mullins,
Respondent on Cross-Appeal
D.W.
Pilley
Counsel for the Respondents,
Dr. John Mark Levy, Dr. Joelle Materi, Dr. Rua
Roxanne Mercier, and
Dr. Soma Ganesan
J.G.
Dives
Counsel for the Respondents
Vancouver Hospital and Health Sciences Centre, Western
Pacific Security Group Ltd., Geoff Brown, Donna Wright, Robert Coleman,
Raymond Weipprecht and
Cyrus Farivar
L.
Mrozinski
Counsel for Attorney General of British Columbia pursuant
to Notice of Constitutional Question
Place
and Date of Hearing:
Vancouver, British Columbia
8, 9 and 10 October 2008
Place
and Date of Judgment:
Vancouver, British Columbia
13 January 2009
Written
Reasons by
:
The
Honourable Madam Justice Kirkpatrick
Concurred
in by:
The
Honourable Mr. Justice Chiasson
The
Honourable Mr. Justice Bauman
Reasons
for Judgment of the Honourable Madam Justice Kirkpatrick:
I.
INTRODUCTION
[1]
Stephen Norman Mullins appeals the order of the Supreme Court entered
on 22 December 2006. Mr. Mullins foremost objective in bringing this
appeal is to clear his name from the stigma of mental illness. A related objective
is to establish that those who are, or who are perceived to be, mentally disordered
have the same rights as all other Canadians under the
Canadian Charter
of Rights and Freedoms
, Part I of the
Constitution Act, 1982
,
being Schedule B of the
Canada Act
1982
(U.K.),
1982, c. 11.
[2]
The trial consumed 34 days over three years. The action arose from
events that occurred following Mr. Mullins attendance at the emergency
department of the Vancouver Hospital and Health Sciences Centre (VGH or
the hospital) in the early morning of 9 May 1998.
[3]
The trial judges reasons, indexed as 2005 BCSC 1217, 258 D.L.R. (4th),
460 and 33 C.C.L.T. (3d) 42, review in detail the circumstances of the case.
For the purposes of this appeal, it is necessary to recount only the more
salient features.
II. BACKGROUND
A. Facts
[4]
In April 1998, Mr. Mullins was experiencing stress in his business
and family relationships. In particular, his step-grandmother died at the
end of April, and his uncle suffered a stroke. He had a close relationship
with both of these relatives. Mr. Mullins took over running his uncles
business which was housed in an area of Surrey that Mr. Mullins described
as crime-ridden. He came to believe that Hells Angels were using the business
or trying to acquire it. In addition, Mr. Mullins learned that, unbeknownst
to his family, his elderly uncle had married a much younger immigrant woman
from China, who, along with some undesirable associates, wanted Mr. Mullins
removed from the business.
[5]
Mr. Mullins volunteered for many years with the North Shore Rescue
team. He believes that the recovery of deceased and seriously injured people
left him susceptible to critical incident stress, a recognized condition
that is experienced by, among others, police officers who are confronted by
traumatic and violent events.
[6]
On 1 May 1998, Mr. Mullins experienced a panic attack. He was
at his parents home in West Vancouver and experienced difficulty breathing,
rapid heartbeat, and uncontrollable movement of his limbs. He telephoned 911
and asked for the fire department, believing that they would attend more quickly
than an ambulance. The fire crew arrived, followed by an ambulance. Mr. Mullins
asked to be taken to VGH. When the ambulance crew refused, Mr. Mullins
called the police. When the police arrived, they handcuffed Mr. Mullins
and placed him in the police car. Mr. Mullins kicked at the car windows
and door. He was ultimately taken to the police station where an ambulance
was waiting to take him to VGH. At VGH he was diagnosed as having suffered
from a panic attack.
[7]
Mr. Mullins testified that he sought treatment for stress from
a psychologist who recommended that he reduce his stress and get more sleep.
Mr. Mullins suspended his activities with his uncles business and most
of his own business activities.
[8]
Dr. Burak, a family doctor and friend of Mr. Mullins father,
testified that he treated Mr. Mullins on 7 May 1998 for the first time.
Mr. Mullins indicated that he needed help and agreed to see a psychiatrist.
Dr. Burak provided a referral to a psychiatrist on an urgent basis.
[9]
On 9 May 1998, before Mr. Mullins was able to see the psychiatrist,
he woke up sweating with a racing heart and breathing difficulties. He called
the police to take him to VGH.
[10]
Mr. Mullins arrived at VGH in the early morning of 9 May 1998.
The entire hospital is designated as a psychiatric assessment unit pursuant
to a ministerial order under s. 3(2) of the
Mental Health Act
.
The psychiatric department is also referred to as the Psychiatric Assessment
Unit (PAU). Dr. McKnight, an emergency physician, met briefly with
Mr. Mullins several times during the night before his shift ended at
7:00 a.m. He assessed Mr. Mullins as suffering from mania but did not
consider him sufficiently ill so as to require certification.
[11]
It appears that while Mr. Mullins agreed with Dr. McKnight
that he should see a psychiatrist, he was required to wait until the morning
when the Psychiatric Assessment Unit (the PAU) had a psychiatrist available
to see him. He waited in the emergency ward and wrote several pages of notes.
The notes, which have been lost, set out, among other things, his direction
not to be medicated. Mr. Mullins testified that the notes indicated his
clear instruction that if he did not like the medical care he did not have
to accept it and was entitled to leave the hospital.
[12]
Toward the end of Dr. McKnights shift, he gave permission to
Mr. Mullins to leave the hospital to participate in a charity run held
at the University of British Columbia campus.
[13]
The respondent Dr. Mercier, an emergency room physician, took
over from Dr. McKnight when his shift ended. She was introduced to Mr. Mullins
and observed his interaction with Dr. McKnight. From those observations,
Dr. Mercier formed the opinion that Mr. Mullins was suffering from
hypermania or hypomania (a lesser form of mania). She did not disagree with
Dr. McKnight when Mr. Mullins asked for permission to go on the
run that his condition was not sufficiently serious to warrant committal.
She disagreed, however, that he should be given permission to leave but said
nothing.
[14]
While Mr. Mullins was absent from the hospital, Dr. Mercier
reviewed his chart, Dr. McKnights notes and Mr. Mullins handwritten
notes. Dr. Mercier described Mr. Mullins notes as difficult to
follow a flight of ideas, jumping from one topic to another without a logical
connecting theme. Having met Mr. Mullins, and having read his chart
and the notes, Dr. Mercier formed the opinion that he had a manic depressive
disorder. She was very concerned that when he was away from the hospital,
Mr. Mullins might cause harm to himself.
[15]
When Mr. Mullins returned to the hospital around noon, a triage
nurse informed Dr. Mercier of his return. Dr. Mercier escorted Mr. Mullins
to an interview room in the PAU which is located immediately adjacent to the
emergency department.
[16]
The respondent psychiatric resident, Dr. Materi, was not yet qualified
as a physician or psychiatrist and was accordingly unable to sign a medical
certificate under the
Mental Health Act,
R.S.B.C. 1996, c. 288
(the
Act
). Dr. Materi had read Mr. Mullins handwritten
notes. She interviewed Mr. Mullins for about 30 minutes and concluded
that he was suffering from a manic episode, possibly bipolar disorder mania.
She concluded that his behaviour was escalating throughout the interview.
Dr. Materi testified that Mr. Mullins demeanour fluctuated throughout
the interview from friendly to irritable, anxious and at times agitated to
predominantly irritable and agitated. He exhibited pressured speech, a symptom
consistent with a manic episode. While she had read his notes which indicated
he would refuse medication, Dr. Materi was of the opinion that he required
medication. Dr. Materi testified that she believed that Mr. Mullins
had no insight into his condition.
[17]
There is no dispute that, if left untreated, a manic episode can lead
to severe long term problems in persons suffering from bipolar disorder. For
instance, the respondent Dr. Levy, a psychiatrist, testified:
I
think the standards in our community, or certainly in our medical practice,
are to take a first episode of psychosis very seriously, because if left untreated
can lead to long-term problems, effects, that if treated early we can get
a person back to their normal level of functioning.
Dr. McKnight, in cross-examination, stated:
the literature is fairly solid from a scientific perspective that patients
who receive treatment early for major psychiatric illness tend to do better
in terms of their quality of life.
Similarly,
the respondent Dr. Ganesan, a psychiatrist, testified in cross-examination
that:
the earlier the intervention the better it is in term[s] of rehabilitation,
faster response to treatment, and the least the least damaging to the patient
and to others.
[18]
Dr. Materi concluded that Mr. Mullins met the criteria for
involuntary admission under the
Act
. She closed the interview
with Mr. Mullins and left to discuss her treatment plan with her supervisor,
the respondent Dr. Ganesan. Before seeing Dr. Ganesan, Dr. Materi
spoke with the officer or team leader on duty to deal with emergency department
security, the respondent Mr. Brown, and advised him that Mr. Mullins
either had been certified or was in the process of being certified and he
was not to leave the hospital. At about the same time, Dr. Materi spoke
with Dr. Mercier and advised her that Mr. Mullins was escalating
and asked if Dr. Mercier would sign a certificate. Dr. Mercier,
without further interviewing Mr. Mullins, signed a medical certificate
as a prelude to involuntary admission or certification under the
Act
.
Dr. Materi then went to speak with Dr. Ganesan.
[19]
Mr. Brown assembled a security team to carry out Dr. Materis
direction. Mr. Brown did not ask to see any medical certificates. The
evidence before the trial judge was that security staff are not permitted
to look at patient records because of confidentiality issues.
[20]
In the meantime, Mr. Mullins was resting in the interview room.
He was tired from having been awake most of the night and having participated
in a 10 km run. Mr. Mullins heard the chatter on the security staff radio
and left the interview room to investigate. The security staff ordered him
to stay in the room. Mr. Mullins testified that he tried to call the
police from the interview room but was unable to do so. He then attempted
to leave the room by force. The security staff tackled and restrained him,
and took him to a quiet room until he could be assessed by Dr. Ganesan.
By this time, Dr. Merciers certificate had been completed.
[21]
Mr. Mullins described having his clothes cut from his body and
being injected with medication that rendered him helpless. It is unclear as
to the precise time at which the first medication was administered.
[22]
At about the same time, Dr. Materi spoke with Dr. Ganesan.
Dr. Ganesan was about to conduct his own assessment of Mr. Mullins
when he heard the noise associated with Mr. Mullins attempt to leave
the interview room and the ensuing restraint by the security staff. When he
arrived at the quiet room, he found Mr. Mullins unwilling or incapable
of responding to his questions. Mr. Mullins was repeatedly demanding
that he be permitted to call a lawyer. Based on what he had been told by Dr. Materi
and from his visual observations of Mr. Mullins, Dr. Ganesan concluded
that Mr. Mullins needed to be involuntarily detained under the
Act
.
He completed a medical certificate and ordered medication to be administered
to Mr. Mullins to calm him.
[23]
The respondent Cyrus Farivar was the psychiatric nurse on duty. Immediately
after the two medical certificates were completed, Nurse Farivar signed a
form for Consent to Treatment pursuant to s. 31 of the
Act
which allows for medications to be administered involuntarily.
[24]
Within approximately four hours of his committal, Mr. Mullins
father, who is a lawyer and who represented his son at trial and on appeal,
met with his son in the hospital.
[25]
Dr. Levy assumed treatment of Mr. Mullins on the following
day, 10 May 1998. Dr. Levy confirmed that Mr. Mullins required treatment
for mania and that his continued hospitalization was necessary for his own
protection. When Dr. Levy denied Mr. Mullins demands to be released
from the PAU, the writ of summons was served on Dr. Levy. As he considered
himself to be in conflict, Dr. Levy arranged for another psychiatrist,
Dr. Duke, to assess Mr. Mullins. Dr. Duke examined him on 14
May 1998 and agreed to his discharge on the condition that he continue the
medication he had been receiving and remain under medical supervision.
[26]
Mr. Mullins was detained for five days and medicated throughout
that period against his express wish.
[27]
In his statement of claim, Mr. Mullins alleged an array of wrongful
acts and omissions by the defendants for which he claims damages. He also
seeks a declaration that his rights guaranteed by the
Charter
were infringed and damages in respect of the infringement, as well as a declaration
that his detention was contrary to the
Mental Health Act
and
the regulations. The trial commenced in April 2002, but was adjourned to allow
Mr. Mullins to issue a notice of constitutional question to challenge
the validity of the
Mental Health Act
. As the trial judge noted
at para. 18, the constitutional challenge was taken in reaction to the defendants
reliance on the immunity provisions contained in s. 16 of the
Act
.
This section provides a defence against liability where parties are found
to have acted in good faith and without an improper purpose.
B. A Note Regarding the Relevant Legislation
[28]
The crux of the issues in this case revolves around the interpretation
and application of the
Mental Health Act
, R.S.B.C. 1996, c.
288 (the
Act
). A section of particular relevance is s. 22,
which outlines the requirements of involuntary admissions.
[29]
It is important to note that since the incident on 9 May 1998, but
evidently not because of it, the
Act
was amended (see the
Mental
Health Amendment Act
, S.B.C. 1998, c. 35). Notably, the amendments
revised s. 22. The amendments came into force by regulation (several
amendments, including those to s. 22, came into force by B.C. Reg. 233/99).
The result is that the current
Mental Health Act
now requires
only one medical certificate to be signed in order for a person to be involuntarily
admitted. The amendments also changed key definitions in the current
Mental
Health
Act
. Thus, the precedential impacts of the trial
judgment and of this appeal are appreciably attenuated.
[30]
For the sake of clarity, when I refer to the
Act
in
these reasons, I am referring to the
Mental Health Act
, R.S.B.C.
1996, c. 288 as it read at the time of the incident (i.e. prior to the 1998
amendments), not as it currently reads, unless I expressly indicate otherwise.
C. The Trial Judgment
[31]
The trial judge described Mr. Mullins background and the circumstances
leading up to his hospital detention, including the perceived stressors in
Mr. Mullins life. For our purposes, it is sufficient to note that the
trial judge was sceptical of Mr. Mullins explanations for his behaviour.
The trial judge held, at para. 45:
The
detailed evidence of the plaintiff concerning the events surrounding his uncles
business is quite bizarre. The factual events are uncontradicted, however
the inferences the plaintiff appears to have drawn from most of the facts
are not ones I am prepared to accept without more convincing evidence.
[32]
The trial judge correctly observed that the underlying issue in the
action was whether Mr. Mullins was admitted to the PAU in conformity
with the requirements of the
Act
. The trial judge agreed with
the plaintiffs submission that the
Act
is a badly drafted piece
of legislation.
[33]
Section 22 of the
Act
, the provision governing involuntary
admissions, read as follows:
22
(1) On receiving 2 medical certificates completed by 2 physicians in accordance
with subsection (2), the director of a Provincial mental health facility may
admit a person to the facility and detain the person in it.
(2)
Each medical certificate must be completed and signed by a physician who is
not disqualified under subsection (3) and who has examined the person whose
admission is requested not more than 14 days before the date of admission
and must set out
(a) a statement
by the physician that he or she has examined the person whose admission is
requested on the date or dates set out and is of the opinion that the person
is a mentally disordered person,
(b) in summary
form the reasons for the opinion, and
(c) in addition
to the statement required under paragraph (a), a separate statement by the
physician that he or she is of the opinion that the person whose admission
is requested
(i) requires
medical treatment in a Provincial mental health facility, and
(ii) requires
care, supervision and control in a Provincial mental health facility for the
persons own protection or for the protection of others.
(3)
A physician is disqualified from giving a valid medical certificate under
this section if the physician is
(a) the
person whose admission is requested,
(b) engaged
in the practice of medicine in partnership with the physician who completes
the other certificate, or
(c) a person
employed as an assistant by a physician who completes either of the medical
certificates in respect of the person whose admission is requested.
(4)
A medical certificate given under this section becomes invalid on the 15th
clear day after the date on which the physician examined the person who is
the subject of the certificate.
(5)
The 2 certificates completed as required under this section are sufficient
authority for a person to apprehend and transport the person named in the
statement made under subsection (2) (a) to a Provincial mental health facility.
Relevant
terms are defined in s. 1 of the
Act
. Director is defined
as:
a person who is appointed in charge of a Provincial mental health facility
and includes a person authorized by a director to exercise a power or carry
out a duty conferred or imposed on the director under this Act.
Mentally disordered
person includes a mentally ill person. The definition of mentally ill person
is as follows:
a person who is suffering from a disorder of the mind
(a) that
seriously impairs the persons ability to react appropriately to his or her
environment or to associate with others, and
(b) that
requires medical treatment or makes care, supervision and control of the person
necessary for the persons protection or for the protection of others
[34]
The question of who was the director of the PAU at the time of Mr. Mullins
admission was not uncontroversial. The evidence at trial was varied and the
trial judge noted that the legislation was unclear. Ultimately, the trial
judge accepted that Dr. Levy and Dr. Watson, head of the Psychiatric
Department in 1998, were both directors within the meaning of the
Act
.
He concluded that, at the time in question, Drs. Materi and Ganesan were
designates of Dr. Levy for purposes of admission under the
Act
.
[35]
Central to the trial judges finding of liability against the defendants,
with the exception of Dr. Levy and Nurse Farivar, was the issue as to
whether two medical certificates had been completed at the time Mr. Mullins
was admitted and detained in the PAU. Section 22(2)(a) of the
Act
requires that each medical certificate contain a statement by the physician
that he or she examined the person to be admitted. While examine or examination
is not defined in the
Act
, the trial judge found it necessitated
a patient interview and personal examination of the patient by the physician.
He stated at para. 83:
The
opinions required of psychiatrists certifying a patient to be properly informed
will require review and consideration of available medical history, information
on patient interview and personal examination.
It
is likely that the trial judges interpretation was influenced by Dr. Ganesans
evidence that he wished to interview the plaintiff as he certainly appreciated
the value of an in person interview and observed behaviour which he considered
was 50% of the examination process (para. 93).
[36]
The trial judge found that Dr. Mercier did not conduct an examination
of Mr. Mullins prior to signing the medical certificate. He noted at
para. 86 that Dr. Merciers exposure to Mr. Mullins was very brief
and any consideration of an involuntary committal would have required an examination
and review process she did not consider taking. The trial judge observed
at para. 88 that there was no notation by Dr. Mercier in the hospital
chart and no record of any relevant difference from Dr. McKnights conclusion
that Mr. Mullins did not meet the criteria for involuntary certification
at 7 a.m. on 9 May 1998.
[37]
Based on his interpretation of examination, the trial judge was also
concerned by the conduct of Dr. Materi. The trial judge stated at para.
92:
It
is also difficult to understand how in the circumstances Dr. Materi could
have possibly believed Dr. Mercier was a physician who could provide
a certificate in respect of the plaintiff without conducting an examination.
Dr. Materi had reviewed the plaintiffs chart and it contained no indication
Dr. Mercier had examined the plaintiff, or indeed made any observations
of him. She was aware Dr. Mercier was not going to examine the plaintiff
before signing a Certificate however Dr. Ganesan would be led to believe
it was the opinion of another physician who had examined the plaintiff.
[38]
The trial judge also attributed fault to Dr. Materi for her role
in initiating the involvement of the security staff, leading to Mr. Mullins
detention.
[39]
With respect to Dr. Ganesan, the trial judge concluded that he
attempted to interview Mr. Mullins. He noted the absurdity that could
result if an examination under s. 22 of the
Act
could be
thwarted by a patient who refused to be interviewed. In the circumstances,
the trial judge found that Dr. Ganesan conducted an examination within
the meaning of s. 22. However, the trial judge found Dr. Ganesan
negligent in not taking appropriate action when he became aware of Mr. Mullins
seizure and detention.
[40]
In addition, the trial judge found Dr. Ganesan had a reasonable
basis to consider Mr. Mullins was a mentally ill person within the
meaning of the
Act
:
[106]
Dr. Ganesan was of the opinion persons with mania or hypomania can be
unpredictable and behave in a manner destructive or harmful to themselves.
Dr. Ganesans view is that persons with bipolar disorder are most dangerous
to themselves during a manic phase. Dr. Ganesans personal observations
of the plaintiff caused him concern the plaintiff might injure himself but
he of course was witness to the violent nature of apprehension and confinement
taking place. Dr. Materis findings were of hypomania with escalation
occurring.
[107]
In my view because of the detailed report and findings of Dr. Materi
coupled with the visual observation and attempt to communicate with the plaintiff
he had a reasonable basis to consider the plaintiff met the criteria of a
mentally ill person requiring care, supervision and control of the person
necessary for the persons protection, at the time and at least until a more
comprehensive review and assessment was possible.
[41]
The trial judge reviewed the medical evidence concerning Dr. Materis
preliminary diagnosis that Mr. Mullins was experiencing mania. The difficulties
associated with the manic phase were recognized by the trial judge at para.
121:
...
The evidence is that an episode of mania can come on quickly. The evidence
is that Dr. Mercier considered the plaintiff was suffering hypomania
from her brief encounter with him and Dr. McKnight certainly observed
indications of hypomania and his finding against Certification was only his
belief that the plaintiffs status was not serious enough on his observation
to warrant involuntary confinement, not that escalation might not occur worsening
or endangering the plaintiff.
[42]
Notwithstanding his conclusions that Dr. Materis diagnosis was
reasonable and Dr. Ganesan had examined Mr. Mullins in accordance
with the
Act
and found him in need of care, the trial judge
found Drs. Mercier, Materi and Ganesan liable for the false imprisonment
of Mr. Mullins. The foundation for liability appears to be that, in respect
of Dr. Materi, she ought to have arranged more quickly for Dr. Ganesan
to conduct his interview and should not have initiated the actions of the
security staff. In respect of Dr. Mercier, the trial judge found that
she did not conduct an examination of Mr. Mullins, and thus the medical
certificate signed by her was invalid. As to Dr. Ganesan, the trial judge
found that he should have considered interim measures before signing his medical
certificate to allow him to investigate the circumstances of Dr. Merciers
certificate and Mr. Mullins initial detention.
[43]
The trial judge dismissed the claim against Dr. Levy whom he found
had acted in good faith and with reasonable care in taking charge of Mr. Mullins
on the authority of properly completed medical certificates, thereby exempting
him from liability for damages under s. 16(f) of the
Act
which provides that:
16.
A person is not liable in damages as the result of doing any of the following
in good faith and with reasonable care:
(f) transporting
or taking charge of a person on the authority of properly completed
(i)
applications and medical certificates, or
(ii)
medical certifications
[44]
Dr. Levy conducted interviews and assessments of Mr. Mullins
on 10 and 11 May 1998, from which he concluded that treatment for mania and
continued hospitalization were required. The trial judge found that, unlike
Dr. Ganesan, the defendant Dr. Levy was entitled to assume the certificates
signed pursuant to Section 22 of the
Act
by Drs. Mercier and Ganesan
were valid and he was entitled to rely upon them without undertaking a review
(para. 151).
[45]
The trial judge dismissed the action against Nurse Farivar essentially
on the basis that Nurse Farivar was authorized by the director of the PAU,
Dr. Levy, to sign the form provided for by s. 7(5) of the
Mental
Health Regulation
that authorizes treatment for persons detained under
s. 22 of the
Act
(B.C. Reg. 155/97). The form contained
Nurse Farivars statement that [t]he nature of the condition, the reasons
for and the likely consequence(s) of the treatment have been explained to
me by Dr. Materi (para. 145).
[46]
The trial judge found the security staff and an orderly, Raymond Weipprecht,
(whom I will refer to collectively as the security staff) liable and the
hospital vicariously liable for Mr. Mullins detention on the basis that
the security staff had no reason to believe that Mr. Mullins was dangerous
or violent. He rejected the arguments that their actions were necessary to
fulfill the hospitals obligations at common law, and that the security staff
were merely following orders and ought not to be held liable:
[163]
The evidence is that the security personnel act on the direction of doctors
in restraining and detaining patients. They do not appear to question, seek
verification, or exercise independent analysis in respect of implementation
of involuntary admissions and detentions under the
Act
. That
is what the defendant hospital wishes them to do and they must therefore stand
fully responsible as employer for their conduct.
[186]
I do not accept the defendants argument they were simply
meeting VGHs
common law obligation to maintain a reasonable level of supervision and security
for patients and visitors and to contain any dangerous or violent situations
on the premises. There was no dangerous or violent situation prior to the
defendant Dr. Materi ordering their intervention.
[187]
The actions taken by the security guards may be explained, but not legally
justified, by the orders under which they were operating. The force used may
only have been commensurate with that needed to safely restrain and detain
the plaintiff in the circumstances. They however had no right to restrain
and detain him. They chose to act entirely on the view of the instructing
doctor and where that doctor has no foundation for the detention that cannot
excuse the action of these defendants... .
[47]
The trial judge assessed general damages (including aggravated damages)
globally in respect of all the responsible defendants in the sum of $15,000.
He dismissed Mr. Mullins claims for punitive damages as not pleaded
and unsupported by the evidence. He also dismissed the claim for loss of income
earning capacity related to his lapsed pilot license that Mr. Mullins
claimed was attributable to the misdiagnosis of mania, as damages in respect
of this were not proven. He also refused to grant Court Order Interest in
respect of Mr. Mullins award of general damages.
[48]
Finally, the trail judge dismissed Mr. Mullins constitutional
challenge on the basis that he lacked standing to challenge the
Act
as an unjustifiable violation of ss. 7,8,9,11 and 12 of the
Charter
and to challenge the
Health Care (Consent) and Care Facility (Admission)
Act
, R.S.B.C. 1996, c. 181, as infringing s. 15 of the
Charter
.
The trial judge refused to grant an order for the destruction of hospital
records as a
Charter
remedy.
III. ISSUES ON APPEAL
A. Grounds of Appeal
[49]
Mr. Mullins asserts 14 grounds of appeal. For clarity of analysis,
these issues can be reduced to five categories. First and foremost, Mr. Mullins
challenges the trial judges finding that he was a mentally disordered person
under the
Act
. Second, he seeks to overturn the trial judges
dismissal of the action in relation to Dr. Levy and third, in relation
to Nurse Farivar. Fourth, he asserts the trial judge erred in several respects
in his analysis of the
Charter
issues raised at trial. More
specifically, he asks this Court to find that, contrary to the trial judges
findings, his
Charter
rights were infringed and he is entitled
to damages for such infringement as well as an order for the destruction of
his hospital records. Mr. Mullins also challenges the trial judges decision
that he lacked standing to question the constitutional validity and in finding
the
Act
valid. Finally, Mr. Mullins claims that the damages
awarded were inordinately low and should have attracted Court Order Interest.
B. The Cross-Appeal of the Doctors
[50]
The respondent doctors, Mercier, Materi and Ganesan, cross-appeal on
the grounds that the trial judge erred in holding that Dr. Mercier did
not conduct an examination, that Dr. Ganesan breached the appropriate
standard of care, and in finding Dr. Materi liable.
C. The Cross-Appeal of the Hospital and Staff
[51]
The respondent hospital and security staff cross-appeal on the basis
that the claim against them should have been dismissed as their actions were
protected by s. 16 of the
Act
, or in the alternative, were
justified at common law. Further, and in the alternative, they argued the
trial judge failed to allocate damages amongst the different defendants for
their conduct.
[52]
The issues raised by the parties on appeal and cross-appeal are obviously
related and interconnected. This presents an analytical challenge; if certain
legal findings of the trial judge are determined to be incorrect by this Court,
a cascade of legal results will follow. For the sake of clarity I will deal
with the issues, not in the order in which they are raised by the parties,
but in an order that logically reflects the interrelationship between the
issues at stake and their outcomes. For that reason, my analysis will have
the following structure: first I will deal with the constitutional questions;
second, I will deal with the issue raised by Mr. Mullins regarding the
trial judges finding that he was a mentally disordered person under the
Act
; then I will deal with the issues raised in the cross-appeal
of the respondent doctors; following that I will deal with the issues raised
in the cross-appeal of the respondent security staff and hospital; and finally
I will deal with the remaining issues raised by Mr. Mullins on appeal.
IV. DISCUSSION
A. The Constitutional Issues
[53]
As the trial judge found, Mr. Mullins initially brought his constitutional
challenge with the aim of defeating the immunity provisions of s. 16
of the
Act
. Mr. Mullins
Charter
challenges
broadened over the course of the trial to include challenges to ss. 22
and 31 (the involuntary admission and treatment provisions), to various words
and phrases in the
Act
, and a challenge to s. 2 of the
Health Care (Consent) and Care Facility (Admission) Act
as being
contrary to s. 15(1) of the
Charter
.
[54]
The trial judge framed the essential question posed by Mr. Mullins
as, the
Act
must be invalid if it could authorize the involuntary
committal and treatment of persons, as he viewed himself, not suffering a
serious mental disorder (para. 190).
[55]
The trial judge correctly pointed out that while the object of Mr. Mullins
challenge was to obtain a larger damage award, this was not available in the
circumstances. He identified the flaw in Mr. Mullins argument at paras. 191-192:
In
this fashion has a private dispute between the plaintiff and the defendants
evolved to include a public law dispute as to the validity of British Columbias
mental health legislative scheme. The plaintiffs challenge is however misguided,
as if defendants acted in accordance with the
Act
, in good faith and
for no improper purpose they would not be held liable in damages even if the
Act
were subsequently held invalid. [
Schachter v. Canada
, [1992]
2 S.C.R. 679 at 719-20;
Mackin v. New Brunswick (Minister of Finance)
,
[2002] 1 S.C.R. 405 at ¶78-81;
Guimond v. Quebec (Attorney General)
,
[1996] 3 S.C.R. 347 at ¶18-19;
Quebec (Human Rights Commission) v. City
of Montreal
, [2004] 1 S.C.R. 789]
The
constitutional challenge need not therefore be considered when the purpose
for it being raised is to obtain damages, as at best it would result in a
bare declaration of invalidity.
[56]
The trial judge further determined that Mr. Mullins lacked standing
to litigate a constitutional challenge to the
Act
because, as
a person who denies he suffered from a mental illness or disorder for the
purposes of the
Act
, he cannot litigate the
Charter
rights of others who do suffer from mental disorders (paras. 201, 203-205).
[57]
The trial judge then considered whether Mr. Mullins satisfied
the test for public interest standing. He found that Mr. Mullins did
not meet the third criterion delineated in
Canadian Council of Churches
v. Canada (Minister of Employment and Immigration)
, [1992] 1 S.C.R.
236, that there was no other reasonable and effective way to bring the issues
before the court (at 253). The trial judge found that anyone who actually
does suffer from a mental disorder or mental illness pursuant to the
Act
was clearly in a position to bring the challenge (para. 208).
1. Standing
[58]
Since the enactment of the
Charter
, the standing of an
individual to challenge the constitutionality of laws is grounded in s. 52(1)
of the
Constitution Act, 1982
, which provides:
The
Constitution of Canada is the supreme law of Canada, and any law that is inconsistent
with the provisions of the Constitution is, to the extent of the inconsistency,
of no force and effect.
[59]
Prior to 1982, the Supreme Court of Canada had expanded citizens ability
to challenge the constitutionality of laws by holding that courts have discretion
to grant standing when a litigant is not directly affected by an impugned
law. After 1982, those directly affected by an impugned law have standing
as of right under s. 52(1), and standing may also be granted on a discretionary
basis, under the heading of public interest standing (Kent Roach,
Constitutional
Remedies in Canada
, (2006) Canada Law Group (looseleaf) at p. 5-2).
[60]
In Mr. Mullins case, I agree with the conclusion of the trial
judge that Mr. Mullins failed to establish that he has direct interest
standing or public interest standing. I come to this conclusion as a result
of the manner in which Mr. Mullins has pleaded his case, and how he has
approached the issues surrounding mental health.
[61]
The essential logical difficulty in Mr. Mullins argument is that
his case was premised on the claim that, if the
Act
had been
properly applied, he would never have been detained and treated. In other
words, Mr. Mullins claim was that he was unlawfully assaulted and imprisoned
and the actions against him were committed outside the legislation. As my
reasons below illustrate, I accept that Mr. Mullins was suffering from
mental illness within the meaning of the
Act
, but conclude that
the respondents conduct was also in compliance with the
Act
.
Thus, I have found that the respondents conducted themselves within the scope
of the legislation.
[62]
Thus, what remains to be considered is Mr. Mullins alternative
argument that the provisions of the
Act
are constitutionally
invalid. However, as the trial judge observed at para. 204, there was no
alternative pleading that if he is found to have been a mentally disordered
person for the purposes of the
Act
, it is nonetheless invalid
on constitutional grounds. The only alternative pleading the Court has been
presented with, which the trial judge observed at para. 203, is Mr. Mullins
pleading that if the provisions of the
Act
and
Regulations
are properly construed in his case (as a person who is not mentally
disordered), then they are as a consequence constitutionally invalid.
[63]
The essential logical difficulty with this argument, as observed by
the trial judge at para. 205, is that Mr. Mullins seeks to challenge
the
Act
, if it authorizes the committal and treatment of persons
who do not suffer from mental disorders. This is legally problematic because,
in essence, Mr. Mullins is seeking to litigate the
Charter
rights of others. Canadian courts have recognized in other situations that
the
Charter
rights Mr. Mullins seeks to litigate are personal
rights, that s. 24(1) provides a remedy for an individual, and that the
power to litigate such rights generally resides in the person whose rights
have been infringed (
Stinson Estate v. British Columbia
,
1999 BCCA 761, 70 B.C.L.R. (3d) 233, leave to appeal to S.C.C. refused 27849
(November 9, 2000);
Christian Labour Assn. v. British Columbia (Transportation
Financing Authority)
,
2001 BCCA 437, 91 B.C.L.R. (3d) 197;
604598 Saskatchewan Ltd. (c.o.b. Great Canadian Superbar) v. Saskatchewan
(Liquor and Gaming Licensing Commission)
(1998), 163 Sask. R. 104,
157 D.L.R. (4
th
) 82, leave to appeal to S.C.C. refused 26566 (October
1, 1998);
PSC Industrial Services Canada Inc. v. Ontario (Ministry of
Environment)
(2005)
,
202 O.A.C. 93, 258 D.L.R. (4th) 320;
R.
v. Rahey
, [1987] 1 S.C.R. 588 at 619 (per Wilson J.)).
[64]
Most significantly, it cannot be overemphasized that Mr. Mullins
staunchly denies ever having suffered from a mental disorder and seeks to
firmly distance himself from those members of society whom he refers to as
lunatics. This obviously explains why he was incapable of accepting the
premise that the other alternative pleading would have required. Nonetheless,
it establishes, in my view, that Mr. Mullins does indeed lack direct
standing and is, as the trial judge found, not the appropriate litigant to
mount a public interest challenge against the constitutionality of the
Act
on behalf of those who do suffer from mental illness. More specifically, I
agree with the trial judges conclusion that Mr. Mullins has failed to
demonstrate his challenge meets the third requirement as outlined in
Canadian
Council of Churches
, since there are other effective ways to bring
the issues before the court.
[65]
Furthermore, Mr. Mullins challenge must fail on other grounds
as well. Mr. Mullins failed to bring any evidence before the court in
regards to his constitutional
challenge. More specifically, he claims
to be challenging the legislation on behalf of individuals who do not suffer
from mental disorders. As my reasons below will demonstrate, I am in agreement
with the trial judge that Mr. Mullins is not part of that group of individuals.
Since Mr. Mullins own factual circumstances do not appear to address
the circumstances of persons not suffering from mental disorders, and he did
not lead any evidence in regards to others who are effected by the legislation
and do not suffer from mental disorders, there is no evidence before the court
on which it could make the determination that Mr. Mullins seeks.
[66]
I would therefore not accede to the submission that the trial judge
erred in his holding that Mr. Mullins lacked standing to litigate the
constitutional issues.
2. Constitutional Issues: Section
7
[67]
Mr. Mullins arguments at trial and on appeal concerning the constitutional
and
Charter
issues were difficult to follow, principally because
he dealt with them indiscriminately.
[68]
The trial judge examined in detail Mr. Mullins submissions that
his
Charter
rights had been breached. Ultimately, the trial
judge concluded that, although Mr. Mullins liberty was clearly curtailed,
it was incumbent on Mr. Mullins to establish that the deprivation was
contrary to the principles of fundamental justice, citing
R. v. Beare
,
[1988] 2 S.C.R. 387 at para. 401.
[69]
Mr. Mullins alleges that the trial judge erred in failing to find
that his rights guaranteed pursuant to ss. 7, 8, 9, 10(b) and 12 of the
Charter
were unjustifiably infringed by operation of the
Act
on the grounds that he was:
(a)
deprived of his right to counsel (s. 10(b));
(b) subjected to unreasonable search and seizure,
and arbitrary detention (ss. 8 and 9);
(c) subject to cruel and unusual punishment (s. 12);
(d) involuntarily committed and treated under
an enactment, the provisions of which are unconstitutionally vague (s. 7).
[70]
The trial judge, properly in my view, considered Mr. Mullins
challenges as if they were violations of s. 7 because that section is
of broad application and encompasses each of the alleged violations. (para.
211)
(a) Right
to Counsel
[71]
Contrary to Mr. Mullins submission, the trial judge did find
that he had been denied his right to counsel.
[72]
The
Mental Health Regulation
in effect at the time provided:
6(2)
If a person is involuntarily admitted to and detained in a facility under
section 22, 27, 28 or 29(1) to (5) of the Act or is transferred under section
35 of the Act, the director or officer in charge of the facility must, immediately
on admission or transfer or as soon as the person is capable of comprehension,
inform the person of
(a) the
reasons for detention,
(b) the
persons right to retain and instruct counsel without delay,
(c) the
persons right to have the validity of the detention determined by way of
habeas corpus, and
(d) if
the person is detained under section 22(1) or 29(4) of the Act, the persons
right to a hearing under section 25(1) of the Act and to apply to the Supreme
Court under section 33 (2) of the Act.
[73]
As I have noted, Mr. Mullins demanded to see a lawyer immediately
after he was detained by the security staff. The denial of his right to retain
and instruct counsel was arguably a breach of Mr. Mullins s. 10(b)
Charter
right. The trial judge noted that an inadvertent mitigating
factor in respect of the breach of the
Regulation
and Mr. Mullins
s. 10(b)
Charter
right was that Mr. Mullins parents
were notified and his father, a lawyer, visited him within four hours of his
confinement.
[74]
The point is that the denial of Mr. Mullins right to counsel
was not, as Mr. Mullins argued, authorized by the
Act
.
Thus the
Act
itself did not violate Mr. Mullins constitutional
right. Furthermore, even though the denial of the right to counsel was action
done outside the
Act
, and assuming for the purpose of argument
that the
Charter
applied to individual staff members who denied
Mr. Mullins his s. 10(b) rights, the fact that a lawyer arrived
within four hours demonstrates that any damage suffered as a result was minimal.
The thrust of Mr. Mullins argument was that he would not have done anything
differently had a lawyer been called immediately at the time of his detention;
but rather, the lawyer may have been able to persuade others to act differently.
However, there was no evidence to support that contention.
(b) Unreasonable
Search and Seizure
[75]
Mr. Mullins submission that he was subjected to unreasonable search
and seizure was not supported by any argument as to why his involuntary committal
failed to accord with the principles of fundamental justice. I would not accede
to the submission that the trial judge erred in dismissing Mr. Mullins
claim in this respect.
(c) Cruel
and Unusual Punishment
[76]
Mr. Mullins objected to the quiet room as cruel and described
his time there as solitary confinement. The trial judge found that Mr. Mullins
was not subjected to punishment at all because the intention was to aid him.
I respectfully agree with that finding and note that the
Act
does not authorize any specific treatment or accommodation. Those matters
are decided by physicians, hospital boards and hospital staff.
(d) Void
for Vagueness
[77]
Mr. Mullins argued that the words used in the
Act
are unconstitutionally vague. However, Mr. Mullins did not present any
evidence in support of the allegation and did not identify words or phrases
that were so vague as to be unconstitutional.
[78]
In my opinion, Mr. Mullins failed at trial and on appeal to establish
that the
Act
was so unintelligible as to render it incapable
of an adequate basis for legal debate:
R. v. Nova Scotia Pharmaceutical
Society
, [1992] 2 S.C.R. 606. Furthermore, the issue of the constitutional
invalidity of the
Act
on the ground of vagueness was thoroughly
examined and rejected in
McCorkell v. Riverview Hospital (Director)
(1993), 81 B.C.L.R. (2d) 273, 104 D.L.R. (4th) 391 (B.C.S.C.).
[79]
In my view, Mr. Mullins has failed to demonstrate any reviewable
error by the trial judge on the question of whether his s. 7 right to
liberty was infringed in a manner that does not accord with the principles
of fundamental justice.
3. Health
Care (Consent) and Care Facility (Admission) Act as a Violation of s. 15
of the Charter
[80]
Mr. Mullins entire submission on the issue of his s. 15
Charter
challenge is stated as follows in his factum:
131.
At common law and by virtue of the
Health Care (Consent) and Care Facility
(Admission) Act
, the (
HCCA
),
everyone has the right
to refuse treatment even if, in doing so, he might die. The Appellant in his
Notes expressly stated he would not accept detention in the hospital or medication
without being fully informed and consenting.
132.
However, the
HCCA
purports specifically to exclude this right
for persons covered by the
MHA
.
133.
Such exclusion is clearly discrimination on the ground of mental or physical
disability contrary to
Charter
s. 15.
[81]
It appears that Mr. Mullins takes issue with the fact that by
virtue of s. 2 of the
HCCA,
persons admitted and treated
under s. 22 of the
Mental Health Act
are exempt from
the consent rights conferred on adults by the
HCCA
.
[82]
At trial, Mr. Mullins called no evidence to support his submissions
on this issue or to refute the substantial body of evidence tendered by the
Attorney General and the intervenor, British Columbia Schizophrenia Society.
[83]
The trial judge made no specific finding in respect of Mr. Mullins
s. 15
Charter
challenge.
[84]
Given my conclusion that the trial judge did not err in refusing Mr. Mullins
standing, it is not necessary to address this issue. In my view, however,
it is simply not enough for a litigant who makes a claim such as this to raise
a bare allegation, call no evidence to support it, and then expect that the
court will devise arguments on his behalf and decide the issue.
[85]
To establish a violation of s. 15(1) of the
Charter
,
Mr. Mullins is obliged to do more than simply identify a distinction
in law between two or more groups in society. While it is necessary for Mr. Mullins
to identify the existence of differential treatment and the presence of enumerated
or analogous grounds, he is also obligated to show that such a distinction
is discriminatory within the meaning of the equality guarantee:
Law
v. Canada (Minister of Employment and Immigration)
, [1999] 1 S.C.R.
497 at para. 88. Using contextual factors as outlined in
Law
,
Mr. Mullins was required to address the following question:
Does
the differential treatment discriminate, by imposing a burden upon or withholding
a benefit from the claimant
in a manner which reflects the stereotypical
application of presumed group or personal characteristics
, or which otherwise
has the effect of perpetuating or promoting the view that the individual is
less capable or worthy of recognition or value as a human being or as a member
of Canadian society, equally deserving of concern, respect, and consideration?
[Emphasis added]
Mr. Mullins
did not address the question by submissions or evidence and thus, in my opinion,
the argument must fail.
4. Damages for Breach of Charter Rights
[86]
Mr. Mullins submitted that his rights under the
Charter
were denied and he should be compensated for those constitutional offences
in addition to any damages awarded for other common law and statutory wrongful
acts and omissions.
[87]
Since I have concluded that Mr. Mullins has not established that
any claimed
Charter
rights were infringed in a manner that does
not accord with the principles of fundamental justice, it is not necessary
to discuss this issue.
[88]
It is clear, however, that an action for damages under the general
law of civil damages will not generally lie against the government for damages
arising from the enactment or enforcement of laws subsequently determined
to be unconstitutional:
Guimond v. Quebec (Attorney General)
,
[1996] 3 S.C.R. 347. Thus, even if Mr. Mullins had succeeded in his constitutional
challenge, damages would not be awarded, provided the conduct was not clearly
wrong, in bad faith or an abuse of power:
Mackin v. New Brunswick (Minister
of Finance)
, 2002 SCC 13,
[2002] 1 S.C.R.
405
at para. 79.
[89]
It follows that for all the above reasons, I would not give effect
to the constitutional issues raised on appeal.
B. WHETHER MR. MULLINS WAS A MENTALLY ILL
PERSON
[90]
It is clear from both written and oral submissions on appeal that this
is perhaps the most important issue from Mr. Mullins perspective. In
his factum, Mr. Mullins stated that the trial judges findings were not
only demonstrably in error but also they brand the Appellant forever in the
eyes of the public as a certified lunatic.
[91]
It is important to note here the role of the Court with respect to
making a medical diagnosis. As succinctly and correctly stated by the
trial judge at para. 123, [t]he Court is not in a position to diagnose the
plaintiff. That is a medical mental health issue that must be based on the
evidence of persons of expertise.
[92]
I am unable to find that the trial judge erred in holding that Mr. Mullins
was a mentally ill person under the
Act
. This was a central
issue in the case and is, without question, a finding of fact. The trial judges
finding was based on the evidence of all of the physicians who testified.
For example, Dr. Duke, the psychiatrist who replaced Dr. Levy, was
called to give evidence for Mr. Mullins at trial. She testified, In
my assessment, Stephens symptoms were of the severity when he was admitted
that he would be manic. Dr. Long, the psychiatrist who treated Mr. Mullins
after his discharge from VGH diagnosed him as suffering from bi-polar disorder
and described him as desperately ill. Dr. Long emphasized that Mr. Mullins
had poor insight into his illness. Dr. Long further testified that, as
a result of the treatment Mr. Mullins received in hospital, his condition
improved. However, the weight of the evidence is that there is no cure for
bi-polar disorder and that, at least currently, there is no effective treatment
for the disease other than medication.
[93]
The totality of the evidence on this critical issue more than amply
established that Mr. Mullins suffered from a disorder of the mind that
seriously impaired his ability to react appropriately to his environment or
to associate with others and that required medical treatment, supervision,
and control for his own protection or the protection of others.
[94]
The only evidence that Mr. Mullins was not mentally ill came from
Mr. Mullins himself.
[95]
There can be no doubt that Mr. Mullins sincerely believes that
he is not mentally ill and fervently wishes to be absolved from what he describes
as the stigma of lunacy. However, the weight of the evidence supports the
trial judges finding that, at least at the time in question, Mr. Mullins
was mentally disordered.
C.
Cross-Appeal of the Respondent Doctors
1. The Meaning of Examination
[96]
Central to the trial judges finding of liability against the doctors
was his finding that Dr. Mercier did not conduct an examination of
Mr. Mullins before signing the medical certificate. Section 22(2) of
the
Act
requires that [e]ach medical certificate must be completed
and signed by a physician
who has examined the person whose admission is
requested.
[97]
As I have noted, examination is not defined in the
Act
.
It is thus distinguishable from the case provided to us by Mr. Mullins,
Schmidt v. Katz
(1954), 13 W.W.R. 654 (Sask. Q.B.), which considered
the provision in Saskatchewans
The Mental Hygiene Act, 1950
,
S.S. 1950, c. 74, that required that every medical certificate shall
state that the physician has
personally examined
the patient (s. 12(2),
emphasis added).
[98]
It is interesting to note that the amended
Act
does not
specifically provide for a personal examination, and in reviewing the status
of a person detained under s. 22, s. 24(2.1) states that such an
examination must include:
(a)
consideration of all reasonably available evidence concerning the patients
history of mental disorder including
(i)
hospitalization for treatment, and
(ii)
compliance with treatment plans following hospitalization, and
(b)
an assessment of whether there is a significant risk that the patient, if
discharged, will as a result of mental disorder fail to follow the treatment
plan the director or physician considers necessary to minimize the possibility
that the patient will again be detained under section 22.
[99]
The finding that Dr. Mercier did not conduct an examination is
a finding of mixed fact and law. The respondent doctors do not challenge the
trial judges findings as to what Dr. Mercier did or did not do as matters
of fact. The respondent doctors do however challenge the trial judges interpretation
of the word examination. It is a term used in the
Act
and
its interpretation is properly a question of law.
[100]
As noted above, the trial judge, at para. 83 found that the opinion
that a person is certifiable will require review and consideration of available
medical history, information on patient interview and personal examination.
[101]
I take from those remarks that the trial judge construed examination
to require a personal interview of the patient. In ordinary circumstances,
one cannot quarrel with the common sense proposition underlying that construction.
It would be rather odd if patients were admitted to hospital without first
being examined as to their need for admission.
[102]
However, as the respondent doctors submit, a voluntary and cooperative
interview with a mentally ill person requiring psychiatric care will not always
be possible and attempting one will not always be safe.
[103]
For example, Dr. Long testified that it is not always possible
to conduct an examination before signing the medical certificate. He testified:
Q
Now, you have had occasion in your years as a psychiatrist to certify
patients, have you?
A
That is correct, my lord.
Q
When you would have an examination, would you conduct an examination
of the patient before signing a certificate?
A
Not always, my lord. In an emergency ward, a patient hitting his
head against the wall, et cetera, often examination at that point is impossible.
We go by the behaviour. We quickly medicate the patient. Yes, medicate. And
the paperwork may often follow after the patients immediate threat to harming
themselves or others is contained medically. Once the medical -- Once the
patients well-being is secured, we go and do the paperwork.
Q
So --
A
So it is not always legalistic, that we have to complete the half-hour
paperwork before we start treating patients; well often do it the other way
around. But, my lord, in the emergency ward, people are hitting their heads
against concrete walls. Somebody has to do something quick. We cannot wait
half an hour until all the paperwork is done.
[104]
The unchallenged expert medical evidence on the point came from the
defendant doctors expert witness Dr. Remick, a psychiatrist:
Q
Now, my friend asked you a bit about evaluations of patients, and
you talked about the timing of interviews. Are there times or are there patients
who are unable to be interviewed because of their behaviour?
A
Yes.
Q
And in those cases, do you still certify the patient on occasion?
A
Yes. On occasion you would certify the patient.
Q
And where do you look for your information in such cases?
A
Youd look for what we call collateral information. It would be information
obtained by other doctors who perhaps saw the patient before myself; any police
report, if were talking about an emergency situation; any information that
I -- one can get from calling up family members or other doctors who have
treated that person. And you put all that together to make your judgment.
Q
And are there some patients who youre considering for certification who are
becoming progressively more agitated or escalating in their behaviour?
A
Yes, that is the case.
Q
And in those cases, is a continued or a second interview a good idea?
A
Yes, it is.
Q
If the patient is -- is escalating to the point where he or she might
become violent, is it a good idea to continue with that interview?
A
Is it a good idea to continue --
Q
Yes.
A
-- if the patient is escalating or is getting violent? No, it is
not.
Q
All right. And maybe I misunderstood your earlier answer. If youve
got -- If there is a patient who is reported to be escalating in his behaviour,
and if you have information about that patient already, and you form the view
that that -- that a further interview would be a bad idea, is it your experience
that in those cases a certificate may be appropriate?
A
It would be appropriate. And indeed, further -- if were talking about a manic
state, and if you mean by escalation sort of a patient is getting more overactive,
more irritable, talking even faster, it would be a very bad idea to continue
the interview. Because all thats going to do is escalate that person further.
[105]
Definitions provided in medical dictionaries indicate that examination
is a general term that refers to an investigation undertaken by a physician,
and that the term is usually qualified by reference to a specific type of
examination. For instance, in
Stedmans Medical Dictionary
, examination
is defined as [a]ny investigation or inspection made for the purpose of diagnosis;
usually qualified by the method used (Maureen Barlow Pugh et al., eds.,
Stedmans
Medical Dictionary
, 27th ed. (Baltimore: Lippincott Williams & Wilkins,
2000)).
Dorlands Illustrated Medical Dictionary
provides a definition
that suggests the term is a general one. Examination is defined as an:
Inspection,
palpation, auscultation, percussion or other means of investigation especially
for diagnosing disease, qualified according to method employed as physical
examination, radiologic examination, diagnostic imaging examination, or cystoscopic
examination.
(Douglas M. Anderson, ed.,
Dorlands Illustrated Medical
Dictionary
, 28th ed. (Philadelphia: W.B. Saunders Company, 1994))
Definitions
of a similar nature can be found in other relevant sources, although they
are not strictly medical in nature. For instance,
The Dictionary of Canadian
Law
defines medical examination as follows: Includes a mental examination,
a physical examination and medical assessment of records respecting a person
(
The Dictionary of Canadian Law
,
3d. ed., s.v. medical examination).
In
The Oxford English Dictionary
, the definition of examination includes,
[t]he action of investigating the nature, qualities, or condition of any
object by inspection or experiment; minute inspection, scrutiny, and [t]he
action or process of searching or inquiring into (facts, opinions, statements,
etc.); investigation, scrutiny (
The Oxford English Dictionary
, 2d.
ed. s.v. examination).
[106]
The purpose of the
Act
was found to be manifestly plain
in
McCorkell v. Riverview Hospital
, where Donald J. (as he then
was) stated it to be the treatment of the mentally disordered who need protection
and care in a provincial psychiatric hospital. Having regard to the views
of the physicians, the purpose of the
Act
, and the interpretation
of the word in its ordinary usage in the medical context, in my opinion the
term examination must be given a broad interpretation so as to be applicable
in the myriad of circumstances that confront physicians called upon to make
the serious decision to involuntarily commit persons to a psychiatric facility.
Examination, in this context, must mean observing the person, reviewing
the patients chart (if there is one), reviewing the available history and
collateral information, and where possible (in the sense that the person complies)
and necessary (in the sense that the information to be gained is not available
from other sources) conducting a personal interview with the person to be
admitted.
[107]
No one suggests that the physicians examination be treated other than
with utmost seriousness. The decision to certify obviously has profound implications
for the liberty of persons who may be held against their will for significant
periods of time.
[108]
However, the physicians decision is ultimately a question of medical
judgment. Once the physician has gathered sufficiently reliable information
to make the diagnosis that the person is mentally disordered and in need of
treatment and protection, then a court ought not lightly interfere with that
decision provided it is made in good faith and with reasonable care.
[109]
It is perhaps in recognition of the multiplicity of situations that
may arise in the mental health context, and the very nature of the way mentally
ill persons present that lead the legislature not to define the term examination
in the
Act
. What is plain, is that there must be sufficient
reliable information to justify the denial of a persons liberty.
[110]
In my opinion, the trial judge erred in law in narrowly construing
the word examination as it is used in the
Act
by necessitating
a personal interview of the person to be admitted in all cases.
2. The Liability of Dr. Mercier
[111]
The trial judge found that before Dr. Mercier completed her medical
certificate she observed Mr. Mullins on two occasions once when she
met him with Dr. McKnight, and again when she escorted him to the interview
room on his return from the charity run. The trial judge did not note, but
it was Dr. Merciers evidence, that when he was away from the hospital,
she had read Mr. Mullins handwritten notes which, together with her
other observations, led her to form the opinion that he had a manic depressive
disorder. Dr. Mercier, as the trial judge observed, had reviewed Mr. Mullins
chart and had been informed by Dr. Materi that Mr. Mullins was escalating.
These facts are inconsistent with the trial judges ultimate conclusion at
para. 90 of his reasons that Dr. Mercier did not see, interview or examine
the plaintiff before signing the certificate. Dr. Mercier decided to
rely upon the opinion of Dr. Materi and in doing so completely abrogated
her duty under the
Act
.
[112]
In my view, applying the broader interpretation of examination discussed
above, Dr. Mercier conducted an examination within the meaning of the
Act
. It is clear that she had all the information she needed
to make the diagnosis that Mr. Mullins was mentally disordered. Her reasons
are recorded on the medical certificate: Patient has pressured speech, flight
of ideas, no insight + is clearly hypomanic. His behaviour is escalating and
he is at significant risk of causing harm to himself.
[113]
Most significantly, Dr. Mercier had read Mr. Mullins handwritten
notes which she testified displayed bizarre, rambling thoughts. Dr. Mercier
was aware that Mr. Mullins was escalating which, as Dr. Remick
testified and Dr. Mercier believed, meant that a further attempt at an
interview could simply annoy Mr. Mullins or potentially result in an
outburst or violent episode.
[114]
Dr. Mercier testified:
Q
Now, what did you understand Dr. Materi to mean from the word
escalating?
A
Well, escalating is a term that we use when a patients behaviour
is going from an acceptable level of behaviour up to an unacceptable level,
which involves usually violence, either physical or verbal violence, and is
-- when a patient is becoming unpredictable and potentially a danger to other
people specifically, as well as to himself.
Q
Now, at that point, were you prepared to sign a certificate under
the Mental Health Act?
A
Yes, I was.
Q
And what information went into your decision to do that?
A
I was not surprised that he was escalating. I think that is part
of the process which I believe that Mr. Mullins was experiencing, the
process of his mental disorder. I think it was a natural, inevitable thing
to happen. The concerns that I had had up until that time remained exactly
the same. I was very concerned about him leaving the hospital, and with the
escalating behaviour I was basically put into a position of either bring him
in or let him go. I was unhappy at 7:00 a.m. about him leaving the hospital.
I certainly -- At the time that Dr. Materi came up to me some hours later,
I was not happy about him having that opportunity to leave the hospital again,
without a prolonged serious mental status examination.
Q
And is that something you anticipated could take place in the PAU
over time?
A
Yes.
[115]
Given the circumstances extant in this case, and based on the interpretation
of the term discussed above, I would find that Dr. Mercier conducted
an examination within the meaning of the
Act
. Hence, the finding
of liability against her cannot stand.
[116]
This conclusion affects the findings of liability in respect of Drs. Ganesan
and Materi.
3. The Liability of Dr. Ganesan
[117]
As I have noted, the trial judge held that Dr. Ganesan had conducted
an examination within the meaning of the
Act
. He found fault
in Dr. Ganesan failing to inquire as to the circumstances giving rise
to Dr. Merciers certificate. With great respect to the trial judge,
I have difficulty understanding why, if Dr. Ganesans certificate was
valid, he can be said to have breached the standard of care required of him.
The trial judge found fault on the assumption that, before signing his certificate,
Dr. Ganesan should have satisfied himself that Dr. Merciers certificate
was valid. On the trial judges view of the case, Dr. Ganesan would have
then discovered that Dr. Mercier had not conducted an examination and
would have concluded that her certificate was invalid.
[118]
With respect, I consider that in so finding, the trial judge erred.
I come to this conclusion for three reasons.
[119]
First, since I have concluded that Dr. Merciers certificate was
valid, having been signed after an examination of Mr. Mullins, the supposition
inherent in the trial judges assumption falls away.
[120]
Second, the notion that the second physician to sign a medical certificate
must investigate the circumstances giving rise to the first certificate is
contrary to the scheme of the
Act
that aims at ensuring the
complete independence and freedom from influence as between the two certifying
physicians. This aim is apparent in s. 22(3) of the
Act
,
which reads:
A
physician is disqualified from giving a valid medical certificate under this
section if the physician is
(a) the
person whose admission is requested,
(b) engaged
in the practice of medicine in partnership with the physician who completes
the other certificate, or
(c) a person
employed as an assistant by a physician who completes either of the medical
certificates in respect of the person whose admission is requested.
[121]
The trial judges finding that Dr. Ganesan should have done something
more than satisfy himself as to the requirements of s. 22(2) imposes
a standard that in many cases could not be met and which could result in delays
and possible harm to the patient and third parties. Furthermore, it represents
a fundamental misunderstanding of the physicians independent obligations
in signing the medical certificate.
[122]
Third, the trial judge found that Dr. Levy was entitled to assume
the certificates signed by Drs. Mercier and Ganesan were valid and he
was entitled to rely on them without undertaking a review (para. 151). It
is difficult to reconcile this with the findings in respect of Drs. Mercier
and Ganesan.
[123]
Having found that Dr. Ganesan had examined Mr. Mullins within
the meaning of the
Act
, there was no basis on which it could
reasonably be said that Dr. Ganesan was negligent in failing to review
the circumstances of Dr. Merciers certificate. That certificate was
in Mr. Mullins chart at the time Dr. Ganesan was speaking with
Dr. Materi.
[124]
Accordingly, I would find that the trial judge erred in law in finding
that Dr. Ganesan was negligent in failing to review the circumstances
surrounding Dr. Merciers certificate. Since both certificates were valid,
it cannot be said that Mr. Mullins was involuntarily admitted to the
PAU in a manner contrary to the
Act
.
[125]
In arriving at this conclusion, I have not ignored Mr. Mullins
arguments that he was not admitted to the PAU; that the PAU was not a Provincial
Mental Health Facility; and that there was no Director, or, if one existed,
he or she was not present. In my opinion, the trial judges findings in respect
of these issues was supported by the evidence and Mr. Mullins has not
demonstrated palpable and overriding error in the trial judges factual findings
and no error in his legal analysis.
4. The Liability of Dr. Materi
[126]
The conclusion that the medical certificates were valid also affects
the finding of fault with respect to Dr. Materi. As I have noted, the
trial judge accepted that Dr. Materis diagnosis of mania was not unreasonable.
He accepted that Dr. Materi was fully capable of recognizing pressured
speech and flight of thought. The trial judge did not say that Dr. Materis
concern that Mr. Mullins was escalating was unfounded.
[127]
The trial judges finding of fault with respect to Dr. Materi
was essentially that Dr. Materi, confronted with a compliant patient
who, in the trial judges view was unlikely to leave, should have arranged
for an earlier interview by Dr. Ganesan. Implicit in this finding is
the suggestion that Dr. Materi should not have alerted the security staff
about the possibility of Mr. Mullins imminent certification.
[128]
There is nothing in the evidence or the findings of the trial judge
to suggest that Dr. Materi was not acting in good faith. Dr. Materis
evidence concerning the involvement of the security staff was:
Q
Do voluntary patients sometimes leave the hospital without anybody
knowing?
A
Yes.
Q
Now, what was your plan, again in that moment youve just left the
interview, what was your plan for what was going to happen next and what steps
you were going to take to provide Mr. Mullins with treatment?
A
My plan was to talk to Dr. Mercier, who was the new emergency
physician after Dr. McKnight, to talk to Dr. Ganesan, both of whom
would be able to certify Mr. Mullins; to phone the collateral sources
that Mr. Mullins had provided me with; and to arrange for Mr. Mullins
admission to PAU.
Q
Now, do you remember the order in which you did that?
A
Somewhat.
Q
Okay. Whats the first thing you think you did?
A
The first thing I did, to my recollection, was to approach the security
desk to let them know that Mr. Mullins was still in interview room 2
and that he was going to be admitted, he did not yet know that yet, and that
I would be returning, I was in the process of arranging for his admission
and I would be returning. And to my recollection, the -- there was a security
guard at the desk with whom I spoke who had said that they would have somebody
stand -- stand near that room.
Q
Now, let me ask you a bit about that. Did you tell the security guard
that Mr. Mullins was certified?
A
No.
Q
Why did you want security to be -- or a security guard to be standing
around or be aware of the situation?
A
If we go back to the nursing notes, I think it was page B-35 you
had said -- at 0815 it says Pt patient not at triage. Pt patient not
in room which indicates to me that even the nurse did not know where the
patient was, and I wanted to make sure that we -- we knew where Mr. Mullins
was.
[129]
In cross-examination, Dr. Materi reiterated that one of her concerns
was losing track of Mr. Mullins:
Q
Now, you -- did you ask Brown to go to the interview room and make
sure that Stephen Mullins didnt leave?
A
I dont recall whether it was me who asked him to -- somebody to
wait outside or whether it was he who offered it, but I do recall that the
agreement was that somebody would wait outside the interview room to keep
track of Mr. Mullins.
Q
So when you left the security station, it was your understanding that
someone would go there and prevent Stephen Mullins from leaving the hospital?
A
I dont recall whether it was my exact expectation that someone would prevent
him from leaving the hospital. I do recall that someone was going to be hovering
around the area.
Q
Wasnt it your expectation that whoever was hovering around the area
would not permit him to leave the hospital if he tried to go?
A
I dont think I had thought that far ahead. I was concerned primarily
of Mr. Mullins wandering and us losing track of him like had happened
before.
[130]
The trial judges findings in respect of this evidence are set out
in paras. 159-160:
The security personnels involvement occurred as a result of the direction
of the defendant Dr. Materi. She told the defendant Brown the plaintiff
was in the interview room and that he was admitted to the PAU seclusion room
and that he was not to leave the hospital. The defendant Brown understood
the plaintiff was barricaded in the interview room and that he would not
be happy about staying in the hospital.
The defendant Brown understood the plaintiff had been pinked, or perhaps
was in the process of being pinked, a reference by reason of the colour
of the form of the Certificate for Involuntary Admission under the
Act
.
The defendant Dr. Materis recollection was that she advised the defendant
Brown that the plaintiff was in the interview room, was going to be admitted,
and she was arranging the admission and would be returning. Her evidence is
that she did not say he had been certified and she had not really turned her
mind to him leaving the hospital. Whatever the precise nature of the discussion
between the defendant Dr. Materi and the defendant Brown I accept it
was clear that the defendant Dr. Materi was directing that the plaintiff
be detained until her return. Her direction was more than just a request that
they stand by in case they would later be needed.
[131]
The trial judge essentially found that Dr. Materi should not have
told the security staff that Mr. Mullins should not be allowed to leave
the hospital because Mr. Mullins presented as completely co-operative
and was, therefore, unlikely to leave.
[132]
In so doing, I consider that the trial judge erred in substituting
his own view of Mr. Mullins mental condition and the potential ramifications
on his behaviour for that of Dr. Materi. Dr. Materis judgment that
Mr. Mullins was escalating and was in need of detention was made in
the course of her 30 minute interview and with the benefit of having read
Mr. Mullins handwritten notes. It was a complex medical judgment call.
There was no evidence that her medical judgment fell below the reasonable
standard of care.
[133]
As the Supreme Court of Canada stated in
Ter Nuezen v. Korn
,
[1995] 3 S.C.R. 674 at para. 34, 127 D.L.R. (4th) 577 [quoting
Lapointe
v. Hôpital Le Gardeur
, [1992] 1 S.C.R. 351, at 362-363]:
courts should be careful not to rely upon the perfect vision afforded by hindsight.
In order to evaluate a particular exercise of judgment fairly, the doctors
limited ability to foresee future events when determining a course of conduct
must be borne in mind. Otherwise, the doctor will not be assessed according
to the norms of the average doctor of reasonable ability in the same circumstances,
but rather will be held accountable for mistakes that are apparent only after
the fact.
[134]
In my opinion, there being no evidence that Dr. Materi was wrong
in her medical conclusion that Mr. Mullins was escalating and needed
to be detained, it would be unreasonable to find her liable for the subsequent
actions of the security staff.
[135]
In the result, I would allow the respondent doctors cross-appeal and
dismiss the action against them.
D. The Cross-Appeal of the Security Staff and
VGH
[136]
The essence of the trial judges finding of liability against the security
staff is set out in para. 163 of his reasons which for convenience I reproduce
here:
The
evidence is that the security personnel act on the direction of doctors in
restraining and detaining patients. They do not appear to question, seek verification,
or exercise independent analysis in respect of implementation of involuntary
admissions and detentions under the
Act
. That is what the defendant
hospital wishes them to do and they must therefore stand fully responsible
as employer for their conduct.
[137]
The hospital records may reasonably be described as alarmingly deficient
in detail as to the sequence in which events took place in this case. It was
thus impossible for the trial judge to determine with certainty whether Dr. Merciers
certificate was signed prior to the actions taken by the security staff. It
is clear that Dr. Ganesans certificate was not signed at that time because
his diagnosis of Mr. Mullins was, at least in part, premised on his observations
of Mr. Mullins distraught behaviour subsequent to being tackled and
dragged to the quiet room.
[138]
The trial judge, correctly in my view, rejected the security staffs
contention that they were entitled to the protection of s. 16(f) of the
Act
for transporting or taking charge of a person on the authority
of properly completed medical certificates because, at the time in question,
at best only Dr. Merciers certificate had been completed.
[139]
However, the security staff argued that, in the alternative, their
actions were protected at common law, on the basis that the hospital and its
employees had a duty to protect third parties from dangerous or violent patients
who are in the process of being certified.
[140]
Section 22 (1) provides that:
On receiving
2 medical certificates completed by 2 physicians in
accordance with subsection (2), the director of a Provincial mental health
facility may admit a person to the facility and detain the person in it.
[Emphasis added]
[141]
At trial, the defendant doctors argued and the trial judge accepted
that on receiving does not necessarily mean after and that it has a less
temporal meaning that encompasses a meaning of simultaneously with or approximately
simultaneous with. The trial judge cited s. 8 of the
Interpretation
Act
, R.S.B.C. 1996, c. 238 at para. 76:
Every
enactment must be construed as being remedial, and must be given such fair,
large and liberal construction and interpretation as best ensures the attainment
of its objects.
[142]
The trial judge then cited the helpful passage referred to earlier
from the reasons of Donald J. in
McCorkell v. Riverview Hospital
at
296:
The
purpose of the
Act
is manifestly plain: the treatment of the
mentally disordered who need protection and care in a provincial psychiatric
hospital. Commenting on a similar statute for Prince Edward Island, McQuaid
J., speaking for the Supreme Court of that province, in the case of
Re
Jenkins
(1984), 5 D.L.R. (4th) 577 at pp. 589-590 said:
The thrust
of the
Mental Health Act
, including its predecessors, has been the
safety, support and succour of those who suffer from, or appear to suffer
from, a debilitating mental disability or disorder and who, as a consequence,
require hospitalization, whether voluntary or otherwise, for their own safety
or the safety of others. In this context the word safety goes beyond mere
protection from the infliction of physical injury
.
[143]
Most significantly, the trial judge accepted the defendants fundamental
proposition that a literal interpretation of the
Act
renders
the statute absurd. He stated at para. 78:
I
agree a liberal interpretation is required to prevent the absurd result of
a race to the door competition between doctors filling in Certificates to
detain and patients refusing to remain.
[144]
In this conclusion it appears that the trial judge accepted that, once
the process of certification is underway, it is not in the interests of patients
who require treatment, but who lack the insight to accept it, to leave the
hospital before both physicians complete a certificate.
[145]
The trial judge nevertheless concluded that there was insufficient
temporality in the actions of the security staff to permit application of
a liberal interpretation of s. 22. He held at paras. 79-81:
I
am of the view however the delay here was more than temporal. The certification
process was far from complete.
There had been no examination by a psychiatrist
which presumably was the purpose of the plaintiffs referral to the PAU and
Dr. McKnight
who had first examined the plaintiff and had already found
he was not certifiable under the
Act
. Dr. Materi should in my
view of the evidence also have been aware that there was
no indication
Dr. Mercier had conducted an examination
in compliance with the
Act
.
I
also accept that the common law doctrine of necessity in emergency situations
could have application in certain circumstances. That would be particularly
applicable in situations where it was necessary to protect the patient from
harming himself or others. [
Conway v. Fleming
, [1996] O.J. No. 1242
(Gen. Div.)]
I
am not satisfied on the evidence there was an emergency situation here that
could reasonably justify a modification of the requirement to detain only
on receipt of two certificates.
There was no indication the plaintiff
posed any threat to others and the threat of any harm to himself was not immediate
.
The plaintiffs history had been one of complete co-operation and he was apparently
at Dr. Materis request placidly waiting her return when he was arrested
and detained. He was apparently not even asked if he would mind waiting a
few minutes until a psychiatrist could see him.
[Emphasis added]
[146]
The trial judge thus rejected the argument of the security staff and
hospital that they were absolved of liability on the basis that their conduct
was required to fulfill a duty at common law to protect third parties from
patients who require certification.
[147]
In
Conway v. Fleming
, [1996] O.J. No. 1242 (Ont. Div.
Ct.) (QL) affd (1999) 43 O.R. (3d) 92, 173 D.L.R. (4
th
) 372 (Ont.
C.A.), leave to appeal to S.C.C. refused 27519 (June 8, 2000), the plaintiff
was a patient in a psychiatric ward pursuant to a Lieutenant Governors Warrant.
An order was in place that authorized staff to medicate the plaintiff in certain
circumstances. At one point the plaintiff became upset and threatening. He
was locked up and medicated. He sued for damages.
[148]
Based on his findings of fact, the trial judge held that the injection
was authorized by the terms of the Warrant of the Lieutenant-Governor. However,
the trial judge went on to consider whether, in the alternative, the actions
of the defendants would have been justified at common law. At para. 278, the
trial judge held that at common law:
there was a right and a duty to restrain Conway when necessary to protect
him, other patients, or others lawfully on the premises (staff or other patients)
from harm and to prevent endangerment to the safe environment of the hospital
or facility.
[149]
In
obiter
, the trial judge was satisfied a common law duty existed.
At paras. 276-277, the trial judge briefly explained:
On
the basis of the reasoning in the decisions of
Stewart v. Extendicare Limited
,
[1986] 4 W.W.R. 559, and
Wellesley Hospital v. Lawson
(1977), 76 D.L.R.
(3d) 688, and the very useful article by G. Robertson, Mental Disability
and the Law in Canada (Toronto) Carswell, 1987, I am satisfied that there
was authority for the injection at common law.
At
p. 386, it was stated: Psychiatrists and other health care professionals
involved in the care and treatment of a patient are under a legal duty to
exercise reasonable care to ensure that the patient does not harm himself.
Also at p. 389:
A psychiatric
patient may pose a danger not only to himself but also to others in the hospital.
The hospital must respond to that risk by providing and maintaining a reasonable
level of supervision and security. That responsibility is not limited to the
protection of patients. As an occupier of premises, a hospital is under a
duty to take reasonable care for the safety of all persons who are lawfully
on the premises.
[150]
The court in
Conway
relied on the decision of
the Supreme Court of Canada in
Wellesley Hospital v. Lawson
,
[1978] 1 S.C.R. 893, 76 D.L.R. (3d) 688 (cited to S.C.R.), a case regarding
the liability of a hospital for personal injuries inflicted by a psychiatric
patient on a non-psychiatric patient. The majority noted at 896 that the parties
to the litigation agreed that:
[A]t
common law a hospital, especially one providing treatment for mentally-ill
persons, would be under a common law liability if by reason of its failure
to provide adequate control and supervision injury occurred to third persons
by reason of the conduct or behaviour of a patient.
[151]
The majority noted that the hospital owed an independent duty to supervise
and keep under reasonable control patients who the hospital knows or ought
to know have propensities to violent behaviour (at 899).
[152]
The trial judge found at para. 160 that Mr. Brown understood that
Mr. Mullins had been pinked, or perhaps was in the process of being
pinked, a reference by reason of the colour of the form of the Certificate
for Involuntary Admission under the Act. Mr. Brown testified that he
had the impression from his conversation that Mr. Mullins was a potential
elopement risk and needed to be kept at the hospital and moved into seclusion.
[153]
However, in para. 162, the trial judge found that there was no evidence
to suggest the security staff had any reason to believe Mr. Mullins was
dangerous or violent, or had been told not to leave the hospital.
[154]
The difficulty posed by the second factual finding is that it ignores
the implications of the first factual finding the head of security in the
PAU knew that Mr. Mullins was to be detained under the
Act
.
Whether or not Mr. Brown knew that Mr. Mullins was dangerous or
violent or had been told not to leave the hospital is, in my opinion, only
marginally relevant. What is relevant is that, under the
Act
,
Mr. Mullins detention was necessary for his own protection, which was
supported by the uncontroverted medical evidence.
[155]
In my opinion, the conclusions that I have made in respect of the doctors
cross-appeal affect the cross-appeal of the security staff and hospital. Chiefly,
I have concluded that the trial judge erred by substituting his own view of
Mr. Mullins mental state and the need to protect him for that of Dr. Materi
and in finding that Dr. Mercier had not conducted an examination. Those
legal errors, in my respectful opinion, render unsupportable the trial judges
finding in paras. 78-79 of his reasons that the certification process
was far from complete and therefore did not give rise to the race to the
door.
[156]
Once it is established that Dr. Materis diagnosis was correct
and Mr. Mullins was escalating and was in need of care, the process was
underway for Mr. Mullins admission. Approximately 19 minutes passed
between the time Dr. Materi spoke with Mr. Brown and the time Dr. Ganesan
signed the second certificate. The conduct of the security staff, in the circumstances,
occurred in the midst of the certification process. As the hospital and security
staff contends, it is impractical to suggest that a psychiatrist can detain
a patient but cannot enlist the assistance of security staff to effect the
detention.
[157]
The trial judge appears also to have found fault for the security staff
failing to ask to see the certificates before taking steps to detain Mr. Mullins.
I accept the submission of the hospital and security staff that the burden
of determining whether a person may be forcibly detained because of mental
illness is uniquely placed on the medical profession. It is implicit in the
Act
that physicians, provided they are not disqualified by a
conflict, are trusted to act knowledgeably and in the patients best interest.
To require that certificates be verified by security staff undermines the
intention of the
Act
, creates potential hazard to patients and
others, and interferes with the privacy interests of patients.
[158]
It follows that, for all of the above reasons, I would allow the cross-appeal
of the security staff and hospital.
E.
The Remainder of the Issues on Appeal
[159]
It remains necessary to address certain aspects of Mr. Mullins
appeal.
1. The Liability of Dr. Levy
[160]
Mr. Mullins challenges the trial judges dismissal of the action
against Dr. Levy. I can see no basis on which we could accede to Mr. Mullins
arguments. The trial judge heard expert evidence from Dr. Remick that
Dr. Levys care was reasonable. There was no evidence to the contrary.
[161]
Central to Mr. Mullins argument is the suggestion that Dr. Levy
was obliged to review the circumstances of the completion of the certificates
by Drs. Mercier and Ganesan. As I have concluded that such review is
contrary to the intention of the
Act
, I would reject this argument.
[162]
Nor can I conclude that the trial judge erred in finding that Dr. Levy
was entitled to the protection of s. 16 of the
Act
. Implicit
in Mr. Mullins argument is that, in order to qualify for the protection
afforded by s. 16, the certificates must be properly completed which
Mr. Mullins submits must refer to the circumstances in which they were
completed. In other words, Mr. Mullins argues that those relying on the
certificates must be satisfied that they were obtained in circumstances that
could not impugn their validity, i.e. were created in rigorous compliance
with the
Act
.
[163]
I would reject that argument. Properly completed must refer to the
certificates themselves, not the circumstances under which they were completed.
The section aims to protect those persons who take charge of a person on
the authority of properly completed medical certificates. So long as those
persons act in good faith and with reasonable care and there are certificates
which, on their face, are valid, then s. 16 applies. If the physician
completing the certificate is negligent or acts in bad faith in completing
the certificate he or she may be liable in damages. It does not render the
certificate invalid for the purpose of others relying on it.
2. The Liability of Nurse Farivar
[164]
Mr. Mullins contends that the trial judge erred in finding that
Nurse Farivar signed a form of Consent to Treatment
pursuant to the provisions
of the
Act
. Mr. Mullins argues that since there were
not two valid certificates as mandated by s. 22, there was no authority
under the
Act
permitting Nurse Farivar to sign the form.
[165]
For the reasons given above in the cross-appeals, I would reject Mr. Mullins
argument.
V. CONCLUSION
[166]
It follows that I would dismiss the action against all the defendants.
It also follows that it is unnecessary to address the issues related to the
quantum of damage, punitive damages, costs and Court Order interest, and the
destruction of records.
[167]
I would dismiss the appeal, allow the cross-appeals, with costs of
the trial and
appeals to the doctors, hospital, and security staff.
The Attorney-General is entitled to his costs of the appeal if sought.
The Honourable Madam Justice Kirkpatrick
I
agree:
The
Honourable Mr. Justice Chiasson
I
agree:
The
Honourable Mr. Justice Bauman
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Park
v. FinancialCAD Corporation,
2009
BCCA 7
Date: 20090113
Docket: CA036011; CA036012; CA036023; CA036024
Between:
Robert
Park, Takashi Yuri, Steven P. Korn, Gerri Sinclair, Frank Barr,
John Greiner, Katherine Greiner, Robert Reynolds, Nancy Petersen,
Capital G. Limited, Cayber Management Limited, Shadowood Builders Ltd.,
Conqueror Limited, Jambo Limited, Stratos Limited,
Tower Nominees Limited, William W. Stevenson, Sojitz Corporation,
Kelly L. Storteboom, Juniperus Limited G, Coral Caper Limited,
Westward Grand Cayman Limited, Sandee-Jo Butterley,
Techmatrix Corporation, Brian Kipp, Priscilla McDonald,
Lachlan Brown, Lynne Dale-Johnson, Rod Dale-Johnson,
Bari Consiglio, Bonny Consiglio and Ronald Gillies
Appellants
(
Petitioners
)
And
Gary
Davidson, Byron Doyle, Elizabeth Doyle, Glacier Fuels Ltd.,
David Glassco, National Tradex Limited and Pavel Vasak
Respondents
(
Respondents
)
And
FinancialCAD
Corporation
Appellant
(
Respondent
)
Before:
The
Honourable Chief Justice Finch
The
Honourable Mr. Justice Lowry
The
Honourable Madam Justice Smith
D.
B. Kirkham, Q.C. and R. S. Padda
Counsel for the Appellants/Petitioners,
Robert Park et al
J.
C. McArthur and
T. C. Louman-Gardiner
Counsel for the Appellant/Respondent, FinancialCAD
Corporation
B.
D. M. Loewen
Counsel for the Respondents
Place
and Date of Hearing:
Vancouver, British Columbia
November 28, 2008
Place
and Date of Judgment:
Vancouver, British Columbia
January 13, 2009
Written
Reasons by
:
The
Honourable Mr. Justice Lowry
Concurred
in by:
The
Honourable Chief Justice Finch
The
Honourable Madam Justice Smith
Reasons
for Judgment of the Honourable Mr. Justice Lowry:
[1]
FinancialCAD Corporation is a successful privately held software company
that is the subject of a shareholders dispute. It was incorporated in British
Columbia in 1990 and continued under the
Canada Business Corporations Act,
R.S.C. 1985, c. C-44, in 2000. There are five directors and approximately
85 shareholders.
[2]
On June 26, 2007, at the annual meeting, a special resolution
presented by the directors, amending the Corporations articles to restrict
the transfer of shares, was adopted. A Certificate of Amendment amending
the articles was issued by the Director under the
Act
. Statutory dissent
rights the right of those who did not vote for the resolution to choose
to surrender, and be paid the fair value of, their shares were triggered.
Seven of the shareholders, who hold 30 per cent of the shares, did not vote
and then gave notice of their dissent; the Corporation refused to accept the
notices, reserving the right to make a court application to have the special
resolution set aside.
[3]
Thirty shareholders, holding almost 60 per cent of the shares, who
voted in favour of the resolution, including three of the directors holding
more than 20 per cent of the shares, maintain they did not know its adoption
would trigger dissent rights. They take the position that, had they known,
the resolution would not have been presented and adopted: it was a mistake.
They contend that, while the value of the dissenting shareholders shares
has not been determined, the size of the payment that might be expected could
so impair the Corporations financial position as to threaten its continued
viability, thereby substantially diminishing the value of the remaining issued
shares.
[4]
The seven dissenting shareholders (the Davidson Petitioners) filed
a petition naming the Corporation the respondent and seeking a declaration
of entitlement with an order for payment of the value of their shares. A
cross-petition was filed by the 30 shareholders and the two directors not
holding shares (the Park Petitioners) naming the Davidson Petitioners and
the Corporation the respondents. They seek to have the special resolution
and the notices of dissent set aside as void, and the Certificate of Amendment
issued by the Director cancelled. The Corporation supports the relief sought
in the petition filed by the Park Petitioners.
[5]
On hearing the petitions, Mr. Justice Pitfield, in reasons for
judgment, indexed as 2008 BCSC 353, 44 B.L.R. (4th) 70, concluded the Davidson
Petitioners should succeed. The relief they sought was granted; the cross-petition
was dismissed. The orders entered are now appealed by the Park Petitioners
as well as by the Corporation. The appeals have been consolidated for hearing.
The question is whether, on the grounds advanced, the judge erred in his
conclusion such that this Court should now intervene to preclude the
Davidson Petitioners from exercising their dissent rights.
The
Resolution
[6]
The judge began by outlining the circumstances he found had led to
the adoption of the special resolution. He saw the resolution to be the directors
strategic response to the attempt of one minority shareholder, who holds the
largest number of shares (24 per cent), to avoid a Shareholders Agreement
to which he is a party. The agreement precludes him from selling his shares
without the approval of others, and such approval was not forthcoming, at
least not on terms satisfactory to the shareholder. He is one of the two
people who founded the Corporation. He was discharged from the position he
last held with the Corporation and wished to sell his interest. He commenced
proceedings for a declaration he was no longer bound by the Shareholders
Agreement. The directors then sought the amendment to the articles to restrict
the transfer of shares without their approval so that, even if the shareholders
court application succeeded, they would have control over the sale of his
shares. Subsequent to the orders that are the subject of this appeal being
made, the relief sought in the petition was in material respects dismissed:
Glassco v. 554252 Saskatchewan Ltd.
, 2008 BCSC 523.
[7]
The
Canada Business Corporations Act
provides:
173.
(1) Subject to sections 176 and 177, the articles of a corporation may by
special resolution be amended to
* * *
(n)
add, change or remove restrictions on the issue, transfer or ownership of
shares; ...
[8]
However, the
Act
also provides that, if a corporation resolves
to amend its articles to restrict the transfer of shares, a shareholder may
dissent and the corporation must then pay the shareholder the fair value of
the shares held:
190.
(1) Subject to sections 191 and 241, a holder of shares of any class of a
corporation may dissent if the corporation is subject to an order under paragraph
192(4)(d) that affects the holder or if the corporation resolves to
(a)
amend its articles under section 173 or 174 to add, change or remove any provisions
restricting or constraining the issue, transfer or ownership of shares of
that class;
* * *
(3)
In addition to any other right the shareholder may have, but subject to subsection
(26), a shareholder who complies with this section is entitled, when the action
approved by the resolution from which the shareholder dissents or an order
made under subsection 192(4) becomes effective, to be paid by the corporation
the fair value of the shares in respect of which the shareholder dissents,
determined as of the close of business on the day before the resolution was
adopted or the order was made.
[9]
An information circular approved by the directors based on legal advice
they obtained was sent to the shareholders with the notice of the annual meeting
and a form of proxy. The circular stated the intention to present the following
resolution:
BE
IT RESOLVED that:
1.
Section 4 of the Corporations articles is hereby amended to add the following:
No securities
(other than non-convertible debt securities) of the corporation shall at any
time be transferred to any person without the consent of the directors to
be signified by a resolution passed by the board or by any instrument or instruments
in writing signed by a majority of the directors.
2.
Any one director or officer of the Corporation is hereby authorized, on behalf
of the Corporation, to take such steps, and execute, file and deliver such
documents (including, without limitation, the required Articles of Amendment),
as may be necessary or advisable in order to give effect to the foregoing
resolution.
[10]
The
Act
and the Regulations promulgated under it, as well as
the by-laws of the Corporation, prescribe the information the circular was
required to contain. The
Act
provides:
150. (1) A person shall not solicit proxies unless
(a)
in the case of solicitation by or on behalf of the management of a corporation,
a management proxy circular in prescribed form, either as an appendix to or
as a separate document accompanying the notice of the meeting, or
(b)
...
is
sent to the auditor of the corporation, to each shareholder whose proxy is
solicited, to each director and, if paragraph (
b
) applies, to the corporation.
[11]
The prescribed form is found in the
Canada Business Corporations
Regulations, 2001
, SOR/2001-512:
57. A management
proxy circular shall contain the following information:
* * *
(z) if action is to be taken under section 173
or 174 of the Act to modify the rights, privileges, restrictions or conditions
attached to any class of securities of the corporation or to authorize or
issue securities in order to exchange them for other securities of the corporation,
(i) ...
(ii) ...
(iii)
the reasons for the proposed modification or exchange and the general effect
on the rights of existing security holders,
(iv)
...
(v)
all other information material to the proposed modification or exchange, including,
if the corporation is a distributing corporation, information required to
be included in a prospectus or other similar document under the securities
laws of any of the provinces of Canada, unless an exemption from the laws
is available or a waiver of the laws or similar relief is granted by the relevant
provincial securities regulator;
* * *
(z.5)
a statement of the right of a shareholder to dissent under section 190 of
the Act with respect to any matter to be acted on at the meeting and a brief
summary of the procedure to be followed;
[12]
Under the Corporations By-law No. 1, Article 10.4 provides:
10.4
Notice of Meetings
. ... Notice of a meeting of shareholders called
for any purpose other than consideration of the financial statements and auditor's
report, election of directors and reappointment of the incumbent auditor shall
state the nature of the business to be transacted in sufficient detail to
permit the shareholders to form a reasoned judgment thereon, and shall state
the text of any special resolution to be submitted to the meeting....
[13]
Under the
Act
, a dissenting shareholder who is given notice
of a resolution to be presented for consideration at a meeting
and
the right to dissent is required to deliver written objection prior to the
meeting:
190.
...
(5)
A dissenting shareholder shall send to the corporation, at or before any meeting
of shareholders at which a resolution referred to in subsection (1) or (2)
is to be voted on, a written objection to the resolution, unless the corporation
did not give notice to the shareholder of the purpose of the meeting and of
their right to dissent.
[14]
The circular the Corporations directors approved did not, however,
contain a statement of the right of a shareholder to dissent under s. 190
of the
Act
as required by s. 150(1)(a) of the
Act
and s. 57(z.5)
of the Regulations. Nor was there any discussion to that effect at the meeting
where the resolution was adopted. The Davidson Petitioners took no part in
the meeting. None attended in person nor did they vote their shares by proxy.
[15]
Section 190(7) of the
Act
provides a dissenting shareholder
shall, within 20 days of learning of the adoption of the resolution, inform
the corporation of the number of dissenting shares held and make demand for
payment. Under subsection (8) the shareholder shall then surrender the shares
within the following 30 days.
[16]
It is common ground the Davidson Petitioners complied with s. 190.
The
Trial Judgment
[17]
The relief sought in both petitions is predicated on the following
provision of the
Act
:
247.
If a corporation or any director, officer, employee, agent, auditor, trustee,
receiver, receiver-manager or liquidator of a corporation does not comply
with this Act, the regulations, articles, by-laws, or a unanimous shareholder
agreement, a complainant or a creditor of the corporation may, in addition
to any other right they have, apply to a court for an order directing any
such person to comply with, or restraining any such person from acting in
breach of, any provisions thereof, and on such application the court may so
order and make any further order it thinks fit.
[18]
The judge determined the courts jurisdiction under s. 247 was properly
invoked with respect to the declaration the Davidson Petitioners sought to
compel the Corporation to comply with s. 190. He considered the right to
dissent had accrued to the Davidson Petitioners and would only be vitiated
if the special resolution was to be rescinded or nullified.
[19]
The judge concluded s. 247 did not provide the relief sought by the
Park Petitioners. He said it was not disputed the
Act
and the Regulations
had been breached by the failure to inform the shareholders the resolution
would trigger dissent rights. He also said the Corporations by-laws had
not been complied with. However, he expressed the view that nothing in the
Act
suggests a failure to notify shareholders of their right to dissent
in the event of certain corporate acts necessarily means that act will be
invalid. In support of this conclusion, he cited provisions of the
Act
he considered suggest otherwise.
[20]
In any event, with respect to the Park Petitioners relying on s. 247
for the relief they seek, the judge said:
[30]
Section 247 contemplates the restraint of action by any of the named persons,
or an order requiring a named person to comply with the
CBCA
or the
regulations, or with a companys articles and by-laws. It does not expressly
confer jurisdiction on the court to exercise discretion to rescind or nullify
the special resolution adopted by the shareholders in this case. There is
no provision in the
CBCA
which stipulates that any resolution of shareholders
adopted without strict compliance with all of the provisions of the statute
and the regulations, or the articles and by-laws of the company is a nullity
and void
ab initio.
Likewise, there is no provision in the
CBCA
which empowers the court to ratify resolutions of shareholders which appear
to have been adopted other than in strict compliance with the statutory and
regulatory requirements. In that respect, the
CBCA
differs from some
of its provincial counterparts: see, for example s. 229 of the
Business
Corporations Act
, S.B.C. 2002, c. 57.
[21]
The judge concluded the Park Petitioners are not seeking an order to
either compel or restrain compliance, but rather they seek nullification of
a special resolution in order to restore articles that contain no restriction
on the transfer of shares. Section 247 provides no jurisdiction to grant
that form of relief.
[22]
The Park Petitioners petition also seeks to invoke s. 265.1 of the
Act
. It is that section on which reliance is placed for an order compelling
the Director to cancel the amended articles and the related certificate he
issued. But the judge considered that can only be done in the circumstances
prescribed by s. 96 of the Regulations, which do not arise here. Most
significantly, the relief appears limited to instances where it is the Director
who has made an obvious error, having lacked authority to issue the articles
and related certificate, which is clearly not the case with respect to the
special resolution in question.
[23]
In the absence of any other provision of the
Act
being cited
as providing the relief the Park Petitioners seek, the judge then engaged
(we are told
ex mero motu
) in weighing the factors he considered ought
to govern what he regarded to be the exercise of a discretion lying within
the power the court has, as a court of general jurisdiction, to rescind the
special resolution, thereby nullifying the amendment to the Corporations
articles. The judge said his discretion was to be exercised having regard
for the interests of the Corporation and its shareholders.
[24]
The factors he considered to favour rescission were: the exercise of
dissent rights would permit the individual holding by far the largest number
of the Davidson Petitioners shares to circumvent the Shareholders Agreement
he was seeking to have set aside; that individual knew before the meeting
the effect the resolution would have in triggering dissent rights but said
nothing; the directors would not have presented the resolution to amend the
articles to the shareholders if they had known dissent rights would be triggered;
and the financial burden the payments to be made would have on the Corporation
is uncertain and could be unacceptable. The factors the judge considered
to favour refusing rescission were: no provision of the
Act
suggests
a failure to give notice of dissent rights renders corporate acts invalid;
the amendment to the articles was a conscious corporate strategy to defeat
the largest shareholders attempt to sell his shares without the directors
approval; and the Corporation may have a remedy in damages suffered, if any,
against the solicitors who gave advice to the directors.
[25]
On the factors considered, the judge concluded he should decline to
rescind the special resolution.
The
Appeal
[26]
The Park Petitioners and the Corporation raise the same grounds of
appeal. The Corporation adopts the submission of the Park Petitioners.
[27]
They first say the judge erred in not exercising jurisdiction under
s. 154(1) of the
Act
, although it was in no way raised before him.
It provides:
154.
(1) If a form of proxy, management proxy circular or dissidents proxy circular
contains an untrue statement of a material fact or omits to state a material
fact required therein or necessary to make a statement contained therein not
misleading in the light of the circumstances in which it was made, an interested
person or the Director may apply to a court and the court may make any order
it thinks fit including, without limiting the generality of the foregoing,
(
a
)
an order restraining the solicitation, the holding of the meeting, or any
person from implementing or acting on any resolution passed at the meeting
to which the form of proxy, management proxy circular or dissidents proxy
circular relates;
(
b
)
an order requiring correction of any form of proxy or proxy circular and a
further solicitation; and
(
c
)
an order adjourning the meeting.
[28]
The Park Petitioners continue to rely in the alternative on s. 247
but, for the reasons given by the judge, with which I agree, that section
does not provide for the remedy they seek. As I understand it, no reliance
is now placed on s. 265.1 and it need not be further considered. We
are asked to apply s. 154(1) now to restrain the exercise of dissent rights
under s. 190. This is the primary ground argued on the appeal. It is said
to give the court a jurisdiction specific to the facts of this case and to
constitute the complete answer to the shareholders dispute.
[29]
The contention is s. 154(1) provides the relief sought because the
proxy circular sent to the shareholders with the notice of the annual meeting
omitted to disclose a material fact adopting the resolution to be presented
would trigger s. 190 dissent rights to be paid the fair value of shares
not voted in favour of the resolution. Reliance is placed on what was said
in
Sparling v. Royal Trustco Ltd.
(1984), 6 D.L.R. (4th) 682 at 687,
45 O.R. (2d) 484 (Ont. C.A.), in adopting a statement from American authority
of what constitutes a material fact in the context of shareholder information:
an omitted fact is material if there is a substantial likelihood that a reasonable
shareholder would consider it important in deciding how to vote.
[30]
The disclosure was clearly required by s. 150(1)(a) of the
Act
and s. 57(z.5) of the Regulations: a statement in the proxy circular of the
right of a shareholder to dissent under s. 190 and a brief summary of the
procedure to be followed.
[31]
That being the case, the Park Petitioners say but for the omission
the resolution would not have been adopted and s. 154(1) can then be invoked.
They say the discretion s. 154(1) provides should be exercised to restrain
the Corporation and the Davidson Petitioners from complying with s. 190.
[32]
The Davidson Petitioners maintain s. 154(1) cannot be raised on this
appeal but, if it can, there was no omission of a material fact. They argue,
with some force, the omission of a statement of legal rights is not the omission
of a material fact. They say further what was material was not that the adoption
of the resolution would give rise to s. 190 dissent rights, but that some
shareholders would exercise those rights.
[33]
The Park Petitioners then contend in the alternative that, if the relief
they seek is not available under sections 154(1) or 247 of the
Act
,
the judge was required to exercise the courts general jurisdiction to set
the special resolution aside, given its adoption constituted what they maintain
was a serious breach of the
Act
, the Regulations, and the Corporations
by-laws: it was illegal. They say the judge erred in purporting to exercise
any discretion but, in the further alternative, they say he erred in the exercise
of any discretion he did have by considering irrelevant factors: the equities
between a minority shareholder and the Corporation and the potential of a
remedy against solicitors. The Park Petitioners say the judge failed to give
proper consideration to the financial harm to be suffered by the Corporation
and, most particularly, by the shareholders who are not among those seeking
to exercise dissent rights.
[34]
The Davidson Petitioners maintain the judge properly exercised the
jurisdiction afforded him under s. 247 of the
Act
in granting the relief
they sought against the Corporation with respect to the exercise of their
s. 190 rights. They say there is now no challenge to the exercise of the
judges discretion under s. 247 and there is no basis upon which the relief
sought by the Park Petitioners should be granted as a matter of the courts
general jurisdiction.
A
Section 154 Application
[35]
What the Park Petitioners essentially seek to do is make an application
under s. 154(1) in this Court that was not made in the trial court. They
seek to establish the omission of a material fact in the form of proxy employed
in respect of the special resolution. I am unable to see on what basis that
can be done.
[36]
It is clear the application contemplated in the wording of the section
is, in this province, an application to the Supreme Court of British Columbia,
the court defined in s. 2 of the
Act
. The Park Petitioners say s.
9 of the
Court of Appeal Act,
R.S.B.C. 1996, c. 77, gives this Court
jurisdiction to grant any relief that could be granted by the Supreme Court,
which it does. But that is the jurisdiction the Court has on hearing an appeal
from the trial court. It does not give this Court jurisdiction to entertain
applications under s. 154(1) in the first instance.
[37]
Section 154(1) requires the exercise of the courts discretion. That
is not an exercise to be undertaken by an appellate court but rather by a
judge sitting in the trial court. An order made on the exercise of the discretion
the section affords may be reviewed by an appellate court for error in the
principles applied or the understanding of facts, but generally it is only
where error of that kind is found there can be any intervention. An
appellate court cannot entertain a s. 154(1) application and exercise
its own discretion as if it were sitting as a judge of the Supreme Court.
[38]
Further, s. 154(2) requires the applicant to give notice of an application
under s. 154(1) to the Director under the
Act
. A copy of the Park
Petitioners petition was delivered to the Director and a response was received.
The Park Petitioners say that was sufficient to constitute the required notice
under s. 154(2); the petition states the information sent to the shareholders
with the proxy was deficient:
16.
There was no disclosure by the Corporation in the Information Circular, or
otherwise, to the shareholders that if they passed the Special Resolution
it would trigger dissent rights pursuant to Section 190(1). This was contrary
to the requirements of the
CBCA
, the Regulations herein and the Articles
of the Corporation.
[39]
But the petition makes no mention of s. 154(1), nor does it make any
mention of a failure to disclose a material fact such as would render that
section applicable. The petition the judge heard was simply not an application
made under s. 154(1) for a restraining order. As I stated at the outset,
the relief sought is for orders setting aside the special resolution and notices
of dissent as well as a declaration the amendment to the articles is invalid
and an order cancelling the Amending Certificate issue by the Director. The
sections of the
Act
under which the relief is claimed are stated to
be s. 247 and s. 265.1. The judge was clear on the position taken before
him:
[44]
In this case, the Park Petitioners do not seek a restraining or compliance
order. Rather, they seek nullification of a special resolution in order to
restore articles that contain no restriction on the transfer of shares.
[40]
Section 154(2) makes the requirement the Director be given notice of
a s. 154(1) application concerning the deficiency in a proxy circular
mandatory [The] applicant
shall give to the Director and the fact
is that was not done. The Park Petitioners made no s. 154(1) application
before the Supreme Court and, accordingly, no notice of such could have been
given. It is evident there was a covering letter sent to the Director with
a copy of the petition, which is not in the appeal record, but it is clear
a copy of the petition was sent to him solely to comply with s. 265.1(5) which
requires notice be given to him of an application under s. 265.1(4).
[41]
Finally, the evidentiary record appears to be less than complete because
the Park Petitioners made no application under s. 154(1) seeking to establish
the omission of a material fact. The Davidson Petitioners say, had it been
otherwise, they would have sought to adduce evidence, through cross-examination,
of the extent to which the omission was material to the adoption of the resolution.
The affidavits of the directors establish they would not have presented the
resolution had they known about the s. 190 dissent rights. But as to whether
the omission was actually material to the shareholders, the evidence is limited.
Apart from the directors, only three of the shareholders and the principal
of eight corporate shareholders say they would not have voted the shares they
hold or control to adopt the resolution if they had known the amendment would
trigger dissent rights. They say they may have voted against the resolution
or not voted at all in order to exercise the right to dissent. No evidence
is adduced from any of the remaining Park Petitioners. However, the extent
to which the evidence adduced, or which may have been adduced, might bear
on a s. 154(1) application, need not be further considered.
[42]
In my view, it is not open to the Park Petitioners to make an application
under s. 154(1) now. No application under that section was made in the
petition before the judge and no notice of such an application was given to
the Director. It then becomes unnecessary to decide whether the section provides
for the relief sought.
The
Courts General Jurisdiction
[43]
While the Park Petitioners did not seek to have the judge invoke any
general jurisdiction to set the special resolution aside, they contend now
that, because the non-disclosure of dissent rights in the proxy circular was
a failure to comply with the
Act
, the Regulations, and the Corporations
by-laws, the resolution was illegal and cannot stand. They rely on
Caleron
Properties Ltd. v. 510207 Alberta Ltd.
, 2000 ABQB 720, [2001] 3 W.W.R.
323, as discussed by the judge at paras. 35-37 of his reasons, for the proposition
the court has a general jurisdiction to inquire into the legality of corporate
actions beyond, but not inconsistent with, the jurisdiction provided by statute.
[44]
Given the provisions of s. 150(1)(a) of the
Act
and s. 57(z.5)
of the Regulations in particular, it is then necessary to consider whether
the omission in the proxy circular of a statement of the right to dissent
and the procedure to be followed to obtain payment for shares held requires
the special resolution be set aside rendering the amendment to the articles
invalid.
[45]
The Park Petitioners base their case on non-compliance with statutory
requirements, but it is of no small significance the non-compliance of which
they complain is not attributable to the Davidson Petitioners against whom
relief is sought. The Davidson Petitioners have done nothing but comply with
the provisions of s. 190 in attempting to exercise the rights given them by
statute. The omission in the circular sent to the shareholders was attributable
to the directors who approved the contents, albeit based on legal advice.
They are now among the Park Petitioners seeking relief from the failure to
comply with the
Act
and the Regulations.
[46]
The Park Petitioners seek to have a resolution to amend the Corporations
articles, which they voted to adopt, set aside. They seek to have the amendment
rendered invalid, solely for the purpose of depriving the Davidson Petitioners
of their statutory right to dissent. The Park Petitioners cite the financial
implications both they and the Corporation will experience as justification
for depriving the Davidson Petitioners of their statutory rights.
[47]
Whether, in these circumstances, an order setting aside the resolution
the Park Petitioners voted to adopt, thereby defeating the exercise of the
minority shareholders statutory rights, could be justified would, in my view,
be questionable even if such would not offend the provisions of the
Act
.
But I consider the question to be essentially foreclosed by what appears to
me to be a clear legislative intention that an amendment of the articles of
a corporation under s. 173(1) remains valid even where it is made by
the adoption of a special resolution in the absence of any notice of s. 190
dissent rights being given when required.
[48]
First, the
Act
contemplates shareholders may not be informed
about dissent rights when a resolution to amend the articles pursuant to s. 173(1)(n)
is presented. Section 190(5) of the
Act
(quoted above) requires a
dissenting shareholder to give written objection prior to the meeting where
the resolution is to be considered. But the shareholder is required to do
so only if given notice of the right to dissent. If no notice is given, no
objection need be made. It would appear to follow that the amendment is valid
and the shareholders right to dissent is preserved.
[49]
Second, the
Act
does specifically provide that where notice
of a meeting is given at which a proposal of a director or a shareholder to
amend the articles of a corporation is to be considered, the omission of a
required statement that a dissenting shareholder is entitled to the value
of the shares held pursuant to s. 190 does not invalidate the amendment:
175.
(1) Subject to subsection (2), a director or a shareholder who is entitled
to vote at an annual meeting of shareholders may, in accordance with section
137, make a proposal to amend the articles.
(2)
Notice of a meeting of shareholders at which a proposal to amend the articles
is to be considered shall set out the proposed amendment and, where applicable,
shall state that a dissenting shareholder is entitled to be paid the fair
value of their shares in accordance with section 190, but failure to make
that statement does not invalidate an amendment.
[50]
The parties divide over whether the directors presentation of the
resolution to amend the articles was a proposal of a director made in accordance
with s. 137. It is difficult to see why the reference in s. 175 is to a director
instead of to the directors as it was until the
Act
was amended in
1978 (see s. 169 of the
Canada Business Corporations Act
, S.C. 1974-75-76,
c. 33). It is also difficult to see why the section provides a proposal
of a director is to be made in accordance with s. 137 when that section
appears to govern only proposals made by shareholders.
[51]
However, even if s. 175 is not directly applicable, I see no basis
on which it could be said the absence of a statement about s. 190 dissent
rights required in a proxy circular under s. 57(z.5) of the Regulations will
render an amendment of the articles of a corporation invalid. I see no reason
why an amendment made by a resolution presented by the directors for the shareholders
consideration should be invalid if the required notice of dissent rights is
not given when the same amendment made by a resolution proposed by a shareholder
without the required notice will be preserved by s. 175(2).
[52]
Further, there are, as the judge observed, other sections in the
Act
similar to s. 175(2) where a failure to notify shareholders of their right
to dissent will not render the corporate act invalid: ss. 183(2), 188(3),
189(4). These sections all relate to fundamental changes such as an amalgamation,
the continuance of the corporation in another jurisdiction, and the sale of
substantially all of a corporations assets. It appears to me the requirement
that there be a statement about s. 190 dissent rights is largely procedural
in nature. Parliament has not seen fit to provide that non-compliance will
render amendments to the articles, or other corporate changes, invalid.
[53]
The legislation does not provide non-compliance with s. 150(1)(a)
of the
Act
and s. 57(z.5) of the Regulations renders the amendment
invalid. To the contrary, the intention appears to be the amendment stand.
[54]
I do not consider support for the relief sought in the petition filed
by the Park Petitioners for an order setting aside the special resolution
lies in the exercise of the courts general jurisdiction. Given the provisions
of the
Act
, I do not consider an order that would invalidate the amendment
to the articles should be made.
Conclusion
[55]
I would not then accede to any of the grounds of appeal raised by the
Park Petitioners and the Corporation. The underlying question the judge had
to address was whether he should exercise jurisdiction under s. 247 of the
Act
to grant the relief sought by the Davidson Petitioners in the petition
they filed. His exercise of discretion in their favour under that section
is not now directly challenged; the grounds of the appeal are confined to
the Park Petitioners reliance first on s. 154(1), then on s. 247, and then
on the general jurisdiction of the court in support of the relief sought in
their petition. No case for interfering with the judges determination the
Davidson Petitioners are entitled to exercise their s. 190 rights has been
made out. They are statutory rights and the Davidson Petitioners have done
what is required by the statute to exercise them. The Corporation must comply
with the provisions of the
Act
.
Disposition
[56]
I would dismiss the appeals.
The Honourable Mr. Justice Lowry
I
agree:
The
Honourable Chief Justice Finch
I
agree:
The
Honourable Madam Justice Smith
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
Dondale
(Re),
2009 BCCA
10
Date: 20090115
Docket: CA035253
IN BANKRUPTCY AND INSOLVENCY
IN THE MATTER OF THE JOINT PROPOSAL OF
Ronald Manning
Dondale
and
Lynell
Marie
Dondale
Corrected Judgment:
The text of the judgment was corrected at paragraph 9 on August 4, 2009
Before:
The
Honourable Madam Justice Prowse
The
Honourable Mr. Justice Hall
The
Honourable Mr. Justice Low
D.
Nygard
Counsel for the Appellant
J.I.
McLean and S.
Pivnick
Counsel for the Respondents
Place and
Date of Hearing:
Vancouver, British Columbia
16 October 2008
Place and
Date of Judgment:
Vancouver, British Columbia
15 January 2009
Written
Reasons by
:
The
Honourable Mr. Justice Low
Concurred
in by:
The
Honourable Madam Justice Prowse
The Honourable Mr. Justice Hall
Reasons
for Judgment of the Honourable Mr. Justice Low:
[1]
Lynda Vogt, an official
receiver, acting on behalf of the Superintendent of Bankruptcy under the
Bankruptcy
and Insolvency Act
,
R.S.C.
1985, c. B-3 (the
Act
), invoked her power under s. 66.22(1) of the
Act
to require the administrator to apply to the court for review of a joint
consumer proposal made by Ronald Manning
Dondale
and
Lynell
Marie
Dondale
pursuant to
Division II of Part III of the
Act
. The Superintendent now
appeals the order of Mr. Justice
Burnyeat
approving
the proposal. At issue is the legality of clause 7(b) of the
proposal. We are told that the clause is in common use and that a
decision at the appellate level will serve to guide administrators in the
preparation and approval of proposals made under Division II.
[2]
Clause 7 of the
Dondale
proposal reads:
(a)
the
creditors may appoint up to three inspectors responsible
for the Consumer Proposal of the consumer debtor. The inspectors may have, in
addition to any powers of inspectors under the Act, the power to
(
i
)
receive
any notice of default in the performance of a provision of the Consumer
Proposal and waive any such default, and
(ii)
approve any amendment to the Consumer Proposal without calling a meeting of
creditors, if the amendment would alter the schedule for and the amount of the
payments to be made by the consumer debtor, but would not change the total
amount to be paid; and
(b)
in
the absence of appointed Inspectors the
Administrator of this Consumer Proposal shall have the power to extend the time
for the making of any payment required to be made pursuant to this Proposal
provided that no such extension shall extend beyond the five years following
the approval of this Proposal by the court.
[Emphasis added]
[3]
The Superintendent
contends that clause 7(b) overrides a provision in the
Act
that
mandates the consequences of default by a debtor in making payments under the
proposal, and that it permits the administrator of the proposal to amend it
without resort to the proposal amendment provision in the
Act
.
[4]
Division II creates a
summary process for an insolvent person to make a proposal to creditors to
retire debt by making payments over time. It is not necessary to describe
this statutory scheme in complete detail to determine the narrow point at
issue. It will suffice to observe that the scheme applies to
non-corporate
debtors
whose aggregate debt does not
exceed $75,000, excluding debt on the debtors principal residence. The
debtor may make a proposal to his or her creditors generally. Section
66.13(1
)(
a) of the
Act
requires the
debtor to obtain the assistance of an administrator in preparing the consumer
proposal. An earlier section designates trustees in bankruptcy as
administrators. In the present case,
Abakhan
& Associates Inc. is the administrator and is the respondent in this
appeal.
[5]
On 1 February 2007, the
Dondales
made a consumer proposal that they pay $400
per month for sixty months to retire their joint unsecured debt. They had
assets of $173,786.74, secured debt of $136,300 and unsecured debt of
$54,409. The proposal went to their fourteen creditors. All the
creditors who voted approved the proposal. They represented unsecured
debt of $43,244.61. Under the payment schedule, the debtors would pay off
$24,000 of their unsecured debt, less administrative costs.
[6]
On 8 February 2007, the
administrator reported to the creditors as follows:
4. That we
are of the opinion that the cause or causes of the consumer debtors insolvency
are as follows:
The debtors
advise that their debt load has been slowly mounting over the course of the
last few years. In January of 2006 Mr.
Dondale
was forced to take time away from work at a reduced income due to heart
problems leaving less money to service their debt. The situation was
further compounded by the fact that Mrs.
Dondale
is a
casual
LPN
, whose work schedule is irregular and infrequent
due to her being in school. As a result of these factors and poor
financial management the debtors now find themselves in a position where they
can no longer continue to service their debt obligations as they come due and
feel that their creditors will be better off if they make a consumer proposal
rather than an assignment in bankruptcy.
5. That we
are also of the opinion, for the following reasons, that the consumer proposal
is reasonable and fair to both the consumer debtor and the creditors, and that
the consumer debtor will be able to perform it:
As noted in
Appendix A in a bankruptcy, the unsecured creditors may receive approximately a
$0.08 recovery for every dollar they are owed. This proposal provides a
better return for all the unsecured creditors of approximately $0.30 for every
dollar they are owed.
[7]
Under ss. 66.15(1) and
(2
)(
b) of the
Act
, a meeting of the
creditors can be required by the official receiver or by creditors holding 25%
of the proven debt claims. At such a meeting, the creditors can appoint
inspectors from among their number. Otherwise, under s. 66.18, the
proposal is deemed to have been accepted by the creditors. In the present
case, no meeting was required so no inspectors were appointed. This seems
to be the norm under the consumer proposal provisions of the
Act
.
In most cases, the administrator becomes the ongoing connection between the
debtor and the creditors.
[8]
Because no inspectors
were appointed, clause 7(b) of the
Dondale
proposal
became operative.
[9]
Court approval of a
proposal is required only if requested by the official receiver or any other
interested party within fifteen days after the day of acceptance or deemed
acceptance
(s. 66.22(1)). Otherwise the proposal is deemed to have
been approved by the court (s. 66.22(2)).
[10]
Under s. 66.24, the court can either
approve or refuse to approve the proposal. Subsection 66.24(3) provides
that the court
shall
refuse approval if the proposal does not comply
with ss. 66.12(5) and 66.12(6) of the
Act
(reproduced below at
para
. 15). Under s. 66.24(2), the court
shall
refuse approval where it is of the opinion that the terms
are not reasonable
or are not fair to the consumer debtor and the creditors
; and the court
may
refuse approval if the debtor has committed any of certain offences under the
Act
or was not eligible to make the proposal when it was filed.
[11]
In the present case, the
Superintendent argues that the chambers judge should have refused approval of
the proposal on the basis that it does not comply with the
Act
.
It is not clear to me whether this argument is based on the assertion that
clause 7(b) of the proposal renders the proposal unreasonable or unfair to the
creditors; or on the assertion that the court should have rejected the proposal
under a residual discretion in s. 66.24(4), which reads: subject to
subsections (1) to (3), the court may either approve or refuse to approve the
consumer proposal. It seems to me that if a proposal is in conflict with
the legal requirements of the
Act
, it ought to be rejected as
being unreasonable or unfair.
[12]
The official receiver required the
administrator to apply for court review of the proposal. In an earlier
letter to the administrator, the official receiver set out a number of concerns
about the proposal. The principal concern related to clause 7 and was
expressed in the letter as follows:
·
It
is not reasonable to expect
creditors to recognize that paragraph (7) bypasses the requirement to send the
Notice of Deemed Annulment when payments are not made. As a result, the
Administrator may (or may not) send notice when payments are not made for up
to five years.
·
It
appears the purpose of paragraph #7
is to bypass the Notice of Deemed Annulment when payments are in arrears in
excess of 3 months; which diminishes the integrity of Bankruptcy and Insolvency
Act and compromises the credibility of the proposal process.
[13]
No creditor appeared at the hearing
of the administrators application to the court for approval of the
proposal.
[14]
Two trustees in bankruptcy employed
by the administrator swore affidavits amplifying the reasons for the content of
the proposal in general and for clause 7 in particular.
At
para
.
9 of his reasons, the
chambers judge set out the crux of their evidence:
(a) Richard Robinson:
The family income is sufficient to allow for the payment of $400.00 per month
but with little room for error. However, Mrs.
Dondale
is currently attending school to become a fulltime nurse and currently earns
$375.00 per month. It is anticipated that when she completes her schooling in
September of 2009, the family income should increase by approximately $2,500.00
per month.
.
Paragraph 7 of the Proposal allows the creditors flexibility in whether or not
to terminate the Proposal and induce a bankruptcy. In the absence of
inspectors, the Trustee is given the ability to defer payments and avoid a
default under the Proposal.
The Trustee would only rely on that provision if:
(a) the
Debtor had a valid reason for missing payments, such as loss of employment or
illness, and that the Debtor was confident that he or she still had the ability
to complete the terms of the Proposal; and
(b)
the
Trustee was satisfied that the creditors as a whole
would be better off allowing the Proposal to continue than they would be were
the Debtors to become bankrupt.
In this case, it is possible that the Debtors could miss payments before Mrs.
Dondale
achieves fulltime employment as a nurse. It may
well not be in the creditors interest to terminate this Proposal were the
Debtors to miss three payments if that were to occur at a time when it still
appears that Mrs.
Dondale
would become a fulltime
nurse with the resultant substantial increase in the family income.
(b) George
Abakhan
:
The Office of the Superintendent of Bankruptcy
has expressed concern with the inclusion of paragraph 7 in the Consumer
Proposal filed by Mr. and Mrs.
Dondale
.
This provision is a term that is used by
Abakhan
& Associates Inc., and other Trustees, as a
common practice in consumer proposals.
Consumer proposals typically involve
individuals with relatively modest incomes.
Consumer proposals usually call for regular
payments to be made by the consumer debtor (the Debtor) over a period of
three to five years.
It is difficult for this type of Debtor to
predict the future with precision what the Debtors income will be over a three
to five year period. The flexibility that paragraph 7 of the proposal provides
allows the Debtor to be confident that he or she will not be in default under
their proposal should there be a temporary interruption in their employment or
unanticipated expenses over the term of the proposal.
Temporary employment interruption is fairly
common in the resource sectors of the British Columbia economy.
The flexibility allowed to a Debtor under
paragraph 7 of the Proposal allows the Debtor to make proposals to his or her
creditors so that the Debtor would pay more in a proposal than in a bankruptcy.
Our experience with consumer proposals is that
only about 5% to 10% of them have defaults. Many of these catch up payments in
arrears during the course of the proposal.
In the typical consumer proposal the creditors
will consist almost exclusively of financial institutions, credit card
companies and Canada Revenue Agency.
These creditors will each have either an
internal department that specializes in dealing with loans that are in default
or will outsource this to a third party who specializes in administering
default loans.
It is the policy of our firm to advise Debtors
of their respective rights and costs in a bankruptcy situation and in a
settlement proposal situation to ensure Debtors understand the alternatives and
the costs relating thereto.
The advocacy of our firm is to encourage the
Debtors to consider proposals to maximise the return to Creditors which
invariably would receive NIL in a bankruptcy. Therefore, the need for Clause 7
referred to above is to allow flexibility in the successful completion of the
proposal.
In the vast majority of the consumer proposals,
there is never a meeting of the creditors.
It is also rare to ever have inspectors
appointed by the creditors in a consumer proposal.
[15]
Parliament has seen fit to give
sparse direction under the
Act
as
to the form and content
of consumer proposals. The
Act
states:
66.12(5)
A
consumer
proposal must provide that its performance is to be completed within five
years.
(6) A
consumer proposal must provide
(a)
for
the payment in priority to other claims of all
claims directed to be so paid in the distribution of the property of the
consumer debtor;
(b)
for
the payment of all prescribed fees and expenses
(
i
)
of
the administrator on and incidental to proceedings arising out of the consumer
proposal, and
(ii)
of
any person in respect of counselling provided
pursuant to paragraph 66.13(2)(b); and
(c)
for
the
manner of distributing dividends.
[16]
Section 66.2 of the
Act
provides
that the creditors may include in the proposal, subject to the consent of the
debtor, such provisions or terms
with respect to
the supervision of the
affairs of the consumer debtor
as they may deem advisable [emphasis
added]. In my opinion, whether it was initiated by the debtors or by the
creditors, clause 7(b) in the subject proposal is such a provision.
Supervision must be seen to include adjustment of the payment schedule.
[17]
Just as s. 66.12 is sparse, so s.
66.2 is very broad. Together they evince an intention of Parliament to
permit creditors to consent to, and to permit the court to approve, consumer
proposals containing flexible provisions. These two sections of the
Act
permit the parties to structure the payment provisions
and the
supervision of payment
in such manner as they see fit.
[18]
The Superintendent contends that
clause 7(b) of the proposal in question cannot be approved because it provides
for an amendment of the proposal unilaterally and without compliance with the
legal requirements for amendment found in the statute. The Superintendent
says that the clause forestalls the effect of default as dictated by the
statute. The sections in question are ss. 66.3(1), 66.31(1), 66.31(2),
and 66.37(1). These provisions read:
66.3(1)
Where
default is made in the performance of any provision in a consumer proposal
,
or where it appears to the court
(
a
)
that
the debtor was not eligible to make a consumer
proposal when the consumer proposal was filed,
(
b
)
that
the consumer proposal cannot continue without
injustice or undue delay, or
(
c
)
that
the approval of the court was obtained by fraud,
the
court may, on application
, with such notice as the court may
direct to the consumer debtor and, if applicable, to the administrator and to
the creditors,
annul the consumer proposal
.
66.31
(1) Independently of section 66.3,
(
a
)
where
payments under a
consumer proposal are to be made monthly or more frequently and
the consumer
debtor is in default to the extent of three months
payments
, or
(
b
)
where
payments under a
consumer proposal are to be made less frequently than monthly and the consumer
debtor is in default for more than three months on any payment,
the
consumer proposal shall
thereupon be deemed to be annulled
unless the court has previously ordered
otherwise or unless an amendment to the consumer proposal has previously been
filed, and the administrator shall forthwith so inform the creditors and file a
report thereof in the prescribed form with the official receiver.
(2)
Where an
amendment to a consumer proposal filed before the deemed annulment of the
consumer proposal by virtue of subsection (1) is withdrawn or refused by the
creditors or the court, the consumer proposal shall thereupon be deemed to be
annulled.
...
66.37 (1) Where an administrator files an
amendment to a consumer proposal
(a)
before
the withdrawal, refusal, approval or deemed approval
by the court of the consumer proposal, or
(b)
after
the approval or deemed approval by the court of the
consumer proposal and before it has been fully performed or annulled or deemed
annulled,
the
administrator shall call a meeting of
creditors to be held within twenty-one days after the amendment is filed, to
consider the consumer proposal as amended.
[Emphasis added]
[19]
The chambers judge correctly stated
the law of statutory interpretation as it applies to the
Act
by
quoting the following passages from the judgment of Levine
J.A.
in
Port Alice Specialty Cellulose Inc. (Bankruptcy) v. ConocoPhillips Co.
2005 BCCA 299; 41
B.C.L.R.
(4th) 259:
[25] There is no dispute that
the proper approach to the interpretation of s. 81.1 [of the Act] is that
described in
E.A.
Driedger's
Construction of Statutes
(2nd ed. 1983), at p. 87:
Today there
is only one principle or
approach,
namely, the words
of an Act are to be read in their entire context and in their grammatical and
ordinary sense harmoniously with the scheme of the Act, the object of the Act,
and the intention of Parliament.
[26] This approach has been
approved by the Supreme Court of Canada in numerous cases. The Supreme Court
has also said that this approach is confirmed by s. 12 of the
Interpretation
Act
,
R.S.C.
1985, c. I-21, which provides that
every enactment "is deemed remedial, and shall be given such fair, large
and liberal construction and interpretation as best ensures the attainment of
its objects": see
Barrie Public Utilities v. Canadian Cable Television
Assn.
, [2003] 1
S.C.R.
476 at
para
.
20;
Bell
ExpressVu
Limited
Partnership v. Rex
, [2002] 2
S.C.R.
559 at
para
.
26.
[27] In interpreting the
BIA
,
courts have noted that it is a commercial statute used by business people and
should not be given an overly narrow or legalistic approach: see
Re
McCoubrey
, [1924] 4
D.L.R.
1227 at 1231-32 (Alta.
S.C
);
Mercure
v. Marquette &
Fils
,
[1977] 1
S.C.R.
547 at 556;
Re Maple Homes Canada Ltd.
, 2000
BCSC
1443 at
para
. 21.
[20]
The judge also referred to
conflicting decisions on the point in question. In
Bankruptcy of
Williams
, 2005
BCSC
108, Master Baker,
sitting as a Registrar, considered a term in a proposal identical to clause
7(b) in the present case. He concluded his analysis with the opinion that
there is a great deal of flexibility in crafting a Consumer Proposal, the only
limitation being that the proposed terms not offend or violate the terms of the
Act
(
para
. 8). He found no
conflict between the clause and the provisions of the
Act
.
In Ontario, Registrar Nettie reached the opposite conclusion in
Re
Sztojka
, [2005]
O.J.
No.
5551 (
S.C.J.
). Although he agreed that there is
a great deal of flexibility in crafting a consumer proposal, he was of the
opinion that creditors cannot cure a default in payment under a Division II
proposal, except by acceptance of a properly filed amended proposal in
accordance with [s. 66.37] of the Act
(at
para
.
15). For the reasons that follow, I prefer the conclusion on the point
reached by Master Baker.
[21]
The chambers judge described the
issue before him as follows:
[32]
the question which
arises is whether I should refuse to approve this consumer proposal on the
basis that it is not reasonable or not fair to the consumer debtor and the
creditors (s. 66.24(2) of the
Act
) or whether, in interpreting the
Act in a way which is not overly narrow or legalistic, I should approve or
refuse to approve the Consumer Proposal (s. 66.24(4) of the
Act
).
He considered the reasonableness and fairness clause and the residual
discretion clause.
[22]
The chambers judgment concludes with
nine paragraphs containing ten reasons why the court should approve the
proposal. In these paragraphs, the judge conflated the issues of legality
and reasonableness. It seems to me that those two issues should be
considered separately. If the proposal in question does not comply with
the
Act
, it cannot be approved because it is presumptively
unreasonable. If it does comply, there should then be a subjective
consideration of its reasonableness.
[23]
The Superintendent contends that the
Dondale
proposal is not legal because clause 7(b) has
the effect of permitting the debtors to miss three monthly payments with the
administrator then having the power to effectively override the legal effect of
those missed payments under s. 66.31(1). In other words, says the
Superintendent, a deemed annulment under that section can be excused by the
administrator. The Superintendent argues further that clause 7(b)
conflicts with the proposal amendment provision, s. 66.37(1).
[24]
I do not agree with these
submissions. The purpose and effect of clause 7(b) is not to override the
annulment provision in the
Act
. Rather, it is to avoid it
before it becomes operative. If the
Dondales
have legitimate difficulty in meeting the payment schedule at any time during
the five-year period because their income flow is erratic, the administrator
can rearrange the payment schedule from time to time to make the monthly
payments correspond more closely to the flow of their income. However, if
they miss three payments in a row before the schedule can be adjusted by the administrator,
or if they miss three payments in a row under the adjusted schedule (or if the
adjusted payment schedule provides for payments less frequently than monthly
and one payment falls in arrears for more than three months), s. 66.31 will
become operative and there will be a deemed annulment.
[25]
In my opinion, s. 66.31(1) does not
purport to dictate the content of proposals and how they are to be
administered. It only provides that a proposal is automatically annulled
if the debtor is in default for three months, except as provided therein.
It does not define default and is not specific as to how default may come
about. In the present case, the creditors have agreed that the
administrator can alter the payment schedule to create flexibility to meet
changing conditions during the term of the proposal. The provision would
likely reduce administration costs that otherwise might be incurred. It
does not give the administrator the power to forgive any part of the debt
payment. Nor does it offend s. 66.12(5) by permitting the debtor to make
payments beyond the five-year term.
[26]
Section 66.31(1
)(
a)
requires default under a consumer proposal for three months before there is an
automatic annulment of the proposal. Clause 7(b) of the subject proposal
permits a summary and efficient rearrangement of the payment schedule by the
administrator. It seems to me that this does not offend s. 66.31(1)(a)
because there can be no default under the consumer proposal until the debtors
have missed three months of payments or have been in default for three months
under the payment schedule as modified by the administrator under his delegated
authority. This is what the creditors and the debtors agreed to and I see
no reason under the statutory scheme to reject the proposal as being in
conflict with the
Act
. To the contrary, it seems to me that
it builds into the proposal flexibility that is administratively efficient and
potentially less costly.
[27]
I do not see clause 7(b) as being in
conflict with s. 66.37(1) of the
Act
. Empowerment of the
administrator to adjust the payment schedule during the five-year term of the
proposal is simply designed to make the payment schedule flexible, to make it
adjustable to future exigencies. If such an adjustment is properly viewed
as an amendment of the proposal and not just its implementation (which I am
inclined to think is the case), there is nothing in the
Act
that
says that the procedure under s. 66.37(1) is the only way that an amendment can
be brought about. That section is concerned with the filing of an
amendment by the administrator. It does not provide that its procedure is
the only available mechanism for adjustment of a payment schedule. The
creditors and the debtors can agree to a procedure that is more efficient
administratively and is less costly.
[28]
The above is in keeping with
Parliaments overall purpose in enacting Division II of Part III. If
Parliament had intended to restrict the way consumer proposals are to be worded
and administered, it would have used more specific and restrictive language in
ss. 66.12(5) and (6), and in s. 66.2.
[29]
I do not understand the
Superintendent to argue that if clause 7(b) of the proposal is not in conflict
with the
Act
, the proposal is nonetheless unreasonable.
Therefore, it is not necessary for us to consider that issue.
[30]
I would dismiss the appeal.
The
Honourable
Mr. Justice Low
I agree:
The
Honourable
Madam Justice Prowse
I agree:
The
Honourable
Mr. Justice Hall
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Stevanovic
v. Sin,
2009
BCCA 11
Date: 20090116
Docket: CA035259
Between:
David
Stevanovic
Appellant
(
Plaintiff
)
And
Yong
Gen Sin and Dhong Yin Sin
Respondents
(
Defendants
)
Before:
The
Honourable Mr. Justice Mackenzie
The
Honourable Madam Justice Levine
The
Honourable Mr. Justice Tysoe
D.
Stevanovic
Appearing In Person
A.
Urquhart
Counsel for the Respondents
Place
and Date of Hearing:
Vancouver, British Columbia
11 December 2008
Place
and Date of Judgment:
Vancouver, British Columbia
16 January 2009
Written
Reasons by
:
The
Honourable Mr. Justice Mackenzie
Concurred
in by:
The
Honourable Madam Justice Levine
The
Honourable Mr. Justice Tysoe
Reasons
for Judgment of the Honourable Mr. Justice Mackenzie:
[1]
This appeal is from an assessment of damages for personal injuries
sustained in a motor vehicle accident. The defendants admitted liability.
The plaintiff appellant, David Stevanovic, was awarded $35,000 for non-pecuniary
damages, $16,026 for past wage loss, and $837.24 for special damages. His
claim for loss of future earnings was dismissed. He appeals on the ground
that the trial judge erred in dismissing the claim for future loss of earnings
and made errors in the assessments under other heads of damages. He also
submits that the trial judge erred in the application of the principles of
causation to his claim.
[2]
The trial judge accepted that the appellant suffered soft tissue injuries
in the accident but she found that his medical problems at the time of trial
in 2007 were caused by a degenerative condition of his spine and shoulders
and not caused by injuries sustained in the motor vehicle accident. She concluded
symptoms of neck and shoulder pain resulting from the accident would have
been resolved within two years at the outside. In reaching that conclusion
she relied on the medical opinion of an orthopaedic surgeon who examined the
appellant on behalf of the respondents.
Facts
[3]
The appellant was injured in an accident on 16 December 1998 when the
Volkswagen Vanagon he was driving collided in an intersection with the respondents
Volvo sedan that was turning left in front of him. Both vehicles had been
travelling at speeds between 20 and 30 kph. The appellant braced himself
against the steering wheel before impact. He heard his neck make two cracking
noises as he was propelled forward in the collision. The left front bumper
area of the appellants vehicle was damaged in the collision, later repaired
at a cost of $3,026.99. The appellant was able to drive his vehicle a short
distance to his home after the accident.
[4]
He went to bed when he arrived at home and woke up the next morning
stiff and sore in his shoulders and upper back. He had a headache. He could
not turn his head to the left and experienced numbness on one arm from the
mid-arm to the thumb. He had difficulty sleeping. Over the next four months
he had 31 physiotherapy and three acupuncture treatments. His symptoms gradually
improved.
[5]
The appellant was 57 at the date of the accident. He was employed
as a heavy duty mechanic with Deere-Hitachi. He was off work for four months
after the accident. He then returned to full-time work and continued until
he retired in 2003, after 13 years with the employer. He claimed that the
injuries he sustained in the accident contributed to his retirement three-and-a-half
years before his normal retirement date. His claim for loss of future earnings
and loss of pension benefits is based on his early retirement.
[6]
The trial judge accepted the appellants evidence that he has continuing
neck and shoulder problems but she found that they were caused by the degenerative
condition of his spine aggravated by the physical demands of his work and
not related to the injuries sustained in the motor vehicle accident. Accordingly
she rejected the claim for future income loss arising from his early retirement.
The appellant contends that she erred in that conclusion and the motor vehicle
accident injuries contributed to his forced early retirement.
Issues and Analysis
[7]
The trial judge applied the test of causation outlined in
Athey
v. Leonati
, [1996] 3 S.C.R. 458, which she summarized as requiring the
appellant to show that but for the negligence of the respondents the injury
would not have happened. She noted that the accident does not have to be
the sole cause but must materially contribute to the injury.
[8]
The appellant contends that the trial judge erred in her application
of the
Athey
principles to the future earnings claim. The issue turns
primarily on the medical evidence. The appellant called his family physician,
Dr. Frank Beck, and the respondents called Dr. Iain Dommisse, who conducted
a medical examination of the appellant on their behalf.
[9]
Dr. Beck noted the degenerative changes of the appellants cervical
spine and shoulders but in his opinion the appellants continuing symptoms
were consistent with soft tissue injuries resulting from the motor vehicle
accident. Dr. Dommisse disagreed. His opinion was that the soft tissue injuries
suffered in the 1998 accident would have temporarily flared a pre-existing
condition resulting from degenerative changes and soft tissue injuries in
an earlier 1977 accident. That flare-up would not have lasted more than 24
months and ended before the appellant retired. The trial judge accepted the
evidence of Dr. Dommisse over that of Dr. Beck.
[10]
The appellant contends that there are inconsistencies in Dr. Dommisses
opinion letters that make his opinion unreliable. Dr. Dommisse examined the
appellant on 10 July 2006, six-and-a-half years after the accident. In his
report letter of 13 July 2006, he gave his opinion that the appellant sustained
a Grade II cervical strain as a result of the accident and that [t]he overall
prognosis for this man is good. He added:
Bilateral
shoulder tendonitis is noted in the handwritten notes dated July 24, 1998
and x-rays done at that time showed calcific tendonitis.
He was noted
to have neck problems with chiropractic adjustments in the handwritten entry
dated September 8, 1998.
Additionally,
as outlined above, Mr. Stevanovic was involved in a motor vehicle accident
in 1977. His vehicle flipped over at that time and he sustained a neck injury.
He was off work for eighteen months following the injury in 1977.
In my opinion,
this mans prior history of neck and shoulder problems is likely contributing
to his ongoing symptoms.
Additionally,
this man has degenerative changes within the cervical spine as noted above.
In my opinion, his degenerative changes are contributing to his symptoms
predominantly at this time.
The CT scan
done for his cervical spine on October 5, 2002 does show right-sided C516
foraminai stenosis, as outlined above, and, in my opinion, these changes are
likely causing a degree of nerve root irritation and contributing predominantly
to his symptoms.
[11]
Dr. Dommisse was asked by counsel to supplement his report and responded
by letter dated 8 February 2007 as follows:
Following our telephone conversation yesterday, I confirm
that in my opinion, this mans symptoms would likely have been flared temporarily
for a period of approximately six (6) to twelve (12) months as a result of
the motor vehicle accident of December 16, 1998. It is likely that as outlined
in my letter of July 13, 2006 in the last two paragraphs on page 7, his prior
history of neck problems, requiring chiropractic adjustments in September
1998 and his previous neck injury as a result of his motor vehicle accident
in 1977 is contributing predominantly to his symptoms at this time.
In my opinion Mr. Stevanovic would have been able to
continue working for Deere Hitachi until retirement as he stated he would
be able to manage this work as a heavy duty mechanic following the motor vehicle
accident of December 16, 1998.
[12]
The appellant contends that these reports present conflicting predominant
causes of the continuing symptoms and treat the soft tissue injuries from
the 1977 and 1998 accidents inconsistently. The appellant says that Dr. Dommisse
opines that the soft tissue injuries from 1977 still contribute to the appellants
present symptoms whereas the symptoms of similar injuries in 1998 must have
resolved within 12 months (extended to 24 months in his evidence at trial).
He argues that there is no objective reason to view similar injuries from
the two accidents differently.
[13]
Dr. Dommisses report and supplementary letter are confusing and potentially
inconsistent. The trial judge saw this apparent inconsistency and she questioned
Dr. Dommisse for clarification during the course of his cross-examination
by the appellant. Dr. Dommisse responded that the soft tissue injuries from
the 1977 accident were significant to the extent that they made the recovery
from the 1998 accident soft tissue injuries a little longer. He maintained
his opinion that the appellant was not prevented by his medical condition
from continuing to work as a heavy duty mechanic until normal retirement.
[14]
There were difficulties with respect to Dr. Becks opinion as well.
The appellant did not become Dr. Becks patient until 2001 and Dr. Beck was
unaware of the appellants pre-accident medical history. The appellants
family physician at the time of the accident was not called as a witness or
asked to provide a medical-legal report.
[15]
The trial judge concluded (at para 52):
The defendant is not obliged to put the plaintiff into a better position
than he would have been had the accident not occurred. Here the plaintiff
suffered from a condition of degeneration of the spine before the accident.
Given the numerous doctor and chiropractor visits prior to the accident for
neck and shoulder pain (of which Dr. Beck was unaware) and the significant
degenerative changes in the spine, I accept the opinion of Dr. Dommisse over
that of Dr. Beck in terms of the long-term cause of the pain. Mr. Stevanovic
had significant shoulder and neck problems pre-accident. His problems today
are related to the degeneration of his spine, not the motor vehicle accident.
He would suffer his present symptoms even if the motor vehicle accident did
not occur.
[16]
And later, at para 70:
I have found that Mr. Stevanovic's ongoing
neck and shoulder problems are due to the degenerative changes in his spine
from which he suffered before the accident. I expect that the aggravation
of these injuries was caused by his work and related to the degenerative spine
and not the motor vehicle accident. I cannot conclude that Mr. Stevanovic
had to retire due to his injuries. He worked four years post-accident. Retirement
was his decision and his decision alone. This is not something for which
the defendant is responsible. It is therefore not necessary to review the
merits of the claim from a financial analysis. The claim for future wage
loss is dismissed.
[17]
The appellant contests these findings. He contends that the 1998 accident
injuries must have contributed to a degenerative condition in his cervical
spine appearing on post-accident medical imaging in 2002, 2003, and 2007 as
they were not shown in pre-accident X-rays. The medical evidence does not
support that inference. Dr. Dommisses opinion was that the degenerative
condition was unrelated to the accident. Dr. Beck disagreed to the extent
that he regarded the appellants spasm as consistent with chronic soft tissue
injury but he agreed that the degenerative changes shown on the X-rays were
not caused by the accident.
[18]
The appellant also states he told Dr. Dommisse that shortly before
he retired, the nature of his work for Deere Hitachi changed from lighter-duty
refits of logging road excavators to heavier work involving quarter-inch plate
steel that put additional strain on his neck and shoulders. Dr. Dommisse
did not refer to that change in his report but in his testimony he confirmed
that his opinion was based on the lighter work and he was not opining that
the appellant could do the heavier work. However, he maintained that the
occupational disability with respect to the heavier work was related to the
degenerative condition and not to the MVA soft tissue injuries.
[19]
The trial judge correctly applied the principle of causation taken
from
Athey
. I am satisfied that there was evidence to support her finding
that the causes of the appellants early retirement were unrelated to the
soft tissue injuries sustained in the 1998 accident. There was no misapprehension
of the evidence or other palpable or overriding error that would permit this
court to disturb that conclusion: see
Toneguzzo-Norvell (Guardian ad litem
of) v. Burnaby Hospital
, [1994] 1 S.C.R. 114 at 121-22. Accordingly,
there are no grounds to set aside the dismissal of the claim for loss of future
earnings.
[20]
The trial judge allowed the appellants claim for the cost of post-accident
physiotherapy treatments but rejected a claim for the cost of chiropractic
treatments, and a claim for time off work to attend the chiropractor, on the
ground that the chiropractic treatments were not recommended by his doctor.
She also dismissed a claim for time off to attend medical appointments on
the ground that the time off for that purpose was not proven on the balance
of probabilities. I do not think that there are any grounds to vary the trial
judges conclusions on those aspects of past wage loss and special damages.
[21]
In the result, I would dismiss the appeal.
The Honourable Mr. Justice Mackenzie
I AGREE:
The Honourable Madam Justice Levine
I AGREE:
The Honourable Mr. Justice Tysoe
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Loyola
v. Loyola,
2009
BCCA 20
Date: 20090119
Docket: CA035720
Between:
Concepcion
Loyola
Respondent
(
Plaintiff
)
And
Jamie
Anglo Loyola
Appellant
(
Defendant
)
Before:
The
Honourable Mr. Justice K. Smith
The
Honourable Mr. Justice Lowry
The
Honourable Madam Justice Neilson
Oral Reasons for Judgment
J.
Marquardt
Counsel for the Appellant
Y.S.
Wong
M.P.
Maryn
Counsel for the Respondent
Place
and Date:
Vancouver, British Columbia
19 January 2009
[1]
K. SMITH J.A.
: Before us are an appeal and a cross-appeal from a judgment
for damages for loss and injury suffered by the respondent as a result of
an automobile accident on 20 September 2001.
[2]
The respondent was a front seat passenger in an automobile driven by
the appellant, her husband, which collided with the rear of another automobile
and pushed it into a third. She suffered injury from the collision itself
and from the airbag in her vehicle which suddenly inflated in front of her
and struck her in the face.
[3]
Following a three week trial before the Honourable Mr. Justice Sigardson
and a jury in which liability for the accident was admitted, judgment was
granted for the respondent for damages assessed by the jury as follows:
Non-pecuniary damages $194,000
Special damages $745
Past loss of income $6,000
Total
$200,745
[4]
The jury assessed no damages for future loss or diminution of earning
capacity or for cost of future care, although the respondent claimed damages
under those heads.
[5]
The appellant submits the jury committed palpable and overriding error.
In his submission, the award of $194,000 for non-pecuniary damages is wholly
out of proportion to the evidence, is inordinately high, and is inconsistent
with the jurys refusal to award damages for future losses. He seeks an order
setting aside the award for non-pecuniary damages and either substituting
an award of between $75,000 and $90,000 or remitting this head of damages
to the trial judge for assessment.
[6]
The respondent contends the award for non-pecuniary damages is warranted
on the evidence and the jury made no error in their assessment under this
head of damages. On her cross-appeal, she submits the jury erred in failing
to assess any damages for future loss of earning capacity and cost of future
care and asks us to award a modest sum for a loss of opportunity to earn income
in future and about $124,000 for costs of future of care.
[7]
The respondent was a homemaker and a nanny. She was 48 years old at
the time of the accident. She suffered from chronic low back pain before
the accident as a result of an injury she suffered more than 20 years earlier.
She claimed the accident aggravated her symptoms from that condition and,
as well, that it caused soft tissue injuries to her neck, back and other parts
of her body that, in turn, caused her pain that was constant and had become
chronic by the time of trial five years later. Further, she claimed the accident
caused her mild traumatic brain injury and post-concussion syndrome that resulted
in depression, anxiety and cognitive problems including difficulties with
her memory.
[8]
It was her position that these conditions were permanent and that she
requires treatment for her psychological conditions and for her chronic pain.
She claimed the effects of her injuries have changed her from a happy, sociable,
independent and active woman to one who is depressed and irritable and unable
to do the things she did before, requiring assistance even with mundane day-to-day
tasks.
[9]
She claimed she had worked gainfully in the past, that she confined
her work to babysitting while she raised her three children, and that she
would have returned to the workforce before the trial but for her injuries.
She claimed the injuries have rendered her competitively unemployable.
[10]
There was expert and lay evidence led at the trial that, if accepted
by the jury, would have supported the respondents claims and a substantial
award of non-pecuniary damages along with awards for past loss earnings, future
loss of earning capacity, and cost of future care. We were referred, during
submissions this morning, to cases that would support an award of $75,000
to $90,000 or as much as $200,000, depending on what view the jury took of
the nature and extent of the respondents injuries.
[11]
The appellants position at trial was that the respondent lacked credibility.
He argued that the doctors who saw her after 2004, which included virtually
all of the medical specialists who diagnosed mild traumatic brain injury and
psychological injury, relied on her reports of symptoms, for their diagnoses
and prognoses, and that to that extent their opinions were not reliable.
He urged the jury to rely on the respondents complaints to her family doctor
in the months immediately following the accident. He noted that there was
no diagnosis of concussion or brain injury during those early months and that
her first report of complaints to a doctor that would support such a diagnosis
were not recorded until August 2004. He submitted the respondent had proven
only soft tissue injuries and injuries to her face and that she had completely
recovered from these injuries within about three months of the accident.
[12]
He argued she had not proven she was unable to work as a babysitter
after the accident, and that there should be no award for past wage loss.
He submitted, as well, that no diminution in the respondents earning capacity
had been proven. Further, he submitted, many of the items claimed for cost
of future care related to her pre-existing back condition and were unrelated
to the accident. The balance, he argued, were largely related to treatment
for the consequences of post-concussion syndrome which, in his submission,
had not been proven.
[13]
Accordingly, he urged the jury to assess no damages for cost of future
care.
[14]
There were frailties in the respondents evidence that could have led
to the jury to conclude she was not a credible witness and that her complaints
could not be relied upon. Thus, it was open to jury on the evidence to accept
the picture painted for them by defence counsel.
[15]
The difficulty on this appeal is that both sides say the jury erred.
If, as the appellant contends, the refusal to assess any damages for future
diminished earning capacity and future cost of care indicates that the jury
accepted the appellants submission that the respondent suffered only minor
injuries with short term consequences, the award of $194,000 for non-pecuniary
damages was clearly inordinately high and should be set aside.
[16]
On the other hand, if the jury accepted the respondents evidence that
she suffered mild traumatic brain injury and post-concussion syndrome and
was left with chronic pain and permanent psychological problems that have
rendered her unemployable and which require future treatment, which the award
of non-pecuniary damages and, to some extent, the award of past loss of income
would signify, the jury clearly erred in failing to assess any damages for
future diminished earning capacity and cost of future care.
[17]
Without weighing the evidence or speculating as to what evidence the
jury accepted, which we cannot do, I am quite unable to determine where the
jurys error lies. Regrettably, I see no alternative except to allow the
appeal and the cross-appeal and to remit the assessment of damages to the
Supreme Court for a new trial.
[18]
I would so order.
[19]
LOWRY J.A.
: I agree.
[20]
NEILSON J.A.
: I agree.
[21]
K. SMITH J.A.
: The appeal and the cross-appeal are allowed. The appellant
will have the costs of the appeal. The respondent will have the costs of
the cross-appeal. The costs of the trial and the new trial will be for the
Supreme Court.
The Honourable
Mr. Justice K. Smith
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Catalyst
Paper Corporation v. Companhia de Navegação Norsul,
2009
BCCA 16
Date: 20090120
Dockets: CA035088; CA035494
Between:
Catalyst
Paper Corporation
Respondent
(
Plaintiff
)
And
Companhia
de Navegação Norsul
Appellant
(
Defendant
)
Supplementary Reasons
on Costs
Before:
The
Honourable Mr. Justice Hall
The
Honourable Mr. Justice Smith
The
Honourable Mr. Justice Chiasson
M.L.
Smith
Counsel for the Appellant
G.C.
Weatherill
Counsel for the Respondent
Place
and Dates of Hearing:
Vancouver, British Columbia
22 and 23 May 2008
Place
and Date of Judgment:
Vancouver, British Columbia
2 September 2008
Written
Submissions on Costs Received:
9, 27 and 30 October 2008
Date
of Supplementary Judgment:
20 January 2009
Supplementary
Reasons for Judgment of the Honourable Mr. Justice Hall:
[1]
In my reasons for judgment dated 2 September 2008, I requested submissions
from the parties concerning entitlement to costs in this Court and in the
Supreme Court of British Columbia. The plaintiff succeeded in its claim for
breach of contract at trial but that verdict was reversed in this Court.
Costs should normally follow the event (R. 57(9) of the
Rules of Court
)
and be payable to the successful appellant unless there is some principled
basis for departure from that normal rule. Section 9(1)(a) of the
Court
of Appeal Act
,
R.S.B.C. 1996, c. 77, permits this Court to
make any order that could have been made by the trial court.
[2]
In
Grassi v. WIC Radio Ltd
.
, 2001 BCCA 376, 89
B.C.L.R. (3d) 198, 5 C.P.C. (5th) 94, Southin J.A., for the court, gave a
concise history of the courts discretion in making an order for costs:
[18]
British Columbia, from 1st July, 1970, to 1st July, 1990, but neither before
the former nor since the latter date, had an express provision as to the court's
discretion as to costs, which was understood to give the same wide discretion
as that conferred by s. 5 of the
Judicature Act, 1890
, although
the judges here did not express the ambit of the discretion by reference to
s. 5. See, for instance,
Peters v. Davidson
(1982), 41 B.C.L.R.
330 (C.A.), and
Landry v. Bridgestone Tire Co. Ltd.
(1975), 66 D.L.R.
(3d) 408 (B.C.S.C., Craig J., as he then was). The provisions to which I
refer were these:
S.B.C.
1969, c. 38, s. 14
, proclaimed in
force 1st July, 1970, added to the
Supreme Court Act
, R.S.B.C. 1960,
c. 374, this:
80.
...
(2)
Subject to subsection (1), a Judge may, in his discretion, award or refuse
to award costs to any litigant in any civil proceeding in the Court.
S.B.C.
1976, c. 33, s. 146
, amending s.
80(2) to read:
80.
...
(2)
Subject to subsection (1), the Court may, in its discretion, award or refuse
to award costs to any party in any civil proceeding in the Court.
R.S.B.C.
1979, c. 397
, amended s. 80(2) and
renumbered it s. 63(2):
63.
...
(2)
... the court may, in its discretion, award or refuse to award costs to a
party in civil proceedings in the court.
[19]
I suspect that the change said to have been made in 1979 was made by the revisers
of the Statutes and did not have any express legislative warrant.
[20]
On 1st July, 1990, the present Rules came into force and s. 63(2) was
dropped from the
Supreme Court Act
.
[21]
Cases on costs decided in this Court when s. 63(2) or one of its predecessors
was applicable must be scrutinized in order to determine whether the statutory
provision was material to the reasoning.
[22]
One discretion which now exists is that of Rule 57(9), unless the court otherwise
orders.
[Emphasis in original]
[3]
Shortly after the adoption of the new R. 57(9) of the
Rules of
Court
, Lambert J.A., in
Claessins v. Wice
(1991), 56
B.C.L.R. (2d) 110 (C.A.), without referring to R. 57, said at para. 9:
The
cases in British Columbia indicate that the trial judge has a wide discretion
in deciding whether to decline to award costs in favour of the successful
party. I refer particularly to
Landry v. Bridgestone Tire Co.
(1975),
[1976] 3 W.W.R. 160, 66 D.L.R. (3d) 408 (B.C.S.C.);
Peters v. Davidson
(1981), 22 C.P.C. 246, 125 D.L.R. (3d) 753, affirmed (1982), 41 B.C.L.R.
330, 32 C.P.C. 210, 141 D.L.R. (3d) 763 (C.A.); and
Steinhauser v. Robinson
(1983), 49 B.C.L.R. 333 (S.C.).
[4]
In
Moore v. Dhillon
(1993), 85 B.C.L.R. (2d) 69 (C.A.),
Taylor J.A., for the court, opined that R. 57(9) did not alter the discretion
of the trial judge that existed under s. 80(2). He said at paras. 7-8:
Before
us it is asserted for the defendants on their cross-appeal that the reasoning
followed in
Peters v. Davidson
ought no longer to be followed. Counsel
points out that the words of s. 80(2) introduced into the
Supreme Court
Act
in 1969 were removed when the statute was recast in 1989 in the present
much abbreviated form (S.B.C. 1989, c. 40). There is now no reference
in the statute to discretion to grant or refuse costs.
By
the time that this statutory change came into effect, however, the
Supreme
Court Rules
had also been recast. The matter of costs was dealt with
by Rule 57(4) (now 57(9)) which says:
Subject
to subrule (12), costs of and incidental to a proceeding shall follow the
event unless the court otherwise orders.
Since
subr. (12) relates only to motions, R. 57(9) seems to grant unqualified discretion
to depart from the prima facie rule which it provides in the matter awarding
costs at trial. The
Supreme Court
Rules
, including R. 57, were
confirmed and validated by the
Court Rules Act
, S.B.C. 1989, c. 22.
It seems to me that omission of the phrase for good cause which had previously
been included in M.R. 976 shows an intention that the new rule as to costs
be consistent with s. 80(2) of the
Supreme Court Act
, as it stood at
the time the Rules were recast. The elimination thereafter of what was previously
s. 80(2) from the Act could have no effect, therefore, so far as the discretion
of the Court is concerned in the matter of awarding or denying costs at trial.
[5]
In
Grassi
, Southin J.A. commented on the decision in
Moore
with respect to possible alteration of the law arising
from the replacement of s. 63(2) of the
Supreme Court Act
, R.S.B.C.
1979, c. 397, with R. 57(9) of the
Rules of Court
when she said:
[24]
I would not myself go so far as did Taylor J.A. because, in my opinion, the
change from s. 63(2) to Rule 57(9) has made a subtle change in emphasis. I
would say that the subtle change of emphasis is that the person who seeks
to displace the usual rule has the burden of persuading the judge that the
rule should be displaced, but even if the discretion is the same under both
the statutory provision and the present rule, it is nonetheless a discretion
to be exercised on a principled basis.
[6]
This Court has had occasion to consider the exercise of discretion
of the Supreme Court in awarding costs to or imposing costs on a successful
litigant in the cases of
Rossmo v. Vancouver Police Board
, 2003
BCCA 677, 21 B.C.L.R. (4th) 68, and
Brito (Guardian ad litem of) v.
Woolley
, 2007 BCCA 1, 63 B.C.L.R. (4th) 139, 36 C.P.C. (6th) 41.
[7]
In
Rossmo
, the background circumstances were thus narrated
by Donald J.A., writing for the court:
[1]
The plaintiff, Dr. Kim Rossmo, sued the Vancouver Police Board (the Board)
for wrongful dismissal and Deputy Chief Constable John Unger for interference
with contractual relations and inducing breach of contract in a matter arising
from the Board's decision in October 2000 not to renew the plaintiff's five-year
contract as head of the Geographic Profiling Unit (GPU).
[2]
In reasons for judgment delivered on 19 December 2001, Madam Justice Allan
dismissed the action. She denied costs to the defendant Unger because of
what she found to be inappropriate behaviour in his dealings with the plaintiff's
employment: 2001 BCSC 1775.
[8]
The plaintiff Rossmo appealed to this Court from the dismissal of his
action and the individual defendant cross appealed the decision of the trial
judge denying him his costs. This Court dismissed the appeal of the appellant
and allowed the cross appeal of the individual defendant on the costs issue.
Although Donald J.A. found there to be some basis in the evidence for the
trial judges criticism of the conduct of the individual defendant vis-à-vis
the plaintiff including his apparent alacrity in getting rid of the plaintiff
when he had the chance (para. 53), he found the judge had erred in refusing
to award costs to this defendant. He noted that while costs are discretionary,
the discretion must be exercised on a principled basis having regard for the
general rule that costs follow the event as provided for in R. 57(9). He
found that the judge erred when she denied the successful party costs based
on conduct that was prior to and outside the litigation process. He concluded
on this matter by saying:
[62]
I conclude that the trial judge erred in principle by basing her decision
on pre-litigation conduct. The very purpose of the litigation was to determine
whether the impugned conduct supported a cause of action leading to a judgment
in damages. The trial judge found no liability against DCC Unger. Costs
should follow that determination. The order denying him costs amounts to
a finding of quasi-liability and cannot be sustained.
[9]
More recently, in
Brito
, this Court reversed the decision
of a trial judge in a medical malpractice case awarding costs of the action
to the unsuccessful plaintiffs. The trial judge observed that the onus was
on the unsuccessful plaintiffs to demonstrate that a departure from the ordinary
costs rule was justified, citing
Grassi
, but elected to depart
from the ordinary rule because, on her view of the evidence, all of the defendants
were reckless with respect to the manner in which they prepared the medical
records that it was their duty to prepare, and because all but one of the
defendants were negligent with respect to the care they provided to the plaintiffs
(although the defendants were not liable in negligence for the plaintiffs
failure to prove causation).
[10]
Saunders J.A., following the earlier decision of
Rossmo
,
found that the trial judge had erred in her disposition of costs. She said:
[27]
For the reasons that follow, I have concluded that the order of the trial
judge as to costs must be set aside, and the usual order issued. In my view,
the trial judge did not follow, in the words of this Court in
Stiles v.
B.C. (W.C.B)
(1989), 38 B.C.L.R. (2d) 307 (C.A.) at 310, the principles
[that] have developed which guide the exercise of the discretion of a judge
with respect to costs. In particular, the trial judge based her order upon
two features of the case which, in my view, do not support the sanction imposed.
First, she referred to the state of the records created at the time of the
events in issue, or shortly after, which was a time long before the litigation
commenced, and did so in circumstances in which no liability attaches in the
action for the delict of poor record keeping, and in circumstances in which
there was not even a whiff of bad faith. Second, she referred to the tortious
conduct of the defendants, when in fact no liability attached to them because
the entire tort of negligence was not proved. I do not consider that the
Rules of Court
permit the sanction imposed, in these circumstances.
***
[32]
In this case the deficiencies in the record keeping were well known to the
plaintiffs prior to trial. There was, as I understand the reasons for judgment
of the trial judge, no serious backtracking from the evidence the defendants
gave at their examinations for discovery, and inconsistencies in the evidence
was in the nature of those often discovered as a product of the trial process,
but were not created through dishonesty of the defendants.
[33]
Likewise, it was error, in my view, to base the costs order upon a finding
that most of the defendants were found to have failed to comply with their
duties to the plaintiffs (I observe that this does not include Nurse Omstead).
More than this failure is required to establish an entitlement to costs.
The case was defended not just on the issue of compliance with the standard,
but also on the issue of causation. The plaintiffs were required to succeed
on the causation issue in order to obtain an order in their favour. They
did not.
[11]
She found there existed no sound basis in that case to deny the successful
defendants their costs and she ordered costs in their favour.
[12]
Both
Rossmo
and
Brito
involved tort claims.
It seems to me that this Court was concerned that the disposition of costs
made at trial in both of those proceedings could be perceived as what Donald
J.A. referred to in
Rossmo
as a finding of quasi-liability
(para. 62) when, in fact, no liability had been found against the successful
defendants. The successful appellant here submits that there should be no
distinction drawn between a plaintiff failing to make out a claim in tort
as opposed to a claim in contract. It submits that to sanction a party for
conduct that is not actionable is to create some species of quasi-liability
which would not be an appropriate or a principled application of the costs
rules.
[13]
A number of cases in this Court have made the point that the costs
rules should be seen as having a purpose beyond indemnification of the successful
party in the litigation. In
Houweling Nurseries Ltd. v. Fisons Western
Corp
. (1988), 37 B.C.L.R. (2d) 2 at 25, 29 C.P.C. (2d) 168 (C.A.),
leave to appeal refd [1988] S.C.C.A. No. 200, McLachlin J.A. (as she then
was) noted that the costs rules, beyond indemnity, serve the purpose of deterring
frivolous actions or defences. She said, Parties, in calculating the risks
of proceeding with a particular action or defence, should be able to forecast
with some degree of precision what penalty they face should they be unsuccessful.
[14]
In
Skidmore v. Blackmore
(1995), 2 B.C.L.R. (3d) 201
at para. 28, 35 C.P.C. (3d) 28 (C.A.), Cumming J.A. observed that while costs
are awarded to indemnify a successful litigant for fees and disbursements
incurred in the litigation process, costs are also awarded to encourage or
deter conduct on the part of litigants.
[15]
In the recent case of
Bedwell v. McGill
, 2008 BCCA 526,
a case dealing with a particular aspect of costs not relevant to this appeal,
Newbury J.A., for the court, at para. 33, noted the purpose of former R. 37(24)
as being aimed at encouraging litigants to settle wherever possible, thus
freeing up judicial resources for other cases.
[16]
It seems to me that the trend of recent authorities is to the effect
that the costs rules should be utilized to have a winnowing function in the
litigation process. The costs rules require litigants to make careful assessments
of the strength or lack thereof of their cases at commencement and throughout
the course of litigation. The rules should discourage the continuance of
doubtful cases or defences. This of course imposes burdens on counsel to
carefully consider the strengths and weaknesses of particular fact situations.
Such considerations should, among other things, encourage reasonable settlements.
[17]
I must say that in this particular case, I have been moved to a degree
of sympathy for the position of the ultimately unsuccessful plaintiff. That
is so because of the statement of Mr. Baroncini in December 2003 that in effect,
the parties were agreed on a new contract. However, on reflection, I consider
it was becoming clearer as the process of reducing matters to writing went
forward in early 2004 that there had been no consensus reached between the
parties on the vital issue of responsibility for freight damage.
[18]
The discovery process should have also placed this into sharper relief.
I have considered whether in light of the pronouncement of Mr. Baroncini in
December 2003, some apportionment of trial costs ought to be ordered. I have
concluded that such an order would tend to create uncertainty in the law relating
to costs and therefore I would not be disposed to so order. As to any suggestion
that perhaps some distinction might be made between this case (a contract
case) and the cases of
Rossmo
and
Brito
(tort
cases), I am not of the view that differing causes of action mandate a different
approach to the usual costs rules.
[19]
Ultimately, I am not persuaded that this Court should countenance any
departure from the usual rule that costs should follow the event in this Court
and in the trial court. This result seems to me consistent with the reasoning
in the cases of
Rossmo
and
Brito
. Accordingly,
I would order costs in favour of the defendant appellant in this Court and
in the Supreme Court of British Columbia.
The Honourable Mr. Justice Hall
I
agree:
The
Honourable Mr. Justice Smith
I
agree:
The
Honourable Mr. Justice Chiasson
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Payne v. Montague,
2009 BCCA 351
Date: 20090120
Docket: CA036564
Between:
David Payne
Appellant
(
Plaintiff
)
And
Atoya Montague and
Orellana Gustavo Ernesto Amador
also known as Gustavo Amador Orellana
Respondents
(
Defendants
)
Before:
The Honourable Mr. Justice Donald
(In Chambers)
On appeal from: Supreme Court of British Columbia, October 10, 2008
(
Payne v. Montague
, New Westminster RegistryM100928)
Oral Reasons for Judgment
Counsel for the Appellant:
O.L.
Wilson
Counsel for the Respondent:
M.
von Antal
Place and Date of Hearing:
Vancouver,
British Columbia
January 20, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
20, 2009
[1]
DONALD J.A.:
This
is an application for leave to appeal a costs order in a personal injury action.
The action was settled shortly before trial. As the trial date drew near, the
respondent obtained an independent medical examination order on short leave
from a master. The master granted the respondent costs in any event of the
cause.
[2]
The applicant applied to set aside the order. That
application was refused by Mr. Justice Slade who awarded costs of that
proceeding. It is from Mr. Justice Slades order that the proposed appeal is
taken. There are two grounds: first, there was no urgency supporting short
leave; and second, the process was defective because the short leave order was
not served within the time limited. The order required service by the afternoon
of the day of the application for short leave, but in fact, it was not served
until about 7:00 on the morning of the hearing of the application itself.
[3]
Mr. Justice Slade found no error in the masters
discretionary decision. There was a basis for urgency and the late delivery was
inconsequential as he held that applicants counsel had adequate notice and did
not appear.
[4]
Leave to appeal will rarely be granted for
discretionary orders:
Silver Standard Resources Inc. v. Joint Stock Co.
Geolog
, [1998] B.C.J. No. 2298 (QL) (C.A.), per Madam Justice Rowles in
chambers:
[12] The usual rule followed by
appellate courts in relation to discretionary orders was succinctly stated by
Madam Justice McLachlin in
British Columbia Teachers' Federation v. British
Columbia (Attorney General)
(1986), 4 B.C.L.R. (2d) 8 (C.A.) at 11:
Generally speaking, barring error in the
decision below, a justice will be reluctant to grant leave where the decision
constitutes the exercise of a discretion conferred on the chambers judge. The
party seeking leave to appeal bears the onus of establishing that the
conditions for leave have been met.
[5]
Leave to appeal a discretionary order will only
be granted where the order is clearly wrong or serious injustice will occur or
where a discretion was not exercised judiciously or was exercised on the wrong
principle:
Strata Plan LMS 2019 v. Green
(2001), 152 B.C.A.C. 174, 2001
BCCA 286, per Madam Justice Proudfoot in chambers:
[6] Before
I assess the merits of these arguments, I point out that an order under R.
52(11)(d) [for which leave to appeal is sought] is a discretionary order. This
court is slow to grant leave from a discretionary order unless the order is
clearly wrong or a serious injustice will occur:
Watson v. Imperial
Financial Services Ltd.
, (1992), 65 B.C.L.R. (2d) 281 (C.A.).
[6]
In my view, the applicant is unable to establish
any of the prerequisites for leave. The order is discretionary. The points
taken on appeal are not of significance to the practice and since the action is
settled, they are not of significance to the action itself. I can see no merit
in the proposed appeal. The applicant cannot show an error in principle or a
manifestly unjust result.
[7]
For these reasons I dismiss the application and
refuse leave to appeal.
(discussion
with counsel)
[8]
DONALD, J.A.
: The
costs are yours as a matter of course.
The
Honourable Mr. Justice Donald
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
R. v. Li, R. v. Zheng
2009 BCCA 21
Date: 20090120
Docket: CA035613; CA035679
Docket: CA035613
Between:
Regina
Respondent
And
Jing Yan Li
Appellant
- and -
Docket: CA035679
Between:
Regina
Respondent
And
George Zheng
Appellant
Before:
The Honourable Mr. Justice
K. Smith
The Honourable Mr. Justice
Lowry
The Honourable Madam
Justice Neilson
Oral Reasons for Judgment
D.N.
Fai
Counsel for the Appellant, J. Li
J.I.S.
Sutherland
Counsel for the Appellant, G. Zheng
P.
Eccles
Counsel for the (Crown) Respondent
Place and Date:
Vancouver, British Columbia
20 January 2009
[1]
SMITH, J.A.
: The appellants appeal their convictions by the
Honourable Judge de Walle of the Provincial Court sitting at Vernon, British
Columbia on charges of production of marihuana and possession of marihuana for
the purposes of trafficking contrary to s. 7(1) and s. 5(2) respectively of the
Controlled Drugs and Substances Act
. They were charged on a
single information and were tried together. Neither appellant testified or
called evidence in defence of the charges. The trial judges reasons for
judgment are reported at [2007] B.C.J. No. 2802 (QL) and are indexed as 2007 BCPC
406. He imposed a one-year conditional sentence on each of them.
[2]
The charges arose when around 9:30
a.m., on December 15, 2005, the RCMP executed a search warrant at 6919 Service
Road, a rural residential property at the end of a dead-end street in Westwold,
British Columbia, a small community roughly midway between Kamloops and Vernon.
They arrested the appellants, who were found alone inside the house.
[3]
The undisputed facts are as
follows.
[4]
The police found 2,298 marihuana
plants in various stages of growth and a 54½ pound bag of dried marihuana in a
large shop or barn located on the property about 30 metres from the house. There
was a well-worn path in the snow from the back door of the house to the locked
door of the shop. There was a faint odour of marihuana outside between the
house and the shop and the odour of marihuana inside the shop was overpowering.
The shop building contained several rooms. Marihuana was growing in three of
them. The bag of dried marihuana was found in a drying room. Another room
contained materials and supplies related to the growing of marihuana, including
plant pots, soil, fertilizers, and piled up used equipment. In this room the
police found three used shrouds lying on the floor which were very similar if
not identical to other shrouds that were in use hanging over plants in the
growing rooms. In one of the growing rooms they found a CO
2
control unit hanging in the middle of the room above
growing marihuana plants. The marihuana grow operation was large and
sophisticated and required human attention at least every other day, if not
daily.
[5]
The trial judge accepted the
evidence of Corporal Coates, a fingerprint expert, that he found three
individual fingerprints of the appellant Zheng on one of the shrouds and that
he found a fingerprint of the appellant Li on the CO
2
control box.
[6]
The police found a vacuum sealer
unit for saving food and a number of new sealable Ziploc plastic bags in the
kitchen of the house. In a closed dishwasher they found three pH soil testers.
On the kitchen counter they observed some cooking oils, dishwashing soap,
dishes, and a rice maker.
[7]
They also found a hydro bill and a
gas bill in a kitchen drawer, both addressed 6919 Service Road to a customer by
the name of Min Zheng. According to their drivers licences, the appellants
resided in Coquitlam, in the Lower Mainland, more than 200 miles from the
scene. A set of keys found in the kitchen contained a key that unlocked the
doorway to the shop. The room immediately inside this doorway was completely
empty and access to the grow operation was through this room.
[8]
There were no beds in the house,
just mattresses on the floor. The furniture in the house was to use the trial
judges words makeshift. There were no pictures on the walls and clothes
were strewn about the floor. The trial judge concluded the house gave the
appearance of, and again using the trial judges words, being used in a
transient way.
[9]
The trial judge accepted the
evidence of Constable Evans, an expert in marihuana grow operations. In this
respect, he said that Constable Evans
[11]
had an opportunity to view the various exhibits in this case, the photograph
and the flow chart of the exhibits. He described some of the
paraphernalia that was involved in the grow operation here, various electrical
controls, timer lights, carbon dioxide devices and the charcoal filters to keep
the smell away from the building. He testified that the vacuum sealer and
bags located in the kitchen of the residence were items that are used in
marihuana grow operations. The marihuana is placed into the bags; the air
is removed by the vacuum sealer, for the purpose of prolonging the life of the
marihuana bud. He described that the pH testers found in the dishwasher
in the kitchen of the residence are commonly used to check soil conditions in
marihuana grow op operations, to determine the best production of the
plants. He also referred to a surveillance camera that was found in the
residence, and he said surveillance cameras are commonly used in marihuana grow
ops to watch for uninvited or unwanted visitors, including the
authorities. He testified that the CO
2
detector, which was
located in one of the marihuana growing rooms, suspended from the ceiling, was
an item used to check CO
2
levels and that could adjust those levels
automatically to ensure the best growing conditions for the plants, and that it
would be placed in the centre of the plants as it was in this case to best
determine and check levels of CO
2
for the entire growing area.
He testified that, and as I have referred to already, that this size of grow op
would require frequent attention, not necessarily daily, but more than likely
at least every other day.
[10]
All elements of the offences were
established save for the appellants knowledge and control of the marihuana in
question, which the trial judge noted was the sole issue to be decided. He
noted that all of the evidence was circumstantial and he cited
R. v
Cooper
(1977), 34 C.C.C. (2d) 18 (SCC), for the proposition that
before basing a verdict of guilty on circumstantial evidence the trier of fact
must be satisfied beyond a reasonable doubt that the guilt of the accused is
the only reasonable inference to be drawn from the proven facts. He expressed
his ultimate finding of guilt in the following passage in paragraph 13 of his
reasons:
[13] Defence
counsel in a very thorough manner identified a number of items where it is
suggested that there is evidence that does not indicate knowledge or control,
evidence that is absent in cases that would support an inference that there was
proof of knowledge and control. I am not going to refer to the list of
absent pieces of evidence in this case, except to say that I have considered
that entire list very carefully and I have concluded based on the evidence
before me, the whole of the evidence, that it has been established beyond a
reasonable doubt that the accused Zheng and the accused Li had the necessary
knowledge and control of the marihuana grow op in this case to be convicted of
both offences. I am, as I said at the outset, mindful of the test to be
applied in a case of circumstantial evidence, but I am satisfied beyond any
reasonable doubt that the guilt of the accused is the only reasonable inference
to be drawn from the proven facts. I refer in particular to the location
of this grow operation, the presence of the accused at the scene, the items
that were seized from the inside of the residence, including the key that
gained access to the outbuilding where the marihuana grow op was located, as
well as the fingerprints of Mr. Zheng on a shroud and the fingerprint of Mr. Li
on the CO
2
control unit. That evidence, in my view, leads to
the inescapable conclusion that these accused were aware of the marihuana grow
op, had control of it. Whether or not others were involved is a question
that I am not going to speculate on, and it is not necessary for me to
determine. In the end result, I find each accused guilty on both counts.
[11]
During the hearing of the appeal,
the grounds of appeal were narrowed to two. Both appellants submit that the
verdict was unreasonable or was not supported by the evidence. The appellant
Li contends, in addition, that the trial judge should not have accepted the
evidence that the fingerprint found on the CO
2
control box was his fingerprint.
[12]
I will deal first with the latter submission.
[13]
Corporal Coates was called by the
Crown as its fingerprint expert. He explained in detail the process he went
through to reach his conclusion that the print was that of the appellant Li. He
testified that he submitted his file and his conclusion to another officer for
peer review. He said the other officer responded that he was unable to explain
some discrepancies without further information. Corporal Coates said he
supplied more information but before the second officer could review it, he was
transferred to another jurisdiction. He testified his opinion was then
reviewed and confirmed by a third officer. No other fingerprint evidence was
before the trial judge.
[14]
Counsel for the appellant Li
contends that the opinion of Corporal Coates was unreliable because of the
comments of the first reviewing police officer that there were discrepancies he
could not explain. As well, he points to the evidence of the information
supplied by Corporal Coates in response to the request for further information
and submits that the second officer had the same information, if not better
information, than the third officer who ultimately confirmed the opinion.
Accordingly, he contends, it was not reasonable for the trial judge to accept
Corporal Coates opinion as proof beyond a reasonable doubt that the finger
print was that of the appellant Li. He did not attempt to identify any clear
and overriding error in the trial judges reasoning and he did not suggest that
the trial judge misunderstood or misapprehended the evidence.
[15]
In my view, counsel for Mr. Li is
simply asking us to substitute our view of the weight of Corporal Coates
opinion for the view taken by the trial judge. We may not do that. Questions
of credibility and weight are for the trial judge and we may not interfere in
the absence of some demonstrated error. No error being demonstrated, I would
therefore not accede to this submission.
[16]
I turn to the submission that the
verdict was unreasonable or unsupported by the evidence.
[17]
The standard of review applicable
in this case is set out in
R. v. Yebes
, [1987] 2 S.C.R. 168 at
185; affirmed in
R. v. Biniaris
, [2000] 1 S.C.R. 381 at para. 36
the question is whether the verdict is one that a properly instructed jury
acting judicially could reasonably have rendered. In answering this question
we must, within the limits of the appellate disadvantage, weigh the evidence to
some extent and view it through the lens of judicial experience.
[18]
The attack on the reasons on this
ground is based on the premise that the trial judge was required to explain in
paragraph 13 of his reasons, which I have already set out, his reasoning for
the inferences he drew from each of the facts he found proven and that he
failed to do so he expressed only conclusions. As an example, counsel noted
that there was no evidence of exactly where the keys were first found or who
found them. He characterized the evidence of the officer who said he found
them on the kitchen table about two hours or so after he arrived as ambiguous
and said the trial judge was required to acknowledge this ambiguity and explain
how he resolved it. I cannot agree.
[19]
This approach has been rejected in
R. v. R.E.M.
, 2008 SCC 51 and in
R. V. H.S.B.
, 2008
SCC 52, albeit in another context. In
R. V. R.E.M.
, Chief
Justice McLachlin said for the Court at para. 24:
The
Court of Appeal in this case took the phrase the path taken by the trial judge
through confused or conflicting evidence to mean that the trial judge must
detail the precise path that led from disparate pieces of evidence to his
conclusions on credibility and guilt. In other words, it insisted on the very
verbalization of the entire process engaged in by the trial judge in reaching
a verdict rejected in Morrissey (p. 525). Sheppard does not require this. The
path taken by the judge must be clear from the reasons read in the context of
the trial. But it is not necessary that the judge describe every landmark
along the way.
[20]
Chief Justice McLachlin added,
again speaking for the Court, in
R. v. H.S.B.
at para. 2:
The
purposes of giving reasons are fulfilled where the reasons for judgment, read
in context, establish a logical connection between the verdict and the basis
for it - in other words, the reasons must explain why the judge made his or her
decision. A detailed description of the judges process in arriving at the
verdict is unnecessary.
[21]
In my view, the reasons given by
the trial judge here read as a whole and in the context of the evidence given
at the trial explain clearly why he reached his verdict. He drew the
inferences of guilt from a consideration of the evidence as a whole and from
the cumulative effect of the facts he found as he recounted them in his reasons
for judgment.
[22]
Counsel for the appellant Zheng
conceded that an inference of guilt drawn from the facts mentioned in para. 13
of the reasons for judgment was a reasonable inference. However, he submitted,
that it was not the only reasonable inference open on the evidence. Other
inferences he suggested were that the appellants were invited guests at the
residence and that the fingerprints of his client were placed on the shroud at
some earlier time and place.
[23]
He relies in this part of the
argument primarily on the absence of evidence that is often led in such cases. For
example, he says there was no smell of marihuana in the house; no evidence of
fans or other sounds related to marihuana production; no evidence of
scoresheets, cash or other paraphernalia typically found in grow operations; no
evidence that marihuana was found in the house; no evidence from which it could
be concluded that it was the appellants who were using the residence in a
transient way; no evidence of where the keys were found or to whom they
belonged; and no evidence of whether there was anything else in the dishwasher
besides the pH testing kit. He points as well to the evidence that the
appellants had no marihuana residue or smell of marihuana on their persons and
noted the Crowns evidence that persons tending marihuana plants often have
both. He notes also evidence that the fingerprints could have been on the
shroud and the control box for a very long period of time.
[24]
Inferences must be based on proven
facts. If there are no facts from which an inference can be made, we are left
with mere speculation. In my view, there was no evidence before the trial
judge that would have supported an inference that the appellants were merely
casual visitors to the premises or that Mr. Zhengs fingerprints were placed on
the shroud at some earlier time and place. These things are mere speculation.
[25]
Here, the appellants were found in
a remote area far from their homes early one morning in a residence used only
in a transient way in close proximity to a large and sophisticated commercial
marihuana grow operation. A well worn path led from the back door of the
residence in which they were found to the locked door of the building in which
the marihuana was found. A key that unlocked the door was found in the
residence. Their fingerprints were found on equipment in use or which had been
used in the enterprise. The appellants concede the trial judges inference of
guilt from these facts was a reasonable inference. I have not been persuaded
that any other reasonable inference was open to the trial judge on the
evidence. Accordingly, I have not been persuaded that the verdicts were
unreasonable or unsupported by the evidence.
[26]
Moreover, I would take into
account against the appellants their failure to testify in the face of
otherwise convincing evidence and to provide an innocent explanation of the
circumstances: see
R. v. Noble
, [1997] 1 S.C.R. 874;
R. v.
E.R.
(2002), 171 B.C.A.C. 223. If there was an innocent explanation
for these facts, they could have taken the stand and given it.
[27]
In the result, I would dismiss the
appeals.
[28]
LOWRY, J.A.
: I agree.
[29]
NEILSON, J.A.
: I agree.
[30]
SMITH, J.A.
: The appeals are dismissed.
The Honourable Mr. Justice
Smith
CORRECTION 20 January 2009
On the cover page the style
of cause of Docket CA035679, the Appellant Regina should be Respondent and the
Respondent George Zheng should be Appellant.
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Saalfeld
v. Absolute Software Corporation,
2009
BCCA 18
Date: 20090121
Docket: CA036271
Between:
Jennifer
Saalfeld
Respondent
(
Plaintiff
)
And:
Absolute
Software Corporation
Appellant
(
Defendant
)
Before:
The
Honourable Madam Justice Huddart
The
Honourable Madam Justice Saunders
The
Honourable Madam Justice Neilson
N.T.
Mitha
D. Rideout
Counsel for the Appellant
C.
Forguson
Counsel for the Respondent
Place
and Date of Hearing:
Vancouver, British Columbia
30 October 2008
Place
and Date of Judgment:
Vancouver, British Columbia
21 January 2009
Written
Reasons by
:
The
Honourable Madam Justice Huddart
Concurred
in by:
The
Honourable Madam Justice Saunders (P. 18, para. 34)
The Honourable Madam Justice Neilson (P. 21, para. 44)
Reasons
for Judgment of the Honourable Madam Justice Huddart:
[1]
This appeal from an award of damages for wrongful dismissal challenges
the trial judge's determination of the appropriate notice period and her inclusion
in the award of compensation for loss of the right to participate in the appellants
stock option plan. The trial judges reasons for judgment are indexed at
2008 BCSC 760.
Facts
[2]
In October 2006, the appellant company, Absolute Software, offered
employment to the respondent, Ms. Saalfeld, as a Federal Territory Manager
at a base annual salary of $60,000 as part of its initiative to seek sales
of its anti-theft software products to the U.S. federal government. Despite
its title, Ms. Saalfelds job did not include any managerial or supervisory
duties.
[3]
Absolute Software contacted Ms. Saalfeld after her posting on the website
Monster.ca had caught the interest of a recruiting agency working with it:
the respondent had ten years experience in software sales and some expertise
selling to the United States federal government.
[4]
From June 2005 until accepting the job offer from Absolute Software
in October 2006, Ms. Saalfeld was employed as a salesperson by ACL Systems,
a successful software company headquartered in Vancouver. The job at Absolute
Software offered her a slightly higher base salary, significant potential
for earnings based on sales in the U.S. federal government territory, stock
options, as well as reduced travel. In consequence, she accepted the appellants
written offer of employment made on 16 October 2006.
[5]
On 25 October 2006, Absolute Software granted her 5,000 stock options,
as it did all new employees, to be earned at the rate of 1,250 per year.
Under the terms of the Share Option Plan, the first 1,250 were to vest on
25 October 2007, priced at $6.00 per unit. The Share Option Plan included
these relevant provisions:
1.1 In this Share Option Plan:
(z) The words
the last
day on which the Officer or Employee worked for the Company or a Subsidiary
of the Company
means, with respect to an Officer or Employee whose employment
has been terminated by the Company or a Subsidiary of the Company
i.
other than for cause, either
(A)
the day specified by the Company
in writing to the Officer or Employee as
being the last day on which the Officer
of Employee is to work for the Company
; or
(B)
if such Officer or Employee is given pay in lieu of advance notice of a pending
effective date of termination, the day on which such notice of termination
is given in writing by the Company or such Subsidiary to the Officer or Employee;
and
ii.
for cause, the day on which the notice of termination was given.
3.6 No option may be exercised after:
(a)
; or
(b) in the case of an Officer
or Employee, 5:00 p.m. Pacific Standard Time on the last day on which the
Officer or Employee worked for the Company or Subsidiary of the Company
[6]
Ms. Saalfeld began to work for Absolute Software on 13 November 2006,
sharing her territorys quarterly sales target of $650,000 with a U.S. based
account executive. On 24 July 2007, Absolute Software terminated her employment
without cause. The company paid her one week's salary in lieu of notice,
salary and benefits accrued to that date, including commissions, and refunded
her contributions to the Employee Share Ownership Plan.
[7]
Ms. Saalfeld found alternative employment shortly before the summary
trial held on 26 May 2008 after what the trial judge called a reasonably
diligent job search. The evidence relating to Ms. Saalfelds job search
consists of these statements from her examination of discovery on 23 April
2008:
Q:
Ill
ask you some questions, Ms. Saalfeld, regarding your search for other work.
And youve produced a number of documents from tabs 36 through 42 of your
list of documents. Its in your list of documents the companies that are
here are Oracle?
[Ms. Saalfeld]:
Mmm-hmm.
Q
Theres
also Microsoft?
[Ms. Saalfeld]:
Yes.
Q
And
a company called RHI?
[Ms. Saalfeld]:
Correct.
Q
Theres
also Business Objects?
[Ms. Saalfeld]:
Yes, it is.
Q
And
also a company called Lock Search?
[Ms. Saalfeld]:
Yes.
Q:
These
documents that youve produced appear to run from the period from August 13
th
,
through to November 19
th
, so I just want to focus on that period.
[Ms. Saalfeld]:
Okay.
Q:
From
August 13
th
to November 19
th
, are these five companies
the only five companies that you contacted for work?
[Ms.
Saalfeld]:
I believe so.
Q
Did
you keep a diary or a log of any companies that you contacted in your efforts?
[Ms.
Saalfeld]:
No.
[8]
Absolute Software pled failure to mitigate, but did not pursue this
allegation at trial.
The Trial Judges Decision
[9]
The trial judge concluded the respondent was entitled to five months
notice. After taking guidance from
Bardal v. Globe and Mail Ltd.
(1960),
24 D.L.R. 140 (Ont. H.C.J.), and
Ansari v. British Columbia Hydro and
Power Authority
, [1986] 4 W.W.R. 123, 2 B.C.L.R. (2d) 33 (S.C.), she
explained why at para. 30 of her reasons for judgment:
[30]
In
this case, the plaintiff had been employed for over
ten years in software sales and had developed some special expertise in working
with the U.S. federal government and its agencies. She was recruited by the
defendant but I do not find that she was induced to leave her previous employment
to the extent that inducement should be given significant weight in determining
the reasonable notice period. Her position with the defendant was a responsible
and relatively senior one although it did not carry management responsibilities.
It took the plaintiff some nine months to find another job, despite conducting
a reasonably diligent search. The defendant did not allege failure to mitigate.
The length of the plaintiff's subsequent job search does not determine the
reasonable notice period, but it provides some evidence putting into question
the transferability of sales skills generalization and supporting that the
brevity of employment may affect a subsequent job search.
[10]
In assessing the damages flowing from the appellants failure to give
the appropriate five months notice, the trial judge concluded the respondent
was entitled to be compensated for her loss of the stock options as she would
have exercised them on their vesting date. On the trial judges construction
of the employment contract, the respondent would have been entitled to those
options if proper notice had been given because for the purpose of assessing
damages, the employment continues throughout the reasonable notice period
(at para. 51).
Discussion
The Notice Period
[11]
The appellant submits the award warrants this Courts intervention
because it is outside the range of reasonableness, entirely disproportionate
to judicial precedent, and like the award in
Cronk v. Canadian General
Insurance Company
(1995), 128 D.L.R. (4
th
) 147, 25 O.R.
(3d) 505 (C.A.) at 158-59, one that has the potential of disrupting the practices
of the commercial and industrial world, wherein employers have to predict
with reasonable certainty the cost of downsizing or increasing their operations,
particularly in difficult economic times. This erroneous result may have
been influenced, the appellant suggests, by the trial judges findings, unsupported
by the evidence, that the respondents sales position was a responsible and
relatively senior one although it did not carry management responsibilities
(at para. 30) and that there was a slight degree of inducement (at para.
23). In the appellants view, the range of reasonable notice on the facts
of this case would be three weeks to two months.
[12]
I do not accept that the inducement could have played much, if any,
role in the trial judges determination of the appropriate notice period.
She was clear that she did not give that factor significant weight (at para.
30) probably because the evidence does not support a finding of inducement
as that concept is understood in the jurisprudence:
Timm v. Juran Institute
(Canada) Ltd
., [2004] O.T.C. 615 (Ont. S.C.J.);
Wright
v. Feliz Enterprises Ltd.,
2003 BCSC 267;
Ansari
,
supra
. As in
Shinn v. TBC Teletheatre B.C.
, 2001 BCCA
83, 85 B.C.L.R. (3d) 75, McEachern C.J.B.C., dissenting in part, at para.
10, it seems obvious the respondent lost nothing that could relate to the
determination of his notice period by accepting this employment. The respondent
had been in her previous employment for 16 months. She presented no evidence
to suggest that either she or the appellant anticipated a difficult job market
when she was hired or if she were terminated. She was looking for an opportunity
to advance her software sales career; the appellant offered her that opportunity
and nothing more. As with any sales job, continuance of employment would
depend on demonstrable results.
[13]
I have similar difficulty with finding that the trial judge ascribed
much significance to the senior nature of the respondents employment.
On the evidence, the trial judge could only have meant that the respondents
function was important to the appellant. Ms. Saalfeld was an inside salesperson
who, together with another salesperson, was responsible for developing a new
market for Absolute Software under the supervision of the Territory Sales
Manager (responsible for 19 territories). While the trial judge discussed
at some length the diminishing importance given by courts to the character
of the employment in determining appropriate notice, she recognized (at para.
29) the important factors were those set down in
Bardal
and
Ansari
: the respondents age (35), her length of service (nine
months), her position (a shared quarterly sales target of $650,000 in a market
new to the employer), and availability of similar employment. As I read the
reasons of the trial judge, she gave primary importance to the last factor.
[14]
The appellants main submission is supported by the decision in
Foster
v. Kockums Cancer Division Hawker Siddeley Canada Inc
., [1993] 8 W.W.R.
477, 83 B.C.L.R. (2d) 207 (C.A.), where this Court affirmed the importance
of determining a range of reasonableness from recent British Columbia precedents.
The exercise of looking to comparables and adjusting for differences permits
a reasoned objective analysis, not only by a court, but by all who must determine
reasonable notice in particular circumstances. (See also
Cassell &
Co. Ltd. v. Broome,
[1972] 1 All E.R. 801, [1972] A.C. 1027 (H.L.);
Bavaro v. North American Tea, Coffee & Herbs Trading Co.
,
2001 BCCA 149, 86 B.C.L.R. (3d) 249; and
Shinn,
supra
,
at para. 28, Prowse J.A., concurring in part).
[15]
The trial judge's reasons do not reveal that analysis. However, the
respondent submits that the recent jurisprudence
supports a
notice period of five to six months in short service cases. While B.C. precedents
are consistent that proportionately longer notice periods are appropriate
for employees dismissed in the first three years of their employment, I see
little support for the proposition that five to six months is the norm in
short service cases for employees in their thirties or early forties whose
function is significant for their employer, but not one of senior management.
I further see no support for a floor of six months as the trial judge appears
to have understood the respondents counsel to have suggested to her. That
proposition was not put to us. Absent inducement, evidence of a specialized
or otherwise difficult employment market, bad faith conduct or some other
reason for extending the notice period, the B.C. precedents suggest a range
of two to three months for a nine-month employee in the shoes of the respondent
when adjusted for age, length of service and job responsibility:
Zeidel
v. Metro-Goldwyn Mayer Studio Inc
., 2004 BCSC 1415;
Duprey v.
Seanix Technology (Canada) Inc
., 2002 BCSC 1335; 20 C.C.E.L. (3d)
136;
Woolard v. Unum Life Insurance Co. of Canada
, 2002 BCSC
1178, 4 B.C.L.R. (4
th
) 333;
Mitchell v. Paxton Forest Products
Inc
., 2001 BCSC 1802, affd 2002 BCCA 532, 174 B.C.A.C. 205;
Kussman
v. AT & T Capital Canada, Inc.
, 2000 BCSC 268, 49 C.C.E.L. (2d)
124.
[16]
Nevertheless, I am not persuaded the trial judges award in this case
is unreasonable. The factor that appears to have loomed largest in her analysis
was the nine months it took the respondent to find employment. While the
evidence of the respondents job search between the date she received notice
of the termination of her employment and the date she obtained new employment
is paltry, it is legitimate to take that evidence into account in assessing
the availability of alternative employment. Neither party led evidence as
to the market in which the respondent was competing for employment as a senior
software salesperson. It seems both her counsel and the trial judge considered
the appellants failure to pursue its pleaded allegation of failure to mitigate
rendered such evidence unnecessary in light of the authorities:
Bavaro
,
supra
;
Beglaw v. Archmetal Industries Corp
., 2004 BCSC 1369,
36 C.C.E.L. (3d) 265;
Longshaw v. Monarch Beauty Supply Co.
,
[1996] 3 W.W.R. 365, 14 B.C.L.R. (3d) 88 (S.C.);
Athey v. Steve
Marshall Motors Ltd.
(1996), 23 C.C.E.L. (2d) 114 (S.C.);
Frederick
v. International Fund Raising Consultants Ltd.
, [1991] B.C.J. No 3420
(S.C.); and
Paradis v. Skyreach Equipment Ltd
., 2002 BCSC 32.
[17]
Of these cases,
Bavaro
is the closest comparable. On
appeal, this Court accepted it was reasonable to fix a notice period for a
35-year-old purchasing manager discharged after 14 months employment at six
months. Mr. Bavaro found subsequent employment, some ten and a half months
later, with a job that required him to move to New York. Ms. Saalfelds position
involved less responsibility than that of Mr. Bavaro, who, as one of six department
managers, supervised four employees, managed a purchasing budget of $50 million
annually and reported to the managing director. Ms. Saalfeld was employed
for significantly less time, and her job search lasted for about the same
length of time as Mr. Bavaros, although she found employment that allowed
her to remain in Vancouver.
[18]
In the absence of an error in principle, the test on appeal is not
whether I would have made the same award had I been the trial judge, it is
whether the trial judges award was beyond the range of reasonableness in
all the circumstances. In light of
Bavaro
, while the award
on the evidence before the trial judge was on the very high end of an acceptable
range, I cannot accept the appellants submission that it warrants appellate
intervention. Thus, I would not give effect to the first ground of appeal.
Share Option Plan
[19]
Absolute Software alleges the trial judge erred by failing to properly
apply the agreement between the parties to determine the damages that flowed
from the failure to give reasonable notice, and by implying the term lawful
into clause 1.1(z) of the Share Option Plan.
[20]
It is not disputed that the measure of damages for breach of an employment
contract is what the employee would have received if the contract had been
performed according to its terms:
Nygard International Ltd. v. Robinson
(1990), 46 B.C.L.R. (2d) 103 (C.A.); and
Iacobucci v. WIC Radio Ltd
.,
1999 BCCA 753, 72 B.C.L.R. (3d) 234. Nor is it disputed that the Share Option
Plan was integral to the employment contract. Thus, the loss of its value
to the respondent is properly to be compensated.
[21]
Absolute Softwares point is that the respondent would not have been
entitled to exercise a stock option after 24 July 2007, the date on which
she received notice of her dismissal, whether [she] received 1 month or 5
months notice or pay in lieu. In other words, the breach of the reasonable
notice duty did not cause Ms. Saalfelds loss of the entitlement to exercise
her stock options; her dismissal did. In the appellants view, the wording
of the Share Option Plan provides that an employees entitlement to options
ceases on the date notice is given. Thus, it is inconsequential whether
the right to receive stock options would have vested within the notice period,
had she received proper notice. Once dismissed, she could not have exercised
them. This, Absolute Software maintains, is the effect of the employment
agreement, properly construed.
[22]
The trial judge disagreed with this interpretation, as she explained
at paras. 51 and 52 of her reasons:
[51]
I am persuaded by the plaintiff's submissions on this issue. There is no
doubt that the parties can agree to a contract that would deprive a dismissed
employee of options during a period of notice even if the dismissal was wrongful;
that is a matter of construction of the contract as a whole. I find that
the parties did not make such an agreement in this case, upon proper construction
of the contract. The option plan here referred to notice. The principle
that dismissal without cause must be upon reasonable notice and that employment
continues to the end of the reasonable notice period has been recognized on
numerous occasions by our Court of Appeal. Though
Martell
[
v. Ewos
Canada Ltd. and Statkorn Holdings ASA
, 2005 BCCA 554] was somewhat different
from this case, in that the employer had alleged cause, nevertheless the principle
it states is applicable: that, for the purpose of assessing damages, the
employment continues throughout the reasonable notice period.
[52]
I find that the plaintiff's entitlement to damages for the loss of her option
rights is not precluded by the terms of the contract, properly construed.
[23]
The trial judge accepted Ms. Saalfelds submissions regarding the stock
options, outlined at para. 43:
[43] Counsel
for the plaintiff argued, on the other hand, that the words whose employment
has been terminated by the company defined in paragraph (z) and used in paragraph
3.6 should be taken to refer to
lawful
termination of employment. The
plaintiffs position is that there was no lawful termination until the plaintiff
had received reasonable notice: thus, if reasonable notice was five months,
her employment
was not
lawfully
terminated until December 24, 2007.
[Emphasis in original]
[24]
In effect, Absolute Software submits, the trial judge impermissibly
read the word lawful into paragraph (z) of the Share Option Plan where the
agreement was effective without it:
Life Innova Capital Inc. v. Perceptronix
Medical Inc
., 2008 BCSC 1132. The appellant seeks to distinguish
Veer
v. Dover Group Corp. (Canada) Ltd/Société Dover Canada Ltée
(1999),
45 C.C.E.L. (2d) 183, 2 B.L.R. (3d) 234 (Ont. C.A.), where the court construed
the meaning of termination as lawful rather than unlawful dismissal,
and other cases where the stock option agreement is ambiguous as to the determinative
termination date:
Gryba v. Moneta Porcupine Mines Ltd.
(2000),
5 C.C.E.L. (3d) 43 at para. 51, 139 O.A.C. 40, and
Iacobucci
,
supra
. In those cases where the employment contract contains ambiguity,
the contract, including the stock option agreement, is given the construction
most favourable to the employee on the principle of
contra proferentem
.
[25]
I agree, as did the trial judge, with the proposition that the Share
Option Plan governs the rights and responsibilities of both parties. Where
an agreement is clear as to when the right to exercise an option terminates,
it governs. This was the case in
Brock v. Matthews Group Ltd.
(1991), 34 C.C.E.L. 50, 43 O.A.C. 369. At paras. 21-22, the Ontario Court
of Appeal explained:
[The trial judge] held that Brock could have exercised his option up to November
8, 1985, the expiration of the period of reasonable notice, and he made his
calculations of the numbers on that basis.
With
respect, we are of the view that he was in error. Brock was discharged from
his employment on November 8, 1984. He had, in law, a right to reasonable
notice or compensation in lieu of such notice. But the proper focus of the
question relating to the interpretation of the share option agreements is
not the determination of the period of reasonable notice or the quantification
of compensation in lieu thereof. The proper focus of that question is the
meaning, within the contemplation of the option agreements, of the words notice
of dismissal, dismissal and ceasing to be an employee. In our view,
that meaning is the same for all of the events described
[26]
The Ontario Court of Appeal came to the same decision on a differently
worded stock option agreement in
Kieran v. Ingram Micro Inc.
(2004), 33 C.C.E.L. (3d) 157, 189 O.A.C. 58, noting at para. 56 that, under
Ontario law, the employee would be entitled to damages for the loss of the
stock option benefit as it formed part of his compensation, absent contractual
terms to the contrary, in the presence of which those terms govern.
[27]
In this case, the words governing the termination of the right to exercise
an option (assuming one has vested) are the last day on which the Officer
or Employee worked for the Company
I do not agree with the appellant that
the Share Option Plan clearly defines those words to mean the date of notice.
[28]
Paragraph 1.1(z) of the agreement provides two alternate definitions.
The first applies where an employee is given written notice of the last
day on which [(s)he] is to work for the Company. In that event, the specified
day is the date on which the right to exercise a vested option terminates.
The specified day might be the date of notice or it might be a date months
after the date of notice if, for example, working notice is given (whether
reasonable or unreasonable in length). However, Absolute Software does not
rely on that definition within the provision, and rests its argument on the
second definition. Having given Ms. Saalfeld one weeks pay in lieu of advance
notice of a pending effective date of termination, it argues, her right to
exercise the stock option terminated on the date of receipt of that notice.
[29]
Ms. Saalfeld submits that the preamble of the provision makes the definition
inapplicable to a person whose employment has not been lawfully terminated.
According to Ms. Saalfeld, although she was given one weeks notice of the
termination of her employment and paid for that week, her employment was not
terminated at common law because she did not receive reasonable notice:
Dunlop
v. British Columbia Hydro & Power Authority
, [1989] 2 W.W.R. 518,
32 B.C.L.R. (2d) 334 (C.A.). Her counsel suggests the second definition in
paragraph 1.1(z) of the Share Option Plan applies only where the underlying
employment agreement contains a termination provision. Ms. Saalfelds agreement
contained no such clause. Thus, her counsel submits, she is entitled not
only to reasonable notice, but to be treated as an employee until the notice
period fixed by the court comes to an end. Included among the benefits lost
when Absolute Software dismissed her without reasonable notice was the value
of the stock option rights. The trial judge found as a fact that she would
have exercised her option to acquire 1,250 shares at the time they would have
vested, and then immediately sold them.
[30]
This submission by the respondent is consistent with this comment of
Gouge J.A. for the Ontario Court of Appeal in
Veer
,
supra
at para. 14:
In my view voluntary termination refers to a termination that is consensual
or initiated by the employee, whereas involuntary termination is that initiated
by the employer. In either case, the termination contemplated must, I think,
mean termination according to law. Absent express language providing for
it, I cannot conclude that the parties intended that an unlawful termination
would trigger the end of the employee's option rights. The agreement should
not be presumed to have provided for unlawful triggering events. Rather,
the parties must be taken to have intended that the triggering actions would
comply with the law in the absence of clear language to the contrary.
[31]
It is also consistent with the approach of this Court as explained
by Thackray J.A. in
Martell
v. Ewos Canada Ltd. and Statkorn
Holdings ASA
, 2005 BCCA 554
,
218 B.C.A.C. 241 at para. 26,
quoting from the reasons of the trial judge:
The termination was not of his volition, but rather was that of the employer.
It has been found to have been unlawful. In the circumstances, the employer
cannot thus benefit from having wrongfully dismissed the plaintiff. The correct
course is that the plaintiff will be entitled to benefits which he would have
had a right to claim, had he been employed.
[32]
On the other hand, Absolute Software submits that this Courts decision
in
Dunlop
has been overtaken by more recent decisions of the
Supreme Court of Canada, where that court has recognized that an employer
can discharge its implied obligations under an employment contract either
by giving reasonable notice or by providing pay in lieu of notice:
Wallace
v. United Grain Growers Ltd
., [1997] 3 S.C.R. 701 at paras. 65 and
75, 152 D.L.R. (4
th
) 1. I read that decision as requiring employers
to give reasonable notice that the contract is about to be terminated, and
the payment of damages for failure to do so. It does not support the proposition
that providing pay in lieu of notice is an alternative means of lawfully terminating
employment, effective on the date of the payment. The payment is a remedy
for the failure to give the appropriate notice. I see nothing in
Ansari,
supra,
or
Tull v. Norske Skog Canada Limited
, 2004 BCSC
1098, 34 C.C.E.L. (3d) 225, that suggests payment in lieu of notice terminates
the employment contract unless that payment compensates for reasonable notice.
[33]
As a result, I am not persuaded that the Share Option Plan is clear
that the right to exercise stock options terminates on the day of notice.
As in
Veer,
without express language to the contrary, it cannot
be presumed that the preamble in paragraph 1.1(z), an Officer or Employee
whose employment has been terminated by the Company, contemplates those officers
or employees unlawfully terminated. The essential question is whether participation
in the Share Option Plan was a benefit of employment lost by reason of the
employers breach of the employment contract. In my view, it was. Since
Ms. Saalfeld is entitled to damages for any benefits she would have accrued
if the employment contract had been performed according to its terms until
the end of the reasonable notice period, she is entitled to damages for the
loss of her option rights. There being no reason to interfere with the trial
judges valuation of the benefit she lost, I would dismiss the appeal.
The Honourable Madam Justice Huddart
Reasons
for Judgment of the Honourable Madam Justice Saunders:
[34]
I have had the privilege of reading in draft form the reasons for judgment
of Madam Justice Huddart. I agree with her, for the reasons she has given,
we should not interfere with the award of damages for the appropriate notice
period. I agree as well the appeal of the damage award relating to the share
options should be dismissed, but for somewhat different reasons.
[35]
The question is the loss to Ms. Saalfeld from the appellants failure
to give reasonable notice, found by the trial judge to extend past the date
on which Ms. Saalfelds right to receive share options would have vested.
[36]
It is clear, on authority of this Court, the implied term in the employment
contract is that each party must give reasonable notice of termination to
the other. The implied term is not a term to the effect that the employer
may give pay in lieu of notice:
Dunlop v. BC Hydro & Power Authority
(1988), 32 B.C.L.R. (2d) 334 at 338, [1989] 2 W.W.R. 518 (C.A.), Lambert J.A.
The corollary of this proposition is, as said by Southin J.A. in
Nygard
Int. Ltd. v. Robinson
(1990), 46 B.C.L.R. (2d) 103 at 107 (C.A.):
That compensation, that is to say, damages for the breach are what
the innocent party would have received or earned depending on the nature of
the contract had it been performed according to its terms.
See
also
Iacobucci v. WIC Radio Ltd.
, 1999 BCCA 753, 72 B.C.C.R.
(3d) 234, and
Gillies v. Goldman Sachs.
, 2001 BCCA 683, 95 B.C.L.R.
(3d) 260.
[37]
This means, in my view, the remedy for Ms. Saalfeld is the value of
the emoluments she would have earned during the notice period had she continued
to work until its end.
[38]
It is, of course, open to the parties to agree to, as part of the contract
of employment, the length of notice to which the employee is entitled and
the monetary and benefit package that will be provided to the employee in
the event employment is terminated without cause.
[39]
My learned colleague has referred to
Veer v. Dover Corp. (Canada)
Ltd. / Société Dover Canada Ltée
(1999), 45 C.C.E.L. (2d) 183, 2 B.L.R.
(3d) 234 (Ont. C.A.),
Gryba v. Moneta Porcupine Mines Ltd.
(2000),
5 C.C.E.L. (3d) 43, 139 O.A.C. 40, leave to appeal refd [2001] S.C.C.A. No.
92,
Brock v. Matthews Group Ltd.
(1991), 34 C.C.E.L. 50, 43
O.A.C. 369, and
Kieran v. Ingram Micro Inc.
(2004), 33 C.C.E.L.
(3d) 157, 189 O.A.C. 58., leave to appeal refd [2004] S.C.C.A. No. 423.
[40]
As she has observed, those cases turn on the particular language of
the plan before the court. In this case the language of clause 1.1(z) provides:
1.1 In this Share Option Plan:
(z) the words
the last
day on which the Officer or Employee worked for the Company or a Subsidiary
of the Company
means, with respect to an Officer or Employee whose employment
has been terminated by the Company or a Subsidiary of the Company
(i.)
other than for cause, either
(A)
the day specified by the Company
in writing to the Officer or Employee as
being the last day on which the Officer of Employee is to work for the Company
; or
(B)
if such Officer or Employee is given pay in lieu of advance notice of a pending
effective date of termination, the day on which such notice of termination
is given in writing by the Company
to the Officer or Employee; and
(ii.)
for cause, the day on which the notice of termination was given.
[41]
Absolute Software Corporation contends that clause of the share option
plan limits Ms. Saalfelds right to compensation for loss of the opportunity
to participate in it. Respectfully, I do not consider the terms of the share
option plan accomplish this result.
[42]
It appears to me the share option plan addresses entitlement to shares.
Had Ms. Saalfeld received the notice to which she was entitled, colloquially
referred to as working notice, clause (A) of clause 1.1(z)(i.) would apply
and Ms. Saalfeld would have had the opportunity to acquire shares. I do not
consider clause (B) of 1.1(z) detracts from that proposition; had she received
the working notice to which she was entitled, clause (B) would have been inapplicable.
[43]
It follows I, too, would dismiss the appeal.
The Honourable
Madam Justice Saunders
Reasons
for Judgment of the Honourable Madam Justice Neilson:
[44]
I have had the opportunity to read the draft reasons for judgment of
both Madam Justice Huddart and Madam Justice Saunders. I agree with the reasons
for judgment of both, and I would accordingly dismiss this appeal.
The Honourable
Madam Justice Neilson
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Vancouver
Fraser Port Authority v. Canadian Forest Products Ltd.,
2009
BCCA 17
Date: 20090121
Docket: CA036616
Between:
Vancouver
Fraser Port Authority
Respondent
(
Plaintiff
)
And
Canadian
Forest Products Ltd.
Appellant
(
Defendant
)
And
Greater
Vancouver Sewerage and Drainage District
Respondent
(
Defendant
)
And
The
Attorney General of British Columbia and
The
Attorney General of Canada
Respondents
Before:
The
Honourable Madam Justice Prowse
(In
Chambers)
H.
Poulus, Q.C.
A.
Sabur
Counsel for the Appellant
R.W.
Grant
Counsel for the Respondent
Vancouver Fraser Port Authority
R.G.
Hildebrand
Counsel for the Respondent
Greater Vancouver Sewerage
and Drainage District
No
one appearing on behalf of
The
Attorney General of British Columbia or The Attorney General of Canada
Counsel for the Respondents
The Attorney General of
British Columbia
and
The Attorney General of Canada
Place
and Date of Hearing:
Vancouver, British Columbia
January 15, 2009
Place
and Date of Judgment:
Vancouver, British Columbia
January 21, 2009
Reasons
for Judgment of the Honourable Madam Justice Prowse:
[1]
Canadian Forest Products Ltd. (Canfor) is applying for leave to appeal
from the decision of a chambers judge, made October 24, 2008, granting Vancouver
Port Authority (the Port Authority) an injunction enjoining the Greater
Vancouver Sewerage and Drainage District (the GVSDD) from filing a vesting
notice in the land title office in respect of certain lands in the City of
New Westminster owned by Canfor until the final disposition of this action,
further Order of this Court, or until March 1, 2009, whichever occurs first.
The order provides for liberty to apply, and also provides that the Port Authority
provide the usual undertaking as to damages. I was advised that there was
some initial dispute as to the content of the order, which was settled on
January 6, 2009.
[2]
The trial of the action between the parties has been expedited and
is set to be heard for three days commencing February 18, 2009.
[3]
By way of brief background, the Port Authority and Canfor entered into
a contract on April 11, 2008 whereby Canfor agreed to sell waterfront property
it owns along the Fraser River which is zoned for industrial use (the property)
to the Port Authority for a total purchase price of $47.5 million. That offer
was subject to certain conditions which had been removed by the time of the
hearing on October 28, 2008.
[4]
It is common ground that the Port Authority had been looking for land
of this description to accommodate the increasing demand for interregional
distribution facilities in the Lower Mainland for goods coming and going by
ship, and that there are few remaining waterfront properties in the Lower
Mainland suitable for its purposes. The chambers judge observed that the
Port Authoritys operations are an important foundation to the economy of
the Lower Mainland, British Columbia and Western Canada.
[5]
At approximately the same time as the Port Authority was evidencing
an interest in Canfors property, the GVSDD was also attempting to acquire
the property for the possible future construction of a solid waste management
infrastructure, including a new transfer station, a waste energy facility,
an organic management facility, a re-use centre, and an education centre.
In March 2008, the GVSDD offered to purchase the Canfor property for $34.5
million. When Canfor did not accept that offer, and knowing of the Port Authoritys
interest in the property, the GVSDD attempted to negotiate a Section 3
Expropriation
Act
agreement with Canfor. When this failed, the GVSDD then proceeded
with an expropriation of the property.
[6]
On June 25, 2008, the Port Authority commenced an action naming the
GVSDD as a defendant, claiming that it has a binding enforceable contract
with Canfor pursuant to which it has a unconditional right to acquire the
legal and beneficial interest in the property and seeking, amongst other relief,
an interlocutory and permanent injunction restraining the GVSDD from filing
a vesting notice in relation to the property.
[7]
The GVSDD is defending the action, denies that the Port Authority has
a legal or equitable interest in the property, and ultimately seeks to have
the action dismissed and to proceed with its expropriation of the property
pursuant to the
Expropriation Act
, R.S.B.C. 1996, c. 125 (the
Act
).
[8]
Canfor was added as a party to the action, and opposed the granting
of the injunction primarily on the basis that, in the present economic circumstances
where the real estate market is falling, the injunction could result in it
receiving a lower price for the property, or being deprived of any sale should
the GVSDD decide at some point not to proceed with the expropriation.
[9]
It was in these circumstances that the chambers judge granted a four-month
injunction precluding the GVSDD from finalizing its expropriation of the property
and vesting title in its own name, pending the determination of the action
which is now set to be heard in mid-February.
[10]
At the outset of the hearing, I raised with counsel the timing of this
application for leave to appeal. I observed that two and a half months had
elapsed since the injunction was granted and that the matter did not appear
to have been treated with any degree of urgency. Further, it was only one
month until the hearing of the action and less than two months before the
injunction expired according to its terms. Counsel for Canfor agreed that,
even if I were to grant leave to appeal, there was little prospect of the
appeal being heard before the date set for the hearing of the action. In
his view, however, there was a likelihood that the injunction would be continued,
or a new injunction granted, after the date of the hearing and, possibly,
after the present termination date, given what he viewed as the likelihood
of the matter ultimately proceeding to appeal from whatever decision is ultimately
rendered.
[11]
Counsel for the Port Authority took the position that any appeal of
the order would likely be moot by the time any appeal was heard and that there
was little utility in granting leave to appeal in the circumstances. He also
submitted that the application did not meet the standard criteria for the
granting of leave.
[12]
I note that the other parties to the action took no position on this
application.
[13]
Having now had a further opportunity to consider this matter, I have
concluded that this is not a proper case in which to grant leave to appeal.
Assuming, without deciding, that the usual criteria for granting leave have
been met, this is not the usual case. I am satisfied that the appeal would
be moot by the time it was heard (within the meaning of the decision in
Borowski
v. Canada (Attorney General)
, [1989] 1 S.C.R. 342) and that it is unlikely
that this Court would be moved to decide the appeal, since the factual landscape
would have changed. The action would have been heard, and a decision likely
rendered. The injunction may have expired or been modified. Canfor may or
may not have continued to suffer prejudice as a result of being unable to
complete a sale of the property or to receive monies pursuant to the expropriation
process. In that regard, I note that the expropriation process is still ongoing,
and that the injunction only precludes the GVSDD from vesting title in its
own name; it does not impede the rights or duties of the GVSDD to proceed
with the expropriation in accordance with the
Act
.
[14]
I am not persuaded that it would be appropriate to grant Canfor leave
to appeal based on the possibility that the injunction may be extended in
the future. If a new injunction is issued, or if the present injunction extended
by further order of the court, it will be open to Canfor to seek leave to
appeal at that time, based on the facts as they then stand.
[15]
In the result, and for these reasons, I would dismiss the application
for leave to appeal.
The
Honourable
Madam Justice Prowse
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Albert
v. Conseil Scolaire Francophone de la Colombie-Britannique,
2009
BCCA 19
Date: 20090122
Docket: CA034590
Between:
Anne-Marie
Albert
Appellant
(
Plaintiff
)
And
Le
Conseil Scolaire Francophone de la Colombie-Britannique
also known as Francophone Education Authority of
British Columbia
Respondent
(
Defendant
)
Before:
The
Honourable Madam Justice Ryan
The
Honourable Mr. Justice Lowry
The
Honourable Madam Justice Neilson
W.
R. Southward
Counsel for the Appellant
N.
T. Mitha
Counsel for the Respondent
Place
and Date of Hearing:
Victoria, British Columbia
September 24, 2008
Place
and Date of Judgment:
Vancouver, British Columbia
January 22, 2009
Written
Reasons by
:
The
Honourable Madam Justice Neilson
Concurred
in by:
The
Honourable Madam Justice Ryan
The Honourable Mr. Justice Lowry
Reasons
for Judgment of the Honourable Madam Justice Neilson:
INTRODUCTION
[1]
The appellant, Anne-Marie Albert, is an employee of the respondent,
Le Conseil Scolaire Francophone de la Colombie-Britannique, also known as
the Francophone Education Authority of British Columbia (CSF). In 2004,
she sued CSF, alleging breaches of her employment agreement, wrongful dismissal,
intentional infliction of mental suffering, and negligent misrepresentation.
Following a trial in 2006, her claims were dismissed but for an award of $500
for breach of contract, and an award for moving expenses to be assessed by
the registrar. The reasons for judgment are found at 2006 BCSC 1539, 54 C.C.E.L.
(3d) 87.
[2]
On this appeal, Ms. Albert argues that the trial judge made errors
in the disposition of her contractual claims. She has not pursued her claims
in tort.
BACKGROUND
[3]
The parties generally accept the chronology of their dealings set out
in the trial judges reasons, and I take this background largely from that
source.
[4]
CSF is a school district instituted in 1997 to cover Francophone education
in British Columbia. Ms. Albert commenced her employment with CSF as a vice-principal
2 (VP2) in Prince Rupert for the 1999-2000 school year.
[5]
CSF had grown rapidly, and introduced the VP2 position to establish
an administrative officer in its smaller schools. The VP2 performed both
teaching and administrative functions for the school. The teaching component
was permanent and represented .8 of the job. The administrative aspect was
.2 of the job, and was generally described as temporary but continuous.
Temporary meant that the contract term would be for one year, to protect
CSF financially if the school closed, in which case the VP2 would return to
a teaching position. Continuous meant that the contract would be automatically
renewed each year.
[6]
The trial judge described the VP2 position as amorphous and evolving.
When it was introduced, the VP2s signed one-year contracts, but CSF abandoned
that practice by 2000. The trial judge found that the VP2 position was covered
by the terms of the Administrative Officer Employment Agreement between CSF
and the Regroupement des Directions DÉcoles Francophones (the RDF Contract),
which dealt with the terms of employment for Administrative Officers, the
Principals and Vice-Principals in the schools. She noted, however, that CSF
did not revise the agreement specifically to include the VP2s, and applied
it without a cohesive policy.
[7]
These provisions of the RDF Contract are relevant to this appeal:
Whereas
* * *
d)
Le Conseil scolaire francophone and the Administrative Officer (the parties)
mutually agree to observe a duty of good faith toward one another, which duty
shall apply to the employment relationship of this Contract.
* * *
Section
1 Nature of the Appointment
1.1
Le Conseil scolaire francophone hereby appoints, on a continuing appointment,
___________________________, as an Administrative Officer for Le Conseil scolaire
francophone effective __________________.
* * *
Section
2 Reassignment
2.1
The Administrative Officer may be reassigned at any time by mutual agreement.
* * *
2.4
Upon reassignment to a new position or school, which would provide a lower
salary, the Administrative Officer will continue to receive the salary of
his/her previous position for 12 months.
* * *
Section
4 Termination
* *
*
4.4
This Contract may be terminated, without just and reasonable cause, by Le
Conseil scolaire francophone upon a 4/5 vote of all
the Directors
of Le Conseil scolaire francophone provided that the Administrative Officer
shall have been given reasonable notice in writing by Le Conseil scolaire
francophone that such a vote is being contemplated, together with the reasons
therefore [sic], and that prior to any such a vote being taken, the Administrative
Officer has been afforded a full and fair opportunity to be heard by all the
members of Le Conseil scolaire francophone in a special in-camera meeting,
to be accompanied at the meeting by representatives of the Administrative
Officers choice and to respond to the reasons given and to any allegations
made against him/her and that upon such a vote being taken the Administrative
Officer is forthwith advised in writing stating the reasons therefore [sic].
4.5
If Le Conseil scolaire francophone terminates the Contract of the Administrative
Officer without just and reasonable cause, Le Conseil scolaire francophone
shall offer to the Administrator Officer a teaching position mutually agreed
upon and commensurate with his/her qualifications and experience, to be assumed
upon the effective date of the termination.
4.6
If the Administrative Officer accepts the offer of a teaching position, Le
Conseil scolaire francophone shall pay to the Administrative Officer a severance
payment equal to the amount of salary he/she would have received for 6 months.
* * *
4.8
Any severance payment provided for in this agreement shall be paid as a retiring
allowance and will be paid to the Administrative Officer either in one lump
sum or by installments as selected by the Administrative Officer and may be
deposited directly to a registered retirement savings plan, to the extent
permitted by law.
4.9
The provisions of article 4.6 and 4.7 do not constitute a waiver of any rights
which Le Conseil scolaire francophone or the Administrative Officer may have
to enforce this Contract in the Courts under contract or other applicable
law.
* * *
Section
8 Interpretation
8.1
For the purposes of interpreting this Contract, the Contract shall specifically
be considered to be subject to the provisions of the School Act, the Teaching
Profession Act, and Regulations and Ministerial Orders made thereunder. Should
there exist any conflict between this Contract and the above-stated enactments,
then those enactments shall take precedence.
8.2
In the event that any term of this Contract is inconsistent with or in violation
of the provisions of the School Act or any other laws of the Province of British
Columbia, it is hereby deemed to be amended to the extent required to avoid
such inconsistency and, if any term of this Contract is thereby annulled,
the remainder of this Contract shall remain in full force and effect.
[8]
Ms. Albert sought a leave of absence from her position in Prince Rupert
for the 2000-2001 school year to pursue a Masters degree in New Brunswick.
When a car accident interrupted her studies, she applied for and received
an extension of her leave for the 2001-2002 school year.
[9]
In June 2001, CSF decided to open a new school in Kamloops. It had
limited time to find qualified candidates for the VP2 position at this school
and so Mr. LeBlanc, CSFs human resources agent, offered it to Ms. Albert.
[10]
Ms. Albert was reluctant to give up her Masters programme and relocate
to Kamloops unless the position was permanent. The posting referred to the
teaching component of the job as a full-time continuing permanent position.
Ms. Albert demanded confirmation from Mr. LeBlanc that the VP2 component would
also be permanent.
[11]
On August 23, 2001, Mr. LeBlanc faxed Ms. Albert a description of the
position that stated:
POSITION
DESCRIPTION
Elementary
instruction: Kindergarten/Grade 1/Grade 2
and Grade 3 (K/1/2/3)
vice-principal
II*
FULL
TIME 0.8 FTE*
continuing
position (permanent)
...
*This
instructional assignment shall be combined with a school administration
assignment (0.2 FTE). Only internal candidates with three (3) years
teaching experience will be considered.
[12]
A salary scale for Ms. Albert set out a base salary for the position
of $47,185 as a teacher, $3,727 for the administrative component, for a total
salary of $50,912, effective from 1 July 2001 to 30 June 2002.
[13]
Ms. Albert accepted the position and moved with her family to Kamloops
on Mr. LeBlancs assurance that the VP2 position was permanent.
[14]
After her arrival in Kamloops, Ms. Albert received a letter of understanding
from CSF, dated September 20, 2001, that described her position as a one-year
temporary position. She immediately telephoned Mr. Ouimet, the Assistant
Superintendent of CSF, to clarify that her position was permanent. He assured
her this would be resolved at a pending meeting in October.
[15]
Before she bought a house in Kamloops, Ms. Albert had further discussions
with Mr. Ouimet about the permanency of her position there. Their accounts
of these conversations diverged somewhat. The trial judge found that there
was no contractual assurance or promise that Ms. Alberts administrative position
would last for a fixed time, but the standard expectation was that such a
position would last three to five years.
[16]
At the end of Ms. Alberts first year at the Kamloops school, CSFs
personnel were very pleased with her performance, notwithstanding that a performance
evaluation had not been done due to time constraints. In July 2002, she received
notice that her salary for 2002-2003 would be $67,760, without differentiation
between the teaching and administrative components of the position. Another
salary document, however, suggested that $3,727 should be added to that salary,
for a total of $71,487. CSF explained this by advising that the increased
amount was only for a VP2 who had completed a Masters degree. The salary
documentation was inconsistent, and the trial judge observed that the resulting
confusion over Ms. Alberts salary was indicative of the general confusion
surrounding the VP2 position. She accepted, however, that Ms. Alberts salary
for 2002-2003 was $67,760.
[17]
Ms. Alberts situation at the Kamloops school began to deteriorate
in the fall of 2002 when she encountered difficulties with a new teacher.
The new teacher was insubordinate and complained about Ms. Albert. Parents
became involved in the dispute. The situation was exacerbated in early 2003
by a complaint from a parent about Ms. Alberts discipline of her son. Ms.
Albert received limited and inconsistent support during these events from
CSF personnel, who were concerned that parental displeasure would undermine
the growth of the new Kamloops school.
[18]
On February 4, 2003, Ms. Albert left her position on stress leave,
due to anxiety, depression and pain from her earlier car accident. Despite
her absence, she continued to perform administrative duties for the school.
[19]
In mid-February 2003, CSF and RDF agreed to change the VP2 position,
and re-classify it as Principal 5 (D5) at the end of the 2003 school year.
This was an administrative restructuring, and did not change the job description.
The D5 position was to be a one-year contract that would be renewed each year
until the school had 50 students, at which point the contract would automatically
become continuous. At the outset, all D5 positions were to be internally
posted for members of RDF. If they were not filled in this process, they
would be posted externally. These changes were formally approved on March
23, 2003.
[20]
Ms. Albert returned to work on March 24, 2003. Shortly after, she
was summoned to attend a meeting in Richmond on March 31, 2003 to discuss
the problems at the Kamloops school with Ms. Leduc, the Instructional Services
Manager, Dr. Ardanaz, the Superintendent of CSF, and Mr. Ouimet. She
was given little information about the purpose of the meeting, or the communications
from parents that had instigated it. The trial judge described this meeting
and the events immediately subsequent at paras. 22-25 of her reasons for judgment:
[22]
Albert travelled from Kamloops to attend the March 31 meeting. Ardanaz, Leduc
and Ouimet, an intimidating threesome, were in attendance at the two-hour
meeting. No minutes were kept by CSF but Albert wrote to RDF about the meeting
soon after. Ardanaz told Albert that parents and staff had complained about
her and that some parents were holding back on re-registration until the situation
at the school was resolved. He told Albert that they were going to have a
meeting with the parents on April 7, investigate, and report back to the board.
Ardanaz told Albert that she had returned to work without a note from her
doctor indicating that she was fit to do so. Ardanaz also told Albert to
go back on sick leave immediately and until further notice pending the results
of the investigation. This was decided without reference to medical documentation
to support this decision, a practice contrary to CSFs human resources policy,
and without the involvement of the human resources department, also contrary
to normal practice. There was no requirement for an administrative officer
to have a medical note stating that she was fit to return to work, although
a note could be required to claim sick leave with pay. Ardanaz also told
Albert that the VP2 position was to be phased out and that she would have
to apply for the new replacement position of D5, that she would interview
for the job and quite possibly not be selected. In the latter event, she
would return to a position as teacher. Ardanaz did not inform Albert of any
deadlines for application. There was also the suggestion that, although Albert
had done an excellent job at the school, her leadership style was not suitable
and that stability within the school was the foremost requirement. When Albert
suggested that only two or three parents had complained over incidents that
had already been dealt with, Leduc told Albert to round up her supporters
for the April 7 parent meeting. At no time were specific parent or staff
complaints detailed.
[23]
Albert had a telephone conversation with Leduc on her way home to Kamloops
after the meeting. Leduc told Albert to attend a meeting with herself and
the superintendent prior to the parents meeting but not to attend the parents
meeting itself. Instead, she was to meet with Leduc and Ardanaz following
the parents meeting to discuss the results.
[24]
On April 2, 2003, Ardanaz contacted Albert in anger that she had contacted
parents to advise them to attend the parents meeting scheduled for April 7.
He was unaware that Leduc had told Albert to contact her supporters. In the
conversation, he told Albert that he considered her conduct to be a severe
case of insubordination.
[25]
Albert was devastated emotionally by this meeting and these conversations.
She had never been critically evaluated in her position before despite her
requests for a performance evaluation in the past. She also felt that Ardanaz
had been curt and rude. She was not informed of specific complaints and felt
that Leduc had not kept her informed of Leducs meetings with staff and parents,
thus undermining her authority at the school. She immediately contacted and
wrote to RDF. Albert considered that she had been suspended because she knew
that CSF could not order her back to sick leave. She did not return to work.
[21]
On April 4, 2003, Ms. Alberts doctor provided CSF with a medical note
stating that she was fit to attempt a return to work on March 25, 2003, and
would continue to be evaluated. CSF personnel were unable to provide a consistent
explanation as to why Ms. Albert did not return to work thereafter.
[22]
Following these events, Ms. Albert sought assistance from her professional
association, the B.C. Principals and Vice-Principals Association (BCPVPA).
Thereafter, she was aided in her dealings with CSF by a representative of
BCPVPA, as well as counsel retained by BCPVPA on her behalf.
[23]
On April 7, 2003, her counsel wrote a letter to CSFs counsel on Ms.
Alberts behalf. This stated that she continued to be under medical care,
that the conduct of CSF had caused her great anxiety, and that, as a result,
she would not attend the upcoming meetings with parents and the CSF administration.
The letter invited further discussion about her employment relationship and
future with CSF.
[24]
Dr. Ardanaz, Ms. Leduc and the Kamloops parents met on April 7, 2003.
The purpose of the meeting was to inform the parents about the changes to
the VP2 position, to seek their input on the qualities sought in a principal
for the next year, and to discuss the situation at the school. Only two parents
were openly critical of Ms. Albert. Another asked whether Ms. Albert
would return, and Dr. Ardanaz advised that she would not be coming back right
now as she was on sick leave and others would be undertaking training as principal.
The CSF representatives deflected open discussion about Ms. Alberts performance
by advising that she would be evaluated by human resources. No one reported
to Ms. Albert about what occurred at the meeting.
[25]
CSF personnel gave inconsistent evidence about Ms. Alberts medical
condition, and about why she did not return to work. On April 11, 2003, CSFs
lawyer wrote to Ms. Alberts counsel and denied that she was suspended from
her employment. He said that CSF had asked her to provide medical certification
of her fitness to return to work due to what was understood to be a serious
mental health condition. At trial, CSF personnel were unable to explain
this letter, in view of the earlier doctors note. Nor could they provide
a basis for the statement that Ms. Albert had a serious mental health condition.
The trial judge noted that, regardless of the lack of substance for that statement,
Ms. Albert did not return to work and felt compelled to obtain a psychiatric
evaluation and treatment. A report completed in July 2003 concluded that
she was stable and in good control.
[26]
By the end of April, Ms. Leduc asked Ms. Albert to return the administration
files to the school, and informed the parents that her replacement teacher
was there for an undetermined time.
[27]
The CSF had set a deadline of April 30, 2003 for applications for the
new D5 positions from RDF employees. The evidence indicated that CSF was
inconsistent in the manner in which it filled these positions. Several VP2s
were confirmed as D5s without an interview. The Kamloops D5 position was
treated differently, and posted externally. The trial judge found that this
was further indication of the confusion that surrounded the VP2 position.
She also found that the Kamloops D5 position was treated differently because
of the confrontations between Ms. Albert and the parents and staff.
[28]
On May 5, 2003, Ms. Albert was advised through her counsel that she
could apply for the Kamloops D5 position after she saw a psychiatrist. Ms.
Albert applied on May 12, 2003. She met all the formal criteria and was granted
an interview, but the position was awarded to another candidate. Ms. Albert
also applied for other administrative positions with CSF without success.
[29]
By the end of June 2003, when Ms. Albert had not received an offer
of any other position with CSF, she contacted CSF and pointed out that paragraph
4.5 of the RDF Contract required CSF to offer her a position following termination
without cause.
[30]
Ultimately, Ms. Albert and CSF negotiated an agreement that CSF set
out in a letter of July 8, 2003. Ms. Albert received a teaching position
at the CSF school in Port Alberni. This was a permanent position under the
collective agreement for instructional personnel, as opposed to an administrative
position under the RDF agreement. However, the parties agreed to treat it
as a reassignment under paragraph 2.4 of the RDF Contract, and Ms. Albert
accordingly continued to receive her VP2 salary for her first year in the
teaching position. As well, CSF agreed to pay her moving costs to Port Alberni,
pursuant to paragraph 12.1 of Appendix A of the RDF Contract.
[31]
At the time of the trial, Ms. Albert continued to work for CSF as a
teacher at the Port Alberni school, and was earning a salary of $59,820.
THE
ISSUES
[32]
Ms. Albert brought an application to adduce fresh evidence on this
appeal. As well, she alleged that the trial judge erred in six respects:
[1] in finding that Ms. Albert had not been wrongfully
dismissed by CSF, and awarding only nominal damages for a technical breach
of contract;
[2] in finding that Ms. Albert was not entitled
to a severance payment under paragraph 4.6 of the RDF Contract due to the
operation of s. 14.4 of the
Public Sector Employers Act
, R.S.B.C.
1996, c. 384 and s. 6(3) of the
Employment Termination Standards
,
B.C. Reg. 379/97;
[3]
in finding that Ms. Albert was not entitled to an award of damages related
to the manner of her dismissal;
[4]
in finding that CSF did not owe Ms. Albert $7,454 for unpaid salary as a VP2
during 2002-2003 and 2003-2004;
[5]
in finding that CSF was not obliged to reimburse Ms. Albert for dental expenses
incurred in 2003-2004;
[6]
in awarding CSF its costs.
DISCUSSION
The application to lead fresh evidence
[33]
Ms. Albert applied to lead fresh evidence comprised of volume VII of
the trial transcript, and four documents. There is no issue with respect
to the transcript, which would be available to the Court in any event. CSF
opposed the admission of the four documents.
[34]
As this Court explained in
Spoor v. Nicholls
, 2001 BCCA
426, 90 B.C.L.R. (3d) 88 at para. 16, the test for the admission of fresh
evidence in a civil case is found in the criminal case of
Palmer v.
The Queen
, [1980] 1 S.C.R. 759. There, McIntyre J. for the Court
set out the governing principles at 775:
(1)
The evidence should generally not be admitted if, by due diligence, it
could have been adduced at trial provided that this general principle will
not be applied as strictly in a criminal case as in civil cases: see
McMartin
v. The Queen
[ [1964] S.C.R. 484].
(2)
The evidence must be relevant in the sense that it bears upon a decisive
or potentially decisive issue in the trial.
(3)
The evidence must be credible in the sense that it is reasonably capable
of belief, and
(4)
It must be such that if believed it could reasonably,
when taken with the other evidence adduced at trial, be expected to have affected
the result.
[35]
The first two documents were a copy of CSFs seniority list and a portion
of the Teachers Collective Agreement that was in effect from 2001 to 2004.
Ms. Albert sought to admit these as a basis for what she said was a new argument
that CSF was negligent in failing to honour her seniority by giving her the
option of a teaching position at the Kamloops school when her employment as
a VP2 ended. However, this was pleaded as a breach of the employment contract
in paragraph 13(c)(iii) of the further amended statement of claim, and rejected
by the trial judge at para. 52 of her reasons for judgment. Ms. Alberts
counsel frankly admitted that these documents were in her possession prior
to the trial. These documents accordingly do not satisfy the due diligence
requirement of the
Palmer
test.
[36]
The third document is notes of a meeting of CSF personnel on February
24, 2003, which Ms. Albert says relate to action she took in regard to salary
changes imposed upon her in 2002. She says this document was not provided
to her at trial and that it is relevant to her fourth ground of appeal. The
notes simply state that there have been discussions regarding Ms. Alberts
salary and the CSF is still checking. I cannot see how this document would
have affected the result at trial.
[37]
The last document is a copy of a receipt in the amount of $1,001.24
for dental services to Ms. Alberts husband. Ms. Alberts counsel advises
that it was available at trial but was overlooked. It fails to meet the
due diligence test set out in
Palmer
.
[38]
I would accordingly dismiss the application to adduce fresh evidence.
Did the trial judge err in finding that Ms. Albert had
not been wrongfully dismissed by CSF, and awarding only nominal damages for
a technical breach of contract?
[39]
At trial, Ms. Albert claimed $299,976 as damages for wrongful dismissal.
This represented the projected salary differential between a teaching position
and an administrative position with CSF for the balance of her career.
[40]
The trial judge dealt with this claim at paras. 46-52 of her reasons
for judgment. She found that the RDF Contract applied to Ms. Albert as a
VP2. She held that paragraph 1.1 of the RDF Contract, as well as Ms. Alberts
dealings with CSF when she was hired for the VP2 post in Kamloops, established
that it was a continuing position, not a one-year contract. She found that
CSF effectively terminated Ms. Albert as a VP2 without cause on March 31,
2003, although it continued to pay her salary and benefits to June 20, 2003
(this date was in error and should have been July 31, 2003, a matter discussed
later in these reasons). She decided, however, that the terms of the RDF
Contract, as well as the law governing employment contracts, precluded Ms.
Albert from recovering damages for wrongful dismissal.
[41]
The trial judge properly observed that an offer of permanent employment
does not mean that employment is offered until retirement unless that is expressly
articulated. She found that the RDF Contract contained no such term.
[42]
Further, the trial judge held that paragraphs 4.4, 4.5, and 4.6 of
the CSF Contract allowed CSF to terminate Ms. Albert without cause, so long
as she was offered a teaching position in compliance with paragraph 4.5.
She noted that Ms. Albert demanded, and accepted, such an offer, and that
CSF had agreed to pay her as a VP2 for her first year in that teaching post
and to pay her moving costs, concessions that it was not required to make
under paragraph 4 of the RDF Contract.
[43]
The trial judge acknowledged that CSF did not evaluate Ms. Alberts
performance before terminating her contract as a VP2. Nor had it followed
the procedural steps set out in paragraph 4.4 of the RDF Contract. She found,
however, that Ms. Albert was aware that her position had been terminated and
that, although she was represented by counsel, she did not demand that CSF
follow the required procedural steps before dismissing her.
[44]
At paras. 73-75 of her reasons, the trial judge considered whether
these procedural irregularities entitled Ms. Albert to a remedy. She observed
that Ms. Albert was not seeking an administrative remedy, or reinstatement.
Her claim was limited to damages for breach of contract. She referred to
Richards v. Athabasca School District No. 839
, [1931] S.C.R.
161 and
Lalonde v. Kelowna (City)
(1981), 29 B.C.L.R. 125 (S.C.)
as support for the view that the failure to follow procedural steps should
be viewed as a technical breach only, if following the procedures would not
have changed the result, or if the plaintiff has accepted severance pay and
does not seek reinstatement. She concluded at para. 75 that the procedural
irregularities constituted a technical breach of contract:
[75]
The plaintiff has not established that there would have been any different
result if her termination had been considered by the board of CSF or if CSF
had followed the procedures related to the evaluation of her performance.
This was a dismissal without cause. The VP2 position was undergoing
change. There was uncertainty whether the RDF contract applied to VP2s.
The leadership at Kamloops was integral to the success of the school.
The superintendent of CSF had lost confidence in Alberts ability to regain
the support of parents or teachers. The plaintiff did not request a
hearing before the board or a formal notification of the reasons for her dismissal.
It is improbable that termination without cause would not have ensued
in any event. Failure to follow procedure was a technical breach of
contract separately compensable from severance pay. In these circumstances,
nominal damages in the amount of $500 are awarded.
[45]
Ms. Albert says the trial judge erred in finding a technical breach
of the contract only. She points out that the preamble to the RDF Contract
imposes a duty of good faith on CSF, and says that, viewed in that context,
the trial judge should have found that CSFs failure to evaluate her performance
and follow the procedures in paragraph 4.4 before dismissing her was a fundamental
breach of contract, and entitled her to substantial damages for wrongful dismissal.
[46]
With respect to CSFs duty to evaluate her before her dismissal, Ms.
Albert points to paragraph 16 of Appendix A of the RDF Contract. This provides
a process for evaluation of Administrative Officers by CSF in accordance with
CSF policy. The only CSF evaluation policy in evidence was Policy G-7005.
This is entitled Evaluation of Principals, and mandates regular evaluation
of Principals by the Superintendent, in part to provide a basis for all decisions
regarding
terminations. Ms. Albert says that since she was the
de facto
principal at the Kamloops school, this policy applied to her. Essentially,
she argues that an evaluation was a precondition to the lawful termination
of her employment as a VP2, and the trial judge should have found that CSFs
failure to evaluate her constituted a breach of her employment contract, and
entitled her to damages.
[47]
I am unable to agree. Paragraph 16 of Appendix A does not state that
Administrative Officers must be evaluated before they can be terminated.
Further, Policy G-7005 clearly applies only to principals. It makes no mention
of VPs, VP2s, or Administrative Officers generally. Even if CSFs confusion
over the VP2 position justified applying this policy to Ms. Albert, its wording
does not require an evaluation as a precondition of termination.
[48]
With respect to the failure to follow the procedural requirements in
paragraph 4.4, Ms. Albert seeks to distinguish the cases relied on by the
trial judge, and points to
Cardinal v. Director of Kent Institution
,
[1985] 2 S.C.R. 643 at 661 for the proposition that the denial of a right
to a fair hearing renders a decision invalid, whether or not the hearing would
have resulted in a different decision.
[49]
With respect, Ms. Alberts argument is misconceived to the extent that
it relies on principles and authorities from the field of administrative law.
As the trial judge pointed out, Ms. Albert has cast her claim against CSF
as an action for wrongful dismissal, rooted in the law of contract. She cannot
use that vehicle to seek judicial review of CSFs decision or reinstatement
due to procedural irregularity:
Jalan v. Inst. Of Indigenous Government
et al
, 2005 BCSC 590, at paras. 117-119, [2005] B.C.J. No. 929;
Dunsmuir
v. New Brunswick
, 2008 SCC 9 at para. 81.
[50]
Ms. Albert knew at the end of March 2003 that the VP2 position was
being phased out and that she would have to compete for the new D5 position.
From April 7, 2003 she was represented by counsel or by a representative of
the BCPVPA in her dealings with CSF. By the end of May 2003, she knew that
she had been unsuccessful in obtaining a D5 position, and that her duties
as a VP2 would come to an end on June 30, 2003. Instead of insisting that
CSF observe the procedural steps in paragraph 4.4, she chose to negotiate
a resolution that entitled her to a teaching position with CSF, increased
salary for her first year in that position, and her moving expenses.
[51]
I am satisfied that the trial judge made no error in finding that CSFs
failure to follow those steps was a mere technical breach of contract.
[52]
Finally, Ms. Albert says that even if this was a technical breach,
the award of $500 as nominal damages was too low. She refers to
Finn
v. St. Johns (City)
, 2002 NLCA 76, 220 Nfld.
&
P.E.I.R. 245 at paras. 64-65 as support for the view
that she should have received at least one months salary, which was $6,500.
[53]
An award of nominal damages is a discretionary matter.
Finn
can be distinguished on the basis that it involved a breach of statutory requirements
by a public authority. In
Remedies
:
The Law of Damages
, 2d
(Toronto: Irwin Law Inc., 2008), Professor Cassels at page 310 describes nominal
damages as a small sum of money awarded when the plaintiff has established
a cause of action but has suffered no substantial loss, or has successfully
mitigated the loss. I am satisfied that the sum of $500 is a reasonable award
for nominal damages here, and I would not interfere with the trial judges
assessment.
[54]
In summary, I find no error in the trial judges conclusion that Ms.
Albert was not wrongfully dismissed by CSF. The RDF Contract clearly entitled
CSF to dismiss employees without cause. There were several legitimate reasons
to terminate Ms. Alberts employment as a VP2. CSF was not required to evaluate
her performance before doing so. While the procedural steps in paragraph
4.4 were not followed, this had no bearing on the outcome of her contractual
claim for damages.
Was there a legislative bar to recovery of a severance
payment under paragraph 4.6 of the RDF Contract?
[55]
Ms. Albert argues that the trial judge erred in finding that the legislative
framework underlying her employment with CSF precluded her from receiving
the severance payment of six months salary, or $35,744, contemplated by paragraph
4.6 of the RDF Contract.
[56]
The trial judge usefully summarized the relevant legislation, the issue,
and her conclusion at paras. 53-56 of her reasons for judgment:
[53] There
is then the question of notice period for termination of the VP2 position
without cause. Paragraph 4.6 of the RDF contract said that if the administrative
officer accepted the offer of a teaching position, then CSF was required to
pay severance equal to six months of salary, in this case, $35,744. The
defendant, however, argued that this clause was void because of operation
of the
Public Sector Employers Act
, R.S.B.C. 1996, c. 384 (the
Act
) and the regulations enacted under section 14.4 of the
Act
,
the
Employment Termination Standards
(the
Regulations
).
The pertinent subsections of section 14.4 are:
14.4
(1) The Lieutenant Governor in Council
may, by regulation, establish employment termination standards for an employee.
(3)
If the Lieutenant Governor in Council establishes an employment termination
standard by regulation under subsection (1), effective on the date on which
the regulation comes into force,
(a) the
standard is deemed to be included in all applicable contracts of employment
that are commenced, changed or renewed on or after that date, and
(b) any
provision of an applicable contract of employment referred to in paragraph
(a) that conflicts or is inconsistent with the standard is void to the extent
of the conflict or inconsistency.
(4) The
Employment Termination Standards regulation (B.C. Reg. 379/97) made under
this Act before the commencement of this section continues, as amended by
this section, and is deemed to have been made under this section.
(5) On
the effective date,
(a) the
Employment Termination Standards regulation (B.C. Reg. 379/97) is deemed to
have been amended as set out in the Schedule to the
Public Sector Employers Amendment Act, 2002
,
(b) the
employment termination standards set out in that regulation are deemed to
be included in all applicable contracts of employment that are in force on
the effective date or are commenced, changed or renewed on or after that date,
and
(c) any
provision of an applicable contract of employment referred to in paragraph
(b) that conflicts or is inconsistent with any of those standards is void
to the extent of the conflict or inconsistency.
(6) Subsection
(5) is retroactive to the extent necessary to give it force and effect on
and after the effective date.
(7) The
amendment to section 5 (2) of the Employment Termination Standards regulation
(B.C. Reg. 379/97) made under this section does not apply in relation to an
employee with whom a contract of employment was entered into before the effective
date and which contract of employment is for a definite term unless that contract
of employment is changed or renewed on or after the effective date.
[54]
The CSF is a public sector employer within section
1(c) of the
Act
as it is a francophone education authority as
defined in the
School Act
. Section 6(3) of the
Regulations
states:
Re-employment
in the public sector
6 (3) If an employee commences employment with
a public sector employer during the notice period or period of notice in lieu
of which severance is provided,
(a) no severance covering this period of re-employment
is payable, and
(b) the
employee must pay the government any amount that is attributable to the period
during which the employee is re-employed.
[55]
By section 14.4(3)(a) of the
Act
, the employment
termination standard is included in all contracts of employment that are commenced,
changed or renewed on or after the date that the regulation comes into force.
By section 14.4(3)(b) of the
Act
, any contractual provision
that conflicts with or is inconsistent with the standard is void to the extent
of any conflict. If section 6(3) of the
Regulations
was
in force at the time that the plaintiff entered into the contract of employment,
she was no longer entitled to severance pay under paragraph 4.6 of the contract
because once she had commenced her position in Port Alberni, such pay would
be in conflict with the
Regulations
.
[56]
The effective date is defined in section 14.1 of the
Act
as the date on which the
Public Sector Employers Amendment
Act, 2002
, S.B.C. 2002, c. 64 (the
Amendment Act
) receives
first reading in the Legislative Assembly. The first reading was on
October 21, 2002. This was after the date when the plaintiff entered into
the contract of employment. The defendant argued that section 6(3) of
the
Regulations
is applicable as a result of the retroactive
provisions of sections 14.4(5) and (6) of the
Act
. The
plaintiff argued that the termination standard is applicable only to contracts
entered into after the effective date as a result of section 14.4(7) of the
Act
. I have concluded that section 6(3) of the
Regulations
was in force at the time that Albert entered into the contract of employment.
[57]
The trial judge then explained the basis for her conclusion. Briefly,
she found that the
Act
and
Regulations
applied
to contracts between CSF and its employees since August 1, 1997. Under that
legislation, the
Regulations
were deemed to be included in those
contracts, and any contractual provision inconsistent with them was deemed
void. In particular, s. 6(3) of the
Regulations
had been in
force since May 1997, and was continued by s. 14.4(4) of the
Act
.
It was therefore applicable to Ms. Alberts employment contract. At para.
58 of her reasons for judgment the trial judge concluded that since paragraph
4.6 was inconsistent with s. 6(3) of the
Regulations
, it was
void to the extent of that inconsistency, and no severance was payable from
the point when Ms. Albert commenced her teaching position at Port Alberni.
The rest of the RDF Contract remained in force pursuant to paragraph 8.2.
[58]
Ms. Albert does not attack the trial judges interpretation of the
Act
and
Regulations
. Instead, she presents two
arguments that do not appear to have been made at trial.
[59]
First, she says that the trial judge failed to appreciate that the
six month severance payment provided by paragraph 4.6 was in fact a retiring
allowance, and was thus not subject to s. 6(3) of the
Regulations
.
She points out that paragraph 4.8 of the RDF Contract states that any severance
payment under the agreement shall be paid as a retiring allowance. She
says that s. 2.1(1) of the
Regulations
also distinguishes between
severance and a retiring allowance. This states:
2.1
(1) An employee who receives a notice period or severance must not be given
a retiring allowance.
Ms.
Albert says that the trial judge should have found that the intent of paragraphs
4.6 and 4.8 was to exempt employees who were dismissed without cause from
s. 6(3) of the
Regulations
, and that she was thus entitled to
receive $35,744 as a retiring allowance upon termination of her employment.
[60]
I am unable to accept that proposition. The RDF Contract and the
Regulations
both define retiring allowance in a manner incompatible with Ms. Alberts
argument. Section 13 of Appendix A to the RDF Contract contains the only
other reference to retiring allowance in the Contract. It is titled Retiring
Allowance and states:
An
administrator who is 55 years of age or older shall receive, on retirement,
a retiring allowance in recognition of his/her service to Le Conseil scolaire
francophone equal to five (5) percent of his/her annual salary at retirement
for each year of service with Le Conseil scolaire francophone and the immediately
preceding school district, either as a teacher or as an Administrative Officer
to a maximum of one years salary.
[61]
It is a reasonable assumption that it was the intent of the parties
to the RDF Contract to use contractual terms consistently. Retiring allowance
as defined by s. 13 clearly has no application to Ms. Albert. She was not
55 years old, and she was not retiring.
[62]
Similarly, the
Regulations
define notice period, retiring
allowance, and severance:
notice
period
means the length of time from the date on which notice
of termination is given to an employee until the date on which employment
will terminate;
retiring
allowance
means a payment that, by a contract of employment, an
employee may receive on or after retirement of the employee from his or her
employment in recognition of the employees service, but does not include
severance
means the severance payment made in lieu of the notice
period;
[63]
Those definitions are of no assistance to Ms. Albert, particularly
when read in conjunction with s. 2.1(1) of the
Regulations
,
which makes a notice period or severance mutually exclusive with a retiring
allowance.
[64]
I am satisfied that the trial judges interpretation of the legislation
and the RDF Contract was correct. Paragraph 4.6 clearly deals with a severance
payment following dismissal without cause. I find it a reasonable inference
that paragraph 4.8 permits the severance to be paid as a retiring allowance
for tax reasons, since it permits the deposit of the payment into a registered
retirement savings plan. However, it is not necessary to decide that point.
Payment of severance as a retiring allowance does not alter the fundamental
nature of the payment. It is a severance payment, and s. 6(3) of the
Regulations
precludes Ms. Albert from receiving it.
[65]
Ms. Alberts second argument is that s. 6(3) of the
Regulations
only applies to severance paid once an employee commences re-employment with
a public sector employer. She says that her employment as a VP2 ended on
June 30, 2003, and the teaching position in Port Alberni did not start until
September 1, 2003. She is therefore entitled to severance pay under paragraph
4.6 of the RDF Contract for July and August.
[66]
I agree that this is a reasonable interpretation of s. 6(3) if there
is a hiatus between an employees termination date and the commencement of
the new teaching position.
[67]
However, CSF says this does not apply to Ms. Albert, as she continued
to receive her salary as a VP2 during July and August 2003. CSF points out
that, although Ms. Alberts duties as a VP2 in Kamloops ended in June 2003,
the pay periods under her VP2 Contract did not end until July 31, 2003. The
agreement reached between the parties and recorded in the letter of July 8,
2003 entitled Ms. Albert to be paid as a VP2 for the first year of her teaching
position in Port Alberni, commencing August 1, 2003. Ms. Alberts Employees
Pay History confirms that she was paid as a VP2 during July and August 2003.
CSF says it would be inconsistent and unfair to now permit Ms. Albert to rely
on paragraph 4.6 to obtain double recovery for those two months. If she is
entitled to severance pay under paragraph 4.6 for that period, it should be
set off against the salary she was already paid for those months.
[68]
I am satisfied that the documentary evidence supports a conclusion
that, although Ms. Albert was not working during the summer of 2003, CSF continued
to pay her as a VP2 for July and August. There was therefore no hiatus in
her income between her termination as a VP2 and the commencement of her employment
in Port Alberni. Nor did her income level change.
[69]
I cannot agree that it is the intent of the legislative scheme underlying
public sector employment to permit Ms. Albert to achieve double recovery by
collecting severance under paragraph 4.6 at the same time that she continued
to receive her VP2 salary. Clearly the intent of the legislation is to minimize
the payment of severance from the public purse. I accordingly would not give
effect to this argument.
Was Ms. Albert entitled to damages related to the manner of her dismissal?
[70]
At trial, Ms. Albert sought damages in the form of an extension of
the notice period related to the manner of her dismissal, in accord with the
principles in
Wallace v. United Grain Growers Ltd.
, [1997] 3
S.C.R. 701, 152 D.L.R. (4th) 1. She claimed that CSF had acted unfairly
and in bad faith in terminating her employment as a VP2.
[71]
The trial judge reviewed the
principles in
Wallace
, and the decision of Tysoe J. in
Lane
v. School District 68 (Nanaimo-Ladysmith)
, 2006 BCSC 129, 47 C.C.E.L.
(3d) 219.
Lane
was a case involving a similar contract and
legislative scheme.
At para.
188 of that decision, Mr. Justice Tysoe stated:
The
second reason why Ms. Lane is not entitled to Wallace damages is that her
contract of employment stated that the School Board had the ability to dismiss
Ms. Lane without cause and, at its discretion, provide Ms. Lane with 12 months'
notice of termination or pay her salary and benefits for 12 months. In these
circumstances, where there is an employment contract containing an express
term regarding notice of termination or payment in lieu thereof, the law does
not imply a term providing for reasonable notice which is different from the
express term: see
Barnard v. Testori America Corp
., [2001] P.E.I.J.
No. 28, 2001 PESCAD 4 at [paragraph] 7. Even if the School Board had acted
with bad faith in terminating Ms. Lane's employment, the maximum amount of
damages she is entitled to receive under her contract of employment is the
equivalent of 12 months' salary and benefits. She has already been paid this
amount, and she is not entitled to be paid any further damages.
[72]
The trial judge concluded at para. 69 of her reasons for judgment that
Ms. Albert was not entitled to
Wallace
damages because she had
not been wrongfully dismissed by CSF. She agreed with Tysoe J. that damages
arising from the manner of dismissal are not recoverable where the employment
contract expressly limits the severance payable, and legislation further limits
that severance if the employee accepts another teaching position.
[73]
While those findings made it unnecessary for the trial judge to consider
whether CSF had acted unfairly or in bad faith in the course of terminating
Ms. Albert, she nevertheless went on to consider this, and concluded that
it had not. The basis for that finding is set out at para. 71 of her reasons
for judgment:
[71]
In this case, the plaintiff was terminated shortly after
returning from sick leave, was not informed about the purpose of the March
31 meeting, was treated insensitively at the meeting, was subsequently marginalized
by her superiors, was not given an opportunity to respond to concerns about
her performance, was never evaluated as to performance, and was not dismissed
according to contractual procedure. On the other hand, CSF was entitled
to dismiss without cause, the dismissal pertained to only a small portion
of her employment, she was offered a new teaching position in reasonable time,
she lost no salary and was paid excessively over the ensuing year, and the
conduct of CSF can be blamed on general confusion about the VP2 position and
anxiety concerning the future of the Kamloops school. Although CSF could
certainly have handled the situation better, especially the key personnel
responsible for the Kamloops school, I do not find bad faith or unfair dealing
in the overall circumstance when there was no ill will directed towards the
plaintiff personally, but rather a heightened, hyperventilated concern about
the growth and future of the Kamloops school.
[74]
Later in her reasons, the trial judge dealt with the plaintiffs claims
of intentional infliction of mental suffering and negligent misrepresentation
(which are not being pursued on this appeal). At paras. 78 and 80 she made
additional findings that have some bearing on CSFs conduct, and whether it
acted unfairly or in bad faith in its dealings with Ms. Albert:
[78]
The plaintiff has not proven the tort [of intentional
infliction of mental suffering]. The conduct of CSF did not reach the
level of flagrant or outrageous. It did not engage in conduct that would
foreseeably inflict shock and mental suffering. CSF did not make reckless,
careless, or inaccurate accusations against the plaintiff, nor did CSF employees
show wanton disregard for the plaintiffs health. Although Ardanaz and
Leduc were insensitive during and after the March 31 meeting, I do not conclude
that either specifically intended to cause Albert mental suffering. They
were focused on the future of the Kamloops school and tried to manage the
situation when the position of VP2 was in a state of confusion and flux, when
parents had questioned Alberts leadership style, and when there had been
disruption at the school due to absences of the two main teachers for extended
periods during the school year. They did express some concern for the
plaintiffs state of health and requested updated medical reports to follow
through on her recovery. The medical report of July 2003 did not suggest
that the plaintiffs depression had been caused by the manner of her discharge
as VP2, but rather by the culmination of events at the school since the fall
of 2002 and the plaintiffs fragile state as a result of her previous car
accident. In any event, the plaintiff was in good and stable condition
by July 2003 such that any conduct by CSF resulted in only transient injury
to feelings.
[80]
The evidence [related to negligent misrepresentation]
established that the plaintiff did not consider anything that Ouimet may have
said in the October conversation to be an assurance or promise that she would
remain in Kamloops for four or five years. She knew that Ouimet could
not promise her anything in the future. Any comment by Ouimet was based
upon the normal time that one could expect to remain in one place into the
future dependent upon growth of the school. This was a brief conversation
that included mention about the possibility of Albert buying a house, the
specifics of which were not conveyed by Albert. At the time of the conversation,
there was no plan to change the VP2 position and it was expected that Albert
would perform well in Kamloops. Albert said that she would have bought
the house regardless of Ouimets statements.
[75]
Since the trial, the Supreme Court of Canada has recast how damages
attributable to employer conduct in the manner of dismissal should be measured:
Honda Canada Inc. v. Keays,
2008 SCC 39, [2008] 2 S.C.R. 362
at paras. 50-60. Instead of awarding damages through an extended notice period
as advocated in
Wallace
, Bastarache J., writing for the majority,
determined that such damages should be awarded according to the classic principle
articulated in
Hadley v. Baxendale
(1854), 9 Ex. 341, 156 E.R.
145: what was in the reasonable contemplation of the parties at the time the
contract was formed? He observed that there is an expectation by both parties
to an employment contract that employers will act in good faith in the manner
of dismissing an employee. Their failure to do so will accordingly lead to
foreseeable compensable damages. With respect to the conduct that will attract
such damages, the Court at para. 57 endorsed the view in
Wallace
that it will be conduct during dismissal that is unfair or is in bad faith
by being, for example, untruthful, misleading or unduly insensitive.
[76]
As a result of the decision in
Honda
, Ms. Albert now
seeks damages of $50,000 instead of an extension of the notice period, due
to what she says was bad faith conduct by CSF in terminating her VP2 position.
While she acknowledges that paragraph 4 of the RDF Contract applied to her
dismissal, she says that paragraph 4.9 of the RDF Contract nevertheless preserved
her right to go to court for additional damages related to her termination.
She also points to the term in the preamble of the RDF Contract that the parties
will observe a duty of good faith toward each other and argues that,
even if CSF dismissed her in accordance with the terms
of that Contract, it did so in a manner that was unfair and in bad faith and
thus breached that contractual term. She says she is accordingly entitled
to damages arising from that breach. She distinguishes
Lane
on the basis that the contract there did not include an express duty of good
faith.
[77]
I do not agree that paragraph 4.9 of the RDF Contract adds force to
Ms. Alberts arguments. It simply refers to enforcing the RDF Contract in
the courts. It does not add rights or remedies beyond those in the Contract.
[78]
As to Ms. Alberts argument that CSF breached its contractual duty
of good faith, in my view, there is little distinction between an express
term of good faith in a contract and the implied term to act in good faith
at common law, in deciding whether an employer breached that term in the manner
in which it dismissed an employee. The question remains the same: did the
employer act
unfairly or in bad faith?
[79]
Here, the trial judge found that there was no bad faith or unfair dealing
by CSF when it dismissed Ms. Albert. That is a finding of fact, and must
be given appellate deference. This Court cannot interfere unless Ms. Albert
establishes that the trial judge made a palpable and overriding error:
Housen
v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235 at para. 10.
[80]
Ms. Albert argues that the trial judge erred in finding that there
had been no bad faith. She says that the judge failed to consider all aspects
of the dealings between the parties, including events prior to her termination,
and that she weighed the evidence improperly in concluding that CSFs conduct
was due to confusion, rather than bad faith. Ms. Alberts counsel conceded
that the evidence fell short of establishing that CSF deliberately intended
to cause Ms. Albert harm, but argued that the trial judge should have found
that CSFs insensitivity and reckless disregard met the test for bad faith.
[81]
I am unable to find that the trial judge made any reviewable error
in concluding that CSF did not act unfairly or in bad faith in terminating
Ms. Alberts employment as a VP2. She was clearly aware of the legal test
for bad faith in
Wallace
.
Honda
has not changed
that. She heard and assessed the witnesses evidence and credibility over
the course of an 11 day trial. Her reasons for judgment display a detailed
knowledge of the dealings between Ms. Albert and CSF, and of each of the events
that Ms. Albert argues should have supported a finding of bad faith, both
before and during her termination. In my view, there was a proper evidentiary
basis for her conclusion that, while CSF was at times confused and inconsistent
in their treatment of Ms. Albert, and while it could have handled the situation
better, its conduct did not meet a standard of bad faith or unfair dealing
that would entitle Ms. Albert to damages. A further consideration, not expressly
mentioned by the trial judge in her analysis, was the fact that Ms. Albert
remained employed by CSF at the trial, three years after her termination as
a VP2. In my view, this is an unusual feature in a wrongful dismissal case
and further weakens the allegation of bad faith.
[82]
I would not accede to this ground of appeal.
Is Ms. Albert entitled to recover $7,454 from CSF for
unpaid salary as a VP2 for 2002-2003 and 2003-2004?
[83]
Ms. Albert claims that CSF owes her unpaid salary of $7,454, which
she says represents the annual administrative supplement of $3,727 associated
with the VP2 position that she should have received in addition to her teaching
salary of $67,760 for each of 2002-2003 and 2003-2004.
[84]
The trial judge dealt with this claim at paras.14 and 59 of her reasons,
and disallowed it. She acknowledged that there had been confusion among the
CSF staff as to this issue, which she found indicative of the general confusion
surrounding the VP2 position. She found, however, that this supplement had
been paid to only one VP2, on the basis that she had completed her Masters
degree. The other VP2s, including Ms. Albert, were not entitled to it. The
trial judge observed that Ms. Albert had received and accepted a salary of
$67,760 in 2002-2003, and that is what appeared in her official salary document.
She found that the supplement was not payable to Ms. Albert in 2003-2004 for
the additional reason that she no longer held the position of VP2 in that
year.
[85]
Ms. Albert argues that, in reaching those conclusions, the trial judge
ignored other relevant evidence. A review of the available documents and
testimony, however, does not support that view. These demonstrate that up
to 2002, Ms. Alberts VP2 salary document did break her salary into a teaching
component and an administrative component. In 2001-2002, these were $50,912
and $3,727 respectively, resulting in a total salary of $50,912. In 2002-2003,
CSF adopted a new Salary Scale form that did not break down the two components.
Instead, it indicated Ms. Albert was to receive a base salary for category
VP2 of $67,760. Mr. Paquin, Manager of Human Resources for CSF, testified
that this was because CSF had negotiated a new way to pay VP2s, and had increased
their salaries significantly. There was some inconsistency in CSFs documents,
as the trial judge noted. One did set out a base salary of $71,487 for VP2s.
This same document, however, indicated there would be a deduction from that
of $4,000 for vice-principals with no Masters degree. It was silent about
a reduction for VP2s.
[86]
Ms. Albert gave evidence that when she received her salary information
for 2002-2003 she asked Mr. Menard why she was not receiving the administrative
supplement of $3,727 in addition to the base salary of $67,760, and he told
her that she was not entitled to it.
[87]
In my view, there was evidence to support the findings of fact made
by the trial judge that from 2002 on Ms. Alberts total salary as a VP2 was
$67,760, and that she was not entitled to receive an additional $3,727 in
2002-2003 and 2003-2004. Ms. Albert has failed to convince me that there
is any basis for disturbing those findings.
Rejection of the claim for dental benefits
[88]
Ms. Albert claimed $3,652.49 for dental services for her husband that
she said would have been paid by CSFs benefit plan if she had continued employment
as a VP2. She presented a series of receipts for these services, as well
as a Dental Pre-Authorization Remittance Statement issued by Blue Cross, which
is dated April 28, 2003 and appears to authorize dental treatment for her
husband, Mr. G. Fincham, over the next 12 months. The record indicates that
these documents were admitted for their truth. The invoices show that a
dentist provided treatment to Mr. Fincham in 2003-2004, and that he was paid
for this in part by Blue Cross and in part by credit cards. Ms. Alberts
claim represents the total credit card payments.
[89]
At para. 63 of her reasons for judgment, the trial judge concluded
the claim had to be denied because there was no evidence to show that Ms.
Albert had actually paid for these services. In doing so, she relied on
Wilks
v. Moore Dry Kiln Co. of Canada Ltd.
(1981), 32 B.C.L.R. 149 (S.C.)
at 152, which stands for the proposition that where a plaintiff claims loss
of benefits as part of her damages for wrongful dismissal, she must have actually
incurred the expense for the benefit in question during the period of reasonable
notice. She is not entitled to recover projected benefits for which she has
not paid.
[90]
I disagree with the trial judge that the
Wilks
principle
applies to this case. I am satisfied that the documentary evidence establishes
that Ms. Alberts husband was preauthorized for dental work while she was
still a VP2, and that he had dental work performed during the following year.
I nevertheless agree that the claim cannot succeed. In my view, the difficulty
lies in limitations in those documents. In the absence of evidence explaining
them, it is impossible to tell whether the dental work performed on Mr. Fincham
was the same as that which was preauthorized by Blue Cross. Moreover, it
is apparent that Blue Cross paid for some of this work, yet there is nothing
to explain how its contributions would have differed if Ms. Albert had remained
in a VP2 position. Nor is there information as to the holder of the credit
cards that paid for the balance. In short, I find it impossible to reliably
calculate Ms. Alberts loss on the available evidence.
[91]
I would accordingly disallow this claim.
Costs
[92]
On February 19, 2007, the trial judge awarded CSF its costs up to January
25, 2006, and double costs thereafter, apparently on the basis that CSF had
made a formal offer of settlement to Ms. Albert that exceeded the amount awarded
to her at trial.
[93]
Ms. Albert argues that this award was inappropriate, and that she should
instead have recovered special costs from CSF, based on its conduct during
the case. She says that CSF extended the litigation unreasonably and unnecessarily,
by taking unreasonable and inconsistent positions.
[94]
CSF says that Ms. Albert made similar submissions to the trial judge,
who rejected them.
[95]
An award for costs is a discretionary order, and an appellate court
may only interfere with such an order if it finds that the trial judge misdirected
herself on the law, or made a palpable error in her assessment of the facts.
We do not have the judges reasons on the issue of costs, and the submissions
of counsel were abbreviated. It is impossible to carry out any meaningful
review of the award for costs on the limited material before us. I would
not alter the order with respect to costs.
CONCLUSION
[96]
I would accordingly dismiss Ms. Alberts appeal.
The Honourable
Madam Justice Neilson
I agree:
The Honourable Madam Justice Ryan
I agree:
The Honourable Mr. Justice Lowry
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
Buchan v. Moss
Management Inc.,
2009 BCCA 25
Date: 20090123
Docket: CA035964
Between:
Steven Thomas Buchan
Appellant
(
Plaintiff
)
And
Moss Management Inc.,
Alan Frederick
Wolrige
,
Peter Colin Graham Richards and 331609 B.C. Ltd.
Respondents
(
Defendants
)
Before:
The Honourable Mr. Justice
K. Smith
The Honourable Mr. Justice
Lowry
The Honourable Mr, Justice
Groberman
Oral Reasons for Judgment
Appellant Appearing In Person
T.J.
Delany
S.W.K. Urquhart
Counsel for the Respondent
Place and Date:
Vancouver
,
British Columbia
23 January 2009
[1]
LOWRY J.A.
: Steven Buchan appeals the order of Mr. Justice
Bauman dismissing the action he brought seeking a declaration of his beneficial
ownership of a corporation and certain assets it holds. The judges
comprehensive reasons for the decision he reached after what was a long trial
are indexed as 2008 BCSC 285. The primary issue raised on the appeal is
purely one of fact. The issue turned on a determination of
credibility. As is well established, an appellate court cannot intervene
in circumstances of this kind unless the decision from which the appeal is
taken is shown to be predicated on an overriding and palpable error:
Housen
v.
Nikolaisen
,
2002 SCC 33, [2002] 2 S.C.R. 235. Mr. Buchan acknowledges that but says
the judge misapprehended or ignored evidence which led him into such an error.
[2]
Mr. Buchan is now representing
himself. He has, however, filed a factum that was drawn by his trial
counsel. Mr. Buchan relies on the argument made in this factum and makes
some further submissions.
[3]
Mr. Buchan sued on a written agreement he
made with three others on 20 March 1990: Frederick Marsh, a business
associate; Alan
Wolrige
, an accountant; and Peter
Richards, a solicitor. The purpose of the agreement was to provide for
the management of assets Mr. Buchan and Mr. Marsh were endeavouring to assemble
to pursue a mining venture either personally or through two publically traded
companies in which they held substantial interests. The companies were
referred to as Prospectors and Boston Financial. On the face of what
is referred to as the Management Agreement they were to own the assets either
directly or indirectly and each of the four parties were to share equally in
the benefits derived from the anticipated success of the venture. The
assets identified at the time were set out in Schedule B to the agreement.
The first two were an existing mill and
townsite
to be acquired from what is referred to as Amax by an offshore company, and a
60% interest held by Cominco in the development of certain mining
properties. The other 40% interest was held by Prospectors. The
remainder of the assets listed were acquired by a numbered company, 331609 B.C.
Ltd., which Mr. Buchan claimed to beneficially own.
[4]
The agreement reflected that Mr. Buchan
and Mr. Marsh proposed, but were not obligated to arrange for, the acquisition
of the mill and the
townsite
. The Cominco
interest was being acquired by a shelf company, Moss Management Ltd., made
available by Mr. Richards, and at least most of the purchase price of $800,000
was expected to be provided by Boston Financial. Apparently unknown to
Mr. Buchan, 500 shares in Moss Management were issued to each of Mr.
Wolrige
and Mr. Richards, which was consistent with what
Mr. Marsh testified was his understanding of the ownership of that
company. By the time of the trial, he and Mr. Buchan had gone their
separate ways.
[5]
The expectations for financing the
acquisition of the Cominco interest were not realized. Boston Financial
paid a deposit of $25,000 but nothing more. Mr. Richards arranged
for payments of $50,000 in each of April and May as well as a payment of
$375,000 in June. He obtained a one-year deferment of the balance owed
and he and Mr.
Wolrige
made substantial payments of
interest in the interim. The balance was eventually paid by TVI Copper
Inc. as part of a transaction whereby TVI acquired some of the mineral
claims. Moss Management had proceeded to acquire the 40% interest in the mining
properties held by Prospectors. The TVI transaction facilitated the
completion of that acquisition.
[6]
In the end, Mr. Buchan made no tangible
contribution to the mining venture. The mill and the
townsite
were never acquired. To do so would have required a multi-million dollar
investment. The assets held by 331609 B.C. Ltd. were, in the judges
view, of limited value and he concluded Mr. Buchan had not made out his claim
to them and, given that it was equitable in nature, it was not one the court
should recognize in any event. Thus, as the judge said:
[228]
Richards and
Wolrige
hold Moss in trust for
Separ
[an offshore company], which in turn is controlled by
a complicated offshore ownership. Marsh and Buchan have nothing, save
their personal shareholdings in Prospectors and Boston Financial.
[7]
The question then was whether Mr. Buchan
had been wrongly deprived of the interest in Moss Management to which he was
entitled by virtue of the Management Agreement. Mr. Richards and Mr.
Wolrige
took the position the agreement was never performed
and was mutually abandoned. Mr. Buchan maintained that was not so.
His position was and remains the agreement was performed and entitles him to
the beneficial ownership of Moss Management.
[8]
The judge undertook a thorough
consideration of the credibility of Mr. Buchan and Mr. Richards. He found
Mr. Buchans testimony to be quite wanting. He based his assessment on
the inconsistency in Mr. Buchans conduct over time. Aspects of Mr.
Buchans behaviour in relation to his dealings with the directors of
Prospectors as well as Mr. Richards and Mr.
Wolrige
,
and his posturing different positions before the court were discussed (
paras
. 234-253). The judge concluded he could place
little reliance on Mr. Buchans evidence. By contrast, while the judge
did not accept what Mr. Richards had to say on all aspects of his evidence, he
did find Mr. Richards testimony to be truthful on a number of critical
issues and he preferred it where it conflicted with Mr. Buchans
testimony. Mr. Buchan does not now challenge directly any of the basis of
the judges assessment of credibility.
[9]
Starting with his assessment of
credibility, the judge found the Management Agreement was never implemented or
performed. He began his analysis on the point as follows:
[321]
I begin by noting Mr. Richards' evidence that at some point after he was forced
to make the first payment of $50,000 under the Cominco Moss Agreement, he told
Wolrige
, Marsh and Buchan, that as far as he was concerned
the Managers' Agreement was at an end and that he would thereafter proceed to
salvage what he could out of the aborted venture. I accept this
evidence.
[10]
The judge considered various aspects of
Mr. Buchans conduct in dealings between Moss Management and Prospectors which
he saw as clearly inconsistent with Mr. Buchan having an ownership interest in
Moss Management during the spring and summer of 1990. He attached
importance to Mr. Buchans acquiescence in the TVI acquisition of assets of
Moss Management. Perhaps most significantly, the judge found a proposal
prepared by Mr. Richards, dated 18 May 1990, to permit Mr. Buchan to
acquire a 10% interest in Moss Management for $75,000 to be completely
inconsistent with Mr. Buchan considering he had a continuing ownership interest
stemming from the Management Agreement. The judge rejected Mr. Buchans
assertion that he had never seen the proposal.
[11]
The judge concluded:
[340]
I find, as a fact, that Buchan accepted, in the spring of 1990, Richards'
position that the Managers' Agreement would never be implemented or performed
and that Richards and the others would work towards salvaging whatever they
could.
[341]
While it was proposed that Marsh and Buchan would have an indirect interest in
Moss, that never happened. The scheme was abandoned and Buchan accepted
that and left Richards and
Wolrige
to do their best
to preserve the Cominco Moss Agreement in the hope of selling off the assets of
Moss to repay the outstanding loans to Moss.
[12]
Mr. Buchan says the judge was wrong; the
evidence does not support his conclusion. He maintains the judge made a
fundamental error predicated on a critical misinterpretation of the
evidence. He recognizes the judges conclusion is rooted in an assessment
of credibility but says that does not render the judgment immune from appellate
intervention because he is in a position to show the judge could not have
reasonably accepted Mr. Richards testimony, citing
Lapointe
v.
Hôpital
Le
Gardeur
,
[1992] 1 S.C.R. 351 at 358-60. Mr. Buchan argues that, rather than Mr.
Richards assuming responsibility for salvaging Moss Managements acquisition of
the Cominco interests, the parties to the Management Agreement moved forward
after it was made to find investors so the interests acquired could be
developed. He maintains that what he and Mr. Marsh brought to the table
were opportunities which gave them the ownership interest the judge accepted
was intended, while Richards and
Wolrige
were to be
remunerated for their contribution of skill and knowledge in their respective
fields.
[13]
Mr. Buchan contends the judge
misunderstood Mr. Richards evidence to the effect the Management Agreement
began to unravel almost immediately. He says Mr. Richards testimony in
this regard relates to events after May 1990 when the second instalment of
$50,000 had been paid to Cominco. Mr. Buchan then says this
misunderstanding of the evidence led to undue weight being attached to the
proposal Mr. Richards drew for Mr. Buchan to acquire a 10% interest in Moss
Management.
[14]
The judge quoted Mr. Richards testimony
upon which he relied in this regard:
[191]
He testified that the Managers' Agreement of 20 March 1990 was virtually a
dead issue, almost immediately after its execution (T. 25 October 2007,
p. 42, ll. 37 to p. 43, l. 22):
Q
And during this time when your group put up the second $50,000 towards the
Moss/Cominco payment, did you have any discussions at all with Mr. Marsh or the
representatives of Boston Financial about what was going on?
A
After I put up the 50,000 --
Q
Yes.
A
-- in April the 18th, I think it was.
Q
Yes.
A
And as time went on and I -- no assets were transferred from any of the parties
pursuant to the March 20th agreement and no monies had been advanced by any
third party other than the 25,000 by Boston. I stated to Mr.
Wolrige
, Marsh, Mr. Buchan that as far as I was concerned
the March 20th agreement was at an end and that I was going to go forward as
best I could to salvage whatever could be salvaged from the agreement with
Cominco.
Q
Yes?
A
And I expected them to work with me to try and ensure that the payments, the
upcoming payments, would be forthcoming. Being concerned in early May
that Boston may not perform, I put Mr. Marsh on notice that I was
concerned. I then scrambled to try and raise the $50,000.
I had numerous conversations with all three --
Wolrige
,
Marsh and Buchan -- and with Barry Whelan as to evaluation, you know, how can
we get out of this if we go forward. How can we -- where are we going to
find a purchaser to realize something so we can recover something from what
we've done.
[15]
As I read what Mr. Richards said, there
was no error in the judges understanding. While the question Mr.
Richards was asked referenced the time after the second of the two $50,000
payments to Cominco were made, it is clear he was talking about the first
instalment. He said he told Mr. Buchan and Mr. Marsh the Management
Agreement was at an end before he began looking for $50,000 to make the second
payment. As he said, it was April 18 when he put up $50,000.
I am, in any event, unable to see what real difference the timing of Mr.
Richards statement to Mr. Buchan and Mr. Marsh might have had, whether it was
in April or after May 1990. Certainly the date of the proposal he drew
for Mr. Buchan to purchase 10% of Moss Management, dated 18 May 1990, is more
consistent with the agreement being abandoned before then.
[16]
The Management Agreement was actually
never completed. It referenced a Schedule C which was never drawn.
The Schedule was to have specified the shareholdings of the offshore company
that was to have held the ownership interest in the mill and
townsite
that was to be acquired. The judge saw the
Management Agreement as essentially a work in progress toward a joint venture,
the terms of which were a matter for future consideration (
paras
.
313-314). He found it difficult to accept the parties would agree to Mr.
Buchan having an ownership interest without making a tangible
contribution. The agreement began to unwind when it became apparent to
Mr. Richards he would have to arrange the financing of the purchase of the
Cominco interest if the opportunity was to be preserved. Whether Boston
Financial was to have paid the whole $800,000 price or, as Mr. Buchan says now,
only $675,000 of the price, it quickly became apparent a month after the
Management Agreement was signed the acquisition was not going to be made as had
been expected. The Management Agreement was not completed. It was,
as the judge found, accepted it would not be performed.
[17]
In any event, I am unable to see what the
understanding of Mr. Richards evidence has to do with the weight the judge
afforded to the proposal for Mr. Buchan to acquire a 10% interest in Moss
Management. It largely puts an end to Mr. Buchans assertion he
considered he held an ownership interest in Moss Management by virtue of the
Management Agreement made a month earlier. I can see no reason
Mr. Richards would have been drawing a proposal for Mr. Buchan to acquire
an interest in a company he now maintains he owned at the time.
[18]
I do not consider Mr. Buchan has shown
there to be any material misunderstanding of the evidence by the judge.
[19]
Mr. Buchan raises other evidentiary
concerns like the fact Mr. Richards and Mr.
Wolrige
charged Moss Management for their services, which they were entitled to do
under the Management Agreement. But the most that can be said about
evidence like that, which Mr. Buchan says shows the agreement was being
performed, is that it is evidence which is not inconsistent with the agreement
being performed. It does not follow that is what was happening. Mr.
Richards and Mr.
Wolrige
were entitled to be
remunerated for their services to the company. The evidence is at best
neutral. Much the same is to be said about Moss Managements purchase of
331609 B.C. Ltd., to which Mr. Buchan points as performance under the
Management Agreement. As the trial judge pointed out, the agreement did
not provide that 331609 B.C. Ltd. or any of its assets would be sold to Moss
Management. This transaction had, in the end, nothing to do with
Mr. Buchan, in any event. The judge found he had no ownership
interest in the numbered company.
[20]
On the argument advanced, I am unable to
see any error in the judges interpretation of the evidence. There may be
some evidence that would be consistent with Mr. Buchans account of what
happened, but the judge took the view that what Mr. Richards testified had
occurred was to be accepted. Mr. Buchans testimony may have been to the
contrary, but the judge found he could not rely on what Mr. Buchan said in
material respects. No sound evidentiary basis is now shown for
interfering with the judges acceptance of Mr. Richards testimony. The
judge has not been shown to have misinterpreted or ignored any evidence that
renders the acceptance of Mr. Richards account unsupportable.
[21]
Mr. Buchan raises two other grounds of
appeal. He first argues the judge wrongfully held, in effect, the
Management Agreement was never formed because the acquisition of the mill and
the
townsite
was a condition precedent, citing
para
. 351 where the judge emphasized those assets were
never acquired. I do not, however, consider the judges conclusion was
based on the acquisition of those assets being a condition precedent. He
never used the term. The judge determined the agreement was not performed
and was mutually abandoned.
[22]
Finally, Mr. Buchan contends the judge
erred in his conclusion that Mr. Richards and Mr.
Wolrige
owed no fiduciary obligations to Mr. Buchan that were breached. He argues
they arose because the four parties to the Management Agreement were members of
a joint venture. But he acknowledges the issue only arises if it is first
determined the judge erred in concluding the Management Agreement failed.
Given my view of that issue, it is not necessary I consider the question of any
fiduciary duties Mr. Richards or Mr.
Wolrige
may have
had.
[23]
Mr. Buchan does seek to add a fourth
ground of appeal to that advanced in his factum. It has to do with two
individuals who did not testify at the trial. From what Mr. Buchan has
said, I do not consider our entertaining the proposed ground now could affect
the disposition of the appeal.
[24]
I do consider Mr. Buchan has said all
that he can in his effort to persuade us a mistake has been made. An
appellate court cannot retry this case and, for the most part, that is what it
appears Mr. Buchan would have us do.
[25]
It follows then, I would dismiss the
appeal.
[26]
SMITH J.A.
: I agree.
[27]
GROBERMAN J.A.
: I agree.
[28]
SMITH J.A.
: The appeal is dismissed.
(discussion with counsel)
[29]
SMITH J.A.
: We are not inclined to award special costs.
Costs will follow the event in the usual way.
The Honourable Mr. Justice Lowry
CORRECTION
18 FEBRUARY 2009
The panel for this oral judgment should be:
The Honourable Mr. Justice
K. Smith
The Honourable Mr. Justice
Lowry
The Honourable Mr. Justice
Groberman
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Budget
Rent-A-Car of B.C. Ltd. v. Vancouver International Airport Authority,
2009
BCCA 22
Date: 20090123
Docket: CA035349
Between:
Budget
Rent-A-Car of B.C. Ltd.
Appellant
(
Plaintiff
)
And
Vancouver
International Airport
Authority and Hertz Canada Limited
Respondents
(
Defendants
)
Before:
The
Honourable Madam Justice Prowse
The
Honourable Mr. Justice Chiasson
The
Honourable Madam Justice Neilson
R.G.
Ward and E.L. Bosma
Counsel for the Appellant
D.
Curtis and A. Borrell
Counsel for the Respondent,
Vancouver International Airport
H.H.
Van Ommen and J. Cytrynbaum
Counsel for the Respondent,
Hertz Canada Limited
Place
and Date of Hearing:
Vancouver, British Columbia
26 & 27 November 2008
Place
and Date of Judgment:
Vancouver, British Columbia
23 January 2009
Written
Reasons by
:
The
Honourable Mr. Justice Chiasson
Concurred
in by:
The
Honourable Madam Justice Prowse
The Honourable Madam Justice Neilson
Reasons
for Judgment of the Honourable Mr. Justice Chiasson:
Introduction and background
[1]
In 1995, Budget Rent-A-Car of B.C. Ltd. (Budget) and Hertz Canada
Limited (Hertz) were granted rent-a-car concessions by the Vancouver International
Airport Authority (YVR). They each entered into concession leases, which
provided space in the airport terminal and a land lease on which they were
to construct improvements for the operation of their car rental businesses.
The land was comprised of Quick Turn Around (QTA) and Service Centre areas.
This appeal concerns the latter.
[2]
The leases were for a total of 10 years. The improvements once constructed
were the property of YVR. Their capital costs were to be amortized over 15
years. YVR could order the removal of a building with no cost to it. If
a concessionaire were not granted a new concession at the expiration of the
term of the lease, YVR was obliged to pay the concessionaire one-third of
the unamortized capital costs of improvements. Other than this requirement,
concessionaires were not entitled to be compensated for the costs of improvements.
[3]
In late 2004, YVR issued a Request for Proposals (RFP) seeking bids
from car rental companies for concessions to replace the existing regime.
The bidders were called proponents. Bids were subject to an evaluation
process and successful proponents were ranked, the ranking giving them the
right to land in a descending amount of area.
[4]
Both Hertz and Budget were successful proponents. Hertz ranked second;
Budget ranked last. This meant that Hertz had the right to an increased area
of land and Budgets holding was reduced.
[5]
Under their 1995 leases, Budget and Hertz had contiguous properties
that fronted on McDonald Road. At the front of its property, Budget constructed
an office building. In a drawing in the RFP, the building was designated
temporary. It became clear that temporary buildings were to be removed.
Budget and Hertz also had permanent buildings on their leased land. The
RFP required them to keep those buildings which determined, in part, where
their leased land would be located.
[6]
Hertz decided to expand its area by leasing the front part of Budgets
land. Budget kept the rear portion on which there was a permanent building
and obtained a separate parcel which fronted on McDonald Road.
[7]
Budget was required to remove its office building from the front section
of its land. Relying on s. 1.6 of the RFP, Budget claimed $455,151.21, being
one-third of the capital costs of the building and one-third of the capital
costs of soil and site preparation costs of the land taken over by Hertz.
Section 1.6 stated, in part:
The
QTA and Service Centre lands have improvements. During the first five years
of the Land Lease, the successful Proponents will not be required to pay any
cash rent to [YVR] for the improvements. If a successful Proponent displaces
an existing concessionaire, the successful Proponent shall be required to
reimburse the displaced concessionaire an amount equal to one-third the capital
cost of those improvements. This payment must be made before March 1, 2005.
Part 3, Schedule F sets out in detail the capital costs of the QTA and Service
Centres. Part 3 also includes drawings of the QTA and Service Centre lands.
Proponents are expected to take the cost of such improvements into consideration
when making their choice of QTA and Service Centres.
[8]
In its statement of claim, Budget contended it was displaced from its
improvements by Hertz and Hertz had a contractual obligation to pay compensation.
It also claims YVR had a contractual obligation to require that Budget be
compensated by Hertz.
[9]
Budget sought summary judgment pursuant to Rule 18A of the
Rules
of Court
. Hertz conceded it was liable to pay soil and site
development costs less a set-off for over-holding rent. Based on his construction
of the 1995 lease and the RFP and on the fact Budget knew its office building
was to be removed before it bid, Mr. Justice Silverman concluded Budget was
not entitled to compensation for the loss of its office building. The chambers
judge did not determine whether there was a contract between Budget and Hertz.
Taking into account the set-off for over-holding rent, in supplemental reasons,
the judge awarded Budget $3,642.25 for the capital costs of soil and site
preparation. The judges principal reasons are indexed as 2007 BCSC 1186;
his supplemental reasons are not reported.
[10]
Budget appealed, contending the judge erred in his construction of
the documents and miscalculated the amount of soil and site preparation costs
because he refused to consider evidence relevant to it.
[11]
For the reasons that follow, I would allow the appeal to the extent
of increasing the payment to Budget from Hertz for reimbursement of soil and
site preparation capital costs to $48,876.78 and otherwise would dismiss this
appeal.
Relevant provisions
[12]
I set out and paraphrase relevant provisions of the 1995 lease and
the RFP in order to place the chambers judges decision into context.
[13]
Pursuant to s. 3.4 of the 1995 lease, Budget agreed to design, install
and construct on the Service Centre Land, such improvements as may be necessary
for [its] operations. Section 10.2(a) specified that [a]ll fixtures, alterations,
additions, improvements and buildings installed or constructed on the land
immediately became the property of YVR without compensation to Budget, subject
only to the provisions of s. 3.5.
[14]
Section 3.5 of the 1995 lease stated:
If
the Tenant has duly performed all of its obligations under this Lease and
the Concession Lease and if, within six months following the expiration of
the Term, the Landlord has not granted to the Tenant a new vehicle rental
concession at the Airport the Tenant shall transfer to the Landlord the Improvements,
free and clear of all liens, charges and encumbrances (save those in favour
of the Landlord) and the Landlord shall pay to the Tenant an amount equal
to the unamortized portion of the Initial Capital Cost. For the purposes of
this Section 3.5, the Initial Capital Cost shall be amortized on a straight
line basis over a 15 year term, or the useful life of the improvement, whichever
is less, all as determined by the Airport Authority, and shall include interest
capitalized during the construction period of the Improvements in accordance
with generally accepted accounting principles at a rate not to exceed eight
percent (8%) per annum.
The
language of the section is curious in that it speaks of Budget transferring
to YVR improvements it already owns, but nothing turns on this.
[15]
Section 10.2(b) of the 1995 lease gave YVR the right to require Budget
by notice to remove any fixture, alterations, additions, improvements or buildings
at its expense.
[16]
Notice was required to be in writing pursuant to s. 14.12(a). The
section also provided for permissive modes of delivery of notice.
[17]
Section 1.6 of the RFP has been quoted above.
[18]
Section 7.4 of the RFP stated that successful proponents that had existing
permanent buildings were required to take their own buildings.
[19]
Other provisions will be addressed in my recapitulation of the judges
reasons and in my discussion of the issues.
The reasons of the chambers judge
[20]
The judge began by referring to Budgets argument that YVR was bound
contractually to ensure Hertz paid compensation to it and because Hertz had
not paid, YVR was obliged to do so. Budget also contended Hertz was liable
directly to it.
[21]
The judge noted that Hertz conceded it was liable to pay Budget for
soil and site preparation costs. In para. 34, the judge observed that, apart
from quantum, he expressly was not addressing the soil and site preparation
costs claim.
[22]
In para. 26, the judge set out the core of the building costs compensation
issue:
Budget
argues that, having taken over the lands, Hertz had the option of occupying
Budgets facilities or of having them removed. Hertz disagrees, and argues
that Budget had a contractual obligation to remove its facilities and Hertz
had no contractual obligation to keep them, unless it chose to enter into
an agreement to that effect with Budget. It did not choose to enter into
such an agreement, and had no contractual or other kind of obligation to do
so.
[23]
In para. 27, the judge made a finding of fact that YVR gave Budget
notice to remove its office relying on the terms of the 1995 lease and that
such notice was acknowledged and understood by Budget prior to its submitting
its bid on or about December 23, 2004.
[24]
It was costly and time consuming to remove the office building which
resulted in Budget delaying turning over the property to Hertz. This was
the basis of the over-holding rent claim by Hertz.
[25]
The judge discussed a number of the provisions of the 1995 lease and
the RFP and then addressed the distinction between temporary and permanent
facilities. Budget had adduced evidence its principals considered the office
building to be permanent and expert evidence on the point. Budget also
relied on its course of dealings with YVR to establish the building was permanent.
[26]
On the basis of evidence and argument, the judge concluded in para.
60 that Budget was not entitled to compensation for the capital cost of its
office. He stated in para. 61 that Budget based its claim for compensation
on s. 3.5 of the 1995 lease and the Compensation Clause, s. 1.6, of the
RFP.
[27]
In para. 66 the judge stated:
One
reason Budget is not entitled to compensation is as previously stated, that
is, the clear wording of s. 3.5 of the 1995 Lease prohibits compensation in
the circumstances where they have been granted a new concession.
[28]
The judges second reason was that Budget had accepted the designation
of its office as temporary and knew it had to be removed before it bid (para.
67). In this context, the judge reviewed the section of the RFP that required
proponents to advise YVR of any errors in the RFP and that stated proponents
accepted the provisions of the RFP. This latter proviso was expressed also
in the 2005 lease.
[29]
The judge turned to the issue whether Budget was displaced. He concluded
in paras. 79 and 80 that Budget was displaced, but not by Hertz because [t]he
Compensation Clause is intended to provide compensation for displacement from
facilities, not from land.
[30]
The judge stated it did not make commercial sense to require Hertz
to pay Budget for a building Hertz did not want and did not use. He considered
that this would be a penalty to Hertz and a windfall to Budget.
[31]
The judge left the parties to try to agree on the quantum of compensation
for soil and site preparation costs. They did not do so and the judge addressed
that issue in supplemental reasons released November 13, 2007.
[32]
In its statement of claim, Budget stated it claimed one third of its
capital costs "as set out in Schedule F to the RFP". In its statement
of defence, Hertz stated it was obliged to pay only one third of the capital
cost of soil and site preparation as set out in Schedule F. The judge held
in para. 11 that the amount based on Schedule F was $33,789.20.
[33]
Budget sought to rely on the affidavit of its accountant, Mr. Cummings,
to explain its actual soil and site costs.
[34]
In para. 16, the judge stated the evidence did not allow him to conclude
it was known by the parties that there were capital costs not in Schedule
F. He declined to consider the affidavit of Mr. Cummings. The judge determined
that Budget should be held to its pleadings and its claim constrained by the
content of Schedule F (para. 17). Deducting for over-holding rent resulted
in a net award to Budget of $3,642.25.
Positions of the parties
[35]
In its factum, Budget contends the judge erred by holding it was not
displaced by Hertz:
in the sense
that the word is used in [s. 1.6 of the RFP] on the basis that:
A.
The Compensation Clause was intended to provide compensation for displacement
from facilities, not from land;
B.
Section 3.5 of the 1995 Lease prohibits compensation in circumstances where
a proponent is granted a new concession;
C.
YVR gave notice to Budget that it was required to remove Budgets administration
Buildings prior to Budget submitting its bid;
[36]
It asserts the judge erred by refusing to award compensation for soil
and site preparation costs in the amounts set out in Schedule F to the RFP.
Budget also states the judge erred in concluding there was no contract between
it and YVR.
[37]
Hertz contends the RFP is not a contract and does not give rise to
contractual obligations between it and Budget. It also states the judge did
not err in his conclusion Budget was not displaced by Hertz or in his determination
of compensation for soil and site preparation costs.
[38]
YVR asserts the judge did not err concluding Budget was not entitled
to compensation for the removal of its office, deciding Budget was limited
to the amounts in Schedule F for recovery of its soil and site preparation
costs or in finding there was no contract between YVR and Budget.
Discussion
Introduction
[39]
The chambers judge did not determine whether there was a contract between
Hertz and Budget.
[40]
The judge stated the claim advanced by Budget against YVR was that
YVR was bound contractually to ensure Hertz paid compensation to Budget and
because Hertz had not paid, YVR was obliged to do so. That is the position
taken by Budget on this appeal.
[41]
In his supplementary reasons, when discussing soil and site improvement
costs, the judge stated, while YVR was obliged to require Hertz to pay Budgets
costs, it was not obliged to be successful
. The judge concluded YVRs
obligation was met by YVR requiring Hertz to pay displaced proponents in
its contract between YVR and Hertz, and in correspondence and documentation
between YVR and Hertz (para. 35). I take the reference to contract to
be a reference to the 2005 lease between YVR and Hertz, which in s. 4.9(a)
contained a requirement to pay to a displaced tenant one third of the unamortized
capital costs of improvements.
[42]
The judge also considered whether YVR was directly contractually bound
to Budget without consideration of whether
Hertz has paid
and stated
there is no basis in the evidence for concluding that such a contract exists
(para. 37).
[43]
The judge appears to have concluded YVR had a best efforts contractual
obligation. Although he did not state on what basis this obligation arose,
having decided it was met by the provisions of the lease, the obligation only
could arise out of the RFP, which is the position advanced by Budget on this
appeal.
[44]
I begin by considering whether the RFP was a contract between Budget
and YVR. I next shall consider whether it was a contract between Budget and
Hertz.
RFP − whether a contract between Budget and YVR
[45]
In its factum, Budget cites no authority to support its contention
the RFP was a contract between it and YVR, but relies on provisions of the
RFP. In oral argument, counsel for Budget relied on
M.J.B. Enterprises
Ltd. v. Defence Construction (1951) Ltd.
, [1999] 1 S.C.R. 619, and
asserted that when the process of submitting proposals closed, a contract,
contract A, was formed. The terms of the contract were said to be those of
the RFP.
[46]
In
M.J.B. Enterprises
, Iacobucci J., for the Court, stated
at para. 15 that any discussion of contractual obligations and the law of
tendering must begin with this Courts decision in [
Ontario v. Ron Engineering
& Construction (Eastern) Ltd.
, [1981] 1 S.C.R. 111]. In that
case, Estey J. held that the tendering process involved two contracts: contract
A, which was formed when a tender was submitted in response to a call for
tenders; contract B, the contract that was entered into as a result of the
acceptance of a tender. He described contract A as a unilateral contract.
As noted in
Elite Bailiff Services Ltd. v. British Columbia
,
2003 BCCA 102, Iacobucci J. expressly did not endorse that characterization
of contract A (para. 18). He affirmed that the submission of a tender can
give rise to contractual obligations, but stated whether such obligations
arise depends on the terms and conditions of the call for tenders. The inquiry
is whether the parties intended to initiate contractual relations by the
submission of a bid in response to the invitation to tender (para. 23).
[47]
In
M.J.B Enterprises
, the Court determined a contract
had been formed, stating at para. 23:
In
the present case I am persuaded that this was the intention of the parties.
At a minimum, the respondent offered, in inviting tenders through a formal
tendering process involving complex documentation and terms, to consider bids
for Contract B. In submitting its tender, the appellant accepted this offer.
The submission of the tender is good consideration for the respondents promise,
as the tender was a benefit to the respondent, prepared at a not insignificant
cost to the appellant, and accompanied by the Bid Security.
[48]
In
Ron Engineering
, the Court concluded contract A had
been formed, stating at 119:
There
is no question when one reviews the terms and conditions under which the tender
was made that a contract arose upon the submission of a tender between the
contractor and the owner.
[49]
The gloss that Iacobucci J.
put on the decision in
Ron
Engineering
was explained in
Martel Building Ltd. v.
Canada
, 2000 SCC 60, [2002] 2 S.C.R. 860:
80. In
M.J.B. Enterprises Ltd. v.
Defence Construction
(1951) Ltd.,
[1999] 1 S.C.R. 619, this Court
confirmed that
Contract A also
imposes obligations on the owner. It further explained that
Ron Engineering
does not stand for the proposition that
Contract A will always be formed, nor that the irrevocability
of the tender will always be a term of such contract.
Whether the tendering
process creates a preliminary contract is dependant upon the terms and conditions
of the tender call
.
[Emphasis added]
[50]
These comments lead to a consideration of the terms and conditions
of the RFP.
[51]
The parties rely on various provisions of the RFP to support their
respective positions. In my view, the answer is in s. 13.1(a) which states:
This
RFP does not constitute an offer. No agreement shall result upon submission
of Proposals. [YVR] shall not be under obligation to enter into any agreement
with anyone in connection with this RFP and responses received. [YVR] will
not have any obligation to anyone in connection with this RFP unless [YVR]
executes and delivers an agreement in writing approved by [YVRs] senior management.
This
section tracks the analysis in
M.J.B. Enterprises
. It is difficult
to see how the draft-person could have made the intention of YVR more clear.
[52]
It is asserted that the last sentence of s. 13.1(a) imposes RFP obligations
on YVR because it entered into a lease with Budget. I do not agree. While
the word agreement is not defined, it must be construed in the context in
which it is being used. It is an agreement to be bound by obligations in
connection with the RFP. The proviso is not met by entering into the lease
unless the lease contains an agreement to the terms of the RFP, which it did
not.
[53]
In my view, the RFP was not a contract between Budget and YVR. Section
1.6 has no contractual force between these parties.
RFP − whether a contract between Budget and Hertz.
[54]
Prima facie
, it is difficult to conceive that the RFP could be a
contract between Budget and Hertz when it is not a contact between Budget
and YVR. As is stated in s. 1.1, [t]he purpose of the RFP is to assist [YVR]
in selecting proponents for the operation of
Vehicle Rental Concessions
.
The thrust of the document is to inform proponents what may be available to
them and what they must do to be eligible for consideration as concessionaires.
[55]
Budget relies on
The Satanita
, [1895] P. 248 (C.A.),
affd [1897] A.C. 59 (H.L.), and cases that have applied the so-called community
of interest doctrine.
[56]
The Satanita
arose out of a collision between two racing yachts.
It was a claim for damages unrestricted by the English
Merchant Shipping
Act
limitation on quantum based on the tonnage of a vessel. The Court
held there was a contract between each of the owners of the yachts based on
their individual agreement with the organizers of the race to abide by prescribed
racing rules. The rules included a commitment to compensate for any damages
that ensued as a result of a violation of the rules.
[57]
The Court of Appeal stated there was a relationship between each competitor
and the race committee when the competitor signed-up for the race. Lord Esher
M.R. described this as a relation (p. 255). Lopes L.J. stated there probably
was a contract with the [race] committee in certain cases (p. 260). Rigby
L.J. held a contract arose with the committee at the moment that the yacht
owner signed the document, which it was necessary to sign in order to be a
competitor (p. 262).
[58]
All judges stated there was no contract between the competitors when
they signed-up for the race, but a contract arose when they began racing under
the rules.
[59]
The focus of the House of Lords was on the applicability of the statutory
limitation on quantum. All Lords agreed it did not apply and all agreed,
with limited analysis, that there was a contract between each of the competitors.
[60]
In the context of building schemes and shopping centres, courts have
developed the so-called doctrine of community of interest. In
Salmon
Arm Pharmacy Ltd. v. R.P. Johnson Construction Ltd.
(1994), 94 B.C.L.R.
(2d) 169 at paras. 23-24, 46 B.C.A.C. 249, Finch J.A., as he then was, stated:
[23]
The doctrine of "community of interest" appears to be an exception
to the fundamental rule that only the parties to a contract have standing
to enforce its terms (privity of contract). The doctrine does not appear to
afford a basis for creating or imposing substantive obligations or enforcing
a contract against a stranger to the contract.
[24]
The doctrine of "community of interest" apparently derives from
the English common law relating to "building schemes": see
Scharf
v. Mac's Milk Ltd
., [1965] 2 O.R. 640 (C.A.) at pp. 645-647, and applied
in more recent times to shopping-centre leases. Consideration as to whether
or not the doctrine is applicable seems to arise only where:
(a) one tenant seeks to enforce a
contractual obligation owed by another tenant to the landlord;
(b) both tenants have restrictive
covenants in their leases which limit the use to which the tenants can put
their premises; and
(c) both tenants have the benefit of restrictive covenants
by which the landlord promises not to allow the use of any portion of the
shopping centre for a purpose which competes with that of another tenant.
The
doctrine of "community of interest" appears to allow one tenant
to insist that another tenant live up to its contractual obligations because,
although there is no privity of contract between the tenants, each has made
parallel contractual commitments which are designed for their common advantage.
The
Court declined to apply the doctrine because the contractual commitments were
not parallel.
[61]
In
Scharf v. Macs Milk Ltd.
, [1965] 2 O.R. 640 (C.A.),
the Ontario Court of Appeal referred to
Elliston v. Reacher
,
[1908] 2 Ch. 374, affd [1908] 2 Ch. 665 (C.A.), for the proposition that
participants in a building scheme could enforce against each other covenants
each had with the common vendor of the land. At 646, Schroeder J.A. quoted
from
Elliston
: the plaintiffs would in equity be entitled
to enforce the restrictive covenants entered into by the defendants or their
predecessors with the common vendor
. In
Scharf
, the trial
judge and the Court of Appeal stated the covenant inured for the benefit of
the plaintiff. There was no discussion whether there was a contract between
the participants.
[62]
In
Progas Ltd.
v. AEC West Ltd.
, 2001 ABQB 549, Clark J. referred to the House of
Lords decision in
The Satanita
and to this Courts decision
in
McCannell v. Mabee-McLaren Motors Ltd.
, [1926] 1 D.L.R. 282
(B.C.C.A.), when discussing implied contracts and to the building scheme and
shopping centre cases in his discussion of community of interest.
[63]
In
McCannell
,
this Court held that a contract between Studebaker and one of its automobile
dealers also brought about a contractual relationship between each of the
dealers. The contract stated in part:
It
is understood and agreed that this paragraph shall be construed as an agreement
between dealer and all other Studebaker dealers who have signed a similar
agreement and that nothing herein contained shall be construed as a liability
on the part of Company to dealer for territorial infringement by any other
dealer.
[64]
Hertz and YVR state this clause in
McCannell
distinguishes
the case from cases like
The Satanita
, but it is clear from
a reading of the judgments that while the Court was well aware of the provision,
it did not base the decision on it. At 286, MacDonald J.A. quoted Lopes L.J.
in
The Satanita
:
I
have no doubt that there was a contract. Probably a contract with the committee
in certain cases, but also a contract between the owners of the competing
yachts amongst themselves, and that contract was an undertaking that the owner
of one competing yacht would pay the owner of any other competing yacht injured
by his yacht all the damages arising from any infringement or disobedience
of the rules. In my opinion, directly any owner entered his yacht to sail,
this contract arose and it is clear that the owners of the
Valkyrie
and the
Satanita
did enter their respective yachts and did sail.
[65]
The community of interest doctrine appears to have been applied in
the context of preventing a participant in a venture like a building scheme
or shopping centre from taking steps unfairly to compete with another member
of the venture when the participants have agreed not to do so. Equity intervenes.
The Satanita
principle is based on contract and provides a right
of recovery to which the participants have agreed each is entitled.
[66]
I agree with the respondents position that an examination of the authorities
suggests that obligations and the right to enforce them arises out of the
contracts between participants and the organizer, be it vendor of land,
owner of a shopping centre or racing committee. In this case, whether the
analysis is based on equity or contract, rights and obligations do not derive
from the RFP.
[67]
In summary, the RFP is not a contract. This conclusion is based
on construing the RFP in light of the tendering cases and
The
Satanita
. The analysis mandated by those cases does not
stop with merely looking at the relationship involved yachts in a race;
proponents or bidders seeking a contract. As in all matters of contract
the core inquiry is the intention of the parties. In this case, the
proponents were competing for concessions at the Vancouver Airport.
None of them was guaranteed a concession even if its bid was ranked high.
The terms of any lease of the airport lands was subject to negotiation.
The RFP envisioned a commitment for compensation if improvements were lost
because an existing concessionaire was displaced by another proponent, but
the draft lease contained a specific proviso, s. 4.9, dealing with that. Although
the language and substance of s. 1.6 of the RFP and s. 4.9 was not identical,
it is clear to me that if there were any community of interest among the successful
proponents it arose, not from the RFP, but from the leases into which they
all entered and which legally obliged each to compensate displaced concessionaires.
Section 1.6 has no contractual force.
Alternative
[68]
My conclusions there is no contract obliging Hertz to compensate Budget
for the capital cost of its removed office building and no contract obliging
YVR to compensate Budget for the costs of the removed building or soil and
site preparation costs disposes of this aspect of the appeal, but because
the case was argued and decided by the judge on the construction of the RFP
and 1995 lease, I provide my analysis of the relevant provisions of each.
In addition, while agreeing with the judges conclusion that Budget was not
entitled to compensation for the loss of its building, I do not agree with
his reasons for reaching that conclusion.
[69]
The 1995 lease, which had a ten-year term, obliged Budget to construct
facilities to enable it effectively to carry on business. These improvements
were the property of YVR once constructed. Budget could be directed to remove
an improvement with no cost to YVR. The capital costs of improvements were
amortized over 15 years. Apart from s. 3.5, Budget was not entitled to compensation
for its capital costs. That section provided for reimbursement of the unamortized
capital costs of improvements if Budget were not granted a replacement concession.
[70]
The judge gave two reasons for dismissing Budgets claim: one, Budget
was not entitled to compensation under s. 3.5 of the 1995 lease; two, before
Budget made its proposal, it knew the office building had to be removed.
In my view, neither reason adequately addressed the issue before him.
[71]
It is common ground Budget was granted a replacement concession, which
disentitled it from compensation under s. 3.5. Budget did not claim under
the 1995 lease. The judges discussion of that lease was helpful background,
but could be nothing more. In this case, it could not be a basis for denying
Budget recovery.
[72]
In my view, whether Budget knew its office building had to be removed
before it delivered its proposal is irrelevant to the proper construction
of s. 1.6 of the RFP. If Budget were entitled to compensation, the fact it
knew its building was to be removed would not alter that fact.
[73]
Budget based its claim on s. 1.6 of the RFP, which for convenience
I again reproduce in part:
The
QTA and Service Centre lands have improvements. During the first five years
of the Land Lease, the successful Proponents will not be required to pay any
cash rent to [YVR] for the improvements. If a successful Proponent displaces
an existing concessionaire, the successful Proponent shall be required to
reimburse the displaced concessionaire an amount equal to one-third the capital
cost of those improvements. This payment must be made before March 1, 2005.
Part 3, Schedule F sets out in detail the capital costs of the QTA and Service
Centres. Part 3 also includes drawings of the QTA and Service Centre lands.
Proponents are expected to take the cost of such improvements into consideration
when making their choice of QTA and Service Centres.
[74]
In drawing D of the RFP, buildings were marked as temporary building
or simply as building. It became apparent during the RFP process that buildings
marked temporary were to be removed at no cost to YVR. Minutes dealing with
questions and answers make this clear.
[75]
Evidence was adduced at the chambers hearing and argument advanced
whether Budgets building which was marked as temporary was in fact a temporary
building. It my view, this line of inquiry was irrelevant. YVR had the right
to direct that improvements be removed at no cost to it. In the context of
analyzing the rights of the parties, labelling buildings as temporary merely
identifies them for removal whether they were in fact temporary or permanent.
[76]
Similarly, there was considerable discussion on the meaning of the
word displace. In paras. 79 and 80, the chambers judge had this to say:
[79]
YVRA gave Budget notice, as it was entitled to do pursuant to s. 10.2(b) of
the 1995 Lease, to remove its facilities. Budget was contractually required
to comply. Therefore, it is correct to say that it was forced to vacate by
virtue of its contract with YVRA, and by virtue of YVRAs notice given under
that contract. However, it is not correct to say that it was displaced by
Hertz or by Hertz status as a successful proponent.
[80]
The Compensation Clause is intended to provide compensation for displacement
from facilities, not from land. Hertz status as a successful proponent entitled
it to take possession of and lease the land around and under Budgets facilities.
But it did not entitle it to take possession of or lease the facilities themselves.
Therefore, by leasing the land under Budgets facilities, Hertz did not displace
Budget as that term is used in the Compensation Clause.
With
respect, I do not agree entirely with these comments.
[77]
In my view, displacement clearly refers to the land. The buildings
were owned by YVR. Budget leased the land. Hertz was being granted a lease
over part of that land. When Hertz obtained the legal right to occupy that
land, Budget was displaced from the land. If that displacement resulted in
Budget losing an improvement, it was entitled to compensation from Hertz.
[78]
This leads to a consideration of the construction of s. 1.6. In my
view, on a plain reading of the provision:
·
the first sentence advises proponents
that there are improvements on the lands;
·
the second sentence envisions
a new concessionaire using existing improvements, but not being obliged to
pay rent for the first five years; obviously this assumes there are existing
improvements on the land;
·
the third sentence requires a
new concessionaire to pay one-third of the capital costs of existing improvements
to the previous concessionaire; again, this obviously assumes there are existing
improvements on the land;
·
if there are no improvements
on the land, the new concessionaire does not have to pay rent and does not
have to pay anything to the previous concessionaire.
Construed
in this way, the issue becomes: was Budgets office building on the land
when Budget was displaced from the land?
[79]
The judge concluded Budget was given notice to remove its office building
late in 2004. Budget challenges this conclusion. It my view, it is amply
supported by the evidence, but it is common ground that, at a minimum, written
notice was given in correspondence in mid-February 2005. Budgets lease expired
and Hertzs lease began at the end of February. In my view, that is the date
when Budget was displaced. Prior to the end of February it had the legal
right to occupy the land. By that time, notice to remove the office building
had been given and Hertz was not obliged to compensate Budget for it.
[80]
It was Budgets position that the scheme of the 1995 lease and 2004
RFP entitled it to recover the capital costs of improvements either through
amortization based on use or by compensation if it were to lose the use of
the improvement. Budget asserts that the policy of s. 3.5 of the 1995 lease
was carried into the RFP and it would be unconscionable for it not to recover
its capital cost once it lost the use of the office building.
[81]
Budget states, correctly in my view, that even if notice of removal
was given under the 1995 lease and the office building removed, if it were
to meet the criterion of s. 3.5 no renewed concession it would be entitled
to recover the unamortized capital cost of its office building. Counsel for
Budget extended this proposition and asserted that notice to remove was completely
irrelevant to Budgets claim under the RFP. He contended that even if the
building were removed a considerable time before the RFP was issued, although
as a successful proponent Budget could not claim compensation from YVR under
s. 3.5 of the 1995 lease, it would be entitled to compensation from Hertz
under the RFP. In my view, this ignores the full scheme of the 1995 lease
and RFP.
[82]
Compensation under s. 3.5 of the 1995 lease occurs when a leaseholder
loses its position as a concessionaire: it has no building and has no concession.
It recovers the unamortized costs of the building it lost. If it were compensated
under s. 3.5 of the 1995 lease, it would not be entitled to be compensated
under s. 1.6 of the RFP. Section 1.6 provides for reimbursement and the leaseholder
would have used or recovered all of its capital cost.
[83]
While Budget was displaced from a portion of the land it occupied,
it was not entitled to compensation under s. 3.5 because it obtained a new
concession. Any perceived unfairness in not being compensated for one-third
of the capital cost of the office building must take into account the advantage
of continuing to do business at the Vancouver Airport. There is no unfairness
or lack of business sense in the scheme.
[84]
In my view, on a proper construction of s. 1.6 of the RFP, Hertz was
not obliged to compensate Budget for the loss of its office building.
Liability for soil and site preparation costs
[85]
In its statement of claim, Budget alleged a contract between it and
Hertz, partly oral and partly in writing. Insofar as it was in writing, Budget
stated the agreement was comprised of the RFP, Budgets proposal and Hertzs
proposal. Hertzs proposal was not in evidence.
[86]
Budget claimed compensation, stating:
It
was a material term of the Hertz Agreement that to the extent that Hertz displaced
Budget from any improvements by taking possession of land which had previously
been in Budgets possession, Hertz would compensate Budget pursuant to the
figures set out in Schedule F.
[87]
As noted, in its statement of defence, Hertz stated it was obliged
to pay only one third of the capital costs of soil and site preparation as
set out in Schedule F.
[88]
In its statement of defence and at trial, Hertz provided no legal basis
for the concession. In its factum and at the hearing, Hertz based its concession
on s. 4.9 of the 2005 lease between it and YVR which states:
If the Tenant:
(a)
takes over a QTA or Service Centre facility from a previous tenant, the Tenant
shall pay to the displaced tenant one third of the unamortized capital cost
of the improvements by such method as agreed by the parties before the Tenant
takes possession of the QTA or Service Centre leasehold; or ...
[89]
Although Budget did not claim compensation based on the 2005 lease,
I am prepared to take Hertzs concession as given and do not opine on the
construction of s. 4.9.
[90]
It was not suggested that YVRs obligation to ensure that Hertz paid
compensation derived from the 2005 lease. My conclusion the RFP did not constitute
a contract between Budget and YVR disposes of Budgets claim that YVR is obliged
to ensure the Budget is compensated by Hertz. There is no such obligation
on either a best efforts or stand-alone basis.
Compensation for soil and site preparation costs
[91]
Because the legal basis for Hertzs obligation to compensate Budget
for soil and site preparation costs was not articulated, presumably relying
on the pleadings, the parties and the judge proceeded on the basis the recoverable
costs were as set out in Schedule F to the RFP. There was no finding the
RFP contractually bound Budget and Hertz and I have concluded it did not do
so. Section 4.9 of the 2005 lease, which is the legal basis on which Hertz
concedes it is liable, does not refer to Schedule F.
[92]
The judge appears to have been of the view that Budget sought the capital
cost of soil and site improvements not contained in Schedule F and based on
the pleadings and submissions of both parties, concluded Budget should be
limited to costs in that document, which he concluded totalled $33,789.20.
This was based on the first page of Schedule F, which is entitled Service
Centre Soil and Site Preparation.
[93]
The judge appears to have concluded Budget should be held to its pleadings
because it was not common knowledge that there were soil and site preparation
costs not stated in Schedule F. Hertz contends it relied on Schedule F and
would be prejudiced if Budget were entitled to recover for costs not in the
Schedule.
[94]
On the assumption Schedule F is relevant to the claim as now being
considered, there is some merit to Hertzs position because s. 1.6 of the
RFP states that the capital costs are set out in detail in Schedule F. On
the basis the claim now being considered, it is questionable whether Schedule
F is a controlling document, but, in any event, the simple answer is that
Budget does not claim costs not included in Schedule F. This is made clear
in the affidavit of Gary Cummings.
[95]
I do not opine on whether Schedule F is controlling. Although it is
somewhat legally unorthodox to rely on Schedule F in the circumstances of
the claim as it now is being considered, I am prepared to do so because it
was the basis on which the parties advanced the case in chambers and on appeal.
[96]
Because of the conclusion he reached, the judge did not consider the
evidence of Mr. Cummings. In my view, he erred, but I am not at all certain
it was made clear to him that Mr. Cummings was not adding costs, but merely
providing guidance on the content of Schedule F.
[97]
Mr. Cummings is a Certified General Accountant who has been employed
by Budget as a general ledger accountant since 1992. In response to a May
10, 2004 request, Mr. Cummings provided capital costs information to YVR which
was to be included in the RFP and which was reproduced in Schedule F. After
Budget was displaced, Mr. Cummings reviewed Schedule F and the invoices that
supported the numbers in it.
[98]
Mr Cummings identified the capital cost of the office building from
numbers on the second page of Schedule F, which was entitled: Other Service
Centre Construction Costs. He identified the capital cost of soil and site
improvements from numbers on both the first and second pages of Schedule F.
These numbers were presented for payment to Hertz. They totalled $425,374.96
made up of $90,290.61 for the soil and site cost and $335,084.35 for the capital
cost of the office building.
[99]
Taking into account additional information and correcting some errors,
Mr. Cummings reviewed his calculation prior to the hearing before Silverman
J. He provided two calculations for soil and site preparation based on the
inclusion or non-inclusion of a fire-access road.
[100]
In my view, it is appropriate to take into account the fact Budget
uses the access road. Based on Mr. Cummings calculations, doing so gives
a soil and site preparation capital cost of $79,023.73, from which must be
deducted over-holding rent of $30,146.95, resulting in $48,876.78 being the
amount payable by Hertz to Budget.
[101]
At the hearing of the appeal, Budget asserted that the numbers on the
first page of Schedule F referred only to common site costs, essentially pre-loading
the site, and that numbers on page two had to be taken into account as was
done by Mr. Cummings. Hertz contended this could not be true because the
per-square-metre figures differed among the concessionaires. Counsel for
Budget stated this issue had not been explored previously and had no explanation
for the differences.
[102]
I am not prepared to draw any conclusions from the differences. They
appear not to have been dealt with in the evidence. There may be an explanation:
for example, there might have been different volumes of pre-load material
and different compaction required at different places on the site. I accept
the uncontradicted evidence of Mr. Cummings.
Conclusion
[103]
In my view, the RFP was not contractually binding on either YVR or
Hertz and Budget was not entitled to compensation based on s. 1.6. Alternatively,
if the RFP were contractually binding, on a true construction of s. 1.6 in
the circumstances of this case, Budget was not entitled to compensation for
the loss of its office building. Based on the concession of Hertz, Budget
was entitled to compensation for its soil and site preparation capital costs
in the amount of $48,876.78.
[104]
I would increase the award to Budget to $48,876.78 and otherwise dismiss
this appeal.
The
Honourable Mr. Justice Chiasson
I agree:
The Honourable Madam Justice Prowse
I agree:
The Honourable Madam Justice Neilson
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
R. v. Gregory,
2009 BCCA 26
Date: 20090123
Docket: CA036047
Between:
Regina
Respondent
And
Aaron Ronald Gregory
Appellant
Before:
The Honourable Mr. Justice
Mackenzie
The Honourable Mr. Justice
Chiasson
The Honourable Mr. Justice
Bauman
Oral Reasons for Judgment
J.M. Duncan
Counsel for the Appellant
E. Campbell
Counsel for the (Crown) Respondent
Place and Date:
Vancouver
, British Columbia
23 January 2009
[1]
Mr. Gregory appeals his
conviction in Provincial Court on February 27, 2008, on three counts of
possession of stolen property: a motor vehicle and two motor vehicle licence
plates that were in the motor vehicle. He contends the trial judge:
1.
misapprehended the evidence when applying the principles established by
R.
v. W.(D.)
, [1991] 1 S.C.R. 742, to the facts of this case;
2.
erred taking judicial notice of facts not in evidence without notice to Mr.
Gregory;
3.
erred convicting Mr. Gregory where there was no or insufficient evidence he had
guilty knowledge;
4.
erred convicting Mr. Gregory when the evidence raised a reasonable doubt on the
issue of identity.
Background
[2]
On January 10, 2007, R.C.M.P.
Constable MacNeill was on patrol in an unmarked police car in Prince George, British Columbia. He passed a pick-up truck travelling in the opposite direction and
decided to follow it. The officer testified that as the vehicles passed, he
looked into the truck and recognized Mr. Gregory. The officer knew Mr. Gregory
from previous face-to-face encounters and from seeing him on a video when Mr.
Gregory was the victim of a home invasion and beating.
[3]
Constable MacNeill followed the
pick-up truck into an apartment buildings outdoor parking lot where the
vehicles again passed each other travelling in opposite directions. The
officer testified he again made eye contact with Mr. Gregory. He could not
ascertain the licence number of the pick-up truck because it had no front plate
and the rear plate was obstructed with snow.
[4]
Constable MacNeill radioed for
assistance and advised the dispatcher he had observed Mr. Gregory driving the
motor vehicle. He then drove around the apartment building and returned to the
parking lot. The pick-up truck was empty and parked at a right angle
straddling three marked parking spaces.
[5]
The officer then heard on the
police radio that another officer, Constable McClarty, had arrested Mr. Gregory
a couple blocks from where the vehicle was abandoned. Constable McClarty
heard the discussion between Constable MacNeill and the dispatcher. Mr.
Gregory was known to Constable McClarty. Constable MacNeill went to the arrest
location and confirmed the person there was the person he had observed in the
pick-up truck. In court, Constable MacNeill identified Mr. Gregory as that man.
[6]
Constable McClarty observed the
clothing of Mr. Gregory. He stated he was wearing a one-piece blue coverall,
which he described as summer-weight, no gloves and no hat. With the wind chill,
the temperature was minus 20 degrees.
[7]
Constable McClarty is a police-dog
handler. He instructed his dog to undertake a dog-track. The dog picked-up a
scent and located a cache of clothes: a white and beige jacket and a small
baseball cap. They were soft and not frozen. The dog then continued its track
which ended in the apartment buildings outdoor parking lot approximately 20
feet from the pick-up truck. The dog there lost the scent. Constable
McClarty, who was qualified as an expert in dog-handling, described the area
around the truck as contaminated because police and a tow-truck driver were
active there.
[8]
Mr. Gregory denies he was in the
pick-up truck; denies he fled the area where the truck was parked and denies he
dumped the clothing the dog found. He asserts that when he was apprehended by
Constable McClarty, he was walking from a Tim Hortons location carrying a
coffee and a bagel on his way to visit a friend.
Trial judgment
[9]
Facts were agreed which
established the pick-up truck and licence plates were stolen. The trial judge
concluded he did not believe Mr. Gregory and he did believe the two police
officers. The judge decided the clothing found by the dog was Mr. Gregorys
clothing and that he fled the location where the truck was parked. He
concluded Mr. Gregory had possession of the truck and licence plates and the
elements of the offence were established.
[10]
The judge dealt with
W.(D.)
in
paras. 80 81 and 83 as follows:
[80]
In a trial, the responsibility throughout is with the Crown. They have the
burden to prove their case beyond a reasonable doubt. Looking at that case of
R.
v. W.(D.)
, and it is quoted extensively in our case law, and referring
to
R. v. Sherman
or
R. v. Miller
, decisions of Mr.
Justice Romilly of the Supreme Court, the decisions of
R. v. W.(D.)
,
that decision, rather, and the subsequent case law, first, as I assess
credibility, and that is the primary function here; I have to determine from
the evidence I have the credibility that I can place on the testimony of the
various witnesses. I first look to the evidence of the accused, the evidence
that you presented in your testimony, and it is my determination that I cannot
accept your evidence, and I have made that determination based, as I say, on a
number of factors: the criminal record, the contradictions that appear in the testimony,
and as I view it, the inconsistencies in your own testimony regarding, for
instance, distances and how long you were on the streets.
[81) The principle in
W.(D.)
is that if I believe the evidence of the accused, I just acquit. The next
principle is that if I do not believe the testimony of the accused but I still
have reasonable doubt, then I still must acquit, and then the third term,
perhaps, from our Court of Appeal case,
R. v. H.
, is if,
considering all the evidence, I am unable to decide whom to believe, I must
acquit. Then thirdly, or the last term, is that on the whole of the evidence,
in other words, whether or not I believe you or not believe you, if on the
whole of the evidence I am left in a reasonable doubt, then I must acquit.
. . .
[83]
As I say, I have looked at the evidence. I have examined the evidence, and
although this is a case of being mindful of credibility, I am still required to
look at all the evidence and make an assessment in terms of its credibility,
its reliability, and its consistency, either with consistency with other pieces
of evidence or consistency within itself, and in my view, after I have made
that full assessment, and being mindful of the case law as set out in
R.
v. W.(D.)
, in my view, my conclusion is that the Crown has proved their
case beyond a reasonable doubt on all three counts and I find you guilty, Mr.
Gregory, of the charges as set out in Information 23991.
Discussion
Misapprehension of evidence
[11]
In his factum, Mr. Gregory
addressed his contention the judge misapprehended the evidence in the context
of the judges consideration of the principles of
W.(D.)
. He
asserts the judges misapprehension of the evidence led him to decide not to
believe Mr. Gregory and to decide to believe the officers.
[12]
In
R. v. Lohrer
, 2004
SCC 80, [2004] 3 S.C.R. 732 at para. 1, Binnie J. provided guidance for the
required analysis, quoting from Doherty J.A. in
R. v. Morrissey
(1995),
97 C.C.C (3d) 193 (Ont. C.A.):
Where
a trial judge is mistaken as to the substance of material parts of the evidence
and those errors play an essential part in the reasoning process resulting in a
conviction, then, in my view, the accuseds conviction is not based exclusively
on the evidence and is not a true verdict.
[13]
Mr. Gregory focuses on two
matters: his clothing and his statement he was walking from Tim Hortons to
visit a friend.
[14]
Mr. Gregory testified he was
wearing pants, a pair of long-johns, winter boots, insulated coveralls, two
t-shirts and a sweater. The police officers stated Mr. Gregory was under-clothed
for the weather conditions. The judge accepted their evidence.
[15]
It was common ground Mr. Gregory
was wearing coveralls. Constable McClarty described them as summer clothes. In
cross-examination, Constable MacNeill appears to have agreed they were winter-type.
Mr. Gregory states in his factum that in para. 76, the judge [p]ointed to a
contradiction in Mr. Gregorys claim to be wearing winter clothing on his feet
but not on the upper part of his body. I do not read the judges reasons as doing
so.
[16]
The judge stated I do note
you
had
heavy winter boots on, but in my view, it was contradictory to have heavy
winter clothing on your feet but not on the upper part of your body. After
the phrase I do note, the judge wrote as you said. It is apparent to me,
he was accepting Mr. Gregorys evidence he wore winter boots, but was not
accepting the rest of his evidence concerning clothing. As he was entitled to
do, he preferred the evidence of the officers and noted it was not consistent
to wear winter boots and less protection for the upper body. This was
consistent with Mr. Gregory having discarded his coat and hat.
[17]
As to the coat, Mr. Gregory
contends the judge misapprehended the evidence because the coat was size large
and at a minimum he wears size extra-large. In court, Mr. Gregory was wearing
a double extra-large shirt. The judge was aware of this evidence. He also was
told by the officers that Mr. Gregory had put on considerable weight between
the time of his arrest and the trial.
[18]
A further misapprehension is said
to be the judges comment in para. 71 that Constable McClarty denied Mr.
Gregory had a coffee with him. The following is the exchange between Constable
McClarty and counsel on cross-examination:
A His
Tim Hortons coffee? No, I dont recall.
Q. Isnt
it true that he had a Tim Hortons coffee in his hand, when you stopped him.
A I
dont recall. Now that you mention that, I remember some Timbits maybe being
on his person or something though. I dont know. Aarons shaking his head no,
I dont recall a coffee, no.
In
my view, it is not an unreasonable reading of this evidence as denying Mr.
Gregory had a coffee. It certainly was an interpretation open to the trial
judge.
[19]
Mr. Gregory also contends the
judge erred in his assessment of the evidence of Mr. Gregory by taking judicial
notice of the distance he would have walked had his story about being at Tim
Hortons been true. He contends this amounts to a misapprehension of the
evidence and seeks to introduce fresh evidence to contradict the judges
statement of the distance.
[20]
The Crown states defence counsel
invited the judge to undertake his own assessment of the distance. At trial,
Crown counsel contended the distance that Mr. Gregory would have had to walk
was more than a mile. The following comment was made by defence counsel:
MR.
DUNCAN: . . ., her comment that its certainly more than a mile. Theres no
evidence of that. The best we have is the map guide and if Your Honour wishes
to take -- get another Mapquest guide to see how long it is from Central to
Lacoma, I have no objection to that.
[21]
In para. 77, the judge stated he
had examined a city map and determined the distance was 1.9 miles or
approximately three kilometres. It is not clear to me that he, in fact, took
judicial notice of the distance although he stated he was doing so. In these
circumstances, I do not consider the judges observation that the distance was
1.9 miles to be reviewable error.
[22]
In addition, the point related to
the improbability of Mr. Gregory walking any significant distance, clothed as he
was, in minus 20 degree weather. The fresh evidence seeks to establish the
distance is approximately two kilometres. In my view, the evidence would not
meet the test in
R. v. Palmer
, [1980] 1 S.C.R. 759, because it is
not likely the evidence would affect the outcome.
[23]
Repeatedly, appellate courts have
been admonished that findings of credibility are not scientific. This Court is
not entitled to inject its view of the facts over that of a trial judge unless
there is palpable and overriding error.
[24]
In this case, the judges
determination he did not believe Mr. Gregory was based on a number of factors.
He stated in para. 72:
[72]
In my view, the evidence regarding the coffee and the bagel having been
purchased at the Tim Hortons at the location that was described as Central and
5th is not reliable. I make that conclusion based, one, on my view of your
credibility. Your credibility is lessened, to some extent, by the record. I
take that into account. That is an important consideration, in my view. I also
observed you as you testified in court and your demeanour during the trial, and
in my view, there were times when your testimony was casual and exaggerated,
and I take some support for that determination from your testimony about the
coffee. You stated that when stopped by the officer you stated, Do you want my
bagel and coffee? and then you later offered the evidence that the coffee was
still warm, as I recall your testimony, at the detachment, and in my view, that
is improbable evidence of what could have occurred on that January 10
th
date.
And
in para. 80:
. .
. I cannot accept your evidence, and I have made that determination based, as I
say, on a number of factors: the criminal record, the contradictions that
appear in the testimony, and as I view it, the inconsistencies in your own
testimony regarding, for instance, distances and how long you were on the
streets.
[25]
In my view, the judge did not
misapprehend the evidence. He was aware and referred to the testimony of Mr.
Gregory and the officers. He found much of Mr. Gregorys story implausible and
did not interpret the evidence of the officers as urged by Mr. Gregory. I
would not accede to his first and second grounds of appeal.
Guilty knowledge
[26]
Mr. Gregory contends there is no
clear pathway to conviction concerning the judges conclusion Mr. Gregory was
in possession of the stolen property. The judges discussion and conclusion on
this issue is in para. 82. He stated he had determined Mr. Gregory was in the
stolen pick-up truck, although Mr. Gregory denied this. The stolen licence
plates were in the truck. He concluded Mr. Gregory had control of the truck
and plates.
[27]
Mr. Gregory states this is not
enough. Mr. Gregory had been observed driving the truck with a female
passenger. It is asserted he may merely have been driving a vehicle she had in
her possession and the plates may have been hers or someone elses. The Crown
asserts this is mere speculation and states the following in its factum:
61. The
distinction between a reasonable inference and speculation was the subject of
comment in
R. v. Wild
, [1971] S.C.R. 101, 4 C.C.C. 40 at 47,
where Martland J., for the majority, approved the trial judges comments in
R.
v. McIver
, [1965] 4 C.C.C. 182 (Ont. C.A.) [1966] S.C.R. 254 as
follows:
the case is to be decided
on the facts, that is, the facts proved in evidence and the conclusions
alternative to the guilt of the accused must be rational conclusions based on
inferences drawn from proven facts. No conclusion can be a rational conclusion
that is not founded on evidence. Such a conclusion would be a speculative,
imaginative conclusion, not a rational one.
In
my view, the observation is apt in this case.
[28]
In addition, the Crown contends
the judges finding Mr. Gregory fled the scene supports his conclusion he had
possession of the truck and plates. I agree and would not accede to Mr.
Gregorys third ground of appeal.
Identity
[29]
Mr. Gregory contends there was a
reasonable doubt of his identity as the person driving the pick-up. In my
view, the contention is not sustainable in this Court.
[30]
The trial judge accepted the
evidence of the officers. He was entitled to do so. There was ample evidence
to support their identification of Mr. Gregory. Both knew him from previous
occasions. Both named him immediately in their communications with the
dispatcher. Constable MacNeill confirmed Mr. Gregorys identity as the driver
of the pick-up truck at the arrest scene and in the courtroom. There is no
basis on which this Court properly could intervene in the judges conclusion
Mr. Gregory was the person seen driving the stolen pick-up truck.
Conclusion
[31]
Mr. Duncan has said everything
that could be said to support this appeal, but I would dismiss this appeal.
[32]
MACKENZIE J.A.
: I agree.
[33]
BAUMAN J.A.
: I agree.
[34]
MACKENZIE J.A.
: The appeal is dismissed.
The Honourable Mr. Justice Chiasson
|
COURT OF
APPEAL FOR BRITISH COLUMBIA
Citation:
Hassan v. Hunter Hill
Housing Co-Operative,
2009 BCCA 35
Date: 20090129
Docket: CA036714
Between:
Zahara
Hassan
Appellant
And
Hunter Hill
Housing Co-Operative
Respondent
Before:
The Honourable Madam
Justice Newbury
The Honourable Madam
Justice Kirkpatrick
The Honourable Mr. Bauman
Oral Reasons for Judgment
Appellant appearing In Person
L.L. Afonso
Counsel for the Respondent
Place and Date:
Vancouver
, British Columbia
29 January 2009
[1]
NEWBURY, J.A.
: Ms. Hassan seeks to vary an order of
Madam Justice Prowse in chambers, made on January 15, 2009. She dismissed
Ms. Hassan’s application for leave to appeal and for a declaration of
indigent status.
[2]
Ms. Hassan was seeking
to appeal in turn an order of Mr. Justice Brine dated November 27 of last year,
in which he granted the application of Hunter Hill Housing Co-Operative for an
order of entitlement to vacant possession of a residential unit occupied by Ms.
Hassan and her children since 2001. Brine J. also dismissed an appeal of
Ms. Hassan from a decision of the Co-operative terminating her
membership. Under s. 171 of the
Cooperative Association Act
,
S.B.C. 1999, c. 28, any right of a member to possession or occupancy of
residential premises that is dependent on his or her membership in a housing
cooperative, which is the case here, is terminated on the termination of the
membership.
[3]
The termination
decision was made at a duly called meeting of the Co-operative at which Ms.
Hassan spoke. The Directors of the Co-op subsequently passed a similar
resolution at a meeting where she also spoke. She was advised of her right
to appeal to the Supreme Court of British Columbia under s. 37(3) of the
Act
,
and did so after obtaining counsel.
[4]
Ms. Hassan did not
appear at the hearing before Brine J. Proceeding on affidavit evidence,
he found that the rules of natural justice had been met. That is, Ms.
Hassan had had notice of the hearing, had known the case to be met, had had an
opportunity to meet it and had been advised of her right to appeal. Brine
J. was satisfied that the Co-operative’s decision to terminate her
membership and to seek vacant possession were “appropriate”.
He therefore granted the Co-operative the declarations sought, to take effect
January 31, 2009. I note that s. 172(3) of the
Act
states:
(3) If the court determines that the person's membership was terminated
in accordance with the principles of natural justice, the court must make an
order of possession in favour of the housing cooperative.
[5]
Before Madam Justice
Prowse, Ms. Hassan appeared in person and the Co-operative was
represented. Ms. Hassan insisted that she had made all of the payments
that she was required to make. However, this had been contradicted by
affidavit materials filed before Brine J. in the court below. Madam
Justice Prowse observed that Brine J. had found that in fact, Ms. Hassan had
failed to meet many of those payments and that there was no prospect Ms. Hassan
was to succeed in challenging that finding.
[6]
Madam Justice Prowse
also dealt with an argument that Ms. Hassan had failed to appear in Supreme
Court because she had not had notice of what time she was required to
appear. There is affidavit evidence on this point, and at the end of the
day, Madam Justice Prowse said that she was satisfied “all proper steps
were taken to ensure that Ms. Hassan had notice of that hearing”.
[7]
Madam Justice Prowse
found “with some concern and some regret”, that there was no valid
ground of appeal on the basis of no notice or on any of the other grounds
advanced by Ms. Hassan. The proposed appeal was also very fact-specific,
did not turn on an issue of public concern and in Madam Justice Prowse’s
view, it was not in the interest of justice that it proceed. She declined
to extend the January 31 date, and indicated that if Ms. Hassan intended to
seek a review of her order, she should do so immediately and such a review
should be expedited.
[8]
Before us today, Ms.
Hassan has argued the same points she argued below. However, in order to
succeed in a review of an order of a judge in chambers, the applicant must show
that the judge was wrong in law in principle or misconceived the facts:
Frew
v. Roberts
(1990), 29 B.C.R. (3d) 34 and
Ward v. Clark
[2001] B.C.J. No. 901.
[9]
I am not persuaded Ms.
Hassan has met this onus. It was for the Supreme Court judge to find the
facts, which he did, and Madam Justice Prowse found no basis in which Ms.
Hassan would have a realistic chance of showing such findings were clearly
wrong. We have been shown no reason today to find that there was any real
merit to the proposed appeal or that the appeal should be heard in the interest
of justice. Rather it appears that as Madam Justice Prowse stated, Ms.
Hassan would be bound to fail on the grounds she is advancing.
[10]
I acknowledge that
being expelled from a housing co-operative will be hard on Ms. Hassan and her
family; however, the Co-operative has given her every opportunity to remedy her
default and clearly has complied with the rules of natural justice. As I
have indicated, the
Act
is clear that the Court must in the
circumstances make an order for possession.
[11]
I have inquired whether
the Co-operative might consider extending the time somewhat since January 31 is
two days away and I would ask that counsel take that request back to her
client.
[12]
In the result, however,
I would dismiss the application for review.
[13]
KIRKPATRICK, J.A.
I agree.
[14]
BAUMAN, J.A.
: I agree.
[15]
NEWBURY, J.A.
: The application is dismissed.
(discussion with
counsel)
[16]
NEWBURY, J.A.
: Yes, that would be fine.
“The Honourable Madam Justice
Newbury”
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
Booty v. Hutton,
2009 BCCA 29
Date: 20090130
Docket: CA036259; CA036260
Docket: CA036259
Between:
Charlein Booty
Respondent
(
Petitioner
)
And
Gordon Stanford Hutton
(Allen Hutton, Agent)
Appellant
(
Respondent
)
and
Docket: CA036260
Between:
Gordon Stanford Hutton
and Allen Hutton
Appellants
(
Plaintiffs
)
And
Charlein Booty
Respondent
(
Defendant
)
Before:
The Honourable Mr. Justice
Donald
(In Chambers)
A. Hutton
Appearing in person
D. H. Unterman
Counsel for the Respondent
Place and Date of Hearing:
Vancouver
, British Columbia
January 19, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January 30, 2009
Reasons for Judgment
of the Honourable Mr. Justice Donald:
[1]
Allen Hutton, as agent for Gordon
Stanford Hutton, applies for an extension of time to apply for a review of the
order of 14 October 2008 of Mr. Justice Frankel, in chambers, dismissing his
application for leave to appeal.
[2]
Charlein Booty applies for a
declaration that Allen Hutton is a vexatious litigant and for an order quashing
the proceedings as vexatious. In the alternative, she applies for security for
costs in the Supreme Court and in this Court.
[3]
Allen Hutton, son of Gordon
Stanford Hutton, deceased, conducts this litigation as agent of his fathers
estate. Whether he is the estates legal representative has not yet been
determined. For clarity, I refer to father and son as Gordon and Allen and
I intend no disrespect in using their given names.
[4]
Charlein Booty is the sister of
Gordon. Gordon was the executor of their fathers estate. Ms. Booty
successfully claimed in a contempt proceeding that Gordon did not administer
the estate properly and, on 20 November 1996, she received a judgment for
$40,000 plus costs from Madam Justice Boyd.
[5]
Gordon brought an appeal,
CA022525, but did not pursue it. It was dismissed as abandoned on 21 May 1998
pursuant to s. 25(5) of the
Court of Appeal Act
, R.S.B.C. 1996, c. 77.
[6]
Gordon died in 2004.
[7]
Allen is convinced that Madam Justice
Boyds judgment is a miscarriage of justice. In that belief, he brought an
application in September 2004 to set aside her order. That was dismissed by
Mr. Justice Shabbits in oral reasons (22 September 2004), Vancouver A932373
(B.C.S.C. Chambers), on the holding that he lacked jurisdiction to overturn
another Supreme Court judges decision.
[8]
Allen also applied at the same
time for production of documents relating to two estates in the Hutton family,
which documents he asserted would show the wrongness of Madam Justice Boyds
order. Mr. Justice Shabbits held that production of documents bearing on the
validity of the order was a matter for the Court of Appeal.
[9]
On 12 January 2005, Mr. Justice
Holmes adjourned Allens applications to review and set aside or stay the
orders of Mr. Justice Shabbits so that the application could be brought before
Shabbits J.
[10]
On 5 June 2008, Shabbits J.
dismissed the applications to review and stay his earlier orders: (5 June
2008), Vancouver A932373/S016658 (B.C.S.C. Chambers). He ruled that the formal
orders as settled reflected the relief that he pronounced in his reasons for
judgment. It is from this decision that the appeal is taken.
[11]
Allen applied for an order
dispensing with the requirement to serve the notices of appeal on Ms. Booty.
This was refused by Madam Justice Rowles, in chambers, on 14 August 2008. In
the course of her reasons, she remarked:
[7]
I would add that it appears to me that Mr. Huttons applications have no merit
and it may be time for an order to be made preventing him from bringing any
further appeal proceedings without leave from a justice of this Court.
[12]
Leave to appeal was dismissed by
Mr. Justice Frankel, in chambers, on 14 October 2008.
[13]
The time limit for applying to
vary an order of a single justice is seven days. Allen filed his application
on 17 November 2008, about three weeks late. His explanation is that he was
unaware of the short time requirement and proceeded as quickly as he could.
[14]
It seems obvious that the review
of Frankel J.A.s order refusing leave is bound to fail on the ground that
Allen has appealed the wrong order of Shabbits J., i.e., instead of
appealing the substantive order, he appealed the refusal to vary that order.
The only issue that can arise in respect of the latter is whether the order
conformed with the reasons, and there is no apparent disparity.
[15]
Allen hopes that the appeal will
open up the whole miscarriage issue as he sees it. He is certain to be
disappointed in that expectation.
[16]
My view of the merits, which is in
accord with Rowles J.A.s assessment mentioned earlier, is not by itself a
sufficient ground for refusing to extend time; nor, for that matter, is it
enough for a vexatious litigant order.
[17]
The delay of three weeks in
bringing the variance application is not inordinate. A single judge should not
refuse an extension on account of lack of merit alone:
Dadashzadeh v. British Columbia (Motor Carrier Commission)
, 2003 BCCA 463, 35 C.P.C. (5th) 276
(Chambers), Rowles J.A.
[18]
I cannot say that the application
for an extension of time or other processes taken so far in the Court of Appeal
rises to the level of vexatious conduct. While a pattern of persistent
vexatious behaviour is beginning to emerge, it is inchoate at this point:
Koch
v. Mitchell
, 1999 BCCA 16, 118 B.C.A.C. 176.
[19]
If the review application goes
before a division of this Court and is dismissed, Allen must accept that the
order of Boyd J. can no longer be challenged. Any further litigation in that
regard will likely result in a vexatious litigant order.
[20]
Turning to the application for
security for costs, Ms. Booty asks for security in the amount of $3,921.99
unpaid costs in the Supreme Court and $2,500 in this Court.
[21]
The authority to order security
for trial costs can be found in s. 10(2)(b) of the
Court of Appeal Act
.
In
Aikenhead v. Jenkins
, 2002 BCCA 234, 166 B.C.A.C. 293 at para. 30,
Madam Justice Ryan, in chambers, stated the three principles to be considered
in the exercise of discretion in ordering security for trial costs:
1. The
onus is on the applicant to show that it is in the interest of justice to order
posting for security of a trial judgment and/or of trial costs.
2. The
applicant must show prejudice if the order is not made.
3. In
determining the interests of justice the chambers judge should consider the
merits of the appeal and the effect of such an order on the ability of the
appellant to continue the appeal.
[22]
In my opinion, an order for
security for trial costs is appropriate. The appeal has no merit. Allen has
not paid outstanding costs from 2004, 2005 and June 2008, despite having the
ability to pay. He owns a home in Vancouver and a farm in Saskatchewan.
Posting security will not impede his opportunity to pursue the appeal.
[23]
Although Allen has real property,
he denies having any income. Recovery of appeal costs is likely to be
difficult. Given the absence of merit in the appeal and the demonstrated
refusal to pay other court costs, I consider it in the interest of justice to
order security for appeal costs.
[24]
The estimate of $2,500 for
proceedings to date plus the hearing of the variance application is not
unreasonable.
[25]
In the result, I extend the time
to file the application to vary to the date of filing. I direct that the
variance hearing be set down on the date that security for costs is posted, and
that the hearing itself be no later than one month from that date. I order
security for costs in the amounts stated and stay the proceedings until
security is posted.
The Honourable Mr. Justice Donald
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
Pemberton Benchlands
Housing Corporation v. Sabre Transport Ltd.,
2009 BCCA 30
Date: 20090130
Docket: CA035912
Between:
Pemberton Benchlands
Housing Corporation
Appellant
(
Plaintiff
)
And
Sabre Transport Ltd.
Respondent
(
Defendant
)
Before:
The Honourable Madam
Justice Levine
The Honourable Mr. Justice
Tysoe
The Honourable Madam
Justice D. Smith
J.A. Henshall
Counsel for the Appellant
J.R. White
Counsel for the Respondent
Place and Date of Hearing:
Vancouver
, British Columbia
January 9, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January 30, 2009
Written Reasons by
:
The Honourable Madam
Justice Levine
Concurred in by:
The Honourable Mr. Justice
Tysoe
The Honourable Madam Justice
D. Smith
Reasons for Judgment
of the Honourable Madam Justice Levine:
Introduction
[1]
The appellant, Pemberton
Benchlands Housing Corp. (PBH), appeals from the order of Ehrcke J.,
following a summary trial under Rule 18A, dismissing its action against the
respondent, Sabre Transport Ltd. (Sabre). (His reasons for judgment may be
found at 2008 BCSC 294.)
[2]
PBH sought a declaration that it
had entered into a fixed price construction contract with Sabre, specific
performance of the contract, and in the alternative, damages in lieu of
specific performance for breach of contract. The trial judge found that PBH
had not established that the parties had entered into a fixed price
construction contract. PBH claims on appeal that the trial judge erred in his
substantive conclusions, and in summarily dismissing its action.
[3]
In my opinion, the appellant has
not raised any reviewable error. As further explained in the reasons that
follow, I would dismiss the appeal.
Background
[4]
PBH was incorporated in April 2003
to carry out a joint venture to acquire and develop lands near Pemberton, British Columbia. Its shareholders were Glacier Creek Development Corporation
and Whistler Service Park Ltd., each owning 50 per cent. Glacier was owned by
Mr. Serge Côté, and Whistler was owned by Mr. Art Den Duyf, who also owned the
respondent, Sabre. Glacier was a real estate development company, and Sabre
provided road and civil construction services. The dispute in these
proceedings concerned the terms and price under which Sabre was to provide site
servicing for the development.
[5]
PBH claimed that the construction
contract was partly written and partly oral. It alleged that the written terms
were included in two documents: a CCDC2 form of construction contract
together with an attached 20-page document (referred to by the trial judge as
the Tabulation), or alternatively, only in the Tabulation, which provided for
a fixed price of $2,859,765. One of the alleged oral terms was that the
contract included a contingency reserve of $500,000.
[6]
In defence, Sabre claimed it
agreed to provide construction services under an oral or implied contract for
time and materials. It counterclaimed for judgment for $3,351,542.42 for
contract work completed up to May 31, 2005, plus additional amounts for work
completed after that date.
[7]
Sabre applied under Rule 18A for
an order dismissing PBHs action, or alternatively, dismissing PBHs claim that
the parties had entered into a fixed price contract, and for leave to proceed
with its counterclaim.
[8]
The only issue on the summary
trial was whether the construction contract was for a fixed price of $2,859,765
plus a contingency reserve of $500,000. The trial judge dismissed PBHs
action, and gave leave to Sabre to proceed with its counterclaim.
Reasons for Judgment
[9]
The trial judge considered the two
documents PBH alleged contained the written terms of the contract. He found
(at para. 24) that the CCDC2 form was not part of any contract between PBH and
Sabre, based on the evidence of Mr. Côté. Mr. Côté was the president and a
director of PBH. He testified that he did not know if Mr. Den Duyf had signed
the document, although his signature appeared on it; the CCDC2 form was not
agreed to by PBH and Sabre; and PBH had not used it as a contract. There was
evidence that Mr. Den Duyfs signature on the CCDC2 form was forged (at para.
22).
[10]
The trial judge then considered
the Tabulation, which he described as follows (at paras. 18-19):
The
second part of Document 345 is an appended 20-page list of construction items
and prices. For convenience I shall refer to this second part of Document 345
as the Tabulation. On its first page, it has the heading:
Sabre
Transport
Project:
Pemberton Benchlands, Pemberton, B.C.
Construction
Contract
Authorized
Signature: Pemberton Benchlands Housing _____
Authorized
Signature: Sabre Transport _____
Job
No. 416
December
8, 2003
It then lists in detail items of work, materials and
prices under various sections such as Storm Sewer, Sanitary Sewers,
Waterworks, Roadworks, and so on. On the bottom of the last page is a
total of the earlier sections, with the words, Construction Cost Summary
$2,859,765.
[11]
The trial judge summarized PBHs
argument that the Tabulation contained the written terms of a fixed contract (at
para. 27):
In support of its theory that the Tabulation contains
the written terms of a fixed price contract, the plaintiff relies on the
following facts: the Tabulation is headed Construction Contract; it is
signed by Dave Paterson next to the words, Authorized Signature: Sabre
Transport; it itemizes the work to be done; and the final words on the last
page are Construction Cost Summary $2,859,765.
[12]
Sabres submissions were as
follows (summarized at para. 33):
The defendant counters with the following
submissions: first, that Dave Paterson did not sign the Tabulation as a
construction contract; second, that even if he did sign it as a contract, he
had no authority to bind Sabre because only Art Den Duyf, as its president,
could do that; third, that even if the Tabulation was a binding contract, the
fact that it consists merely of a twenty-page list of work and prices without
any specific contractual terms demonstrates on its face that it is a time and
materials contract, not one for a fixed price; and finally, the defendant
submits that the conduct of the parties is inconsistent with the existence of a
fixed price contract.
[13]
After reviewing the evidence
surrounding the creation of the Tabulation and the circumstances under which it
was signed by Mr. Paterson, the trial judge found (at para. 40):
The plaintiff relies on the Tabulation as being the
written portion of a fixed price contract that was partly written and partly
oral. It is clear that Mr. Côté signed that document on behalf of PBH and that
Mr. Paterson, the project manager for Sabre, signed it on the line beside the
words Authorized Signature: Sabre Transport.
[14]
The trial judge noted (at para.
41) that there was fundamental divergence in the evidence about what was said
and done when the document was signed. PBHs representatives, Mr. Côté and
Mr. Prall, maintained that Mr. Paterson agreed on behalf of Sabre to the price
for the civil work at $2,859,765. Mr. Patersons evidence was that when
signing the Tabulation he made it clear to Mr. Côté that it was not a contract
and that the $2.85 million was not a contract amount.
[15]
The trial judge accepted Sabres
submissions that it should nonetheless succeed on the summary trial on the
ground that even if Mr. Paterson thought he was signing a contract (which he,
of course, denies), he had no authority to bind Sabre, and therefore, the
Tabulation is not a contract between PBH and Sabre (para. 42).
[16]
The trial judge found (at para.
43) that Mr. Den Duyfs uncontradicted evidence was clear that Mr. Paterson
did not have authority to sign the document on behalf of Sabre. He concluded
that Mr. Paterson had no actual authority to sign the Tabulation as a contract
binding on Sabre.
[17]
He went on to reject PBHs
argument that Mr. Paterson had apparent authority to sign the Tabulation as a
contract enforceable against Sabre. He noted that PBH did not develop the
argument or provide any authorities. He analyzed the issue and concluded (at
paras. 45-46):
In
Rockland Industries, Inc. v. Ameranda Minerals Corp.
of Canada
, [1980] 2 S.C.R. 2, the Supreme Court of Canada referred to the
criteria set out in
Freeman & Lockyer v. Buckhurst Park Properties
(Mangal) Ltd.
, [1964] 2 Q.B. 480 at pp. 505-06 for relying on the apparent
authority of an agent:
If the foregoing analysis of
the relevant law is correct, it can be summarised by stating four conditions
which must be fulfilled to entitle a contractor to enforce against a company a
contract entered into on behalf of the company by an agent who had no actual
authority to do so. It must be shown:
(1) that a representation
that the agent had authority to enter on behalf of the company into a contract
of the kind sought to be enforced was made to the contractor;
(2) that such
representation was made by a person or persons who had "actual"
authority to manage the business of the company either generally or in respect
to those matters to which the contract relates;
(3) that he (the
contractor) was induced by such representation to enter into the contract, that
is, that he in fact relied upon it; and
(4) that under its
memorandum or articles of association the company was not deprived of the
capacity either to enter into a contract of the kind sought to be enforced or
to delegate authority to enter into a contract of that kind to the agent.
In the present case, the plaintiff has not shown that
anyone with actual authority for Sabre, such as Mr. Den Duyf, made
representations to Mr. Côté or anyone else at PBH that Mr. Paterson was
authorized to enter into a 2.85 million dollar fixed price construction
contract on behalf of Sabre. The first two necessary conditions for relying on
apparent authority have not, therefore, been established in the evidence.
[18]
In the result, he found (at para.
48) that PBH had not established that the alleged written terms of the contract
were signed by anyone with either actual or apparent authority to bind Sabre,
and dismissed PBHs claim that Sabre had entered into a fixed price
construction contract with it. As PBHs other claims were dependent on PBH
proving a fixed price construction contract, he dismissed PBHs action, and
granted leave to Sabre to proceed on its counterclaim (at paras. 49-50).
Positions of the Parties on Appeal
[19]
The appellants primary ground of
appeal is that the trial judge erred in not finding that Mr. Den Duyf actually
authorized Mr. Paterson, and represented by his conduct that Mr. Paterson had
authority, to sign a fixed price construction contract in the form of the
Tabulation.
[20]
The appellant argues that actual
authority derived from Sabres obligation under the joint venture agreement to
enter into a fixed price contract for services within the range of $3.1 to $3.5
million, as determined by engineering estimates. It says that Mr. Den Duyf
agreed to this term, and then left Mr. Paterson to carry out the obligation,
determine the details, and enter into a contract that was not outside the
range. The appellant did not further specify how Mr. Den Duyfs agreement to
the joint venture agreement resulted in actual authority to Mr. Paterson to
enter into the agreed-upon contract.
[21]
The appellant argues further that,
in any event, by leaving Mr. Paterson to carry out all of Sabres part of the
deal, Mr. Den Duyf by his conduct represented that Mr. Paterson was authorized
to enter into the contract required by the joint venture agreement. That
conduct included making Mr. Paterson responsible for attending all the
meetings, advancing the project, and carrying out the work as the construction
superintendent and foreman. The appellant says that Mr. Patersons position
implied that he had authority to sign the contract. In addition, the appellant
maintains that Mr. Patersons authority was implied since he knew about the
requirements to obtain financing and that the Tabulation was prepared for the
purpose of presenting a fixed price contract as demanded by the bank.
[22]
The respondent argues that Mr.
Côtés evidence was that he knew that Mr. Paterson had limited authority, and
acted accordingly. There was no evidence that a construction superintendent is
customarily authorized to enter into multi-million dollar contracts. Mr. Côté
delivered the financing documents to Mr. Den Duyf for his signature, the
financial statements of PBH were delivered to Mr. Den Duyf, and he signed all
the cheques. Mr. Côtés evidence was that Mr. Den Duyf signed but did not read
the financing documents, the financing documents were not in evidence, and Mr.
Côtés evidence as to what the bank required was contradictory hearsay. At one
point he said the bank required a contract supported by contractors bids, and
at another point he said it required a fixed price contract. He also said that
the Tabulation was submitted as a budget, without the $500,000 contingency, to
save bonding expense with the Village of Pemberton. Thus, the respondent says,
Mr. Côtés evidence as to what the bank required was contradictory, and was
consistent with Mr. Patersons evidence that the Tabulation was not intended as
a fixed price contract.
[23]
As to the obligation under the
joint venture agreement, Mr. Den Duyfs position, on behalf of the respondent,
is that he was aware of the obligation and thought Sabre would be negotiating a
fixed price contract, but the parties never got there. Mr. Den Duyf did not
know about the Tabulation until after the litigation commenced, in 2005. The
respondent also points out that Whistler, not Sabre, was the party to the joint
venture agreement, and bound by the obligation to enter into a fixed price
contract. As this last argument was not raised at the trial, I do not intend
to consider it on the appeal.
[24]
The other issue raised by the
appellant is whether the matter was appropriate for judgment under Rule 18A.
The appellant says that it will defend the counterclaim on the basis that there
was a fixed price contract, and the risk of inconsistent conclusions on this
issue could embarrass the court. It will also rely on the joint venture
agreement that is in issue in other proceedings. Thus, the appellant claims,
this summary trial will not result in more efficient and less expensive
proceedings. The respondent says that the question of whether there was a
fixed price contract is
res judicata
, and the trial of its claim for
time and materials will be simplified as a result.
Analysis
[25]
In their factums and at the
hearing of the appeal, both parties reviewed the evidence supporting their
respective positions, without much reference to the trial judges findings of
fact. The appellant did not expressly allege that the trial judge made any
palpable or overriding error in his consideration of the evidence, or that he
erred in law in his understanding or application of the legal principles
relating to ostensible authority. At best, the appellants argument amounts to
an allegation that the trial judge misapprehended the evidence by failing to
find that Mr. Den Duyf represented by his conduct that Mr. Paterson had the
authority to sign a fixed price contract.
[26]
It is not the role of this Court
to retry the case. The Court is a court of review and a court of error. Where
no error is alleged, the Court has no task to undertake in reviewing the
judgment appealed from.
[27]
The trial judge considered the
principles of ostensible authority, had all of the evidence relied on by both
parties before him, and concluded that there was no evidence that contradicted
Mr. Den Duyfs statement that Mr. Paterson did not have authority to sign the
Tabulation. While he did not expressly summarize the evidence of Mr. Den
Duyfs conduct by reference to whether it amounted to representations
concerning Mr. Patersons authority, he is presumed to know the law (that
conduct may amount to a representation) and the evidence supported his
conclusion. Nothing in the appellants argument raises a reviewable error.
[28]
Nor did the trial judge err in
deciding this case at a summary trial. Both parties consented to the matter
being decided under Rule 18A. In fact, the appellant brought its own
application for judgment under Rule 18A, and, according to the respondent, both
parties urged the trial judge to decide it. The parties positions at the
summary trial are not determinative of whether the matter is suitable for
disposition under Rule 18A (see
Bacchus Agents (1981) Ltd. v. Dandurand (Philippe)
Wines Ltd.
, 2002 BCCA 138 at para. 28), but they explain why the question
of whether the matter was suitable for disposition under Rule 18A was not
argued before the trial judge.
[29]
The issue of whether there was a
fixed price contract, based on the two documents the appellant relied on, was a
discrete issue in this action. The fact that the appellant, on appeal, relies
on the terms of the joint venture agreement, and the joint venture agreement is
in issue in other proceedings, does not complicate the matter so that the Rule
18A judgment is unsuitable, inefficient, or unjust: see Rule 18A(8)(b)(i) and
(ii) and 18A(11)(a)(ii). This case is not like
B.M.P. Global Distribution
Inc. v. Bank of Nova Scotia (c.o.b. Scotiabank)
, 2003 BCCA 534, (2003), 19
B.C.L.R. (4th) 347, where new issues arose on appeal that could not be resolved
based on the record. There is no new issue on appeal here just a variation in
the manner in which the issue at the trial was argued. The resolution of
whether there was a fixed price contract appears to simplify this action.
[30]
The respondent raised a further
argument at the hearing that the inconsistent evidence of Mr. Côté shows that
the appellant did not think that the Tabulation was a fixed price contract, and
even if Mr. Paterson was authorized to sign it, it was only a budget and not a
contract. The trial judge did not make that finding, and it is not necessary
to do so to decide this appeal.
Conclusion
[31]
The appellant has not identified
any reviewable error in the reasons or order of the trial judge.
[32]
It follows that I would dismiss
the appeal.
The Honourable Madam Justice Levine
I Agree:
The Honourable Mr. Justice Tysoe
I Agree:
The Honourable Madam Justice D. Smith
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
West Bay SonShip Yachts Ltd. (Re),
2009
BCCA 31
Date: 20090130
Docket: CA035080
IN THE MATTER OF THE
COMPANIES
CREDITORS ARRANGEMENT ACT
,
R.S.C. 1985, c. C-36
and
IN THE
MATTER OF THE
BUSINESS CORPORATIONS ACT
, S.B.C. 2002, c. 57
Between:
West Bay SonShip Yachts Ltd.
Respondent
(
Petitioner
)
And
Gerald Esau
Appellant
(
Respondent
)
Before:
The
Honourable Madam Justice Rowles
The
Honourable Madam Justice Levine
The
Honourable Mr. Justice Groberman
S.
Kent
Counsel for the Appellant
R.A.
Millar
Counsel for the Respondent
Place
and Date of Hearing:
Vancouver
, British Columbia
October 8, 2008
Place
and Date of Judgment:
Vancouver
, British Columbia
January 30, 2009
Written Reasons by
:
The
Honourable Madam Justice Levine
Concurred in by:
The
Honourable Madam Justice Rowles
The
Honourable Mr. Justice Groberman
Reasons for Judgment of the Honourable Madam Justice Levine:
Introduction
[1]
The
appellant, Gerald Esau, appeals from the order of a Supreme Court chambers
judge made May 3, 2007, in the course of proceedings involving the respondent,
West Bay SonShip Yachts Ltd., under the
Companies Creditors Arrangement Act
,
R.S.C. 1985, c. C-36
(
CCAA
). Mr. Esau claims, among
other grounds of appeal, that the chambers judge erred in ruling that he was a
creditor subject to the terms of the Plan of Arrangement (the Plan).
[2]
For
the reasons that follow, I would dismiss the appeal.
Background
Facts
[3]
On
December 16, 2005, West Bay filed for protection under the
CCAA
. Mr.
Esau had been an employee of West Bay since 1991. On January 17, 2006, he
received notice that his employment in the position of Vice President,
Production, would be terminated, effective June 6, 2006. Mr. Esau sued West Bay for damages for wrongful dismissal, but did not file a Proof of Claim in the
CCAA
restructuring. West Bay sought a declaration that Mr. Esaus claim was
compromised by the Plan, and an order that the wrongful dismissal action be
stayed.
The CCAA Proceedings
[4]
In
the initial order in the
CCAA
proceedings, made on December 16, 2005
(the Filing Date), the court imposed a stay of proceedings against West Bay,
including any proceeding pursuant to labour or employment standards legislation
(s. 2(c)). The initial order provided for West Bay to continue to pay
obligations incurred by it after the Filing Date, including wages and other
monies owing to or in respect of its employees, but expressly prohibited the
payment of any amounts that are due on account of severance pay arising at law
or under Statute (s. 5). The order permitted West Bay to downsize its
operations and terminate its employees. The financial consequences of
downsizing were to be dealt with in the Plan to be filed (s. 6):
5. THIS
COURT FURTHER ORDERS that
all obligations incurred by the Petitioner after
the Filing Date
, including without limitation, all obligations to persons
who advance or supply goods or services to the Petitioner after the Filing Date
(including those under purchase orders outstanding at the Filing Date but
excluding any interest on the Petitioner's existing obligations incurred prior
to the Filing Date)
shall be paid or otherwise satisfied
by the
Petitioner and, without limiting the generality of the foregoing, that
the
Petitioner shall pay all wages, source deductions, benefits (including long and
short term disability payments), expenses, omissions, vacation pay, and other
monies owing to or in respect of its employees
(including any independent
contractor providing employment related services to the Petitioner)
irrespective of whether such obligations arose
or
were
earned before or after the Filing
Date
but not including any amounts that are due on account of severance pay
arising at law or under Statute (hereinafter collectively referred to as
"Wages").
6.
THIS COURT FURTHER ORDERS that, subject to the terms of
this Order, the Petitioner shall remain in possession of its undertaking,
property and assets, wherever situate (collectively, the "Assets")
with full power and
authority to relocate
to British Columbia
those Assets
currently situated within
other jurisdictions
including, without limitation, the State of California, the State of Florida
and the State of Washington and shall continue to carry on its business in the
ordinary course, provided that:
(b) it shall have the right without further Order of this Court, but
subject to the consent of the Monitor, to proceed with an orderly disposition
of such of its Assets outside of the ordinary course of its business as it
deems appropriate in order to facilitate the downsizing of its business and
operations (Downsizing), including:
(i)
terminating the employment of
such of its employees or temporarily laying off such of its employees, as it
deems appropriate;
all without interference of any kind from third parties,
including its landlords and notwithstanding the provisions of any lease,
mortgage other instrument or law affecting or limiting the rights of the
Petitioner to move or liquidate Assets from leased premises, and may take any
Downsizing steps at any time after the Filing Date irrespective of whether or
not payments have been made subsequent to the Filing Date under any lease or
mortgage,
provided that the financial obligations, if any, of the Petitioner
to creditors affected by such Downsizing shall be provided for and dealt with
in the Plan of Arrangement to be filed by the Petitioner.
[Emphasis added]
[5]
By final
order in the
CCAA
proceedings, pronounced June 23, 2006, the court
approved West Bays Plan. All claims falling within the definition of Claim
in Article 1.1 of the Plan were compromised as against West Bay and others:
Claim
means a claim for an amount alleged
by a person to be owed to it by the Company, or
a claim in relation to any
obligation, enforceable right, duty or liability, contingent, accrued, vested
or otherwise,
(including any claim whether contingent or accrued on behalf
of Her Majesty the Queen in right of the Dominion of Canada or any Province or
any municipality)
against the Company which was in existence in whole or in
part as of the Filing Date
, including any claim in relation to any
liability, loss or damage arising from any such claim after the Filing Date, or
any cause of action against the Company or its assets and property calculated
either as at the Filing Date,
or, in the case of claims under executory
contracts arising subsequent to the Filing Date as a result of the termination
of such contracts in accordance with an order of the Court made prior to the
date of the Meeting, as at the date of such termination
,
either:
(a) as set forth in a Proof of Claim which
has either:
(i) been admitted by the Company pursuant
to the Plan for all purposes; or
(ii) been determined by a Court of
competent jurisdiction to be a proper obligation of either or both of the
Company; or
(b) for which a valid Proof of Claim could
have been filed with the Company, but which Proof of Claim was not so filed
prior to the Claims Bar Date;
provided
that a Claim shall not include the amount due or accruing due to a Post Filing
Creditor in respect of Post Filing Creditor Claims, nor shall the Claim include
interest for the period subsequent to the Filing Date.
[Emphasis added]
The Reasons of the Chambers Judge
[6]
The
chambers judge held that Mr. Esaus claim for damages for wrongful dismissal was
a contingent liability at the Filing Date, and, as such, fell within the
definition of Claim in the Plan. She relied on two superior court decisions,
British Columbia (Director of Employment Standards) v. Eland Distributors
Ltd. (Trustee of)
(1996), 21 B.C.L.R. (3d) 91 (S.C.), and
Rizzo and
Rizzo Shoes Ltd. (Re)
(1991), 6 O.R. (3d) 441 (Gen. Div.), affd. (on other
grounds), [1998] 1 S.C.R. 27, in concluding that the claim for damages for
breach of Mr. Esaus employment contract accrued from the outset of his
employment, and was therefore a liability of West Bay at the Filing Date.
[7]
The
chambers judge ordered
that
Mr. Esaus claim
was a pre-filing claim and was compromised by the Plan. She permanently
stayed the action, and refused to grant Mr. Esau an extension of time to file a
Proof of Claim.
[8]
Her
reasons may be found at
West Bay SonShip Yachts Ltd. (Re)
, 2007 BCSC
1553, 37 C.B.R. (5th) 253.
Issues on Appeal
[9]
On
appeal, the parties joined issue on two alternative interpretations of the
definition of Claim in the Plan, under which Mr. Esaus claim for damages for
wrongful dismissal may be considered to be a pre-filing claim: if it was a
contingent liability at the Filing Date, or it was a claim under an executory
contract.
[10]
Thus,
there are two issues in this appeal:
1.
Is a
wrongful dismissal claim a contingent liability prior to the termination of
employment?
2.
Is an
employment contract an executory contract?
Analysis
Contingent Liability
[11]
Mr. Esau
takes the position that his claim for damages for breach of his employment
contract did not accrue throughout his employment, but only arose when he was
terminated. Thus, he argues, West Bay had no liability, contingent or
otherwise, until the termination of his employment, which occurred after West Bay filed for protection under the
CCAA
. Thus, he says, his claim for damages
is not compromised by the Plan.
[12]
West
Bay argues that while Mr. Esaus right to bring an action for damages for
wrongful dismissal may not have crystallized until notice of termination was
given, West Bays obligation to pay severance was in existence in whole or in
part as of the filing date. Thus, Mr. Esaus claim for damages for wrongful
dismissal is a pre-filing claim and is compromised by the Plan.
[13]
Both
Eland
Distributors
and
Rizzo and Rizzo Shoes
, relied on by the chambers
judge and West Bay, dealt with severance under employment standards legislation.
The present case, however, involves a common law claim for damages for wrongful
dismissal. As explored in three recent decisions of the British Columbia
Employment Standards Tribunal, citing the decision of the Supreme Court of
Canada in
Barrette v. Crabtree Estate
,
[1993] 1 S.C.R. 1027, this distinction is
significant.
[14]
In
Sitter
(
Re)
, [2000] B.C.E.S.T.D. No. 515 at paras. 11 and 14, the
adjudicator drew the following distinction between statutory and common law
claims:
Compensation for length
of service payable under section 63 of the [
Employment Standards
]
Act
is a form of deferred contingent compensation that is intended to compensate
long-serving employees for their years of service and investment in the
employer's business and for the special losses they suffer when their
employment ends
(see
Re Rizzo & Rizzo Shoes Ltd.
[1998] 1 S.C.R. 27
). Consistent with it being a service-based benefit, the
amount of compensation for length of service payable by an employer increases
in lockstep with an employee's tenure.
However, an amount payable in lieu
of [contractual] notice does not flow from services performed for the
corporation, but rather from the damage arising from non-performance of a
contractual obligation to give sufficient notice
(see
Barrette v.
Crabtree Estate
,
[1993] 1 S.C.R. 1027
).
Wages, as defined in section 1 of the
Act, includes monies payable as compensation for length of service. Since
compensation for length of service represents compensation for years of
service (see
Rizzo
, supra.) it is, in fact, deferred compensation that
is paid for work (see definition, section 1). On the other hand, damages for
breach of a contractual notice provision are not paid for work but, rather,
are paid (subject to mitigation) for non-performance of a contractual obligation
to give sufficient notice (
Barrette
, supra.). An employee's right to
sue for damages for breach of contract, even though the proper amount of
compensation for length of service has been paid to the employee, is preserved
by section 118 of the Act.
[Emphasis
added]
[15]
This
view was affirmed in
Rupert Title Search Ltd. (Re)
, [2003] B.C.E.S.T.D.
No. 70 at paras. 25 and 32, and in
Taylor
(Re)
, [2003]
B.C.E.S.T.D. No. 82 at para. 11. In
Rupert Title Search
, the Tribunal
described the statutory liability of an employer as
an
'earned' benefit to the employee that accumulates as the length of service of
the employee increases, and distinguished this length of service
compensation from common law damages for wrongful dismissal.
[16]
Sitter
,
Rupert Title Search
,
and
Taylor
were recently approved by this Court in
Colak v. UV
Systems Technology Inc.
, 2007 BCCA 220, 66 B.C.L.R. (4th) 373 at paras.
5-7. Madam Justice Huddart, for the Court, held that the Tribunals
understanding of the
Employment Standards Act
, R.S.B.C. 1996, c. 113,
and the distinction between statutory compensation payments and reasonable
notice under an employment contract merits respect. Common law claims for damages
for wrongful dismissal are distinguishable from statutory claims for severance
under employment standards legislation in terms of how they arise and are
calculated.
[17]
It is
not necessary for the purpose of this appeal to determine whether a statutory
claim for severance is properly characterized as a contingent liability prior
to termination of employment. For present purposes, it is sufficient to
conclude that
Eland Distributors
and
Rizzo and Rizzo Shoes
do not
assist in the analysis of Mr. Esaus claim.
[18]
The
first step in determining whether Mr. Esaus claim for damages for breach of
his employment contract represents a contingent liability is to consider the meaning
of that term. This was recently discussed by the Supreme Court of Canada in
Canada
v. McLarty
, 2008 SCC 26, [2008] 2 S.C.R. 79 at paras. 17
18, where Rothstein
J. for the majority referred to the well-accepted test for a contingent
liability as that described by Lord Guest in
Winter v. Inland Revenue
Commissioners
,
[1963] A.C. 235
at
262 (H.L.):
I should define a contingency as an event which may or may
not occur and a contingent liability as a liability which depends for its
existence upon an event which may or may not happen.
[19]
Similarly,
Blacks Law Dictionary
, 8
th
ed. 2004, defines contingent
liability as a liability that will occur only if a specific event happens; a
liability that depends on the occurrence of a future and uncertain event.
[20]
For
financial reporting purposes, threatened and pending litigation are considered
to be contingent liabilities of a company:
Institute of Chartered
Accountants Handbook
, looseleaf (Toronto: Canadian Institute of Chartered
Accountants, 1981) at s. 3290; Errol C. Soriano,
Understanding
Financial Analysis in Litigation
(Scarborough: Carswell, 2004) at 64-65;
Levy-Russell
Ltd. v. Shieldings Inc.
(2004), 48 B.L.R. (3d) 28 at para. 126 (Ont. S.C.J.
[Commercial List]). That is, threatened or pending litigation is characterized
as a contingent liability. Actual liability will arise only when there is a judgment
against the company.
[21]
The
question that arises in this case is whether the existence of a contractual
obligation, and the corresponding potential for a claim for damages for its
breach, is a contingent liability of the party who may commit the breach. I
conclude that, although there is the potential of a claim for damages, there
can be no liability, contingent or otherwise, where there is no present cause
of action. That is, until there is a breach of contract, there is no legal
basis for any claim or any corresponding liability.
[22]
This
conclusion finds support in the following definition of liability from
Royal
Trust Co. v. H.A. Roberts Group Ltd.
, [1995] 4 W.W.R. 305 at para. 119 (Sask. Q.B.):
These statutory provisions [s. 125(1) and (3) of
The
Land Titles Act
] envisage three kinds of obligations that can be secured by
a registrable mortgage: a debt, a loan, or a liability that is future or
contingent. No case was cited to me that clarifies what is meant by these terms
used in s. 125.
The term liability is a broad term and is most often used
to describe an unliquidated or unspecified legal obligation which arises due to
negligence, breach of contract, etc.
The term debt is a narrower term and
means a specific kind of obligation for a liquidated or certain sum incurred
pursuant to an agreement. The term loan is even narrower and means a specific
type of debt. [emphasis added]
[23]
Further
support can be found in the American case of
Grant-Howard Associates v.
General Housewares
, 472 N.E.2d 1 at 3-4 (N.Y. 1984), approved in
Climatrol
Industries Inc. v. Fedders Corp.
, 501 N.E.2d 292 at 294-295 (Ill.App. 1
Dist. 1986), in the context of a product liability claim:
An uninjured party simply is not a
contingent liability in the usual sense of that term (see, e.g., Blacks Law
Dictionary [5
th
ed.], p. 291 [A potential liability; e.g. pending
lawsuit]). There is no liability or claim before injury occurs.
Granted
that contingency invokes uncertain events, the uncertainty should be
restricted to the success of asserting an existing claim, rather than expanding
it to include the altogether unpredictable event that an injury will occur.
[emphasis
added]
[24]
I
conclude that the liability to pay damages if an employment contract is
breached for failing to give reasonable notice of termination is not a
contingent liability within the ordinary meaning of that term. Until the termination
of employment without adequate notice, there is no injury. The possibility of
a breach of contract is not sufficient to give rise to a contingent liability.
[25]
Therefore,
Mr. Esaus wrongful dismissal claim did not accrue from the outset of his
employment and it did not represent a contingent liability of West Bay at the Filing Date. Consequently, Mr. Esaus claim is not a pre-filing claim on this
basis.
Executory Contract
[26]
West
Bay
argues in the
alternative that Mr. Esaus contract of employment was an executory contract.
As a result, it maintains that his claim for damages for its termination after
the Filing Date and before the date of the meeting of General Creditors to
approve the Plan on June 12, 2006 (the Meeting), was a Claim within the
meaning of, and compromised by, the Plan. It says that the characterization of
an employment contract as an executory contract is consistent with the legal
definition of executory contracts and the purpose of the
CCAA
.
[27]
Mr.
Esau submits that when his employment contract was terminated it was not an executory
contract because the only remaining performance to be tendered was the payment
of money. He cites in support of his argument
re U.S. Metalsource Corp.
,
163 B.R. 260 at 269 (Bankr. W.D. Pa. 1993), in which it was held that where the
only obligation of the debtor was the obligation to pay severance pay to
terminated employees, [t]his type of contractual duty to pay a debt is
insufficient to create an executory contract.
[28]
If
the contract was an executory contract at the Filing Date, however, a claim
arising subsequent to that date as a result of termination of the contract is a
Claim as of the date of termination. That is, if Mr. Esaus contract of
employment was an executory contract at the Filing Date, his claim for damages
for wrongful dismissal, arising as a result of his termination subsequent to
that date and before the Meeting, became a Claim as of the date of
termination.
[29]
Thus,
the question is whether a contract of employment such as Mr. Esaus, under
which he promised to render services in return for West Bays promise to pay
him, was an executory contract at the Filing Date.
[30]
The
Alberta Court of Appeal recently considered the meaning of executory contract
in
Kary Investment Corp. v. Tremblay
, 2005 ABCA 273 at para. 19, 371
A.R. 339:
A contract is
said to be executory if anything remains to be done under it by any party
, and
executed when it has been wholly performed by all parties:
Halsbury's Laws
of England
, 4th ed. reissue, vol. 9(1) (London: Butterworths, 1998) at 341,
para. 606;
S. W. Mackay & Associates Ltd. v. Park Lane Ventures Ltd.
(1997), 32
B.C.L.R. (3d) 338
at para. 8 (S.C.)
.
[Emphasis added]
[31]
In
A
Joint Report of the Insolvency Institute of Canada and the Canadian Association
of Insolvency and Restructuring Professionals Joint Task Force on Business
Insolvency Law Reform March 15, 2002
, the authors cited the following
meanings for executory contract:
What is an executory contract? Neither the CCAA
nor the BIA use the expression, but the United States Bankruptcy Code does in
s. 365 (Code, s. 365). In general contract law, executory contract means a
contract under which one or both parties still have obligations to perform.
However, in U.S. bankruptcy law the expression is normally given a narrower
meaning. According to the most widely accepted definition in the United States, an executory contract for the purposes of Code s. 365 is:
a contract under which both the
obligations of the bankrupt [A] under the contract and the other party to the
contract [B] are so far unperformed that the failure of either to complete
performance would constitute a material breach excusing the performance of the
other.
(Countryman, Executory
Contracts in Bankruptcy (1974) 57
Minnesota Law Review
439 (Part 1), at
460).
[32]
The
authors included an employment contract as an executory contract in this
sense. See also:
Debtors and Creditors Sharing the Burden: A Review of the
Bankruptcy and Insolvency Act and the Companies Creditors Arrangement Act
,
a Report of the Standing Senate Committee on Banking, Trade and Commerce,
November 2003, at 131, and Janis Sarra,
Rescue!: The Companies Creditors
Arrangement Act
(Toronto: Carswell, 2007) at 177-178, where employment
contracts were characterized as executory contracts in the context of the discussion
of insolvency laws. Professor Sarra noted (at 178-179) that damage claims
resulting from termination or repudiation of executory contracts after the
initial order are unsecured claims for damages.
[33]
None
of these sources discussed the application of the U.S. definition of executory
contract for bankruptcy purposes to an employment contract. It is not clear to
me, because of the nature of the employment relationship, that that definition
will generally apply. As a matter of contract law, if the employee fails to
provide the promised services, or the employer fails to pay for services
rendered, subject to any other terms of the contract, that would ordinarily be
a material breach excusing the performance of the other party. Whether that conclusion
would ordinarily apply to an employment contract is, however, a question I do
not need to decide for the purposes of this case. The ordinary legal
definition of executory contract covers these circumstances.
[34]
An ongoing
employment contract, under which an employee has promised to render services in
return for the employers promise to pay for those services, is an executory
contract as there are obligations on both parties that are yet to be
completed. Thus, Mr. Esaus employment contract was, at the Filing Date, an
executory contract.
[35]
Accordingly,
Mr. Esaus claim against West Bay for damages for wrongful dismissal fell
within the definition of Claim in the Plan.
[36]
That
Mr. Esaus rights arising on termination of his employment contract were
compromised under the Plan is consistent with the purpose of the
CCAA
, as
recently considered by this Court in
Skeena Cellulose Inc. v. Clear Creek
Contracting Ltd.
, 2003 BCCA 344, (sub nom.
Skeena Cellulose Inc. (Re)
)
13 B.C.L.R. (4th) 236 at para. 34:
[C]ourts appear to have given full effect to
the "broad public policy objectives" of the [CCAA], which in the
phrase of a venerable article on the topic (Stanley E. Edwards,
"Reorganizations under the Companies' Creditors Arrangement Act",
(1947) 25
Can. Bar Rev.
587) are
to "keep the company going
despite insolvency" for the benefit of creditors, shareholders and others
who depend on the debtor's continued viability for their economic success
.
As the author commented:
Hon. C.H. Cahan when he introduced the bill into
the House of Commons indicated that it was designed to permit a corporation
through reorganization to continue its business, and thereby to prevent its
organization being disrupted and its goodwill lost. It may be that the main
value of the assets of a company is derived from their being fitted together
into one system and that individually they are worth little. The trade
connections associated with the system and held by the management may also be
valuable. In the case of a large company it is probable that no buyer can be
found who would be able and willing to buy the enterprise as a whole and pay
its going concern value. The alternative to reorganization then is often the
sale of the property piecemeal for an amount which would yield little
satisfaction to the creditors and none at all to the shareholders.
Reorganization
may give to those who have a financial stake in the company an opportunity to
salvage its intangible assets. To accomplish this they must ordinarily give up
some of their nominal rights, in order to keep the enterprise going until
business is better or defects in the management can be remedied. This object
may be furthered by providing in the reorganization plan for such matters as a
shift in control of the company or reduction of the fixed charges to such a
degree as to make it possible to raise new money through new issues of bonds or
shares. It may therefore be in the interest of all parties concerned to give up
their claims against an insolvent company in exchange for new securities of lower
nominal amount and later maturity date.
[Emphasis added]
[37]
The
Plan permitted West Bay to rationalize its business affairs with a view to a
reorganization that would make it viable in the future. The stated purpose of
the Plan was to allow West Bay to settle payment of its liabilities arising
both before and after the Filing Date and to compromise the indebtedness owed
to Creditors of the Company on a fair and equitable basis (Plan, s. 2.1). It
needed to retain its employees in order to complete existing orders for the
construction of yachts, and to use the sale proceeds from the yachts to fund
payments to its creditors on a compromised basis, on the basis that all of its
creditors would derive a greater benefit from the Plan than would result from
the bankruptcy of the Company and so as to allow the Company to continue in
business in the future. West Bays tangible assets were sold to a related
company to provide cash to further fund payments to creditors. It was intended
that the company would remain in business using a revised production financing
model, using private capital raised after the effective date of the Plan.
[38]
In
Skeena
, the issue addressed by the Court was whether the termination of replaceable
forest contracts, which could have disastrous consequences for many
individuals, local governments and communities, supplanted the intent and
purpose of the
CCAA
to stave off a bankruptcy. The Court upheld the
trial judges decision that terminated employees were not to be placed in a
better position than other creditors (at para. 22), and noted that [i]n the
exercise of their broad discretion under the CCAA, it has now become common
for courts to sanction the indefinite, or even permanent, affecting of
contractual rights (at para. 37). In considering whether the arrangement
under the
CCAA
, as a whole, was fair, reasonable and equitable, the
Court noted that equity is not necessarily equality and that the courts
looks to all of the creditors to see if rights are compromised in an attempt to
balance interests (at para. 59). The Court concluded (at para. 60):
As the Chief Justice noted, many individuals and
corporations, as well as the Province, incurred major losses under the Plan.
Each of them might also ask Why me? However, as he also noted, that is a
frequent and unfortunate fact of life in CCAA cases, where the only upside is
the possibility that bankruptcy and even greater losses will be averted.
Mr. Esaus Claim
[39]
Mr.
Esaus claim was thus subject to the terms of the Plan, which required
creditors to file a Proof of Claim in accordance with the procedure and
before the times set out in the relevant court orders. Mr. Esau did not file a
Proof of Claim at any time. He did not receive a Proof of Claim Package, as
did other creditors, providing notice to file a Proof of Claim. However, West Bay published the notice to creditors, as ordered by the court, in the Vancouver Sun, and
on its website. Mr. Esau was advised, through his counsel, that he was not
entitled to bring an action against the company because of the stay of
proceedings, that his claim as a creditor was compromised in the Plan, and that
he could apply for an extension of time to file a Proof of Claim.
[40]
In West Bays application that is the subject of this appeal, it sought an order extending the
time for Mr. Esau to file a Proof of Claim. It was only during the hearing of West Bays application that Mr. Esau took the position that the time should be extended.
[41]
The
chambers judge denied the application for the extension of time, after
considering the factors enumerated in
Blue Range Resources Corp. (Re)
,
2000 ABCA 285, 271 A.R. 138 at para. 26:
1.
Was the delay
caused by inadvertence and if so, did the claimant act in good faith?
2.
What is the
effect of permitting the claim in terms of the existence and impact of any
relevant prejudice caused by the delay?
3.
If relevant
prejudice is found can it be alleviated by attaching appropriate conditions to
an order permitting late filing?
4.
If relevant
prejudice is found which cannot be alleviated, are there any other
considerations which may nonetheless warrant an order permitting late filing?
[42]
She
concluded that the delay was significant, and was not caused by inadvertence.
She further concluded that permitting the claim would result in prejudice that
could not reasonably be alleviated (at paras. 32-36).
[43]
The
chambers judges decision to deny an extension of time to file a Proof of Claim
was discretionary, reviewable by this Court only if it was clearly wrong or has
worked a substantial injustice: see
Meuller v. Coronation Insurance
(1995), 12 B.C.L.R. (3d) 90 (C.A.).
[44]
Mr.
Esau has not shown that the chambers judges decision was clearly wrong, and
she was in the best position, as the judge supervising the
CCAA
proceedings, to weigh the relative prejudice to all parties if his claim was
allowed to be litigated while all other matters involving West Bays creditors had been finalized.
[45]
I see
no basis to interfere with the chambers judges decision not to extend the time
to file the Proof of Claim.
Conclusion
[46]
Mr.
Esaus claim for damages for wrongful dismissal was a claim under an executory
contract, and as such was stayed and compromised by the
CCAA
proceedings. There is no basis to interfere with the chambers judges decision
not to extend the time to file a Proof of Claim, nor to consider Mr. Esaus
claim for misrepresentation.
[47]
It
follows that I would dismiss the appeal.
The
Honourable Madam Justice Levine
I AGREE:
The Honourable Madam
Justice Rowles
I AGREE:
The Honourable Mr. Justice
Groberman
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
Blue Line Hockey
Acquisition Co., Inc. v. Orca Bay Hockey Limited Partnership,
2009 BCCA 34
Date: 20090203
Docket: CA035780
Between:
Blue Line Hockey
Acquisition Co., Inc.,
Northland Properties
Corporation,
Kery Ventures Limited
Partnership,
R. Thomas Gaglardi,
Ryan K. Beedie,
True North Hockey
Limited Partnership and
True North Arena
Limited Partnership
Appellants
(
Plaintiffs)
And:
Orca Bay Hockey
Limited Partnership,
Orca Bay Hockey Inc.,
Orca Bay Arena Limited
Partnership,
Orca Bay Arena Corp.,
John E. McCaw, Jr.,
Sportco Investments,
Inc.,
Sportco Investments
II, Inc.,
Francesco Aquilini
Aquilini Investment
Group, Inc.
Vancouver Hockey
Limited Partnership,
Vancouver Hockey
General Partner Inc.,
Vancouver Arena
Limited Partnership,
Vancouver Arena
General Partner Inc.,
Aquilini Investment
Group Limited Partnership,
Tri Power Developments
Limited Partnership,
0783612 B.C. Ltd. and
Vancouver Canucks
Limited Partnership
Respondents
(
Defendants
)
Before:
The Honourable Madam
Justice Newbury
The Honourable Madam
Justice Kirkpatrick
The Honourable Mr. Justice
Groberman
I.G. Nathanson, Q.C.
M.A. Clemens, Q.C.
R.D. Diebolt, Q.C.
S.R.
Schachter, Q.C.
Counsel for the Appellants
H. Poulus, Q.C.
H. Shapray, Q.C.
D.
Brown
Counsel for the Respondents
Place and Date of Hearing:
Vancouver
, British Columbia
December 9, 10, 11, 2008
Place and Date of Judgment:
Vancouver
, British Columbia
February 3, 2009
Written Reasons by
:
The Honourable Madam
Justice Newbury
Concurred in by:
The Honourable Madam
Justice Kirkpatrick
The Honourable Mr. Justice
Groberman
Reasons for Judgment
of the Honourable Madam Justice Newbury:
[1]
This appeal turns on the existence
or non-existence of a partnership among three Vancouver businessmen who worked
together for some months beginning in November 2003 towards the possible purchase
of a 50% interest in the Vancouver Canucks. The purchase was to be carried out
not by the three men themselves, but by a tax-effective entity to be formed
later. Negotiations with the vendors principal, Mr. McCaw, were long and
arduous. One of the three men, the defendant Mr. Aquilini, withdrew from the group
in March 2004. The remaining two continued their efforts, ultimately expressing
interest in buying 100% of the Canucks and General Motors Place (the Enterprise). Six months later, at the same time as their final proposal was in the
vendors hands, Mr. Aquilini began discussions directly with Mr. McCaw. In
very short order, Mr. Aquilini was able to reach an agreement for the purchase
of a 50% interest, and an option to buy the remaining 50% of the Enterprise. His former associates, the plaintiffs Messrs. Gaglardi and Beedie, claim that
in so doing, he breached a fiduciary duty owed to them as partners, either by
wrongfully competing against them for the very objective of the partnership, or
by appropriating a business opportunity belonging to it. Accordingly, they say
Mr. Aquilini holds his interest in the Enterprise on a constructive trust for
them.
[2]
A decade ago, such a claim would
have had little or no chance of success. Courts drew a bright line between intended
partnerships and those that had actually commenced carrying on business. The
authors of
Lindley on Partnership
expressed this principle the same way
in 1995 in their 17
th
edition as the authors of the 7
th
edition had in 1905:
An agreement between two or more persons to carry on
business at a future time cannot render them partners before they actually
start to carry on that business.
It is the carrying on of a business, not a
mere agreement to carry it on, which is the test of partnership
, hence the
importance of distinguishing between actual and contemplated partnerships. As
Lord Lindley put it:
Persons who are only contemplating
a future partnership, or who have only entered into an agreement that they will
at some future time become partners, cannot be considered as partners before
the arrival of the time agreed upon.
So long as an agreement to form a partnership remains
executory, no partnership will be created. Subject to the point noted in the
previous paragraph, intending partners will retain that status if the chosen
commencement date has not yet arrived or if some act still remains to be done
before the business can be commenced. Precisely the same principle applies as
between the promoters of companies, as will be seen hereafter. [At 1314;
emphasis added.]
[3]
However, the plaintiffs rely on
more recent case-law for the proposition that a single venture partnership was
formed in this case to pursue the acquisition of the Enterprise by a second
vehicle likely a limited partnership that in the end never came into
existence. Counsel referred to the first partnership as the pursuit partnership
and to the second as the acquisition partnership. The plaintiffs say that
although the three men never agreed on the shape of the ultimate transaction
that would be acceptable to them or even on whether each of them would ultimately
participate in it, there is now authority that supports the existence of a
pursuit partnership in the circumstances of this case. They cite the House of
Lords decision in
Khan v. Miah
[2000] UKHL 55, [2001] All E.R. 20 and
other cases involving the establishment of new businesses by two or more
persons, to show that it is not necessary for trading to have commenced for a
partnership to come into existence or for a duty of utmost good faith to arise.
[4]
The trial judge, Madam Justice
Wedge, found that no partnership of any kind came into existence in this case.
She found that the three men had had only an informal agreement to work toward
the formal arrangement. That agreement did not give rise to the legal
relationship of partnership with its onerous duties of loyalty and good faith.
Nor had the parties entered into a joint venture (a term she used to refer
to a contractual relationship that is not a partnership). Even if a
partnership or joint venture had existed, she found that Mr. Aquilinis
withdrawal had ended the relationship such that he was entitled to compete
against the remaining two. Nor, she found, had any maturing business
opportunity been developed by the group by the time he departed, so as to
import the application of a
CanAero
-like duty. (See
CanAero Service
Ltd. v. OMalley
[1974] S.C.R. 592, 40 D.L.R. (3d) 371.) Thus Wedge J.
stated in summary at paras. 5 and 6 of her reasons:
I have concluded that the relationship among Gaglardi,
Beedie and Aquilini was not one of partnership or joint venture. The
three pursued the acquisition of the Canucks without an agreement as to their
respective rights and obligations during the pursuit or the terms of a deal
they were ultimately prepared to accept. Each was free to leave the group
and pursue the opportunity on his own account without regard to the others.
Even assuming the relationship constituted a
partnership or joint venture, it ended when Aquilini gave notice of his
departure. Any fiduciary obligations arising from the relationship ended
at the same time. [At paras. 5-6.]
She
dismissed the plaintiffs claims in their entirety.
[5]
In their opening argument on
appeal, the plaintiffs provided us with a list of the errors they alleged were
made by the trial judge. This list was quite different from the list appearing
in their factum, but counsel for the defendants did not object. The revised
grounds of appeal were that the trial judge had erred as follows:
1. She misconstrued the nature of the common
venture;
2. She misapprehended the evidence as to the
nature of the common venture;
3. This led her to err in law in her
determination of the agreement required to constitute the partnership;
4. She erred in law in determining the
essential terms of the partnership contract;
5. She misconstrued the evidence and
overlooked relevant evidence; and
6. She erred in law in holding that, if the
parties were partners, Mr. Aquilini owed no fiduciary duty to the appellants
after his departure from the partnership.
It
will be evident that the first four grounds relate to the central question of
the existence of a partnership among Messrs. Gaglardi, Beedie and Aquilini. Although
the factors to be considered in such an enquiry are a matter of law, the
question of whether a partnership exists in a given instance is generally seen
as one of mixed fact and law: see
Lindley & Banks on Partnership
(18
th
ed., 2002) at 716.
[6]
The plaintiffs also challenged
various inferences of fact drawn by the trial judge, her analysis of the law
relating to partnerships set forth at paras. 33148 of her reasons, and her
application of the legal principles to the facts she found. Indeed, as his
oral argument unfolded, Mr. Nathanson on behalf of the plaintiffs left behind
the six stated grounds in favour of a more specific and integrated analysis of
the law relating to partnerships and fiduciary duty, and of the pursuit
partnership theory as a characterization of the relationship among Messrs.
Gaglardi, Beedie and Aquilini. Mr. Nathanson made it clear that his clients
were not advancing any argument based on breach of confidentiality of
information, and that unless he could persuade the Court that a pursuit
partnership existed, the appeal must fail. For the reasons that follow, I
have concluded that the trial judge was correct in her conclusions, and that therefore
the appeal must indeed fail.
FACTUAL BACKGROUND
[7]
The trial of this action occupied
several weeks, and the trial judges reasons, indexed as 2008 BCSC 27 and
reported at 40 B.L.R. (4th) 83, are long and detailed. They recount the
circumstances of the parties first discussions
inter se
; their negotiations
with Mr. McCaw and his representative, Mr. McCammon, of Orca Bay Hockey Limited
Partnership and Orca Bay Arena Limited Partnership (referred to collectively as
Orca Bay); the facts surrounding Mr. Aquilinis departure from the group of three
in March 2004; and his successful discussions with Orca Bay later that year. Because
of the length and complexity of the facts, I will not attempt to recount them in
these reasons but will assume the reader has read the trial judgment, and in
particular the narration at paras. 149362 thereof. I will use the same
terminology used by the trial judge in her reasons.
LEGAL FRAMEWORK
[8]
Wedge J. noted at the outset that
although challenges to credibility had been mounted by both sides at trial,
very few of her findings of fact required an assessment of credibility. (Para. 9.) At para. 38, she began her analysis of the legal framework of the case by
emphasizing that a partnership (defined by s. 2 of the
Partnership Act
,
R.S.B.C. 1996, c. 348 as the relation subsisting between persons carrying on
business with a view of profit) results from a
contract
between the
partners. As stated by the Supreme Court of Canada in
Porter v. Armstrong
[1926] S.C.R. 328:
Partnership, it is needless to say, does not arise from ownership
in common, or from joint ownership. Partnership arises from contract, evidenced
either by express declaration or by conduct signifying the same thing. It is
not sufficient there should be community of interest; there must be contract.
[At 329.]
[9]
Like any contract, Wedge J. observed,
a contract of partnership requires an offer containing all of the essential
terms and an acceptance of the offer, consideration, and the intention to
create legal relations. Here she quoted from
Whistler Mountain Ski
Corporation v. Projex Management Ltd
. (1994) 90 B.C.L.R. (2d) 283 (B.C.C.A.),
a case that did not involve a question of partnership; and
Surerus
Construction & Development Ltd. v. Rudiger
2000 BCSC 1746, 11 B.L.R.
(3d) 21 (B.C.S.C.), where the Court held that although the parties had
considered themselves partners and held themselves out as such, the essential
terms of the contract of partnership were lacking. (See also
Milroy v.
Klapstein
2003 ABQB 871, 24 Alta. L.R. (4th) 349.) Wedge J. also noted
Backman
v. Canada
2001 SCC 10, [2001] 1 S.C.R. 367, where the Court enunciated a
longstanding principle:
As
adopted in
Continental Bank
,
supra
, at para. 23, and stated in
Lindley
& Banks on Partnership
,
supra
, at p. 73: in determining
the existence of a partnership ... regard must be paid to the true contract and
intention of the parties as appearing from the whole facts of the case.
In other words, to ascertain the existence of a partnership the courts must
inquire into whether the objective, documentary evidence and the surrounding
facts, including what the parties actually did, are consistent with a
subjective intention to carry on business in common with a view to profit. [At
para. 25.]
[10]
The trial judge briefly noted the
three elements of the statutory definition of partnership and then turned to the
characteristics of a joint venture, which also has contractual underpinnings: see
Canlan Investment Corp. v. Gettling
(1997) 37 B.C.L.R. (3d) 140, 95 B.C.A.C.
16, at para. 35, and
Zynik Capital Corp. v. Faris
2007 BCSC 527, 30
B.L.R. (4th) 32. In the latter case, Tysoe J. (as he then was) held that a
memorandum of understanding between two parties that described the basic terms
of a venture pending the execution of a formal agreement, had not created a joint
venture. The parties had not agreed on the price they would pay for the asset
or even on the maximum price they would be willing to bid for it, and one of
the parties had reserved the right to conduct due diligence. In these circumstances,
the Court found, no concluded bargain had been reached. In summary, Wedge J.
observed in the case at bar that while the constituent ingredients of a partnership
differ slightly from [those] of a joint venture, both require as their
foundation a binding contract among the partners or joint venturers which
contains all the essential terms of the agreement between the parties. (Para. 67.)
A Partnership in This Case?
[11]
The trial judge reviewed the
evidence relevant to the existence of contractual underpinnings in this case at
paras. 171209 and 365391 of her reasons. The plaintiffs position was that
the three men had formed a partnership at the latest, by November 3, 2003 or if
not by then, within the ensuing days. Prior to their first meeting on
November 3, Mr. Gaglardi and Mr. Aquilini had been only slightly acquainted
through business dealings between their families. Mr. Gaglardi did not know
Mr. Beedie (whose name as a possible investor had been suggested to him by KPMG),
and Mr. Aquilini was barely acquainted with Mr. Beedie. After a couple of
preliminary contacts, the three met for dinner at a restaurant before a Canucks
game and chatted in general terms about the terms of a possible offer and how
much each might contribute in order to make a bid for a 50% interest in the
Canucks. (Paras. 189190.) At trial, Mr. Gaglardi was unable to recall any
specific discussion of partnership terms, even though he was familiar with
partnerships and partnership agreements. Mr. Beedie recalled that the three had
agreed each would own one-third of the interest they hoped to acquire, but had
not discussed other terms of partnership, either on November 3 or at any time
thereafter. (Para. 194.) The trial judge wrote:
Gaglardi testified that between November 3 and 13,
2003, he had discussions with Beedie and Aquilini about the proposal they might
make to Orca Bay. It was understood that none of the three had the
authority to bind the others in any transaction.
They agreed that all
proposals would be in the form of expressions of interest. Before
any proposal could form the basis of a binding agreement with Orca Bay, a consensus was required among the three of them concerning its terms
.
There was no discussion among the three men as to the
terms they were ultimately prepared to accept in order to complete the
transaction. They did not discuss the upper limit of the price they were
ultimately prepared to pay for the Enterprise or the maximum interest they were
prepared to purchase. They deferred any decision on the actual
participants in the proposed transaction. Beedie, for example, did not
know whether he or his father would purchase the share on behalf of the Beedie
family. Aquilini did not know whether he would purchase his share
individually or as part of his family.
It was understood that once the transaction took
shape, each member of the group, in consultation with his family, was free to
decide whether or not to participate. Each would seek the approval of his
family as to whether to proceed with the transaction
. [At paras. 1968. emphasis added.]
Elsewhere, she stated that it
was understood each was free
at any time
to leave the group. (Para. 384.)
[12]
The three did agree to retain a
solicitor, Mr. Sehmer, and it appears they at least understood that each would
be responsible for one-third of his fees. However, neither Mr. Sehmer nor Mr.
Gaglardis advisor, Mr. McRae, brought up the matter of partnership or a partnership
agreement among the three men during their negotiations. Wedge J. found at
para. 204 that:
There was some discussion about governance within the
purchasing entity once the transaction was concluded. Beedie and Aquilini
favoured the suggestion that the three interest-holders each have a one-sixth
vote in the affairs of the partnership with McCaw. Gaglardis view was
that the acquiring entity should vote a 50% interest in the partnership with
McCaw. In general, the discussion focussed on governance concerning the
entity that would be formed to purchase the Enterprise once all of the business
terms had been negotiated.
There was no discussion about governance
among the three members of the group while they were advancing their proposals
to Orca Bay, with the exception of an agreement that Gaglardi would act as
spokesperson for the group
. [Emphasis added.]
[13]
Beginning at para. 365, the trial
judge addressed whether the evidence supported the pursuit partnership theory.
She found that it did not. At trial, neither Mr. Gaglardi nor Mr. Beedie had described
a partnership that would be distinct from the partnership that would acquire
the assets. In fact, Mr. Gaglardis evidence was that the two partnerships
were one and the same thing. (Para. 369.) When he was asked, for example,
whether when he had used the word partnership in his testimony, he had been
speaking colloquially, he answered:
A Well,
I don't know that I can agree with that because from the very beginning we
discussed and agreed to use a limited partnership or a general partnership
vehicle to do the deal. So, you know, from the first BLG meeting we had. So,
I mean, we were, in my view, partners in a partnership. And so I don't -- I
don't think I can agree with your characterization of it.
Q The
partnership that you have just mentioned, is that the partnership that was to
be the purchaser?
A Yes,
it's the entity that we, you know, would form to buy an interest in the
enterprise.
[14]
The trial judge noted the
importance of identifying the scope of the alleged partnership, as illustrated
by
Khan v. Miah, supra
. She purported to draw a distinction between
pursuing an ownership interest in the Enterprise and pursuing ownership with
a view to
acquiring
it. Apparently referring to the acquisition partnership,
she observed at para. 372 that since the objective of the three men was to
acquire
an interest in the Enterprise, they required (at a minimum) an agreement among
themselves as to the nature of their relationship, the rights and obligations they
shared as a result of the relationship, and the business terms with which each
of them was prepared to go forward to conclude a binding transaction involving
a $250 million asset. In fact, they had not agreed on the multitude of
business terms that would need to be settled, or on the price they would
ultimately be prepared to pay for the Enterprise. Nor had the identity of the
partners been settled, or even discussed even though the objective was to
form a partnership with Mr. McCaw, and he would only enter into a partnership
with individuals with whom he was convinced he could work. (Para. 387.) Finally,
the trial judge wrote in a passage that is critical to her conclusions:
The decision the three men reached in November 2003
was to defer any agreement on the essential terms of the transaction with Orca Bay to which they would be prepared to commit, as well as the terms pursuant to which they
would do business together as joint owners of the Enterprise.
The
conduct of the parties in the meeting of November 3, 2004 -- and thereafter --
is inconsistent with an intention to enter into legal relations. Rather,
it is consistent with an informal association created to explore the prospect
of a partnership with McCaw that would not result in binding, reciprocal
promises until the parties had identified and agreed to all of the terms of the
transaction
.
The parties manifested by their conduct after November
3, 2003 that while they shared a common interest in the opportunity, they
understood that any party could resile from the venture without
consequence. It is telling that when Aquilini told Gaglardi and Beedie in
March 2004 he was leaving the group, they did not suggest to Aquilini that he
was not free to walk away. They did not suggest at the time that Aquilini
was barred from pursuing the opportunity on his own. When Aquilini asked
to rejoin the group in August 2004, Gaglardi and Beedie understood they were
free to said no, and did so.
The objective of the three men was to become owners of
the Canucks and partners with McCaw in the operation of the Enterprise.
They
intended to enter into a partnership agreement at that time which would govern
the relationship among themselves and their relationship with McCaw
.
In the interim, theirs was simply an informal agreement to work toward the
formal arrangements. That agreement did not give rise to the legal
relationship of partnership with its onerous duties of loyalty and good faith.
[At paras. 38991; emphasis added.]
[15]
For substantially the same
reasons, she also found that no joint venture had been entered into by the
three men:
I
have concluded the evidence falls short of establishing a binding joint venture
agreement.
Not only was there no agreement as to the identity of the
parties that would hold the interest in the Enterprise, should it be acquired,
there was no certainty of subject matter because the scope of the acquisition
had yet to be determined
. The parties had yet to agree on the price
they would ultimately be prepared to pay and the host of other conditions that
required agreement in a complex acquisition of the kind they were
contemplating.
In short, the members of the group
had not agreed
to any of the terms necessary to bind themselves to one another in order to
complete a transaction with Orca Bay.
In summary, the relationship among Gaglardi, Beedie
and Aquilini was not one of partnership or joint venture. None owed
duties of loyalty or good faith to the others.
Each was entitled to
withdraw from the group at any time and pursue the opportunity for himself
.
[At paras. 398400; emphasis added.]
Post-Dissolution Obligations
The latter part of the trial
judges reasons dealt in the alternative with the consequences of Mr. Aquilinis
departure from the group, on the assumption that there
had
been a
partnership or joint venture. (At trial, the plaintiffs had taken the position
that the partnership continued in existence after Mr. Aquilinis departure, but
in this court, both the plaintiffs and defendants were content with the finding
that the partnership had indeed terminated in March 2004.)
[16]
In connection with the claim based
on
CanAero
, Wedge J. found that no maturing opportunity had been
developed by the three men at the time of Mr. Aquilinis departure. Each of
them had learned about the opportunity independently, before meeting the others,
well in advance of their starting to work together. (Indeed, Mr. Aquilini had
been interested in acquiring an interest in the Canucks for more than two years
before he met with the plaintiffs in November 2003.) Orca Bays wish to sell the Enterprise had been widely-known in the business community and it had announced
its willingness to disclose its financial information to any credible
potential purchaser. (Para. 411.) Each of the three men had signed individual
non-disclosure agreements with Orca Bay before being given access to such
information.
[17]
By the time Mr. Aquilini left the
group in early March 2004, very little progress had been made in the
discussions with Orca Bay for the purchase of a 50% interest. Things did not
improve after March. In July, Messrs. Gaglardi and Beedie decided to try a
different tack and to explore increasing the interest they would purchase and the
amount of cash they would pay on closing. At first, they discussed acquiring
75%, but later in the month, they prepared a Term Sheet that contemplated the
purchase of 100% of the Enterprise. The opening paragraph of this document made
it clear it was not a binding agreement, but was intended to set out the
principal business terms of an agreement to be negotiated and entered into upon
satisfactory completion of Purchasers due diligence and receipt of all
required assurances, approvals, rulings and consents. The Purchaser was to be
a limited partnership (yet to be formed) of which the general partner would be
a company controlled by the Gaglardi and Beedie family companies. Many terms
were left open, but by signing the Term Sheet on August 13, Orca Bay did agree
to deal exclusively with the two men until the termination by Purchaser of its
efforts to purchase the Enterprise; October 1, 2004; or the execution by all
parties of the Definitive Agreement, whichever first occurred. Mr. Gaglardi
and Mr. Beedie had some preliminary discussions about putting together the
partnership that would acquire the Enterprise. (Paras. 2734.)
[18]
In the late summer, Mr. Aquilini
called Mr. Gaglardi to enquire about coming back into the transaction. He was
told that Messrs. Gaglardi and Beedie were now pursuing the purchase of the
entire Enterprise. Mr. Aquilini expressed an interest in acquiring a 20%
share, but Mr. Gaglardi refused his overtures. (Para. 278.) Orca Bay set up a
data room, and having had a falling-out with Mr. McCrae, Mr. Gaglardi began
to perform the due diligence himself. It took several weeks. Drafts of the
Definitive Agreement raised longstanding points of contention and Orca Bays solicitor began redrafting it extensively. The exclusivity period expired but
no renewal was sought. At a meeting held on October 28 among Mr. McCammon, Mr.
Gaglardi and Mr. Gaglardis father, some personal differences between Mr.
Gaglardi and Mr. McCammon surfaced and Mr. McCammon said he could not recommend
Mr. Gaglardis most recent proposal to Mr. McCaw. (Para. 304.)
[19]
Meanwhile, Mr. Aquilini called Mr.
McCaw to express his interest in buying a 20% interest. Mr. McCaw said he
would consider this proposal, and Mr. Aquilini began to discuss possible terms
with his own solicitor, Mr. Knott. Mr. McCammon provided a proposal to Messrs.
Gaglardi and Beedie that was not acceptable to them, and they countered with a
proposal that Mr. McCammon, at least, took as their final offer. (Para. 324.) Following a conversation with Mr. Gaglardi on November 3, Mr. McCaw instructed
Mr. McCammon to begin discussions with Mr. Aquilini about the sale of 20% of
the Enterprise.
[20]
Mr. McCammon met with Mr. Knott
later that day. Their talks went well, but halted when Mr. Aquilini received
advice that the tax benefits of the transaction (presumably the ability to set
off losses against other income for tax purposes) would be available only if
there was a change of control of the Enterprise. (Para. 337.) Mr. Aquilini
and his brother discussed with their family the prospect of bringing their
offer up to 50% and arrived at a plan for financing that might make such a step
possible. The next morning, they met again with Mr. McCammon and proposed a new
deal. Mr. McCammon responded positively. At the end of the day, the
Aquilinis and Mr. McCammon signed an Investment Agreement with a proposed
closing date of March 8, 2005.
[21]
Mr. McCammon had spoken to Mr.
Gaglardi on November 4 and received a fairly negative reaction to the credit
terms Orca Bay had previously suggested. Mr. Gaglardi told Mr. McCammon that
he would speak to his lawyers and get back to him. (Para. 339.) On November 5,
after the Investment Agreement had been signed with the Aquilinis, Mr. McCaw
phoned Mr. Gaglardi to reject the counter-proposal that had been made by
Messrs. Gaglardi and Beedie, and to terminate negotiations with them. (Para. 345.) Mr. McCammon did not tell Mr. Gaglardi about Orca Bays agreement with the
Aquilinis, and Mr. Gaglardi suspected that Mr. McCaw was simply ending
negotiations as a bargaining ploy. The trial judge wrote:
Gaglardi
and Beedie suspected that McCaw had brought negotiations abruptly to an end as
a bargaining ploy, and, for that reason, they did not tell him they were
prepared to accept the October 30 proposal. Gaglardis evidence was that
they did not want to telegraph to McCaw that they would accept the proposal if
it was tabled. I view that evidence with some scepticism. If they
simply wanted McCaw to re-table the proposal so they could accept it, why not
simply tell McCaw it was acceptable? The evidence is more consistent with
the ongoing view of Gaglardi and Beedie, even in the face of McCaws withdrawal
from the negotiations, that the proposal was unacceptable. [At para. 355.]
[22]
It was not until several days
later that Mr. Gaglardi heard that Orca Bay was about to announce the sale of
50% of the Canucks. Subsequent conversations between him and Mr. Beedie on the
one hand and Orca Bay on the other took place, but the die was cast. The
Aquilini family closed their purchase of the 50% interest in March 2005 and
exercised the option to acquire the remaining 50% of the Enterprise the
following year.
[23]
The trial judge rejected the
plaintiffs argument that (assuming a partnership had existed) their proposed
purchase of the Enterprise had been a maturing opportunity at the time of Mr.
Aquilinis departure in March 2004:
The acquisition the three were pursuing at the time of
Aquilinis departure was one that held no attraction to Orca Bay. As at March 2004, the chances of acquiring an interest in the Enterprise were remote.
For that reason, Gaglardi and Beedie changed course and decided to advance a
proposal based on a very different ownership structure than the one advanced
while Aquilini was part of the group.
Any maturing business
opportunity did not materialize, at the earliest, until late July 2004 when
Gaglardi and Beedie began negotiating for 100% of the Enterprise
.
In short,
there was no ripening or maturing
opportunity that existed at the time of Aquilinis departure
. There
was no transaction begun but unfinished at the time of the partnerships
dissolution. Significantly, neither Gaglardi nor Beedie suggested
otherwise at the time Aquilini announced his departure from the group.
When asked whether the alleged partnership had any tangible or intangible
assets, Gaglardi said he could not think of any.
In conclusion,
Aquilini was not bound by any
fiduciary obligation to Gaglardi and Beedie when he entered into negotiations
with Orca Bay in late October or early November 2004
. [At paras. 4235;
emphasis added.]
[24]
With respect to the claim that Mr.
Aquilini breached a fiduciary duty in competing with the (assumed) partnership
by acquiring the very object it had pursued, Wedge J. found that from the date
of the termination, no member of the group owed fiduciary duties to the others.
She stated that former partners are free to compete with one another except as
constrained by s. 41 of the
Partnership Act
. (Para. 418.) Section
41(1) provides that subject to certain exceptions not relevant here:
after the dissolution of a partnership, the authority of each partner to bind
the firm and the other rights and obligations of the partners continue despite
the dissolution so far as may be necessary to wind up the affairs of the
partnership, and to complete transactions
begun but unfinished
at the
time of the dissolution,
but not otherwise
. [Emphasis added.]
The
trial judge did not regard the pursuit of the Enterprise as a transaction
begun but unfinished. If Mr. Aquilini had owed obligations to Messrs.
Gaglardi and Beedie post-termination, she said, they had owed similar
obligations to him, and if they had had ongoing rights to the opportunity in
question, so had Mr. Aquilini. (Para. 419.)
[25]
In the penultimate paragraph of
her reasons, Wedge J. summarized her conclusions as follows:
1) No
partnership or joint venture was formed between Gaglardi, Beedie and Aquilini
in November 2003 or at any time thereafter;
2) Even
assuming the three men entered into a relationship giving rise to fiduciary
duties, the relationship ended in March 2004 as did any fiduciary obligations
arising from it.
3) Aquilini
owed no duty to Gaglardi and Beedie to refrain from competing with them for the
opportunity to purchase the Enterprise, nor did he owe any duty to advise
Gaglardi and Beedie of his negotiations with Orca Bay.
4) Because
Aquilini owed no fiduciary duties to Gaglardi and Beedie, Orca Bays actions did not constitute knowing assistance. Orca Bay entered into negotiations
with Aquilini well after the expiry of the exclusivity period under the Term
Sheet, as it was entitled to do. [At para. 454.]
ON
APPEAL
[26]
As noted earlier, Mr. Nathanson
did not make specific reference in his oral submissions to the general grounds
of appeal provided earlier. Instead, he advanced various specific and overlapping
grounds, which I will try to deal with
seriatim
.
Ability to Withdraw Without Consequence
[27]
The most specific error, which I
take to raise a question of fact, alleged by counsel for the plaintiffs relates
to the trial judges finding at para. 384 that there was a common understanding
among the three men that each was free
at any time
to decide whether or
not to go forward
. Mr. Nathanson submits that this is inconsistent with the
finding at para. 198 that
once the transaction took shape
, each member
of the group, in consultation with his family, was free to decide whether or
not to participate. I do not agree that the two are necessarily inconsistent,
and in any event, the distinction may be more apparent than real. Certainly,
as Mr. Nathanson acknowledged, it would not be possible to obtain an order of specific
performance against one of the three who wished to withdraw before the shape
of the transaction was known, so as to force him to participate in negotiations
towards an objective in which he had no interest. (Nor, I suggest, would
damages be at all likely.) Counsel suggested that there might nevertheless
have been a contractual obligation to remain in the tent until later, but
could point to no evidence in this regard.
[28]
The trial judge found that the
most telling evidence was to the contrary the fact that when Mr. Aquilini did
withdraw from the group, neither Mr. Gaglardi not Mr. Beedie suggested to him
that he was not free to walk away. (Para. 390.) When Mr. Aquilini asked to
rejoin the group in August 2004, the trial judge said, the others understood
they were free to say no, and did so.
[29]
In all the circumstances, I am not
persuaded that she erred in finding that there was a common understanding that
each member of the group was free to leave at any time.
The Plaintiffs Evidence re Pursuit Partnership
[30]
The plaintiffs also take issue
with
the trial judges conclusion that their evidence was not
consistent with the pursuit partnership theory. (See para. 13 above.)
Counsel points to Mr. Gaglardis testimony that at the time of the first
meeting with Mr. Sehmer, the three businessmen had come together to pursue
an interest in the Enterprise as equal partners and that they intended to use
a partnership, either limited or general to roll the tax losses of the Enterprise
through to each of the partners. As well, counsel emphasized that Mr.
Aquilini did not object to Mr. McRaes referring to the three men as partners
at the meeting, and Mr. Gaglardis testimony that he was not using the word
partners at trial in a colloquial sense, given the intention to use a
limited partnership or general partnership vehicle to do the deal. In Mr.
Nathansons submission, this and similar evidence from Mr. Beedie shows that
the plaintiffs clearly differentiated between the pursuit partnership and the
vehicle that would ultimately acquire the Enterprise if the negotiations were
successful.
[31]
It is true, in my respectful view,
that the trial judge did not always distinguish clearly in her reasons between
the concept of a pursuit partnership and that of an acquisition
partnership. However, the evidence cited by the plaintiffs was simply not
probative of a pursuit partnership. The testimony of Mr. Gaglardi to which
counsel referred, focussed consistently on the acquisition partnership and made
no reference to an earlier partnership, either in name or conceptually. Mr.
Beedies testimony also contemplated that until the Enterprise was acquired,
we didnt have a business. Other facts, such as Mr. McCraes reference to
the three men as partners at the November meeting with Mr. Sehmer, were
consistent with either theory and did not advance the plaintiffs position
materially. As many courts have noted, the word partner is often used to
describe persons who are not partners at law: see
Ness Training Ltd. v.
Triage Central Ltd.
[2002] S.L.T. 675 (O.H. Scot.) at para. 17;
Bass
Clef Entertainments Ltd. v. HOB Concerts Canada Ltd
. (2007) 31 B.L.R. (4th)
255 (Ont. S.C.J.) at para. 52;
Perreault v. Churchill
[1994] Y.J. No.
121 (S.C.) at para. 19;
Interprovincial Heat Sales Ltd. v. Canada
(M.N.R.)
[2002] T.C.J. No. 632 (T.C.C.) at para. 34.
[32]
Ultimately, I am not persuaded the
trial judge was wrong in finding that the plaintiffs evidence did not support
the existence of a pursuit partnership.
Analysis of Pursuit Partnership
[33]
The plaintiffs more general challenge
to the trial judges conclusions stems from the distinction she drew at para.
370 between pursuing an ownership interest in the Enterprise and pursuing
ownership with view of acquiring it. The plaintiffs say this shows that the
trial judge did not accept the possibility of a pursuit partnership (a notion
the defendants note was not even enunciated by counsel for the plaintiffs until
late in the trial) or that she misunderstood the concept of a pursuit
partnership as distinct from the entity that would actually acquire the ownership
interest. While some consensus on the terms of acquisition that would be
acceptable to all three men might be necessary for the formation of the acquisition
partnership, and certainly the identity of the actual members of that vehicle
would have to be known before it could come into existence, Mr. Nathanson
submits there is no reason why a pursuit partnership could not be formed at an
earlier point for the purpose of pursuing and negotiating the terms of the Orca
Bay purchase an obviously uncertain and dynamic process.
[34]
Not surprisingly, the plaintiffs
relied strongly on
Khan v. Miah
and
similar cases in which
persons who have banded together to go into business have been found to be
partners even though only preparatory steps for the intended business have been
taken. It is important to note the facts of these cases carefully. They were
generally not concerned with the intention to enter legal relations or with
sufficiency of terms, but with the statutory definition of partnership, in
particular the requirement that the partners carry on business. In
Khan
,
the two respondents and the appellant had agreed they would be partners in a
restaurant business and had agreed on their respective roles in such business.
They found and leased suitable premises, borrowed money for the purchase of the
freehold, opened partnership bank accounts, and entered into various
commitments preparatory to the opening of the restaurant. The first target
date for the opening of the restaurant came and went. Problems arose among the
partners, leading to a breakdown in the relationship, which was found to have
determined on January 25, 1994. On that date the restaurant was not yet open.
The two respondents nevertheless carried on with their preparations and opened
the restaurant on February 14, 1994, before any accounts had been settled with
the appellant. He sued for a half-interest in the profits and capital of the
partnership.
[35]
There was no issue, then, that the
three had intended to enter a partnership. They had held themselves out as
partners and, in the words of the trial judge in
Khan
, had:
so
far advanced towards the establishment of such [a] restaurant as, in my
judgment, properly to be described as having entered upon the trade of running
a restaurant, albeit that it was yet to open and in the event was not opened
for a further two months or slightly more. [
Supra
, at 23.]
The
Court of Appeal reversed the trial court on the basis that as a
rule of law
,
parties to a joint venture do not become partners until trading actually commences.
(See [1998] 1 W.L.R. 477.) Relying on the difference between a contemplated
and actual partnership as described in
Lindley
(see para. 2 above), the
majority of the Court identified the partnerships business as the
carrying
on of a restaurant
. Since the restaurant was not open for business at the
time the relationship ended, the plaintiffs claim was found to be limited to
damages for breach of contract.
[36]
The House of Lords overruled the
Court of Appeal, taking the view that the majority of the Court of Appeal had
been guilty of nominalism. In Lord Milletts analysis:
They thought that it was necessary, not merely to
identify the joint venture into which the parties had agreed to enter, but to
give it a particular description, and then to decide whether the parties had
commenced to carry on a business of that description. They described the
business which the parties agreed to carry on together as the business of a
restaurant, meaning the preparation and serving of meals to customers, and
asked themselves whether the restaurant had commenced trading by the relevant
date.
But this was an impossibly narrow view of the enterprise on which the
parties agreed to embark. They did not intend to become partners in an existing
business
. They did not agree merely to take over and run a restaurant. They
agreed to find suitable premises, fit them out as a restaurant and run the
restaurant once they had set it up.
The acquisition, conversion and fitting
out of the premises and the purchase of furniture and equipment were all part
of the joint venture, were undertaken with a view of ultimate profit, and
formed part of the business which the parties agreed to carry on in partnership
together
.
There is no rule of law that the parties to a joint
venture do not become partners until actual trading commences. The rule is that
persons who agree to carry on a business activity as a joint venture do not
become partners until they actually embark on the activity in question. It is
necessary to identify the venture in order to decide whether the parties have
actually embarked upon it,
but it is
not necessary to attach any particular name to it. Any commercial activity
which is capable of being carried on by an individual is capable of being
carried on in partnership. Many businesses require a great deal of expenditure
to be incurred before trading commences. Films, for example, are commonly (for
tax reasons) produced by limited partnerships. The making of a film is a
business activity, at least if it is genuinely conducted with a view of profit.
But the film rights have to be bought, the script commissioned, locations
found, the director, actors and cameramen engaged, and the studio hired, long
before the cameras start to roll.
The work of finding, acquiring and fitting
out a shop or restaurant begins long before the premises are open for business
and the first customers walk through the door. Such work is undertaken with a
view of profit, and may be undertaken as well by partners as by a sole trader
.
[At 24; emphasis added.]
and:
The question in the present case is not whether the
parties had so far advanced towards the establishment of a restaurant as
properly to be described as having entered upon the trade of running a
restaurant, for it does not matter how the enterprise should properly be
described.
The question is whether they had actually embarked upon the
venture on which they had agreed
. The mutual rights and obligations of the
parties do not depend on whether their relationship broke up the day before or
the day after they opened the restaurant,
but on whether it broke up before
or after they actually transacted any business of the joint venture
. The
question is not whether the restaurant had commenced trading, but whether the
parties had done enough to be found to have commenced the joint enterprise in
which they had agreed to engage. Once the judge found that the assets had been
acquired, the liabilities incurred and the expenditure laid out in the course
of the joint venture and with the authority of all parties, the conclusion
inevitably followed. [At 25; emphasis added.]
[37]
Counsel referred us to three trial
decisions in this province, one affirmed by this court, in which ventures
have split apart or have been effectively abandoned by one or more members
before the intended business could be established, but partnerships have been found
to exist. Most notably, in
Davis v. Ouellette
(1981) 27 B.C.L.R. 162,
two men with experience in the mining industry entered into a written agreement
to carry out the mining of certain property, which provided for the sharing of
net profits between them. Originally, they were interested in the tailings of
a former mine, but samplings carried out by the two men proved much more
promising with respect to the mine itself. The two decided to make an effort
to gain control of the company that owned the mine. The trial judge, McEachern
C.J.S.C., found that from that point, they were equal partners in this venture.
The defendant was able to obtain an option to acquire a control block of the
company for $500,000 and the two men set about raising funds to carry out the
purchase. Differences and misunderstandings arose between them about the
raising of the money, and in the words of the Court, each went his own way in
attempting to put a deal together. Eventually, a shelf company controlled by
the defendant acquired the control block and the plaintiff acquired a lesser
number of shares. He sued for an equal share of the partnerships profits.
[38]
Again, it appears there was no
question as to whether a partnership had existed. The issue was whether it had
terminated, and if so, when. The Chief Justice noted s. 35 of the
Partnership
Act
, para. (c) of which provides that a single venture partnership is
dissolved by the termination of the venture. He observed:
One of the difficulties in these cases is to analyze
what happened in a legal context when that is not likely the way the parties
themselves regarded their affairs. I doubt if they addressed their minds to the
subtleties of a continuing partnership particularly after they abandoned the
tailing operation, although, in a general sense, they described their
relationship in terms of partnership. Certainly, they did not have different
kinds of partnership in mind and they did not have in mind the difference
between a partnership at will and a partnership for a single adventure or
undertaking.
I cannot find any agreement between the parties to
terminate the partnership, and no notice of termination was ever given. As this
partnership was entered into for a single adventure or undertaking, it must
have continued until that single adventure or undertaking was terminated: s.
35(
b
). [At 172.]
[39]
Since both partners had walked
away from [the project] as a partnership undertaking, however, he ruled that
the single adventure or undertaking
had
come to an end at some point.
He noted that on dissolution, each partner must make a full and complete
disclosure of all partnership affairs and that a partner who obtains partnership
assets secretly must hold what he has acquired from such assets in trust for
his partner. (At 174.) At the same time, he declined to apply
CanAero,
finding
that the possible acquisition of control of the company in this case could
hardly be described as a maturing business opportunity. He explained:
At
the time the partnership came to an end these parties only had a plan, although
the potential for success improved dramatically in October 1978 when Mr. Kehler
became interested. The final scramble for funds just before the acquisition
demonstrates the uncertainty under which the matter continued right up to the
date of the final closing in July 1979. These matters are always a question of
degree, and while certainty is not required,
it would be unrealistic to
think that the project was anything close to a sure thing, or even a likely
thing, at any time before the partnership terminated
.
I accordingly find that the plaintiff is not entitled
to 50 per cent of the defendant's share position in the company. [At 176.]
[40]
A more recent decision, post-
Khan,
relied on by the plaintiffs was
Scragg v. Lotzkar
2004 BCSC
1447, 49 B.L.R. (3d) 154, affd. 2005 BCCA 596, 10 B.L.R. (4th) 173. Notably,
the plaintiff and defendants in that case had agreed to engage in a venture
that would carry out a certain project in Victoria, not in a partnership but by
means of a management company to be formed by one of the parties. The two
defendants asked the plaintiff to become the sole director and president of the
company. He accepted the offer and left his existing job in Abbotsford, where
he had worked for the two defendants. Various delays were encountered and the
plaintiff, who needed income, moved to Edmonton where he found a job, assuring
the defendants he was ready to go [to Victoria] at any time. Eventually, one
of the defendants told him the project was not going to happen. In fact it was
completed by the others, without his participation. He sued for his share of
the management company, evidently relying on partnership law rather than
contract alone.
[41]
The defendants argued that
although they had had a business arrangement with the plaintiff, it had not
been a partnership, and that if it had been, the plaintiffs move to Edmonton had ended the relationship. The trial judge, Mr. Justice Bouck, found that
Khan
was analogous to the facts before him. In his analysis:
Applying that law to the facts in this case, it seems
clear that
the venture the parties agreed to engage in was to acquire the
BDL contract, the premises at 2111 Government Street, Victoria, and ultimately,
the equal division of shares in the Management Company
. They did so with a
view to profit. Therefore, they were in partnership. At one time or another,
Mr. Scragg assisted the partnership in getting the BDL contract and acquiring
the premises. Mr. Scragg's partners failed to meet their commitment to hire him
as a manager and allot him his proportion of the shares. [Para. 33; emphasis
added.]
[42]
On appeal, Ryan J.A. for this
court upheld the judgment in favour of the plaintiff on the basis that Bouck
J.s findings were reasonably supported by the evidence. Citing
Khan
,
she noted that the ultimate test was that formulated by Lord Millett namely
whether the parties [had] done enough to be found to have commenced the joint
enterprise in which they had agreed to engage. (Para. 30.) As well, she
quoted from
Lindley & Banks
,
supra
:
Clearly
not all preparatory acts will be sufficient for this purpose; equally, a single
act which involves
long-term commercial consequences
,
e.g
., the
acquisition of premises, may in itself be enough. [At 203; emphasis added.]
[43]
The facts of
Red Burrito Ltd.
v. Hussain
2007 BCSC 1277, 33 B.L.R. (4th) 205, were similar to those in
Khan
,
but again, with the added feature that the parties intended to incorporate a
company to carry on the intended business. They had entered into a Letter of
Understanding to convert a grocery business into a restaurant in Vancouver which would be owned and operated by the new company, in which they would be
equal shareholders. The defendant was tasked with overseeing renovations to
the future premises of the restaurant and arranging for the assignment of a
lease thereof to the company. Although the company was never incorporated and
the lease was never assigned, the restaurant did open in June 2006. Again,
however, problems arose between the parties and in August, the defendant locked
out the principals of the plaintiff. The latter had invested a substantial sum
of money in improvements and equipment for the business. After being locked
out, it received no income or benefit from the enterprise.
[44]
The trial judge, D. Smith J. (as
she then was) stated that a partnership is formed if parties to a venture go
into business together with a view to sharing the ventures profits. The
partnership exists even in the absence of an express agreement and even where
there is an agreement but all of the terms of the agreement have not been
completed, citing
inter alia,
Khan
. Then, turning to the
Partnership
Act
, she noted
Continental Bank Leasing Corp. v. Canada
[1998] 2
S.C.R. 298, where:
the
court discussed the essential elements of a partnership in the context of s. 2
of Ontarios then
Partnership Act
, which employed the same language as
s. 2 of the Act. At para. 22, the court listed the three ingredients
as: (i) carrying on a business; (ii) in common; (iii) with a view to
profit. It stated further at para. 23 that, [t]he existence of a
partnership is dependent on the facts and circumstances of each particular
case. It is also determined by what the parties actually intended.
The
indicia
of a partnership were set out at para.
24. They include the contribution of money, property, effort, knowledge,
skill or other assets to a common undertaking, a joint property interest in the
subject-matter of the adventure, the sharing of profits and losses, a mutual
right of control or management of the enterprise, the filing of income tax
returns as a partnership and joint bank accounts. [At paras. 278.]
[45]
Applying the common law and
statutory criteria for a partnership, Smith J. concluded that one had indeed existed
in
Red Burrito:
The Letter of Understanding expressly referred to the joint venture as a
partnership and the parties conducted themselves as one. Red Burrito and
Hussain planned to carry on business together, as evidenced by the Letter of
Understanding.
They acted on their plans by Red Burrito contributing
the start-up capital to the venture and by Hussain contributing the leasehold
interest. Both contributed effort, knowledge and skills. Both were
involved in the management of the joint venture
Red Burrito as the
managing partner and Hussain as the on-site manager.
The restaurant
was opened and the parties operated the business together from June 29, 2006
,
until on or about August 8, 2006, when Hussain unilaterally locked out the
principals of Red Burrito. During that period, the revenues from the
joint venture went to pay its expenses. It was clear the parties intended
to operate the business with a view to sharing in its anticipated profits. [At
para. 32; emphasis added.]
(See
also
Matthews v. Maurice
[1923] O.J. No. 11, 54 O.L.R. 64 (H.C.J.), where
at para. 14 the Court cited an older line of cases to show that
persons who
are promoters [of a company] may at the same time become so associated by
agreement that they are actually partners.)
[46]
There is no doubt that
Khan
and cases following it have broadened the meaning of carrying on business, but
they do not purport to eliminate that element of the statutory definition, nor to
do away with what the trial judge here referred to as the contractual
underpinnings of a partnership in particular the subjective intention to
carry on business in common with a view to profit. (
Backman
,
supra
,
at para. 25.) In the case at bar, no such intention was evidenced, either by
written agreement or by the parties conduct. Far from agreeing to acquire or
carry on a business, the parties had only a loose understanding that as long as
all three wished, they would hold exploratory talks with Orca Bay. Even that was not a binding obligation, since as the trial judge found, any of the
parties could withdraw at any time from the talks without legal consequence.
They were careful
not
to commit to anything except to the payment of
their lawyers fees in equal shares. They refrained from entering into any obligations
to third parties (again other than their lawyer). They did not make any actual
offer to Orca Bay, but simply advanced expressions of interest. They did not
enter a lease, establish an office, or borrow funds. There was no promise,
explicit or otherwise, to become jointly liable for obligations that they might
incur in connection with the acquisition. In the language of
Khan,
the
parties had not done enough to be found to have commenced the joint
enterprise. Most importantly, they had not agreed to engage in, or acquire, that
enterprise or any other.
[47]
Consistent with the lack of any
agreement of partnership, Mr. Aquilinis withdrawal was not met by any
suggestion that he was bound to continue as a member. Similarly, when he enquired
in August 2004 about being included again and was refused, he did not claim
that the other two were under any obligation to grant his request. There was
no legal consequence because the parties had not had, or evidenced, any
intention to bind themselves to carry on any business together. All three men therefore
remained free to pursue their own interests and did so.
[48]
In all the circumstances, it is difficult
to resist the defendants submission that the notion of a pursuit partnership
was an attempt to engineer around the uncomfortable fact the three men
throughout were discussing the prospect of as-yet-unidentified parties entering
into a transaction to purchase an as-yet-unidentified interest at an
as-yet-unidentified price and as-yet-unidentified terms at some indeterminate
date in the future. If one were to stretch
Khan
so as to infer a partnership
in this case, every two or more people engaging in exploratory discussions with
a third party about a transaction would be regarded as partners, with all the
duties and obligations that concept entails. Such a result defies commercial
sense. The reasoning of Sopinka J. for the majority in
Lac Minerals Ltd.
v. International Corona Resources Ltd
. [1989] 2 S.C.R. 574, seems
apposite:
the parties were not
simply negotiating an ordinary commercial contract but were negotiating in
furtherance of a common object. This factor does not particularly distinguish
negotiations in furtherance of any partnership or joint venture.
All such
negotiations seek to achieve a common object, namely the accomplishment of the
business venture for which the partnership or joint venture is sought to be
formed. I do not see how this factor can elevate negotiations to something more
.
[At 605
6
; emphasis
added.]
A View of Profit
[49]
Given the foregoing, I need not
decide finally whether it could reasonably be said that the pursuit partnership
(had one been intended, and had it embarked on business activity) was formed
with a view of profit. It does seem doubtful, however, that a partnership
that was never intended to acquire any assets, to receive any revenue, or to
carry on any activity other than negotiating on behalf of another tax-effective
vehicle, would meet the definition in s. 2 of the
Partnership Act.
(See
Lindley & Banks, supra
, at 2-08, quoted in the dissenting judgment in
Continental
Bank Leasing
,
supra
, at para. 43.) This point seems not to have
been raised in
Scragg
or
Red Burrito
,
supra
.
Other Partnership Issues
[50]
At some points in his argument,
counsel for the plaintiffs seemed to suggest that because a tax-effective
vehicle such as a limited partnership was to be formed at a later date to
acquire the Enterprise, the relationship among Messrs. Gaglardi, Beedie and
Aquilini from November 3, 2003 or thereabouts
must have been
a
partnership. This assumption may again rest on a misreading of
Scragg
and
Red Burrito
. They turned on findings of fact that although the
parties had intended ultimately to use a corporate vehicle to carry on
business, their conduct evidenced an intention to carry on business in the
meantime as partners,
and
that they had actually conducted such
business, broadly defined. For reasons I have already given, I believe the
trial judge was correct not to reach a similar result in this case. The other possibility,
which is more probable on the evidence, was that the three took a flyer at
exploring, very informally, the acquisition of the Enterprise together. They
delayed thinking about or forming a partnership until an acceptable deal had
been negotiated and they and their respective families had decided whether or
not to participate. At that point, it would make sense to incur the legal fees
and to take the time involved in the preparation of a limited partnership
agreement (if that was the vehicle ultimately decided upon) and to settle the
terms of governance of the acquiring vehicle.
[51]
Mr. Nathanson also submitted that
the trial judge conflated the requirement that parties to a contract, including
a contract of partnership, must intend to enter a binding agreement (the
requirement that there be a concluded bargain), with the requirement that the
bargain must settle everything that is necessary to be settled: see
May v.
Butcher
(1934) 2 K.B. 17 (H.L.) at 21, quoted by the trial judge at para.
66 of her reasons. In counsels analysis, the trial judge failed to find the requisite
subjective intention in this case
because
she did not find that
everything necessary to be settled had been settled. If the latter conclusion
was wrong, counsel suggested the former would also fall.
[52]
I agree with the plaintiffs that
it is not necessary, at least in a pursuit or single venture partnership,
for the members to agree on the price they would ultimately be prepared to pay to
acquire their objective, or on the other multitude of business terms that
they would eventually need to settle. A partnership is consensual in that its
members must intend and agree to carry on business together; but that does not
mean they must anticipate and resolve all questions that may arise in future in
the course of the partnerships business. Having said this, I do not read the trial
judges reasons in the way Mr. Nathanson did; and I believe the trial judge was
correct in finding that
both
the
animus contrahendi
and
sufficiency of terms were lacking in this instance. A consensus on retaining a
lawyer and appointing Mr. Gaglardi to lead the talks with Orca Bay fell far short of an agreement to carry on business together.
Fiduciary Relationship
[53]
Nor did the relationship found
by the trial judge resemble in any way the kind of relationship from which a
fiduciary duty would normally arise outside the established categories. I have
already noted that each of Messrs. Gaglardi, Beedie and Aquilini understood
that none could bind or commit the others in any way. This runs counter to s.
7(1) of the
Partnership Act
, which provides that a partner is an agent
of the firm and of the other partners for purposes of the partnerships
business. Of course, s. 7(1) would protect any outside party dealing with a
partner without knowledge of an internal prohibition, but the lack of agency is
nevertheless unusual in a relationship that is said to be fiduciary. Indeed,
in 1881, in
Cassels v. Stewart
(1881) 6 App. Cas. 64, Lord Blackburn
said of a partner that it is "because he is an agent that the fiduciary
character arises". (At 79; but cf.
Holme v. Hammond
(1872) L. Ex.
218, quoted in
Lindley & Banks, supra,
at 312.)
[54]
More modern authorities, both
academic and judicial, have emphasized other elements of fiduciary
relationships. Some suggest that such a relationship arises wherever one
undertakes to act in the interests of another: see in particular Austin W.
Scott, The Fiduciary Principle (1949) 37 Cal. L. Rev. 539 at 540, quoted by Leonard
I. Rotman,
Fiduciary Law
(2005) at 93. In
Hospital Products Ltd. v.
United States Surgical Core
[1984] 55 A.L.R. 417 (Aust. H.C.), Mason J.
stated:
The
critical feature of these relationships is that the fiduciary undertakes or
agrees to act for or on behalf of or in the interests of another person in the
exercise of a power or discretion which will affect the interests of that other
person in a legal or practical sense. [At 454.]
In
a similar vein, McLachlin J. (as she then was) wrote in
Norberg v. Wynrib
[1992] 2 S.C.R. 226, 92 D.L.R. (4th) 449 that:
Inherent
in the notion of fiduciary duty
is the requirement that the fiduciary have
assumed or undertaken to look after the interest of the beneficiary
Generally people are deemed by the law to be motivated in their relationships
by mutual self-interest. The duties of trust are special, confined to the
exceptional case where one person assumes the power which would normally reside
with the other and undertakes to exercise that power solely for the other's
benefit. [At para. 97.]
(See
also
White v. Jones
[1995] 1 All E.R. 691 (H.L.) at 713, cited by Rotman
at 95; and Kevin P. McGuinness,
The Law and Practice of Canadian Business
Corporations
(2002) at § 8.157.) In
Lac Minerals
,
supra
,
Sopinka J. stated that [t]he one feature
considered to be indispensable
is
that of dependency or vulnerability. (At 599.) A more comprehensive analysis
was of course carried out by Wilson J. in her well-known dissenting reasons in
Frame
v. Smith
[1987] 2 S.C.R. 99, where she suggested as a rough and ready
guide for the existence of a fiduciary duty the elements of (1) scope for the
exercise of a discretion or power; (2) the ability to exercise such power
unilaterally; and (3) a peculiar vulnerability, on the part of the affected
person, to the exercise of the power.
[55]
The concept of reasonable
expectations has also been relied upon by some courts as critical to the
imposition of a fiduciary duty. In
Lac Minerals
, La Forest J. stated in
his minority judgment that the starting point for ascertaining the existence of
the fiduciary obligation should be whether, having regard to all the facts and
circumstances, one party stands in relation to another such that it could
reasonably
be expected
that the other would act or refrain from acting in a way
contrary to the interests of that other. (At 663; my emphasis.) His Lordship
advanced the same argument in his majority judgment in
Hodgkinson v. Simms
[1994] 3 S.C.R. 377, 17 D.L.R. (4th) 161:
The
existence of a fiduciary duty in a given case will depend upon the reasonable
expectations of the parties, and these in turn depend on factors such as trust,
confidence, complexity of subject matter, and community or industry standards.
For instance, in
Norberg
,
supra
, the Hippocratic Oath
was evidence that the sexual relationship diverged
significantly from the standards reasonably expected from physicians by the
community. This inference was confirmed by expert evidence to the effect that
any reasonable practitioner in the defendants position would have taken steps
to help the addicted patient, in start contrast to the deplorable expectation
which in fact took place
[At 412.]
[56]
This is now well-tilled judicial
and academic ground (see, for example, the articles cited by P. Percell, at fn.
7 of Fiduciary Obligations or is it a Breach of Fiduciary Duty to Accept an
Appointment to the Bench? (2004) 28 The Advocates Quarterly
471.) At
the end of the day, no single litmus-test for fiduciary duty will meet all situations.
One falls back on the truism that the nature of the relationship will depend on
all the circumstances. As La Forest J. wrote after his lengthy review of the
law of fiduciary relationships in
Hodgkinson v. Simms
:
In summary, the precise legal or equitable duties the
law will enforce in any given relationship are tailored to the legal and
practical incidents of a particular relationship. To repeat a phrase used by
Lord Scarman, [t]here is no substitute in this branch of the law for a meticulous
examination of the facts; see
National Westminster Bank plc v. Morgan
,
[1985] 1 All E.R. 821 (H.L.), at p. 831. [At 4134.]
[57]
At the core of most fiduciary
relationships, however, is the idea of exercising a discretion that affects
another, and the expectation that this will be done in that others best
interests. Obviously, this is the opposite of the underlying premise of
commercial relationships. As Sopinka J. wrote in
Lac Minerals
, it is
rarely necessary to utilize what he called the blunt tool of equity in the
latter context. He quoted from an article by J. Kennedy entitled Equity in a
Commercial Context in P.D. Finn, ed.,
Equity and Commercial Relationships
(1987) as follows:
It
would seem that part of the reluctance to find fiduciary duty within an arms
length commercial transaction is due to the fact that
the parties in that
situation have an adequate opportunity to prescribe their own mutual
obligations, and that the contractual remedies available to them to obtain
compensation for any breach of those obligations should be sufficient.
Although the relief granted in the case of a beach of fiduciary duty will be
moulded by the equity of the particular transaction, an offending fiduciary
will still be exposed to a variety of available remedies, many of which go beyond
mere compensation for the loss suffered by the person to whom the duty was
owed, equity, unlike the ordinary law of contract, having [
sic
] regard
to the gain obtained by the wrongdoer, and not simply to the need to compensate
the injured party. [At 595; emphasis added.]
[58]
The parties in this case were experienced
businessmen who were familiar with partnerships and partnership agreements.
They had legal advice at the outset of their relationship. There was no
evidence that they discussed or assumed that each of them would act in the
others best interests, nor did any confer a discretion on another to act for
him, thus becoming vulnerable to that others discretion. None was empowered
to bind the others in their negotiations. In short, the facts as found by the
trial judge do not establish any of the usual hallmarks either of a partnership
or of a fiduciary relationship generally.
Post-Dissolution Obligations
[59]
Having concluded no fiduciary
relationship existed, it is unnecessary for me to consider at length the
plaintiffs arguments regarding the continuation of fiduciary obligations after
Mr. Aquilinis withdrawal from the group of three in March 2004. (As mentioned
above, both counsel before us took the position that if there had been a
partnership, it terminated at that time. I will proceed
arguendo
on
that assumption, although as evident from paras. 99114 of the trial judges
reasons, there is some uncertainty regarding the operation of s. 35(1)(c) of
the
Partnership Act
.) I do feel constrained to acknowledge some doubt on
my part concerning the trial judges conclusion that no breach of duty occurred
because no ripening or maturing opportunity existed in March 2004 that was
appropriated by Mr. Aquilini in November
.
First, it is not clear whether
the word maturing used by the Court in
CanAero
was intended to
restrict the scope of the corporate opportunity doctrine to opportunities that
are indeed ripe or a sure thing. Laskin J. (as he then was) himself stated
that the standards of loyalty to which the conduct of a director must conform
must be tested by many factors, including the position held by the director,
the nature of the corporate opportunity,
its ripeness, its specificness
,
the directors relation to it, the amount of knowledge he or she had, the
circumstances in which it was obtained, the time elapsed between the
termination of his or her relationship with the corporation, and the
circumstances of that termination. (At 620; my emphasis.) As well, his
Lordship said, new fact situations may require a reformulation of existing
principle to maintain its vigour in the new setting. (At 609.)
[60]
We were not referred to any
Canadian authority in which the question of maturity was directly addressed
post-
CanAero
although some courts have simply dropped the word
maturing without comment. U.K. courts have traditionally taken an absolute
view of the no-conflict rule, which does not place a great deal of emphasis on
a distinction between mature opportunities and others. Although some English
trial decisions did favour the maturing opportunity approach some years ago (see
Island Export Finance v. Umunna
[1986] B.C.L.C. 460 (Q. B.);
Balston
Ltd. v. Headline Filters Ltd.
(No. 2) [1990] F.S.R. 385 (H.C.J., Ch.);
CMS
Dolphin Ltd. v. Simonet
[2001] EWHC 415 (Ch.), the Court of Appeals recent
decision in
Bhullar v. Bhullar
[2003] EWCA Civ. 424, [2003] B.C.C. 711
reverted to the strict
Phipps v. Boardman
approach. (See [1966] 3 All
E.R. 721 (H.L.); see also Michael Hadjinestoros, Exploitation of Business
Opportunities: How the U.K. Courts Ensure that Directors Remain Loyal to their
Companies [2008] I.C.C.L.R. 70 at 75). In the U.S., the corporate opportunity
doctrine expanded long ago beyond the so-called interest or expectancy test and
now incorporates a line of business test and a fairness test. (See David Clayton
Carrad, The Corporate Opportunity Doctrine in Delaware: A Guide to Corporate
Planning and Anticipatory Defensive Measures, (1977) 2 Del. J. Corp. L. 1, Corporate
Opportunity, (1961) 74 Harv. L. Rev. 765, and Rotman,
supra
, at 4356.)
[61]
If and when the point is ever
argued, then, a Canadian court might well take the view that the appropriation
of an opportunity belonging to a corporation by a director or former director
merits equitable intervention even where the opportunity is not a mature
one. Certainly if one were to imagine that Messrs. Gaglardi, Beedie and Aquilini
had formed a corporation of which they all became directors, that they participated
in the management of its business and carried on negotiations with Orca Bay to
purchase the Enterprise or an interest therein, and that Mr. Aquilini then resigned
and six months later, bought the Enterprise for himself, an argument could be
made that his conduct offended the corporate opportunity rule notwithstanding
the proposed changes to the transaction made by Messrs, Gaglardi and Beedie
after his withdrawal. In this type of situation, the rule against conflicts of
interest ensures that those persons exercising control of a corporations
affairs will do so free of any taint of self-interest. As noted by Professor
K. P. McGuinness,
supra
, at § 8.158:
Although fiduciary status is exceptional in the
commercial context, it is justified in the case of the relationship between the
corporation and its directors and officers on the obvious basis that they do
not deal with the corporation at arms length. On the contrary,
they are
the parties who have effective control over the corporation,
and because of
this fact there is a particular risk to the shareholders and other persons
interested in the corporation that their interests will be unfairly disregarded
unless the directors and officers of the corporation are held to the highest
standard of conduct that the law recognizes, namely the fiduciary standard of
honesty, selflessness and loyalty.
The risk to which the shareholders and
other interested persons are exposed arises as soon as the person achieves a
position of control.
Prior to that time there is no exceptional risk and
therefore no justification for imposing a fiduciary obligation, thus it has
been held that there is no such liability in the case of a director-elect.
[Emphasis added.]
A
similar argument could be made in the case of a continuing partnership, again
where the alleged fiduciary was involved in policy- and decision- making on
behalf of the partnership.
[62]
In the circumstances of the
instant case, however, the rationale for the corporate opportunity rule simply did
not arise. None of the group of three was entrusted to act for the others, none
was at the mercy of the others and none was bound by contract, by statute, or
in Equity to disregard his own interests and act in the best interests of the
others. This of course brings us full circle, since these are some of the
reasons why no fiduciary relationship was found in the first place.
Mr.
Aqulinis Conduct
[63]
Finally, I am not persuaded that
Mr. Gaglardi could reasonably have been lulled into a position of
vulnerability by Mr. Aquilinis expressed reluctance, for cash-flow reasons, to
contemplate a closing in early 2004, or by his request to rejoin the other two
in August of that year. On the contrary, Mr. Aquilinis request gave notice
that he was still interested in the Enterprise. In the absence of a fiduciary
duty, he was, as the trial judge found, just as entitled as the others to
pursue that objective in his own interest. It must also be said that a false
sense of security felt by Mr. Gaglardi as a result of Mr. Aqulinis request is
not the kind of vulnerability that would lead a court to infer the existence
of a partnership from and after November 2003.
[64]
In the result, I conclude that the
trial judge was correct to dismiss the plaintiffs claims. I would dismiss
this appeal, with thanks to counsel for their able arguments.
The Honourable
Madam Justice Newbury
I Agree:
The Honourable
Madam Justice Kirkpatrick
I Agree:
The Honourable
Mr. Justice Groberman
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
Wong v. Antunes,
2009 BCCA 60
Date: 20090203
Docket: CA036720
Between:
Frank Low Fat Wong on
his own behalf and as
personal
representative of the Estate of Stanley Wong,
and on behalf of Sau
Ying Wong and Lorna Wong
Respondent
(
Plaintiff
)
And
Paul George Antunes,
Transportaction Lease Systems Inc.,
and Ju Ling Catherine
Yen
Respondents
(
Defendants
)
And
The Attorney General
of British Columbia
Appellant
(
Respondent
)
Before:
The Honourable Madam
Justice Saunders
(In Chambers)
Oral Reasons for Judgment
A.K. Fraser
Counsel for the Appellant
W.T. Morley
Counsel for the Respondent, Frank Low Fat Wong
R.F. Hungerford
Counsel for the Respondent, Transporaction
Place and Date of Hearing:
Vancouver
, British Columbia
30 January 2009
Place and Date of Judgment:
Vancouver
, British Columbia
3 February 2009
[1]
SAUNDERS J.A.
: The Attorney General of British Columbia seeks leave
to appeal an order made December 19, 2008, by Mr. Justice Pitfield for
production to the plaintiff of materials disclosed to Crown counsel by members
of the Vancouver Police Department in connection with charges against the
defendant Paul Antunes. Those Reasons for Judgment are indexed at 2008 BCSC
1739. The Attorney General also seeks a stay of that order pending the
appeal.
[2]
The action is brought under the
Family
Compensation Act
, R.S.B.C. 1996, c. 126, by the executor of Stanley Wong, who
is the father of Mr. Wong. Stanley Wong was struck and killed by a motor
vehicle. The unidentified driver of that vehicle fled the scene.
[3]
The defendant Paul George Antunes
is charged with criminal negligence causing Mr. Wongs death. Those charges
have not come to trial yet and are scheduled for a time in October 2009.
[4]
The order of Mr. Justice Pitfield
was made under Rule 26(11) of the
Rules of Court
. That order provides
for production of documents held by persons who are not a party to the action.
[5]
The Attorney General is not
opposed to producing all of the material encompassed by the order, but says
production of some of it, being at least in part those portions of a police
file that have statements of witnesses, is subject to a claim for legal professional
privilege, or public interest immunity, and that the issue of production should
be deferred until completion of the criminal proceeding in order not to
jeopardize the prosecution of the criminal charge.
[6]
The respondent does not oppose the
leave application, or a stay, provided the plaintiff is not prejudiced in the
preparation for the trial, which is scheduled to take place before the criminal
trial, that is, he says the documents need to be produced by early summer, and
thus an appeal must be expedited. He seeks as well, as a term of an order,
that the Attorney General pay his costs in any event of the appeal on a
solicitor and client basis.
[7]
There is no dispute that the
proposed appeal raises an issue of importance to the practice. The application
of Rule 26(11) to a case involving criminal charges on the very subject matter
of the civil action, and the treatment of police investigation results in civil
proceedings while criminal charges are outstanding, is a matter of importance
to the practice generally, and clearly to this action. Further, the case has
that degree of merit that is required to obtain leave to appeal, and I will say
nothing more about the merits.
[8]
Likewise, if leave is granted the
stay should issue, as the disclosure could not be undone in the event the
appeal is successful. There are two issues, time and costs.
[9]
As to costs, there is precedent
for the order sought. In
Scotia
Mortgage Corp. v. Dhillon
, 2007
BCCA 485 (in chambers), an order of a similar nature was obtained. There Madam
Justice Ryan reviewed the authorities and said:
[15]
In my view it is open to a justice considering leave to determine the terms
upon which the appellant should be permitted to appeal. The order made in this
case follows the practice of this Court to grant leave, when appropriate, on
the condition that the appellant undertake the costs of the respondent in any
event. Such an order is appropriate to save the respondent taking on the
burden of the expense of an appeal when the appeal is a test case. A case may
be said to be such when the appellant is not particularly concerned about the
outcome of the case as between it and the respondent, but rather is concerned
about its impact on future litigation.
[10]
In my view, it is appropriate in
this case to order as a condition of obtaining leave and the stay that there be
no costs in favour of the Attorney General in any event of the appeal as
against the respondent, and that costs in favour of the respondent shall be
given on a solicitor and client basis in the event the respondent prevails.
[11]
On the question of timing of the
appeal, I am advised by the Registry that hearing dates are available in late
March and April. It seems to me that the motion book, tabs 1 12, can stand
for the Appeal Book and Appeal Record, and I would so direct. That means then
that the appellants factum could be filed promptly, and with filing the
respondents factum promptly some advantage could be taken of those dates,
thereby to provide the answer in a timely way in the event the order of Mr.
Justice Pitfield remains unchanged by this Court.
[12]
I look then to see what dates
might be proposed.
(discussion with counsel)
[13]
SAUNDERS J.A.
: The appellants factum shall be filed by February
27, 2009, and the respondents factum is to be filed within three weeks of that
time. If any adjustment needs to be made to those timeframes, of course,
counsel can apply in chambers.
The Honourable Madam Justice Saunders
|
COURT OF
APPEAL FOR BRITISH COLUMBIA
Citation:
British
Columbia Teachers' Federation v. British Columbia Public School Employers'
Assn.,
2009 BCCA 39
Date: 20090204
Docket: CA034975; CA034982
Docket: CA034982
Between:
British
Columbia Teachers Federation
Appellant
(
Petitioner
)
And
British
Columbia Public School Employers Association and
Attorney
General of British Columbia
Respondents
(
Respondents
)
And
Business
Council of British Columbia
Intervenor
- and -
Docket: CA034975
Between:
Hospital
Employees Union
Appellant
(
Petitioner
)
And
Health
Employers Association of British Columbia and
Attorney General of British Columbia
Respondents
(
Respondents
)
And
Business
Council of British Columbia
Intervenor
Corrected Judgment: The text of the
judgment was corrected
at paragraphs [9], [13], [17], and [59] on June 19, 2009
Before:
The Honourable Mr. Justice Mackenzie
The Honourable Madam Justice Levine
The Honourable Mr. Justice Frankel
J. Rogers, Q.C.
and M. Brown
Counsel for the British Columbia Teachers
Federation
C. Boies Parker
Counsel for the Hospital
Employees Union
K. Murray
Counsel for the British Columbia Public
School Employers Association
G.H. Copley, Q.C.
E.W. Hughes and
K. Wolfe
Counsel for the Attorney General of British Columbia
E. Harris, Q.C.
Counsel for the Health Employers Association
of British Columbia
E.F. Miller
Counsel for the British Columbia Labour
Relations Board
D. Sartison
and B. Korenkiewicz
Counsel for the Business Council of
British Columbia
Place and Date of
Hearing:
Vancouver, British Columbia
12-14 November 2008
Place and Date
of Judgment:
Vancouver, British Columbia
4 February 2009
Written
Reasons by
:
The Honourable Mr.
Justice Mackenzie
Concurred in
by:
The Honourable Madam
Justice Levine
The Honourable
Mr. Justice Frankel
Reasons for
Judgment of the Honourable Mr. Justice Mackenzie:
[1]
The appellants British
Columbia Teachers Federation (BCTF) and Hospital Employees Union (HEU)
challenge the definition of strike in s. 1 of the British Columbia
Labour
Relations Code
, R.S.B.C. 1996, c. 244 (the
Code
) on the ground
that it restricts their ability to engage in political protests and thereby infringes
their rights under s. 2 of the
Canadian Charter of Rights and Freedoms,
Part
I of the
Constitution Act, 1982
, being Schedule B to the
Canada
Act 1982
(U.K.), 1982, c. 11. The main challenge to the definition of
strike is based on the right to freedom of expression under s. 2(b) of the
Charter
but BCTF also advances submissions under ss. 2(c) and 2(d).
[2]
The BCTF and HEU staged
work stoppages to protest legislation interfering with their conditions of
employment. The work stoppages went ahead notwithstanding anticipatory
declarations of the Labour Relations Board (the Board) that the intended work
stoppages were strikes that contravened s. 57 of the
Code
. The
appellants
Charter
challenges followed. The appellants essentially
define a protest work stoppage as one directed at government action, in these instances
legislation, as distinguished from collective bargaining work stoppages aimed
at their direct public sector employers. For convenience I will refer to them
as protest strikes and collective bargaining strikes.
[3]
The definition of
strike in s. 1 of the
Code
was amended in 1984 to include all concerted
work stoppages that restrict production or services. Previously the definition
had been limited to strikes for a collective bargaining purpose. In short, the
amendment replaced a purpose based definition of strike with an effects
based definition, thereby extending it to include protest strikes. Section 57
of the
Code
prohibits strikes during the term of a collective agreement,
referred to as mid-contract strikes.
[4]
For the reasons that
follow, I have concluded that the effect of the strike definition infringes the
freedom of expression guaranteed by s. 2(b) of the
Charter
but the
infringement is justified under s. 1. There is no infringement of s. 2(c) or
s. 2(d).
Adjudicative Facts
[5]
On Friday, 25 January 2002, the
provincial government introduced three bills in the Legislature imposing a
collective agreement on the BCTF and modifying the terms of the HEUs
collective agreement. The three bills, Bill 27,
Education Services
Collective Agreement Act
, 2nd sess., 37th Parl., British Columbia, 2002 (Bill
27), Bill 28,
Public Education Flexibility and Choice Act
, 2nd sess.
37th Parl., British Columbia, 2002 (Bill 28
), and Bill 29,
Health
and Social Services Delivery Improvement Act
, 2nd sess., 37th Parl.,
British Columbia, 2002 (Bill 29), were passed by the Legislature and became
law on Monday, 28 January 2002. Bill 27 and Bill 28 designated education
as an essential service and precluded school boards and teachers from
bargaining class sizes as well as overriding other existing contractual
rights. Bill 29 modified the terms of HEUs existing collective agreement to
allow contracting out of work and restricting bumping and layoff rights.
[6]
The BCTF work stoppage occurred on
28 January 2002, the date Bills 27 and 28 were enacted. The HEU work stoppage
occurred on the anniversary date one year later, 28 January 2003. Both one day
stoppages contravened interim orders of the Board enjoining the work stoppages
obtained by the respective employer respondents, the British Columbia Public
School Employers Association (BCPSEA) and the Health Employers Association
of British Columbia (HEABC).
[7]
The circumstances of the BCTF
protest were summarized by Vice-Chair Saunders of the Board in his original
decision on the legality of the work stoppage: BCLRB No. B92/2004 (19 March
2004), at para. 10 (the BCTF Original Decision). Teachers throughout British
Columbia engaged in a concerted withdrawal of services following a request not
to attend work by the BCTF. A large majority of teachers chose not to attend
work, leading to widespread disruption of classes. The large majority of
students in the public school system did not receive instruction that day.
Teachers participated in protest rallies and demonstrations across the Province
but schools were not picketed. Participation by teachers was voluntary and no
disciplinary action was taken by the BCTF against non-participating teachers.
Teachers who did participate were paid $50 from the BCTF Collective Bargaining
Defence Fund. The BCTF Original Decision (at para. 185) estimated that
hundreds of thousands of students were likely affected and inferred that
thousands of parents of young children would have had to make alternative
arrangements for supervision. Vice-Chair Saunders declined to draw any
inference as to the extent of serious parental inconvenience or hardship in the
absence of evidence on that point.
[8]
The work stoppage by the HEU
members one year later was the subject of a separate hearing and decision by
Vice-Chair OBrien: BCLRB No. B64/2004 (24 February 2004) (the HEU Original
Decision). The parties filed an agreed statement of facts which summarized
the context of the protest and the details of the concerted work stoppage. At
about 6:00 a.m., without notice, HEU members put up picket lines at
healthcare facilities in the Lower Mainland. The HEU directed members
reporting for the morning shift into work to provide essential service levels
generally as determined by the Board for a 2001 healthcare dispute. HEU
members not designated essential were directed not to report for work and they
converged for a protest rally at Vancouvers Plaza of Nations. There were some
instances of picket line intimidation and at least one instance where a car
driven by a management employee was banged on by fists, as it entered
Childrens & Womens Hospital. As a result of the work stoppage and picket
lines, elective surgeries were cancelled and services to patients were
disrupted. Patients, physicians and non-HEU staff had difficulty gaining
access to hospitals and delivery of hospital supplies, including
pharmaceuticals and oxygen, was impeded. Picket lines came down shortly after
noon and the work stoppage ended by the commencement of the afternoon shift at
4:00 p.m.
The Procedural History
[9]
The Board issued its interim
orders on an expedited basis in advance of the work stoppages, deferring a
hearing on the merits. The BCTF and the HEU raised the
Charter
challenge to the definition of strike and the Supreme Court directed that the
constitutional issues be addressed first by the Board. The Board held separate
hearings resulting in the HEU Original Decision and the BCTF Original Decision,
upholding the injunctions. The BCTF and the HEU applied to the Board for
reconsideration. The Board granted leave and, following a hearing before a
three member panel, dismissed the applications in a decision indexed at BCLRB
No. 395/2004 (17 December 2004) (the
Reconsideration Decision
)
,
Associate Chair Fleming
dissenting with respect to the BCTF order.
[10]
Both the BCTF and the HEU
petitioned for judicial review of the Boards orders. The petitions were heard
together by the chambers judge. They were dismissed with reasons dated 20
March 2007, indexed at 2007 BCSC 372.
[11]
The reasons of the several Board
members and the chambers judge varied on the
Charter
issues. Both
original decisions characterized the work stoppages and related activity as
political protests that were strikes as defined by the
Code
and, as
mid-contract strikes,
prima facie
prohibited by s. 57. Both
Vice-Chair OBrien in the HEU Original Decision
and Vice-Chair Saunders
in the BCTF Original Decision concluded that the protests involved expressive
activity within the meaning of s. 2(b) of the
Charter
and the strike
prohibition infringed s. 2(b) rights. They differed on whether or not the
infringement was justified under s. 1. Vice-Chair OBrien concluded that the
definition of strike was largely justified but a complete prohibition was
overbroad. In her view, the
Charter
required an exception for the occasional
day of protest types of political protest strikes that do not undermine the
integrity of the labour relations regime and do not have a significant adverse
impact on the public interest. However, she also concluded that the picketing
activity by HEU members was inconsistent with the nature of constitutionally
protected political protest strikes and excluded from protection.
[12]
Vice-Chair Saunders in the BCTF
Original Decision concluded that an exception as outlined by Vice-Chair OBrien
was unworkable and the adverse effects of protest strikes justified their
complete prohibition during a collective agreement.
[13]
The reconsideration panel agreed
without further detailed analysis that protest strikes can be distinguished
from collective bargaining strikes and that the work stoppages in issue were
political strikes with a free expression dimension that engaged s. 2(b) of the
Charter
.
They addressed the s. 1 issue Is a complete prohibition of mid-contract
protest strikes justified under s. 1 of the
Charter
? The majority
agreed with Vice-Chair Saunders that a complete prohibition was justified, with
Chair Mullin adding the caveat that any exception that might be recognized in
the HEU circumstances of a unilateral drastic legislative modification of an
existing collective agreement was a matter for the courts.
Associate Chair Fleming
dissenting with respect to the BCTF order, agreed
with Vice-Chair OBrien that a day of protest type exemption to a general
prohibition was constitutionally required.
[14]
The chambers judge accepted that
the protest strikes involved expressive activity but, contrary to the Board
consensus, she concluded that it did not engage s. 2(b) protection. In
the alternative, she concluded that any infringement was justified under s. 1.
Accordingly she dismissed the petitions for judicial review.
[15]
On 8 June 2007, the Supreme Court
of Canada delivered judgment in
Health Services and Support Facilities
Subsector Bargaining Assn. v. British Columbia,
[2007] 2 S.C.R. 391, 2007
SCC 27 (
Health Services
), declaring that certain sections of Bill 29
infringed health care employees right to a process of collective bargaining
under s. 2(d) of the
Charter
and that the impugned provisions failed the
test of minimal impairment under s. 1. A similar challenge by the BCTF to
Bills 27 and 28 is at the pre-trial stage of litigation.
The Legislative History
[16]
The issues are raised
against a background of the legislative history of the definition of strike in
British Columbia. The current definition is the result of an amendment to the
Labour
Relations Code,
R.S.B.C. 1979, c. 212 in 1984. The definition now reads;
"strike"
includes a cessation of work, a refusal to work
or to continue to work by employees in combination or in concert or in
accordance with a common understanding, or a slowdown or other concerted
activity on the part of employees
that is designed to or does restrict or
limit production or services
, [
]
[Underlining added]
The
pre-1984 definition limited strikes to work stoppages for the purpose of
compelling employers to agree to terms and conditions of employment.
[17]
The current definition of strike
accords with the definition of strike in the
Canada Labour Code
, R.S.C.
1985, c. L-2, s. 3(1) and the labour relations statutes of six other provinces:
Industrial Relations Act
, R.S.N.B. 1973, c. l-4, s. 1;
Labour
Relations Act
, R.S.N.L. 1990, c. l-1, s. 2(v);
Labour Relations Act
,
S.O. 1995, c. 1, s. 1(1);
Labour Act
, R.S.P.E.I. 1988, c. L-1, s. 7(1)(l);
Labour Code
, R.S.Q. c. C-27, s. 1(g);
Trade Union Act
, R.S.S.
1978, c. T-17, s. 2(k.1).
[18]
Under the earlier definition, a
Board panel chaired by then-Chairman Paul Weiler concluded that a work stoppage
by electrical workers protesting a federal anti-inflation program was not a
strike as then defined because the purpose was not employer related:
BC
Hydro
&
Power Authority v. International Brotherhood of Electrical
Workers Locals 258 & 213, et al.,
[1976] B.C.L.R.B.D. No. 71 (
BC
Hydro
). The Board noted the definition of strike was of long standing in
British Columbia, and that it contrasted sharply with the Ontario definition
which was expressly directed to the effects of a concerted work stoppage as designed
to restrict or limit output. The Board concluded that the contrast between a
purpose based and an effects based definition was a matter of legislative
policy and it was not for the Board to stretch the British Columbia wording to
accord with an effects based result. The Board noted that the purpose
definition was integrated with other provisions of the
Code
that would
have to be revised if an effects based test was substituted, otherwise such
innocuous activity as a small group of mining company employees unilaterally
taking time off work together to go fishing would contravene no-strike
provisions. The Board recognized that the exclusion of protest strikes not
directed at employers was the primary difference between the BC and Ontario provisions.
[19]
The purpose based definition in
British Columbia can be traced to the federal
Industrial Disputes
Investigation Act,
S.C. 1907, c. 20
made applicable in British Columbia
by the
Industrial Disputes Investigation Act,
S.B.C. 1925, c. 19. It
was continued in revised labour relations statutes enacted in 1937, 1947, 1954,
and 1973. In 1983, political protests organized by the Solidarity Coalition in
opposition to a broad package of legislative initiatives culminated in
widespread work stoppages in the education and other public sectors. The Board
refused to declare the work stoppages to be strikes, relying on its earlier
decision in
BC Hydro
that political protest work stoppages fell outside
the purpose based definition:
Pacific Press
Limited and
Vancouver-New Westminster Newspaper Guild, Local 115 et al
.,
[1985] B.C.L.R.B.D.
No. 140. The 1984 amendment followed.
Issues
[20]
The appellants raise the following
issues:
1. Does
the definition of strike, in conjunction with s. 57 of the
Code
,
infringe the appellants right to freedom of expression under s. 2(b) of the
Charter
?
BCTF also raises the issue of infringement of the rights of freedom of peaceful
assembly and freedom of association under ss. 2(c) and 2(d) of the
Charter
.
2. If
strike so defined infringes s. 2 rights, is the infringement a reasonable
limit prescribed by law as can be demonstrably justified in a free and
democratic society under s. 1 of the
Charter
?
3. Does
the engagement by some individual members of the HEU in some acts of
intimidation and violence exclude the entire protest strike from the protection
of s. 2(b)?
The Context of Public Sector Collective Bargaining and
Strikes
[21]
Before addressing the issues
directly, it may be of assistance to reflect briefly on the context of public
sector strikes. Public sector unionism is a relatively recent development in
the history of collective bargaining, gaining impetus beginning in the 1970s: Paul
Weiler,
Reconcilable Differences
(Toronto: Carswell, 1980) at 61-62. In
my view, public sector bargaining has a different dynamic than the system prevailing
in the blue-collar private sector which, according to Weiler, had by the end
of the 1970s become relatively mature. Government is intimately involved in
the delivery of public services by members of public sector unions. Government
revenues pay for the services and governments are accountable at the ballot box
for the quality and quantity of the services. Public sector employers are
formally the bargaining agents and the parties to the collective agreements
but, unlike private sector employers, they are substantially constrained by
government determination of available resources and policy. A public sector
strike has a different
impact
than
a strike in the private sector. Typically a public sector employer saves money
during a work stoppage. There may be little or no loss of revenue to the
employer, and it does not have to pay the wages of the striking employees. The
adverse impact is felt by the public in the interruption of public services;
the union objective is to influence the government to direct or allow the public
sector employer to make concessions. In that sense a public sector strike is
more a political than an economic weapon.
[22]
The appellants protest strikes
were political in the sense that they were aimed at the government but the
legislation they were protesting changed conditions of employment and overrode
collective bargaining processes. The protests illustrate the symbiotic
relationship between governments and public sector employers that blurs the
line between bargaining and politics.
Freedom of Expression Application of the
Irwin Toy
Analysis
[23]
The parties are agreed that the
standard of review of the chambers judges decision and the underlying
decisions of the Board is correctness.
[24]
Section 2(b) of the
Charter
guarantees freedom of expression as a fundamental freedom. The appropriate
analytical framework is outlined in
Irwin Toy Ltd. v. Qu
é
bec
(Attorney General),
[1989] 1 S.C.R.
927 (
Irwin Toy
). It sets out a two-stage approach to the issue of
whether a law infringes the right to freedom of expression. The first stage
addresses the question whether the activity affected by the law is expressive
activity presumptively protected by the s. 2(b) guarantee.
i)
Expressive
Activity
[25]
Any activity is expressive if it
attempts to convey meaning:
Irwin Toy
at 968. The chambers judge and
the Board all accepted that the conduct in issue was expressive activity, so
defined, and the purpose was political protest directed at an attempt to
influence government rather than their public sector employers.
[26]
The
Code
contains a broad
endorsement of free expression. Section 8 states:
8
Subject to the regulations, a person has the
freedom to express his or her views on any matter, including matters relating
to an employer, a trade union or the representation of employees by a trade
union, provided that the person does not use intimidation or coercion.
[27]
Free expression in a collective
bargaining context extends to leafleting, non-coercive distribution of
information at secondary sites for the purpose of discouraging purchase of an
employers products during the course of a strike or lockout.
U.F.C.W.,
Local 1518 v. KMart Canada Ltd.,
[1999] 2 S.C.R. 1083
(
KMart
)
held that non-coercive consumer leafleting was protected under s. 2(b) of
the
Charter
and could not be restricted under picketing provisions of
the
Code
.
Allsco Building Products Ltd. v. U.F.C.W., Local 1288P,
[1999]
2 S.C.R. 1136 followed
KMart
and relied on the New Brunswick equivalent of
s. 8 in the interpretation of the New Brunswick
Industrial Relations Act,
R.S.N.B.
1973, c. I-4 to exclude leafleting from picketing restrictions.
[28]
The chambers judge noted that the
BCTF protest strike was peaceful and it was not excluded from s. 2(b)
protection by reason of its method and location. She concluded that the HEU
protest strike was excluded because of the instances of picket line violence
and intimidation. The HEU accepts that the picket line activity is not within
the
Charter
guarantee. It contends that the picket line activity is
severable from the protest strike
per se
and that the strike activity
apart from picketing should not have been excluded. I will come back to this
issue later in these reasons.
[29]
The respondents and the Attorney
General do not challenge the conclusion that peaceful protest strikes meet the
first stage of the
Irwin Toy
criteria and involve expressive activity
presumptively not excluded from the s. 2(b) guarantee.
[30]
The second stage is whether the
purpose or effect of the law restricts freedom of expression.
ii)
Purpose
[31]
Irwin Toy
, at 971-73, distinguishes between restrictions aimed
at controlling content of expression or form of expression tied to content,
which trenches upon the
Charter
guarantee and restrictions aimed only at
control of the physical consequences of particular conduct not tied to content,
which does not. The appellants contend that the purpose of the amendment is to
restrict the right of unionized employees to participate in political protest.
The respondents and the Attorney General say that the purpose is to control the
consequences of mid-contract work stoppages, politically protest motivated or
otherwise. The chambers judge concluded that the purpose is to address the
disruptive consequences of mid-contract work stoppages.
[32]
While the appellants contend that
the prohibition curtails the ability of union members to attend protest rallies,
the restriction only affects their attendance during working hours. The
content and form of protest rallies is otherwise unconstrained.
[33]
The background to the 1984
redefinition of strike was widespread and escalating politically motivated work
stoppages as part of the Operation Solidarity protests in 1983. Mid-contract
production and services were disrupted. The 1984 amendment was a government
response. The objective apparent on the face of the 1984 definition is the
prohibition of mid-contract strikes that restrict services or production,
irrespective of purpose. No distinction is made between collective bargaining
strikes and protest strikes. The emphasis is on the consequences of strike
action and not on the expressive purpose of the strike or the form of
expression tied to its expressive content.
[34]
In
Dunmore v. Ontario (Attorney
General
), [2001] 3 S.C.R. 1016, 2001 SCC 94, Bastarache J. (at para. 33)
stressed the difficulties of assessing legislative intent and discouraged
attempts to go behind the wording of a statute in search of a subjective
legislative intent. It is generally more appropriate to be guided by the
effects of the impugned provision. With that caution in mind, I do not read
the statements of the Minister of Labour and the Attorney General in the
Legislature, to which we have been referred, as inconsistent with the objective
of constraining the effects of work stoppages involved in political protests
and not the otherwise free expression of the protest. That is the purpose of
the redefinition of strike on the face of the wording. I agree with the
chambers judge that the purpose of the definition of strike does not trench
upon the s. 2(b) guarantee. I turn to the effects of the strike definition.
iii)
Effect
[35]
The chambers judge in considering
the effects of the mid-contract political strike prohibition emphasized the
contractual nature of the obligation to attend at the workplace during normal
working hours. She drew an analogy between union members under a collective
agreement and non-union employees under contracts of personal service. Neither
has a contractual right to unilaterally withdraw services. She observed that a
right to political expression has never been associated with a right to breach
employment contracts and political messages can be effectively communicated by
other means.
[36]
In my respectful view, the
chambers judges analysis fails to adequately reflect the effects of strike
action as an economic weapon to convey a message, particularly in the context
of the changing face of public sector employment.
[37]
Public sector unions have been
given the right to strike for collective bargaining purposes, apart from
essential services staffing requirements, and the political dimension of such
strikes cannot be ignored. Unlike the private sector, the primary target of
the strike weapon is the government and public opinion; the strike is in that
sense political. Theoretically a protest strike could be directed at a
political issue unrelated to employment but the instances where unions mobilize
their strike forces for a purely altruistic objective are likely to be rare.
Certainly it was not the case with the work stoppages at issue here. I accept
that the objectives were not restricted solely to the economic interests of
union members. No doubt teachers are genuinely interested in the effects of
class size on the quality of education as well as the personal burden of the
teaching load. Health care workers are properly concerned about the quality of
patient care as well as their job security and other directly-related
employment conditions. Motivations are mixed and strike objectives in the
public sector cannot be conveniently divided into political protest and
collective bargaining categories. In both cases, the strike exerts pressure
directed beyond the formal public sector employers to the governments that are
their masters. It is a form of effective expression that is curtailed by its
inclusion within the strike definition. In my view, the effect of the
mid-contract strike prohibition is a restriction on an effective means of
expressive action and for that reason alone, it trenches on the s. 2(b)
guarantee of free expression.
[38]
It is therefore necessary
to address the question of whether the infringement can be justified under s. 1
of the
Charter
.
Infringement of Freedom of Peaceful
Assembly
Charter
s. 2(c)
[39]
The BCTF submission
under this heading is linked to the rallies scheduled by the BCTF to protest
Bills 27 and 28. The BCTF contends that the strike prohibition infringes the
right of teachers to peacefully assemble at protest rallies. The chambers
judge agreed with Vice-Chair Saunders that there was no s. 2(c) infringement
because there was no restriction on the right to peacefully assemble away from
the workplace outside of working hours. In my view, in the context of the BCTF
protest, any s. 2(c) issue of infringement is subsumed under the issues related
to the right of free expression under s. 2(b). The fact that teachers went to
rallies when they withdrew their services is a means of expression but in this
case the withdrawal of services to engage in free expression is the central
fact rather than the means of expression at rallies or otherwise. I do not
think that the infringement issues are advanced by characterizing them as
issues of freedom of assembly as an alternative or in addition to infringement
of freedom of expression.
Freedom of Association
Charter
s.
2(d)
[40]
Collective bargaining
rights are included within the right to freedom of association protected by s.
2(b) of the
Charter
. Strikes are part of the system of collective
bargaining. In
Health Services
(at para. 75) McLachlin C.J. endorsed
the principle, taken from the dissenting reasons of Dickson C.J. in
Reference
re: Public Service Employee Relations Act (Alta.),
[1987] 1 S.C.R. 313 (the
Alberta Reference
), that the ability to form and organize unions,
even in the public sector, must include freedom to pursue the essential
activities of unions, such as collective bargaining and strikes, subject to
reasonable limits.
Health Services
overruled the opinion of the
Alberta
Reference
majority that the
Charter
guarantee of freedom of
association did not extend to collective bargaining. McLachlin C.J. did note
at para. 19 of
Health Services
that the issues did not concern the right
to strike.
In the
Alberta Reference
,
McIntyre J. concluded in separate reasons that a right to strike is outside
Charter
guarantees. He warned of the dangers inherent in attempting to determine the
limits of strike action as a matter of constitutional law (at 416-19). He
cautioned that the courts are ill-equipped to deal with the political, social
and economic questions that arise frequently in labour disputes. In his view, judicial
re-engagement in those disputes under a constitutional rubric would be a
retrograde step. Complicated and sophisticated questions would arise where
there would be no clearly correct answers and for which the courts are
ill-equipped to resolve.
[41]
Strikes remain an
integral feature of systems of collective bargaining in the private sector and they
have also become a feature of public sector bargaining in British Columbia. In
the light of
Health Services
, it is an open question whether a right to
strike is within the ambit of the freedom of association guarantee. For the
purposes of these reasons, I assume that a right to strike is included within
the
Charter
guarantee in principle. The question then is whether the
statutory restriction on the right to strike consequent on the 1984
redefinition is within reasonable limits.
[42]
The BCTF accepts that a
statutory prohibition of mid-contract strikes is a reasonable limitation in the
context of collective bargaining, but it contends that the prohibition ceases
to be a reasonable limit when extended to protest strikes. As discussed
earlier the boundary between collective bargaining strikes and protest strikes is
blurred. The BCTF and HEU protests were directed at legislation impacting the
collective bargaining process and part of Bill 29 was struck down because it
unjustifiably infringed
Charter
protection of that process. A similar
challenge to Bills 27 and 28 by the BCTF is pending. The appellants contend
that the difference between a collective bargaining strike and a protest strike
is that the former is directed at the employer and the latter at the
government. The associative dimension of the BCTF protest, as distinct from
its s. 2(b) expressive dimension is directed at an interference with free
collective bargaining, which is properly the subject of the s. 2(d) challenge
to Bills 27 and 28, rather than the strike issue.
[43]
In my view, the BCTF
Charter
challenge before us stands or falls on the issue of justification of the s.
2(b) infringement of freedom of expression. Infringement issues related to
freedom of association are properly addressed in the proceedings challenging
Bills 27 and 28, which are not part of this appeal.
[44]
I would not give effect
to BCTFs submissions on ss. 2(c) and 2(d) of the
Charter
. I turn to
the issue of justification of the s. 2(b) infringement of the guarantee of
freedom of expression under s. 1 of the
Charter
.
Justification of Infringement under s. 1 of
the
Charter
the
Oakes
Analytical Framework
[45]
The chambers
judge
addressed the s. 1 issue, in the event she was in error in her conclusion that
there was no s. 2(b) infringement.
[46]
The analytical
framework for determining whether a law infringing the
Charter
can be
saved under s. 1 as a reasonable limit is outlined in
R. v. Oakes
,
[1986] 1 S.C.R. 103, at 138-39. The objective of the law must be of pressing
and substantial concern. The means chosen by the law must be reasonably and
demonstrably justified under a three part test. The means must be rationally
connected to the objective. They should impair the right as little as
possible. Finally, there must be proportionality between the effects of the
chosen measures and the objective. The government has the onus of establishing
each of the
Oakes
components.
[47]
The BCTF submits that
principles of international law inform the
Charter
scrutiny of the
strike definition. In
Health Services
, McLachlin C.J. (at para. 20)
observed that collective bargaining is an integral component of freedom of
association in international law. BCTF and HEU were parties to complaints
concerning Bills 27, 28 and 29 under
Convention (No. 87) Concerning Freedom
of Association and Protection of the Right to Organize
, 68 U.N.T.S. 17 (
Convention
No. 87
). Report No. 330 of the committee investigating the complaints was
critical of the legislation but the thrust of the criticism was directed to the
adverse effects of the legislative intrusion into the collective bargaining
process: International Labour Office, Committee on Freedom of Association,
Report No. 330, Cases Nos. 2166, 2173, 2180 and 2196, "Complaints against
the Government of Canada concerning the Province of British Columbia",
I.L.O.
Official Bulletin, vol. LXXXVI
, 2003, Series B, No. 1 (Report No. 330).
That was also the focus of
Health Services
which declared much of Bill
29 to be an unjustified infringement of collective bargaining rights protected
by s. 2(d) of the
Charter
. McLachlin C.J. noted (at para 19) that
Health
Services
was not concerned with the right to strike and Report No. 330
did not comment on the protest strike dimension of the dispute. While Report
No. 330 and Convention No. 87 inform the collective bargaining rights aspects
of
Charter
guarantees they do not address the strike dimension.
[48]
The issues here are
framed in terms of the prohibition of mid-contract protest strikes generally,
but mid-contract is a controversial designation in the particular
circumstances because the contracts were not the result of normal collective
bargaining. The terms and conditions were imposed unilaterally by legislative
fiat over strong union opposition. The several opinions at the Board level
indicate that the Board members were troubled by the heavy handed nature of the
government intervention and understandably sensitive to the override of the
Codes
collective bargaining process. Neither the Board nor the chambers judge had
the benefit of
Health Services
where the HEU successfully attacked the
validity of much of Bill 29 on the ground that it unjustifiably infringed the
right to freedom of association under s. 2(d) of the
Charter
. BCTF is challenging
Bills 27 and 28 in similar litigation that is in the pre-trial stage.
Health
Services
decided that there were
Charter
limits to the Legislatures
power to override collective bargaining rights. That decision highlights the
fact that while the protests here were politically aimed at the government, the
subject of the protests had a central collective bargaining dimension
vulnerable to a
Charter
challenge on other grounds.
i)
Pressing and
Substantial
Objective
[49]
There is broad
agreement that the objective of the prohibition of mid-contract work stoppages
in the context of collective bargaining is to create certainty and stability in
the workplace during the term of a collective agreement. The appellants accept
the validity of the pre-1984 strike definition that prohibited mid-contract
collective bargaining strikes to prevent workplace disruption. The prohibition
of mid-contract strikes is balanced by the requirement that every collective
agreement must contain an arbitration provision to resolve mid-contract
disputes.
[50]
In
RWDSU v. Dolphin
Delivery Ltd.,
[1986] 2 S.C.R. 573, McIntyre J. (at para. 23) emphasized
the social costs of industrial conflict:
When
the parties do exercise the right to disagree, picketing and other forms of
industrial conflict are likely to follow. The social cost is great, man-hours
and wages are lost, production and services will be disrupted, and general
tensions within the community may be heightened. Such industrial conflict may
be tolerated by society but only as an inevitable corollary to the collective
bargaining process.
[51]
His observations were
made specifically in the context of picketing, which the appellants exclude
from their concept of limited
Charter
protection, but it has equal
application to disruptions caused by strikes apart from picketing. The
appellants accept that the right to engage in protest strikes is not unlimited.
From that fair concession it follows that at some point the disruption of
services and production caused by a protest strike must become a pressing and
substantial legislative objective. The strike definition satisfies the
Oakes
tests objective requirement.
[52]
The appellants note that the
definition of lockout was not amended when the strike definition was amended in
1984. The lockout purpose definition has been retained, limiting a lockout
to suspension of employment for the purpose of compelling employees to agree to
conditions of employment. They submit that the lack of symmetry is unfair as
it allows employers to engage in lockouts for non-collective bargaining
purposes. The hypothetical illustration advanced is an employer led shutdown
of businesses to support or protest the 2010 Olympics in Vancouver.
[53]
The chambers judge considered that
a political protest lockout was without historical precedent and improbable.
The 1984 amendment of the strike definition was a response to work stoppage
activity actual or threatened by employees and unions. There was no similar
apprehension concerning lockouts and redefining lockout simply to achieve
formal legislative symmetry would serve no practical purpose and could have
added unnecessary complications. Employers may be required to suspend or
permanently shut down operations and lay off employees for legitimate business
reasons unrelated to collective bargaining, and a broad effects-based
definition of lockout that fails to recognize the range of non-collective
bargaining reasons for lay-offs or terminations would be problematic.
[54]
The appellants also unfavorably
contrast the position of unionized employees, whose right to strike is
restricted, with non-union employees who are not so restrained by legislation.
This submission ignores the collective bargaining rights that unionized
employees are given under the
Code
. The
quid pro quo
of those
rights is regulation of the right to strike, including prohibition of
mid-contract strikes. Non-union employees have no
Code
protection and
employers would be free to exercise contractual remedies for breach. In my
view, there is no merit in the proposition that the prohibition of protest
strikes unfairly prejudices employees subject to a collective agreement in comparison
to non-union employees.
ii) Rational
Connection
[55]
A prohibition of all
mid-contract strikes is intended to curtail the disruption caused to services
or production caused by such strikes and therefore is rationally connected to
the laws objective.
[56]
The real issues of
justification are whether the complete prohibition of mid-contract strikes can
meet the tests of minimal impairment and proportionality.
iii) Minimal Impairment and
Proportionality
[57]
The BCTF acknowledges
that employers and the public must be protected against the more severe
effects of protest activities. Essentially it contends that a complete
mid-contract prohibition is overbroad and the limited work stoppages in issue
were within the limits of
Charter
protection. The BCTF submits that the
proper limits of legislative intervention are set by the wrongful action
model outlined in
R.W.D.S.U. Local 558 v. Pepsi-Cola Canada Beverages
(West) Ltd.,
[2002] 1 S.C.R. 156
,
2002 SCC 8,
(
Pepsi
).
In
Pepsi
, the Court held that
Charter
values required common law
limits on secondary picketing to be modified to accord with core principles of
collective bargaining. Secondary picketing is lawful at common law unless it
involves violence, intimidation or other tortious conduct. The Legislature may
modify the common law balance between free expression and protection of neutral
third parties provided limits on the
Charter
value of free expression
can be justified. The BCTF contends by analogy with peaceful secondary
picketing incident to a lawful strike that mid-contract protest strikes also
involve core principles that should be
Charter
protected provided they
are peaceful and avoid tortious or criminal conduct. Notwithstanding
Charter
protection, the BCTF raises the possibility that employers could invoke
grievance and arbitration procedures for breach of the collective agreement.
On this point Vice-Chair Saunders observed: It seems an odd rationale, to
declare legislation an impermissible infringement of
Charter
rights in
part because those same rights are adequately restricted elsewhere.
[58]
In my view, the
wrongful action model, while appropriate to regulate secondary picketing
ancillary to a lawful strike, fails to provide a practical test for strikes.
Under that model, peaceful protest work stoppages of indefinite scope and
duration could not be restrained in the absence of tortious or criminal
conduct. Accepting the BCTFs questionable assumption that
Charter
protection would not insulate protest strikes from breach of contract
grievances by employers, arbitral compensation remedies would be ineffective in
the public sector as employers would not typically suffer financial losses and
disciplinary suspensions would be a questionable and perhaps a
counterproductive deterrent. The harm to the public as third parties would be
outside the arbitral purview.
[59]
The HEU accepts that
political strikes may be curtailed to the extent that they result in undue harm
to the public. It suggests that notice of job action (absent in this case) and
staffing of essential services would address the risk of harm. The HEU
supports the opinion of Vice-Chair OBrien in the HEU Original Decision (at
paras. 218 -19) that a general prohibition against mid-contract strikes is
largely justifiable but overbroad to the extent that it prohibits short,
occasional political protest strikes which neither threaten the integrity of
the labour relations system nor have a significant adverse impact on the public
interest. Vice-Chair OBrien concluded that the disruption of medical
services caused by the one shift HEU work stoppage while undoubtedly causing
hardship to some individuals, did not pose a significant threat to the public
interest. Associate Chair Fleming on the Reconsideration Panel agreed with
Vice-Chair OBrien that limited mid-contract political work stoppages were
Charter
protected, with the caveat that reasonable notice of the work stoppage be
provided to the employer to permit an application to the Board in opposition.
[60]
Vice-Chair Saunders
rejected a
Charter
-based exception to the strike prohibition on the
ground that it would be too uncertain and unworkable: BCTF Original Decision at
para. 154. He addressed those considerations at paras. 135 to 154 of the BCTF
Original Decision. His view is summarized as follows:
151 My point in citing these examples is not to
be judgemental of this phenomenon one way or another. But in assessing the
viability of an exception to the strike definition or, conversely, the
Legislatures need for certainty in respect to it the reality of the
situation must be taken into account. Labour disputes (and political strikes,
to the extent that they are part of an ongoing conflict) are a type of economic
and political warfare. Each side uses various tactics to maximize its leverage
and achieve the best results. Neither side judges success at the end of the
day by the accuracy or objectivity of its communications during the conflict. The
purpose of those communications is not to present the most objective depiction
of matters, but to present the depiction most likely to cause relevant
individuals to believe or act in a manner favourable to one side or the other.
152 It is into this impassioned and essentially
political environment that a
Charter
-created exception to the strike
definition would be injected. The Legislatures compelling need for certainty
in this area is simply not compatible with the application of principled
case-by-case exceptions to the strike definition. And, as I stated earlier, in
my view a principled exception is the only kind of exception mandated by the
Charter
.
153 In conclusion, an exception for certain
political strikes would create far more uncertainty than the difficulty of
distinguishing between political strikes and collective bargaining ones which
the Ontario Board found prohibitive in General Motors. The
objective
of
a strike is typically ascertainable, because it is intended to compel a
reaction of some sort, and is less likely to do so if it is unclear at whom the
strike is directed and why it is taking place. Where the labour board can
identify what would end the strike, it can determine its objective. (See e.g.,
The
Government of the Province of British Columbia
, BCLRB No. 28/80, [1980] 2
Can LRBR 355;
Ontario Hospital Association
,
supra
.). This
approach is not available in the abstract balancing of interests that an
exception for certain political strikes would require.
[61]
The chambers judge
reached a similar conclusion at paras. 194 to 205 of her reasons. Vice-Chair
Brown agreed with the conclusion of Vice-Chair Saunders and emphasized the importance
of clear and practical tests for all those involved in collective bargaining to
provide certainty and stability in the workplace. In his view, the definition
of strike provided necessary bright line clarity for the benefit of the
participants. An indeterminate test would require hearings and adjudication in
particular cases, leading to undesirable uncertainty and instability in the
workplace.
[62]
Chair Mullin generally
agreed with Vice-Chairs Saunders and Brown although he considered that the unique
nature of the government rewriting of an existing collective agreement through
Bill 29 might support a
Charter
-based exception to the general
prohibition. Subsequently,
Health Services
has provided a
Charter
remedy for Bill 29, albeit by a different route.
[63]
The chambers judge considered
the boundary between collective bargaining strikes and protest strikes to be
uncertain. She quoted extensively from the opinion of the Ontario Labour
Relations Board in
General Motors of Canada Ltd.,
[1996] O.L.R.D. No.
2056 (at para. 199) emphasizing the definitional difficulty and supporting a
blanket prohibition of mid-contract strikes by the Ontario
Labour Relations
Act,
S.O. 1995, c. 1, irrespective of purpose, as a legislative response to
the objective of containing industrial conflict which was not disproportionate
to that goal.
[64]
There is general
agreement that at some point legislative intervention to restrict political
protest work stoppages is justified. The Legislature has imposed a standard
based on the effects of the work stoppage, one that is designed to or does
restrict or limit production or services. This can be fairly described as a
bright line test, leaving little ambiguity or discretion in the Board charged
with the supervision of its application. No distinction is made between
collective bargaining strikes and protest strikes and no question of
characterizing a strike as one or the other arises. Part 5 of the
Code
permits strikes by public sector unions, subject to certain essential services
staffing obligations, as part of the collective bargaining process with certain
pre-requisites and limits. Vice-Chair Brown referred to this as the controlled
strike/essential services model. The prohibition on mid-contract strikes is an
integral part of the labour relations scheme.
[65]
The test supported by Vice-Chair OBrien
and Associate Chair Fleming would protect protest strikes that do not
significantly affect the public interest. That standard is wide open to
differing conclusions. Here, the BCTF work stoppage deprived hundreds of
thousands of school children of one days educational instruction and the HEU
stoppage resulted in the cancellation of some elective surgeries and disrupted
some patient care, notwithstanding that the union provided essential service
staffing. Vice-Chair OBrien recognized that the HEU work stoppage
undoubtedly caus[ed] hardship to some individuals, but did not pose a
significant threat to the public interest. Associate Chair Fleming was of a
similar view that the BCTF work stoppage did not have a significant adverse
impact on the public interest. A patient whose elective surgery was cancelled
and parents whose routines were disrupted and whose children lost a days class
instruction likely would disagree.
[66]
The appellants contend that there
was no evidence presented to demonstrate harm caused by protest strikes to
support their prohibition as justified infringement. The chambers judge
concluded (at para. 198) that harm to school children entitled to a certain
level of educational services and to patients needing a certain level of health
care services could be inferred from the context of the work stoppages. There
was evidence that school instruction and patient care were disrupted by the
BCTF and HEU protest strikes and I agree that it can be inferred generally that
a collective work stoppage in the public sector will cause an adverse impact on
public services. An impact is obvious and self-evident. The variable will be
the degree of harm not harm
per se
. I do not accede to the appellants
evidentiary submission.
[67]
The leafleting cases protected
expressive conduct that did not involve harm to third parties. In
KMart
,
Cory J., writing for the court, emphasized (at para. 56) that the consumer
leafleting in issue was not coercive and left consumers free to choose without
being unduly disrupted by the message of the leaflets or the manner in which they
were distributed. It was not distinguishable from other forms of publicity and
communication of the message and was conduct that could not be restrained under
the common law. In
Allsco
, following
KMart
, the picketing
provisions of the New Brunswick
Industrial Relations Act
were
interpreted to exclude leafleting on s. 2(b)
Charter
grounds. Iacobucci
J. observed (at para. 28) that the freedom of expression protected by the
Charter
in leafleting was limited to the extent that those who are engaged in
persuasive expression have respected the right of those receiving the message
not to be coerced or intimidated into undertaking a particular course of
conduct. Peaceful protest strikes do not directly involve coercion or
intimidation but they nonetheless cause harm to neutral third parties through
the disruption of services. I do not think that the leafleting cases assist
the appellants position.
[68]
The difficulty is that significant
disruption of the public interest is a vague standard capable of a wide
variation in application. As Associate Chair Fleming observed, the concerted
withdrawal of services is a powerful and effective way of communicating a
political message. Its power and effectiveness is reinforced by its economic
weapon, the disruption of public services. There is an inherent tension
between the effectiveness of the protest strike and the disruptive impact on
the public. As Associate Chair Fleming summarized his position: If the harm
caused by the expressive activity is sufficient, the freedom of expression can
be overridden under a Section 1 analysis. Who is to decide how much harm is
sufficient? Attempting to draw a line at a point of
significant
disruption seeks a balance that is at best elusive. It tempts a weighing of
the merits of the protest against the harm to the public interest. The higher
the threshold of significant harm, the more powerful the protest. In my view,
this type of balancing is primarily a political policy judgment that is incompatible
with the neutral adjudicative function of labour boards and courts.
[69]
A majority of the Board expressed
serious reservations about its capacity to apply an indefinite standard in a
politically charged atmosphere, even with the benefit of the Boards
specialized expertise. The difficulty is particularly acute when the strike is
said to be a political protest outside collective bargaining norms. I agree
with the conclusion of Vice-Chairs Saunders and Brown and the chambers judge
that a vague test that leaves a wide discretion to the Board or the courts is
not compatible with
Charter
standards.
[70]
It is not clear from the
appellants submissions whether the jurisdiction to supervise
Charter
protected protest strikes would reside in the courts or with the Board. Either
way, supervision of protest strikes under a standard requiring case by case
evaluation would be particularly problematic. The warning by McIntyre J. in
the
Alberta Reference
about judicial re-engagement in the control of
strikes reflects the lessons of past experience. They reinforce the degree of
deference to be accorded to the Legislature in imposing limits on strike action
that avoid the exercise of judicial or administrative discretion. In my view,
the effects based definition of strike satisfies the requirements of minimal
impairment.
[71]
Unions and their members are free
to engage in protest activities outside working hours. The mid-contract strike
prohibition is limited in its restriction of those activities and proportionate
to the disruption of services or production resulting from the prohibited
strike activity.
[72]
As I have concluded that the
impugned definition of strike satisfies the
Oakes
test of justified
infringement under s. 1, it is unnecessary to address the BCTF submission,
relying on
Allsco
, that s. 57 of the
Code
be read down to exclude
protest strikes.
Conclusion
[73]
The pre-1984 definition prohibited
mid-contract collective bargaining strikes; the 1984 amendment extends that
mid-contract prohibition to strikes for any purpose. The right to strike when
no collective agreement is in force is maintained, subject to
Code
procedural requirements and essential services limits. The object of the
prohibition is the prevention of disruption of services or production. That
objective is pressing and substantial; the mid-contract prohibition is
rationally connected to that objective. The prohibition extends a limit that
is non-controversial in a collective bargaining context to a political protest
context. Means of free expression other than through work stoppages remain
unimpaired. The mid-contract prohibition meets the standard of minimal
impairment and is proportionate to the balance between free expression and
harmful impact. The indeterminate and politically charged dimensions of a
Charter
guarantee of limited protest strike action reinforces the validity of the
Legislatures imposition of a clear standard.
[74]
In the result, I conclude that the
impugned definition of strike, through its effects, infringes the guarantee of
free expression in s. 2(b) of the
Charter
but the infringement is
justified under s. 1. It follows that the HEU protest strike was properly
enjoined, independent of the picketing activity and the severance issue raised
by the HEU is immaterial. Accordingly, I would dismiss the appeals.
The Honourable
Mr. Justice Mackenzie
I AGREE:
The Honourable Madam Justice Levine
I AGREE:
The Honourable Mr. Justice Frankel
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
Donaldson v. John
Doe,
2009 BCCA 38
Date: 20090204
Docket: CA035019
Between:
Derek Blair Donaldson
Appellant
(
Plaintiff
)
And
John Doe, Pacific
Promotions Ltd.,
530077 B.C. Ltd.
carrying on business as the
Commodore Ballroom, and
Pensionfund Properties Ltd,
Christopher George
Briggs
Respondents
(
Defendants
)
Before:
The Honourable Madam
Justice Rowles
The Honourable Madam
Justice Prowse
The Honourable Mr. Justice
Frankel
D.G.
Cowper, Q.C. and K.A.J. Grist
Counsel for the Appellant
M.K. Skorah and D.R.
Mackenzie
Counsel for the Respondent
Pacific Promotions Ltd.
J.C. Taylor and K.R. Taylor
Counsel for the Respondent
Commodore Ballroom
Place and Date of Hearing:
Vancouver
, British Columbia
October 15, 2008
Written Submissions
Received:
October 21 and 27, 2008
Place and Date of Judgment:
Vancouver
, British Columbia
February 4, 2009
Written Reasons by
:
The Honourable Mr. Justice
Frankel
Concurred in by:
The Honourable Madam
Justice Rowles
The Honourable Madam Justice Prowse
Reasons for Judgment
of the Honourable Mr. Justice Frankel:
INTRODUCTION
[1]
This appeal concerns the liability
of commercial hosts who serve alcohol when someone is injured by an intoxicated
patron. This issue arises in the context of an Oktoberfest event at which
souvenir glass beer mugs were distributed to patrons. After the event ended and
the patrons had left the host premises, one of the patrons was permanently
injured when struck in the eye by a beer mug held by another patron.
[2]
Following a trial, Mr. Justice
Bernard of the Supreme Court of British Columbia, held that neither the
promoter of the event, nor the owner of the venue, owed a duty of care to the
injured party. As a result, he dismissed the claims against them. However,
with the agreement of the parties, he fixed damages at $350,000.00: 2007 BCSC
557, 72 B.C.L.R. (4th) 111.
[3]
For the reasons that follow, I
have concluded that both the promoter and the owner owed a duty of care to the
injured party. However, I would decline to pronounce in detail on the standard
of care because, regardless of what standard of care is appropriate, there are
evidentiary gaps in the injured partys case that make it impossible to affix
either the promoter or owner with liability. I would, therefore, dismiss the
appeal.
FACTUAL BACKGROUND
[4]
On the evening of Saturday,
November 27, 1999, Pacific Promotions Ltd. held an Oktoberfest event at the
Commodore Ballroom on Granville Mall, in downtown Vancouver, British Columbia.
Coincidentally, this was the night before the Grey Cup football game was to be
played in Vancouver.
[5]
David Frinton, the sole
shareholder of Pacific Promotions, had organized many Oktoberfests in the
past. The vast majority of those had been held at the Commodore. However,
this was the first one held there since the Commodore had closed in the fall of
1996, and re-opened under new management in early November, 1999. Mr. Frinton
was not aware of anyone having been injured by a glass beer mug at previous
Oktoberfests. Gordon Knights, the Commodores general manager, testified that
handing out souvenir glassware (e.g., wine glasses, beer mugs) was a standard
marketing tool in the liquor industry.
[6]
Mr. Frinton organized the
event, and contracted with the Commodore for the use of those premises. The
Commodore was responsible for food and beverage service, and security. Pacific
Promotions received all of the revenue from ticket and souvenir sales. The
Commodore received the food and beverage revenue.
[7]
Tickets to the event were sold
both in advance and at the door. The ticket price included admission, a
souvenir glass beer mug, a mug of beer, and a German sausage in a bun. The
mugs were handed out upon entry, and were to be taken home by patrons at the
end of the evening. The mugs displayed an Oktoberfest 99 logo, and the logos
of four companies that had paid sponsorship fees to Pacific Promotions. Patrons
could have their mugs refilled by purchasing beer from servers who circulated
about the premises. Other alcoholic beverages were also available.
[8]
Patrons could purchase additional beer
mugs as souvenirs, or acquire them from other patrons. Some who acquired multiple
mugs hung them from their waist-belts.
[9]
The Commodores licensed capacity is
900 patrons. The staff on duty for Oktoberfest consisted of the general
manager, two managers, two greeters at the door, ten bartenders, 12 waiters
serving food and drinks, five porters assisting the bartenders, five busers
for clean-up, and five coat checkers. All of them had taken Serving It Right,
a program that trains staff to be alert for persons who have consumed too much
alcohol. The Commodore contracted with International Crowd Management, which
provided ten security personnel.
[10]
The Commodores staff was
instructed to monitor the level of intoxication of the patrons, to head-off
problems before they began. If the security personnel noticed patrons acting
inappropriately, then they would report them to one of the Commodores managers.
[11]
Mr. Knights was not aware of
anyone having been cut-off from bar service that night, although two persons
were asked to leave because of intoxication, and one person was physically
ejected. Mr. Knights said that it was possible for a patron to drink all night
without coming into direct contact with a server or bartender, if this person
had someone else order his or her drinks. He described the event as festive,
and the patrons as a well-behaved, and easy-going group.
[12]
Mr. Knights did not know that
every patron was to be given a glass beer mug until the night of the event, when
the first ticket was presented at the door at 7:30 p.m. He testified that
it never occurred to him that anyone would use a mug as a weapon, or
intentionally break a mug that had been purchased.
[13]
Derek Blair Donaldson and some
friends arrived at the Commodore at about 10:00 p.m. They left with the
majority of the patrons, when the event ended at 2:00 a.m. Mr. Donaldson
described himself as intoxicated and pretty relaxed, but not stumbling or
anything at the time he left.
[14]
After Mr. Donaldson had walked a
short distance from the Commodore, he was struck in the face by a glass mug that
Christopher George Briggs was holding in his left hand. This occurred when Mr.
Briggs suddenly raised his left arm. Mr. Briggs and Mr. Donaldson did
not know each other. Whether Mr. Briggs struck Mr. Donald intentionally or
accidentally is not known. As a result of being struck with the beer mug, Mr.
Donaldson suffered irreparable damage to his right eye, and facial scarring.
[15]
One of Mr. Donaldsons friends took
hold of Mr. Briggs, and there was a brief scuffle until the police arrived.
Constable Mark Burgess handcuffed Mr. Briggs, who had several glass beer mugs with
the Oktoberfest logo hanging from his belt. At trial, the officer testified
that Mr. Briggs was intoxicated, but could not recall to what degree. He
described the level of intoxication of those in the area as moderate to
severe.
[16]
Several police officers described
the crowd on Granville Mall as being larger and more disorderly than is normal
for a Saturday night. In general, the police found the levels of intoxication
and violence (i.e., fighting) to be higher than that usually found when the
bars and nightclubs in that area close. Sergeant Mark Joseph Lavallee, a shift
supervisor with the Vancouver Police Department, described the street scene as
a mini-version of the Stanley Cup riot, which occurred in Vancouver in 1994.
He further stated that the police had not been given advance notice that
Oktoberfest was being held, or that glass beer mugs were being given out. Had Sergeant
Lavallee been aware of this, then he would have gone to the Commodore and suggested
that beer mugs not be given out that evening.
[17]
Mr. Briggs did not participate at
the trial. However, Mr. Donaldson read-in a number of answers from Mr.
Briggss examination for discovery. In these answers Mr. Briggs said that before
going to the Commodore on the night of November 27, 1999, he drank six or seven
beers at home. He and several friends went to Oktoberfest to socialize and
have fun, arriving between 7:00 p.m. and 8:00 p.m. While there, Mr. Briggs
drank eight to ten mugs of beer, getting a new mug each time. He had eight to
ten mugs hung on his belt when he left the event. Mr. Briggs said that the
number of beers he drank that night was more than he would normally consume at
a party. He agreed he had got drunk, and that he had a hangover the next
day.
[18]
The practice of giving out glass
beer mugs at Oktoberfest was discontinued after the 1999 event. Plastic mugs
are now given out.
TRIAL JUDGES REASONS
[19]
The trial judge described the
incident giving rise to Mr. Donaldsons injury as follows:
[36] The
incident was not part of a general melee occurring on the Mall. If there were
disturbances or brawls occurring along the Mall, they were in other discrete
locations and had no bearing on the incident which caused injury to Mr.
Donaldson.
[37]
There is no evidence that the alleged inebriation
among the crowd on the mall contributed, in any way, to the incident in
question; moreover, there is a dearth of evidence that the inebriation of
either Mr. Donaldson or his assailant was a factor. The preponderance of the
evidence establishes that the incident was, in essence, a single, unexpected
blow without precipitating events. It began and ended within a split second. It
remains unknown whether it was a deliberate or accidental blow.
[38]
There is no evidence that any other circumstance
peculiar to the outdoors on the night in question contributed to the incident. For
example, the glass mug did not break against the pavement before it caused
injury, and Mr. Donaldsons assailant did not lose his footing because of icy
conditions, with the mug in his hand.
[20]
The trial judge was satisfied, on
a balance of probabilities, (a) that Mr. Briggs was [Mr. Donaldsons]
assailant; (b) that Mr. Briggs had been a patron of the Oktoberfest held at the
Commodore that night; and (c) that Mr. Briggs struck [Mr. Donaldson] with
a glass mug which Mr. Briggs carried out of the Commodore at the end of the
event: para. 40.
[21]
The trial judge then turned to the
question of whether Pacific Promotions and the Commodore owed a duty of care to
Mr. Donaldson. In so doing, he had regard to the leading authorities from the
Supreme Court of Canada:
Childs v. Desormeaux
, [2006] 1 S.C.R. 643, 2006
SCC 18;
Cooper v. Hobart
, [2001] 3 S.C.R. 537, 2001 SCC 79;
Stewart
v. Pettie
, [1995] 1 S.C.R. 131;
Jordan House Ltd. v. Menow
, [1974]
S.C.R. 239. He also had regard to the decision of the House of Lords in
Anns
v. Merton London Borough Council
, [1978] A.C. 728.
[22]
Citing
Childs
, the trial
judge found that, as commercial hosts, Pacific Promotions and the Commodore
owned a
prima facie
duty of care to persons such as Mr. Donaldson:
[45] In
the case at bar, the question is whether the proposed duty of care is analogous
to a previously recognized category of cases in which a duty has been
recognized. The dicta in
Childs
supports the view that commercial hosts
owe a general duty to prevent foreseeable harm caused to third parties by their
guests, and that this proposition is not tied to motorists (as in
Stewart v.
Pettie
); rather, it covers all those who, as a class of persons, may come
into contact with the guest.
[46] In
discussing commercial hosts in
Childs
, McLachlin C.J.C. states at para.
37:
In
these cases, the defendants offer a service to the general public that includes
attendant responsibilities to act with special care to reduce risk. Where a
defendant assumes a public role, or benefits from a service to the public at
large, special duties arise. The duty of a commercial host who serves alcohol
to guests to act to prevent foreseeable harm to third-party users of the
highway
falls into this category
:
Stewart v. Pettie
.
[Emphasis added by trial judge]
[47] The
phrase falls into this category suggests that
Stewart
is but one
example of the broad proposition in the preceding lines.
[48] In light of all the
foregoing, I conclude that the relational proximity that has been established
as between the commercial host and third-party users of the highway can be
extended by simple analogy to Mr. Donaldson, as pedestrian on Granville Mall. The
proposed duty is not novel, and the
Cooper
/
Anns
test need
not be applied. Specifically, I find that proximity is established and that
there are not sufficient policy reasons that serve to limit the scope of the
prima
facie
duty of care.
The only remaining issue at the duty of care stage,
then, is whether the injury to the plaintiff was reasonably foreseeable.
[Emphasis added]
[23]
Turning to foreseeability, the
trial judge stated the question he had to decide as whether it was reasonably
foreseeable, in all the circumstances, that a pedestrian on Granville Mall
would be injured by Mr. Briggs: para. 51. In answering this question no,
the trial judge, after reviewing the evidence with respect to staffing-levels
and what had been done at the Commodore to monitor alcohol consumption, stated:
[60]
In the absence of evidence of: (a) knowledge of
actual consumption; and/or (b) signs of impairment which ought to have been
observed by the staff but, due to inadequacies in monitoring, were not, there
is an insufficient foundation for imputing knowledge of Mr. Briggs degree of
intoxication (whatever it might have been) to the commercial hosts.
[61]
The absence of actual or constructive knowledge that
Mr. Briggs was drunk is a circumstance which is, in my view, determinative of
the question of reasonable foreseeability of harm. There can be no reasonably
foreseeable risk of harm to others and no required action on the part of the
commercial hosts in the absence of such knowledge.
[24]
However, the trial judge went on
to hold that even if Mr. Briggs had been over-served, and Pacific Promotions
and the Commodore knew or ought to have known that he was drunk, he would not
have found a duty of care because allowing Oktoberfest patrons to leave with
glass beers mugs did not create a foreseeable risk of harm to persons on
Granville Mall:
[65]
I
n relation to the glass mug, I would not draw a
distinction between it and innumerable other hard and/or sharp objects which
might pose a risk of harm if thrust into a vulnerable part of the human body. Benign
objects such as ballpoint pens and keys could cause considerable harm if held
in the hand which struck a person in the face. Glass mugs are not inherently
dangerous objects, even in the hands of persons whom are consuming liquor. If
this were not so, then one would not expect to see such widespread and widely
accepted usage of glassware for the service of alcoholic beverages in bars,
nightclubs, and restaurants.
[66]
In
Stewart v. Pettie
the court held that a
commercial host has a duty of care to see that an intoxicated patron does not
drive. As observed by McLachlin C.J.C. in
Childs
, a duty of care is
justified in such circumstances because the risks of impaired driving and
their consequences for motorists and their passengers are well known (at para.
28). The same cannot be said about the risks and consequences of a drunken man
walking with a glass mug in his hand.
ANALYSIS
Duty of Care
[25]
In their respective submissions on
the duty of care issue, the parties focussed on whether injury from a beer mug
was reasonably foreseeable in the circumstances of this case. As Mr. Donaldson
put it in his supplemental submissions, the general question is whether it was
reasonably foreseeable that letting patrons, including intoxicated patrons,
carry away unpackaged souvenir glass steins was likely to cause injury. Not
surprisingly, Mr. Donaldson said the answer to this question is yes,
while Pacific Promotions and the Commodore say the answer is no.
[26]
By focussing on how Mr. Donaldson sustained
his injury, the parties have conflated the concept of foreseeability in a duty
of care analysis, and foreseeability in a standard of care analysis. A similar
error was committed by the trial judge. These are two different legal
concepts. In determining whether A owes a duty of care to B, foreseeability is
a factor with respect to whether
the relationship between them
warrants imposing
such a duty. The question is whether B falls within a class of persons who
could reasonably be expected to be harmed by As conduct. If a duty of care is
found to exist, then foreseeability with respect to
the specific risk of harm
is considered in determining whether A was negligent, i.e., whether there has
been a breach of the standard of care.
[27]
The general nature of a duty of
care analysis is evinced in
Stewart
. In paragraph 32, Mr. Justice Major
stated:
The
question of whether a duty of care exists is a question of the relationship
between the parties, not a question of conduct. The question of what conduct
is required to satisfy the duty is a question of the appropriate standard of
care.
[28]
In support of this statement,
Major J. quoted with approval a passage from Fleming,
The Law of Torts
,
8th ed. (Sydney: Law Book Co., 1992), which includes the following:
Duty is more appropriately reserved for the problem of whether the
relation between the parties (like manufacturer and consumer or occupier and
trespasser) warrants the imposition upon one of an obligation of care for the
benefit of the other, and it is more convenient to deal with individual conduct
in terms of the legal standard of what is required to meet that obligation.
[29]
This point is also made
in Osborne,
The Law of Torts
, 3rd. ed. (Toronto: Irwin Law Inc., 2007)
at 70:
The foreseeability
requirement of a duty of care is more narrowly focused than the similar inquiry
in respect of the standard of care. The essence of negligent conduct is
foreseeability of some damage. The essence of a duty of care is foreseeability
of damage
to the
plaintiff
. Negligence in the common law is a
relational concept. A duty of care is not owed to the world.
It is owed
only to those whom the defendant might reasonably foresee as being adversely
affected by his failure to take care.
It is not, however, necessary that
the particular individual be foreseen so long as he belongs to a
class
of persons who might foreseeably be harmed if care is not taken.
[Italics in original; underlining added]
[30]
Hill v.
Hamilton-Wentworth Regional Services Board
, [2007] 3 S.C.R. 129, 2007 SCC 41, evinces the
principle that it is the general relationship between the alleged tortfeasor
and the injured party that is central to a duty of care analysis. That case
involved the issue of whether Canadian law recognizes the tort of negligent
investigation, i.e., whether police owe a duty of care to persons under
investigation. In finding that such a duty exists, Chief Justice McLachlin considered
foreseeability by examining the relationship between a police officer and his
or her suspect, without regard to the specific facts of that case: paras. 21 -
27. Further, although Madam Justice Charron dissented and would not have
recognized the tort of negligent investigation, she also found that the nature
of the relationship between investigator and suspect met the foreseeability
aspect of the duty of care analysis: para. 118. More recently, in
Mustapha
v. Culligan of Canada Ltd.
, [2008] 2 S.C.R. 114, 2008 SCC 27, a case in
which Mr. Mustapha sought to recover damages for a psychiatric injury he
suffered as a result of seeing dead flies in a bottle of water supplied by
Culligan, the question of whether Culligan owed a duty of care to Mr. Mustapha
was determined solely on the basis of their manufacturer-consumer relationship:
paras. 6, 7. See also:
Simpson v. Baechler
, 2009 BCCA 13 at
para. 29.
[31]
Turning to the case at
bar, in my view, the duty of care question is not whether a commercial host
owes a duty to third-parties to protect them from injuries caused by
intoxicated patrons who leave the hosts premises with souvenir beer mugs but,
rather, whether a commercial host owes a duty to third-parties to protect them from
alcohol-related injuries caused by intoxicated patrons. Based on what the
Supreme Court of Canada has said about the duties of commercial hosts, the
answer to that question is yes.
[32]
As McLachlin C.J.
indicated in
Childs
(at para. 15), the first step in a duty of care
analysis is to determine whether the duty being claimed is a novel one, or if
it fits within, or is analogous to, a relationship previously recognized as
giving rise to a duty of care. If the duty claimed fits within, or is
analogous to, a previously recognized one, then a duty of care will have been
established, without the need to apply the two-stage test set out by the House
of Lords in
Anns
. This approach was reiterated in
Mustapha
,
where, in holding that the defendant (manufacturer) owed a duty of care to the
plaintiff (consumer), the Chief Justice stated:
[4]
The first
question to consider in an action for negligence is whether the defendant owed
the plaintiff a duty of care.
The question focuses on the relationship
between the parties. It asks whether this relationship is so close that the
one may reasonably be said to owe the other a duty to take care not to injure
the other
:
Donoghue v. Stevenson
, [1932] A.C. 562 (H.L.). Whether
such a relationship exists depends on foreseeability, moderated by policy
concerns:
Anns v. Merton London Borough Council
, [1978] A.C. 728 (H.L.)
.
[5] In many cases, the relationship between the plaintiff and
the defendant is of a type which has already been judicially recognized as
giving rise to a duty of care. In such cases, precedent determines the
question of duty of care and it is unnecessary to undertake a full-fledged duty
of care analysis.
As stated by A. M. Linden and B. Feldthusen,
categories of relationships that have been recognized and relationships
analogous to such pre-established categories need not be tested by the
Anns
formula
:
Canadian Tort Law
(8th ed. 2006), at p. 302;
Cooper v. Hobart
,
[2001] 3 S.C.R. 537, 2001 SCC 79, at paras. 35 - 36.
[6] The
relationship between the parties in this case does not belong to a novel
category. It has long been established that the manufacturer of a consumable
good owes a duty of care to the ultimate consumer of that good:
Donoghue v.
Stevenson
. It follows that Culligan owed Mr. Mustapha a duty of care in
the supplying of bottled water to him.
[Emphasis added]
See also:
Design Services Ltd. v. Canada
, [2008] 1 S.C.R. 737, 2008 SCC 22 at para. 27.
[33]
It is noteworthy that Mr.
Justice Linden and Dean Feldthusen, at page 302 of their book,
Canadian Tort
Law
, state:
It must also be
remembered that not every new fact situation can be considered a new category
of case.
Duty is a general notion describing a class or type of case, not a
particular fact situation.
The minute details of impugned conduct is not the
stuff of duty but the task of the breach analysis.
[Emphasis added]
[34]
In my view, the Supreme
Court of Canada in
Stewart
determined that alcohol-serving commercial
host/third-party
is a category of relationship
that gives rise to a duty
of care. In that case, a passenger in a motor vehicle was injured when the
driver, who had been drinking alcohol at a dinner theatre, lost control and
drove off the road. As I read that case, it rests on an acceptance of the
proposition that alcohol-serving establishments owe a duty of care to persons
who may be harmed by intoxicated patrons. This duty is not restricted to
third-party users of the highways.
[35]
The duty of care
analysis in
Stewart
is based on the neighbourhood principle first articulated
in
Donoghue v. Stevenson
, [1932] A.C. 562 (H.L.). In
Stewart
,
Major J. reiterated this principle as follows (at para. 25):
[T]hat actors owe a duty of care to those whom they ought reasonably
have in contemplation as being at risk when they act.
[36]
Later, in
Stewart
,
Major J., after referring to
Jordan
House Ltd. v. Menow
, in which it was
held that alcohol-serving establishments owe a duty of care to their
intoxicated patron, said (at para. 28):
It is a logical step to move from finding that a duty
of care is owed to patrons of the bar to finding that a duty is also owed to
third parties who might reasonably be expected to come into contact with the
patron, and to whom the patron may pose some risk.
[37]
That the duty of care
recognized in
Stewart
is not restricted to third-party users of
highways, is evinced in the reasons of McLachlin C.J. in
Childs
:
37
The third situation where a duty of care
may include the need to take positive steps concerns defendants who either
exercise a public function or engage in a commercial enterprise
that
includes implied responsibilities to the public at large
:
Dunn v.
Dominion Atlantic Railway Co.
(1920), 60 S.C.R. 310;
Jordan House Ltd.
v. Menow
, [1974] S.C.R. 239;
Doe v. Metropolitan Toronto (Municipality)
Commissioners of Police
(1998), 39 O.R. (3d) 487 (Gen. Div.). In these
cases, the defendants offer a service to the general public that includes
attendant responsibilities to act with special care to reduce risk.
Where a
defendant assumes a public role, or benefits from offering a service to the
public at large, special duties arise. The duty of a commercial host who
serves alcohol to guests to act to prevent foreseeable harm to third-party
users of the highway falls into this category:
Stewart v. Pettie
.
[Emphasis added]
[38]
Like the trial judge in
the case at bar (see para. 22 above), I take Chief Justice McLachlin as having
accepted that commercial hosts who serve alcohol have a responsibility to protect
members of the public from their intoxicated patrons, and that those members of
the public who use the highways are a subset of this category. However, as
already indicated, I do not agree with the trial judge that foreseeability with
respect to the manner in which a third-party was injured is part of the duty of
care analysis. The policy rationale for imposing a duty of care on commercial
hosts arises from the profit-making nature of their activities, coupled with
the inherent dangers of intoxicants:
Childs
at paras. 18 - 22. This reasoning
remains the same regardless of how a specific plaintiff came to be injured by
an intoxicated patron. I, accordingly, agree with the following statement by
Mr. Justice Somers in
Haughton v. Burden
, [2001] O.J. No. 4704 (QL)
(S.C.J.):
[22] The
common law imposes a duty on commercial hosts to take steps to see that
intoxicated patrons do not cause injury to themselves or others upon leaving
the premises. The standard of care required will vary depending on the
circumstances,
[39]
In conclusion, I find
that Pacific Promotions and the Commodore did owe a duty of care to protect persons
such as Mr. Donaldson from injury by patrons of Oktoberfest who left that event
intoxicated.
Standard of Care
[40]
As the trial judge
found that neither Pacific Promotions nor the Commodore owed a duty of care to
Mr. Donaldson, he did not find it necessary to pronounce on the standard of
care required of commercial hosts holding a beer-drinking event at which glass
mugs are taken away by patrons, or on whether that standard had been met. At
the hearing of this appeal, and in their supplemental submissions, the parties
addressed this issue, parsing the trial judges reasons for factual findings to
support their respective positions.
[41]
Mr. Donaldson submits
that, as a matter of common sense, allowing glass beer mugs to be taken away
from a beer-drinking event creates a foreseeable risk that third-parties will
be injured by intoxicated patrons, particularly when patrons leave with several
mugs in their possession. He further submits that Pacific Promotions and the
Commodore did nothing to manage or minimize that risk. He says this is a case
of misfeasance, as the monitoring that did take place did not account for the
risks associated with allowing persons to leave with glass mugs, and did
nothing to control the carrying away of multiple beer steins by intoxicated
patrons. Mr. Donaldson says it is simply a matter of good luck that no
one had been similarly injured at a previous Oktoberfest.
[42]
Pacific Promotions and
the Commodore submit that, unlike the risk of harm associated with drinking and
driving, the risk of injury from a souvenir glass beer mug taken away from an
event at which alcohol is served is not readily apparent. They point to the
lack of any previous incidents as evidence that the injury suffered by
Mr. Donaldson was not foreseeable, at least not in 1999. They further say
that a glass beer mug is a benign object and that, in any event, there was an
adequate monitoring system in place. They also rely on the fact that Mr.
Donaldson did not tender any evidence regarding the standard in the industry
with respect to an Oktoberfest-type event.
[43]
In my view, a full standard
of care analysis is unnecessary to the disposition of this appeal. As I will
explain, as against Pacific Promotions and the Commodore, Mr. Donaldson failed
to adduce evidence with respect to Mr. Briggss drinking and conduct. This
evidence was necessary to prove both a breach of the standard of care (i.e.,
negligence), and the element of causation. Even if Pacific Promotions and the
Commodore were negligent in that their actions fell below the required standard
of care, evidence that Mr. Donaldsons injury would not have occurred but for
that negligence is lacking.
Lack of Proof of Breach of the Standard of Care
[44]
I have difficulty
accepting that the mere fact that a person who has been drinking leaves an
alcohol-serving establishment with glassware gives rise to a foreseeable risk
of harm to others. However, assuming, without deciding, that (a) such a risk
exists, and (b) that the appropriate standard of care requires the
establishment to have a monitoring system in place to reduce that risk, the
establishment will only have failed to meet that standard if that persons
level of intoxication is sufficient to objectively raise concerns that he or
she may act, deliberately or carelessly, in such a way as to injure someone
with the glassware. If the person was not in fact intoxicated to a level that
objectively raises such concerns, then regardless of what standard of care is
appropriate, a breach of that standard will not have occurred. To conclude
otherwise would be to hold a commercial host to a standard of perfection, and
make it liable for the acts of its patrons regardless of their actual level of
intoxication. Perfection, however, is not what the law requires.
[45]
In a commercial-host
case, the plaintiff must prove that the level of intoxication of the patron was
such that, in the circumstances, that person posed a foreseeable risk to
others. The classic example is, of course, the highly intoxicated patron who
is allowed to get behind the wheel of a motor vehicle and drive away. In the
case at bar, however, the evidence admissible against Pacific Promotions and
the Commodore is not capable of proving that Mr. Briggs, by reason of his
level of intoxication, posed a foreseeable risk to others when he left the
Commodore carrying a glass beer mug.
[46]
Mr. Briggs was not
called as a witness at trial. However, as set out in paragraph 17 above, Mr.
Donaldson read-in some of the testimony Mr. Briggs gave at his examination
for discovery. This as done pursuant to Rule 40(27)(a) of the
Rules of
Court
, B.C. Reg. 221/90, which provides:
If otherwise admissible, the evidence given on an examination for
discovery by a party
may be given in evidence at trial, unless the court
otherwise orders, but the evidence is admissible only against
(i) the adverse party who was examined.
[47]
On the basis of the
evidence from the witnesses who were called to testify, including the police
officer who said Mr. Briggs was intoxicated to some unknown degree, it would be
reasonable to infer that Mr. Briggs attended Oktoberfest, and drank beer
there. It would also be reasonable to infer, from the time and place of the
incident involving Mr. Donaldson, that Mr. Briggs left the Commodore at or near
2:00 a.m., when the event ended. However, I agree with Pacific Promotions
and the Commodore that, by reason of Rule 40(27)(a)(i), the read-in evidence
from Mr. Briggss examination for discovery was only admissible against
Mr. Briggs, and cannot be used by Mr. Donaldson to support his claim against
them. Because of this, there is no evidence admissible against Pacific
Promotions and the Commodore to establish that Mr. Briggs (a) drank six or
seven beers before he went to the Commodore, (b) arrived at the Commodore at or
near the beginning of the event, (c) drank eight to ten beers while there, or (d)
considered himself to be drunk when he left.
[48]
I am not suggesting
that when a plaintiff injured by an intoxicated patron alleges that a
commercial-host defendant was negligent, that it is necessary for the plaintiff
to show that the defendant had actual knowledge of the patrons level of
intoxication. It is enough for the plaintiff to establish that the defendant
ought to have known of the patrons level of intoxication. In this regard, I
agree with the following from
McIntyre v. Grigg
(2006), 274 D.L.R. (4th)
28 (Ont. C.A.) at para. 23:
Commercial vendors of alcohol
have an obligation to monitor a patrons consumption of alcohol and should have
protocols in place to ensure that all reasonable precautions are taken to
prevent such patrons who subsequently drive from becoming intoxicated to the
point where they cannot safely operate a motor vehicle. Moreover, a commercial
host does not escape liability simply by
not knowing
that the patron
became inebriated before driving; the commercial host is liable if it or its
employees
knew or ought reasonably to have known
in the circumstances
that the patron was in such a condition.
[Italics in original]
[49]
In the context of a non-drinking-and-driving
fact pattern, I would reword the foregoing extract to read:
Commercial vendors of alcohol
have an obligation to monitor a patrons consumption of alcohol and should have
protocols in place to ensure that all reasonable precautions are taken to
prevent such patrons from
becoming intoxicated to the point where they pose
a foreseeable risk to third-parties
. Moreover, a commercial host does not
escape liability simply by not knowing that the patron became inebriated engaging
in foreseeably dangerous conduct; the commercial host is liable if it or its
employees knew or ought reasonably to have known in the circumstances that the
patron
was in such a condition
.
[Emphasis added]
[50]
I have underlined
portions of the reworded extract to indicate that, to affix a commercial host
with liability, a plaintiff must establish that the patron was intoxicated to
the point where he or she posed a foreseeable danger to others. If the patron
was not in such a condition, then there is nothing that the commercial host could
know, or ought to have known, that would require the host to take some action.
[51]
In this case, the
evidence adduced at trial, when viewed in a light most favourable to
Mr. Donaldson, is capable of proving only that Mr. Briggs was
intoxicated to some unknown degree when he left the Commodore. This is not
sufficient to establish a breach of the standard of care by commercial hosts.
Accordingly, notwithstanding the fact that the trial judge erred in dismissing
Mr. Donaldsons claim against Pacific Promotions and the Commodore on the
basis that they did not owe him a duty of care, that claim was bound to fail in
any event.
Lack of Proof of Causation
[52]
To paraphrase what
Major J. said in
Stewart
(at para. 59), an equally compelling reason to
dismiss this appeal flows from the absence of proof of causation.
[53]
A plaintiff must prove,
on a balance of probabilities, that the defendants impugned conduct actually
caused the loss complained off:
Stewart
at para. 60. To do that, the
plaintiff bears the burden of showing that but for the negligent act or
omission of each defendant, the injury would not have occurred:
Resurfice
Corp. v. Hanke
, [2007] 1 S.C.R. 333, 2007 SCC 7 at para. 21; see also:
Bohun
v. Segal
, 2008 BCCA 23, 77 B.C.L.R. (4th) 85 at para. 53.
[54]
In the present case,
the evidence admissible against Pacific Promotions and the Commodore is capable
of proving only that Mr. Briggs drank some beer at Oktoberfest, left the event
carrying a glass beer mug and, for some unknown reason, raised his arm,
injuring Mr. Donaldson with that mug. This, in my view, is not sufficient to
satisfy the but for causation test, as it would be speculation to infer that
alcohol was a factor in Mr. Briggss actions. In other words, even assuming that
the monitoring system at the Commodore was inadequate, the evidence is not
capable of proving, on a balance of probabilities, that Mr. Donaldson would not
have been injured had a proper system been in place.
CONCLUSION
[55]
I would dismiss this
appeal.
The Honourable
Mr. Justice Frankel
I AGREE:
The Honourable Madam Justice Rowles
I AGREE:
The
Honourable Madam Justice Prowse
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
The Owners, Strata
Plan VIS2968 v. K.R.C. Enterprises Inc.,
2009 BCCA 36
Date: 20090204
Docket: CA35185
Between:
The Owners, Strata
Plan VIS2968
Appellant
(
Plaintiff
)
And
K.R.C. Enterprises
Inc.
Respondent
(
Defendant
)
Before:
The Honourable Chief
Justice Finch
The Honourable Madam
Justice Saunders
The Honourable Madam
Justice Kirkpatrick
A.R. Tryon
Counsel for the Appellant
M.J. Hargreaves
Counsel for the Respondent
Place and Date of Hearing:
Vancouver
, British Columbia
18 December 2008
Place and Date of Judgment:
Vancouver
, British Columbia
4 February 2009
Written Reasons by
:
The Honourable Madam
Justice Kirkpatrick
Concurred in by:
The Honourable Chief
Justice Finch
The Honourable Madam
Justice Saunders
Reasons for Judgment
of the Honourable Madam Justice Kirkpatrick:
I. INTRODUCTION
[1]
This appeal arises from a dispute
between the owners of bare land strata lots in a development in Sooke, B.C.,
and the party to whom the developer assigned options to purchase some of the
common property of the strata corporation. The sole issue on this appeal is
whether the granting of options to purchase some of the common property of a
strata corporation without first obtaining subdivision approval is prohibited
by s. 73 of the
Land Title Act
, R.S.B.C. 1979, c. 219,
the statute in force at the time the options were granted.
[2]
The only issue on the cross-appeal
is whether the fact that a strata plan was not registered at the time
invalidates the granting of the option to purchase the common property in
respect of one phase of the development.
[3]
The action in the Supreme Court
was heard as a special case by consent of the parties in March 2007. Reasons
for judgment were pronounced on 1 June 2007, and are indexed as 2007 BCSC 774,
and reported at 74 B.C.L.R. (4th) 89, 59 R.P.R. (4th) 183.
II. FACTS
[4]
The facts relevant to the appeal
may be briefly stated. The appellants, The Owners, Strata Plan VIS2968 (the
strata corporation), are the owners of 48 bare land strata lots located in
the District of Sooke on Vancouver Island in a development known as Sooke Bay
Estates. There is a single family dwelling on each strata lot. The strata
corporation was created by deposit of the strata plan in the Victoria Land Title
Office on 25 November 1993. The developer and registrant of the strata plan
was Blackstone Capital Corp. (Blackstone).
[5]
The strata plan was developed in
three stages with each phase consisting of 16 strata lots. The three phases
were registered as follows:
(a) Phase 1: 25
November 1993;
(b) Phase 2: 9
March 1994; and
(c) Phase
3: 9 March 1994.
[6]
Each phase of the strata plan includes
a common property area of parklands where the septic field for the sewage of
that phase is located.
[7]
During development, Blackstone
contemplated that in the future the local government might extend sewage
services to the area and there would be no need for the septic fields.
[8]
In anticipation of this
possibility, Blackstone, while owner of the parent property or while owner of
all of the strata lots, granted to itself contingent options to acquire the
parklands in the event that municipal sewage services became available.
[9]
The three contingent options are
substantially identical to one another. In particular, each option states
(with the necessary modification in respect of the particular strata lots),
PROVIDED
HOWEVER, that the Option hereby granted may only be exercised following a
municipal, provincial or other public body providing access to a sewage
disposal system (the Public Sewer System) to service Strata Lots 1 through
16, Strata Plan VIS2968, and upon the Optionee providing to the Optionor, at
the sole expense of the Optionee, a Subdivision Plan converting the Optioned
Property to a separate and legally distinct lot or lots, no longer a part of
the Common Property of the Optionor.
[10]
Pursuant to the
Real Estate
Act
, R.S.B.C. 1979, c. 356, Blackstone was required to file an approved
disclosure statement or prospectus with the Superintendent of Real Estate as a
condition of offering strata lots for sale. The disclosure statement refers to
the options as follows:
The
Developer will grant an Option To Purchase the Common Area septic disposal
fields in each phase in favour of the Developer, which Option To Purchase will
only be exercisable by the Developer in the event that the development is
serviced with a Municipal or other public sewage system at the date of
exercise.
[11]
All original purchasers of the
strata lots received a copy of the disclosure statement. Many of the strata
lots are now owned by successors in title from original purchasers.
[12]
On 24 February 2004, Blackstone
notified the strata corporation that the options were being offered for sale.
The strata corporation responded and advised that it considered the options to
be void and unenforceable. On 1 April 2004, all of the options were assigned
by Blackstone to the respondent, K.R.C. Enterprises Inc. (K.R.C.
Enterprises).
[13]
At all material times, the standard
by-laws in Part 5 of the
Condominium Act
, R.S.B.C. 1979, c. 61,
applied to the strata corporation.
[14]
Municipal sewage services have not
yet been extended to Sooke Bay Estates but the parties anticipate that services
will be within a few years.
[15]
Since 1995 a search of the common
property folio for the strata corporation discloses registration of the
options. Prior to 1995, the options were recorded on a separate strata plan
sheet which, as with the common property folio, could be searched by any
interested party. The options are not registered against the individual strata
lots.
[16]
The chambers judge was asked to
answer seven question of which only two are in dispute on appeal.
III. ANALYSIS
[17]
The strata corporations argument
on appeal is essentially the same argument it advanced in the Supreme Court. The
strata corporation submits the options were prohibited by the combined effect
of ss. 20(1) and 21(4) of the
Condominium Act
and Part 7 of the
Land
Title Act
. At all relevant times, the capacity of the strata
corporation to grant the options was governed by the
Condominium Act
.
[18]
Sections 20(1) and 21(4) of the
Condominium
Act
governed the disposition of common property of a strata corporation
as follows:
20(1) The
owners may, by special resolution, direct the strata corporation
to dispose
of all or part of its common property or assets, and, without limiting the
generality of the foregoing, may direct the strata corporation to grant an
easement or a restrictive covenant burdening the common property included in
the strata plan.
21(4) Notwithstanding
the
Land Title Act
, a disposition, not including a lease for a term of 3
years or less, of all or part of the common property of a strata corporation
under section 20 is a
subdivision of land
, and Part 7 of the
Land
Title Act
applies.
[Emphasis added]
[19]
The relevant section of the
Land
Title Act
that dealt with the subdivision of land read as follows:
73(1)
Except on compliance with this Part
, no person shall subdivide land
into smaller parcels than those of which he is the owner for the purpose of
(a) transferring it; or
(b) leasing it, or agreeing
to lease it for a life, or for a term exceeding 3 years.
(2)
Except
on compliance with this Part, no person shall subdivide land for the purpose
of a mortgage
or other dealing
that may be registered under this Act as
a charge if the estate, right or interest conferred on the transferee,
mortgagee or other party would entitle the person in law or equity under any
circumstances to demand or exercise the right to acquire or transfer the fee
simple.
(4) No
instrument executed by a person in contravention of this section confers on the
party claiming under it a right to registration of the instrument or part of
it.
[Emphasis added]
Compliance
with this Part requires the filing of a subdivision plan in conformity with
Part 7 of the
Land Title Act
.
[20]
Dispose is defined by the
Interpretation
Act
, R.S.B.C. 1996, c. 238, s.29, (and the
Interpretation Act
,
R.S.B.C. 1979, c. 206, s. 29) to mean to transfer by any method and includes
assign, give, sell, grant, charge, convey, bequeath, devise, lease, divest,
release and agree to do any of those things.
[21]
The strata corporation submits
that since there was no subdivision plan filed at the time of the granting of
the options, the options were invalid as they contravened s. 73 of the
Land
Title Act
.
[22]
In both the Supreme Court and on
appeal, K.R.C. Enterprises concedes that the granting of the options was a
disposition as defined by the
Interpretation Act
and a
subdivision of common property under s. 20(1) of the
Condominium Act
.
The respondent contends, however, that the disposition does not actually occur
until the contingencies in the options come to pass when the municipal sewage
system becomes available and K.R.C. Enterprises provides a subdivision plan to
the strata corporation.
[23]
The respondent relies on the wording
of the options:
PROVIDED
HOWEVER, that the Option hereby granted may only be exercised
upon the
Optionee providing to the Optioner, at the sole expense of the Optionee, a
Subdivision Plan converting the Optioned Property to a separate and legally
distinct lot or lots
[24]
K.R.C. Enterprises submits that
the word legally means that the optionee must comply with Part 7 as a
condition precedent to the exercise of the option. Thus the respondent submits
that the options do not offend s. 73 of the
Land Title Act
.
[25]
The chambers judge accepted the respondents
submission. She held,
[43] In
this case, the options are conditional upon complying with Part 7 of the
Land
Title Act
in that they specifically require that there must be a subdivision
converting the optioned lot to a distinct lot or lots that are no longer a part
of the common property prior to the option being exercised. In other words,
the option holder is not entitled to the transfer of the fee simple without the
approval of the subdivision by an Approving Officer who, in compliance with
Part 7 of the
Land Title Act
, will consider whether or not the proposed
subdivision is against public interest. Although the option holder can demand
the right to acquire or transfer the fee simple in certain circumstances, those
circumstances are that Part 7 of the
Land Title Act
has been complied
with. Accordingly, I have concluded that the granting of the options was not
prohibited under either the
Condominium Act
or the
Land Title Act
.
[26]
The strata corporation submits
that the chambers judge erred in failing to recognize that the fact that the
options are conditional does not exempt them from operation of s. 73(2) of the
Land
Title Act
. The strata corporation submits that this is because the subdivision,
within the meaning of the
Land Title Act
,
occurred
when the options were granted, not when they were exercised, and thus
Blackstone was obligated to comply with Part 7 of the
Land Title Act
at
the time they were granted.
[27]
The strata corporation contends
that the decision creates mischief because it permits a host of dealings in
respect of a portion of a lot mortgages, transfers, options, etc. creating
clouds on title by the creation of partial interests in land. The strata corporation
submits that there is no practice or precedent supporting the decision of the
chambers judge, citing the Wendi J. MacKay
et al.,
eds.,
Land Title
Practice Manual
, looseleaf, 3d ed. (Vancouver: Continuing Legal Education
Society of B.C., 2007) at §. 7.109, which states that Section 73(2) prohibits
the filing of options to purchase, rights to purchase, mortgages and other
charges of a part of a lot.
[28]
The strata corporation submits
that the impugned decision would lead the way for developers to avoid the
provisions of the
Real Estate
Development Marketing Act
,
S.B.C. 2004, c. 41, that require developers to first obtain preliminary
approvals, and file a prospectus with the Superintendent of Real Estate, before
entering into agreements with prospective purchasers. If the decision stands,
the strata corporation submits that developers may enter into conditional
purchase agreements and receive money from purchasers without first obtaining
preliminary approval from the relevant authority.
[29]
K.R.C. Enterprises posits that no
such mischief would be created, citing s. 4 of the
Real
Estate
Development Marketing Act
:
4
A
developer must not market a subdivision lot or a bare land strata lot unless,
in relation to the subdivision lot or bare land strata lot,
(a) a subdivision plan
or bare land strata plan, as applicable, has been deposited in a land title
office, or
(b) an approving
officer has given preliminary layout approval.
[30]
Further, K.R.C. Enterprises submits
that in the circumstances of this case, to require the optionor to obtain
subdivision approval in advance of the granting of the option and before the
realization of the event allowing the option to be exercised, namely the
arrival of municipal sewage services, is unnecessarily costly and cumbersome.
[31]
K.R.C. Enterprises seeks an
interpretation that would limit the general proscription in s. 73 of the
Land
Title Act
and make it conditional on compliance with Part 7. The
respondent submits that s. 73 may, in its words, be paraphrased as follows:
No
person shall subdivide land for the purpose of a dealing that may be registered
under this Act as a charge if the estate, right or interest conferred on the
other party would entitle that party, in law or equity, under any
circumstances, other than on compliance with this Part, to demand or exercise
the right to acquire the fee simple.
[32]
In support of its argument K.R.C.
Enterprises relies on this Courts decision in
Bank of British Columbia
v. Tri Holdings Ltd.
(1992), 71 B.C.L.R. (2d) 58, 71 B.C.A.C. 264
(cited to B.C.L.R.). The respondent emphasizes Seaton J.A.s comments in
reference to s. 73, at para. 29:
I do
not read these sections as prohibiting people making an agreement contingent on
there being a subdivision. Doing so is a common practice that does not
constitute subdividing for the purpose of transferring or leasing, or
subdividing for the purpose of a mortgage or other dealing that might be
registered.
[33]
The crucial point in this appeal, however,
is that K.R.C. Enterprises concedes that the granting of the option itself
constituted a disposition. Pursuant to s. 21(4) of the
Condominium
Act
a disposition
is a subdivision of land. The option is not
contingent upon there being a subdivision. By operation of law, the granting
of the option is a subdivision. It is contingent upon the availability of a
municipal sewage system, after which the respondent must provide to the strata
corporation a subdivision plan converting the septic fields to legally distinct
lot or lots.
[34]
It is useful to note that common
law rights to subdivide land have been curtailed by statute for some time. In
City
of Vancouver v. Simpson
, [1977] 1 S.C.R. 71, 65 D.L.R. (3d) 669, the
Supreme Court of Canada considered the effect of the
Land Registry Act
,
R.S.B.C. 1960, c. 208, on the common law right to subdivide land. Martland J.,
for the majority, stated (at 77):
The
enactment of that statute took away a free right to subdivide. The landowner
has no right to subdivide save subject to the approval of the approving officer
who is required by the Act to determine if the contemplated development would
be against the public interest. The very exercise of the power given to the
approving officer by the Act must necessarily curtail the landowners right to
subdivide.
[35]
While I have some sympathy for the
position taken by the respondent and its pragmatic interpretation of s. 73 of
the
Land Title Act
, regard must be had to the words of the
applicable statutes. I am impelled to the view that the combined effect of ss.
20(1) and 21(4) of the
Condominium Act
and s. 73 of the
Land
Title Act
render the options invalid, as they constitute subdivisions
which have not first obtained subdivision approval.
[36]
The challenges that flow from this
interpretation decreased profitability for developers or increased costs to
strata corporations when common property becomes redundant and disposition is
necessary are matters that may best be considered by the Legislature.
However, the current statutes, in my opinion, permit no other interpretation.
IV. DISPOSITION
[37]
It follows that I would allow the
appeal and declare the options invalid. In the circumstances, it is
unnecessary to address the cross-appeal.
The Honourable Madam Justice Kirkpatrick
I agree:
The
Honourable Chief Justice Finch
I
agree:
The
Honourable Madam Justice Saunders
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
Amezcua v. Taylor,
2009 BCCA 42
Date: 20090206
Docket: CA036574
Between:
Justine Amezcua
Appellant
(
Plaintiff
)
And
Stephanie Taylor
Respondent
(
Defendant
)
Before:
The Honourable Mr. Justice Donald
(In Chambers)
J. L. Harbut
Counsel for the Appellant
S. G. Pereira
Counsel for the Respondent
Place
and Date of Hearing:
Vancouver
, British Columbia
January 22, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
February 6, 2009
Reasons for Judgment
of the Honourable Mr. Justice Donald:
[1]
This is the respondents motion
for directions whether leave is required to appeal the order of Madam Justice
Stromberg-Stein made 16 October 2008, setting aside the order of a Master which
added the Minister of Public Safety and the Solicitor General of the Province
of British Columbia (the Minister) as a defendant. The reasons for judgment
are indexed as 2008 BCSC 1494.
[2]
I have concluded that leave is not
required and the appeal has been properly brought by the filing of a notice of
appeal.
[3]
The action arises from a motor
vehicle accident which occurred in 1999 at an intersection in North Vancouver.
The respondent driver was on duty as an officer of the Royal Canadian Mounted
Police at the time of the collision. She admits in her statement of defence
that the accident happened as a result of her simple and regular negligence.
She also pleads the protection afforded her under the
Police Act
,
R.S.B.C. 1996, c. 367:
9. In
answer to the whole of the Statement of Claim, the Defendant pleads and relies
upon section 14(1), 14(2) and 21 of the
Police Act
, as amended and say
that no action lies against her in this matter.
[4]
The gist of those provisions of
the
Police Act
is that no action lies for simple negligence in the
course and scope of an officers employment. But that protection is only for
the officer; under s. 11 of the
Act
, the Minister is vicariously liable
for the officers simple negligence. The
Act
also provides that the
individual officer is not shielded from gross negligence.
[5]
By moving to add the Minister as a
defendant, the appellant hoped to place herself in a position where she could
recover her losses on the basis of vicarious liability for simple negligence.
The problem is that the appellant waited a very long time to bring the motion,
and did so only years after the limitation date had expired. The Master found
that although the delay was inordinate and not satisfactorily explained, the
respondent and the Minister had suffered no prejudice and so he granted the
order. The reviewing judge reversed on the ground that the Master ignored the
loss of a limitation defence in assessing prejudice.
[6]
The question of whether leave to
appeal is required turns on whether this is a final or interlocutory order.
The answer lies in the effect of the order does it dispose of a substantive
issue in the action?:
Forest Glen Wood Products Ltd. v. British Columbia
(Minister of Forests)
, 2008 BCCA 480. I think it does. Effectively, the
order decides with finality that (i) the action against the respondent in
simple negligence is futile; (ii) the only cause of action available against
the respondent is in gross negligence; and (iii) the Minister has the benefit
of the limitation defence. Thus, it is a final order and leave of this Court
is not needed.
[7]
I cannot accept the argument that
this is merely an interlocutory order because it does not alter the position of
the parties as their pleadings presently stand.
[8]
The respondents representatives
warned the appellants solicitors consistently from the early stages of the
action that the appellants pleadings are deficient in not overcoming the
barrier to recover against the officer alone for simple negligence. The order
in question closes the door to recovery, except for gross negligence, which is
not yet pleaded.
[9]
For these reasons, I have decided
that the order gives rise to an appeal as of right.
The Honourable Mr. Justice Donald
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
Edgewater Casino Inc.
(Re),
2009 BCCA 40
Date: 20090206
Docket: CA035922; CA035924
In the Matter of the
Companies
Creditors Arrangement Act
,
R.S.C. 1985, c. C-36, as amended
In the Matter of the
Business Corporations
Act
,
S.B.C. 2002, c 57, as amended
In the Matter of Edgewater Casino Inc. and
Edgewater Management Inc.
Between:
Canadian Metropolitan
Properties Corp.
Appellant
(
Applicant
)
And
Libin Holdings Ltd.,
Gary Jackson Holdings Ltd.
and Phoebe Holdings Ltd.
Respondents
(
Respondents
)
Before:
The Honourable Madam
Justice Levine
The Honourable Mr. Justice
Tysoe
The Honourable Madam
Justice D. Smith
J.J.L. Hunter, Q.C. and
J.A. Henshall
Counsel for the Appellant
J.R. Sandrelli and A.
Folino
Counsel for the Respondents
Place and Date of Hearing:
Vancouver
, British Columbia
January 7, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
February 6, 2009
Written Reasons by
:
The Honourable Mr. Justice
Tysoe
Concurred in by:
The Honourable Madam
Justice Levine
The Honourable Madam
Justice D. Smith
Reasons for Judgment
of the Honourable Mr. Justice Tysoe:
Introduction
[1]
This application raises the
question of the nature and application of the test to be utilized when leave is
sought to appeal from an order made in proceedings under the
Companies
Creditors Arrangement Act
, R.S.C. 1985, c. C-36 (the
CCAA
).
[2]
On August 29, 2008, the chambers
judge refused Canadian Metropolitan Properties Corp. (the Landlord) leave to
appeal from two orders pronounced on March 5, 2008 and December 18, 2008, by
the judge supervising the
CCAA
proceedings (the
CCAA
judge)
concerning Edgewater Casino Inc. and Edgewater Management Inc. (Edgewater).
The Landlord applies under section 9(6) of the
Court of Appeal Act
,
R.S.B.C. 1996, c. 77, to vary or discharge the order of the chambers judge so
that it is given leave to appeal from the two orders. The respondents, being
the original shareholders of Edgewater, oppose the application.
Background
[3]
The Landlord and Edgewater entered
into a lease agreement dated for reference November 8, 2004 (the Lease) under
which the Landlord leased part of the Plaza of Nations site in downtown Vancouver for the operation of a casino by Edgewater. Edgewater took possession of the
leased property on May 4, 2004 and, prior to commencing operation of the casino
on February 5, 2005, spent approximately $15 million renovating the main
building covered by the Lease. These renovations indirectly led to two
disputes between the parties. The first dispute related to the extent, if any,
to which Edgewater was responsible to reimburse the Landlord for increases in
property taxes attributable to improvements made by Edgewater. A related issue
was whether Edgewater was responsible to pay a portion of the consulting fees
incurred by the Landlord in appealing property tax assessments. The second
dispute related to Edgewaters responsibility to pay for the cost of utilities
supplied to the leased property prior to the commencement of the operation of
the casino while Edgewater was in possession and renovating the building.
[4]
Edgewater commenced the
CCAA
proceedings
on May 2, 2006, and the
CCAA
judge supervised the proceedings.
Edgewater proposed a plan of arrangement by which sufficient funds would be
paid into a law firms trust account in an amount to fully pay all claims of
creditors accepted by Edgewater and the asserted amounts of creditor claims
disputed by Edgewater. I gather that the plan of arrangement was predicated on
a sale of the shares in Edgewater by the respondents to a new owner and that it
was agreed that the respondents would be the benefactors of any monies
recovered from the Landlord and any monies left in trust following the
resolution of the property tax and utilities disputes.
[5]
On August 11, 2006, the
CCAA
judge
pronounced a Claims Processing Order establishing a process for claims to be
made by Edgewaters creditors and to be either accepted by Edgewater or
adjudicated upon in a summary manner in the
CCAA
proceedings. On August
29, 2006, the
CCAA
judge pronounced a Closing Order pursuant to which
the plan of arrangement was implemented and sufficient funds were paid into
trust to satisfy the accepted and disputed claims of Edgewaters creditors.
[6]
The Landlord filed a proof of
claim asserting that Edgewater was indebted to it in the amount by which the
property taxes for the leased property had increased since 2004. Edgewater
disallowed the proof of claim. Edgewater subsequently claimed a right of
setoff against the Landlord in respect of the utilities that it alleged had
been improperly charged by the Landlord and had been paid by mistake.
[7]
By a case management order dated
March 29, 2007, the
CCAA
judge directed that, among other things, the
property tax and utilities disputes were to be determined summarily, with the
parties exchanging pleadings and having representatives cross-examined on
affidavits or examined for discovery. Hearings took place before the
CCAA
judge in August and September, 2007.
[8]
In his reasons for judgment
dealing with the property tax dispute, indexed as 2008 BCSC 280, the
CCAA
judge held that: (i) clause 3.05 of the Lease, which dealt with Edgewaters
responsibility for increases in the property taxes, was sufficiently clear to
be enforceable; (ii) the Landlord had not made negligent misrepresentations to
Edgewater on matters relevant to the property tax increase; (iii) Edgewater was
only responsible for increases in the assessment of the Lands (defined as the
lands and improvement thereon) solely attributable to the improvements made by
it, with the result that Edgewater was only obliged to pay the Landlord the
increased taxes based on the increase in the assessed value of the buildings;
and (iv) Edgewater was not liable, either in contract,
quantum meruit
or unjust enrichment, to reimburse the Landlord for any consulting fees
incurred by it in appealing the property tax assessments in question.
[9]
In his reasons for judgment
dealing with the utilities dispute, indexed as 2007 BCSC 1829, the
CCAA
judge
held that: (i) clause 4.01 of the Lease, which was clear on its face,
restricted the amount of rent and additional rent during the period preceding
the commencement of operation of the casino to the sum specified in the clause,
and Edgewater was not responsible to pay for any additional sum in respect of
utilities; (ii) the Landlord did not meet the test in order to have the Lease
rectified in respect of the payment for utilities during the period of
possession preceding the commencement of operation of the casino; and (iii)
Edgewater was entitled to the return of the payments for utilities during the
period of possession preceding the commencement of the casino made by it as a
result of a mistake.
Decision
of the Chambers Judge
[10]
In dismissing the applications for
leave to appeal the two orders, the chambers judge commented that the
CCAA
judge had held the language of clauses 3.05 and 4.01 of the Lease to be clear
and unambiguous. Relying on
Re Pacific National Lease Holding Corp.
(1992), 72 B.C.L.R. (2d) 368, 15 C.B.R. (3d) 265 (C.A. Chambers), and
Re Pine
Valley Mining Corporation
, 2008 BCCA 263, 43 C.B.R. (5th) 203 (Chambers), the
chambers judge stated that leave to appeal in proceedings under the
CCAA
is granted sparingly. He commented that there were none of the time pressures
that often attend
CCAA
proceedings.
[11]
The chambers judge noted that the
CCAA
judge had applied settled principles of contractual interpretation and
expressed the view that there were very limited prospects of success on appeal.
He observed that the issues had been decided in the context of summary
proceedings under the
CCAA
and stated that the decision of the chambers
judge was entitled to substantial deference.
Discussion
[12]
The parties are agreed that the
test to be applied by a reviewing court on an application to review an order of
a chambers judge is to determine whether the judge was wrong in law or
principle or misconceived the facts: see
Haldorson v. Coquitlam (City)
,
2000 BCCA 672, 3 C.P.C. (5th) 225.
[13]
The parties made their submissions
on the basis that there is a special test or standard for the granting of leave
to appeal from an order made in
CCAA
proceedings. The genesis of this
perception is the following passage from the decision of Mr. Justice Macfarlane
in
Pacific National Lease
:
[30]
Despite what I have said, there may be an arguable case for the petitioners to
present to a panel of this court on discreet questions of law. But I am of the
view that this court should exercise its powers sparingly when it is asked to
intervene with respect to questions which arise under the C.C.A.A. The process
of management which the Act has assigned to the trial court is an ongoing one. In
this case a number of orders have been made. Some, including the one under
appeal, have not been settled or entered. Other applications are pending. The
process contemplated by the Act is continuing.
[31]
A colleague has suggested that a judge exercising a supervisory function under
the C.C.A.A. is more like a judge hearing a trial, who makes orders in the
course of that trial, than a chambers judge who makes interlocutory orders in
proceedings for which he has no further responsibility.
[32]
Also, we know that in a case where a judgment has not been entered, it may be
open to a judge to reconsider his or her judgment, and alter its terms. In
supervising a proceeding under the C.C.A.A. orders are made, and orders are
varied as changing circumstances require. Orders depend upon a careful and
delicate balancing of a variety of interests and of problems. In that context
appellate proceedings may well upset the balance, and delay or frustrate the
process under the C.C.A.A. I do not say that leave will never be granted in a
C.C.A.A. proceeding. But the effect upon all parties concerned will be an
important consideration in deciding whether leave ought to be granted.
Numerous
subsequent decisions have referred to these comments. These decisions include
Re
Westar Mining Ltd.
(1993), 75 B.C.L.R. (2d) 16, 17 C.B.R. (3d) 202 (C.A.) at para. 57;
Re Woodwards Ltd.
(1993), 105 D.L.R. (4th) 517, 22 C.B.R. (3d)
25 (B.C.C.A. Chambers) at para. 34;
Re Repap British Columbia Inc.
(1998), 9 C.B.R. (4th) 82 (B.C.C.A. Chambers) at para. 8;
Luscar Ltd.
v. Smoky River Coal Ltd.,
1999 ABCA 179, 175 D.L.R. (4th) 703 at para. 62;
Re
Blue Range Resource Corp.
, 1999 ABCA 255, 12 C.B.R. (4th) 186 (Chambers) at
para. 3;
Re Canadian Airlines Corp.
, 2000 ABCA 149, 19 C.B.R. (4th) 33
(Chambers) at para. 42;
Re Skeena Cellulose Inc.
, 2003 BCCA 344, 13
B.C.L.R. (4th) 236 at para. 52;
Re Fantom Technologies Inc.
(2003),
41 C.B.R. (4th) 55 (Ont. C.A. Chambers) at para. 17; and
Re New Skeena
Forest Products Inc.
, 2005 BCCA 192, [2005] 8 W.W.R. 224 at para. 20.
[14]
The Landlord accepts the general
proposition that leave to appeal from
CCAA
orders should be granted
sparingly, but says that there should be an exception where, as here, the time
constraints present in typical
CCAA
situations do not exist. In this
regard, the Landlord relies on the views expressed by Chief Justice McEachern
in
Westar Mining
. After quoting the above passage from
Pacific
National Lease
, McEachern C.J.B.C. said the following:
[58] I respectfully agree with what Macfarlane J.A. has said, but in
this case the situation of the Company has stabilized as its principal assets
have been sold. The battle for the survival of the Company is over, at least
for the time being. What remains is merely to determine priorities, and the
proper distribution of the trust fund which was established with the approval
of the Court primarily for the protection of the Directors.
Although
McEachern C.J.B.C. was speaking in dissent when making these comments, an
appeal to the Supreme Court of Canada was allowed, [1993] 2 S.C.R. 448, and the
Court agreed generally with his dissenting reasons.
[15]
The respondents submit that there
should be the same test for leave to appeal from all orders made in
CCAA
proceedings.
The respondents maintain that the test has been consistently applied throughout
Canada and that a different test in some circumstances would lead to the
result that there would be many more leave applications to appeal orders made
in
CCAA
proceedings and appellate courts would be required to analyze
the underlying
CCAA
proceeding in every leave application.
[16]
The requirement for leave to
appeal from an order made in
CCAA
proceedings is found in the
CCAA
itself (section 13), as opposed to the provincial or territorial statutes
governing the appellate courts in Canada. This suggests that Parliament
recognized that appeals as of right from orders made in
CCAA
proceedings
could have an adverse effect on the efforts of debtor companies to reorganize
their financial affairs pursuant to the Act and that appeals in
CCAA
proceedings should be limited: see
Re Algoma Steel Inc.
(2001), 147
O.A.C. 291, 25 C.B.R. (4th) 194 at para. 8.
[17]
However, it does not follow from
the fact that the statute itself is the source of the requirement for leave
that the test or standard applicable to applications for leave to appeal orders
made in
CCAA
proceedings is different from the test or standard for
other leave applications. It is my view that the same test applicable to all
other leave applications should be utilized when considering an application for
leave to appeal from a
CCAA
order. In British Columbia, the test
involves a consideration of the following factors:
(a) whether the point on appeal
is of significance to the practice;
(b) whether the point raised is
of significance to the action itself;
(c) whether the appeal is
prima
facie
meritorious or, on the other hand, whether it is frivolous; and
(d) whether the appeal will unduly hinder the
progress of the action.
The authority most frequently cited in British
Columbia in this regard is
Power Consolidated (China) Pulp Inc. v. British
Columbia Resources Investment Corp.
(1988), 19 C.P.C. (3d) 396 (B.C.C.A.
Chambers).
[18]
This is not to suggest that I
disagree with the above comments of Macfarlane J.A. in
Pacific National
Lease
. To the contrary, I agree with his comments, but I do not believe
that he established a special test for
CCAA
orders. Rather, his
comments are a product of the application of the usual standard used on leave
applications to orders that are typically made in
CCAA
proceedings and a
recognition of the special position of the supervising judge in
CCAA
proceedings.
In particular, a consideration of the third and fourth of the above factors
will result in leave to appeal from typical
CCAA
orders being given
sparingly.
[19]
The third of the above factors
involves a consideration of the merits of the appeal. In non-
CCAA
proceedings, a justice will be reluctant to grant leave where the order
constitutes an exercise of discretion by the judge because the grounds for
interfering with an exercise of discretion are limited: see
Silver Standard
Resources Inc. v. Joint Stock Co. Geolog
, [1998] B.C.J. No. 2298 (C.A.
Chambers). Most orders made in
CCAA
proceedings are discretionary in
nature, and the normal reluctance to grant leave to appeal is heightened for
two reasons alluded to in the comments of Macfarlane J.A.
[20]
First, one of the principal
functions of the judge supervising the
CCAA
proceeding is to attempt to
balance the interests of the various stakeholders during the reorganization
process, and it will often be inappropriate to consider an exercise of
discretion by the supervising judge in isolation of other exercises of
discretion by the judge in endeavouring to balance the various interests.
Secondly,
CCAA
proceedings are dynamic in nature and the supervising
judge has intimate knowledge of the reorganization process. The nature of the
proceedings often requires the supervising judge to make quick decisions in
complicated circumstances. These considerations are reflected in the comment
made by Madam Justice Newbury in
New Skeena Forest Products
that
[a]ppellate courts also accord a high degree of deference to decisions made by
Chambers judges in CCAA matters and will not exercise their own discretion in
place of that already exercised by the court below (para. 20).
[21]
The fourth of the above factors
relates to the detrimental effect of an appeal on the underlying action. In
most non-
CCAA
cases, the events giving rise to the underlying action
have already occurred, and a consideration of this factor involves the
prejudice to one of the parties if the trial is adjourned or if the action
cannot otherwise move forward pending the determination of the appeal.
CCAA
proceedings are entirely different because events are unfolding as the
proceeding moves forward and the situation is constantly changing some refer
to
CCAA
proceedings as real-time litigation.
[22]
The fundamental purpose of
CCAA
proceedings is to enable a qualifying company in financial difficulty to
attempt to reorganize its affairs by proposing a plan of arrangement to its
creditors. The delay caused by an appeal may jeopardize these efforts. The
delay may also have the effect of upsetting the balance between competing
stakeholders that the supervisory judge has endeavoured to achieve.
[23]
Similar views were expressed by
Mr. Justice OBrien in
Re Calpine Canada Energy Ltd.
, 2007 ABCA 266, 35
C.B.R. (5th) 27 (Chambers):
[13] This Court has repeatedly stated, for example in
Liberty Oil
& Gas Ltd., Re
, 2003 ABCA 158, 44 C.B.R. (4th) 96 (Alta. C.A.), at
paras. 15-16, that the test for leave under the CCAA involves a single
criterion that there must be serious and arguable grounds that are of real and
significant interest to the parties. The four factors used to assess whether
this criterion is present are:
(1) Whether the point on appeal is of significance to the
practice;
(2) Whether the point raised is of significance to the action
itself;
(3) Whether the appeal is
prima facie
meritorious or, on
the other hand, whether it is frivolous; and
(4) Whether the appeal will unduly hinder the progress of the
action.
[14] In assessing these factors, consideration should also be given to
the applicable standard of review:
Canadian Airlines Corp
.
, Re
,
2000 ABCA 149, 261 A.R. 120 (Alta. C.A. [In Chambers]). Having regard to the
commercial nature of the proceedings which often require quick decisions, and
to the intimate knowledge acquired by a supervising judge in overseeing a CCAA
proceedings, appellate courts have expressed a reluctance to interfere, except
in clear cases:
Smoky River Coal Ltd., Re
, 1999 ABCA 179, 237 A.R. 326
(Alta. C.A.) at para. 61.
Other decisions on leave applications where the usual
factors were expressly considered include
Re Blue Range Resource Corp
.,
Re
Canadian Airlines Corporation
and
Re Fantom Technologies Inc
., each
of which quoted the above comments of Macfarlane J.A. in
Pacific National
Lease
.
[24]
As a result of these
considerations, the application of the normal standard for granting leave will
almost always lead to a denial of leave to appeal from a discretionary order
made in an ongoing
CCAA
proceeding. However, not all of the above
considerations will be applicable to some orders made in
CCAA
proceedings. Thus, in
Westar Mining
, McEachern C.J.B.C., while
generally agreeing with the comments made in
Pacific National Lease
, believed
that the considerations mentioned by Macfarlane J.A. were not applicable in
that case because the
CCAA
proceeding had effectively come to an end
with the sale of the principal assets of the debtor company. Madam Justice
Newbury made a similar point in
New Skeena Forest Products
at para. 25 (which
was a hearing of an appeal, not a leave application), although she found it
unnecessary to decide the appeal on the point.
[25]
The chambers judge did give
consideration to the usual factors in the present case, but none of the
considerations I have mentioned were applicable to the two orders. The
CCAA
judge was deciding questions of law in each case and was not exercising his
discretion. The knowledge gained by the
CCAA
judge during the
reorganization process was not relevant to his decisions, which involved events
that occurred prior to the commencement of the
CCAA
proceeding. The
plan of arrangement made by Edgewater has been implemented, and appeals from
the two orders will not delay or otherwise jeopardize the reorganization
process. There is no prospect that the outcome of the appeals will affect the
continuing viability of Edgewater; indeed, although the disputes involve
Edgewater in name, the parties with a monetary interest in the disputes are the
Landlord and the respondents, who are the former shareholders of Edgewater. In
the circumstances, there was no reason to give substantial deference to the
CCAA
judge.
[26]
I am not saying that the
considerations I have mentioned will never apply to a determination of claims
pursuant to a claims process in a
CCAA
proceeding. For example, a plan
of arrangement may only be successful if the total amount of claims against the
debtor company is less than a specified sum. An appeal from an order
quantifying a claim of a creditor would delay the
CCAA
proceeding and
could jeopardize the companys reorganization.
[27]
I have no doubt that there will be
other circumstances in which the claims process will have an impact on the
reorganization process. Even if the claims process will not jeopardize the
reorganization process, some of the other considerations I have mentioned may
apply to the determination of the claims. For example, the outcome of an
appeal may affect the amounts received by other creditors and may delay the full
implementation of the plan of arrangement. The fact that section 12 of the
CCAA
mandates the determination of claims to be by way of a summary application to
the court illustrates that Parliament recognized that the claims process will
often be sensitive to time constraints.
[28]
There is one other point about the
order relating to the utilities dispute that differentiates it from the typical
CCAA
order. The dispute did not involve a claim against Edgewater but,
rather, it was a claim by Edgewater to have the Landlord refund utilities
payments made by it. Such a claim would normally be pursued in a normal
lawsuit and, if it was determined on a summary application (i.e., a Rule 18A
application), there would have be an appeal as of right, and leave would not have
been required. It was only because the claim was raised as a setoff to the
Landlords property tax claim that it came to be determined in the
CCAA
proceeding.
[29]
I now turn to a consideration of
the usual factors in relation to the order dealing with the property tax
dispute:
1. As stated by the chambers
judge, the point in issue is of no significance to the practice.
2. As conceded by the
respondents on the application before the chambers judge, the point in issue is
of significance to the action itself (in the sense that it finally determines
the Landlords claim).
3. The order did not involve an
exercise of discretion by the
CCAA
judge. The chambers judge was
mistaken in his belief that the
CCAA
judge held that clause 3.05 was
clear and unambiguous; the first issue considered by the
CCAA
judge was
whether the clause was sufficiently clear as to make it enforceable. In my
opinion, the appeal is not frivolous.
4. The appeal will not unduly hinder the
progress of the action because Edgewaters plan of arrangement has been
implemented and the
CCAA
proceeding has come to a conclusion.
On
a consideration of all of the factors, it is my view that leave to appeal the
order dealing with the property tax dispute should be given.
[30]
A consideration of the usual factors
in relation to the order dealing with the utilities dispute leads to the same
observations with one exception. As conceded by the Landlord on this
application, the prospects of success of an appeal do not appear to be as high
as the prospects in an appeal from the other order. However, I am not
persuaded that the appeal has so little merit that it amounts to a frivolous
appeal. If the dispute had not become intertwined with the property tax
dispute as a result of Edgewaters claim of a right of setoff, the dispute
would not have been determined in the
CCAA
proceeding, and the Landlord
would have had an appeal as of right. In all the circumstances, it is my view
that leave to appeal from the order dealing with the utilities dispute should
also be given.
Conclusion
[31]
I would discharge the order made
by the chambers judge dismissing the leave application, and I would grant the
Landlord leave to appeal from both of the orders.
The Honourable Mr. Justice Tysoe
I
agree:
The
Honourable Madam Justice Levine
I
agree:
The
Honourable Madam Justice D. Smith
|
COURT OF APPEAL FOR
BRITISH COLUMBIA
Citation:
R. v. Schwartz,
2009 BCCA 44
Date: 20090206
Docket: CA026741
Between:
Regina
Respondent
And
Douglas Louie Schwartz
Appellant
BAN ON DISCLOSURE
Pursuant to s. 486(3) [now s. 486.4)
C.C.C.
]
Before:
The Honourable Mr. Justice
Low
The Honourable Madam
Justice Kirkpatrick
The Honourable Mr. Justice
Groberman
In person
Appellant
A. Budlovsky, Q.C.
Counsel for the Respondent
Place and Date of Hearing:
Vancouver
, British Columbia
21 January 2009
Place and Date of Judgment:
Vancouver
, British Columbia
6 February 2009
Written Reasons by
:
The Honourable Mr. Justice
Low
Concurred in by:
The Honourable Madam
Justice Kirkpatrick
The Honourable Mr. Justice Groberman
Reasons for Judgment
of the Honourable Mr. Justice Low:
[1]
Mr. Schwartz is serving an
indeterminate sentence after being declared a dangerous offender on 12 January
2000. The designation and the sentence were upheld by this court following a
hearing at which Mr. Schwartz was represented by counsel. He now brings an
application to reopen his appeal. The application originally came on before
Madam Justice Ryan in chambers. She held that, to the extent this
court has the power to rehear a criminal matter, the decision to do so can be
made only by a division of the court.
[2]
Mr. Schwartz was convicted on 24
January 1997 of sexual assault, the predicate offence for the subsequent
dangerous offender proceedings. His appeal from that conviction was dismissed
as abandoned three years later. This court heard his appeal from the dangerous
offender designation on 24 October 2002 and gave written reasons dismissing it
on 18 November 2003: see 2002 BCCA 616.
[3]
On 4 March 2004, the Supreme Court
of Canada dismissed an application brought by Mr. Schwartz for leave to appeal
the order of this court.
[4]
Mr. Schwartz subsequently brought
an application for
habeas corpus
in the Supreme Court of British
Columbia. On 14 September 2004, Ross J. made an order dismissing that
application. Mr. Schwartz did not appeal that order.
[5]
The next step he took was to seek
reconsideration in the Supreme Court of Canada of his leave application. On 17
August 2006 the deputy registrar of that court ruled that his application did
not meet the required standard.
[6]
This court can reopen a criminal
appeal in very limited circumstances.
[7]
In
R. v. Hummel
,
2003 YKCA 4, [2003] Y.J. No. 36 the court held that there is a discretionary
power to reopen after the court has rendered judgment so long as the formal
order flowing from the judgment has not been entered.
[8]
In the very recent case of
R.
v. Henry
, 2009 BCCA 12, in a highly unusual situation, the court
reopened the appeal for consideration on its merits. That was a conviction
appeal that had been dismissed as abandoned many years earlier. The appeal had
not been heard on its merits.
[9]
Mr. Schwartz has exhausted his
remedies in this court. The order dismissing his appeal of the dangerous
offender designation has long since been entered. The court made that order
after a full hearing on the merits. What Mr. Schwartz proposes to do now
essentially is to re-argue the issues canvassed on his appeal. He contends
that the decisions of this court in
R. v. Johnson
(2001), 158
C.C.C. (3rd) 155 and
R. v. Edgar
(2001), 158 C.C.C. (3rd) 212, were
applied and that he should have the opportunity to argue their effect as later
modified by the Supreme Court of Canada on appeal of them to that court.
However, those decisions in the Supreme Court of Canada were handed down by
that court before it heard Mr. Schwartzs leave application and he was still
denied leave. In addition, his argument did not meet the test for
reconsideration of his leave application.
[10]
In any event, even if Mr. Schwartz
had not applied for leave to appeal to the Supreme Court of Canada, this court
would have no power to reopen his appeal.
[11]
In a case in which a convicted
person has exhausted all his appeal remedies and there is an argument that
there has been a miscarriage of justice, that person can apply to the Minister
of Justice under s. 696.1 of the
Criminal Code of Canada
for a
review of his case. That section applies to a dangerous offender finding as
well as to a conviction. If there is any merit to Mr. Schwartzs contention,
and I do not say there is, this is the only way he can now be heard. In the
circumstances, this court has no power to rehear his appeal of the order
designating him a dangerous offender.
[12]
I would dismiss the application.
The Honourable
Mr. Justice Low
I agree:
The Honourable Madam Justice Kirkpatrick
I agree:
The Honourable Mr. Justice Groberman
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. J.G.B.,
2010 BCCA 2
Date: 20100104
Docket:
CA036740
Between:
Regina
Respondent
And
J.G.B.
Appellant
Publication
Ban
Pursuant to Section 486.4(1) of the
Criminal Code
Before:
The Honourable Madam Justice Huddart
The Honourable Mr. Justice Frankel
The Honourable Mr. Justice Tysoe
On appeal from: Supreme Court of British Columbia, May 5, 2008
(
R. v. J.G.B.
, 2008 BCSC 1261, 1262; Cranbrook Registry No. 25073-2)
Counsel for the Appellant:
J.J.
Saulnier
Counsel for the Respondent:
M.T.
Ainslie
Place and Date of Hearing:
Vancouver,
British Columbia
November 30, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
4, 2010
Written Reasons by
:
The Honourable Mr. Justice Frankel
Concurred in by:
The Honourable Madam Justice Huddart
The Honourable Mr. Justice Tysoe
Reasons for
Judgment of the Honourable Mr. Justice Frankel:
Introduction
[1]
J.G.B. appeals his conviction for sexually
assaulting his adopted daughter, A.B. The charge covers the period when A.B.
was between six and 15 years old. J.G.B.s grounds of appeal concern the
admissibility and use of the evidence of J.W., who testified that J.G.B. kissed
her one night, while she and A.B. were lying in the same bed.
[2]
For the reasons that follow, I would dismiss
this appeal.
Factual
Background
[3]
The trial took place before Mr. Justice
Myers of the Supreme Court of British Columbia, sitting without a jury. The
evidence called by both the Crown and defence is reviewed in detail in his
reasons for judgment, which are indexed as 2008 BCSC 1262. Only a summary of
the evidence is required for the purposes of this appeal.
A.B.s Evidence
[4]
A.B. was born in 1990. She and her younger
brother were adopted by J.G.B. and his wife, E.B., after their mother died.
[5]
A.B. testified that the sexual assaults started
just before her seventh birthday, shortly after she began living with J.G.B.
and E.B. The nature of those assaults changed over time.
[6]
The first assault occurred when A.B. was sleeping
in the upper bunk in an upstairs bedroom she shared with her brother. She said
that J.G.B. came into the room, stood on the bottom bunk, and inserted his hand
into her pants, rubbing her clitoris. He also took her hand, put it inside his
pyjama pants, and used it to stroke his penis. While doing this, J.G.B. kissed
A.B. several times.
[7]
A.B. said that J.G.B. repeated this conduct
three or four times a week until she was eight years old, when the bunk beds
were separated into two twin beds. After this, J.G.B. would crawl into A.B.s
bed, and get under the covers. As they were lying side-by-side, he would pull
their respective pyjama pants down and rub his penis against her clitoris until
he ejaculated.
[8]
When A.B. was eight or nine years old, she moved
into a bedroom in the basement. She testified that that J.G.B. continued to
get into bed with her three or four times each week, touching her sexually, and
having her stroke his penis.
[9]
A.B. testified that when she was around ten
years old, her friend, J.W., would often sleep over with her, in the same bed.
A.B. said that J.G.B. would get into bed between them, and tickle them or
engage in horseplay.
[10]
The nature of the sexual acts changed when A.B.
turned 12 years old. J.G.B. would lick her vagina and have her kiss his penis
until he ejaculated. J.G.B. would also kiss A.B. and rub her breasts, which
were beginning to develop. A.B. testified that on three occasions shortly
before her 13th birthday, J.G.B. inserted his penis into her vagina.
[11]
A.B. said that the way J.G.B. kissed her changed
over time. At first he would give her a short kiss (i.e., peck) on the lips.
Later, he would kiss her by placing his tongue in her mouth. She could not
recall when this latter form of kissing started, but said that it was while she
was sleeping upstairs. It never occurred when anyone else was present.
[12]
A.B. said that sexual contact ended just before
she turned 15, when she told J.G.B. that if he did not stop, then she would
tell E.B.
J.W.s
Evidence
[13]
J.W. was seventeen when she testified. She and
A.B. were best friends when they were nine or ten years old. For approximately
one year, J.W. would often sleep over at A.B.s house. She said that J.G.B.
would tuck them in, and lie in bed between them, playing around with, or
tickling them. He would be both over and under the covers, and would stay with
them until they fell asleep.
[14]
In the midst of J.W.s examination in-chief, a
voir
dire
was held to determine whether the Crown could introduce evidence that J.G.B.
had kissed her. J.W. was examined and cross-examined on the
voir dire
.
She testified that the last time she slept over at A.B.s house, they used a
bed in the upstairs bedroom. J.W. said that J.G.B. came into the room, which
was dark, and lay down in the bed between her and A.B. After A.B. had fallen
asleep, and with J.W. nearly asleep, J.G.B. leaned over J.W. and gave her a
long kiss with his mouth open. J.W. said it was like a kiss she had seen
J.G.B. give A.B. After kissing J.W., J.G.B. got up and left the room. J.W. then
heard J.G.B. and E.B. arguing. This was the only time J.W. had been kissed by
J.G.B.
[15]
At the end of the
voir dire
, J.W. resumed
and completed her testimony on the trial proper.
Voir Dire
Ruling
(2008 BCSC 1261)
[16]
Before the Crown closed its case, the trial
judge stated that J.W.s evidence with respect to having been kissed by J.G.B. was
admissible as either original evidence, or as similar-fact evidence. He
said he would provide reasons for that decision later.
[17]
The trial judge gave his
voir dire
ruling
just before he pronounced his reasons for convicting J.G.B. In his ruling, the
trial judge noted that the Crown had advanced two alternative, but
inconsistent, bases for admitting J.W.s testimony: (1) that J.G.B. had intended
to kiss A.B. and, therefore, evidence of the kiss was original evidence, and
(2) that J.G.B. had intended to kiss J.W., and evidence of the kiss was
admissible under the rules governing similar-fact evidence.
[18]
With respect to admitting J.W.s testimony as
original evidence, the trial judge said:
[18] I will first consider whether the
evidence is admissible on the first alternative, namely that J.G.B. intended to
kiss A., but kissed J.W. by mistake.
[19] I think that the evidence is
sufficient to permit a trier of fact to conclude that J.G.B. intended to kiss
A. The room was dark. He was in between both of the girls. Nothing was said
before the kiss.
[20] That
evidence would support A.s evidence that her father kissed her in bed. I do
not consider that its prejudicial value exceeds its probative value. As the
trier of fact, I am able to recognise that the evidence is supportive of only
one aspect of the sexual acts described by A.
[19]
The trial judge next considered whether J.W.s
testimony was admissible as similar-fact evidence, having regard to the framework
for deciding this question set out in
R. v. Handy
, 2002 SCC 56, [2002] 2
S.C.R. 908. After finding that there had been no collusion between A.B. and
J.W., the trial judge continued:
[26] Turning to the similarity of the
conduct to that comprised in the indictment, kissing is one act of many that
has been alleged by A. There is some similarity, but it is limited.
[27] When
considering the potential for prejudice of the evidence and the balancing of
its probative value against that potential prejudice, I think the factors that
I have admitted it into evidence on the alternative basis, and that this is a
trial without a jury, have a significant bearing. I will have in front of me
evidence of the kiss in any event. If I determine that J.G.B. did not intend
to kiss J.W. but, rather, A., the prejudice of leaving it open for me to
determine the weight if any of the evidence as similar fact evidence, is
minimal.
J.G.B.s
Evidence
[20]
J.G.B. denied sexually assaulting A.B. He
testified that he only ever kissed A.B. with a peck on the lips or forehead to
say goodnight. He said that he never lay down in bed with her, either on top
of or under the covers. He expressed the view that such conduct was
inappropriate. He could not recall ever tickling A.B. and J.W. during the
sleepovers, and denied ever lying in the same bed with them.
Reasons for Conviction
(2008 BCSC 1262)
[21]
The trial judge did not accept J.G.B.s
evidence, nor was he left with a reasonable doubt by it. Rather, he accepted
A.B.s version of events. He also accepted J.W.s evidence regarding the kiss,
but found that on that occasion J.G.B.s intention had been to kiss A.B. In
this regard, the trial judge said:
[184] I find J.W. to have been a credible
witness and her evidence to be credible.
[185] I do accept her evidence that she
was kissed by J.G.B. I conclude that J.G.B. intended to kiss A., not J.W. I
say this because kissing J.W. would have been a different level of conduct; one
far more risky. I think that to be unlikely.
[186] I
recognise the limits of J.W.s evidence regarding the kiss: namely, that it
did not involve any further activity similar to that alleged by A. That said,
J.W.s evidence confirms A.s evidence that J.G.B. got into bed with the
children, which is something he denied. That, in turn, lends credence to A.s
evidence that J.G.B. got onto the bed with her when she was alone, something
else he denied, as I noted earlier.
Analysis
[22]
J.G.B. submits that J.W.s testimony regarding
the kiss should not have been admitted because it does not meet the
requirements of the rules relating to similar-fact evidence. J.G.B. further
says that, in any event, the inference drawn by the trial judge, i.e., that he
intended to kiss A.B., amounts to unfounded speculation based on impermissible
propensity reasoning.
Admissibility
of the Kiss Incident
[23]
J.G.B.s position is that the evidence of the
kiss was evidence of extrinsic discreditable conduct beyond that alleged in the
indictment that was introduced to show he had a propensity to engage in sexual
conduct with young girls. He says that evidence is more prejudicial than
probative. His factum contains a very detailed argument that discusses the
leading authorities dealing with the admission of similar-fact evidence.
[24]
In my view, a similar-fact analysis is
unnecessary in this case, as the trial judge did not err in admitting J.W.s
testimony as original evidence. It was evidence, admissible in its own right, capable
of supporting A.Bs evidence with respect to J.G.B.s conduct towards her.
[25]
It is important to keep in mind that the kiss
incident does not involve conduct unconnected to the allegations that form the
subject matter of the charge. The incident took place in A.B.s bed, in her presence,
and in circumstances from which it could be inferred she was the person J.G.B.
intended to kiss. It is also important to keep in mind that, in admitting
the kiss incident, the trial judge was very much alive to the limited use that
properly could be made of that evidence. As he noted in his ruling, as the
trier-of-fact (i.e., a judge sitting without a jury), he would be able to
confine the use of this evidence to the limited purpose for which he was
admitting it: see
R. v. Arason
(1992), 78 C.C.C. (3d) 1 at 39
(B.C.C.A.).
[26]
Having concluded that the trial judge was
correct in admitting the kiss incident as original evidence, it is not
necessary to consider whether he was also correct in ruling it admissible as
similar-fact evidence.
Use of
the Kiss Incident
[27]
J.G.B.s position is that there was no basis in
the evidence to support the trial judges finding that he intended to kiss A.B.
rather than J.W., and that, in drawing that inference, the trial judge wrongly proceeded
on the assumption that he sexually assaulted A.B. In his submission, the trial
judge engaged in the following flawed reasoning process:
(a) contrary to the
presumption of innocence, he started with the assumption that J.G.B. had sexually
assaulted A.B.;
(b) based on that
assumption, he found that J.G.B. had intended to kiss A.B.;
(c) having found
that the kiss was intended for A.B., he treated J.W.s evidence as confirming
aspects of A.B.s testimony; and
(d) having found
confirmation of A.B.s evidence, he accepted her evidence, and concluded beyond
a reasonable doubt that J.G.B. had sexually assaulted her.
[28]
I do not agree with that submission. As I read
the trial judges reasons, he proceeded as follows:
(a) he found J.W. to
be a credible witness, and her evidence reliable;
(b) he accepted J.W.s
evidence that J.G.B. got into bed with her and A.B. (something J.G.B. denied);
(c) he accepted J.W.s
evidence regarding the kiss incident (something J.G.B. denied);
(d) he found it more
likely that J.G.B. intended to kiss A.B.;
(e) he considered J.W.s
evidence as confirmatory of A.B.s evidence that J.G.B. got into bed with the
two of them, and supportive of A.B.s evidence that J.G.B. got into bed with
her when she was alone (something J.G.B. denied); and
(f) based on a
consideration of the whole of the evidence, he accepted A.B.s evidence as
proving, beyond a reasonable doubt, that J.G.B. had committed the alleged
offence.
[29]
I am unable to see any impermissible reasoning
in that analysis. The trial judge did not assume anything, nor did he use the
kiss incident as evidence of discreditable conduct. Rather, he evaluated the
evidence in a logical manner, drawing inferences that are supportable on that
evidence.
[30]
In the end, this was a credibility case. Having
found J.W. credible, the trial judge regarded her evidence as strengthening his
belief in the truthfulness of A.B.s evidence. That is something that was open
to him to do.
Conclusion
[31]
I would dismiss this appeal.
The Honourable Mr. Justice Frankel
I agree:
The Honourable
Madam Justice Huddart
I agree:
The Honourable Mr. Justice Tysoe
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Ward,
2010 BCCA 1
Date: 20100104
Docket:
CA036841
Between:
Regina
Respondent
(
Respondent
)
And
Gail
Phyllis Ward
Applicant
(
Appellant
)
Before:
The Honourable Mr. Justice Lowry
(In Chambers)
On
appeal from: Supreme Court of British Columbia, December 1, 2008,
(
R. v. Ward
, 2008 BCSC 1653, Docket X071775)
Counsel for the Appellant:
M.
T. K. Berry
Counsel for the (Crown) Respondent:
W.
P. Riley
Place and Date
of Hearing:
Vancouver, British Columbia
December 18, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
4, 2010
Reasons for
Judgment of the Honourable Mr. Justice Lowry:
[1]
The applicant seeks leave to appeal the order of
a judge of the Supreme Court dismissing her appeal of her conviction before the
Provincial Court for possession of a small quantity of cocaine. At issue is
the trial courts determination that the admission of evidence obtained in a
manner that infringed the applicants
Charter
rights would not bring the
administration of justice into disrepute: s. 24(2).
The
Conviction
[2]
The applicant was arrested after being observed
in suspicious circumstances in a back alley in Surrey in an area known to
police as a place where people in the drug trade congregated to conduct drug
transactions. The arresting officer was an experienced police officer who had
worked in the area for a long time. He had observed literally hundreds of drug
transactions and carried out many arrests and drug seizures. He observed the
applicant together with several other individuals standing in an alley. The
applicant was holding a weight scale. She and another person appeared to be
attempting to conceal what they were doing. Both were seen to be conducting
what the officer referred to as heat checks, being visual scans for police.
After making these observations, and determining he had sufficient grounds, he
arrested the applicant, conducted a search incidental to arrest, and found a
small amount of rock cocaine in a contact lens container in her left jacket
pocket.
[3]
On conducting a
voir dire
, the trial
judge found that the officer did not have reasonable and probable grounds for
arrest, and that the ensuing search was therefore in violation of the applicants
s. 8
Charter
rights. He then followed the approach to the s. 24(2)
analysis prescribed by the Supreme Court of Canada in
R. v. Collins
,
[1987] 1 S.C.R. 265, 33 C.C.C. (3d) 1, and
R. v. Stillman
, [1997]
1 S.C.R. 607, 113 C.C.C. (3d) 321, in determining that the admission of
the evidence would not bring the administration of justice into disrepute. He
concluded:
[9] Turning next to the next part of the
Collins
test, I find that while this breach was not a flagrant breach, not particularly
obtrusive or egregious, it was certainly deliberate. But the officer had a
subjective, genuine belief in the lawfulness of what he was doing. I therefore
find at the end of the day, applying the
Collins
test to this evidence,
that it has not been established by the defence, on a balance of probabilities,
that the admission of the cocaine in this case would bring the administration
of justice into disrepute, and accordingly I decline to exclude the evidence.
[
R. v. Ward
(17 March 2008) Surrey Registry 165532-1 (B.C. Prov. Ct.)]
[4]
On admitting the evidence, the judge then found
the applicant guilty as charged.
[5]
For reasons indexed as 2008 BCSC 1653, the judge
presiding in the Supreme Court upheld the trial judges decision, finding no
apparent error as to the applicable principles or any unreasonable finding (para.
34). She found the trial judge considered all the relevant factors and that the
evidence was properly admitted.
The
Application
[6]
The considerations on an application of this
kind were recently restated in
R. v. Winfield
, 2009 YKCA 9, 79
M.V.R. (5th) 19:
[13] To
obtain leave to appeal from the decision of a summary conviction appeal court,
the applicant must establish that (a) the ground of appeal involves a question
of law alone, (b) the issue is one of importance, and (c) there is
sufficient merit in the proposed appeal that it has a reasonable possibility of
success. The overriding consideration in the exercise of the discretion
to grant or refuse leave is the interests of justice:
R. v. Cai
,
2008 BCCA 332, 258 B.C.A.C. 235 at para. 26 (Chambers);
R. v. Gill
,
2008 BCCA 259 at para. 3 (Chambers).
[7]
The applicant contends the approach to be taken
to a s. 24(2) analysis is now different than it was at the time of the trial,
and the first level of appeal, by virtue of the Supreme Court of Canadas
decision in
R. v. Grant
, 2009 SCC 32, 245 C.C.C. (3d) 1. This is said
to raise a question of law of sufficient importance to merit the proposed
appeal being heard. The applicant maintains that under the approach that is
now prescribed, the evidence obtained by the officer would have to be held to
be inadmissible.
[8]
In
Grant
, at para. 71, McLachlin C.J.C.
and Charron J., writing for the majority, said s. 24(2) requires a court to
balance the effect of admitting evidence on societys confidence in the justice
system based on three lines of inquiry:
... whether the admission
of evidence obtained in breach of the
Charter
would bring the
administration of justice into disrepute engages three avenues of inquiry, each
rooted in the public interests engaged by s. 24(2), viewed in a long-term,
forward-looking and societal perspective. When faced with an application
for exclusion under s. 24(2), a court must assess and balance the effect of
admitting the evidence on societys confidence in the justice system having
regard to: (1) the seriousness of the
Charter
-infringing state
conduct (admission may send the message the justice system condones serious
state misconduct), (2) the impact of the breach on the
Charter
-protected
interests of the accused (admission may send the message that individual rights
count for little), and (3) societys interest in the adjudication of the case
on its merits. The courts role on a s. 24(2) application is to balance
the assessments under each of these lines of inquiry to determine whether,
considering all the circumstances, admission of the evidence would bring the
administration of justice into disrepute.
[9]
In assessing the seriousness of the infringing
conduct, the court should consider whether admission of the evidence would
suggest to the public that the court condones state deviation from the rule of
law:
Grant
at para. 72. In making this determination, the court should
evaluate the seriousness of the police conduct with an eye to whether the
violation was minimal and inadvertent, or reckless and wilful. Good faith that
is not a result of ignorance of or wilful blindness of
Charter
standards
is a factor that weighs towards admission. Deliberate police conduct in
violation of established
Charter
standards supports exclusion:
Grant
at para. 76.
[10]
Consideration of the impact on the protected
interests of an accused requires the court to evaluate the extent to which the
breach undermined the interests protected by the right infringed:
Grant
at paras. 76-78. A s. 8 violation impacts on the right to privacy and to
human dignity. A higher expectation of privacy in the area of violation
results in a greater negative impact on the interests protected by s. 8.
[11]
With respect to societys interest in an
adjudication on the merits, the court must assess the impact on the perception
of the administration of justice in failing to admit the evidence. The fact
that evidence is reliable is not determinative of its admission:
Grant
at para. 80. The reliability of the evidence and the fact that it will
facilitate the discovery of the truth is a factor to weigh against other
factors that tend toward exclusion.
Discussion
[12]
The applicant contends that in saying the search
the officer undertook was deliberate the judge found the
Charter
breach
to have been wilful. She maintains that renders the officers infringing
conduct serious. The applicant also contends that, contrary to what the trial
judge said, the search conducted was intrusive because the pocket where the
cocaine was found was where there was a high expectation of privacy resulting
in a negative impact on the right protected. As I understand the
submission, it is that on the basis of these two considerations the proposed
appeal has sufficient merit to warrant leave being granted.
[13]
I am unable to accept that is so.
[14]
With respect to the seriousness of the
infringing conduct, I do not accept the judge found the officer wilfully
infringed the applicants
Charter
rights. The judge found the officer
acted deliberately in the sense that he intended to arrest and search the
applicant, but he lacked bad faith in acting as he did, because he had a
subjective, genuine belief in the lawfulness of what he was doing. This
renders the infringement less serious and weighs towards admitting the
evidence.
[15]
The judge saw the search as not particularly
obtrusive or egregious. It was a relatively minor search which quickly led to
the discovery of the small quantity of cocaine. While a persons pocket may be
a place where there is a relatively high expectation of privacy, it does not
necessarily follow that the impact on the right protected in this instance was
so great as to tip the balance of the s. 24(2) assessment against admission of
the evidence.
[16]
The evidence recovered as a result of the search
conducted by the officer was highly reliable and its exclusion would have a
negative impact on the determination of the truth. Certainly that was, in this
case, a factor weighing in favour of admission in serving societys interest in
an adjudication on the merits.
[17]
While it may be the issue on the proposed appeal
is one of law, it involves a deferential standard, and I consider it of
questionable importance given the context in which it is raised. In any event,
I do not consider the appeal would have any reasonable prospect of success and
it would not, in my view, be in the interests of justice to grant leave.
[18]
The application for leave to appeal is
accordingly dismissed.
The Honourable Mr. Justice Lowry
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
V.W.R. Capital Corporation v.
Keremelevski
,
2010 BCCA 599
Date: 20100104
Docket:
CA036524
Between:
V.W.R. Capital Corporation
Respondent
(
Petitioner
)
And
Bozidar Vujicic and Svetlana Vujicic
Canadian Western Trust Company
Ivanco Keremelevski
Appellants
Before:
The Honourable Madam Justice Prowse
(In Chambers)
On appeal from: Supreme
Court of British Columbia, September 24, 2008
(
V.W.R. Capital Corporation v. Keremelevski
, New Westminster Reg.
S112278)
Oral Reasons for Judgment
Appellant appearing In Person:
I. Keremelevksi
Counsel for the Respondent:
P. Roxburgh
Place and Date of Hearing:
Vancouver, British
Columbia
January
4, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 4, 2010
[1]
PROWSE J.A.
: On November 27, 2009, this Court dismissed Mr.
Keremelevskis appeal from an order
nisi
of foreclosure of a property in
Port Coquitlam, British Columbia, in which Mr. Keremelevski claimed a
beneficial interest and in which he had been living as a tenant. He has been
involved in an ongoing dispute with the registered owners of the property, Mr.
and Mrs. Vujcic. The Vujcics earlier efforts to appeal the order
nisi
failed.
[2]
Mr. Keremelevski has applied for a stay of execution under of the order
nisi
pending his intention to seek leave to appeal this Courts decision to the
Supreme Court of Canada. In that regard, he advises that he faxed a Notice of
Application for Leave to Appeal to the Supreme Court of Canada on December 23,
2009, and he has some indication that the fax was received. The Notice has not
been provided to counsel for V.W.R. but, for the purpose of this application, I
am prepared to accept that Mr. Keremelevski has initiated his application for
leave to appeal in the Supreme Court of Canada.
[3]
The respondent opposes this application on the basis that the proposed
appeal is without merit, that the amounts owing on this mortgage and at least
one other mortgage on the property exceed the equity in the property, and that
even if Mr. Keremelevski should be granted leave to appeal, and even if his
appeal should succeed, the most he could expect to receive would be a monetary
judgment.
[4]
This Court has the power to grant a stay of proceedings, including
execution, pending an appeal to the Supreme Court of Canada pursuant to s.
18(2) of the
Court of Appeal Act
. This jurisdiction is also recognized
under s. 65.1 of the
Supreme Court Act.
[5]
The criteria to be considered on an application for a stay are
essentially the same as those governing interlocutory injunctions, namely:
whether there is a serious question to be tried; whether the applicant would
suffer irreparable harm if the stay is not granted; and whether the applicant
would, on the balance of convenience, suffer more harm if the stay is refused
than the respondent would suffer if it were ordered.
[6]
In this case, with respect to the merits, Mr. Keremelevski submits that
this Court erred in not providing him with sufficient time to explain his case.
He submits that the appeal was originally set for a full day and that the
amount of time he was given was reduced so that the appeal was heard in half a
day. He submits that he was not allowed to make all of his arguments as fully
as he wished, based on the materials he filed. He submits that this Court did
not properly consider all of his arguments.
[7]
In the result, I am not persuaded that Mr. Keremelevski has satisfied
the criteria required in order to obtain a stay of proceedings. I can see no
prospect of Mr. Keremelevksi being granted leave to appeal from the judgment of
this Court, nor can I see any merit in his proposed appeal. To the extent he
continues to have any claim against the Vujicics in the Supreme Court, in
relation to the property or otherwise, he can take whatever steps are open to
him to pursue relief there. In the meantime, the respondent has been denied the
ability to pursue its entitlement to relief under the order
nisi
of
foreclosure and the interest and other costs continue to mount, not only with
respect to their mortgage but with respect to other mortgages registered
against the property. In my view, this is not a case where the interests of
justice favour a stay. In the result, I would dismiss the application for a
stay.
The Honourable Madam Justice Prowse
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Tickell,
2010 BCCA 3
Date: 20100105
Docket:
CA037509
Between:
Regina
Respondent
And
Bryan Tickell
Applicant
Before:
The Honourable Mr. Justice Hall
(In Chambers)
On appeal from the Provincial Court of British Columbia, June 1,
2009,
(
R. v. Tickell
, 49581-2-C)
Applicant in Person by Teleconference
Bryan
Tickell
Counsel for the Respondent:
M.
Maisonville
I. Hay
Place and Date of Hearing:
Vancouver,
British Columbia
December 4, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
5, 2010
Reasons for
Judgment of the Honourable Mr. Justice Hall:
[1]
This is an application by Mr. Tickell for the
appointment of counsel to assist him with his sentence appeal. The applicant,
who had a position with the office of the Public Guardian and Trustee of
British Columbia, abused his position to commit frauds upon individuals whose
affairs were under the direction of the Public Guardian and Trustee. Those
activities were the subject of criminal charges to which the appellant pleaded
guilty. The circumstances outlined by the sentencing judge indicate that the
activities of the applicant that constituted the crimes displayed a measure of
planning and sophistication. When Mr. Tickell was before me, he appeared to be
reasonably intelligent and articulate in his presentation of his application.
[2]
It seems to me that the sentence appeal that is
proposed to be pursued by this applicant is not an unduly complicated or
intricate legal proceeding. I am satisfied that this applicant has the requisite
mental capacity and resources to adequately represent himself before this Court
on any sentence appeal. Because I do not consider that there has been demonstrated
any necessity for counsel to be appointed to assist the applicant with the
effective prosecution of his appeal from sentence, I would decline to make the
order requested for the appointment of counsel. In the result, the application
must stand dismissed.
The Honourable Mr. Justice Hall
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Thompson v. Canada (Attorney
General)
2010 BCCA 60
Date: 20100106
Docket: CA036169
Between:
Lisa Darlene Thompson
Appellant
(
Plaintiff
)
And
Attorney General of Canada,
Attorney General of British Columbia,
Mike Pfeifer, Fred Bott, Fraser Health Authority,
Lois Felkar and Estate of Bryan Bruce Heron, Deceased
Respondents
(
Defendants
)
Before:
The Honourable Madam Justice Prowse
(In Chambers)
On
appeal from Supreme Court of British Columbia, May 8, 2008
(
Thompson v. Attorney General (Canada)
, 2008 BSCS 582, Van. Reg.
S052565)
Oral Reasons for Judgment
Counsel for the Appellant:
A.C.
Ward
Counsel for
the Respondents, Attorney General of Canada, Attorney General of British
Columbia, M. Pfeifer, F. Bott
H.J. Roberts
Counsel for
the Respondents, Fraser Health and L. Felkar
W.S. Dick
Counsel for
the Respondent, Estate of B. Heron, Deceased
T.E. Sprague
Place and Date of Hearing:
Vancouver,
British Columbia
January 6, 2010
Place and Date of Judgment:
Vancouver
, British Columbia
January
6, 2010
[1]
PROWSE J.A.
: Ms.
Thompson is seeking directions as to whether she requires leave to appeal from
an order made by a chambers judge on May 8, 2008, following the hearing of a
special case. The order provides:
THIS COURT ORDERS
That Lisa
Thompson cannot maintain an action in negligence against any of the Defendants
to recover compensation for psychiatric injuries suffered as a consequence of
the deaths of Sherry Heron and Anna Adams.
[2]
This appeal was reinstated by order of Madam
Justice Rowles made December 9, 2009. At that time, Madam Justice Rowles
expressed the view that the order was final with respect to the determination
of the issue raised in the special case but, since there seemed to be some
doubt expressed by counsel in that regard at that time, she directed counsel
for Ms. Thompson to file a Notice of Appeal (a Notice of Application for Leave
to Appeal already having been filed) and to seek directions as to whether leave
was required and, if leave was required, to seek leave to appeal.
[3]
As of today, the Notice of Appeal has not been
filed. There was apparently some misunderstanding as to the effect of Madam
Justice Rowles order, but I am advised by counsel for Ms. Thompson that he
will file that Notice of Appeal today. No exception is taken to that by the
respondents.
[4]
It is unnecessary to review the background of
this case which is set out in detail in the reasons of the chambers judge, 2008
BCSC 582, and summarized by Madam Justice Rowles in her recent chambers
decision, 2009 BCCA 614. In my view, there is no doubt that the order of the
chambers judge disposing of the issue raised on the special case is a final
order which does not require leave to appeal. None of the respondents has
argued otherwise. During the course of the hearing of this application there
was a discussion as to whether, and to what extent, counsel for Ms. Thompson
was seeking to raise issues related to the orders of Master Tokarek which were
dealt with briefly by the chambers judge in this matter by way of dismissing an
application for leave to extend the time to appeal the decisions of Master
Tokarek. I am advised by counsel for Ms. Thompson on this application that the
only order he proposes to pursue on this appeal is, in fact, the order as
framed as stated of May 8, 2008.
[5]
On that basis, my conclusion is, as I have
stated, leave to appeal is not required and the appeal should proceed on the
basis of the Notice of Appeal, which will be filed today.
[6]
The only question I have is whether directions are
required with respect to the appeal proceeding from this point onward? The
Notice of Appeal was to take effect as of the date the notice of application
for leave to appeal was filed. I do not know to what extent Madam Justice
Rowles dealt with that question, but arguably, extensions of time are required
for all of the filings thereafter. That is why I want to make sure we do not
run into stumbling blocks. It seems to me that some kind of filing schedule
should be agreed upon by counsel. If I can assist in that regard, I will, but
if you think you can do it on your own then, I urge you to do so. In other
words, I do not want the situation to occur where counsel attempt to file
documents at the Registry and they are told they are out of time. It may be that
you wish to agree that all filings shall be in accordance with the Rules and
shall flow from this date forward so that today is the starting date for all
further applications. If so, I am happy to make that order.
(counsel
agree)
[7]
PROWSE J.A.
: I
will make that part of my order in terms of directions. I would direct that all
further filings following the filing of the Notice of Appeal today will take
place with today as the running date from which all further filings follow and
that the parties will hereafter adhere to the time limits set out in the
Court
of Appeal Rules
. That filing schedule will be subject to the consent of
counsel if for some reason they wish to make adjustments.
(submissions
on costs)
[8]
PROWSE J.A.
: In
my view, the appropriate order with respect to this application is that each
party will bear his or her own costs.
The Honourable Madam Justice Prowse
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
de Rooy v. Bergstrom,
2010 BCCA 5
Date: 20100107
Docket:
CA036665
Between:
Gertrude Frederika de Rooy
Respondent
(
Plaintiff
)
And
James Terrence Bergstrom
Appellant
(
Defendant
)
Before:
The Honourable Mr. Justice Chiasson
The Honourable Mr. Justice Frankel
The Honourable Mr. Justice Bauman
On appeal from: the Supreme Court of British Columbia, November 14,
2008
(de
Rooy
v. Bergstrom
, Vancouver Docket No. F950264)
Counsel for the Appellant:
H.W.
Wiebach
Counsel for the Respondent:
R.N.
Toews
Place and Date of Hearing:
Vancouver,
British Columbia
June 19, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
7, 2010
Written Reasons by
:
The Honourable Mr. Justice Frankel
Concurred in by:
The
Honourable Mr. Justice Bauman
Concurring Reasons by:
The Honourable Mr. Justice Chiasson (p.
22, para. 69)
Reasons for
Judgment of the Honourable Mr. Justice Frankel:
Introduction
[1]
James Terrence Bergstrom appeals from the order of
a judge of the Supreme Court of British Columbia requiring him to pay
retroactive child support with respect to the three children from his
common-law relationship with Gertrude Frederika de Rooy. His position is that
the chambers judge, Mr. Justice Groves, had no jurisdiction to vary an interim
order for child support and that, in any event, the judge erred in both fact
and law in his disposition of the matter. As well, Mr. Bergstrom submits
that it is inequitable to base his child support obligations on the
Federal
Child Support Guidelines
, SOR/97-175.
[2]
For the reasons that follow, I would allow this
appeal in part. Mr. Bergstroms liability should be reduced by the amount
ordered to be paid with respect to the oldest child. At the time of Ms. de
Rooys application, the oldest child was not a child as defined by s. 87
of the
Family Relations Act
, R.S.B.C. 1996, c. 128, and could not
be the subject of a retroactive child support order.
[3]
It should be noted that I agree with the
additional observations made by Mr. Justice Chiasson.
Factual Background
[4]
Mr. Bergstrom and Ms. de Rooy lived in
a common-law relationship from late 1985 until May 1992. They have three children
together: N.B., born May 27, 1986; D.B., born January 27, 1989; and R.B., born
October 9, 1990. Mr. Bergstrom was married prior to entering into a
relationship with Ms. de Rooy. He has three children from that marriage.
[5]
When Ms. de Rooy and Mr. Bergstrom
separated in May 1992, he continued to reside in their family home, and
continued to provide support for her and their children. He remained in the
family home until May 1993. After Mr. Bergstrom moved from the family
home he did not pay Ms. de Rooy child support on a regular basis. He did,
however, pay his former wife $300.00 per month in child support.
[6]
Mr. Bergstroms employment required him to
engage in heavy physical labour. In 1978, he suffered a job-related injury.
By early 1994, he was no longer capable of engaging in heavy physical labour.
As he was unable to work, Mr. Bergstrom received employment insurance and,
later, workers compensation benefits. Mr. Bergstrom was approved for a
retraining, and continued to receive workers compensation benefits while
undergoing retraining.
[7]
On May 4, 1995, Ms. de Rooy commenced an
action against Mr. Bergstrom in the Supreme Court of British Columbia
(Vancouver Docket No. F950264) under the provisions of the
Family
Relations Act
, seeking:
(a) sole
interim and permanent custody of their children;
(b) interim
and permanent maintenance for the support of the children; and
(c) an
order with respect to the division of property with respect to the family home.
[8]
On May 17, 1995, a master of the Supreme Court
made an order in Docket No. F950264, by consent, that:
(a) granted
Ms. de Rooy interim custody of the children;
(b) granted
Mr. Bergstrom reasonable and generous access to the children; and
(c) ordered
Mr. Bergstrom pay to Ms. de Rooy for the interim maintenance of the
children ... the sum of $600.00 per month commencing the first day of May, 1995
and on the first day of each and every month thereafter until further Order of
this Court.
[9]
Following the making of the Supreme Court consent
order, the parties, both of whom were represented by counsel, negotiated a
comprehensive separation agreement, which they signed on December 20, 1995. Amongst
other things, that agreement dealt with custody of and access to the children,
child support, and the division of assets. It provided that neither party
would claim spousal maintenance from the other. Also, Mr. Bergstrom
agreed to transfer his interest in the family home to Ms. de Rooy.
[10]
The agreement stated that it was intended to be
a settlement with respect to guardianship, custody, and maintenance of the
Children. It also stated that Mr. Bergstrom is in receipt of Workers
Compensation benefits while a student in the City of New Westminster and
receives $28,800.00 gross per annum.
[11]
With respect to child support, the agreement
provides:
MAINTENANCE FOR
CHILDREN
8. (1) Terry is to pay to Trudy, for the
maintenance of the children, namely, [names and dates of birth omitted], the
sum of $200.00 TWO HUNDRED DOLLARS per month per child commencing September 1,
1995, and thereafter, on the 1st day of each and every month until that child:
(a) attains the age of 19 years;
(b) marries;
(c) dies; or
(d) becomes self-supporting;
whichever comes first.
(2) While Terry is unemployed the
amount of child maintenance for the Children, namely, [names and dates of birth
omitted], is reduced to $66.00 per month per child until Terry regains
employment.
(3) While required to pay Child
Maintenance under this Agreement, Terry will maintain medical and dental
insurance for the children.
(4) The amount of Child Maintenance
shall be increased annually on the anniversary date of the Separation Agreement
by same percentage as Terry receives as salary increase during the period
before the anniversary date.
9. While
required to pay Child Maintenance under this Agreement, Terry and Trudy will
share the cost of tuition, fees, books, and any other expenses related to that
Child attending any post secondary educational institution in proportion to
their respective incomes.
[12]
I note that both the interim order and the
separation agreement pre-date the coming into force of the federal
Guidelines
that have, since 1998, applied under the
Family Relations Act
by virtue
of the
Child Support Guidelines Regulation
, B.C. Reg. 61/98. As a
result, Mr. Bergstrom was entitled to claim a tax deduction for support
paid under either the interim order or the agreement. Ms. de Rooy, on the
other hand, was required to declare payments she received as income on her tax
returns. Payments based on the
Guidelines
are neither deductible by the
payor, nor taxable in the hands of the recipient.
[13]
The separation agreement also contained the
following provisions:
GENERAL
21. If either party takes any
proceedings with respect to the parties assets or responsibilities to each other,
pursuant to this Agreement this Agreement shall
(a) be filed or exhibited in
such proceedings;
(b) continue in effect after
any order is made in the proceedings; and
(c) survive the divorce.
22. The parties shall execute a
consent to the filing of this Agreement in the Supreme Court of British
Columbia, which, only after unsuccessful mediated settlement, at the option of
either party, may be filed with the Supreme Court of British Columbia.
. . .
25. This Agreement constitutes the
entire agreement between the parties and there are no representations, promises,
warranties, covenants, or conditions other than those expressly set forth in
this Agreement.
. . .
27. Any
provision of this Agreement that is void, voidable, or unenforceable is
severable and the remainder shall continue in effect.
[14]
Prior to executing the separation agreement the
parties orally agreed that Mr. Bergstrom would not pay child support for a
number of years. Although there is disagreement as to the length of this
non-payment period, Ms. de Rooy accepts that it was to last until 2000,
when Mr. Bergstrom would no longer be paying support for the children from
his earlier marriage.
[15]
As a result of their agreement, Mr. Bergstrom
did not pay Ms. de Rooy child support. He did, however, provide some
money for clothing, gifts, and extra-curricular activities.
[16]
Mr. Bergstrom completed his retraining at
the end of May 1999. In October 1999, he commenced full-time employment. By that
time he was no longer supporting his other children. That job lasted six
months. Mr. Bergstrom was paid on an hourly rate basis, equivalent of an
annual salary of approximately $42,000.00.
[17]
In December 1999, Ms. de Rooy was in dire
financial straits. She met with Mr. Bergstrom and asked him to begin
paying child support. Following this meeting Mr. Bergstrom paid Ms. de
Rooy $1,500.00. Mr. Bergstroms income for 1999, including workers
compensation benefits, was in excess of $53,000.00.
[18]
On January 30, 2000, the parties signed a handwritten
document that states:
This is a
preliminary agreement between Trudy De Rooy and J. Terry Bergstrom regarding
child support starting March 1st/2000 for $400.00 per month. We also agree
that I will on each quarter to [
sic
] try to put in $200.00 per child for
their education funds which are located in the Templeton Growth Fund.
[19]
After that document was signed, Mr. Bergstrom
began paying Ms. de Rooy $400.00 per month for the support of their three
children. He increased the payments to $600.00 per month in late 2000, when he
obtained a higher paying job. Mr. Bergstrom did not claim the child
support payments as a deduction on his income tax returns, and Ms. de Rooy
did not include them as income on her returns. From 2000 to 2007, Mr. Bergstroms
annual income was in the range of $50,000.00 to $94,500.00. If he had been paying
under the
Guidelines
in 2000, then, based on his income that year, his
monthly payments would have been $426.00 for one child, $696.00 for two
children, or $911.00 for three children. Based on his 2007 income, the monthly
Guidelines
amounts that year were respectively $860.00, $1374.00, and
$1784.00.
[20]
On October 7, 2005, Ms. de Rooy, acting on
her own behalf, filed the separation agreement in the Provincial Court. She sought
to enforce the child support terms of the agreement, and to have new child
support amounts set under the
Guidelines
, so that those payments would
not be taxable in her hands.
[21]
Ms. de Rooy sought assistance from the
provincial Family Maintenance Enforcement Program. On October 20, 2005, she
completed a List of Payments Form. In filling out the form she indicated she
did not wish to claim any payments owing from January 1993 to December 2001.
[22]
On March 3, 2006, Ms. de Rooy filed an
Application to Change or Cancel an Order in the Provincial Court. However,
it is apparent from the information that accompanied that form that she was
seeking to vary the separation agreement to have child support based on the
Guidelines
retroactive as of 2002.
[23]
During 2006, the parties agreed that Mr. Bergstrom
would re-file his income tax returns for 2003, 2004, and 2005, to deduct the
child support he had paid. They also agreed that he would reimburse Ms. de
Rooy for the additional tax she would have to pay as a result of declaring
those amounts as income. Ms. de Rooy received $4,000.00 under this
agreement. However, as a result of declaring the support payments Ms. de
Rooy was required to repay approximately $2,500.00 in child tax and G.S.T.
benefits.
[24]
The Provincial Court application to vary and
enforce the separation agreement was scheduled to be heard in the fall of
2006. Shortly before the hearing date, Ms. de Rooy retained counsel. Ms. de
Rooys counsel and Mr. Bergstroms counsel were unsuccessful in their
efforts to reach a settlement. As both counsel were of the view that the
matter should proceed in the Supreme Court, they arranged for the Provincial
Court hearing to be adjourned generally.
[25]
On February 20, 2007, Ms. de Rooy filed the
separation agreement in the Supreme Court (Vancouver Docket No. E070595).
She did this at the request of the Family Maintenance Enforcement Program, on
the understanding that doing so would enable those administering that program
to assist her in enforcing the separation agreement.
[26]
On July 14, 2008, Ms. de Rooy filed a
notice of motion in Supreme Court (Vancouver Docket No. F950264). The
relief sought in that notice included:
(a) an order fixing
arrears of child support payable pursuant to the separation agreement;
(b) a determination
of on-going child support for the three children; and
(c) in the
alternative, an order varying the child support provisions in the 1995 interim
order, including retroactive variation, based on the
Guidelines
.
[27]
Ms. de Rooys application was heard on
November 6, 2008. The chambers judge rendered his decision on November 14,
2008.
Chambers Judges Decision
[28]
The chambers judge stated that the first issue
he had to decide was whether child support was to be determined on the basis of
the interim order, or on the basis of the separation agreement. In his view,
the court cannot do both.
[29]
The chambers judge agreed with Mr. Bergstrom
that the clause in the agreement calling for annual increases in child support
could not be used, because it does not set out a baseline income for
calculating those increases. As a result, the chambers judge determined that
he should consider the issue of child support on the basis of the 1995 interim
order. In this regard, he said:
[19] I have concluded on balance, for a
number of reasons, that it is more appropriate to approach this application by
following the court order and then considering the argument for a retroactive
increase to the court order.
[20] Court orders, in my view, are of
considerable moment. Both parties were aware of the court order when they
signed the agreement. Both parties appeared to have legal advice at the time.
Both parties, however, chose not to in any way vary the court order at the time
of the agreement.
[21] Additionally, I have some concern
as to whether or not the court has jurisdiction under the
Family Relations
Act
to in fact vary the agreement. In my view this is an unfortunate quirk
of the
Family Relations Act
. The
Family Relations Act
only
allows the Supreme Court to enforce the terms of an agreement filed pursuant
section 122, not in fact vary it.
[22] However,
on balance I have concluded that the agreement has a level of uncertainty to it
and that the order is the more appropriate matter for the court to consider.
In my view generally speaking orders of the court are more significant than are
the parties agreements.
[30]
Later, the chambers judge said this about why he
was dealing with the matter on the basis of the order, and not the agreement:
[37] I have concluded, as noted, that
the order is to be followed, not the agreement. I will clarify, if need be,
the reasons for this. The agreement is a contract that in some ways it is
slightly uncertain at least as to the acceleration clause. The agreement does
not specify an accurate level of income and it is as such questionable as to
what the parties were agreeing to in the first place, though I note that it is
completely consistent with the order.
[38] It seems clear from the agreement
that [Mr. Bergstrom] should pay $600 a month while going to school and
earning Workers Compensation funds, in my view, because that is what he agreed
to when he agreed to the order.
[39] However,
the main reason for my following the order is not really the uncertainty or the
seeming questions which may remain as a result of the agreement. The main reasons
for following the order is that the order is a consent order, it is an order
entered into and approved by the court, and both parties have legal
representation, and it is, in my view, orders are generally of greater import
than are agreements.
[31]
The chambers judge went on to consider the
merits of the application. He noted that both Ms. de Rooy and Mr. Bergstrom
were 55 years of age. At the time of the hearing Ms. de Rooy was earning
$22,539.00 per year, having been disabled in February 2004, as a result of a
work-related incident. Mr. Bergstroms annual income at the time of the
hearing was $83,000.00.
[32]
The chambers judge did not accept Mr. Bergstroms
submission that Ms. de Rooys handwritten note on the Family Maintenance
Enforcement Program form she filled out on October 20, 2005, evinced an
intention on her part not to seek child support until December 2001. He said
filling out that form was a quick and casual act done without the benefit of
legal advice. Further, the chambers judge did not accept the handwritten note
signed by the parties on January 30, 2000, as being sufficient to modify Mr. Bergstroms
child support obligations under the separation agreement. The chambers judge stated
that the note, which he described as a scrap of paper, was written without the
benefit of legal advice, and was inconsistent with the parties formally
negotiated agreement.
[33]
On the basis of all the evidence before him, the
chambers judge found that Ms. de Rooy had agreed to excuse Mr. Bergstrom
from his child support obligations only until the end of 1999:
[40] The
second issue I would have to consider is the non-payment issue. And as again I
have noted, I am satisfied on all the evidence that the parties agreed that [Ms. de
Rooy] would not seek funds for a while to December of 1999, that she would
attempt to support the children on her own while he was going to school and
while he was paying support for other children. Those circumstances were over
by December of 1999. Her words were that she would try to give him a break and
try to do it on her own. He had, [Mr. Bergstrom], a notice effective
December 1999 that [Ms. de Rooy] required support and that [Ms. de
Rooy] knew by that point not only that he should be supporting his children, as
all parents are deemed to know. He did know that there was an old order based
on a much reduced level of income which required him to pay $600 a month. He
was by December 1999 working full time. He was no longer supporting his other
children. The circumstances giving rise to the giving him a break, had all
end [
sic
]. [Ms. de Rooy] could no longer support the children on
her own.
[34]
The chambers judge rejected Mr. Bergstroms
argument that Ms. de Rooy did not have standing to apply for retroactive
child support for N.B. and D.B. because they were over the age of 19. He held
that it would create an injustice to deny the recipient parent the right to
seek retroactive support merely because a child had reached 19 years of age, as
this would reward payor parents who successfully delay, disobey, or disregard
their obligations.
[35]
Having regard to the factors set out in
D.B.S.
v. S.R.G.
, 2006 SCC 37, [2006] 2 S.C.R. 231, with respect to entitlement to
retroactive child support, the chambers judge found as follows:
(a) Ms. de
Rooy had been actively seeking support from December 1999, and there were
legitimate reasons for the delay in bringing her application, i.e., the
children were difficult, she had suffered a significant disability, and she
lacked the financial and emotional resources to bring the application earlier
than she did;
(b) Mr. Bergstroms
conduct was blameworthy, in that he had been aware of his obligation to pay
$600.00 per month, knew that that amount had been set when his disability
income had been far lower than his post-retraining income, and knew that his
payments were to increase as his income increased;
(c) the
children had lived in difficult financial circumstances, and had grown up in
poverty, being supported by a parent whose income was approximately $23,000.00
per year; and
(d) a
retroactive award would cause limited hardship to Mr. Bergstrom as he had
paid $40,000.00 into trust pending the outcome of the application, being Mr. Bergstroms
share of the net proceeds from the sale of a house he owned with his current
partner.
[36]
Based on those findings, the chambers judge held
that it was appropriate to impose child support obligations on Mr. Bergstrom
as of January 1, 2000. In so doing, he said:
[58] In my view in light of the unique
circumstances of this case it is appropriate to make a substantial retroactive
award. Again, the most unique circumstances of this case are we have a payer
parent who knows that he was to pay $600 a month while he was on disability;
but a payer parent who also knows by virtue of signing an agreement with an acceleration
clause that $600 is a base for support, a base based on a lower level of income
than he clearly had by the time he was actually requested to begin support
payments, which is effectively January 1, 2000.
[59] I have
concluded that it is appropriate in these unique circumstances and in this
factual matrix between the parties to order an imposition of the Child Support
Guidelines retroactive to 1 January 2000.
[37]
The chambers judge then calculated the amount of
child support payable under the
Guidelines
on an annual basis. In doing
so, he had regard to the periods when one or more of the children resided with Mr. Bergstrom,
and the parties respective incomes. Although N.B. had turned 19 in 2005, the chambers
judge found that he continued to be a child for some time thereafter, due to
his inability to support himself. The chambers judge concluded that Mr. Bergstroms
obligations to support N.B. and R.B. ended when each began to receive support
from the provincial government, respectively in October and December 2007.
[38]
The chambers judge held that D.B. remained a
child until the end of July 2008. Although D.B. turned 19 in January 2008,
he continued to be supported by Ms. de Rooy until he finished high school
that June. The chambers found that it was reasonable for D.B. to continue to
receive parental support for one more month, while he sought employment.
[39]
The arrears totalled $52,966.00. The chambers
judge directed that the funds held in trust be applied against that amount and
that Mr. Bergstrom pay the balance at a rate of $750.00 per month.
The formal order entered to give effect to the chambers
judges decision states:
1. The child support provisions
of the Order of this court made May 17, 1995, requiring [Mr. Bergstrom] to
pay to [Ms. de Rooy] support for the children of the parties, namely:
. . .
be and are hereby varied
retroactively to accord with the British Columbia Child Support Guidelines for
the period from and after January 1, 2000.
2. The arrears of child support
payable by [Mr. Bergstrom] to [Ms. de Rooy] pursuant to the aforesaid
terms of this Order be and are hereby fixed at $52,967.00.
3. The sum $42,195.08 presently
held in trust on conditions by the solicitors for [Mr. Bergstrom] ...,
shall be paid to [Ms. de Rooy] on account of the said arrears of
$52,967.00.
4. [Mr. Bergstrom]
shall pay to [Ms. de Rooy] the balance of arrears, $10,771.92, by way of
payments of $750.00 per month, commencing January 1, 2009, and continuing on
the first day of each and every month thereafter until the balance of arrears
of $10,771.92 is paid in full.
Analysis
Standard of
Review
[40]
It is important to keep in mind that Mr. Bergstrom
must show that there was a material error, a serious misapprehension of the
evidence, or an error in law by the chambers judge. As the Supreme Court of
Canada has stated, trial court decisions in family law matters are entitled to
considerable deference:
Hickey v. Hickey
, [1999] 2 S.C.R. 518 at
para. 12;
Van de Perre v. Edwards
, 2001 SCC 60, [2001] 2 S.C.R.
1014 at paras. 14, 15.
Variation
of the Interim Order: Is This What Occurred?
[41]
Mr. Bergstrom submits that the separation
agreement superseded the interim order and that therefore, as a matter of
law, the chambers judge had no jurisdiction to vary that order. His position
is that, by virtue of the separation agreement, the interim order was spent. Although
this point was not taken before the chambers judge, Ms. de Rooy did not
object to it being raised on appeal.
[42]
Before dealing with the jurisdiction of the
chambers judge to vary the interim order, I wish to discuss whether this is a
proper characterization of what occurred. In my view, it is not.
Notwithstanding that the formal order speaks in terms of the interim order
being varied retroactively, what the chambers judge did, in substance, is
make a fresh and final order for child support. No doubt, the chambers judge
improperly framed the issue before him as one involving support under either
the separation agreement, or the interim order, by reason of the relief sought
in Ms. de Rooys notice of motion, and the arguments advanced by counsel.
[43]
In is clear from
Newson v. Newson
(1998),
65 B.C.L.R. (3d) 22 (C.A.), that interim support orders are a summary mechanism
for imposing short-term solutions: para. 11. Such orders give the
parties time to resolve matters either by agreement or, if necessary, through
litigation. When, after an interim order has been made, a judge determines,
following a hearing on the merits, the level of support that is appropriate, he
or she is not varying the interim order, but making a new order. That is what,
in substance, occurred here.
[44]
Even if what occurred could be characterized as
a variation of the interim order, I would not accede to Mr. Bergstroms
argument that the order did not survive the making of the separation
agreement. Mr. Bergstrom relies on three decisions:
Law v. Kilbride
,
[2001] O.J. No. 3270 (S.C.J.);
Sempf v. Sempf
(1984), 38 R.F.L (2d)
142 (Ont. S.C.);
Sprumont v. Turner
(1984), 41 R.F.L. (2d) 1 (Ont.
S.C.). In
Law v. Kilbride
, a mother was found to have acted improperly
when she removed two infant children from Ontario, contrary to a shared-custody
agreement that the parents had entered into after an order had been made giving
the mother sole custody. In
Sempf v. Sempf
, the decree
nisi
of
divorce ordered the husband to pay the wife lump sum support of $100,000.00.
The parties later entered into an agreement whereby the wife agreed to accept
$30,000.00. In granting the decree absolute, the Court amended the decree
nisi
to reflect the fact that the wife had agreed to accept $30,000.00. Lastly, in
Sprumont
v. Turner
, the decree
nisi
incorporated the provisions of a
separation agreement with respect to support to be paid by the husband for his
wife and children. The parties later amended that agreement. When the husband
fell into arrears the wife commenced an action claiming what was owed pursuant
to the agreement. She obtained default judgment, which the husband moved to set
aside. In upholding the refusal of a master to set aside the default judgment,
the Court held that the action was properly founded on the agreement.
[45]
I do not find those decisions of assistance.
They are all relatively brief, and contain little, if any, legal analysis with
regard to the point now in issue. While they support the view that those who
enter into a post-interim-order separation agreement should be held to the
terms of their bargain, they do not bear on the question of whether the interim
order can subsequently be varied and used to govern the continuing relationship
of the parties.
[46]
In the case at bar, the interim order states
that Mr. Bergstrom is to pay child support as stipulated therein, until
further Order of this Court. Accordingly, under the terms of that order, it
cannot be said to have been terminated by the separation agreement. Further,
and more importantly, s. 20 of the
Family Relations Act
specifically confers on a court the power to vary or rescind a previous order.
That section reads:
Subject to this
Act, if a court has made an order under this Act, except an order under Part 5
[Matrimonial Property] or 6 [Division of Pension Assets], the court may, on
application, vary or rescind the order if circumstances have changed since the
order was made or last varied.
This provision has been in existence from
the
Act
s inception: S.B.C. 1972, c. 20, s. 13.
[47]
Finally, the argument advanced by Mr. Bergstrom
runs contrary to the well-established principle that, as child support is the
right of the child, it cannot be bartered away by the parents:
Richardson
v. Richardson
, [1987] 1 S.C.R. 857 at 869.
Alleged
Factual Errors
[48]
Mr. Bergstrom submits that the chambers
judge failed to consider relevant evidence, and misapprehended other evidence,
in reaching his conclusions with respect to the factual matrix used to decide
whether it was appropriate to make an award of retroactive child support. In
particular, Mr. Bergstrom says that the chambers judge erred in finding
that: (a) there was a reasonable excuse for Ms. de Rooys delay in seeking
child support, (b) there was blameworthy conduct on his part, (c) the children
had suffered from growing up in poverty, and (d) a retroactive award would not
cause him hardship.
[49]
In my view, Mr. Bergstroms arguments, individually
and collectively, are an attempt to retry the case. In this connection, he
points to certain statements in the affidavits, and to the absence of other
statements. For example, he says that Ms. de Rooy does not specifically
attribute her delay to a lack of financial or emotional capacity, or that
difficulties with the children contributed to the delay. He says there is no
evidentiary support for the finding that his children lived in poverty, and
that the trial judge ignored the fact that he did not deduct the support he did
pay on his income tax returns.
[50]
I would not give effect to those arguments. The
chambers judge had to consider affidavits that conflicted in some respects. On
the basis of what was before him he was required to make findings of fact, and
to draw inferences. The findings he made and the inferences he drew are
entitled to deference. I cannot find any palpable and overriding error in his
factual determinations:
Rick v. Brandsema
, 2009 SCC 10, [2009] 1 S.C.R.
295 at para. 30;
Struck v. Struck
, 2003 BCCA 623, 20 B.C.L.R. (4th)
242 at paras. 39, 40.
Ordering Payment Retroactive to
January 2000
[51]
The issue here, as put by Mr. Bergstrom, is
whether the chambers judge erred in law in ordering him to pay child support
retroactive to January 1, 2000. The chambers judges decision was based on his
finding that Ms. de Rooy gave Mr. Bergstrom effective notice in
December 1999, that she was seeking child support. Mr. Bergstrom submits
that the date of effective notice should be no earlier than October 2005, when Ms. de
Rooy filed the separation agreement in the Provincial Court. He points out
that prior to this he was paying $200.00 per month, per child.
[52]
I do not accept this argument. On the evidence,
it was open to the chambers judge to find that Ms. de Rooy gave effective notice
when she asked Mr. Bergstrom to begin paying the child support which,
pursuant to their informal agreement, he had stopped paying four years before.
As Mr. Justice Bastarache stated in
D.B.S. v. S.R.G
., effective
notice is any indication by the recipient parent that child support should be
paid, or if it already is, that the current amount of child support needs to be
re-negotiated: para. 121.
[53]
Mr. Bergstrom says that because the separation
agreement is poorly worded he could not know precisely what his child support
obligations were at any given time. While this is correct, it is clear that
the intention of the parties when the agreement was signed was that Mr. Bergstroms
child support obligations would increase as his financial circumstances improved.
Notwithstanding the flawed escalation clause, Mr. Bergstrom must have know
that, while gainfully employed, his minimum child support obligation under the
agreement was $600.00, and that that amount was to be adjusted to reflect
changes in his income. Indeed, under the interim order that was made with Mr. Bergstroms
consent, he agreed to pay $600.00 per month even though disability payments
were then his only source of income. Accordingly, when the subject of child
support was raised by Ms. de Rooy in December 1999, Mr. Bergstrom was
put on notice not only that he should be supporting their children, but also
that that support should be commensurate with his ability to pay.
[54]
Mr. Bergstroms next submission is that,
even if the date of the effective notice is December 1999, the payments should
not have been retroactive more than three years prior to the date of formal
notice. He says that formal notice was given on July 14, 2008, when Ms. de
Rooy filed her application for arrears in the Supreme Court. On this basis,
the arrears should have been made retroactive only to July 2005.
[55]
In
D.B.S. v. S.R.G.
, Bastarache J. stated
that in general a retroactive award should not extend back more than three
years before formal notice has been given, but, could reach back to an earlier date
if the payor parent has engaged in blameworthy conduct: paras. 123 -125.
As indicated above, the chambers judge found that Mr. Bergstrom was guilty
of such conduct. Having done so, the chambers judge exercised his discretion,
and ordered the payments retroactive to the date of effective notice. I am
unable to find any error in principle in that determination. Indeed, given Mr. Bergstroms
awareness of the difficult circumstances under which his children were living, and
his indifference to their benefiting from his improved financial position, the
date chosen was entirely reasonable.
Was it Appropriate to Use the
Guidelines
?
[56]
By virtue of s. 93(2) of the
Family
Relations Act
, a court can depart from the
Guidelines
in certain
circumstances. That provision reads:
Despite subsection (1)(a),
a court may make an order to discharge a liability under section 88 by paying
to the person designated in the order an amount that differs from the amount
the court ascertains, using the child support guidelines, if the court is
satisfied that
(a) provisions in an order, a judgment
or a written agreement respecting the financial obligations of the parents, or
the division or transfer of their property, directly or indirectly benefit the
child, or that special provisions have otherwise been made for the benefit of
the child, and
(b) the
application of the child support guidelines would be inequitable in the
circumstances of the provisions to which paragraph (a) refers.
[57]
Mr. Bergstrom says that requiring him to
pay in accordance with the
Guidelines
is inequitable because, under the
terms of the separation agreement he effectively gave Ms. de Rooy a 90%
interest in their family home. This point does not appear to have been argued
before the chambers judge.
[58]
Under the terms of the separation agreement Mr. Bergstrom
transferred his interest in the family home to Ms. de Rooy, who assumed
responsibility for the mortgage. The agreement further provided that if Ms. de
Rooy sold the property, then Mr. Bergstrom would be entitled to 10% of the
net proceeds.
[59]
The separation agreement is silent as to whether
there was any particular reason why Mr. Bergstrom agreed to give up his
interest in the family home. Further, the evidence on this question is conflicting.
Mr. Bergstrom deposed that he was persuaded to do this so that the
childrens lives would not be disrupted. Ms. de Rooy, on the other hand,
deposed that the agreement with respect to the family home was predicated on
her waiving her right to spousal support.
[60]
The chambers judge did not resolve this
conflict. After summarizing the evidence, he stated:
[27] Both are equally possible to be
viewed as the agreement between the parties because the agreement itself does
not speak to either. The agreement clearly shows that [Ms. de Rooy] gave
up her claim for spousal support.
[28] That
being said, I accept the evidence of [Ms. de Rooy] that she generously
agreed to try to support the children on her own to give [Mr. Bergstrom] a
break. The factors for her doing so were that [Mr. Bergstrom] was living
away from his traditional community and being retrained, he was incurring some
expense in that regard, but of most note, he had other children to support.
[61]
Whatever the reason for the provisions in the
separation agreement regarding the family home, it is not inequitable, in the
circumstances of this case, to base Mr. Bergstroms post-1999 child
support obligations on the
Guidelines
. When the agreement was signed in
1995 the parties equity in the family home was approximately $120,000.00. As
a result of their formal and informal agreements Mr. Bergstrom ended his
relationship with Ms. de Rooy with no spousal support obligation at all,
and with no financial obligation to their children for four years. Not having
to pay child support for four years assisted Mr. Bergstrom in his efforts
to retrain, and improve his life. More significantly, during those four years,
and thereafter, Ms. de Rooy bore a disproportionate share of supporting
their children.
[62]
I should note that I have not overlooked the tax
consequences to the parties. Those do not, in the circumstances of this case, make
it unfair to require Mr. Bergstrom to provide support for his children in
accordance with the
Guidelines
.
Retroactive Support for Adult
Children
[63]
Mr. Bergstroms final contention is that it
was not open to the chambers judge to order retroactive support with respect to
N.B. and D.B., as both were over the age of 19 years when the order was made. As
stated above, the chambers judge found that, although N.B. turned 19 in May
2005, he required parental support until the beginning of October 2007. With
respect to D.B., who turned 19 in January 2008, the chambers judge found that
he required parental support until the beginning of August 2008. Because Ms. de
Rooy filed her application on July 14, 2008, I have concluded that she had
standing to apply on behalf of D.B., but not on behalf of N.B.
[64]
In
D.B.S. v. S.R.G.
, Bastarache J. stated
that the question of whether support can be ordered for a person who is no
longer a child is a matter of statutory interpretation: paras. 86, 87.
In this regard, the following provisions of the
Family Relations Act
are
germane:
Part
7 Maintenance and Support Obligations
s. 87
In this Part:
child includes a person who is
19 years of age or older and, in relation to the parents of the person, is
unable, because of illness, disability or other cause, to withdraw from their
charge or to obtain the necessaries of life;
s. 88(1) Each parent of a child
is responsible and liable for the reasonable and necessary support and
maintenance of the child.
s. 91(1) A
person may apply for an order under this Part on his or her own behalf.
. . .
(3) Any
person may apply for an order under this Part on behalf of a child.
[65]
In this case, Ms. de Roy brought an
application on behalf of her three children pursuant to s. 91(3).
However, as discussed by Mr. Justice Slade in
McDonald v. McDonald
,
2008 BCSC 1203 at para. 34, s. 91(3) confers standing on a third party
to apply for support only on behalf of someone who, at the time the application
is brought, is a child as defined in s. 87. Since N.B. was no longer a
child on July 14, 2008, Ms. de Rooy did not have standing on that day to
bring an application on his behalf. Accordingly, it was not open to the
chambers judge to order that Mr. Bergstrom pay child support for N.B. to Ms. de
Rooy. However, as D.B. was a child at the time the application was filed, Ms. de
Rooy did have standing to apply on his behalf.
[66]
The question of whether N.B. could himself have
applied under s. 91(1) of the
Family Relations Act
for an order requiring
Mr. Bergstrom to pay him what Slade J. described as an accrued
liability is not raised by this appeal. Therefore, I express no opinion on it.
Conclusion
[67]
I would allow this appeal to the extent of recalculating
the retroactive child support payable by Mr. Bergstrom based only on his
obligations with respect to D.B. and R.B. That total amount owing is to be
determined according to the
Guidelines
, having regard to the respective
annual incomes of the parties, and the periods D.B. and R.B. resided with each
one. Mr. Bergstrom is to be given credit for the portion of the support
he paid in any year that is attributable to D.B. and R.B.
[68]
The formal order with respect to the disposition
of this appeal should indicate that the chambers judges order is varied by
substituting the total amount owing as calculated in accordance with paragraph
67 for the $52,967.00 that appears in clauses 2 and 3. In the event the
total amount owing exceeds the funds held in trust, clause 4 of the chambers
judges order should be varied to reflect the balance of the arrears owing. If
the funds held in trust are sufficient to satisfy the total amount owing, then
clause 4 is to be set aside.
The
Honourable Mr. Justice Frankel
I agree:
The Honourable
Mr. Justice Bauman
Reasons for Judgment of the Honourable
Mr. Justice Chiasson:
[69]
I agree with Mr. Justice Frankel, but wish to
add a few thoughts of my own on two issues: the effect of the agreement on the
courts consideration of the application and the implications of ss. 121 and
122 of the
Family Relations Act
, R.S.B.C. 1996, c. 128 (the
F.R.A.
)
.
[70]
I agree with my colleagues observation that the
judge was making a new order, not varying the interim order. In the absence of
an order in the Provincial Court, the Supreme Court has jurisdiction to make an
order in respect of child support under the
F.R.A.
by virtue of ss. 5,
88(1) and 93
.
(See also:
Schaff v. Schaff
(1997), 30
R.F.L. (4th) 63 (B.C.C.A.);
Ekland v. Sangsari
(1996), 24 R.F.L. (4th) 119 (B.C.C.A.).)
[71]
The agreement of the parties was relevant to the
courts determination of the application, but it was not determinative. Child
support is the right of a child and the court always must determine what is in
the childs best interests. This is clear from
Richardson v. Richardson
,
[1987] 1 S.C.R. 857,
Willick v. Willick
,
[1994] 3 S.C.R. 670 and
from
Turpin v. Clark
, 2009 BCCA 530. Sections 88(1) and 93(2) and (3)
of the
F.R.A.
also support this proposition.
[72]
The judge did not err in declining to adhere to
the provisions of the agreement, but it was not a matter of preferring the
provisions of the interim order. He was determining a final order and the
agreement could not dictate its terms.
[73]
The agreement in this case was filed in the
Provincial Court and the Supreme Court. B
ecause the issue presented to
the court below was the variation of an existing order and the relationship of
that order to the agreement, the
question arose in this Court
whether the Supreme Court had jurisdiction to vary the agreement.
[74]
Sections 121 (2), (3) and (4) and ss. 122 (1)
and (3) of the
F.R.A.
provide as follows:
121(2) If a signed copy of a written
agreement containing a provision respecting
(a) the
custody of or access to a child by a parent, or
(b) the
maintenance of a child by a parent or of a person by the person's spouse
is filed in the Provincial Court in
accordance with the Provincial Court (Family) Rules, the provision is
enforceable under this Act or the
Family Maintenance Enforcement Act
as
if it were contained in an order made under this Act.
(3) Subsection (2) applies in respect
of
(a) a written
agreement made after June 30, 1995, and
(b) a
written agreement made before July 1, 1995, but only if a consent in
the form prescribed by the Provincial Court (Family) Rules is filed with the
agreement.
(4) A provision that is referred to in
subsection (2) and is contained in a written agreement filed under this section
may, at any time, be varied or rescinded
(a) by a new
written agreement filed in the Provincial Court in accordance with the
Provincial Court (Family) Rules, or
(b) by the
Provincial Court, on application and subject to sections 20 and 96.
122(1) If a signed copy of a written
agreement containing a provision respecting
(a) the custody of
or access to a child by a parent, or
(b) the
maintenance of a child by a parent or of a person by the person's spouse
is filed in the
Supreme Court in accordance with the Rules of Court, the provision is
enforceable under this Act or the
Family Maintenance Enforcement Act
as
if it were contained in an order made under this Act.
(3) The
filing of a written agreement under this section does not prevent the agreement
from being filed, enforced, varied or rescinded in the Provincial Court under
section 121.
[75]
In
K. v. K.
, 2009 BCSC 69, Garson J., as
she then was, reviewed authorities that appear to be divided on the question of
whether the Supreme Court has the jurisdiction to vary a separation agreement.
She stated in para. 28:
In my view, s.
122 is not a procedural bar to an application under s. 89 and s. 90 on an
originating application for spousal support. I do not read s. 122 as
depriving this Court of jurisdiction to entertain such an application because
the agreement was filed under that section. To conclude that only the
Provincial Court can hear an originating application for spousal support where
an agreement has been filed in the Supreme Court seems illogical given that the
Supreme Court and the Provincial Court have concurrent jurisdiction.
[76]
I agree with her observation that filing a
separation agreement in the Supreme Court does not deprive the court of
jurisdiction to entertain a support application it otherwise would have, but
leave for another day the question whether the Supreme Court has the
jurisdiction to vary a separation agreement, observing that on the plain
language of s. 122, the Supreme Court does not appear to have such
jurisdiction. The provisions of the agreement are not made a court order. The
Legislature has given the court only the authority to enforce provisions as if
they were contained in an order. Variation of provisions in such an agreement
is granted to the Provincial Court if it is filed in that court. While this
could be considered an anomaly or gap in the legislation, viewed as a matter of
policy, it appears the Legislature intended that the Provincial Court, to which
often there is more regular and direct access, is to deal with parties who wish
to vary their agreement.
[77]
In this case, because the court was not dealing
with a variation but was considering a final order for child support at first
instance, the implications of filing the agreement in the Provincial Court did
not affect the jurisdiction of the Supreme Court.
The Honourable Mr.
Justice Chiasson
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Jensen v. Jackman,
2010 BCCA 6
Date: 2010017
Docket:
CA037592
Between:
Tanja Jensen
Appellant
(
Plaintiff
)
And
Clifford James Jackman, Theresa May
Jackson, Paolo and Audrey Benvin, Mary Hominiuk Lakusta, Josip-Pino Sugar, Jana
Pivonkova, Ruth Lea Taylor, Verna Spencer, Donald Moore Cunliffe, Leonard E.
Krog, Lloyd H. Sproule, John W. Horn, C. Vaughan Allin, Christopher G. Green,
Sheila M. Anderson, Glenda Marie Harling, D. Peter Ramsay, Q.C., Richard Franklin
Johnston, Nanaimo Realty cob Royal Lepage Nanaimo Realty, Ash Pabbies,
Sean M. Hogan, Brett R. Vining and Brian J. Senini
Respondents
(
Defendants
)
Before:
The Honourable Madam Justice Garson
(In Chambers)
On
appeal from the Supreme Court of British Columbia, September 25, 2009 (
Jensen
v. Jackman
, S095638)
Appellant:
Appearing
in person
Counsel for the Respondent lawyers:
M.
Armstrong
Place and Date of Hearing:
Vancouver,
British Columbia
November 27, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
7, 2010
Reasons for
Judgment of the Honourable Madam Justice Garson:
[1]
Tanja Jensen seeks leave to appeal an order of a
judge of the Supreme Court of British Columbia pronounced on September 25, 2009,
that dismissed her application for leave to file a writ of summons and
statement of claim against the respondents. Ms. Jensen also applies for
indigent status in this court, pursuant to Rule 56 of the
Court of Appeal
Rules
, B.C. Reg. 297/2001.
[2]
Ms. Jensen was
required to seek leave to commence an action in Supreme Court because on July
22, 1988, Owen-Flood J., made an order under s. 67 of the
Supreme Court Act,
R.S.B.C., 1996, c. 443, that no legal proceedings shall, without leave of the
Court, be instituted by Tanja Jensen in any Court. Section 67 of the
Supreme
Court Act
in force at that time is now, in identical language, s. 18 of the
Supreme Court Act
.
[3]
Section 18, known as the vexatious proceedings
rule, provides as follows:
If, on
application by any person, the court is satisfied that a person has habitually,
persistently and without reasonable grounds, instituted vexatious legal
proceedings in the Supreme Court or in the Provincial Court against the same or
different persons, the court may, after hearing that person or giving him or
her an opportunity to be heard, order that a legal proceeding must not, without
leave of the court, be instituted by that person in any court.
[4]
Neither written reasons for judgment nor a
transcript of the chambers judges oral reasons for judgment is available, but Ms.
Jensen and counsel for the respondents agree that the chambers judge, in dismissing
Ms. Jensens application, gave the following reasons:
·
The appellant had not demonstrated that her
proposed action had any merit and, in the alternative:
·
The proposed action amounted to a collateral
attack on previous decisions of the Court below and of this Court;
·
The proposed claims were clearly out of time;
and
·
The proposed claims were scandalous and vexatious.
[5]
Ms. Jensens claims are related to the estate of
her father, who died in 1987. She says in the materials before this Court that
it has taken her 22 years to gather the documents to file the proposed
statement of claim. She says in her affidavit that was filed in the proposed Supreme
Court action, I verily believe my father and his three daughters were the victims
of professional, white collar crime between 1983 2009, that involved abuse of
process.
[6]
She attaches to her affidavit in the proposed
Supreme Court action two proposed statements of claim, one is 742 paragraphs,
and 70 pages in length. The second proposed action is 1578 paragraphs and 200
pages in length. In this Court Ms. Jensen has filed a memorandum of argument,
also itself prolix, described as a Summary of the Statement of Claim and
Statement of Fact and Law dated September 25, 2009 and the Hearing before the
Honourable Mr. Justice Sewell on September 25, 2009. It is not possible to ascertain
from these three sets of materials the nature of the claim or causes of action Ms.
Jensen proposes to advance, other than in a most imprecise way. The proposed
pleadings are unintelligible. They do not comply with Rule 19(1), which states:
A pleading shall be as brief as the nature of the case will permit and must
contain a statement in summary form of the material facts on which the party
relies, but not the evidence by which the facts are to be proved.
[7]
The first question for my determination is
whether Ms. Jensen requires leave to appeal the order of Sewell J., or whether
she may appeal from it as of right. If the order may be characterized as a
final order and not an interlocutory one then Ms. Jensen may appeal as of
right.
[8]
A final order is one that disposes of the rights
of the parties. An issue that can be the subject of a final order is defined
as a proposition of law or fact defined by the pleadings as a point on which
parties want a decision by the court (
Weyerhaeuser Co. v. Hayes Forest
Services Ltd.
(2008), 291 D.L.R. (4th) 49). Furthermore, orders made under
the
Supreme Court Act
, s. 18 are not matters of practice or procedure (
Colet
v. The Queen et al.
(1979), 11 C.P.C. 111 (F.C.T.D.) at para. 16).
[9]
Although the question of the necessity for leave
was not mentioned in
Nelson v. Canada
, 2006 BCCA 442, 152 A.C.W.S. (3d)
564, it appears that in that case an appeal from a chambers judges order
denying leave to a vexatious litigant proceeded without leave.
[10]
As refusing a vexatious litigant leave to
commence an action finally decides whether that litigant may file a writ and
statement of claim in a particular matter, an order refusing leave under this
section must, in my view, be a final order.
[11]
I therefore conclude that Ms. Jensen does not
require leave to appeal the order of Mr. Justice Sewell denying her leave to
commence the contemplated Supreme Court action.
Indigent Status Application
[12]
Ms. Jensens second application is for indigent
status pursuant to Rule 56, which provides as follows:
Despite anything in these rules, no fee is
payable to the government by a person to commence, defend or continue an appeal
or application if a justice, on application before or after the commencement of
the appeal or application, finds that the person is indigent, unless the
justice considers that the position being argued by that person
(a) lacks merit,
(b) is scandalous, frivolous or
vexatious, or
(c) is
otherwise an abuse of the process of the court.
[13]
The purpose of granting indigent status was discussed in
Trautmann v. Baker
,
[1997] B.C.J. No. 452 at para. 4 (Hall, J.A. in Chambers):
[4]
As
I see it, the underlying rationale for the granting of indigent status is to
ensure that no litigant will be denied access to the courts by reason of
impecuniosity.
[T]he concern of the court must be that no arguably
meritorious case should be prevented from getting a hearing merely because a
person is without the financial resources to carry on with the litigation. ...
[14]
There are two criteria the chambers judge must examine in determining
whether indigent status should be granted: the likelihood of success of the
appeal, and the financial position of the appellant (
Duszynski v. Duszynski
,
2001 BCCA 155 at para. 3, 149 B.C.A.C. 153 (Ryan, J.A. in Chambers)).
[15]
A person will be indigent if, although he or she may have some means,
they are so scanty that he or she is needy or poor (
Griffith v. House
,
2000 BCCA 371 at paras. 3-4 (Hall J.A. in Chambers)).
[16]
I conclude from the material provided that Ms.
Jensen satisfies one criteria to be granted indigent status, that is, she does
not have the financial means to pay court filing fees.
[17]
I turn now to the second aspect of the test for
indigent status.
[18]
Indigent status will not be granted in appeals that are
(on the merits) bound to fail or where there is no reasonable basis for an
appeal (
Kohlmaier v. Campbell
,
2003 BCCA 61 at para. 5 (Rowles J.A. in Chambers)).
[19]
In
Weber v. British Columbia
(Ministry of Social Services)
(1997), 86 B.C.A.C. 70 at para. 5,
Newbury J.A. (in Chambers) found:
[5]
[I]f
one extrapolates from Appendix C of Schedule 1 to the Supreme Court Rules,
which states that indigent status may be granted unless the court considers
that the claim or defence discloses no reasonable claim or defence as the case
may be, the application should be dismissed if no reasonable basis for an appeal
exists. (To this extent, it is necessary for me to make some judgment about the
merits of the appeal, although generally such a result should obviously be
avoided.)
[20]
Applying these tests to this case, means that Ms.
Jensen must establish that her appeal is not without merit. Her appeal will
only succeed if she can prove that her proposed claim against the defendants
is reasonably founded or arguable:
Nelson v. Canada
at para. 8.
[21]
A claim for indigent status may be declined if the litigants proposed
action is scandalous, frivolous, or vexatious or if it is otherwise an abuse of
the process of the court. See
British Columbia
Mental Health Society (c.o.b. Riverview Hospital) v. Louis
,
[1998] B.C.J. No. 1286 at paras. 26-27 (Braidwood J.A. in Chambers):
[26] Considering all of the
circumstances surrounding this case and the complex history of proceedings
between these parties at both levels of court, I am convinced that Mr. Louis is
abusing the court process. To grant him indigent status on this application
would, in my view, only encourage him to bring more applications with
continuing disregard for the jurisdictional limits of the courts and the
procedural requirements of our civil litigation system.
[27] It is
clear to me that Mr. Louis continues to refuse to participate in our court
process on anyones terms but his own. In such circumstances, although an
appeal as of right lies from the decision of Preston, J. regarding the
counterclaim, Mr. Louis must fund the endeavour himself. Indigent status is
denied.
[22]
The original order of Mr. Justice Owen-Flood
made on July 22, 1988, provided that the Caveat filed by Ms. Jensen on April
22, 1988, be cancelled, that all documents by Ms. Jensen in the matter of the
estate of Walther (Walter) Behrens Jensen be struck out, and that pursuant to
s. 67 (now s. 18) of the
Supreme Court Act
, R.S.B.C. 1979 (then in
force), no legal proceedings shall, without leave of the Court, be instituted
by Ms. Jensen in any Court.
[23]
This vexatious litigant order concerning Ms.
Jensen was considered by Gibbs J.A. (in Chambers) in
Jensen v. Jensen Estate
,
10 B.C.A.C. 1, 37 A.C.W.S. (3d) 795, on December 20, 1991. Mr. Justice Gibbs
dismissed Ms. Jensens applications to extend time to file a notice to appeal
several orders made against her from 1987 to 1990. In doing so, he outlined
some of the background of this matter (at para. 5):
[5] All
of the orders [previously made against Ms. Jensen] were made in connection with
the probate and administration of the estate of Walter Behrens Jensen,
deceased, or in connection with consistent and persistent attempts by the
applicant to interfere in the due administration of the estate. The
interference reached such a vexatious level that as long ago as July 22, 1988
Owen-Flood, J., made an order under s. 67 of the
Supreme Court Act
that
no legal proceedings shall, without leave of the Court, be instituted by Tanja
Jensen in any Court, and that all documents filed by her in the matter of the
estate be struck out.
[24]
The matter underlying the appeal now before the Court
appears to have as its origin the same subject matter that Mr. Justice Gibbs
discussed in the above cited passage, and also to be related to the subject
matter of the original Owen-Flood J. vexatious litigant order. I recognize
that the claims have been expanded considerably in the proposed statements of
claim.
[25]
The proposed claims appear to be claims against
the lawyer defendants for professional misconduct and conspiracy. Ms. Jensen appears
to claim that the lawyer defendants were involved in depriving her, or
defrauding her, of the estate of her late father Walter Behrens Jensen over the
last twenty years.
[26]
The precise nature of the claims Ms. Jensen
advances is unclear. Her proposed statements of claim are, as I have already
said, prolix. It is not for the Court to articulate for a litigant, from such
materials, a comprehensible and legally cognizable cause of action. Pleadings
must enable the court, within a reasonable time in review of the pleading, to
find in those pleadings the cause of action, and the material facts upon which
the cause of action is based. Ms. Jensens proposed pleadings are an abuse of
the courts process because they do not meet these minimum requirements of
pleadings. In saying this, I recognize that Ms. Jensen is self-represented and
may be entitled to some latitude in meeting the requirements of pleadings, but
where, as here, the pleadings do not satisfy the function of pleadings at all,
they are an abuse of the process of the court.
[27]
Further, it appears to me that Ms. Jensens application
for leave to bring an action, is essentially an extension of the legal
proceedings that led to the vexatious litigant order to begin with. However, having
concluded that the proposed action is an abuse of process, it is unnecessary
for me to comment further on the merits of the proposed action.
[28]
Although an appeal as of right lies from the
decision of Sewell J., the proposed action does not meet the requirements of
Rule 56, indigent status is denied.
The Honourable
Madam Justice Garson
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Ali,
2010 BCCA 4
Date: 20100107
Docket:
CA035817
Between:
Regina
Respondent
And
Mohammad Sayiad Ali
Appellant
Before:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Chiasson
The Honourable Mr. Justice Frankel
On
appeal from: British Columbia Supreme Court, February 15, 2008, (
R. v. Ali
, 2008 BCSC 657, X068917)
Counsel for the Appellant:
P. M.
Bolton Q.C., A. Samarasekera
Counsel for the Respondent:
R.
Prior
Place and Date of Hearing:
Vancouver
, British Columbia
December 18, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
7, 2010
Written Reasons by
:
The Honourable Mr. Justice Chiasson
Concurred in by:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Frankel
Reasons for
Judgment of the Honourable Mr. Justice Chiasson:
Introduction
[1]
Mr. Ali appeals his sentence of six months
incarceration upon his conviction for trafficking and possession of cocaine for
the purpose of trafficking. He was apprehended in an undercover investigation
of a dial-a-dope operation. Mr. Alis conviction was affirmed by this Court
(2009 BCCA 464). The conviction and sentencing reasons are indexed
respectively at 2007 BCSC 1942 and 2008 BCSC 657.
Positions of the appellant
[2]
The appellant alleges the sentencing judge did
not give consideration to imposing a conditional sentence and erred in treating
the fact that he pleaded not guilty, resulting in the need for a trial, as
indicating a lack of remorse. He also seeks to introduce fresh evidence.
[3]
Mr. Ali contends the fresh evidence, which
consists of a psychologists report and two letters of reference, sheds light
on the effect of separation from his family, and on his good character. The
last paragraph of the report states:
While Mr. Ali
has been convicted of a serious offence, this assessment would indicate that he
does not demonstrate anti-social tendencies. He is someone who is rather naive
in dealing with interpersonal demands. Whether from his personal and/or
religious background, he behaves in ways that are overly generous. This is a
characteristic he admired of his father and demonstrates with his own family in
this assessment. He gives every indication of wanting to be a productive
member of the Canadian society. His family is highly dependent on him for both
financial and emotional support. Given that he is not anti-social, the
positive family dynamics, his obvious ability to financially and emotionally
support his family, and that he is now five years post offense without any
further transgressions, he would appear to have a low risk to re-offend. He is
considered a good candidate for house arrest rather than further incarceration.
It is asserted that this information may
have persuaded the sentencing judge not to incarcerate Mr. Ali if it had been
presented to her.
[4]
Mr. Ali also contends his sentence is not
comparable to that of his co-offender in the dial-a-dope operation.
Discussion
[5]
The second allegation can be disposed of
summarily. In para. 43 the judge stated:
[43] The
age of the accused Mr. Ali is also a factor, because he is not a youth of 19 or
22. He is an adult with very adult responsibilities. Finally, there has been
no remorse that I can detect.
This is the only reference in the reasons
to remorse.
[6]
There is no reference in para. 43 to a not
guilty plea or to the need for a trial. I see nothing in the reasons to
substantiate Mr. Alis contention and would reject it.
[7]
Mr. Ali contends he is a good candidate for a
conditional sentence. He is a devoted family man on whom a number of people
depend. He has adhered scrupulously to terms imposed on him in the context of
immigration proceedings. He is active in the community and in his religion.
It is asserted the judge did not give adequate consideration to the risk he
might reoffend, to his rehabilitation or to the effect of incarceration on his
family.
[8]
The Crown notes that defence counsel at the
sentencing hearing, who was not counsel on the appeal, made extensive
submissions calling for a conditional sentence. In para. 48 the judge noted
the defence position observing: [t]he defence encourages this court to follow
their authorities and impose a conditional sentence..... She reviewed each of
the authorities presented noting they differ a great deal from the case before
me.
[9]
As to the Crowns authorities, the judge
observed that they involved dial-a-dope operations ... and nine months
imprisonment has been a typical sentence ... The courts have rejected
conditional sentences in most of those cases. In para. 52 she concluded I
agree with the submissions by the Crown that a term of imprisonment is
appropriate in this case and a conditional sentence is not.
[10]
Mr. Ali contends the judge failed to undertake
the analysis mandated by the Supreme Court of Canada in
R. v. Proulx
,
[2001] 1 S.C.R. 61. It is apparent from her reasons that the judge weighed the
relevant mitigating and aggravating factors and was alive to circumstances
relevant to a conditional sentence. She stated in para. 52, [t]aking all of
the sentencing factors into consideration, I believe that deterrence both
general and individual is paramount here. She went on to state:
[52] ... I
would ordinarily impose a term of imprisonment of 9 to 12 months as an
appropriate sentence in such circumstances, but I am taking Mr. Alis family
obligations, his lack of criminal record, and other mitigating factors into
account, and therefore imposing a sentence of six months imprisonment, on each
charge, to be served concurrently.
[11]
The sentencing judge referred to
R. v.
Franklin
, 2001 BCSC 706, and stated:
[46] In
Franklin
, at paragraphs
17 to 21, the dial-a-dope procedure was addressed. I will repeat those
paragraphs, as I think it is important that the courts recognize fully what
dial-a-dope operations mean. Paragraphs 17 to 21 of the
Franklin
decision state as follows:
[17] Some explanation of Dial-A-Dope
operations is relevant.
[18] Traditionally, drugs were
disseminated at the street level by purchasers going to certain areas of town
and taking the initiative to seek out those who sold the drugs on street
corners and in back alleys. This, to some extent, constrained the
dissemination of the product. A Dial-A-Dope operation is different. Anyone,
anywhere in the Lower Mainland, can place a telephone call to a vendor of
narcotics and, after establishing his or her credibility by satisfying the
vendor that he or she is not an undercover officer, make an arrangement to have
the drugs delivered to wherever the purchaser happens to be. Typically, the
drugs are delivered within fifteen or twenty minutes and handed over in exchange
for cash.
[19] This has several significant
results.
[20] First, it makes these drugs, and
I refer primarily to cocaine and heroin, more readily accessible throughout the
Lower Mainland than they have been in the past. It makes them accessible with
less effort on the part of the purchasers. Purchasers, and here I think of
adolescents, who might feel intimidated at the thought of seeking out a drug
dealer in the recesses of the Main and Hastings area may nevertheless, in the
relative comfort and safety of suburban locations, easily purchase cocaine and
heroin as long as Dial-A-Dope operators are willing to oblige them.
[21] I infer also that Dial-A-Dope
operations are profitable. There is no evidence before me as to how much a
typical Dial-A-Dope dealer makes in the course of a day or a week but, having
sat as the trial judge on a number of these cases, I am aware that it is a
profitable way to make easy money.
I agree with these observations.
[12]
This Court addressed sentencing for dial-a-dope
operations in
R. v. Rastgoei
, 2008 BCCA 242, noting conditional
sentences have been imposed in some cocaine trafficking cases, but especially
in dial-a-dope trafficking operations, conditional sentence orders have not
been favoured.
[13]
In my view, the sentencing judge made no error
in principle in her refusal to impose a conditional sentence.
[14]
The judge commented on the fact Mr. Ali is from Fiji and is subject to a removal order. She reviewed the history of his coming to Canada,
both legally and illegally, and his efforts to obtain refugee status in this
country. Details of her considerations are in paras. 34-38 of the reasons:
[34] There are a number of mitigating
factors with regard to Mr. Ali which I must take into consideration. He has no
criminal record whatsoever. He appears to be a respected businessman and
hardworking. He began his own business in car sales and repairs of vehicles.
[35] He is clearly a family man. He
has the support of his mother and his wife and children. He supports his four
children, two stepdaughters who are age 19 and 13, and a son age five and a
daughter age three whom he has with his present wife. He is the sole financial
support of this family, and he supports them emotionally as well. His
19-year-old stepdaughter has written a compelling letter on his behalf to the
court.
[36] He is active in his Muslim faith.
He has chosen life in Canada for better opportunities and living standards,
rather than staying in his native Fiji. Two Muslim priests from the mosque
that Mr. Ali attends have been in attendance in court, and two letters have
been filed in this sentencing, one from an Imam, another from a Muslim priest.
His mother and his wife have been in court in support of him.
[37] His mother has been a widow for
eight years. She is diabetic and has written also a letter to the court. Her
son Mr. Ali is her sole support.
[38] Mr. Ali
has an impressive record of reporting almost every second week since January
2002 to Immigration, and that record has now been filed in these sentencing
proceedings.
[15]
The judge then turned to aggravating factors
stating:
[39] With regard to the aggravating
factors, this is trafficking in cocaine. In my view, very serious charges. Possession
for the purpose of trafficking in a substance that is a drug that can only be
described as poison, poison particularly to our youth and certainly for
anybody.
[40] It was a dial-a-dope form of
trafficking. It involved a cell phone. It involved a rental car, and that is
significant, because according to the police evidence before me, those engaged
in dial-a-dope operations significantly use rental cars to avoid forfeiture of
their own vehicles. The dial-a-dope operations spread the drug problem. It is
harder to detect and more accessible for those who seek those drugs.
Motivation here was greed. There is no indication whatsoever that Mr. Ali is a
user, and certainly no indication he is an addict. He is an entrepreneur with
his own business.
...
[42] Following the deal going down,
there was the driving and an attempt to apprehend the two accused; the manner
of driving by Mr. Ali was such as to evade police. There were seven RCMP
officers in this operation and also involved in the court appearance. All
seven gave evidence. This was a time-consuming and costly operation.
[43] The
age of the accused Mr. Ali is also a factor, because he is not a youth of 19 or
22. He is an adult with very adult responsibilities. Finally, there has been
no remorse that I can detect.
[16]
I am satisfied the judge fully and properly
weighed the factors relevant to Mr. Ali. She made no error concluding in this
case that a period of incarceration was warranted. I also am satisfied that
the fresh evidence would add nothing to the analysis.
[17]
In
R. v. Lévesque
,
[2000] 2 S.C.R.
487, the Court stated the criteria relevant to the admission of fresh evidence
in para. 35:
(1) The evidence should generally not be admitted if, by
due diligence, it could have been adduced at trial provided that this general
principle will not be applied as strictly in a criminal case as in civil cases.
(2) The evidence must be relevant in the sense that it
bears upon a decisive or potentially decisive issue relating to the sentence.
(3) The evidence must be credible in the sense that it is
reasonably capable of belief.
(4) The evidence must be such that if believed it could
reasonably, when taken with the other evidence adduced at trial, be expected to
have affected the result.
[18]
In my view, the tendered fresh evidence in this
case does not meet the first and last criteria. There is no explanation why
this material could not have been obtained and placed before the sentencing
judge. The material adds very little to the information that was before the
sentencing judge.
[19]
In para. 41, the judge dealt with the
relationship between Mr. Ali and his co-offender:
[41] His
co-accused, Mr. Osborne, was clearly an addict. There was evidence of active
and heavy trafficking by the number of telephone calls that came to the cell phone
after the two were apprehended by the police. The money was found on Mr. Ali.
There was no money found on Mr. Osborne. The $30 in marked bills was found on
Mr. Ali. There was a significant amount of drugs found on Mr. Osborne, 20
grams of cocaine in 54 small packages. There is an inference that this was not
an isolated transaction, as I say, because of the telephone calls that kept
coming in to the apprehended cell phone. This type of operation, a dial-a-dope
operation, is to avoid detection and forfeiture.
[20]
In my view, the judge made no error in her
consideration of the positions of Mr. Ali and his co-offender who was given a
conditional sentence.
Conclusion
[21]
I would dismiss this appeal.
The
Honourable Mr. Justice Chiasson
I agree:
The Honourable Madam
Justice Newbury
I agree:
The Honourable Mr. Justice Frankel
|
COURT
OF APPEAL FOR
BRITISH COLUMBIA
Citation:
R. v.
Bodaly
,
2010 BCCA
9
Date: 20100107
Docket: CA37022
Between:
Regina
Respondent
And:
Stacey Terry
Bodaly
Appellant
Before:
The
Honourable Madam Justice Newbury
The
Honourable Madam Justice Huddart
The
Honourable Mr. Justice
Tysoe
Sentence Appeal from the Provincial Court of
British Columbia
R. v.
Bodaly
,
Port Alberni Registry No. 40281,
April 14, 2009
Oral Reasons for
Judgment
Counsel
for the Appellant:
P. Gibb
Counsel
for the Respondent:
P.
LaPrairie
Place and
Date of Hearing:
Victoria, British Columbia
January 7, 2010
Place and
Date of Judgment:
Victoria, British Columbia
January 7, 2010
[1]
NEWBURY,
J.A.
:
Mr.
Bodaly
, who is now 47
years old, was convicted at Port Alberni almost a year ago of one count of
possession of marihuana for purposes of trafficking, after pleading guilty. He
was sentenced by a Provincial Court judge to three months imprisonment with one
year probation.
[2]
The offence took place
in Mr.
Bodalys
home, which was across the street
from a community park where youths often gathered. Police observed both adults
and youths coming and going from the house. When the police executed their
search warrant, there were three youths around the kitchen table with
marihuana paraphernalia, including a girl who was about 12 years old. She was
not Mr.
Bodalys
daughter, but the daughter was,
we may infer, being exposed to the marihuana operation in the house where she
lives.
[3]
Mr.
Bodaly
applied to appeal the sentence in April of last year on various grounds,
including that the sentencing judge had disregarded a recommendation of
community supervision in the pre-sentence report and had failed to give due
consideration to the appellants Aboriginal status as required by s. 718.2(e)
of the Code.
[4]
The
PSR
had noted the appellants dreadful upbringing was in a household full of
neglect, abuse and indifference. Mr.
Bodaly
left
home in Port Alberni at age 14 and became self-sufficient. He had a child,
Ashley, in 1997 and has always been her primary caregiver. He left school in
Grade 8 and is basically unable to read or write, perhaps due to a reading
disability. Yet he has managed to hold down decent jobs for extended periods
until about 2001. He has been living in recent years on social assistance of
$664 per month plus rent. When young, he abused alcohol until he quit,
certainly when his daughter is around, but in
latter
years he has self-medicated with marihuana and, it appears, pills.
Accordingly to the report, this assists him in coping with depression, anxiety
and ongoing back pain.
[5]
He has a criminal
record but not a lengthy one, the last offence having occurred in 1995 for
possession of a narcotic. Most of the offences relate to alcohol or drug use or
possession. He told the author of the
PSR
that he now
realizes that with a child around, he cannot continue trafficking in drugs and
that he must act in accordance with the law. I should also note the sentencing
judge had evidence from a social worker to the effect that Mr.
Bodalys
daughter was receiving good care from her father
and is doing well at school.
[6]
Mr.
Bodaly
was born a member of the
Snuneymuxw
First Nation but
has not cultivated his ties to the band, having made it on his own to this
point. The author of the
PSR
noted that no
information regarding programs that might be available for or from members of
the band was available before sentencing. The author was of the view that Mr.
Bodaly
sincerely wanted to change his behaviour,
especially if anything he does impacts his daughter or his ability to maintain
custody of his daughter. The
PSR
recommended a
period of community supervision subject to various conditions.
[7]
The defence sought a
conditional sentence and suggested the appellant would benefit from community
assistance, perhaps from Aboriginal sources. The Crown sought a term of
imprisonment of three months and, as we have seen, that is what the sentencing
judge ordered. He emphasized deterrence, although he was troubled by the gap
in Mr.
Bodalys
record and the fact he had done well
in raising his daughter single-handedly. On the other hand, the location of the
offence was seen as an aggravating factor, and properly so.
[8]
The sentence appeal was
first set down to be heard on November 2 of last year. At that hearing, defence
counsel argued that the sentencing judge had not given adequate weight to the
appellants Aboriginal status. The Court, however, was not given any evidence
or information regarding any alternative to imprisonment that might be provided
by the
Snuneyuxw
First Nation. The Court concluded
that in light of Mr.
Bodalys
background as
detailed in the
PSR
, the gap in his record and the
Courts duties under s. 718.2, more information was required. The appeal was
therefore adjourned to permit counsel to file evidence of alternatives
available to him from the
Snuneymuxw
First Nation.
The appeal was rescheduled to today and Mr.
Bodaly
was released on bail in the meantime.
[9]
Today there is evidence
that there are community services available through the Band, that is, a
program that assists with substance abuse, as well as counselling, a health
nurse, a program that assists people who have been out of school for a long
time, and a friendship centre close to the community. It also appears Mr.
Bodaly
made arrangements to begin counselling in December
2009 in Port Alberni and has been attending for counselling with Mr.
Zyrd
.
[10]
The Crown takes the position that
the sentencing judge did not err or impose an unfit sentence on Mr.
Bodaly
and notes that the judge was not required to comment
on the appellants Aboriginal status, of which the Court had clearly been made
aware. Counsel says the sentencing judge considered a conditional sentence,
citing
paras
.
5-6 of his reasons.
I must say I see no reference to that alternative in those paragraphs or
elsewhere. The sentencing judge did emphasize that the offence was a serious
one (and one cannot disagree with that) and told Mr.
Bodaly
he was not here to sentence your daughter, I am here to sentence you. This is
true, but it does not explain why a conditional sentence was not thought
appropriate. I do not suggest that every sentencing judge must in every case go
through the reasons why he or she thinks a conditional sentence is not
appropriate.
In many cases that is self-evident or is
implicit in the analysis.
In this case, however, a conditional sentence
was in my respectful view an obvious and viable option, and why it was rejected
is
not
self-evident. Section 718.2(e) instructs courts that they must in
every case take into consideration all available sanctions other than
imprisonment that are reasonable in the circumstances ... for all offenders
with particular attention to the circumstances of aboriginal offenders.
R.
v.
Gladue
([1999] 1
S.C.R.
688) tells us that this is a remedial provision intended to alter the method
of analysis which each sentencing judge must use in determining the nature of a
fit sentence for an aboriginal offender.
(Para.
33.)
[11]
It is true Mr.
Bodaly
has lived apart from his Aboriginal community since he was able to remove
himself from the care of his obviously dysfunctional family. That does not mean
he is any the less a victim of his upbringing or disentitled to have
s. 718.2(e) given due consideration in his case. Even if he were
not
Aboriginal
, he would be entitled to have a conditional
sentence seriously considered, given his background, the long gap in his
criminal record and his ability to hold employment in the face of severe
educational deficiencies and his family situation.
[12]
In my view, the sentencing judge did
not give adequate weight to s. 718.2(e) or to the personal and family
circumstances that militated in favour of a conditional sentence in this case.
Given Mr.
Bodalys
attitude and recognition that he
cannot keep breaking the law, it is likely that deterrence and protection of
the public are not as important in this case as rehabilitation. It appears now
that there is a reasonable alternative to imprisonment that may help Mr.
Bodaly
return to a way of life that is stable and
productive and enables him to continue to provide his daughter with the
environment she needs. We are told he realizes he cannot do so if he flouts the
law and I would add the warning that if he is convicted of another criminal
offence, imprisonment is more likely with all that would entail for this
family.
[13]
In all the circumstances, and
considering also that Mr.
Bodaly
did serve 21 days in
custody (with rather serious consequences for his daughter), I find that a fit
sentence would be a conditional sentence of three months, giving credit for the
21 days already served, subject to the following conditions:
1.
There would a curfew from 9:00 p.m.
to 6:00 a.m., except when Mr.
Bodaly
is
attending to go to work or to attend rehabilitation or counselling programs or
sessions.
2.
He must attend and participate in rehabilitation substance abuse and other
counselling programs that may be recommended by his probation officer, whether
Aboriginal-based or otherwise.
3.
He must refrain from associating with persons that he knows are users of
illicit substances.
The one
year probation order would continue in place. On these conditions, I would
allow the appeal.
[14]
HUDDART,
J.A.
:
I agree.
[15]
TYSOE
,
J.A.
I agree.
[16]
NEWBURY,
J.A.
:
The appeal is
allowed, and a conditional sentence of 90 days substituted for the sentence of
three months
imprisonment
. The conditions stated
shall be imposed, and the probation period and terms remain unchanged.
The Honourable Madam Justice
Newbury
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Shortridge-Tsuchiya v. Tsuchiya
,
2010 BCCA 61
Date: 20100209
Docket:
CA037139
Between:
Theresa Shortridge-Tsuchiya
Appellant/Respondent on Cross Appeal
(
Plaintiff
)
And
Sakae Tsuchiya
Respondent/Appellant on Cross Appeal
(
Defendant
)
Before:
The Honourable Madam Justice Rowles
The Honourable Madam Justice Prowse
The Honourable Mr. Justice Lowry
On
appeal from the Supreme Court of British Columbia, April 21, 2009 and September
4, 2009 (
Shortridge-Tsuchiya v. Tsuchiya
, 2009 BCSC 541 and 2009
BCSC 1217, Nanaimo Docket E54989)
Counsel for the Appellant:
P.
Golden
Counsel for the Respondent:
M.A.
Thomas
Place and Date of Hearing:
Vancouver,
British Columbia
November 17 & December 11, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
February
9, 2010
Written Reasons by
:
The Honourable Madam Justice Prowse
Concurred in by:
The Honourable Mr. Justice Lowry
Dissenting Reasons by:
The Honourable Madam Justice Rowles (page
44, para. 136)
Reasons for
Judgment of the Honourable Madam Justice Prowse:
INTRODUCTION
[1]
This case raises issues regarding the
interpretation and application of Part 3 of the
Family Relations Act
,
R.S.B.C. 1996, c. 128 (the
FRA
), in circumstances where a child in the
joint care of his parents has been removed by one parent from a jurisdiction,
Japan, which is not a signatory to the
Hague Convention
on the Civil
Aspects of International Child Abduction,
25 October 1980, 1343 U.N.T.S.
22514, Can. T.S. 1983 No. 35 (entered into force 1 December 1983) (the
Hague
Convention
).
[2]
Ms. Shortridge-Tsuchiya (the mother) is
appealing from the order of a chambers judge, made April 21, 2009 (the
jurisdictional order), containing the following terms:
1. The Supreme Court of British Columbia has no
jurisdiction pursuant to section 44 of the
Family Relations Act
,
R.S.B.C. 1996, c. 128 to make an order relating to the care and custody of the
Child:
Taiyo Tsuchiya,
also known as Taiyo George Tsuchiya, born August 6, 2001.
2. Pursuant to section 47 of the
Family
Relations Act
, R.S.B.C. 1996, c. 128, the Plaintiff shall return with the
Child to Japan so that the issues relating to the Childs custody, access and
guardianship can be decided in Japan.
3. The order under paragraph 2 hereunder is
stayed until:
(a) the Defendant pays to the Plaintiff the reasonable travel
expenses for the Plaintiff and the Child to return to Japan; and
(b) the Defendant secures payment to the Plaintiff of a sum
of money that is sufficient to cover the reasonable living expenses of the
Plaintiff and the Child in Japan until the issues relating to the Childs
custody, access and guardianship can be decided there.
4. The parties have liberty to
apply should they be unable to agree as to what payment is required of the
Defendant and as to the amount and manner of securing payment of living
expenses.
5. Pursuant to section 47 of the
Family Relations
Act
, R.S.B.C. 1996, c. 128, the Plaintiff shall have interim custody, care
and control of the Child and the Defendant shall have reasonable and generous
access to him, pending a decision on these issues by the courts in Japan.
[3]
The jurisdictional order further provided that
if the father did not pay the required expenses pursuant to s. 47 by a set
date, the mother had liberty to apply to have the issues of custody and access
determined in British Columbia. If the father paid the required expenses and
the mother failed to return with the child to Japan as directed, then the father
had liberty to apply for interim custody to enable him to return with the child
to Japan. Finally, the parties were ordered to pay their own costs of the
application.
[4]
The parties were unable to agree as to the
appropriate amount of expenses and returned before the chambers judge on May
13, June 17, July 3, and August 19, 2009. Following that hearing, the chambers
judge made an order on September 4, 2009 (the expenses order) requiring the
father to pay $17,000 to the mother on or before October 31, 2009 for the
travel expenses of the mother and the child to return to Japan, and for the
costs of the mother re-establishing a household in Japan. The father was also
ordered to pay $84,000 into the trust account of the mothers lawyer, from
which a sum of $3,500 was to be paid to the mother on the first day of each
month representing the costs of the mother and child in Japan pending a
determination of the issues of custody and access in that jurisdiction. At
that time it was estimated that, in the absence of agreement, a final
resolution of those issues could take up to two years in Japan.
[5]
The expenses order further provided that if the
father made the requisite payments, the mother was to return to Japan with the
child on or before November 30, 2009.
[6]
The father is cross-appealing from that aspect
of the jurisdictional order giving the mother interim custody pending the
childs return to Japan. Although no separate Notice of Appeal has been filed
in relation to the expenses order, the father also seeks to appeal from that
order to the extent it exceeds the $17,000 travel and start-up costs for the
mother and child on their return to Japan. The parties agree that it is
appropriate for this Court to make an order with respect to that issue.
[7]
The parties seek to have all of these issues
resolved by this Court in order to avoid the inevitable delays which would
occur if matters were remitted to the Supreme Court. There have already been
regrettable delays in concluding the fathers application in the Supreme Court
because of the necessity of a second hearing regarding expenses. There was a
further, unavoidable, delay when this appeal had to be adjourned for
continuation from November 17 to December 11.
[8]
At the conclusion of the appeal, this Court
stayed the orders of the chambers judge pending the release of this decision.
THE
ISSUES
[9]
The mother submits that the chambers judge erred
in finding that the Supreme Court of British Columbia did not have jurisdiction
to decide the issues of custody and access, and, in the alternative, in finding
that if the B.C. Supreme Court had jurisdiction, it was appropriate to decline
jurisdiction under s. 46 of the
FRA
in favour of the courts in Japan.
[10]
In particular, the mother submits that the
chambers judge erred as follows:
(1) by conflating the
considerations under sections 44 and 46 of the
FRA
in making his
jurisdictional order;
(2) by making his
jurisdictional order under the misapprehension that proceedings the husband had
commenced in Japan the day following the commencement of the mothers action
for custody and access in B.C. were extant at the time he made his
jurisdictional order;
(3) by finding,
without an evidentiary foundation, that it would be unusual for a mother to be
denied custody in Japan; and
(4) by inferring that the legal
system in Japan would be able to protect the best interests of the child if the
case was remitted to Japan.
[11]
The mother also submits that, if all other bases
for finding or asserting jurisdiction in the B.C. Supreme Court failed, the
court should have called in aid its
parens patriae
jurisdiction to
assert jurisdiction and to dismiss the fathers application.
[12]
The father seeks to uphold the jurisdictional
order except with respect to the provision awarding the mother interim custody,
and the provision with respect to costs which, he submits, should have been
awarded in his favour. With respect to the expenses order, he submits that the
chambers judge erred in his application of s. 47 of the
FRA
by
making an order for expenses which was the equivalent of an order for spousal
and child support in accordance with the support guidelines applicable in
British Columbia, and which went beyond the nature and extent of expenses
contemplated under s. 47.
[13]
There is also an issue as to the admissibility
of fresh evidence filed by both parties, much of which relates to the
substantive and procedural law of Japan in relation to issues of custody, and to
the enforcement of foreign court orders.
CONCLUSION
[14]
In my view, the chambers judge erred, in part,
in his analysis under s. 44 of the
FRA
and in finding that the B.C.
Supreme Court did not have jurisdiction to make an order for custody of, and
parenting rights with respect to, the child. I agree with his alternative
finding that, assuming the B.C. Supreme Court had jurisdiction (and I find that
it did), British Columbia should decline jurisdiction pursuant to s. 46 of the
FRA
in favour of Japan.
[15]
In coming to these conclusions, I have considered the fresh
evidence, but I have concluded that most of it is not sufficiently reliable to
meet even the flexible application of the test for the admission of fresh
evidence which has been applied in family law cases. I have also concluded
that the evidence which I do find reliable could not reasonably, when taken
with the other evidence, be expected to have affected the result reached by the
chambers judge. I would decline to admit the fresh evidence on that basis.
[16]
I find no merit in the grounds of appeal
alleging that the chambers judge misapprehended the evidence, or that he may
have reached a different conclusion on the jurisdictional issue had he been
aware in a more timely fashion that the father had discontinued his divorce
proceedings in Japan.
[17]
Finally, I am not persuaded that the chambers
judge erred in awarding the mother interim custody of the child, in the nature
and extent of the expenses he ordered pursuant to s. 47 of the
FRA
, or
in ordering each party to bear his or her own costs.
[18]
I would dismiss the mothers appeal with
respect to the jurisdictional order and the fathers cross-appeal with respect
to the issues of interim custody, expenses, and costs. I would vary the
expenses order to extend the time for the mother to return with the child to
Japan to no later than March 14, 2010. I would vary the jurisdictional order
by deleting para. 1 and substituting an order that the Supreme Court of British
Columbia declines jurisdiction over the child except to the extent of the
orders for interim custody and the payment of expenses made pursuant to s. 47
of the
FRA
.
BACKGROUND
[19]
The mother, now 39 years of age, is a Canadian
citizen who was born in Burlington, Ontario and moved to Japan in 1995 to teach
English. The father, now 51 years of age, was born and raised in Japan and is
self-employed as an electrical engineer. The parties began dating in 1997 and
married in March 2000. Their son was born in August 2001 and is now eight
years of age. He has dual Japanese-Canadian citizenship.
[20]
As of 2005, the parties lived in a three story
home in Kasugai, Japan. The fathers parents occupied the first floor; the
fathers office was on the second floor; and the parties lived with the child
on the second and third floors. The fathers parents, now in their late 70s,
often took care of the child while the parents worked and when the child was
not in kindergarten.
[21]
In 2006, the parties were experiencing
significant difficulties in their marriage. An attempt at counselling was
unsuccessful. In December 2007, the father advised the mother that he intended
to seek a divorce. He hired a lawyer and applied for Coordination and
Mediation of Marriage with the Nagoya Family Court in July 2008. This was in
accordance with Japanese law, which requires the parties to participate in a
mediation and reconciliation process prior to divorce. The first mediation
session was held on September 4, 2008, and the second session was held on
October 8, 2008. These efforts at mediation were unsuccessful. A third
mediation session was scheduled for November 5, but, on November 1, 2008, the
mother flew with the child to British Columbia. The mother did not advise the
father she was leaving Japan, nor did she seek his consent to take the child
with her. Instead she advised him that she was taking the child to a camp for
a few days. On November 5, the mothers lawyer advised the father that the
mother and the child had gone to live with the mothers parents in Nanaimo.
She and the child have been living in Nanaimo with the mothers parents since
then.
[22]
The mother commenced an action pursuant to Part
2 of the
FRA
in the B.C. Supreme Court on November 20, 2008 seeking
custody and guardianship of the child, and child and spousal support.
[23]
The following day, on November 21, the father
brought a proceeding in the Nagoya Family Court seeking a divorce and custody
of the child. In the meantime, on November 5, 2008, upon being advised that
the mother and the child had left the jurisdiction, the court in Japan issued a
Certificate of Failure of Mediation which ended the mediation proceedings.
[24]
The father withdrew his proceedings for divorce
on February 15, 2009 after receiving legal advice from his Japanese counsel
that there was no point in pursuing that action while the child was subject to
outstanding proceedings in British Columbia. Thereafter, on April 6, 2009, he
brought an application pursuant to Part 3 of the
FRA
seeking, amongst
other relief, an order that the B.C. Supreme Court decline to exercise its
territorial competence in this proceeding. He also asked that the mothers
action be struck out or stayed, and that he be granted interim custody of the
child pending the making of an order in Japan.
THE
JURISDICTIONAL DECISION
[25]
The chambers judge observed that Japan was not a
signatory to the
Hague Convention
, and conducted his analysis under Part
3 of the
FRA
. In applying Part 3, he drew the following conclusions:
(1) that the purpose
of Part 3 is to ensure that applications for custody and access are determined
on the basis of the best interests of the children;
(2) that one of the
purposes of Part 3 is to recognize that concurrent exercise of jurisdiction
over custody and access by more than one state is to be avoided;
(3) that another
purpose of Part 3 is to discourage the abduction of children from one
jurisdiction to another;
(4) the child was not
habitually resident in British Columbia at the time of the fathers
application, but his habitual residence was in Japan;
(5) utilizing the
criteria in s. 44(1)(b) of the
FRA
:
(i) the child was physically
resident in B.C. at the time of the application;
(ii) there was limited, short-term evidence
relating to the childs best interests in B.C., but there was not substantial
evidence concerning his best interests within the jurisdiction;
(iii) there was no application
for custody or access to the child pending before an extra-provincial tribunal
in another place where the child is habitually resident (Japan);
(iv) there was no
extra-provincial order in respect of custody or access which has been
recognized by a court in B.C.;
(v) the child had a real, but
not a substantial connection with B.C.;
(vi) on the balance of
convenience, it was not appropriate for jurisdiction to be exercised in B.C.;
(6) he would decline jurisdiction
pursuant to s. 46 of the
FRA,
even if the courts of B.C. had
jurisdiction under s. 44.
[26]
The chambers judge then considered the mothers
submission that the child would suffer discrimination in Japan due to his mixed
racial heritage. It is not clear whether her submission in this regard was
intended to raise the prospect that the child would suffer serious harm
within the meaning of s. 45 of the
FRA
if he were returned to Japan, or
whether she was calling upon the court to exercise its
parens patriae
jurisdiction. In either case, the chambers judge stated (at para. 60) that
There is at present no unusual reason for this Court to assume jurisdiction.
In his view, the Japanese courts were in a better position to address any
issues of discrimination in relation to either the mother or the child.
[27]
After concluding that the B.C. Supreme Court had
no jurisdiction pursuant to s. 44 of the
FRA
, or that, if jurisdiction
existed, he would decline jurisdiction under s. 46, the chambers judge
made an order under s. 47 giving the mother interim custody of the child
pending determination of the issues of custody and access in Japan. He
accepted the mothers submission that the father had been unilaterally and
secretly controlling the familys finances in Japan and had failed to pay child
support while the child was in Canada. He concluded, therefore, that it was
appropriate to make an order requiring the father to pay reasonable travel and
other expenses of the mother and the child pursuant to s. 47 of the
FRA
to enable custody to be determined in circumstances where both parties could
participate meaningfully in the court process in Japan. He provided that his
order returning the child to Japan should be stayed until the father had secured
payment of those expenses, at which time the mother was to return with the
child to Japan. He also provided that if the father did not secure the
expenses, or, if he did so and the mother refused to return with the child to
Japan, either party could apply to the court for relief.
[28]
The chambers judge concluded that the parties
had enjoyed mixed success on the fathers application, and he declined to make
any order as to costs.
THE
EXPENSES DECISION
[29]
The parties were unable to agree on the
appropriate amount of expenses to be paid by the father pursuant to the
jurisdictional order. They returned to court and made detailed submissions
with respect to that issue. In the result, the chambers judge made the order
referred to at para. 4,
supra
. In determining the quantum of expenses,
the chambers judge found that it was unlikely that the mother would earn income
of any consequence during the legal process in Japan; he rejected the fathers
submission that the mother and child should return to live in the former
matrimonial home even if the father moved out; he rejected the figures put
forth by the father and the mother; and he arrived at the amount he considered
appropriate by reference to the child and spousal support guidelines applicable
in British Columbia as a useful yardstick. In applying the guidelines, he
estimated the fathers income as $100,000, and the mothers income as nil. He
concluded his reasons by stating that it was for the courts of Japan to make
orders relating to this family, including court costs and other financial
issues outstanding between them.
DISCUSSION
OF THE ISSUES
1.
Introduction
[30]
The most significant issue on this appeal is
whether the trial judge erred in his interpretation of Part 3 of the
FRA
and in its application to the facts before him. A related issue is whether,
and to what extent, the fresh evidence is admissible.
[31]
As earlier stated, I am of the view that the
other grounds of appeal are without merit. I will address those grounds at the
conclusion of my Part 3 analysis.
2.
Part
3 of the
FRA
Interpretation and Application
[32]
It is apparent from the submissions made on
behalf of the father and the mother on this appeal that they are not in
agreement as to either the interpretation or application of several provisions
of Part 3 of the
FRA
. For that reason, it is useful to begin this
discussion with the basic principle of statutory interpretation which is set
forth in many decisions, including
Rizzo & Rizzo Shoes Ltd. (Re)
, [1998]
1 S.C.R. 27, 154 D.L.R. (4th) 193, where Mr. Justice Iacobucci, speaking for
the court, stated as follows (at para. 21):
Although much has
been written about the interpretation of legislation [references omitted] Elmer
Driedger in
Construction of Statutes
(2
nd
ed. 1983) best
encapsulates the approach upon which I prefer to rely. He recognizes that
statutory interpretation cannot be founded on the wording of the legislation
alone. At p. 87 he states:
Today there is only one principle or
approach, namely, the words of an Act are to read in their entire context and
in their grammatical and ordinary sense harmoniously with the scheme of the
Act, the object of the Act, and the intention of Parliament.
This statement of principle has been
restated in many decisions of the Supreme Court of Canada and is not
contentious.
[33]
With this principle in mind, and in order to
place the jurisdictional issues raised in this appeal in context, it is useful
to review, briefly, the interaction between Parts 2, 3, and 4 of the
FRA
in relation to the facts of this case.
[34]
The mothers action for custody of the child was
commenced under Part 2 of the
FRA
which is headed Child Custody, Access
and Guardianship. The most relevant provisions of Part 2 for the purpose of
this discussion are ss. 24, 34, and 35. In summary, s. 24 provides that, when
making an order under Part 2, a court must give paramount consideration to the
best interests of the child; s. 34 provides that where the father and mother
are living together they may jointly exercise custody over a child; and s. 35
provides that:
35(1)
Subject
to Part 3,
a court may, on application, order that one or more persons may
exercise custody over a child or have access to the child. [Emphasis added.]
[35]
Before turning to Part 3, it is relevant to note
that Part 4 of the
FRA
, headed International Child Abduction, provides
(in s. 55(2)) that the
Hague Convention
has the force of law in British
Columbia. Subsection 55(6) of Part 4, however, makes it clear that it is Part
3 of the
FRA
which applies to jurisdictional disputes where, amongst
other things, a child who, immediately before a breach of custody or access
rights, was habitually resident in a state other than a contracting state
(s. 55(6)(b)). As will become apparent, I am satisfied that the mother
removed the child from Japan, his habitual place of residence, in breach of the
fathers custody rights.
[36]
The most important provisions of Part 3 for the
purpose of this discussion are ss. 43-47.
[37]
The purposes of Part 3, headed Extraprovincial
Custody and Access Orders, are set out in s. 43 of the
FRA
and are
fourfold:
(a)
to ensure that applications to the
courts in respect of custody of, access to and guardianship of children will be
determined on the basis of the best interests of the children
,
(b) to recognize that the concurrent
exercise of jurisdiction by judicial tribunals of more than one province,
territory or state in respect of the custody of or access to the same child
ought to be avoided, and
to make provision so that the courts of British
Columbia will, unless there are exceptional circumstances, refrain from
exercising or decline jurisdiction in cases where it is more appropriate for
the matter to be determined by a tribunal that has jurisdiction in another
place with which the child has a closer connection
,
(c)
to discourage the abduction of
children as an alternative to the determination of custody rights by due
process
, and
(d) to provide
for the more effective enforcement of custody and access orders and for the
recognition and enforcement of custody and access orders made outside British
Columbia. [Emphasis added.]
[38]
I note that, while under Part 2 of the
FRA
the best interests of the child are stated to be paramount, the best
interests of the child under Part 3 must be read in the context of the other
three purposes that Part 3 is designed to serve. Those purposes reflect the
underlying assumption that a wrongful removal of children from one jurisdiction
to another will, in most cases, be contrary to the childrens best interests.
This is so because such a move almost invariably interferes with meaningful
contact between the children and one of their lawful parents or guardians, and
with their other family, friends, school, and home in a manner which is
necessarily disruptive of their sense of stability and security. There is also
an underlying assumption, reflected in the wording of Part 3, that the state of
the childs habitual residence is the jurisdiction best suited to a
determination of the childs best interests. In this respect, the provisions
of Part 3 reflect similar considerations under the
Hague Convention
.
[39]
Section 44 of the
FRA
, headed Jurisdiction,
sets out the circumstances in which the court must exercise its jurisdiction
to make an order for custody of, or access to, a child. It provides:
44(1)
A court must exercise its
jurisdiction
to make an order for custody of or access to a child
only
if
(a) the
child is habitually resident in British Columbia at the commencement of the
application for the order, or
(b) although
the child is not habitually resident in British Columbia, the court is
satisfied that
(i) the
child is physically present in British Columbia at the commencement of the
application for an order,
(ii) substantial
evidence concerning the best interests of the child is available in British
Columbia,
(iii) no
application for custody of or access to the child is pending before an
extraprovincial tribunal in another place where the child is habitually
resident,
(iv) no
extraprovincial order in respect of custody of or access to the child has been
recognized by a court in British Columbia,
(v) the
child has a real and substantial connection with British Columbia,
and
(vi) on
the balance of convenience, it is appropriate for jurisdiction to be exercised
in British Columbia. [Emphasis added.]
[40]
Thus, under s. 44(1)(b) all six criteria under
that subsection must be met in order
to require
the court to exercise
its jurisdiction.
[41]
Section 45 of the
FRA
provides that, in
situations where the court might not otherwise assert jurisdiction under s. 44,
the court may exercise its jurisdiction if the child is within the jurisdiction
and the court is satisfied that the child would probably suffer serious harm
if (amongst other things) the child is removed from British Columbia. It does
not appear that the mother was relying on s. 45 at the hearing before the
chambers judge, and she has not raised it as a relevant consideration on
appeal.
[42]
Section 46 of the
FRA
provides for
instances where the court may decline jurisdiction. In private international
law terms, it is a
forum conveniens
, or
forum non conveniens
provision, and states:
46. A court
that has jurisdiction in respect of custody or access may decline to exercise
its jurisdiction if the court is of the opinion that it is
more appropriate
for jurisdiction to be exercised outside British Columbia. [Emphasis added.]
[43]
Section 47 of the
FRA
provides for
interim orders and for expenses. I will address this section later in these
reasons in dealing with the fathers cross-appeal.
[44]
In addition to its jurisdiction over the custody
of, and access to, children found in the
FRA
, the Supreme Court has an
inherent jurisdiction by virtue of its
parens patriae
power to make
orders in relation to children within the jurisdiction and, in rare instances,
in relation to children outside the jurisdiction. (See, for example,
Yassin
v. Loubani
, 2006 BCCA 509, 277 D.L.R. (4th) 79, leave to appeal
dismissed, [2007] S.C.C.A. No. 19.) In that respect, s. 5(3) of the
FRA
provides that: This Act must not be construed as limiting or restricting the
inherent jurisdiction of the Supreme Court to act in a parens patriae capacity
respecting a child before the court.
[45]
It is apparent from his order that the chambers
judge erred in treating s. 44 of the
FRA
as if it were a
jurisdiction-conferring
provision. By its terms, s. 44 does not create jurisdiction in the court, but
provides for the circumstances in which the court must exercise its
jurisdiction.
[46]
Apart from the error of the trial judge in
treating s. 44 as a jurisdiction-conferring provision, the mother submits that
he erred in several other respects in his interpretation and application of s.
44. Her principal submission is that the chambers judge conflated the analysis
under s. 44(1)(b) and s. 46. She submits that she only had to establish that
British Columbia was an appropriate jurisdiction under s. 44(1)(b), and that
the question of whether it was a more appropriate jurisdiction did not arise
under s. 44, but only under s. 46. Thus, the mother did not have to show that
there was more substantial evidence of the best interests of the child in
British Columbia under s. 44(1)(b)(ii), or that the child had a more real and
substantial connection with British Columbia than with Japan under s.
44(1)(b)(v), but only that there was substantial evidence in British Columbia
and a real and substantial connection between the child and British Columbia.
[47]
In addressing this submission, it is important
to note that the only dispute between the parties under s. 44 concerned the
application of ss. 44(1)(b)(ii), (v), and (vi). The child was physically
present in British Columbia (s. 44(1)(b)(i)); there was no application for
custody or access to the child pending in Japan at the commencement of the
proceedings in B.C.
since the fathers action, subsequently
discontinued, was not commenced until the day after the mothers action
(s. 44(1)(b)(iii)); and there was no extraprovincial order in
relation to the child (s. 44(1)(b)(iv)).
[48]
With respect to the application of s.
44(1)(b)(ii), the chambers judge properly framed the question before him (at
para. 45) as whether the evidence available in British Columbia as to [the
childs] best interest is substantial evidence within the meaning of that
criterion. The chambers judge observed that there was evidence of the childs
best interests in British Columbia, since the child had been in British
Columbia for approximately five months at the time of the jurisdictional
hearing, he was enrolled in school, and his mother and maternal grandparents
were here. The chambers judge also observed that the child had visited British
Columbia on earlier occasions, but stated that the evidence relating to those
earlier visits was likely limited. In concluding that there was no
substantial evidence of the childs best interests in British Columbia, he
stated (at para. 53):
The evidence of outside
witnesses who have seen [the child] relate to both of his parents is available only
in Japan. The long term evidence relating to [the childs] best interests is in
Japan. [The child] has been in British Columbia only since November.
The
evidence that is available in British Columbia is short term evidence including
evidence from his elementary school teacher and evidence from witnesses who
have seen him relate to his mother over restricted periods of time. I am not
satisfied that there is substantial evidence concerning [the childs] best
interests available in British Columbia.
See
Nordin v. Nordin
,
(2001), 17 R.F.L. (5th) 119 (Ont. S.C.J.) and
Gilbert v. Gilbert
[(1985),
47 R.F.L. (2d) 199 Ont. U.F.C.)] In my view, the substantial evidence
concerning [the childs] best interests is in Japan. [Emphasis added.]
[49]
While the chambers judge referred to the nature
of the evidence available in Japan in this passage, he clearly stated that the
evidence available in British Columbia was not substantial. In my view, it
was
open to him to come to this conclusion, particularly given the short time the
child had been in British Columbia at the time of the hearing. His reference
to the evidence available in Japan may well have been used by him as a means of
determining whether the evidence in British Columbia could be described as substantial,
but I do not regard that as undermining his conclusion. Like the court in
Nordin
,
he was not operating in a vacuum, but in the context of another jurisdiction
with which the child also had ties.
[50]
I have difficulty, however, with the finding of
the chambers judge under s. 44(1)(b)(v) of the
FRA
that, while the
child had a real connection with British Columbia, that connection was not
substantial. This finding appears to track the submission of the father, who
acknowledged a real connection, but submitted that the connection was not
substantial.
[51]
In addressing the mothers submission that the
child had a substantial connection with British Columbia within the meaning of
s. 44(1)(b)(v), the chambers judge framed the question, and stated the answer,
as follows (at para. 46):
Criterion
(v) is that [the child] has a real and substantial connection with British
Columbia. [The child] has a real connection with British Columbia. His
maternal grandparents live here. He has lived here for the past several
months. He is a Canadian Citizen. He visited British Columbia in times past.
[The childs] mother is qualified to teach here, and she wishes to live and
work here with [the child]. The issue is whether [the childs] connection with
British Columbia is substantial.
[52]
The chambers judge did not offer any clear reason for finding
that there was not a substantial connection between the child and British
Columbia. In my view, the presence of the child (and his mother) within the
jurisdiction, living at the home of his maternal grandparents, and attending
school in the local school district are factors demonstrating a real and
substantial connection with the jurisdiction. In other words, the connections
which the chambers judge described as real connections were also substantial
connections. I conclude that he fell into error in separating these two
concepts, which are invariably linked in the private international law
context. In my view, there is nothing to be gained, and much to be lost in
terms of certainty, in attempting to give this phrase a new meaning in
determining conflicts issues in family law. The words real and substantial
are linked, and should remain linked.
[53]
Finally, the chambers judge considered the question of whether,
under s. 44(1)(b)(vi), on the balance of convenience, it is appropriate
for jurisdiction to be exercised in British Columbia. He concluded that it
was not. In making that determination, he had to have in mind that the other
jurisdiction which was said to be appropriate was Japan. In other words, his
balance of convenience analysis necessarily took into account the convenience
to each of the parties of the courts exercising jurisdiction in one forum or
the other.
[54]
Did the chambers judge err in his s.
44(1)(b)(vi) analysis? In my view, he did not. At para. 55 of his reasons, he
stated:
In
my view, of overriding significance, is that I am not satisfied on the balance
of convenience that it is appropriate for jurisdiction to be exercised in
British Columbia. Japan is where [the child] has spent most of his life. Japan
is the place his parents chose to make their lives until their recent
separation, and Japan is the place where the best evidence concerning [the
childs] best interests is available.
[55]
Implicit in the finding of the chambers judge
that the child had spent almost all of his life in Japan and that the best
evidence concerning the childs welfare was there, is the obvious fact that the
marshalling of evidence would have been extremely difficult and inconvenient in
British Columbia, and very costly. There is evidence that the fathers parents
are elderly and, in the case of the paternal grandfather, in poor health; the
child has other relatives in Japan with whom he is closely connected; he was
attending kindergarten in Japan and had friends there; there is evidence from
the mediation process which would be relevant to the issue of custody;
interpreters would be required for most of the evidence. The cost and disruption
of arranging for this evidence to be heard in British Columbia would be
considerably greater than the cost and disruption of having the necessary
witnesses in British Columbia provide evidence in Japan. In my view, it is not
an answer to say that some, or all, of these witnesses from Japan could provide
their evidence by video linkage or deposition, assuming that is the case. That
option is one which could well place both the father and the court at a
distinct disadvantage, not the least because the evidence would have to be
given through interpreters. The financial burden on the father in the first
instance in paying for this process would be considerable, and there is no
suggestion that the mother would be willing or able to contribute to those
costs. The father and his witnesses would be operating in a foreign
environment in which not only the language, but the culture and the legal
process were completely unfamiliar to them.
[56]
The mother and child, on the other hand, have
many connections in Japan, including the mothers connections from working in
Japan for many years and the support group she testified to there. She has a
working command of the Japanese language; she has already engaged in the
mediation process there; and she has the ability to find work there if she
chooses to do so in the event the proceedings are unduly prolonged.
[57]
In my view, the evidence before the chambers judge fully supports
his finding that, on the balance of convenience, it was not appropriate for
jurisdiction to be exercised in British Columbia. His conclusion in that
regard is fundamentally sound.
[58]
As a result of finding that the criteria in s.
44(1)(b)(ii), (v), and (vi) were not met, the chambers judge concluded that the
courts of British Columbia did not have jurisdiction over the issue of the
childs custody and parenting. As earlier stated, the correct conclusion which
flowed from his findings was that the court was not required to assert
jurisdiction, but that it, nonetheless, had jurisdiction which it could
exercise in appropriate circumstances. One of those circumstances might be
where there was evidence that the child would suffer serious harm within the
meaning of s. 45 if the court did not assert jurisdiction; another might be if
there were circumstances which engaged the courts
parens patriae
jurisdiction.
[59]
Although the chambers judge found that the B.C.
Supreme Court did not have jurisdiction, he went on to find that, even if the
court had jurisdiction, he would exercise his discretion to decline jurisdiction
under s. 46. There is no doubt from his reasons as a whole that he viewed
Japan as the more appropriate jurisdiction for the resolution of the custody
and parenting issues involving the child.
[60]
The factors which apply on a
forum conveniens
analysis, and which are engaged under s. 46, are set forth in s. 11 of the
Court
Jurisdiction and Proceedings Transfer Act
, S.B.C. 2003, c. 28 (the
CJPTA
),
which codifies the doctrine of
forum non conveniens
in British Columbia (see
Amchem Products Incorporated v. British Columbia (Workers Compensation
Board)
, [1993] 1 S.C.R. 897, 102 D.L.R. (4th) 96, and
Teck Cominco
Metals Ltd. v. Lloyds Underwriters
, 2009 SCC 11, [2009] 1 S.C.R. 321). Section
11 provides:
11(1) After considering the interests of the
parties to a proceeding and the ends of justice, a court may decline to
exercise its territorial competence in the proceeding on the ground that a
court of another state is a more appropriate forum in which to hear the
proceeding.
(2) A court, in deciding the question of
whether it or a court outside British Columbia is the more appropriate forum in
which to hear a proceeding, must consider the circumstances relevant to the
proceeding, including
(a) the
comparative convenience and expense for the parties to the proceedings and for
their witnesses, in litigating in the court or in any alternative forum,
(b) the law
to be applied to the issues in the proceeding,
(c) the
desirability of avoiding multiplicity of legal proceedings,
(d) the
desirability of avoiding conflicting decisions in different courts,
(e) the
enforcement of an eventual judgment, and
(f) the fair and efficient working
of the Canadian legal system as a whole.
[61]
Section 12 of the
CJPTA
provides, amongst
other things, that in the event of inconsistency between it and another Act of
British Columbia, the other Act applies. I do not see any inconsistency
between s. 11 of the
CJPTA
and s. 46 of the
FRA
. The factors to
be considered under s. 11 are inclusive, not restrictive, and permit the court
to consider the purposes of Part 3 set forth in s. 43 of the
FRA
,
including the best interests of the child, in making the determination whether
to decline jurisdiction. Further, the other purposes of Part 3 are reflected
in common goals of avoiding multiplicity of proceedings and conflicting
judgments. The stated purpose in s. 43 of avoiding abductions or wrongful removal
of children from one jurisdiction to another may be viewed in this context as
relevant to a consideration of the fair and efficient working of the Canadian
legal system as a whole under s. 11(2)(f).
[62]
In my view, these considerations are encompassed,
either expressly or implicitly, in the reasons of the chambers judge in his
Part 3 analysis.
[63]
In the mothers submission, however, in exercising
his discretion under s. 46, the chambers judge failed to take into account the
difficulty which the mother might face in enforcing a British Columbia order in
Japan. In this respect, the mother made much of the fact that Japan is not a
contracting party to the
Hague Convention
and is, therefore, not bound
to give foreign custody orders effect.
[64]
In my view, apart from the fact that Japan is not a signatory to
the
Hague Convention
, there was little evidence before the chambers
judge concerning enforceability of foreign judgments in Japan, and certainly
not sufficient evidence to justify him finding that Japan was a
forum non
conveniens
. It is only the fresh evidence which emphasizes the question of
enforceability. I will address the fresh evidence later in these reasons.
[65]
I confess to finding it rather incongruous that
it is the mother who is seeking the benefits associated with the
Hague
Convention
in circumstances where it is likely that the child would have
been returned to Japan under the
Convention
had Japan been a signatory.
I say that because I am satisfied that the circumstances in which the mother
removed the child from Japan amounted to a wrongful removal under both the
Hague
Convention
and Part 3 of the
FRA
. This finding is relevant to the
forum
non conveniens
analysis under s. 46
since two of the four stated
purposes of Part 3 are to encourage the courts to decline jurisdiction where
there has been a wrongful removal. A finding that there has been a wrongful
removal from one jurisdiction to another
engages the very
concerns which Part 3 of the
FRA
is designed to address. As earlier
stated, a wrongful removal may also be viewed as relevant under s. 11(2)(f) of
the
CJTPA
which is concerned with the fair and efficient working of the
Canadian legal system as a whole.
[66]
My conclusion that the mothers actions
constituted an unlawful removal of the child from Japan is not in keeping with
the chambers judges reasons. In that respect the chambers judge stated (at
para. 33):
I do not find that the plaintiff abducted [the child] as an
alternative to the determination of custody rights by due process. The
defendant knew where the plaintiff and [the child] had gone. The plaintiff has
always been subject to court process. There was nothing illegal about the
plaintiff leaving with [the child]. The plaintiff was one of his legal
custodians. There was no pending court process. There was no court order
preventing her from leaving.
[67]
In my view, the chambers judge erred in fact and
in law in this portion of his analysis. The father did not know where the
mother had gone until four days after she left Japan when her lawyer advised
him she had taken the child to Nanaimo. Although there were no court
proceedings in Japan at that point, she was engaged in the mediation process
which is mandatory as a precondition of divorce. That process was terminated
when the mother removed the child from Japan. More importantly, it was
unlawful, in the sense of being contrary to the fathers custody rights as
joint custodian of the child, to remove the child from Japan as she did.
[68]
It is not the case that a parents only rights
to custody of, and/or access to, their children are defined by court order. At
common law, and under Part 2 of the Act (s. 27), the mother and father of a
child who are living together are the joint guardians of the child with joint
rights and obligations in relation to the child. If one parent unilaterally
removes the child from the jurisdiction without the knowledge or consent of the
other parent, this amounts to a wrongful taking of the child and a breach of
the other parents rights as joint custodial parent. The fact that there was
no order in place may be relevant to the fathers ability to enforce his
rights, but the absence of an order does not mean that those rights are
non-existent. This was the view of Madam Justice Levine in
Hewstan v.
Hewstan
, 2001 BCSC 368, where she stated, at para. 35:
There can be no
doubt that one parent having joint guardianship rights over the person of a
child cannot remove a child from the jurisdiction without the consent or over
the objections of the other.
[69]
A similar view was expressed by Mr. Justice La
Forest, speaking for the majority in
Thomson v. Thomson
, [1994] 3 S.C.R.
551 at 580, 119 D.L.R. (4th) 253. While these statements were made in the
context of a
Hague Convention
analysis, they have equal application to
the issue of whether a taking amounts to an abduction or wrongful removal
within the meaning of Part 3.
[70]
In this case, there is little doubt that the
mother knew she was taking the child out of the jurisdiction without the
fathers knowledge or consent. She did so without notice to him and in
circumstances where she led him to believe that she was taking the child to
camp. The fact that she felt she had a good reason for leaving may explain her
actions, but it does not convert them to a lawful removal.
[71]
In seeking to justify her clandestine move to
Canada, the mother deposed that the father had physically abused her on occasion
and that he was secretive and controlling in relation to the family finances.
She also deposed that she was concerned that, as a foreign national, she would
not likely be successful in obtaining custody of the child in Japan. The
chambers judge accepted that the father was unduly secretive and controlling
with respect to family finances, but he made no finding that the mother had
been abused by the father, an allegation which the father denied. It is
significant that the mother deposed that she came to the conclusion while still
in Japan that, if she and the father were not able to reach an agreement as to
custody, she could be facing a long and expensive legal battle. As she stated in
her affidavit, sworn April 2, 2009, The message was very clear at this stage. I
was on the path to losing my son forever. Shortly thereafter, the mother left
Japan with the child.
[72]
These are not circumstances in which it can be
said that, in taking the child from Japan, the mother was simply exercising her
own right to custody, or that she was, in some sense, exercising lawful
mobility rights in the interests of the child. Nor is it a case where there
was anything resembling clear evidence that the mother had genuine concerns for
the safety of either herself or the child. The only inference available on her
own evidence is that she was very concerned about her prospects for success in
the Japanese courts, that she was distressed at the prospect of facing a
lengthy custody battle in Japan, and that she chose to deceive the father as to
her plans in order to avoid confrontation and to ensure that she would be
successful in leaving the country. She had family in British Columbia and that
was the obvious place for her to turn for help in what were obviously unhappy
circumstances. The difficulty with the mothers explanation, however, is that
it reflects precisely the type of conduct which Part 3 of the
FRA
is
designed to deter, that is, forum shopping and wrongful taking of children from
the jurisdiction with which they have the closest connection.
[73]
It is important to emphasize that the question
of whether either the mother or the father is a fit parent, or whether he or
she should be awarded custody or related parenting rights, is not in issue in
these proceedings. The only issue before the chambers judge was whether he
should assume or decline jurisdiction under Part 3 of the
FRA,
and on
what terms. In my view, the fact that this was a wrongful removal of the child
from Japan supports his finding that he would decline jurisdiction in favour of
Japan.
[74]
I conclude this point by saying that I am also
satisfied that the chambers judge did not err in failing to assert the
parens
patriae
jurisdiction of the court in these circumstances. I agree with him
that there was nothing so compelling or unusual about this situation (as in the
case of
Yassin
, for example) to invite or require reliance on the
inherent jurisdiction of the court. I do not propose to say more about
parens
patriae
jurisdiction of the court since it did not form a significant part
of the mothers submissions.
[75]
For all of these reasons, I conclude that,
although the chambers judge erred in finding that British Columbia did not have
jurisdiction over the issue of custody of the child pursuant to s. 44, he was correct
in concluding that this was a proper case in which to decline jurisdiction
under s. 46 on the basis that Japan was the more appropriate forum to exercise
jurisdiction. His decision with respect to s. 46 was discretionary and, thus,
is subject to a stringent standard of review. In the recent decision of
Olney
v. Rainville
, 2009 BCCA 380, 95 B.C.L.R. (4th) 118, at para. 39, Mr.
Justice Groberman, speaking for the Court, stated the standard of review under
s. 11 of the
CJPTA
(which would also apply to an analysis under s. 46 of
the
FRA
) as follows:
A
decision to decline jurisdiction under s. 11 of the
CJPTA
is a
discretionary one. The chambers judges views, therefore, ought not to be
interfered with unless it is shown that he took into account irrelevant
considerations, failed to take into account mandatory considerations, or was
otherwise clearly wrong in the exercise of his discretion.
[76]
Applying this standard of review to the decision
of the chambers judge in his application of s. 46 of the
FRA
, I find no
basis for interfering with his decision.
[77]
The next question which must be determined is
whether the fresh evidence tendered in this Court should lead to a different
result on the jurisdictional issue.
3.
The Fresh Evidence
[78]
The fresh evidence is almost all directed to the
substantive and procedural law of Japan with an emphasis on the enforceability
of foreign judgments in Japan. Some of the evidence also ventures opinions on
the mothers prospects of success in obtaining custody in Japan.
[79]
There was no evidence concerning the law of
Japan before the chambers judge at the time he made his jurisdictional order
except a statement of the mother (referred to at para. 118 of these reasons)
which cannot be regarded as a weighty statement of Japanese law.
[80]
By the time counsel returned before the chambers
judge in relation to the expenses hearing, the father had provided the court with
an affidavit from the fathers lawyer in Japan, Mr. Sudo. Mr. Sudos evidence
was primarily intended to address the second stage of the proceedings, namely,
the issue of expenses under s. 47. He deposed that there were procedures
available in Japan for the mother to obtain monies bearing some similarities to
child and spousal support. He also provided a chart setting out the steps
which would be followed in Japan for resolving issues of custody and access by
agreement or through the courts. If the case were contested, he stated that it
could take between 18 months and two years to complete from the time the father
re-filed the complaint, but that the parties would not have to go through the
mediation and conciliation stages again. I do not understand this aspect of
this evidence to be in dispute.
[81]
Mr. Sudo also addressed the mothers concern
that when she returns to Japan with [the child] it would be possible for [the
father] to take [the child], keep him from her and legally bar her from
entering his residence. Mr. Sudos response to those concerns is set out at
para. 9 of his affidavit:
It would not be possible
for [the father] to unilaterally take such action in Japan: such issues would
have to be decided by the Japanese court and [the mother] would be accorded
full protection under the Japanese legal system. If [the father] were to apply
to court for a provisional disposition to prevent [the mother] from seeing [the
child], this would almost certainly be declined because the court would have
regard to the order made by the British Columbia Supreme Court, setting out the
conditions under which [the mother] is to return to Japan with [the child].
[82]
Mr. Sudos evidence is not entirely fresh
evidence. It was properly before the chambers judge, albeit following his
jurisdictional decision. The weight to be given to his evidence must be
tempered, however, by the fact that he was the fathers lawyer.
[83]
The fresh evidence on appeal consists primarily
of the following:
(1)
An
affidavit by the mother sworn October 15, 2009 attaching as Exhibit A a 100+
page article written by Colin P.A. Jones, a Professor at Doshisha University
Law School in Japan, entitled
In the Best interests of the Court: What
American Lawyers Need to know about Child Custody and Visitation in Japan
,
cited as being found in the Asian-Pacific Law & Policy Journal; Vol. 8,
Issue 2 (Spring 2007).
(2)
An
affidavit of a lawyer in Japan, Ms. Terada, sworn October 15, 2009, providing
opinion evidence on behalf of the mother as to the law in Japan concerning,
amongst other subjects, custody and parenting rights and enforceability of
foreign orders in Japan, and refuting, in some respects, the opinion evidence
given by Mr. Sudo.
(3)
Three
letters requested by the mother from consular officials for Canada, the United
States and Britain setting forth their experience in relation to the
difficulties of enforcing foreign court orders, principally with respect to
children abducted
into
Japan. These letters were confirmed by statutory
declarations provided on the final day of, or subsequent to, the hearing of the
appeal.
(4)
A
Legal Memorandum dated November 9, 2009 from Mr. Kogawa, a lawyer in Japan,
offering opinion evidence in response to that of Ms. Terada concerning, amongst
other subjects, whether foreigners are discriminated against in the courts of
Japan in relation to custody matters, the relationship between resident status
and child custody, the criteria the courts would consider in determining the
best interests of the child, and an opinion on the mothers and fathers
prospects of obtaining custody in Japan.
(5)
A
supplementary Memorandum from Mr. Kogawa dated December 8, 2009, correcting his
earlier opinion to the extent it commented on the mothers resident status.
[84]
Counsel for the mother submits that the fresh
evidence indicates that the courts in Japan would not recognize any order made
by the B.C. Supreme Court (including the order giving her interim custody);
that Japanese law does not recognize significant rights of access to
non-custodial parents; that enforcement procedures for those with custody or
access in Japan are ineffective; that the child would suffer discrimination in
Japan as a mixed-race child; and that the mother, as a foreigner, would also
suffer from discrimination in the application of Japanese law to her claim for
custody.
[85]
Counsel for the father opposes the admission of
the fresh evidence on the basis that it does not meet any of the criteria for
the admission of fresh evidence set forth in the relevant authorities but, if
the Court admits the mothers fresh evidence, he requests that the materials
filed by the father also be considered.
[86]
The criteria to be applied for the admissibility
of fresh evidence on appeal are set forth in the oft-cited decision of the
Supreme Court of Canada in
Palmer v. The Queen
, [1980] 1 S.C.R. 759 at
775, 106 D.L.R. (3d) 202:
(1)
The evidence should generally not be admitted if, by due diligence,
it could have been adduced at trial provided that this general principle will
not be applied as strictly in a criminal case as in civil cases: see
McMartin
v. The Queen
.
(2)
The evidence must be relevant in the sense that it bears upon a
decisive or potentially decisive issue in the trial.
(3)
The evidence must be credible in the sense that it is reasonably
capable of belief, and
(4)
It must be such that if believed it could reasonably, when taken
with the other evidence adduced at trial, be expected to have affected the
result.
[87]
There are authorities which stand for the
proposition that, in family law cases, the courts will apply the
Palmer
test with a measure of flexibility. (See, for example,
Luney v. Luney
,
2007 BCCA 567, 74 B.C.L.R. (4th) 203, at para. 31, leave to appeal refd,
[2008] S.C.C.A. No. 90.) This is particularly true where it has been shown
that the due diligence test has not been met, but where the evidence is
sufficiently compelling and reliable that it would likely affect the result.
Cases involving the welfare of children generally lend themselves to this more
flexible approach.
[88]
I will begin by observing that all of this fresh
evidence hopelessly fails the due diligence test. All of it could have been
obtained prior to the hearing before the chambers judge in the first instance.
The chambers judge commented on the absence of any evidence of Japanese law at
the jurisdictional hearing, and the only evidence forthcoming at the expenses
hearing was that of Mr. Sudo.
[89]
With respect to the second criteria, I accept
that the evidence is relevant to the extent that it relates to the best
interests of the child, which must inform the court in making decisions under
Part 3 of the
FRA
.
[90]
With respect to the third and fourth criteria,
the question is not so much whether the fresh evidence is credible as whether
it is reliable. It is in that respect I find most of the evidence is lacking.
Much of the evidence is contradictory; some of it is not sworn; the expertise
of some of the deponents is not clearly established; and some of the opinions
are expressed in such broad language that it is difficult to determine what, if
any, weight should attach to them. Some of the evidence appears to have been
put together very quickly and without appropriate care. There was no
opportunity to test the evidence by cross-examination. While that will be so
in many cases, it is particularly significant in this case where so much of the
evidence is controverted.
[91]
In the result, it is only where the evidence
coincides that I am prepared to give it any weight. And even then, in order to
admit the evidence, I have to be satisfied that it could reasonably have affected
the result.
[92]
I do not place any weight on the lengthy article
written by Professor Jones. It does not qualify as evidence,
per se
,
nor does it qualify as a learned treatise. There is no indication that the
article has been peer-reviewed or that it has been adopted as authoritative.
It reads like an expert opinion, but without any indication of what Professor
Jones expertise may be, except that he is a law professor at a University in
Japan. Professor Jones himself attaches caveats to any use which should be
made of the article in the following passage at 169:
Before proceeding, a few caveats are in order.
First, I am not a
Japanese lawyer and nothing in this article should be relied on as legal advice
in any specific case.
Second, readers should know that I am writing this
article in part because of my own personal experiences with the Japanese family
court system and I thus may have more than a slight bias. [The author lost
custody of his son after a two year battle in the Japanese courts.] However, as
one of a few Japanese-speaking Western lawyers with first-hand experience in
the Japanese family court system, I feel obliged to share these experiences.
[Emphasis added.]
[93]
These are only a few of the problems associated
with placing any weight on this article in these proceedings. Counsel for the
mother did not seek to assist the Court by attempting to verify the information
contained in the article by reference to the footnotes, or otherwise.
[94]
I will deal briefly with the letters from the
embassies which were later confirmed by statutory declaration.
I accept
this evidence to the extent that it refers to the authors experiences in
dealing with enforcement issues, but not to the extent that the authors express
general opinions about Japanese law. This is not because I doubt the veracity
of the deponents, but because many of their general statements of opinion with
respect to Japanese law are broadly based and their expertise is unknown.
There is no indication, for example, that any of them has any training in Japanese
law.
[95]
The authors of these letters state that abduction of children
into Japan is a problem and that they have many files in which their nationals
have not been successful in obtaining enforcement of their orders in Japan. The
number of open files reflecting enforcement problems is stated to be 36 for
Canada, eight for Britain, and 80 for the United States. There are no
statistics provided to enable us to compare the incidence of ineffective
enforcement of custody orders in Japan with those of other countries, including
Canada. (Those involved in the Canadian system know that enforcement of
custody orders here is not problem-free.) The fact that Japan is not a
signatory to the
Hague Convention
is identified as a factor exacerbating
problems of enforcement.
[96]
In her affidavit, Ms. Terada states that she is
a lawyer in Japan with experience in cases such as the instant one. There is
no further statement of her expertise. She then proceeds to express opinions
concerning the operation of the Japanese legal system which are contrary to the
opinions expressed by Mr. Sudo in his earlier affidavit. For example, Mr. Sudo
states that the father could not unilaterally take the child from the mother in
Japan in the face of a B.C. court order, and that the Japanese court would have
regard for the B.C. order. Ms. Terada replies that she is aware of no case
where an order of a foreign court respecting custody has been upheld by a
Japanese Family Court. (I note she does not say she is aware of any case in
which a foreign court order has not been upheld by a Japanese court, although
presumably this is the message she is intending to convey, particularly by her
reference to the fact that Japan is not a signatory to the
Hague Convention
.)
[97]
Ms. Teradas opinions are expressed in very
broad language, which is unhelpful, at best. For example, she states that Japanese
law does not contain any clear protections for a childs relationship with a
non-residential parent after separation or divorce. It is not clear to me
whether that statement is intended to convey that there is no specific
provision in the
Civil Code of Japan
providing for non-resident custody
or access rights (in which event, I know of no such express provision in the
FRA
);
or whether the statement is intended to convey that there are no protections
for non-resident parents. In either case, statements like these and others
contained in her affidavit, call for clarification.
[98]
Ms. Terada also expresses concern that the
mother could have problems retaining her right to reside in Japan and could be
subject to deportation. This concern was reflected in Mr. Kogawas first
memorandum, but refuted in his second memorandum of December 8, 2009, based on
further facts. Mr. Kogawas information in that respect was provided in
response to a request from the Court for further information on the effect of divorce
on the mothers resident status. Because it is of some significance in terms
of the mothers rights in Japan, I will quote from paras. 1 and 2 of Mr.
Kogawas supplementary memorandum:
1.
At the time of preparing the Legal Memorandum
mentioned above, I was not aware that [the mother] had obtained a permanent
resident visa in Japan in 2007, and that she still holds the visa to this
date. If [the mother] already holds permanent resident status, she does not
need to apply to the Japanese government for special permission to stay, as I
previously suggested in Section 2 of said Memorandum.
2.
[The mothers] permanent resident status would not be affected at
all by her divorce, and her husband would not be able to cause her to forfeit
her permanent resident status either. To renew her alien registration, she
only has to submit her application, after re-entering Japan, at the local
office of the municipality where she is to reside. [The mother] does not need
any assistance from her husband, and no fees are required for the renewal.
[99]
The fresh evidence relied upon by the father (in
addition to the evidence previously provided by Mr. Sudo) consists of the Legal
Memoranda provided by Mr. Kogawa, who describes himself as an attorney
registered with the Tokyo Bar Association since 1995 and as having handled
many cases concerning a variety of issues relating to foreign nationals living
in Japan (issues concerning status of residence or international family
relations, as well as criminal cases involving foreigners), as well as many
adoption, divorce and custody cases involving foreign nationals in Japan. His
memoranda, which are unsworn, were tendered to refute the evidence tendered on
behalf of the mother on several points.
[100]
Mr. Kogawa denies that Japanese law discriminates against foreign
nationals, and states that the fact the mother is a foreign national would be only
one of many factors taken into account in applying the best interests of the
child under Japanese law. He describes the best interests test in Japan as
including factors such as: the respective parents willingness and capability
to be responsible for the childs custody and education, as well as his or her
health condition, the financial and psychological state of the home
environment, living conditions, educational opportunities, level of love and
affection for the child, state of assets, and the availability or possibility
of assistance by other family members, friends, or acquaintances to care for
the child.
[101]
Mr. Kogawa acknowledges that, traditionally, the
prevailing view was that public authorities should not interfere in family
matters; that visitation rights in Japan are different from those in North
America; and that child abduction cases have become more common. He states,
however, that custody rights given by foreign courts will be enforced provided
that the content of the judgment or court proceedings are not contrary to the
public policy or good morals of Japan.
[102]
I recount much of this evidence simply to make
the point that it is difficult, if not impossible, to draw from it any coherent
picture of the state of Japanese law in relation to custody and access issues,
including issues of enforcement of foreign orders. Rather, there is a
patchwork of information which raises more questions than it answers. Certainly,
this is not a case in which the Court can draw any assistance from s. 54 of the
FRA
which provides that, for the purpose of an order under Part 3, a
court may take notice, without requiring formal proof, of the law of a jurisdiction
outside British Columbia and of a decision of an extraprovincial tribunal.
[103]
In my view, the only common ground in the new
evidence appears to be as follows:
(1)
Japanese
law recognizes the test of the best interests of the child in custody disputes,
but the factors it considers, and the weight it gives to those factors may not
be exactly the same as under the law applied in Canadian courts.
(2)
There
is no concept of joint custody in Japan; one party is granted custody and the
rights which flow from custody.
(3)
Access
is not a term used in the
Civil Code of Japan
and there is no policy
similar to that under s. 16(10) of our
Divorce Act
encouraging maximum
contact with both parents to the extent that accords with the best interests of
the child. Rather, it appears that visitation is a recognized, but less
emphasized, right of the non-custodial parent in Japan, and that it is more
often addressed through mediation and agreement, and less often through the
courts.
(4)
Enforcement
mechanisms for domestic and foreign custody orders may be less effective in
Japan than in Canada. The fact that Japan is not a signatory to the
Hague
Convention
is a factor in that respect, particularly in situations where
children have been wrongfully abducted into Japan by Japanese nationals.
(5)
The
Japanese police are reluctant to become involved in the enforcement of custody
or access orders.
[104]
I am prepared to consider these factors, albeit with some
hesitation, in determining the ultimate question of whether the fresh evidence
could reasonably have made a difference to the orders made by the chambers
judge. In considering that question, I am of the view that it is prudent to
resist the temptation to regard foreign legal systems as somehow less able, or
less willing, to take proper care of children under their jurisdiction. It is
tempting for any country to view its own system of dealing with children as
superior to that of other countries which may deal with them differently. In
some cases, those differences may be fundamental, for example where it is
established that human rights issues are engaged, or where the law of the
foreign country is so antithetical to Canadian views of child care that a court
here could not, in good conscience, abdicate its jurisdiction in favour of that
country.
[105]
The difficult question of the circumstances in
which the courts of one country will defer to the courts of another country
which has a different legal system with respect to issues of custody, and which
is not governed by the
Hague Convention
, was addressed by the House of
Lords (as it then was) in
Re J (a child) (FC)
, [2005] UKHL 40. At para.
37 of the decision, Baroness Hale of Richmond, with whom the other members of
the court agreed, stated:
Like everything else, the extent to which it is relevant that the
legal system of the other country is different from our own depends upon the
facts of the particular case. It would be wrong to say that the future of every
child who is within the jurisdiction of our courts should be decided according
to a conception of child welfare which exactly corresponds to that which is
current here. In a world which values difference, one culture is not
inevitably to be preferred to another. Indeed, we do not have any fixed
concept of what will be in the best interests of the individual child. Once
upon a time it was assumed that all very young children should be cared for by
their mothers, but that older boys might well be better off with their
fathers. Nowadays we know that some fathers are very well able to provide
everyday care for even their very young children and are quite prepared to
prioritise their childrens needs over the demands of their own careers. Once
upon a time it was assumed that mothers who had committed the matrimonial
offence of adultery were only fit to care for their children if the father
agreed to this. Nowadays we recognise that a mothers misconduct is no more
relevant than a fathers: the question is always the impact it will have on the
childs upbringing and wellbeing. Once upon a time, it may have been assumed
that there was only one way of bringing up children. Nowadays we know that
there are many routes to a healthy and well adjusted adulthood. We are not so
arrogant as to think that we know best.
[106]
In this case, I am not persuaded that any differences, or perceived
deficiencies, in the manner in which Japan addresses issues of custody and enforcement
as set forth in the fresh evidence are such that, if the chambers judge had
been made aware of that evidence, he would have asserted the jurisdiction of
the B.C. courts over the child. There are simply too many factors which make
Japan the natural and obvious place for the resolution of the childs future
care. While the fresh evidence raises legitimate questions about the enforceability
of foreign custody orders in Japan, those questions are answered to a
considerable extent by the information provided by Mr. Sudo and Mr. Kogawa, who
were addressing the specific facts of this case. I found Mr. Kogawas
memoranda to be of particular assistance since he clearly set out his expertise
and made specific references to Japanese law in expressing his opinions.
[107]
In my view, the chambers judge applied Part 3 of the
FRA
in a
way which honoured its purposes, and he protected the best interests of the
child pending the determination of his custody and parenting in Japan by
providing continuity of care with the mother, generous access to the father,
and by ensuring that the financial welfare of the mother and the child would be
protected by providing security for their expenses while awaiting a decision by
the courts in Japan.
[108]
Having considered the new evidence, I conclude that it would not
have affected the result, and I would, therefore, not admit it.
[109]
I now turn to the final two issues raised by the mother in her
appeal.
4.
Discontinuance of the Proceedings in Japan
[110]
The mother submits that the father misled the chambers judge by
failing to advise him at the jurisdictional hearing that he had discontinued
his proceedings in Japan. She submits that the decision of the chambers judge
may have been different if he had been aware that there were no proceedings
extant in Japan at the time he made the jurisdictional order.
[111]
As earlier stated, the mother commenced proceedings in British
Columbia for custody and access on November 20, 2008 and the father commenced
proceedings for divorce and custody in Japan on November 21, 2008. The
chambers judge assumed that the Japanese proceedings were still extant at the
time he made his jurisdictional order. In fact, the father had discontinued
his proceedings in Japan on February 15, 2009 in accordance with legal advice
he had received from his Japanese counsel. The mother discovered that those
proceedings had been discontinued when she made a telephone call to the
Japanese court in late April 2009. At that point, the trial judge had issued
his reasons for judgment on the jurisdictional issue, but the order had not
been entered. If the mother had viewed the fathers failure to reveal that he
had discontinued his proceedings in Japan as significant, it was open to her to
raise the issue before the chambers judge prior to entry of the order, and to
ask him to reconsider his decision. She did not do so.
[112]
The chambers judge was advised that the Japanese proceedings had
been discontinued on May 13, 2009 at the hearing concerning expenses. By then,
the jurisdictional order had been entered. At that time, the mother did not
suggest that the order should be set aside or reconsidered on the basis that it
had been based on a fundamental misconception of the relevant facts. Rather,
the mother appears to have relied on the fact that the father had failed to
disclose this information as an indication that he could not be trusted to
respect the court process, or adhere to any orders which the court might make.
[113]
The chambers judge made his jurisdictional order on the basis that
there were no proceedings or orders in existence in Japan at the time the
mother commenced her action for custody in British Columbia (s. 44(1)(b)(iii)).
That was so. The fathers explanation that he had discontinued his proceedings
in Japan on the understanding that there was little point in proceeding there
while the child was in British Columbia was later confirmed by Mr. Sudo, who
also deposed that the father could reinstate those proceedings without having
to go through the mediation process again.
[114]
It may be that this omission on the part of the father was a factor
in the decision of the chambers judge to give the mother interim custody of the
child pending the determination of custody and access rights in Japan. In my
view, however, it does not give rise to a sound basis for challenging the
jurisdictional order.
[115]
I would not give effect to this ground of appeal.
5.
Alleged
Misapprehension of the Evidence
[116]
After making his determinations as to jurisdiction under ss. 44 and
46 of the
FRA
, the chambers judge addressed the question of whether he
should make an interim order for custody and access under s. 47 pending the
determination of those issues in Japan. In so doing, he noted that the child
had been in the mothers care and control since they had come to Canada and
that there was no suggestion that the child was not well cared for by her.
After making those observations, he stated (at para. 64): The evidence before
me is that it is extremely unusual for a mother in Japan not to be awarded
custody of her child or children upon breakdown of a marriage. He then went
on to award the mother interim custody.
[117]
The mother says that there is no evidentiary support for the
statement of the chambers judge just quoted from para. 64 of his reasons. The
father points to the fact that this statement was relied upon by the chambers
judge solely in his s. 47 analysis in deciding to award the mother interim
custody, and that there is no indication that he relied on this statement in
making his findings concerning jurisdiction. In other words, the father points
to the fact that the mother benefited from this finding in obtaining an order
for interim custody, and now seeks to resile from the finding to the extent it
does not support her jurisdictional argument.
[118]
In my view, the mothers submission that there was no evidence that
it is unusual for a mother not to be awarded custody of a child in Japan upon
marriage breakdown is disingenuous and without merit. The evidence was that of
the mother herself. She deposed in her affidavit sworn April 2, 2009 (para.
19), that it is the mother who raises the children in Japan and that, if she
were Japanese, it would be extremely unusual for the father to obtain custody
of the child. In her words, Granting custody to him would also be extremely
unusual [in Japan] if I were Japanese, but I am not. It is clear that the
chambers judge placed some reliance on her evidence that mothers in Japan are
usually awarded custody of the child, but he was not prepared to accept, at
face value, her statement that this would not apply in her case because she was
not Japanese. He was not required to do so. In any event, it is apparent that
he relied on this evidence to the mothers benefit in awarding her interim
custody.
[119]
I would not give credence to this ground of
appeal.
[120]
I turn, next, to the fathers cross-appeal.
THE
CROSS-APPEAL
1.
Interim
Custody
[121]
The father submits that the chambers judge erred
in awarding the mother interim custody of the child. This order was made under
s. 47 of the
FRA
, which provides:
47.
On application for custody of
or access to a child, a court
(a) that
is satisfied that the child has been wrongfully removed to or is being
wrongfully retained in British Columbia, or
(b) that
may not exercise jurisdiction under section 44 or that has declined
jurisdiction under section 46 or 49(2),
may do any one or more of the
following:
(c)
make
any interim order in respect of the custody or access that the court considers
is in the best interests of the child;
(d) stay
the application subject to
(i) the
condition that a party to the application promptly commence a similar
proceeding before an extraprovincial tribunal, or
(ii) any
other conditions the court considers appropriate;
(e)
order a party to return the
child to a place the court considers appropriate and, in the discretion of the
court, order payment of the cost of the reasonable travel and other expenses of
the child and any parties to or witnesses at the hearing of the application.
[Emphasis added.]
[122]
In awarding the mother interim custody of the
child, the chambers judge stated (at paras. 64-65):
[The child] has been in the
plaintiffs care and control. There is no issue that she has cared for him
well. The evidence before me is that it is extremely unusual for a mother in
Japan not to be awarded custody of her child or children upon breakdown of a
marriage.
I
order that the plaintiff have interim custody and interim care and control of
[the child]. The defendant shall have reasonable and generous access to him.
[123]
There is no evidence that the mother is not a fit and proper person
to have interim custody of the child. He has been living with her for the past
year and the evidence that is available supports the finding of the chambers
judge that he has been well cared for by her. While I am of the view that the
mothers wrongful taking of the child was ill-considered and not in the childs
best interests, that is not to say that she is not a fit and proper person
ultimately to be granted custody of the child. That is for the courts of Japan
to decide. In the meantime, it would be unfortunate if the childs care was
interrupted any more than is already necessary to ensure that he returns to
Japan for the resolution of the issue of his future care before the courts in
Japan. I agree with the chambers judge that his best interests would be served
by leaving him in the care of his mother pending an order with respect to his
custody in Japan, or the agreement of the parties.
[124]
I would not give effect to this ground of the cross-appeal.
2.
Expenses
[125]
Assuming the correctness of the interim custody order, the father
submits that the chambers judge erred in ordering the father to pay expenses
which are in the nature of spousal and child support. He submits that such
expenses cannot be justified under s. 47 of the
FRA
. He does not seek
to set aside the order for the payment of $17,000 for travel expenses and
start-up costs for the mother and child to enable them to return to Japan. Nor
does he challenge the authority of the court to order that he pay reasonable
travel and accommodation expenses for any witnesses resident in Canada who may
be called as witnesses by the mother in the legal proceedings in Japan. But he
does challenge the amount of $84,000 he was ordered to pay in trust for the
mother and child to cover their ongoing living expenses in Japan pending a
court order. (I note that the father has paid this amount as ordered and that
it is being held in the trust account of the mothers lawyer pending the
disposition of this appeal and cross-appeal.)
[126]
The hearing before the chambers judge with respect to the issue of
expenses was lengthy. Each of the parties presented detailed evidence as to
the reasonable costs the mother would incur in returning with the child to
Japan, re-establishing herself in suitable accommodation for herself and the
child, and meeting their necessary living expenses pending an order of the
court in Japan with respect to custody and parenting rights and support.
[127]
The chambers judge did not agree with the figures for reasonable
expenses provided by either the father or the mother. He was forced,
therefore, to find some other means by which to determine those expenses. He
chose to use the spousal and child support guidelines as what he described as a
yardstick in making his determination. I agree with the father that, in
effect, the chambers judge has ordered the father to pay the equivalent of
spousal and child support pending the courts in Japan resolving the issues of
custody and parenting rights. In so doing, he was giving effect to his interim
custody order and ensuring the welfare of the mother and child.
[128]
Given the finding of the chambers judge that the father had been
strict and controlling with respect to money matters while the parties were
living together, and that he had failed to pay any child support while the
child was in Canada, I am satisfied that the chambers judge was justified in
including as other expenses of the child and any part[y], an allowance for
the day-to-day living expenses of the mother and child. Had the father
provided some form of support while the child was in Canada, the trial judge may
not have viewed such an order as necessary. But he was obviously satisfied that
the order providing for these expenses was essential to the best interests of
the child, and I cannot say he was wrong.
[129]
Counsel were unable to provide any authority with respect to the
interpretation of what constitutes reasonable ... expenses within the meaning
of s. 47. I note, however, that in
Finizio v. Scoppio-Finizio
(1999),
179 D.L.R. (4th) 15, 46 O.R. (3d) 226, the Ontario Court of Appeal found
that it was appropriate to impose undertakings requiring the payment of somewhat
similar expenses on the party seeking return of the children to Italy to cover
the transition period between the date of the return order and the time the
matter was dealt with by the courts there. In that case, the father agreed to
undertakings which included: providing airline tickets for the mother and
children, providing suitable housing for the wife and children in Italy, and
payment of a lump sum as prepaid support for the two months it was expected to
take for the matter to be heard by a court in Italy. The amount of the lump
sum was influenced by the fact that the wife had taken $200,000 when she left Italy.
[130]
The court in
Finizio
, in turn, relied on
the decision of the Supreme Court of Canada in
Thomson
,
supra,
where the court found that such undertakings had been approved, although not
expressly provided for, in the
Hague Convention
. The rationale for such
undertakings was referred to by Mr. Justice La Forest at 599 of
Thomson
:
Given the preambles statement that the interests of the children
are of paramount importance, courts of other jurisdictions have deemed
themselves entitled to require undertakings of the requesting party provided
that such undertakings are made within the spirit of the Convention: see
Re L.,
supra; C. v. C, supra; P. V. P. (Minors) (Child Abduction),
[1992] 1 R.F.R.
155 (Eng. H.C. (Fam. Div.)); and
Re A. (A Minor) (Abduction), supra
.
Through the use of undertakings, the requirement in Article 12 of the
convention that the authority concerned shall order the return of the child
forthwith can be complied with, the wrongful actions of the removing party are
not condoned, the long-term best interests of the child are left for a
determination by the court of the childs habitual residence, and any
short-term harm to the child is ameliorated.
[131]
While this is not a
Hague Convention
case, the underlying
object of securing the safe and secure return of the child to the appropriate
jurisdiction is equally compelling under Part 3 of the
FRA
. In my view,
it would be anomalous if such protections were afforded for the return of
children wrongfully removed under the
Convention
, but not for those
wrongfully removed under Part 3. Section 47 must be interpreted in light of
the purposes set forth in s. 43, including the best interests of the child. Under
s. 47, the court is not limited to undertakings of the parent requesting the
return of the child, but may impose an order to ensure the childs best
interests during the transition period.
[132]
In the result, I am not persuaded that the chambers judge erred in
the circumstances before him in making the expenses order.
3.
Costs
[133]
The father submits that the chambers judge erred in failing to award
him costs on the basis that he was successful in having the B.C. Supreme Court
decline jurisdiction in favour of Japan. He submits that it is only because
the mother wrongfully removed the child from Japan that he was put to the cost
of having to seek relief in the courts of British Columbia.
[134]
An order for costs is discretionary. It is not for this Court to
substitute its own view of an appropriate order simply because it may take a
somewhat different view of the equities between the parties. There was divided
success in the overall proceedings, although the extent of the mothers success
was not fully evident until the expenses order was made. I am not persuaded
that the chambers judge erred in finding that it was appropriate to order each
party to bear his or her own costs.
DISPOSITION
[135]
In summary, I would dismiss the mothers appeal
with respect to the jurisdictional order and the fathers cross-appeal with
respect to the issues of interim custody, expenses, and costs. I would vary
the expenses order of September 4, 2009 to extend the time for the mother to
return with the child to Japan to no later than March 14, 2010. I would vary
the jurisdictional order of April 21, 2009, by deleting para. 1 and
substituting an order that the Supreme Court of British Columbia declines
jurisdiction over the child except to the extent of the orders for interim
custody and the payment of expenses made pursuant to s. 47 of the
FRA
.
I would direct counsel to take steps to draw and enter this order as soon as
possible after the release of this judgment.
The Honourable Madam Justice Prowse
I Agree:
The Honourable Mr. Justice Lowry
Reasons for Judgment of the Honourable Madam Justice
Rowles:
I. Introduction
[136]
The father of a child who had been taken by his
mother from his habitual place of residence in Japan brought an application in
the custody proceedings the mother had commenced in British Columbia asking the
court to decline jurisdiction to hear the mothers action.
[137]
At the time the fathers application was heard,
neither party had presented any evidence of the law and procedure in Japan
pertaining to the determination of custody and access matters or to the rules
of private international law that apply.
[138]
Canada is a party to the
Hague Convention on the Civil Aspects of
International Child Abduction
, 25 October 1980, 1343 U.N.T.S. 22514, Can.
T.S. 1983 No. 35 (entered into force 1 December 1983) (
Hague
Convention
or
Convention
) but Japan is not. There is no
foundation in the evidence to support the proposition that the laws of Japan
mirror those found in countries that have adopted the
Convention
.
[139]
The law of conflicts that applies in this case is to be found in
Part 3 of the
Family Relations Act
, R.S.B.C. 1996, c. 128 (
FRA
).
On the question of whether the judge ought to have declined jurisdiction,
s. 46 of the
FRA
and s. 11 of the
Court Jurisdiction and
Proceedings Transfer Act
, S.B.C. 2003, c. 28 (
CJPTA
), have
application. As part of his order, the chambers judge included provisions
aimed at reducing or eliminating the prejudice to the mother of having the
issue of custody determined in Japan. While the statutory provisions on which
the judge relied gave him the power to impose the terms and conditions he did, there
was no evidence before him to show that the extraterritorial order he made will
be recognized and enforced by the Japanese courts. On the appeal of the order
requiring her to return the child to Japan, the mother seeks to adduce fresh
evidence to show, among other things, that the terms and conditions imposed
will not accomplish their intended goal.
[140]
Justice Prowse, whose reasons I have had the
privilege of reading in draft, has concluded that the mothers appeal and the
fathers cross-appeal from the order made 21 April 2009 must be dismissed. I
respectfully disagree.
[141]
In my opinion, the chambers judge erred in
declining to exercise his jurisdiction to hear the mothers action, taking into
account the factors set out in s. 11 of the
CJPTA
. I would allow
the appeal, set aside the judges order of 21 April 2009 and dismiss the
fathers application to have the court decline to exercise its jurisdiction to
hear the mothers action. My reasons follow.
II. The statutory framework
[142]
Fundamental changes to the law of conflicts in
matters of custody and access got under way in British Columbia in 1978 when
provisions relating to extraprovincial child custody and access orders were
added to the
Family Relations Act
, S.B.C. 1978, c. 20,
ss. 38-42, in force 31 March 1979. Those amendments were based on
the Reciprocal Enforcement of Custody Orders Act, a Model Act which the
Uniform Law Conference of Canada (the ULC) had agreed upon in 1974.
[143]
In 1982, the ULC amended its 1974 Model Act
based on an Ontario bill that became
An Act to amend the Childrens Law
Reform Act
, S.O. 1982, c. 20, and renamed it the
Uniform Custody
Jurisdiction and Enforcement Act
. In 1985, British Columbia replaced
its provisions on extraprovincial custody and access orders to accord with those
of the ULCs 1982 Model Act:
Family Law Reform Amendments Act
,
1985
,
S.B.C. 1985, c. 72, s. 17 (ss. 38-42 of the amended
Family
Relations Act
, in force 2 June 1986). Those provisions remain in force
today in Part 3 of the
Family Relations Act,
R.S.B.C. 1996, c. 128.
[144]
The purposes of Part 3 of the
FRA
are set
out in s. 43:
43 The
purposes of this Part are
(a)
to ensure that applications to the courts in respect of custody of,
access to and guardianship of children will be determined on the basis of the
best interests of the children,
(b)
to recognize that the concurrent exercise of jurisdiction by judicial
tribunals of more than one province, territory or state in respect of the
custody of or access to the same child ought to be avoided, and to make
provision so that the courts of British Columbia will, unless there are
exceptional circumstances, refrain from exercising or decline jurisdiction in
cases where it is more appropriate for the matter to be determined by a
tribunal that has jurisdiction in another place with which the child has a
closer connection,
(c)
to discourage the abduction of children as an alternative to the
determination of custody rights by due process, and
(d) to provide for
the more effective enforcement of custody and access orders and for the
recognition and enforcement of custody and access orders made outside British
Columbia.
[145]
Sections 44 and 45 provide for the exercise of
jurisdiction in three circumstances. Section 44 reads:
44 (1) A court must exercise its
jurisdiction to make an order for custody of or access to a child only if
(a)
the child is habitually resident in British Columbia at the commencement
of the application for the order, or
(b)
although the child is not habitually resident in British Columbia, the
court is satisfied that
(i)
the child is physically present in British Columbia at the commencement
of the application for the order,
(ii)
substantial evidence concerning the best interests of the child is
available in British Columbia,
(iii)
no application for custody of or access to the child is pending before an
extraprovincial tribunal in another place where the child is habitually
resident,
(iv)
no extraprovincial order in respect of custody of or access to the child
has been recognized by a court in British Columbia,
(v)
the child has a real and substantial connection with British Columbia,
and
(vi)
on the balance of convenience, it is appropriate for jurisdiction to be
exercised in British Columbia.
(2) A child is habitually resident in
the place where the child resided
(a)
with both parents,
(b)
if the parents are living separate and apart, with one parent under a
separation agreement or with the implied consent of the other parent or under a
court order, or
(c) with a person other than a parent on a
permanent basis for a significant period of time,
whichever last
occurred.
(3) The
removal or withholding of a child without the consent of the person who has
custody of the child does not alter the habitual residence of the child unless
there has been acquiescence or undue delay in commencing due process by the
person from whom the child is removed or withheld.
[146]
Section 45 provides that if a child is
physically present in the jurisdiction and there is a probable risk of serious
harm to the child, the court may exercise jurisdiction:
45 Despite sections 44 and 48, a
court may exercise its jurisdiction to make or to vary an order in respect of
the custody of or access to a child if
(a)
the child is physically present in British Columbia, and
(b)
the court is satisfied that the child would, on the balance of
probability, suffer serious harm if the child
(i)
remains in the custody of the person legally entitled to custody of the
child,
(ii)
is returned to the custody of the person legally entitled to custody of
the child, or
(iii) is removed
from British Columbia.
[147]
Apart from ss. 44 and 45, there may be rare circumstances in
which the courts
parens patriae
jurisdiction might be exercised in
cases involving extraterritorial custody or access disputes but that
possibility does not arise in this case. Sections 49 and 50 in Part 3 of the
FRA
provide for jurisdiction to be exercised where circumstances permit a superseding
order to be made but that does not concern us here.
[148]
The doctrine of
forum non conveniens
finds its place in s. 46 of the
FRA
, which provides:
46 A
court that has jurisdiction in respect of custody or access may decline to
exercise its jurisdiction if the court is of the opinion that it is more
appropriate for jurisdiction to be exercised outside British Columbia.
[149]
Part 3 also contains provisions enabling the court
to make orders or impose conditions if one of the circumstances set out in
s. 47(a) or (b) applies. Section 47 provides:
47 On application for custody of or
access to a child, a court
(a)
that is satisfied that the child has been wrongfully removed to or is
being wrongfully retained in British Columbia, or
(b)
that may not exercise jurisdiction under section 44 or that has declined
jurisdiction under section 46 or 49 (2),
may
do any one or more of the following:
(c)
make any interim order in respect of the custody or access that the
court considers is in the best interests of the child;
(d)
stay the application subject to
(i)
the condition that a party to the application promptly commence a
similar proceeding before an extraprovincial tribunal, or
(ii)
any other conditions the court considers appropriate;
(e) order a party
to return the child to a place the court considers appropriate and, in the
discretion of the court, order payment of the cost of the reasonable travel and
other expenses of the child and any parties to or witnesses at the hearing of
the application.
[150]
Section 47(c) permits the court, in the
circumstances specified in subsections (a) or (b), to make any interim custody
or access order that the court considers to be in the best interests of the
child. Subsections (c) through (e) grant wide powers which are intended to
ensure that there is no injustice to a plaintiff in ordering a stay or in
ordering that a party return the child to the place the court considers
appropriate.
[151]
In 1982, British Columbia implemented the
Hague
Convention
by amending the
FRA
to include what is now Part 4 (
Family
Relations Amendment Act, 1982
, S.B.C. 1982, c. 8, s. 1 (s. 42.1
of the amended
FRA
, in force 1 December 1983). Section 55 of the
FRA
comprises the whole of Part 4:
55 (1) In this section, convention means
the Convention on the Civil Aspects of International Child Abduction signed at
The Hague on October 25, 1980.
(2) Subject to subsection (4), the
provisions of the convention have the force of law in British Columbia.
(3) The Attorney General is the
Central Authority for British Columbia for the purpose of the convention.
(4) The government is not bound to
assume any costs resulting from the participation of legal counsel or advisers
or from court proceedings in relation to applications submitted under the
convention, except to the extent that the costs are covered under British
Columbias system of legal aid and advice.
(5) Subsections (1) to (4) and the
convention apply in respect of a child who, immediately before a breach of
custody or access rights, was habitually resident in a contracting state but do
not apply in respect of a child described in subsection (6).
(6) Part 3 applies in respect of
(a)
a child who is in Canada and who, immediately before a breach of custody
or access rights, was habitually resident in Canada,
(b)
a child who, immediately before a breach of custody or access rights,
was habitually resident in a state other than a contracting state,
(c)
a child who, immediately before a breach of custody or access rights,
was resident, but not habitually resident, in a contracting state, and
(d)
any other child affected by an extraprovincial order, other than a child
in respect of whom subsections (1) to (4) and the convention apply.
(7) The
Attorney General must publish, in Part II of the Gazette, a copy of the
convention and the day on which the convention extends to British Columbia.
[152]
Justice La Forests judgment in
Thomson v. Thomson
, [1994] 3
S.C.R. 551 at 575-576, 119 D.L.R. (4th) 253, describes the impetus for the
Convention
and the recognition of the need
for
governments to coordinate their efforts to prevent the problems associated with
international parental child abduction.
The underlying purpose of the
Convention
,
as set out in its preamble, is to protect children from the harmful effects of
their wrongful removal or retention and to establish procedures to ensure their
prompt return to the state of their habitual residence:
Thomson
at 559.
[153]
Article 1 of the
Convention
reads:
The objects of the present Convention are
a) to
secure the prompt return of children wrongfully removed to or retained in any
Contracting State; and
b) to ensure that
rights of custody and of access under the law of one Contracting State are
effectively respected in the other Contracting States.
[154]
Under s. 55(5) of the
FRA
, the provisions of the
Convention
do not apply when s. 55(6)(b) applies; instead, Part 3 applies. In other
words, when Japan has not adopted the
Convention
, it is Part 3 of the
FRA
,
not the
Convention
, that governs the determination of the issues on this
appeal.
[155]
When Japan is a non-
Convention
state,
there is no reason to assume that the uniform and shared approach to
jurisdiction adopted by
Convention
states will be applied by the courts
in Japan. Nor is there any foundation for an assumption that the law and procedure
in Japan for the resolution of conflicts over custody and access would conform
to or be consistent with the Articles in the
Convention
that apply to
the contracting parties through recognition and enforcement of extraterritorial
orders.
[156]
The provisions in Part 3 of the
FRA
for
the recognition and enforcement of extraprovincial custody and access orders
reflect the law as it developed in common law jurisdictions. Part 3 requires
recognition and enforcement of extraprovincial custody and access orders unless
one of the circumstances set out in s. 48(1)(a) to (e) applies. Section
48 provides:
48
(1) On
application by any person in whose favour an order for the custody of or access
to a child has been made by an extraprovincial tribunal, a court must recognize
the order unless the court is satisfied that
(a) the
respondent was not given reasonable notice of the commencement of the
proceeding in which the order was made,
(b) the
respondent was not given an opportunity to be heard by the extraprovincial
tribunal before the order was made,
(c) the
law of the place in which the order was made did not require the
extraprovincial tribunal to have regard for the best interests of the child,
(d) the
order of the extraprovincial tribunal is contrary to public policy in British
Columbia, or
(e) the
extraprovincial tribunal would not have jurisdiction under section 44 if
it were a court in British Columbia.
(2) An order that is made by an
extraprovincial tribunal and that is recognized by a court is deemed to be an
order of the court and enforceable as such.
(3) A court presented with
conflicting orders made by extraprovincial tribunals for the custody of or
access to a child that, but for the conflict, would be recognized and enforced
by the court under subsections (1) and (2), must recognize and
enforce the order that appears to the court to be most in accord with the best
interests of the child.
(4) A
court that has recognized an extraprovincial order may make any further orders
under this Act that the court considers necessary to give effect to the order.
[157]
Absent evidence of Japanese law pertaining to
the recognition and enforcement of extraterritorial interim orders or
conditions with respect to custody, there is no foundation for the assumption
that under Japanese law, the order the chambers judge made under s. 47 of
the
FRA
would be recognized or enforced in Japan.
[158]
In 2003, British Columbia enacted the
CJPTA
. The
CJPTA
is based on a Model Act of the same name
prepared by the ULC. The ULCs commentary on the Model Act states that it is
intended to be a comprehensive statement of the substantive law of court
jurisdiction, but the commentary also recognizes that there may be special
provisions, particularly in the family law area, which are inconsistent with
the Act and are to be preserved. The commentary notes that an enacting
jurisdiction can list such acts as exceptions or, if the enacting jurisdiction
cannot specifically list the exceptions but is convinced that they exist, s. 12
may be included. The British Columbia legislation includes s. 12.
[159]
Section 12 of the
CJPTA
provides:
12 If there is a conflict or
inconsistency between this Part and another Act of British Columbia or of
Canada that expressly
(a)
confers jurisdiction or territorial competence on a court, or
(b)
denies jurisdiction or territorial competence to a court,
that other Act
prevails.
[160]
As there are conflicts or inconsistencies between Parts 3 and 4 of
the
FRA
and Part 2 of the
CJPTA
with respect to
jurisdiction
,
the provisions of the
FRA
prevail with respect to the
jurisdiction
of the court.
[161]
I repeat s. 46 of the
FRA
, which provides
for the application of the doctrine of
forum non conveniens
:
46 A
court that has jurisdiction in respect of custody or access may decline to
exercise its jurisdiction if the court is of the opinion that it is more
appropriate for jurisdiction to be exercised outside British Columbia.
[162]
Section 11 of the
CJPTA,
which codifies the doctrine of
forum
non conveniens
, provides:
11 (1) After considering the interests of
the parties to a proceeding and the ends of justice, a court may decline to
exercise its territorial competence in the proceeding on the ground that a
court of another state is a more appropriate forum in which to hear the
proceeding.
(2) A court, in deciding the question
of whether it or a court outside British Columbia is the more appropriate forum
in which to hear a proceeding, must consider the circumstances relevant to the
proceeding, including
(a)
the comparative convenience and expense for the parties to the
proceeding and for their witnesses, in litigating in the court or in any
alternative forum,
(b) the
law to be applied to issues in the proceeding,
(c)
the desirability of avoiding multiplicity of legal proceedings,
(d)
the desirability of avoiding conflicting decisions in different courts,
(e) the
enforcement of an eventual judgment, and
(f) the fair and
efficient working of the Canadian legal system as a whole.
[163]
The decision in
Teck Cominco Metals Ltd. v. Lloyds Underwriters
,
2009 SCC 11, [2009] 1 S.C.R. 321, confirms that s. 11 was intended to
codify the
forum non conveniens
test, not to supplement it (at para. 22).
In that case, the Supreme Court rejected the argument that s. 11 does not
apply when a foreign court has already asserted jurisdiction over the matter (at
para. 23) and also rejected the argument that the assertion of
jurisdiction by a foreign court is an overriding and determinative factor (at para. 24).
While
Teck Cominco
was a commercial case, not a case involving issues of
custody of and access to children, it seems to me that the factors listed in
s. 11 of the
CJPTA
would have application if consideration of
forum
non conveniens
under s. 46 of the
FRA
is required, at least in
the context of a case to which the
Hague Convention
does not apply
.
III. Background
[164]
The child in this case was born in Japan in August 2001 and until
his mother brought him to British Columbia in November 2008, he had lived in
Japan all his life except for annual month-long visits to relatives in Canada.
His father is a Japanese citizen and his mother, Canadian. The child has both
Japanese and Canadian citizenship and speaks both English and Japanese.
[165]
The mother was born in Burlington, Ontario, and obtained a Bachelor
of Education degree from the University of Alberta in 1994. The father
graduated from Chubu University in Japan with a major in electrical
engineering. He is self-employed, having taken over his familys firm
from his father.
[166]
In 1995, the mother moved to Japan to teach English. The parties
met in 1996 when the father was taking a course at an English conversational
school in Kasugai. They began to date in 1997 and were married in Hawaii
in March 2000.
[167]
After the childs birth, the mother resumed work as an English
teacher at various schools. She typically worked outside the home two or
three days a week from about noon until eight or nine in the evening, and from
about ten in the morning to one in the afternoon on another day of the
week. She had other occasional teaching assignments. When both of his
parents were working, the child was often cared for by his paternal
grandparents.
[168]
Starting when he was about three months old, the mother would take
the child to visit with her family in Canada, typically during the summer
vacation from the end of July until the end of August.
[169]
In January of 2005, the parties moved into a three-level residence
that had been built by the father, with the fathers parents occupying the
first floor. The father had an office on the second floor.
[170]
In April 2005, the child began kindergarten and in April 2008 he
entered Grade One.
[171]
The mother deposed that the father caused injury to her on a number
of occasions as a result of altercations, all of which were denied by the
father. The father deposed he had received injuries as a result of the mother
striking him and those were denied by the mother. In 2006, the parties began
marriage counselling although they disagree on when it began. The mother said
that in September 2006 she and the father began to live separate and apart in
the family residence. In December 2007, the father stated his intention to
seek a divorce.
[172]
In June 2008, the father retained a lawyer to obtain a
divorce. He was told that as a necessary first step towards obtaining a
divorce he had to go through mediation and if that was not successful the case
could proceed to trial. The father applied for Coordination and Mediation of
Marriage at Nagoya Family Court on 8 July 2008.
[173]
In July 2008, the mother and child travelled to Nanaimo, British
Columbia, on their annual vacation.
[174]
The two mediation sessions which took place
after her return were unsuccessful. On 1 November 2008, the mother left for
Canada with the child without telling the father. Several days later the
mothers lawyer informed the father of their whereabouts.
[175]
The mother brought an action under the
FRA
on
20 November 2008 claiming custody and guardianship of the child. The father
commenced proceedings in Japan on 21 November.
[176]
In January 2009, the father travelled to British Columbia and was made
aware at that time of the proceedings the mother had brought. In February
2009, the father discontinued or abandoned the proceedings he had commenced in
Japan.
[177]
In April 2009, the father brought an application in the mothers
action in which he sought the following relief:
1. this
court decline to exercise its territorial competence in this proceeding;
2. this
action be struck out, or in the alternative, stayed;
3. the
Plaintiff forthwith return the child Taiyo Tsuchiya, also known as Taiyo George
Tsuchiya , born August 6, 2001 (the Child), to the care and custody of the
Defendant, on such terms as this court deems just;
4. if
the Plaintiff does not return the Child to the Defendant as ordered herein, any
peace officer having knowledge of this order may reasonably assist the
Defendant in securing the return of the Child to the Defendant;
5. in the alternative, the Plaintiff
return with the Child to Japan forthwith;
6. special
costs
[178]
The relief sought in the application does not
challenge the jurisdiction of the court to hear the mothers action; instead,
the father asked the court to decline to exercise its jurisdiction. However,
it is clear from his reasons that the judge
focused
primarily on the courts jurisdiction. He
concluded
that the court did not have jurisdiction to make an order relating to the care
and custody of the child but he went on to state, without elaboration, that if
he did have jurisdiction, he would decline to exercise it.
[179]
The substantive part of the judges order dated
21 April 2009 reads as follows:
THIS COURT ORDERS AND DECLARES THAT:
1. The Supreme Court of British
Columbia has no jurisdiction pursuant to section 44 of the
Family Relations
Act
, R.S.B.C. 1996, c. 128 to make an order relating to the care and
custody of the Child:
Taiyo Tsuchiya,
also known as Taiyo George Tsuchiya, born August 6, 2001.
2. Pursuant to section 47 of the
Family
Relations Act
, R.S.B.C. 1996, c. 128 the Plaintiff shall return with the
Child to Japan so that the issues relating to the Childs custody, access and
guardianship can be decided in Japan.
3. The order under paragraph 2
hereunder is stayed until:
(a) The
Defendant pays to the Plaintiff the reasonable travel expenses for the
Plaintiff and the Child to return to Japan; and
(b) The
Defendant secures payment to the Plaintiff of a sum of money that is sufficient
to cover the reasonable living expenses of the Plaintiff and the Child in Japan
until the issues relating to the Childs custody, access and guardianship can
be decided there.
4. The parties have liberty to apply
should they be unable to agree as to what payment is required of the Defendant
and as to the amount and manner of securing payment of living expenses.
5. Pursuant to section 47 of the
Family
Relations Act
, R.S.B.C. 1996, c. 128, the Plaintiff shall have interim
custody, care and control of the Child and the Defendant shall have reasonable
and generous access to him, pending a decision on these issues by the courts in
Japan.
6. If the Plaintiff does not return
to Japan with the Child following payment of the reasonable travel expenses or
after the Defendant secures payment to her of the reasonable living expenses,
as provided for in paragraph 3 hereunder, the Defendant has leave to apply for
an order for the Childs interim custody and care.
7. If the Defendant does not pay the
reasonable travel expenses and secure payment of the reasonable living
expenses, as provided for in paragraph 3 hereunder, the Plaintiff has leave to
apply to have matters relating to the Childs custody and access determined in
British Columbia in this proceeding.
8. Each
party shall bear their own costs of this application.
[180]
After the judge gave his reasons on 21 April
2009, the parties focused their attention on the unresolved issue of the amount
required to pay for reasonable travel expenses to return to Japan and the
amount required for living expenses. Additional material was filed which led
the judge to conclude that resolution of the disputed issues of custody in
Japan would take two years. His order of 4 September 2009, which stipulated
the amount the father was required to pay and secure, is premised on that
two-year time period.
[181]
Both an appeal and cross-appeal have been brought from the order of
21 April 2009 and the father has appealed from the order of 4 September
2009.
[182]
The mother has appealed the declaratory order on jurisdiction and
the part of the order requiring her to return the child to Japan. The errors in
judgment alleged in the mothers factum are that the chambers judge:
[(a)]
made his decision under a misapprehension of the facts as the respondent misled
the Court about the legal proceedings in Japan.
[(b)]
erred in law by inferring that the legal system in Japan would be able to
determine and protect the best interests of the child in relation to the issues
of custody and appropriate parenting arrangement for the child.
[(c)]
made a finding of fact that was unsupported by evidence in relation to the
appellant being awarded custody of her son in Japan.
[(d)]
erred in law
in relation to his analysis of s. 44 and s. 46 of the
Family
Relations Act
.
[183]
The father asserts that the chambers judge erred:
[(a)]
in ordering that the Appellant have interim custody, care and control of [the
child].
[(b)]
in ordering that the Respondent secure payment to cover the reasonable living
expenses of the Appellant and [the child] in Japan.
[(c)]
in not
awarding costs of the application to the Respondent.
IV. The mothers argument on the alleged errors
[184]
The chambers judge concluded that the Supreme
Court of British Columbia did not have jurisdiction under s. 44(1)(b) of
the
FRA
to make an order for the custody of the child.
The judge said he was satisfied that the first, third, and fourth
requirements of s. 44(1)(b) had been met but not the second, fifth or
sixth requirements. The judge went on to state, but without elaboration, that
if he did have jurisdiction he would decline to exercise it.
[185]
As to the judges declaratory order on jurisdiction, the mother
argues that the judge erred by engaging in a comparative analysis of the
evidence available in the other jurisdiction rather than simply determining
under s. 44(1)(b)(ii) if there was substantial evidence concerning the
best interests of the child available in British Columbia. The mothers
argument concerning s. 44(1)(b)(v) is similar to her argument on
s. 44(1)(b)(ii), that is, the question is not a comparative one but a
determination of whether the child has a real and substantial connection with
British Columbia. Her argument on s. 44(1)(b)(vi) is that the balance of
convenience relates to the exigencies of having the matter heard rather than
some of the matters to which the judge referred, such as where the parties had
earlier decided to live.
[186]
The mothers main argument, with which I agree, is that s. 46
is meant to address
forum non conveniens
, and that the chambers judge
erred by conflating the requirements of s. 44(b)(ii), (v) and (vi) with
the factors considered when deciding whether to decline jurisdiction under
s. 46, as appears in paras. 44 through 54 of his reasons. The issue the
chambers judge ought to have addressed is whether, under s. 46 of the
FRA
,
he ought to have declined jurisdiction, taking into account the factors in
s. 11 of the
CJPTA
.
V. The evidence before the court
at the time of the April order, the evidence put before the court prior to the
September order and the fresh evidence
[187]
Under the April order, the parties were given liberty to apply if
they were unable to agree on what payment the father was required to make and
the amount and manner of securing payment for living expenses. The material
the parties submitted between the time of the April and September orders was aimed
at the question of the length of time the proceedings would take and the
reasonable costs the mother and child would incur pending determination of the
custody issue in Japan.
Based on
that
material, the judge found that the issue of custody would probably take two
years to resolve in the courts in Japan. That finding was the underpinning for
the amount he ordered the father to secure for living expenses for the mother
and the child while proceedings were ongoing in Japan. That additional
evidence forms part of the record on the fathers appeal of the September order
but not the mothers appeal or the fathers cross-appeal from the April order.
[188]
Whether the mother could have applied to the judge to set aside the
April order on the ground that false information had been given to the judge
about custody proceedings being underway in Japan does not make the post-April
evidence part of the record in the appeal and cross-appeal from the April
order.
[189]
When the judge made the April 2009 order, neither party had put
before him any evidence regarding the Japanese law of conflicts as it applied,
either generally or specifically, to custody and access disputes. Nor was any
evidence before the court pertaining to the law and procedure in the
determination of custody and access issues in Japan. Some of the evidence
filed between the April and September orders makes reference to matters of
procedure and practice in the resolution of custody disputes in the Japanese
courts but the extent of the evidence was limited by its intended purpose.
[190]
Subsequent to the appeal and cross-appeal being brought, the mother
filed material on the appeal aimed at demonstrating the potential prejudice to
her and the child if the court declines jurisdiction and the issues of custody,
guardianship and access fall to be determined by the courts in Japan. The
father opposes the introduction of that fresh evidence but if it is admitted
the father submits that additional material he has filed ought to be admitted
and taken into account on the appeal.
[191]
During oral submissions, we asked counsel
whether the case ought to be remitted if the appeal were allowed. Both counsel
urged us not to send the case back to the lower court because of the cost and
delay that would inevitably be occasioned in doing so.
[192]
The issue on which the appeal turns was not
addressed by the chambers judge in his reasons; instead, he simply stated that
if he did have jurisdiction, he would decline to exercise it. The absence of
evidence on the relevant Japanese law limits consideration of the factors
referred to in s. 11 of the
CJPTA
. However, admission of fresh
evidence in this case is also problematic because much of it is conflicting and
untested and the relevance of some of it is questionable. It must also be
remembered that an appeal is not a decision of first instance but a judicial
review of a decision made.
[193]
Included in the fresh evidence the mother seeks
to adduce are the affidavits of Canadian and British foreign affairs officials
who have attested to the obstacles foreign nationals face when attempting to
resolve custody and access issues or when attempting to enforce foreign and
domestic orders in Japan. The affiants do not purport to give legal opinions
as to the applicable Japanese law; instead, their observations can go no
further than provide support for the view that without the procedures and
mechanisms embodied in the
Hague Convention
, the mother faces a
juridical disadvantage that may not be remedied by the order the judge made
under s. 47 of the
FRA
granting the mother interim custody and
requiring the father to secure her living expenses for a two-year period.
[194]
While the evidence of those officials is independent of the parties,
their evidence is not essential to the resolution of the issue of prejudice and
is therefore not practically conclusive of the result, the standard this
Court has generally applied in relation to the admission of fresh evidence in civil
matters:
Struck v. Struck
, 2003 BCCA 623, 189 B.C.A.C. 291. Japan has
not adopted the
Hague Convention
although 81 other countries have done
so. As noted earlier, there is no foundation for the assumption the judge
appears to have made in making the order he did under s. 47 of the
FRA
that the law in Japan pertaining to recognition and enforcement of
extraterritorial orders is compliant with the principles and procedures binding
countries that have adopted the
Convention
.
[195]
I agree with Justice Prowse, at least in result, that the fresh
evidence ought not to be admitted.
VI. The judges finding that the mother had not abducted the
child as an alternative to the determination of custody rights by due process
[196]
One of the purposes of Part 3 of the
FRA,
as set out in
s. 43, is to discourage the abduction of children as an alternative to
the determination of custody rights by due process. The judge found that the
mother had not abducted the child as an alternative to the determination of
custody rights by due process. In that regard, he said:
[33] I do
not find that the plaintiff abducted [the child] as an alternative to the
determination of custody rights by due process. The defendant knew where
the plaintiff and [the child] had gone. The plaintiff has always been
subject to court process. There was nothing illegal about the plaintiff
leaving with [the child]. The plaintiff was one of his legal custodians.
There was no pending court process. There was no court order preventing
her from leaving.
[197]
There is no dispute that the mother left Japan
with the child without telling the father that she was going to do so.
However, the judge was correct in stating that at the time she left no custody
order had been made and there were no proceedings in Japan in which a claim for
custody was being advanced.
[198]
There was no evidence of Japanese law on the
question of who was entitled to exercise custody in the circumstances described
in the affidavit material.
[199]
The judge stated that the mother was one of the
childs legal custodians. If by that term the judge meant to include the
right to exercise custody, there is statutory support under British Columbia
law for his finding.
[200]
Section 34 of the
FRA
provides:
34 (1) Subject to subsection (2), the
persons who may exercise custody over a child are as follows:
(a)
if the father and mother live together, the father and mother jointly;
(b)
if the father and mother live separate and apart, the parent with whom
the child usually resides;
(c)
if custody rights exist under a court order, the person who has those
rights;
(d)
if custody rights exist under a written agreement, the person to whom
those rights are given.
(2)
If persons have conflicting
claims to custody under subsection (1), the following persons may exercise
custody to the exclusion of the other persons unless a court otherwise orders
:
(a)
the person who has custody rights under a court order;
(b)
if paragraph (a) does not apply, the person granted custody by an
agreement;
(c)
if paragraphs (a) and (b) do not apply, the person claiming custody
with whom the child usually resides
;
(d)
if paragraph (c) applies and 2 persons
are equally entitled under it, the person who usually has day to day personal
care of the child
.
[Emphasis
added.]
[201]
While the parties were still living under the
same roof prior to the mother leaving Japan, the evidence is clear that the
marriage was at an end. There is no dispute that at the time the mother
brought the child to British Columbia, neither parent had custody rights under
a court order and the parties had not entered into any written agreement as to
custody. Under s. 34(2)(d) of the
FRA
, the mother, who usually had
day to day personal care of the child, would have the right to exercise
custody.
[202]
Whether the right to exercise custody carries
with it the right to determine the childs place of residence is a separate but
contentious question. In my view, it would be open to the court under
s. 46 of the
FRA
to consider whether to accept or decline
jurisdiction based on the mothers unilateral decision to relocate in British
Columbia on the footing that in the circumstances, the relocation is analogous
to an abduction. Some support for that view may be found in
Gordon v.
Goertz
, [1996] 2 S.C.R. 27, 134 D.L.R. (4th) 321, in which the majority
rejected the proposition that there is a presumption in favour of the custodial
parent having the right to decide where children are to reside and did so on
the basis that it is incompatible with the individualized assessment that must
be made regarding a childs best interests.
VII. The application of s. 11 of the
CJPTA
in the determination of whether the chambers judge ought to have declined to
exercise his jurisdiction to determine the issues in the appellants action
[203]
For ease of reference I will repeat s. 11
of the
CJPTA
:
11 (1) After considering the interests of
the parties to a proceeding and the ends of justice, a court may decline to
exercise its territorial competence in the proceeding on the ground that a
court of another state is a more appropriate forum in which to hear the
proceeding.
(2) A court, in deciding the question
of whether it or a court outside British Columbia is the more appropriate forum
in which to hear a proceeding, must consider the circumstances relevant to the
proceeding, including
(a) the
comparative convenience and expense for the parties to the proceeding and for
their witnesses, in litigating in the court or in any alternative forum,
(b) the
law to be applied to issues in the proceeding,
(c) the
desirability of avoiding multiplicity of legal proceedings,
(d) the
desirability of avoiding conflicting decisions in different courts,
(e) the
enforcement of an eventual judgment, and
(f) the fair and
efficient working of the Canadian legal system as a whole.
[204]
Section 11 of the
CJPTA
must be applied taking into account
the legislation under which the issue of
forum non conveniens
arises, in
this case, Part 3 of the
FRA
and its purposes as set out in s. 43.
[205]
The determination of the more appropriate forum is hampered in this
case by the absence of evidence of Japanese law.
[206]
The circumstances relevant to the proceeding in this case include
but are not limited to the childs habitual place of residence, the primary
caregivers right to exercise custody and the other parents right to access.
[207]
The comparative convenience and expense for the parties to the
proceeding and for their witnesses, in litigating in the court in British
Columbia or in an alternative forum, is obviously a factor of significance in this
case. Until November 2008, the child had lived all his life in Japan, with a
one-month visit each year to British Columbia. He has extended family in Japan
and he attended kindergarten and school there. There are obviously a number of
potential witnesses from Japan who could give relevant evidence as to custody
and access issues.
[208]
The child has now been in British Columbia for over one year and has
been attending school in Nanaimo. He has extended family here and lives in his
grandparents house with his mother. At this point, evidence as to the childs
health and well-being, as well as his progress in school, and his relationship
with his extended family in Canada would be readily available here.
[209]
It seems to me that the cost and inconvenience of having evidence
from Canada adduced in Japan may not be appreciably different from having
evidence from Japan adduced here. I note as well that the judges order under
s. 47 required the father to post the amount required for the living costs
of the mother and child for a two-year period, which was the estimated time
required for the issue of custody to be determined in Japan. Posting or
securing funds would not be required if the proceedings took place in British
Columbia. The father might be subject to an order for child support, which he
has not paid to date, but that is an issue unrelated to the question of
declining jurisdiction.
[210]
The law to be applied to the issues in the proceeding may be of
importance but that is uncertain because the applicable law in Japan was not
put before the court. The evidence adduced between the April order and the
September order led the judge to conclude that two years would be required to
determine custody in the courts in Japan. British Columbia rules and procedure
in custody and access matters favour expedition.
[211]
Generally speaking, the law in Canada favours children having as
much contact with both parents as is practicable. On the evidence, it is not
known whether that is the case under Japanese law. When the parents of the
child are from different nations, the importance of having such contact may be
a significant issue in court proceedings to determine both custody and
access.
[212]
When considering the desirability of avoiding a multiplicity of
legal proceedings it is necessary to consider not only the proceeding in
British Columbia but also the proceedings the father may take in Japan. The
provisions of the
Hague Convention
are aimed at avoiding a multiplicity
of legal proceedings. However, Japan has not adopted the
Convention
and
there is no evidence before us of the circumstances under which the Japanese
courts would take jurisdiction. In this case, much the same observations must
be made about the desirability of avoiding conflicting decisions in different courts.
[213]
Whether the courts in Japan would recognize and enforce an
extraterritorial order for custody or access made after a trial is open to
serious question. The impetus for the
Hague Convention
was to prevent
international child abduction. When Japan has not adopted the
Convention
it cannot be assumed that Japan has in place the equivalent in laws and
procedures as found in
Convention
states. The same holds true for the
interim custody and access order the judge made under s. 47 of the
FRA
.
In that regard it is not clear that there is any effective way to prevent the
father from simply taking the child if the child is returned to Japan, thereby
circumventing due process.
[214]
As to the fair and efficient working of the Canadian legal system
as a whole, it is of obvious importance within Canada that custody and access
proceedings in one province be recognized as fair and efficient in another and
that a judgment in one province will be readily recognized and enforced in
another. The same is true of proceedings taken in Canada where a party to a
civil proceeding over custody is habitually resident in another state. As La
Forest J. noted in
Thomson
(at 576), Canada was one of the four original
signatories to the
Hague Convention
. Japan has chosen not to adopt the
Convention
and as a result it may be assumed, without evidence to the contrary, that
Japanese law effectively invites international child abduction.
[215]
When all the factors referred to in s. 11 of the
CJPTA
are considered, it appears to me that the court in British Columbia should not
decline jurisdiction in this case.
VIII. Conclusion
[216]
For the reasons stated, I would set aside the
April order which was the subject of the appeal and cross-appeal. The
September order falls with the April order. I would dismiss the fathers
application for the court to decline to exercise its jurisdiction.
The Honourable Madam Justice Rowles
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Bradley v. Bath,
2010 BCCA 10
Date: 20100113
Docket:
CA036393
Between:
David Ryan Bradley
Respondent
(
Plaintiff
)
And
Dilbahaar Bath and DaimlerChrysler
Services Canada Inc./
Services DaimlerChrysler Canada Inc.
Appellants
(
Defendants
)
Before:
The Honourable Mr. Justice Donald
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Tysoe
On
appeal from: Supreme Court of British Columbia, August 5, 2008
(
Bradley v. Bath
, 2008 BCSC 1056, Docket M055109)
Counsel for the Appellants:
A.
M. Gunn, Jr.
Counsel for the Respondent:
R.
A. Holness and D. B. Hanna
Place and Date of Hearing:
Vancouver,
British Columbia
November 27, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
13, 2010
Written Reasons by
:
The Honourable Mr. Justice Tysoe
Concurred in by:
The Honourable Mr. Justice Donald
The Honourable Madam Justice Newbury
Reasons for
Judgment of the Honourable Mr. Justice Tysoe:
[1]
The plaintiff was injured while riding his
bicycle on the sidewalk in front of a gas station. He was struck by a vehicle,
driven by the individual defendant and owned by the corporate defendant, as it
was emerging from the gas station.
[2]
Following a seven-day trial, the trial judge
held that the defendants were wholly liable for the accident. She made damage
awards for non-pecuniary damages, loss of past income, loss of future wages,
loss of future earning capacity, cost of future care and special damages, and
she made an in-trust award for the benefit of the plaintiffs girlfriend.
[3]
The defendants appeal from the judges order in
three respects. They say the judge erred (i) in her approach to the issue of
contributory negligence on the part of the plaintiff, (ii) in her assessment of
past and future loss of earning capacity, and (iii) in making the in-trust
award.
Background
[4]
The accident took place between 10:30 and 11:00 a.m.
on December 3, 2003. The gas station in question is located at the north-west
corner of S.W. Marine Drive and Cambie Street in Vancouver. The plaintiffs
bicycle was on the north sidewalk travelling in an easterly direction towards
the gas station (S.W. Marine Drive also runs in a slightly southerly to
northerly direction at that location but, for the sake of simplicity, I will
refer only to the predominant directions). The individual defendant (whom I
will call the defendant when I am referring to him alone) had been in the gas
station, and was intending to exit from the westerly driveway of the gas
station to turn onto S.W. Marine Drive in a westerly direction.
[5]
The front of the defendants vehicle struck the
plaintiffs left leg. The plaintiff was thrown approximately 15 feet onto S.W.
Marine Drive.
[6]
The gas station was separated from the property
to its west (the direction from which the plaintiff was coming) by a 5.5 foot
high fence, which extended to a point 1.25 feet short of the sidewalk. The
fence was approximately 5.5 feet from the western edge of the gas stations
driveway from which the plaintiffs vehicle emerged.
[7]
There were three witnesses to the accident the
parties themselves and Ms. Point, who was stopped for the traffic light at
the intersection of S.W. Marine Drive and Cambie Street, facing in a westerly
direction. They gave two versions of the events giving rise to the accident,
which the trial judge referred to as scenarios.
[8]
The plaintiff and Ms. Point testified that the
plaintiff was hit by the defendants vehicle in the middle of the driveway as
the plaintiff was slowly riding his bicycle across the driveway (the plaintiff
estimated his speed to be approximately 8 km/h). The defendants vehicle
suddenly accelerated while it was within the gas station and did not stop until
after it collided with the plaintiff.
[9]
The plaintiff also testified that as he
travelled beyond the fence he observed the defendants vehicle heading towards
the exit driveway. He said the defendants vehicle was moving at a moderately
slow speed approximately two and a half car lengths away from the front edge of
the driveway, and he felt it was safe to proceed. The plaintiff conceded on
cross-examination that he did not make eye contact with the defendant prior to
the impact and did not know the direction the defendant was looking at the time
of the impact.
[10]
The second scenario was the version given by the
defendant. He testified that he stopped his vehicle before crossing the
sidewalk, looked to his right and did not see anyone on the sidewalk and looked
to his left for at least five seconds until the traffic coming from the east
had cleared. He then proceeded onto the sidewalk, at which time he testified
that the plaintiff collided with the front of his vehicle.
[11]
In her reasons for judgment, the trial judge
reviewed the medical evidence in considerable detail but did not make express
findings with respect to the plaintiffs injuries. At para. 42 of her reasons,
the judge quoted a summary of his injuries from the medico-legal report of his
family doctor:
fracture of
the distal tibia, laceration of his scalp, laceration of his left shin,
post-traumatic periostitis of the left shin, a partial tear of his anterior
tibiofibular ligament (an ankle ligament) and retrocalcaneal bursitis (a bursa
in the ankle/heel area).
The plaintiff had continuing symptoms
at the time of the trial, and the injuries affected his ability to do physical
work and to enjoy recreational activities.
[12]
The trial judge also referred to medical
evidence detailing injuries or symptoms of mild traumatic brain injury, post
concussion syndrome, chronic anxiety and post-traumatic stress disorder
symptoms, sleep disorder, depression and personality change. However, she
expressed concern about this evidence because the psychiatrist who gave the
opinion appeared to have relied on erroneous or unproven facts.
[13]
At the time of the accident, the plaintiff was
23 years of age and had a grade 12 education. He grew up in Ontario and had
become skilled at woodworking by working in his fathers business. He moved to
British Columbia in March 2003 and found work at a firm called West Isle
Design, an architectural millwork firm, at a wage of $16 an hour.
[14]
Shortly before the accident, the plaintiff
obtained a job with a new company called Skookum Space Rentals, which was owned
by the father of a friend. He was to be paid $22 an hour. The accident
occurred on the morning of the plaintiffs first day at his new job, and he
never worked at Skookum Space Rentals.
[15]
After the accident, the plaintiff was not able
to work full time in woodworking. In the four and a half years between the
time of the accident and the date of the trial, he worked as a security guard,
a host for SnowBus, a part-time carpenter, a ski-lift painter, a window cleaner
and, together with his girlfriend, a manager/caretaker of a residential
building.
Decision of the Trial Judge
[16]
The trial judge noted that s. 183(2)(a) of the
Motor
Vehicle Act
, R.S.B.C. 1996, c. 318, prohibits a person operating a bicycle
from riding on a sidewalk (unless permitted by bylaw or signage) and that s.
176(1) of the
Act
requires a driver of a vehicle emerging from a
driveway to stop before driving onto the sidewalk and to yield the right of way
to a pedestrian on the sidewalk. The judge did not make a specific finding as
to which of the two scenarios presented by the testimony of the witnesses was
the accurate version of the events leading to the accident because she
concluded that either scenario led to the result that the defendant bore full
liability for the accident. However, it is apparent from the reasons for
judgment that the judge had difficulties with the defendants version, and she
appeared to prefer the version given by the plaintiff and Ms. Point.
[17]
The judge held that, under the scenario
described by the plaintiff and Ms. Point, the defendant was in breach of
s. 176(1) by failing to stop his vehicle before crossing the sidewalk, and his
actions fell below the standard of an ordinarily prudent person. While the
plaintiff was in breach of s. 183(2)(a), the judge held there was no causal
link between the breach and the accident because he could just as easily have
been a jogger, a rollerblader or a regular pedestrian.
[18]
The judge held that, in the five-second period
described by the defendant in the second scenario between the time he looked to
the right and the time he proceeded across the sidewalk, a pedestrian, jogger
or rollerblader could have travelled the distance from a point outside of the
defendants line of sight to the point in front of the defendants vehicle.
The judge concluded that, under this scenario, the accident would not have been
caused by the plaintiff riding his bicycle on the sidewalk but, rather, it
would have been caused by the failure of the defendant to look to his right
before moving his vehicle forward after looking away for a period of time
during which a person could have appeared to the right of his vehicle.
[19]
The judge made an award for past income loss in
the amount of $79,297.25 representing the difference between the amount the
plaintiff would have earned on a full-time basis from the date of the accident
to the date of the trial at $22 an hour plus 10% for bonuses and overtime
($185,684.40) and the amount that counsel agreed he had actually earned during
this period ($106,387.15).
[20]
The judge made an award for loss of future wages
in the amount of $72,526.40 representing the wages the plaintiff would have
lost while retraining for two years for a new career, calculated by determining
his wages at $22 an hour plus 10% for bonuses and overtime ($82,526.40), less a
deduction for contingencies such as the shutdown of a business, layoffs and a
decision to move back to Ontario ($10,000).
[21]
The judge made an award for loss of future
earning capacity in the amount of $80,000. She noted that even if the
plaintiff succeeded in completing his diploma in building inspection, he may
suffer some income limitation from not being able to work long hours and he may
find it problematic to climb ladders to perform inspections. She also noted
that the plaintiff may be viewed as a less attractive employee than one who is
fully able to perform without difficulty all the physical tasks of an
occupation such as a building inspector.
[22]
The judge made an in-trust award in the amount
of $14,040 for household work done by the plaintiffs girlfriend. The amount
was based on two hours a week at $30 an hour from the date of the accident to
the date of the trial.
[23]
The judge also made awards for non-pecuniary
damages ($75,000), cost of future care ($73,078) and special damages
($2,811.45). None of these awards are contested on appeal except to the extent
that the defendants say they should be reduced as a result of the plaintiffs
contributory negligence.
Discussion
(a)
Contributory
Negligence
[24]
At common law, contributory negligence on the
part of a plaintiff was a complete defence to his or her claim. This was
considered to be unjust, and legislatures in many common law jurisdictions
passed contributory negligence statutes (also referred to as apportionment
legislation). The statute in this province is currently called the
Negligence
Act
, R.S.B.C. 1996, c. 333, s. 1(1) of which reads as follows:
If by the fault
of 2 or more persons damage or loss is caused to one or more of them, the
liability to make good the damage or loss is in proportion to the degree to
which each person was at fault.
If damage or loss has been caused by
the fault of two or more persons, s. 4 of the
Act
requires the
court to determine the degree to which each person was at fault. While the
prerequisite to apportionment is that the damage or loss has been caused by the
fault of two or more persons, the apportionment must be done on the basis of
the degree to which each person was at fault, not on the basis to which each
persons fault caused the damage:
Cempel v. Harrison Hot Springs Hotel Ltd.
,
[1998] 6 W.W.R. 233, 43 B.C.L.R. (3d) 219 (C.A.).
[25]
The concept of contributory negligence was
described in John G. Fleming,
The Law of Torts
, 9th ed. (Sydney: LBC
Information Services, 1998) at 302, as follows:
Contributory negligence is a
plaintiffs failure to meet the standard of care to which he is required to
conform for his own protection and which is a legally contributing cause,
together with the defendants default, in bringing about his injury. The term
contributory negligence is unfortunately not altogether free from ambiguity.
In the first place, negligence is here used in a sense different from that
which it bears in relation to a defendants conduct. It does not necessarily
connote conduct fraught with undue risk to
others
, but rather failure on
the part of the person injured to take reasonable care of himself in his
own
interest. ... Secondly, the term contributory might misleadingly suggest that
the plaintiffs negligence, concurring with the defendants, must have
contributed to the
accident
in the sense of being instrumental in
bringing it about. Actually, it means nothing more than his failure to avoid
getting hurt ...
[Emphasis in
original; footnotes omitted.]
[26]
In the present case, the trial judge held that
the plaintiff was not contributorily negligent because the plaintiff could have
been struck by the defendants vehicle if he had been a jogger, rollerblader or
regular pedestrian rather than riding his bicycle. Thus, she concluded that
the plaintiffs breach of the
Motor Vehicle Act
was not causally
connected to the accident.
[27]
In my respectful view, the trial judge did not
ask the correct question. The proper question was not whether a jogger,
rollerblader or pedestrian could have been hit by the defendants vehicle. The
correct inquiry was to determine whether the plaintiff failed to take
reasonable care for his own safety and whether his failure to do so was one of
the causes of the accident. While the judge acknowledged that the plaintiff
was under a heightened duty of care because he was in breach of the law by
riding his bicycle on the sidewalk, she failed to give effect to the heightened
duty because she did not consider what care had been taken by the plaintiff
when he saw the defendants vehicle moving towards the exit from the gas
station.
[28]
In my opinion, the plaintiff was at fault, and
his fault was one of the causes of the accident. Contrary to law, he was
riding his bicycle on the sidewalk against the flow of traffic. He saw the
defendants vehicle moving towards the exit he was approaching. Rather than
making eye contact with the defendant or stopping his bicycle and letting the
defendants vehicle exit the gas station, the plaintiff assumed the defendant
saw him and would not accelerate his vehicle. In these circumstances, he was
at fault for continuing to ride his bicycle across the path to be taken by the
defendants vehicle in exiting the gas station.
[29]
The defendants submit that the apportionment of
fault under s. 4 of the
Negligence Act
should be 70% to the plaintiff
and 30% to themselves. In that regard, they cite the following cases involving
an accident involving a bicycle and a motor vehicle:
Gill v. Francis
, [1997]
B.C.J. No. 2491 (S.C.) (75% to cyclist);
Capostinsky (Guardian ad litem of)
v. Aurora Cycle Supply Ltd.
(1993), 39 B.C.A.C. 236 (60% to the cyclist);
Bergvinson
v. Rapanos
, [1991] B.C.J. No. 4009 (S.C.) (two‑thirds to the
cyclist); and
Tompkins v. Barden
, 2000 BCCA 325, 76 B.C.L.R. (3d) 260
(50% to the cyclist).
[30]
I am of the view that the fault of the parties
in this case is equal. The plaintiffs fault was riding his bicycle on a
sidewalk against the flow of traffic and continuing to ride across the path of
the exiting vehicle without ensuring his way was clear. The defendants fault
was his failure to keep a proper lookout when exiting the gas station. I do
not believe that one party is more culpable than the other.
(b)
Loss of
Past Earning Capacity
[31]
Under the heading past income loss, the trial
judge awarded the plaintiff the sum of $79,297.25. Lawyers and judges often
refer to this head of damages as past income loss or past wage loss because, in
the usual type of personal injury cases, the plaintiff will have been working
at a job at the time of the injury and will return to the same job when
sufficiently recovered from the injury. The amount of damages suffered by the
plaintiff is routinely calculated by determining the amount of salary or wages
the plaintiff would have earned at the job if he or she had not been injured.
It is because of the method of calculating the damages that they are commonly
referred to as past wage loss or past income loss.
[32]
However, this head of damages, both pre-trial
and post-trial, is properly characterized as a loss of earning capacity. This
was explained in
The Queen v. Jennings
, [1966] S.C.R. 532 at 545, 57
D.L.R. (2d) 644, referring to the 7th Report of the Law Reform Committee
(August 1958):
Damages should,
so far as any monetary award can do so, restore the plaintiff to the position
in which he would have stood but for the defendants wrongdoing. On this basis
they should represent compensation for loss of earning capacity and not for
loss of earnings. In a case of personal injuries, what the plaintiff has lost
is the whole or part, as the case may be, of his natural capital equipment ...
For a more recent discussion of the
proper characterization of loss of past earning capacity, see
Rowe v. Bobell
Express Ltd
, 2005 BCCA 141, 39 B.C.L.R. (4th) 185.
[33]
In the usual type of case, as I have described
it above, the assessment of the loss of past earning capacity is
straightforward. There is no suggestion that the plaintiff would have worked
at a job other than the one he or she had at the time of the accident and the
one to which he or she has returned. The loss of the past earning capacity is
quantified by the amount of the wages or salary the plaintiff would have earned
at the job if his or her capacity had not been impaired by the injuries
sustained in the accident. The assessment is not so straightforward, however,
in other cases; for example, where the plaintiff was not employed at the time
of the accident or where, as here, the plaintiff does not return to the job at
which he or she was employed at the time of the accident.
[34]
In this case, the defendants criticize the trial
judges award for past income loss in two respects. First, it is said the
judge made a mathematical calculation to the penny of the wages the plaintiff
would have earned at his new job without addressing the pecuniary value of the
impairment of the plaintiffs capacity. Secondly, it is said the plaintiff did
not introduce any evidence that Skookum Space Rentals continued in operation
through the period from the date of the accident to the date of the trial.
[35]
It is clear the trial judge considered the
plaintiff to be a skilled and industrious worker. Whether the plaintiff worked
at Skookum Space Rentals or elsewhere, it is apparent that the judge believed
the plaintiff had the capacity, if he had not been injured in the accident, to
have been employed continuously to the date of the trial at a wage of $22 an
hour, plus overtime and bonuses. It is also apparent that the judge was
satisfied that the plaintiff worked to the maximum of his impaired capacity
between the date of the accident and the date of the trial.
[36]
While it would have been preferable for the
judge to have expressly made the award in terms of a loss of capacity, I am
satisfied that the award does represent the monetary value of the impairment to
the plaintiffs past earning capacity occasioned by injuries suffered by him in
the accident. It was not necessary for the plaintiff to prove that Skookum
Space Rentals continued to be in business because the judge implicitly found
that he had the capacity to find equivalent employment. I am not persuaded
that the judge erred by failing to make a deduction to take into account the
contingency that the plaintiff may not have been able to find equivalent employment.
I would not accede to this ground of appeal.
(c)
Loss of
Future Earning Capacity
[37]
The trial judge made two awards in respect of
the plaintiffs ability to work in the future: the first was an award for loss
of future wages during a period of retraining; the second was an award for loss
of future earning capacity.
[38]
The defendants have three criticisms of these
awards. The first two criticisms, which relate to the award for loss of future
wages, are the same as their criticisms made in connection with the award for
loss of past earning capacity (namely, the judge made mathematical calculations
of lost wages without assessing the loss of capacity and she assumed during the
retraining period that he was foregoing employment at the $22 an hour wage rate
that Skookum Space Rentals was to have paid him). The third criticism is that
the judge improperly split the post-accident inquiry into separate components
for loss of future wages and loss of future earning capacity.
[39]
The first and third criticisms are based on the
principle that the proper approach in determining damages under this head is to
assess the impairment of the plaintiffs capital asset caused by the injuries
in question. In
Brown v. Golaiy
(1985), 26 B.C.L.R. (3d) 353 at 356
(S.C.), after quoting a case referring to this principle, as articulated in
The
Queen v. Jennings
, Mr. Justice Finch (as he then was) said the following
about considerations to be taken into account when assessing loss of future
earning capacity:
[8] The means by which the value of
the lost, or impaired, asset is to be assessed varies of course from case to
case. Some of the considerations to take into account in making that
assessment include whether:
1. The
plaintiff has been rendered less capable overall from earning income from all
types of employment;
2. The
plaintiff is less marketable or attractive as an employee to potential
employers;
3. The
plaintiff has lost the ability to take advantage of all job opportunities which
might otherwise have been open to him, had he not been injured; and
4. The plaintiff
is less valuable to himself as a person capable of earning income in a
competitive labour market.
To this list of considerations can be
added the consideration that, in order to mitigate the loss resulting from the
impairment, a plaintiff may retrain for another career and forgo earning an
income during the period of retraining.
[40]
While I agree with the defendants that the trial
judge should not have made a separate award for loss of future wages, it would
not have been improper for her to have taken the possibility of retraining into
account when assessing loss of future earning capacity. As noted by Mr.
Justice Hall in the following passage in
Pett v. Pett
, 2009 BCCA 232, 93
B.C.L.R. (4th) 300, the ultimate task is to quantify the financial harm to be
sustained by the plaintiff:
[19] ...
Some cases speak of the
loss of a capital asset and some of the loss of future earnings, but the
essential matter that engages the attention of a court making an assessment in
this area is to endeavour to quantify the financial harm accruing to the
plaintiff over the course of his or her working career.
[41]
In the present case, the plaintiff submitted to
the trial judge that an appropriate award for loss of future earning capacity
was the sum of $400,000. The aggregate of the awards made by the trial judge
for loss of future wages ($72,526.40) and loss of future earning capacity
($80,000) is approximately $152,500. When the judge made the $80,000 award for
loss of future earning capacity, she made the assessment on the basis that the
plaintiff would retrain for another career.
[42]
On the evidence before the trial judge, I would
not regard an award of $152,500 for loss of future earning capacity to be
unreasonable. While the judge theoretically erred in making a separate award
for loss of future wages, I am satisfied that the financial harm to the
plaintiff over the balance of his working life was reasonably quantified, and I
would not accede to this ground of appeal.
(d)
In-Trust
Award
[43]
An in-trust award is one made to a plaintiff in
trust for one or more of his or her family members, who are not named as
parties to the action, as compensation to the family members for additional
work done by them as a result of the impaired capacity of the plaintiff to
perform housekeeping chores or to care for themselves. It was affirmed as a
recoverable award by this Court in
Kroeker v. Jansen
(1995), 123 D.L.R.
(4th) 652, 4 B.C.L.R. (3d) 178 (C.A.).
[44]
The entire reasoning of the trial judge in
making the $14,040.00 in-trust award was as follows:
[157] Mr.
Bradley submits that an in-trust award for the work done by his girlfriend is
appropriate. He calculates it at two hours per week at $30 per hour, for a
total of $14,040.00 to the date of trial. I find that amount reasonable on the
evidence. The defendant did not attempt to rebut this evidence.
The $30 per hour figure came from the
report of an occupational therapist in connection with the plaintiffs claim
for future care costs in relation to janitorial assistance and home
maintenance.
[45]
The defendants say the in-trust award was not
properly pleaded
and, in any event, the evidence did not support such an
award. In my opinion, both points have merit.
[46]
Although the statement of claim requested
special damages, they are not particularized, and there was no reference to an
in-trust claim. Such a claim was first raised in the plaintiffs closing
submissions at trial. It is not surprising in these circumstances that the
defendant did not attempt to rebut the evidence relied upon by the trial judge
in making the in-trust award.
[47]
Mr. Justice Mackenzie said the following about
pleading in-trust claims in
Star v. Ellis
, 2008 BCCA 164, 80 B.C.L.R.
(4th) 57 at para. 21:
[21] One aspect
of this claim that is not directly in issue on this appeal, but is of some
significance, is the question of the extent to which a claim for past in-trust
services ought to be pleaded. The claim is addressed under the heading of
special damages which normally requires that the claim be specifically pleaded
as is the case with out-of-pocket expenses. The trial judge relied on
Frers
v. De Moulin
[2002 BCSC 408] for the proposition that an in-trust claim
does not have to be specifically pleaded and
Frers
was not challenged by
the appellant in this case. Nonetheless, it appears to me that a claim of this
nature ought to be pleaded to provide a degree of specificity to the claim. As
I have indicated, the pleading point is not specifically put in issue on this
appeal, but in my view, good practice suggests that in future cases it ought
properly to be pleaded.
The plaintiff responds by pointing out
that
Star v. Ellis
was decided after his statement of claim was filed
and by asking this Court to grant him leave to amend the statement of claim.
[48]
Unlike the situation in
Star v. Ellis
,
the lack of a proper pleading was made an issue on this appeal. I would have
reservations about granting an amendment at this stage of the proceeding in
view of the trial judges reliance on the failure of the defendants to rebut
the evidence that she regarded as supporting the in-trust claim. However, it
is not necessary to decide this aspect of the appeal on a pleadings point
because it is my view in any event that the evidence did not support the making
of an in-trust award.
[49]
The principle recognized in
Kroeker v. Jansen
is that an in-trust award is to compensate for a diminution in the ability to
carry out household tasks (even if those tasks are performed gratuitously by a
family member). As illustrated in
Cummings v. Olson
(1996), 82 B.C.A.C.
241, this Court will set aside an in-trust award if there is no foundation in
the evidence for such an award.
[50]
In the present case, there was no evidence that
the plaintiffs girlfriend did any household chores that the plaintiff was
incapable of performing. In her testimony, she said that they split the chores
before the accident and that since the accident she has done the household
cleaning, he has done the cooking and she has been the one who jumps up and
takes the dog out. The plaintiff was asked during cross-examination about
household chores:
Q Okay. Youve been able to do all of your normal household
chores since a year or so following this accident?
A Well,
Ill be honest. Leah is a cleaner by trade, and before I even have the chance
to do anything, she really does have it wrapped up. You know, it sounds kind
of bad, but no, its an agreement between her and I.
In my opinion, this evidence does not
provide a foundation for a conclusion that there was a diminution in the
plaintiffs ability to perform household tasks.
[51]
In making closing submissions, counsel for the
plaintiff did not refer the judge to any case authorities dealing with
requirements for an in-trust claim. On the basis of the pleadings, counsel for
the defendants was presumably not anticipating that an in-trust claim would be
made, and he did not cite any authorities in his brief submission that such a
claim was not supported by the evidence. The lack of proper pleadings
presented the judge with a situation in which she did not believe that the
claim was being seriously contested, and she made the in-trust award without
the benefit of the applicable jurisprudence.
[52]
My conclusion that the evidence did not provide
a foundation for an in-trust award is reinforced by the trial judges rejection
of the plaintiffs claim that he should receive an award for future care costs
in respect of janitorial assistance and home maintenance service. Her reason
for rejecting this claim was that I see no need for janitorial or home
maintenance assistance for Mr. Bradley (para. 138). Other than a short period
following the accident, there was no differentiation in the evidence between
the pre-trial and post-trial capacity of the plaintiff to perform household
tasks. Just as the evidence did not support a finding of diminished capacity
at the time of the trial, it did not support such a finding in the period
preceding the trial.
Conclusion
[53]
I would allow the appeal by eliminating the
in-trust award and by reducing the other heads of damage by one-half to take
the plaintiffs contributory negligence into account. The result would be that
the judgment in favour of the plaintiff, apart from pre-judgment interest,
costs and deduction of Part 7 benefits, is reduced from $396,753.10 to
$191,356.55.
The Honourable Mr.
Justice Tysoe
I agree:
The Honourable Mr. Justice Donald
I agree:
The
Honourable Madam Justice Newbury
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Romanchych v. Vallianatos,
2010 BCCA 20
Date: 20100113
Docket:
CA037207
Between:
Deanna
Lynn Romanchych
Respondent
(Plaintiff)
And
Gerassimos
Vallianatos
Appellant
(Defendant)
Before:
The Honourable Mr. Justice Low
The Honourable Mr. Justice Tysoe
The Honourable Madam Justice D. Smith
On
appeal from: Supreme Court of British Columbia, May 20, 2009
(
Romanchych v. Vallianatos
, 2009 BCSC 669, Vancouver Reg. M082429)
Oral Reasons for Judgment
Counsel for the Appellant:
M-H.
Wright
J.P.C.
Miller
Counsel for the Respondent:
M.G.
Bolda
H.S.
Roesch-West
Place and Date of Hearing:
Vancouver,
British Columbia
January
13, 2010
Place and Date of Judgment:
Vancouver,
British Columbia
January
13, 2010
[1]
TYSOE J.A.
: The
defendant appeals from the $80,000 damage award made by the trial judge in
respect of loss of future earning capacity resulting from injuries sustained by
the plaintiff in a motor vehicle accident. The judge also made awards for
non-pecuniary damages, damages for cost of future care, damages for past loss
of income and special damages, but none of these awards are challenged on
appeal.
[2]
The accident occurred on July 4, 2006. The
plaintiffs vehicle was struck from behind by the defendants van while the
plaintiff was waiting to merge onto the Alex Fraser Bridge. Liability for the
accident was admitted by the defendant.
[3]
The plaintiff suffered neck and shoulder
injuries with associated headaches. She also subsequently experienced jaw pain
that the trial judge found was caused by the accident.
[4]
The plaintiffs neck and shoulder pain was
severe in the first month following the accident, but she slowly improved until
reaching the level that existed at the time of the trial. On a good day, her
pain was scaled at a level of 2 or 3 out of 10. On a bad day, when her symptoms
were aggravated, her pain was scaled at a level of 4 or 5 out of 10. The
activities that aggravated her symptoms included writing reports, studying,
long hours of computer work, renovation work, carrying heavy objects, driving,
walking for more than 45 minutes and any activity that involved extending her
arms beyond shoulder level.
[5]
The plaintiffs family doctor opined that her
symptoms would be considered to chronic, with a likelihood of less than 10%
that she would become asymptomatic.
[6]
At the time of the accident, the plaintiff was a
student at Simon Fraser University working towards a Bachelor of Science degree
in chemistry, which she obtained in 2008. As part of her studies, she was working
part-time as a co-op student at Cantest Laboratories. She worked as a
laboratory technician performing chemical extractions. This required her to
work with her arms at chest level or higher.
[7]
The accident caused the plaintiff to miss only
two days of work following the accident, but she worked in pain. The plaintiff
left Cantest Laboratories and joined a company called Freybe Gourmet Foods in
April 2007. She left the Cantest job because it was a long commute from her
home to work and the demands of her job aggravated her symptoms and caused
significant pain.
[8]
The plaintiffs position at Freybe was team
leader in quality control. Her degree was not required for the position. The
job did not aggravate her symptoms. Although the plaintiff liked the job at Freybe,
she was a bit bored with it and she expressed concern that it did not utilize
her educational training.
[9]
When the plaintiff left Cantest, she was earning
$13 an hour, which is the equivalent to approximately $27,000 per annum on a
full-time basis. She started at Freybe at a wage of $14 an hour but at the time
of the trial she was earning $18.25 an hour, or approximately $38,000 per annum.
The plaintiff testified that she would have earned $40,000 per annum at Cantest
if she had been promoted to the position of analyst.
[10]
The trial judge first addressed the question of
whether the plaintiffs earning capacity had been impaired to any degree by the
injuries caused by the accident. She referred to
Athey v. Leonati
,
[1996] 3 S.C.R. 458, 140 D.L.R. (4th) 235 at para. 27, for the proposition that
a future or hypothetical possibility will be taken into consideration as long
as it is a real and substantial possibility and not mere speculation. She also
referred to
Sinnott v. Boggs
, 2007 BCCA 267, 69 B.C.L.R. (4th) 276,
which she considered to be of particular assistance because it also involved a
young person not yet settled into a career. The judge concluded that a loss of
future earning capacity had been proven by the plaintiff.
[11]
The judge then addressed the quantum of the
damages and, in that regard, made reference to the considerations set out in
Brown
v. Golaiy
(1985), 26 B.C.L.R. (3d) 353 at para. 8 (S.C.). She referred
generally to the various contingencies and possibilities to be encountered by a
person in the position of the plaintiff and, considering there was a real and
substantial possibility the plaintiff will experience an income shortfall
during the rest of her working career, she fixed the award at the amount of
$80,000.
[12]
The defendant asserts two errors on the part of
the judge. First, he says the judge erred in law or mixed fact and law. Secondly,
he says the judge made a palpable and overriding error of fact.
[13]
The defendant refers to the decision in
Parypa
v. Wickware
, 1999 BCCA 88, 169 D.L.R. (4th) 661 at para. 67 for the
proposition that the judge was required to take into account all substantial
possibilities and give them weight according to their relative likelihood. The
defendant submits the judge committed an error of law or an error of mixed fact
and law because she failed to consider the extent of any real and substantial
possibilities of an actual income loss and to then attribute them weight
according to their relative likelihood. I am not persuaded that the judge made
such an error. The judge was not required to articulate all of the substantial
possibilities and assign a specific weight to them. She was alive to the
existence of contingencies and possibilities, and took them into account when
assessing the damagesw for the impairment to the plaintiffs future earning
capacity. As noted at para. 69 of
Parypa
, the task of the court is to
assess the damages, not calculate them according to a mathematical formula. Although
it may have been preferable for the trial judge to have given a fuller explanation
with respect to her assessment of the damages, it is my opinion that her
reasons as a whole were sufficient in that regard.
[14]
In
Parypa
, Cumming J.A. acknowledged that
the purpose of damages for loss of future earning capacity is to compensate the
injured party for the loss or impairment of a capital asset.
He said the
following:
[63] ... it is not the lost earnings
themselves that must be compensated, but loss of earning capacity as a capital
asset that requires compensation. There are several cases in this court which
confirm that the capital asset approach is correct:
Earnshaw v.
Despins
(1990), 45 B.C.L.R. (2d) 380;
Palmer v. Goodall
(1991), 53
B.C.L.R. (2d) 44; and
Kwei v. Boisclair
(1991), 60 B.C.L.R. (2d) 393. The
significance of compensating earning capacity as a capital asset as opposed to
projected future earnings is seen in the following passage from
Palmer
,
supra
,
at 59:
Because it is impairment that is being
redressed, even a plaintiff who is apparently going to be able to earn as much
as he could have earned if not injured or who, with retraining, on the balance
of probabilities will be able to do so, is entitled to some compensation for
the impairment. He is entitled to it because for the rest of his life some
occupations will be closed to him and it is impossible to say that over his
working life the impairment will not harm his income earning capacity.
[15]
As Mr. Justice Mackenzie observed in
Sinnott
v. Boggs
at para. 16, the quantification of the loss of future earning
capacity is more at large when the injured plaintiff is a young person who has
not yet established a career. This is in contrast to the situation in
Steward
v. Berezan
, 2007 BCCA 150,
64 B.C.L.R. (4th) 152, where the
plaintiff was near the end of his working career and had no intention of
returning to the trade which he was unable to perform due to his injuries.
[16]
The defendant also relies on the decision in
Mayenburg v. Lu
,
2009 BCSC 1308, where Mr. Justice Myers dismissed a claim for diminished
earning capacity in circumstances where the plaintiff was continuing with her
education. However, unlike the case at bar, there was no evidence in
Mayenburg
to suggest that the plaintiff would be unable to perform the tasks required of
the line of work for which she was being educated.
[17]
In asserting that the judge made a palpable and
overriding error, the defendant says that the judge misapprehended the evidence
in several respects and that this resulted in the judge arriving at an
incorrect damage award for loss of future earning capacity. In my opinion, the
defendant has only identified one factual error made by the judge but it was a
minor error that did not affect the outcome.
[18]
The minor error made by the judge occurred at
para. 81 of her reasons when she stated that [w]hile she currently earns a
dollar more an hour at Freybe than she did as a technician at Cantest, the
plaintiff would have earned more as an analyst at Cantest. It was true that
the plaintiff earned a dollar an hour more when she first joined Freybe, but
she subsequently received one or more pay raises that increased her hourly wage
by $4.25. Hence, it was not accurate to state that the wage differential was
only one dollar an hour at the time of the trial. However, the second part of
the judges statement was accurate because the plaintiffs increased wage at
Freybe was less than the wage the plaintiff testified she would have earned as
an analyst at Cantest. It is my view that the judges error was not overriding
because it was contained in the introductory portion of her statement and did
not affect the point that the judge was making. Her point was that the
plaintiff was earning less at Freybe than she was likely to have been earning
at Cantest, and that was accurate.
[19]
In my opinion, the balance of the
misapprehensions alleged by the defendant are not palpable errors. The
defendant makes arguments with respect to the interpretation of the evidence,
but it was open for the judge to draw the inferences and make the findings of
fact she did.
[20]
As it has not been shown that the judge made any
error of significance, I would dismiss the appeal.
[21]
LOW J.A.
: I
agree.
[22]
D. SMITH J.A.
: I
agree.
[23]
LOW J.A.
: The
appeal is dismissed.
The Honourable Mr. Justice Tysoe
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Dunn,
2010 BCCA 22
Date: 20100114
Docket:
CA037610
Between:
Regina
Respondent
And
Joseph
Allan Dunn
Appellant
Before:
The Honourable Mr. Justice Donald
The Honourable Madam Justice Levine
The Honourable Mr. Justice Lowry
On
appeal from: Provincial Court of British Columbia, May 20, 2009,
(
R. v. Dunn
, Vernon Registry 43549-1;43727-1; 43642-1)
Oral Reasons for Judgment
Counsel for the Appellant:
L.J.
Helps
Counsel for the (Crown) Respondent:
F.
Tischler
Place and Date of Hearing:
Vancouver,
British Columbia
January
14, 2010
Place and Date of Judgment:
Vancouver,
British Columbia
January
14, 2010
[1]
DONALD J.A.
: Joseph
Allan Dunn seeks leave to appeal and, if granted, appeals from a restitution
order in the amount of $15,000 imposed as part of a custodial sentence and
probation on pleas of guilty to break and enter of a dwelling house, failing to
stop a vehicle in an attempt to evade a police officer, assault of a police
officer and escape from lawful custody.
[2]
The order in question obliges Mr. Dunn to pay
$15,000 to the victim of the break-in to compensate for the theft of an all
terrain vehicle (ATV), valued at $10,000, and two mountain bicycles valued at
$5,000.
[3]
Mr. Dunn argues that the sentencing judge erred
in making the order on the spur of the moment without having determined whether
the order was fair in light of the other penalties, and whether it
realistically could be fulfilled.
[4]
I agree that the order was made in error and I would
set it aside.
[5]
Counsel below presented a joint submission on
sentence. The judge acceded to the submission and accordingly imposed the
following sentence:
(i) for the
break and enter one day in jail, having given six months credit for four
months pre-sentence custody, and two years probation, including a condition
that Mr. Dunn pay the victim $1,060 restitution for an insurance deductible of
$1,000 plus $60 for re-keying the home (this order is not appealed);
(ii) for
failing to stop one month consecutive jail and an 18-month driving
prohibition;
(iii) for
assault of a police officer two months concurrent jail and a two-year
weapons prohibition; and
(iv) for escaping lawful custody three months
consecutive jail.
In the result, Mr. Dunn was sentenced to
four months additional time in custody, in addition to the other penalties.
[6]
The transcript of the sentence proceedings
indicates that the idea of an additional restitution order only occurred to the
judge at the end of submissions. It seems that it was prompted by his
consideration of the victim impact statement and not as a request from the
prosecutor:
THE COURT: I see, Ms. Jedlinski, that
on the victim impact statement the victim, ..., says that in addition to the
deduction she paid, she lost the quad at $10,000 and another item at $5,000,
which she wasnt reimbursed, so . . .
MS. JEDLINSKI: Yes, Your Honour, Im
wondering if perhaps there can be a stand-alone restitution order for those
items, the $1,060 be part of the probation and then the $15,000 for the other
items be stand-alone. Just -- I dont know what the likelihood of -- is
recovering -- of recovering that money.
THE COURT: Well, if he wins the
lottery, I guess so. But as far as $1,060, is that in the probation order
itself? What do you think about that, Mr. --
MR. DEULING: Me?
THE COURT: Yes.
MR. DEULING: Well, I dont have any
submissions with respect -- I have a bit of a problem with the ATV and the
$15,000. I --
THE COURT: Well, you can go after all
his cohorts, I guess, to contribute to it if, you know --
MR. DEULING: Well, it would be my
submission, Your Honour, that it would probably be better for Mr. Dunn to not
have those cohorts anymore in any sense of the word, and I think if hes hoping
to have any meaningful recovery from his addiction that he wouldnt want to be
around those people.
THE COURT:
Youd think. On the other hand, we have a bunch of people at the other end of
the crime who are out a whole bunch of money, and were not even talking about
compensation for the psychological harm thats been involved and all that other
stuff that happens on break and enters, so . . .
[7]
The circumstances of the offences are not
material to this appeal. It is to be noted, however, that the victim and her
family suffered considerable emotional distress in addition to the loss of
property. The victim expressed the hope that the appellant would reveal where
the ATV and bicycles were. I surmise that the judge tried to provide the victim
some solace by ordering restitution.
[8]
The circumstances of the offender are, in the
words of his counsel at sentencing, those of a homeless crack addict. Nothing
was said about his ability to make restitution within a reasonable time. The
judges remark about winning the lottery provides some measure of the odds that
Mr. Dunn would be able to comply with the order within a meaningful time frame.
[9]
It appears from the record that the judge
attempted to give effect to the victims wish that Mr. Dunn disclose the whereabouts
of the ATV and bicycles. This is an indirect purpose for the order to pay
money, and since Mr. Dunn was not the only person involved in the theft, the
order has, in that respect, doubtful efficacy.
[10]
The reasons for sentence are very brief. They
adopt the joint submission. As to the order in question, the judge simply
pronounced the order, he did not discuss ability to pay or explain how the
order fits in with the other aspects of the sentence. He said only this (20
May, 2009), Vernon No. 43549-1, 43727-1, 43642-1 (B.C.S.C.):
[15] And with
respect to the 43549 [the information charging the offence], the break and
enter, there will be a 738 order in favour of [the victim] in the amount of
$15,000.
[11]
The relevant principles governing the exercise
of the discretion to order restitution are compendiously reviewed by Madam
Justice Prowse in
R. v. Yates
, 2002 BCCA 583, 169 C.C.C. (3d) 506. Among
those principles are that ability to pay must be examined as an important
factor, as well as the effect such an order has on the balance of the sentence.
Those principles were not observed in the present case.
[12]
I am unable to say that any useful purpose would
be served by a restitution order where the likelihood of compliance is as
remote as the judge said. The order was an afterthought made without the
benefit of full argument and is unlikely to provide any tangible benefit to the
victim.
[13]
I would grant leave, allow the appeal, and set
aside the restitution order under appeal.
[14]
LEVINE J.A.
: I
agree
[15]
LOWRY J.A.
: I
agree.
[16]
DONALD J.A.
:
Leave to appeal is granted. The appeal is allowed and the restitution order is
set aside.
The Honourable Mr. Justice Donald
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Power,
2010 BCCA 21
Date: 20100114
Docket:
CA037574
Between:
Regina
Respondent
And
Harold
Garrett Power
Appellant
RESTRICTION ON
PUBLICATION: AN ORDER HAS BEEN MADE IN THIS CASE PURSUANT TO SECTION 486.4 OF
THE
CRIMINAL CODE
THAT PROHIBITS ANY INFORMATION THAT COULD IDENTIFY THE
COMPLAINANT[S] OR WITNESS[ES] BEING PUBLISHED, BROADCAST OR TRANSMITTED.
Before:
The Honourable Mr. Justice Donald
The Honourable Madam Justice Levine
The Honourable Mr. Justice Lowry
On
appeal from: Supreme Court of British Columbia, October 14, 2009
(
R. v. Power
, 2009 BCSC 1514, Vancouver Docket 24239)
Oral Reasons for Judgment
Appellant appearing In Person (in
custody):
Counsel for the (Crown) Respondent:
S.J.
Brown
Place and Date of Hearing:
Vancouver,
British Columbia
January
14, 2010
Place and Date of Judgment:
Vancouver,
British Columbia
January
14, 2010
[1]
LOWRY J.A.
: The
applicant seeks leave to appeal and, if granted, appeals a sentence of
18 months imprisonment followed by two years probation imposed on him by a
Supreme Court judge before whom he was tried and found guilty of one count of
sexual exploitation under s. 153(1)(a) as it stood at the time. He contends the
sentence is unduly harsh and the judge erred in not giving proper consideration
to a conditional sentence order. He also contends two terms of the probation
order are unnecessarily restrictive. The reasons given for the sentence imposed
are indexed as 2009 BCSC 1514.
[2]
The applicant is a 53-year-old criminal lawyer
who represented the complainant in Youth Court proceedings on various occasions
during 2004. The complainant was, at the time of the offence, an aboriginal boy
of 14 years of age. The applicant encountered the complainant coincidentally
one evening in August of that year after the complainant had been thrown out of
his house and was in need of a place to stay. The applicant invited him to
drive around with him for a time and then he invited him to spend the night at
his apartment. The judge described what happened as follows, referring to the
complainant as J.I.:
[8] Mr. Power took J.I. to his
penthouse suite in New Westminster. In the living room of the suite was a pool
table and mini-fridge containing beer and other alcoholic drinks. Mr. Power
invited J.I. to play pool and offered him a cooler. J.I. accepted. He drank two
coolers at Mr. Powers invitation. He had never consumed alcohol before
that night. Mr. Power then told J.I. that his brother was visiting so J.I.
would have to sleep in Mr. Powers bed. J.I. agreed.
[9] Mr. Power put on a pornographic
video in the bedroom. J.I. remained dressed in his soccer pants and t-shirt. Mr. Power
got undressed and into bed. After watching some of the video, Mr. Power
invited J.I. to masturbate. J.I. declined. Mr. Power then put his hand
down J.I.s soccer pants, following which he performed oral sex on J.I. J.I.
was too shocked and surprised to resist. He recalled ejaculating and then going
to sleep.
[10] The next
morning Mr. Power gave J.I. money for breakfast and asked him to leave. No
such encounters occurred again. Neither spoke of the incident subsequently. Mr. Power
continued to represent J.I. from time to time for approximately 18 months. That
representation ended in the spring of 2006, when J.I. went to police at the
urging of adults he knew and gave a statement concerning the sexual interaction
with Mr. Power in August of 2004.
[3]
The judge then outlined the applicants
background which reveals that he has for many years suffered from alcohol abuse
and has long had a sexual attraction to adolescents. The judge reviewed and
quoted the more pertinent passages of the psychological assessment outlined in
a pre-sentence report furnished to the court. She stated in particular:
[22]
Dr. Hervé noted that despite Mr. Powers assessed risk level,
treatment needs, and treatment prognosis, based on his recent community
functioning he appeared to be a good candidate for community supervision.
[4]
After reviewing the positions taken by the Crown
and the defence, the judge discussed the governing principles and then turned
to consider a conditional sentence having regard for the prerequisites
established in
R. v. Proulx
, 2000 SCC 5, [2000] 1 S.C.R. 61. She
considered that, although it was said the applicant may be an appropriate
candidate to serve his sentence in the community, he was assessed as a low to
moderate risk to re-offend, which gave her concern that he continues to be a
risk to the community. But she considered the greatest difficulty in imposing a
conditional sentence lay in the requirement that it had to be consistent with
the principles and purposes of sentencing. She recognized that, given the
nature of the offence, involving as it did the abuse of a young person, primary
consideration was to be given to the objectives of denunciation and deterrence.
The principle is now codified in s. 718.01 of the
Code.
The judge
expanded on the importance she attached to the unique position of trust and
dependency the applicant held as the complainants lawyer in concluding:
[52] ... that a
fixed term of incarceration is necessary to bring home the significance of the
offence and the consequences that will be visited on those who commit such
offences.
[5]
The applicant says the judge failed to give
adequate reasons for refusing to impose a conditional sentence and failed to
give proper effect to the psychological assessment that he appeared to be a
good candidate for community supervision. But I see no merit in what the
applicant says in this regard. As I have outlined them, the judges reasons as
to why she considered the primary objectives of sentencing would not be
adequately addressed by other than a term of incarceration are clear and quite
complete. She did not overlook the psychological assessment but dealt
specifically with whether community supervision would be appropriate. As
indicated, she had concern the applicant posed a continuing risk to the community.
She said that on that aspect of the evidence it was a very close call but
ultimately rejected a conditional sentence on the basis of the mandated
objectives that she considered required incarceration. I see no basis on which
this Court should interfere with what was an exercise of the judges
discretion:
R. v. Proulx
at paras. 123-126 and
R. v. Labrash,
2006
BCCA 357 at paras. 21-22.
[6]
After deciding a term of incarceration was
warranted, the judge turned to consider the range of sentences for offences of
this nature and commented on the governing authority. She noted the applicant
had no criminal record but said there was no guilty plea or expression of
remorse to mitigate the sentence. She concluded:
[57] I have already outlined the factors
which, in my view, require a definite prison term. The sexual assault took
place on one occasion only, but that cannot surely be viewed as a mitigating
factor. There was nothing impulsive about the assault. There was guile and
manipulation involved. It was a very serious and highly intrusive assault. Mr. Power
committed fellatio on J.I. Before that, he plied him with alcohol and showed
him pornographic videos. J.I. was sexually inexperienced before that time and,
most importantly, of course, Mr. Power had acted as J.I.s lawyer.
[58] In this case, as noted, the sentencing
principles require the greatest emphasis on denunciation and deterrence. I have
considered the other principles, but these must receive the greatest attention.
As noted by Bennett J. in [
R. v. Lennax
, 2008 BCSC 1761] at
para. 45:
Children are entitled to be protected in
society and by our courts. The only way the courts can denounce such crimes [as
this] is by the imposition of a sentence.
[59] As observed by Newbury J.A. in
R.
v. Ashley-Pryce
, 2004 BCCA 531, the case law reflects the very serious view
taken by the courts of offences involving the sexual exploitation of persons
under the age of 18 by persons in positions of authority or trust. In that case,
the Court of Appeal upheld a sentence of 18 months incarceration for a
healthcare worker who masturbated himself by holding the hand of an elderly
female Alzheimers patient. He was convicted of one count of sexual
exploitation under s. 153. He had pled guilty to the offence and, due to
the conviction, had to move his family from the small community.
[60] While I am
not persuaded that a penitentiary term is appropriate in this case, I am
persuaded that a significant reformatory term is required. I will, therefore,
be imposing a sentence of 18 months followed by two years of probation.
[7]
The applicant says the judge overemphasized
denunciation and deterrence and made no mention of the prospects of
rehabilitation. This, he says, led her to impose a sentence that was unduly
harsh and unfit. He maintains the judge wrongly treated the absence of a guilty
plea as an aggravating factor and thus erred in principle.
[8]
Again, I see no merit in what the applicant
contends. I do not consider the judge to have treated the absence of a guilty
plea as an aggravating factor, but merely to have pointed out there was no
mitigating factor that could be attributed to an expression of remorse. Further,
in my view, there is no sound basis on which it can be said the sentence was unfit.
As the Crown points out, the applicant was in a unique position of trust and
the complainant was particularly dependent upon him at a very troubled time in
his young life. The applicant invited the complainant to his apartment for the
night even though he was sexually attracted to adolescent males. Given the
complainants age and circumstances, the applicant knew he was particularly
vulnerable and took advantage of him.
[9]
A couple of times in her reasons, the judge
referred to the offence the applicant committed as a sexual assault when she
ought to have said sexual exploitation, but her having done so is of no
particular consequence now. She was not confused about the charge. The sentence
imposed cannot be said to be inconsistent with what has been imposed for the
offence of sexual exploitation:
R. v Ashley-Pryce,
2004 BCCA 531.
[10]
The applicant says that two provisions of the
probation order are unnecessarily restrictive. The first, Condition 9,
prohibits his having contact with children under the age of 16 years unless
accompanied by an informed adult approved by his Probation Officer. He says the
provision need do no more than prohibit his being alone in the company of a
person under the age of 16 years. The provision is unduly broad and would be
adequate, and consistent with the offence of which the applicant was convicted,
if the worded as by this Court in
R. v. R.R.M.
, 2009 BCCA 578 consistent
with what the applicant seeks.
[11]
The second provision, Condition 11, prohibits
the applicant from attending playgrounds, school grounds, public parks,
community centres or other sites where children may congregate unless
accompanied by an informed and approved adult. The Crown acknowledges that the
words or other sites where children may congregate constitute a vague phrase
that is unnecessary, particularly given Condition 9.
[12]
I would grant leave to appeal but would dismiss
the appeal save that I would amend Conditions 9 and 11 of the Probation Order
so they provide:
Condition 9: You
shall not be in the company of any person under the age of 16 years, unless in
the company of an informed adult approved in advance by your Probation Officer.
Condition 11: You are not to attend at playgrounds,
school grounds, public parks, or community centers unless accompanied by an
informed adult approved of in advance by your Probation Officer.
[13]
DONALD J.A.
: I
agree.
[14]
LEVINE J.A.
: I
agree.
[15]
DONALD J.A.
:
Leave to appeal is granted. The appeal is allowed to the extent of amending the
probation order as indicated in the reasons of Mr. Justice Lowry. The appeal is
otherwise dismissed.
The Honourable Mr. Justice Lowry
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Davidson v. Tahtsa Timber Ltd.,
2010 BCCA 12
Date: 20100115
Docket:
CA035587
Between:
Thomas Clifford Davidson
Appellant
(
Plaintiff
)
And
Tahtsa Timber Ltd.
Respondent
(
Defendant
)
Before:
The Honourable Mr. Justice Low
(In Chambers)
On
appeal from: Supreme Court of British Columbia, November 22, 2007 (
Davidson
v. Tahtsa Timber Ltd.
, 2007 BCSC 1684, 13954)
Counsel for the Appellant, :
I.B.
Lawson
, via teleconference
Counsel for the Respondent:
W.W.
Chapman
,
via teleconference
Place and Date of Hearing:
Vancouver,
British Columbia
October 9, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
15, 2010
Reasons for
Judgment of the Honourable Mr. Justice Low:
[1]
The appellant brings separate motions for leave
to file his factum out of time and for removal of his appeal from the inactive
list.
[2]
The respondent opposes both motions, primarily
on the basis that the appeal lacks merit.
[3]
The action against the respondent was for
wrongful dismissal of the appellant from his job as a truck driver. He had
worked for the respondent in that capacity for twelve years. The trial judge,
Mr. Justice Rice, found that the dismissal was not justified but that the
appellant had fully mitigated his damages by obtaining alternate employment
during the notice period of ten months. Therefore, he dismissed the action.
The appellant contends that the judge erred in finding that damages had been
fully mitigated.
[4]
There is also an issue as to whether there should
have been a Bullock order made against the respondent for that party to pay
the costs of John Brienen, another defendant against whom the action was
dismissed. Mr. Brienen is a principal of Nadina Truck Service Ltd., a company
that owns a repair shop into a wall of which the appellant drove the
respondents truck. That incident and the appellants denial of it are what
led to the appellants dismissal from his employment.
[5]
The appellant claimed damages from Mr. Brienen
for interference with his contract of employment and for slander. He claimed
that what Mr. Brienen said about the appellant induced the respondent to fire
him. The trial judge found that the actual words complained of were not said
by Mr. Brienen and that, even if they had been said, they were truthful and
therefore justified. The appellant does not appeal the dismissal of the action
against Mr. Brienen. Therefore, Mr. Brienen is not a respondent in the appeal.
[6]
The trial judgment was given on 22 November
2007. The notice of appeal was filed on 4 December. The respondent filed its
appearance on 25 January 2008. The appeal record, transcript and appeal books
were filed more than a year later. They had been in the possession of counsel
for the respondent from June 2008 to January 2009 as counsel considered the
content of the transcript and appeal books necessary for a proper hearing of
the appeal. On 18 February 2009 there was a consent order extending the time
for these three filings and the appellant complied with the order. However, by
this time the appeal was on the inactive list so the respondent consented to an
order that the appeal be removed from that list. This order provided that the
time limit for taking the next step required by the
Court of Appeal Act
or
Court of Appeal Rules
must commence to run as of the date of this
order. That meant that the appellant had to file and deliver his factum by 18
April 2009.
[7]
The appellant did not comply. His counsel
advised counsel for the respondents on 15 June 2009 that the factum was
complete. On 13 July, the registry refused to file the factum because an order
was needed extending the time for filing. It was then almost three months
late. The respondent would not consent to late filing. As of 2 September the
respondents counsel had not received even an unfiled copy of the appellants
factum.
[8]
On 18 September 2009 the appellant filed the
motion to extend the time for filing his factum. An affidavit of the appellant
in support of the motion exhibits the draft factum.
[9]
Because the appellant had not filed a
certificate of readiness within 180 days of the date of the consent order
removing the appeal from the inactive list, the appeal again went on the
inactive list on 18 August 2009 pursuant to s. 25(4)(b) of the
Court of Appeal
Act
. When counsel made oral submissions before me in chambers, the
appellant had not brought a motion for a second removal of the appeal from the
inactive list. When I learned this on a later review of the court file, I
advised counsel through the registry that I could not determine the motion
before me while the appeal remained on the inactive list. The appellant has
now brought a motion for removal of the appeal from the list and I have
received written submissions on that motion.
[10]
The test for extension of time for the taking of
a step in an appeal is set out in
Sekhon v. Armstrong
, 2003 BCCA 318,
183 B.C.A.C. 137:
[17] The
tests
that are applied
when an application is made to extend the time for taking a step necessary in
the prosecution of an appeal are set out in
Davies v. Canadian Imperial Bank
of Commerce
(1987), 15 B.C.L.R. (2d) 256 (C.A.). The following questions,
with the necessary modifications, will generally be considered: (1) Was there a
bona fide intention to appeal? (2) When were the respondents informed of the
intention? (3) Would the respondents be unduly prejudiced by an extension? (4)
Is there merit in the appeal? (5) Is it in the interests of justice that an
extension be granted? The fifth question is the most important as it
encompasses the other four questions and states the decisive question. As to
the fifth rule, Lambert J.A., in
Haldorson v. Coquitlam (City)
,
supra
,
observed at para. 9:
[9] The fifth rule, of course, in
Davies
v. Canadian Imperial Bank of Commerce
(1987), 15 B.C.L.R. (2d) 256
(B.C.C.A.) is that in deciding whether to extend time to someone who files a
notice of appeal late, the overriding rule, called the fifth rule, is that
there must be a balancing of the interests of justice as they affect both
parties and in reaching a decision the interests of justice will prevail. The
first four rules cannot be used to defeat the interests of justice but are
themselves guides to the application of the interests of justice.
[11]
The test on an application for removal of an
appeal from the inactive list is found in
Kar Recovery Ltd. v. K.D.A
,
2004 BCCA 503, 204 B.C.A.C. 181:
[23] There is no rigid test to apply in
determining whether an inactive appeal ought to be reactivated. The overriding
issue is whether it is in the interests of justice to grant the application.
[24] Factors which have been considered
by this Court include the following:
● the extent of the delay,
● the explanation for the delay,
● the existence of any prejudice arising from the delay,
● the likelihood of success on appeal.
(
Deline v. Kidd
, 2003 BCCA 170 at
para. 11.)
[12]
The delay in readying this appeal for hearing
has been extensive. Counsel for the respondent took a long time to assist in
settling the appeal book and transcript. Counsel for the appellant delayed
filing the appellants factum until it was out of time. Both counsel have
failed to consider the time limits set out in the rules. No reasons are
offered for the various delays. It happens that the latest delay caused by
counsel for the appellant has created the double problem of leave becoming
necessary for filing of the appellants factum and the appeal having again been
put on the inactive list. The respondent has not argued that it has been
prejudiced by the latest delay. This is one of those cases in which consequences
of the failure of counsel to comply with the time limits should not be visited
upon the litigant.
[13]
It remains to consider the strength of the
appeal and the overriding interests of justice.
[14]
Mr. Brienen has taxed his costs against the
appellant at $42,653.75. The appellant wishes to visit these costs upon the
respondent.
[15]
Mr. Brienen was not an employee of the
respondent. The claim against him was independent of the claim against the
respondent. The appellant failed to prove that Mr. Brienen did any of the
things the appellant claimed that he had done to interfere with the appellants
employment contract with the respondent. The appellant has presented no
argument that the respondent could have properly been ordered to pay Mr.
Brienens costs even if the appellant had been able to prove damages against
his former employer for wrongful dismissal.
[16]
The appellant did not seek a Bullock order at
trial. He wishes to raise that issue for the first time in this court. It is
very unlikely that the appellant would be able to persuade a division of this
court that the trial judge should have made the costs order he now seeks. It
seems unarguable that Mr. Brienen was a necessary defendant to enable the
appellant to make out his case of wrongful dismissal against the respondent.
If this were the only ground of appeal, I would find that the appeal is without
merit.
[17]
On the question of damages for wrongful
dismissal, the appellant says that the trial judge erred in determining his
notice-period income on the basis of his income during the two years prior to
the dismissal. Alternatively, the appellant says that there should have been
an order for nominal damages plus costs.
[18]
The respondent fired the appellant on 11 July
2005. There is no dispute that the appropriate notice period was ten months.
The period to be considered, therefore, was from that date to 11 May 2006. The
trial judge determined that during this period the appellant earned at least as
much as he would have earned had he continued in his employment with the
respondent. The judge said this:
[16]
As for
damages, there was little disagreement with the plaintiffs submission that ten
months was an appropriate notice period subject to the plaintiffs duty to
mitigate his loss. It was not disputed that despite the brief interlude as a
contractor, the plaintiffs position ought to be judged overall as if he were a
twelve year employee. The evidence indicates that work was available to the
plaintiff as a logging truck driver with other companies immediately after his
dismissal. The plaintiff proved this by quickly finding a new job as a driver.
The evidence did not indicate that his scale of pay fell at all with the
change, and from the materials submitted it seems that he earned more than he
did working for Tahtsa. As a result, I was unable to find that there was any actual
loss.
[17] In 2004, the plaintiffs reported
total income was $49,151.24. For 2005, he reported $25,365.69 as employment
income from trucking, and $21,747.30 as farm income. The sum of those two
is $47,112.99. His reported income for 2006 was close to $57,000.00.
[18] A review of the plaintiffs
documentation by Tahtsas counsel showed that his actual income for 2005 was
$55,616.94, not $47,112.99 as per his 2005 return. The discrepancy was not
explained. The plaintiffs calculation of his 2005 income was much higher, at
least for the first half of 2005. However, there were errors in the
plaintiffs calculations, and I preferred the submission of Tahtsas counsel on
the point.
[19] According to both Mr. Posselt and
the plaintiff, logging truck operators could expect eight months work in a
year, possibly more but possibly less depending on weather conditions. A
driver of a low-bed tractortrailer such as the one driven by the plaintiff to
transport equipment could expect one month more work, but not a greater annual
income Logging operations shut down in August usually, and also during winter
freezing and spring break-up, but exact times arent predictable. As a result,
argued Tahtsas counsel, it was likely more reliable to base projected income
for the plaintiff on an average of his income for the previous twelve months or
more.
[20] Mr.
Posselt
explained in some detail other variables that make a truck drivers
income unpredictable. One of those variables is market conditions. The
logging truck operators, taking their pay as a percentage of the price of the
logs sold, must expect their income to fluctuate. Low-bed drivers, normally
paid by the hour, are theoretically immune to those fluctuations, but their
pay, as Mr. Posselt testified, does not tend to exceed what the logging truck
drivers earn.
[21] Accordingly,
taking into account these uncertainties, and relying to a great extent on the
plaintiffs total income for 2005 and 2006, overall it appears that the
plaintiffs expected income for the ten months after his dismissal should have
amounted on average of his past two years earnings per month multiplied by
ten. His actual income was at least that much and was probably more. I am
unable to determine with certainty, therefore, that the plaintiff suffered any
actual loss. Accordingly the claim for wrongful dismissal is dismissed
with costs to Tahtsa at scale B subject to submissions.
[19]
The appellants argument is that the trial judge
erred in failing to take into account that the appellant, pre-dismissal, worked
for the respondent as both a logging truck driver and as a low-bed driver. It
is said that the evidence supported the conclusion that per year this would
have given him two more months employment than when he had been driving only a
logging truck. Although his counsel does not put it this way, the error the
appellant alleges is that the judge misapprehended the evidence in comparing
earnings to determine the amount of the loss. The appellant says that if the
judge had fully considered the evidence he would have found a loss of about
$11,000 during the ten-month notice period.
[20]
This does not appear to be a strong ground of
appeal but I am unable to say that it is devoid of merit and is bound to fail.
[21]
Having regard to the casual manner employed by
both sides in perfecting this appeal, the existence of an arguable ground of
appeal and the absence of prejudice to the respondent, it is in the interests
of justice to permit the appeal to proceed to a resolution on the merits.
[22]
There will be an order removing the appeal from
the inactive list, on terms. The appellant will file and serve his factum
within 14 days of this decision being pronounced. The appeal will then be
ready for hearing in accordance with R. 28(1) and the appellant thereafter will
comply with R. 28(3), R. 28(5) and R. 28(7).
[23]
The costs of each motion before me will be to
the respondent in the appeal.
The Honourable Mr. Justice Low
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Leggett & Platt Canada Co. v.
Brink Forest Products Ltd.,
2010 BCCA 14
Date: 20100115
Docket:
CA036785
Between:
Leggett & Platt Canada Co./Societe
Leggett & Platt Canada
Appellant
(
Plaintiff
)
And
Brink Forest Products Ltd. and
Pleasant Valley Remanufacturing Ltd.
Respondents
(
Defendants
)
Before:
The Honourable Chief Justice Finch
The Honourable Madam Justice Kirkpatrick
The Honourable Madam Justice D. Smith
On
appeal from: Supreme Court of British Columbia, December 24, 2008
(
Leggett & Platt Canada Co. v. Brink Forest Products Ltd.
, S073999)
Counsel for the Appellant:
T.D.
Braithwaite
Counsel for the Respondent:
L.A.J.
Dunn
Place and Date of Hearing:
Vancouver,
British Columbia
November 17, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
15, 2010
Written Reasons by
:
The Honourable Chief Justice Finch
Concurred in by:
The Honourable Madam Justice Kirkpatrick
The Honourable Madam Justice D. Smith
Reasons for
Judgment of the Honourable Chief Justice Finch:
I.
Introduction
[1]
Leggett & Platt [L&P] appeals from the
order of the Honourable Mr. Justice N. Smith of the Supreme Court of British
Columbia pronounced 24 December 2008, holding that, although Brink
Forest
Products Ltd. [Brink] breached its contract with L&P,
L&P
failed to establish damages for loss of opportunity.
[2]
The plaintiff claimed that its contract with
Brink entitled it to the refund of countervailing and anti-dumping softwood
lumber duties that might become recoverable by Pleasant Valley Remanufacturing
(PVR). That company was sold by L&P to Brink and was the subject matter
of the contract between them.
[3]
PVR received the refund of the duties, paid tax
on it, and sent the net amount to L&P. L&P claimed that Brink breached
the contract by not consulting with it on the tax assessment. It claimed it
lost the opportunity to set off tax credits against the taxes payable on the
refund, or otherwise lost the ability to deal with tax in a way that could have
resulted in a greater net return to it. The plaintiff claimed damages for loss
of that opportunity. The learned trial judge said that Brink had breached the
contract but that damages for lost opportunity were not proven. He dismissed
the action.
[4]
For the reasons that follow, in my view the
action was properly dismissed, but for the reason that there was no breach of
contract. It is not necessary to address the issue of damages for loss of
opportunity.
II.
Background
[5]
Prior to the parties contract, made on 17
October 2003, L&P owned PVR. PVR paid softwood lumber duties to the United
States government.
[6]
By the agreement of 17 October 2003, L&P
agreed to sell, and Brink agreed to buy, all of the issued shares of PVR for a
price of $1.1 million (the SPA).
[7]
At the time of the sale, the softwood lumber
dispute between the US and Canada was taking place. No one knew how or when the
dispute would be resolved. It was thought to be possible that the dispute might
be resolved and those companies that had paid softwood lumber duties would be
entitled to refunds.
[8]
Because L&P and Brink did not know how or
when the softwood lumber dispute might be resolved, they agreed to exclude from
the purchase and sale of PVR, and reserve to L&P, any refund of the
softwood lumber duties [Duties] that might arise in the future. This was provided
for in clause 14.5 of the SPA. The interpretation and effect of clause 14.5 is a
central issue on appeal. Clause 14.5 states in full:
Since May 22,
2002, The United States Customs and Border Protection Agency has been
collecting cash deposits in respect of countervailing duties on softwood lumber
at the time of entry of applicable product from Canada to the U.S. at a net
duty rate of 18.8% (herein the CVD Deposits). Additionally, the United States
Customs and Border Protection Agency has also been collecting cash deposits in
respect of antidumping duties on softwood lumber at the time of entry of
applicable product from Canada to the U.S. at a net duty rate of 8.4% (herein
the ADD Deposits). The CVD Deposits and ADD Deposits are herein referred to
collectively as the Subject Deposits. The Subject Deposits have been paid by
or on behalf of the Company [PVR] to and are held by the United States Customs
and Border Protection National Finance Center in respect of each shipment of
applicable product by the Company from Canada to the United States. The
mechanism for collection of the Subject Deposits involves the declaration by
the Company through a customs broker of the value of the product being shipped
with a corresponding actual payment being made via wire transfer from Leggett
& Platt, Incorporated, the indirect ultimate parent of the Company. The
legitimacy of the duties represented by the Subject Deposits are currently the
subject of a dispute between Canada and the United States which may result in
full or partial refunds being made to the payers of such deposits.
It is
agreed
that any return or refund of all or any portion of the Subject
Deposits in respect of the period up to and including October 30, 2003 shall be
for the benefit of the Vendor.
In the event that all or any portion of the
Subject Deposits in respect of the period up to and including October 30, 2003
are refunded or otherwise returned to the Company, the Purchaser shall
immediately cause the Company to pay over to the Vendor the full amount of all
such refunds or returns. It is agreed that the amount of such payment shall be
reduced by an amount equal to any income tax imposed on the Company as a result
of such refunds or returns being characterized as taxable income of the Company
pursuant to the
Income Tax Act
(Canada)
. If the Company or the
Purchaser receive any notices, notices of assessment, requests or other
communication from the United States Customs and Border Protection National
Finance Center or any other government entity or agency or any third party in
respect of the Subject Deposits, the Purchaser covenants and agrees to
immediately provide to the Vendor or to immediately cause the Company to
provide to the Vendor full legible copies of all such notices, notices of
assessment, requests or other communications.
The Purchaser shall cooperate
in good faith at the expense of the Vendor in any attempt made by the Vendor to
obtain the return or refund of all of [sic] any part of the Subject Deposits
including, without limitation, making available to the Vendor those employees
and other persons whose assistance is necessary for the purposes of evaluating
any request for or any notice, notice of assessment, request or other
communication in respect of the Subject Deposits and by making available to the
Vendor all books and records of the Company required for the same purpose.
[Emphasis added.]
[9]
In 2006, the dispute between Canada and the
United States over the legitimacy of the Duties was settled by negotiations
between the governments. The United States agreed to return a portion of the
Duties. Under the terms of the settlement, the USA retained US $1 billion and
returned to Canada approximately US $4.4 billion in deposits and accrued
interest.
This was a global settlement rather than the settlement of
individual claims for those who paid duties.
[10]
The government of Canada designated the agency
Export Development Canada [EDC] to administer a refund mechanism, which was
designed to accelerate the return of duty payments and accrued interest to
Canadian companies. The refund mechanism called for EDC to purchase from
participating companies each companys right to receive a refund. The purchase
price paid by EDC was the amount of refund owing to each company by US Customs,
calculated as a percentage of the total duty paid by the company plus accrued interest.
Thus, each party entitled to a refund received it from EDC, rather than
directly from the US government.
[11]
In September 2006, L&P sought PVRs
assistance in applying to EDC for a refund. On 26 September 2006, Brink stated
that PVR intended to make the claim. The plaintiff acknowledged this, did not
object to PVR submitting the claim, and reminded PVR of its obligations under
the SPA.
[12]
PVR completed the standard form purchase and
sale agreement used by EDC, and the refund was paid to PVR by EDC. The refund
was paid in two instalments: on 30 November 2006, EDC transferred
US $574,346.74 to PVR by wire; and, on 27 March 2007, EDC transferred a
further US $1,204.10, representing a recalculation of interest, to PVR by
wire.
[13]
On 8 December 2006, Brink caused PVR to pay over
to L&P US $378,379.63, less a $12 wire fee, in respect of the first refund.
In making this payment, Brink advised that the amount paid was the first refund
minus 34.12% in applicable taxes. (At a later date, L&P received a
cheque from Brink in the amount of US $793.26, being the amount of the
recalculation of interest less 34.12%. Later, L&P also received a cheque
from Brink in the amount of US $81.85, being interest on the discounted
portion of the recalculation of interest).
[14]
There is no evidence that the plaintiff objected
to the amount it received or questioned PVRs deduction of income tax until
June 2007, when this action was commenced.
[15]
Brink says that it reduced the refund amount by
the amount of tax payable in accordance with clause 14.5 of the SPA
.
The
validity of this interpretation is an issue on appeal.
[16]
On 3 July 2007, after the statement of claim in
this action had been served, PVR caused their accountants to seek
confirmation from Canada Revenue Agency [CRA] that their opinion (i.e.,
that the refunds were taxable income in the hands of PVR) was correct. PVR did
not tell L&P either that they had taken a filing position with respect to
the refund or that they intended to communicate with CRA regarding the
appropriate characterization of the refunds. Based on PVRs submission, on 17 October
2007, the CRA found that what Brink did was in accordance with the tax laws.
[17]
The action was tried by Mr. Justice N. Smith on summary
trial under Rule 18A. The trial judge held that Brink did not breach clause
14.5 when it deducted the amount of tax payable from the refund before sending the
balance to L&P. However, the trial judge held that Brink had an obligation
to co-operate in good faith with L&P and that it breached the contract by
not allowing L&P to make submissions to the CRA. In assessing loss of
opportunity damages, however, the trial judge held that L&P had failed to
prove loss. He therefore dismissed the action.
III.
Issues
[18]
On appeal, L&P argued that the trial judge
erred in declining to award damages for loss of opportunity. Brink argued that
the trial judge erred in finding that there was a breach of contract, but that
in any event, no damages were proven.
IV.
Analysis
Issue 1: Did Brink breach clause
14.5 of the SPA?
Principles of Contractual Interpretation
[19]
The principles of contractual interpretation are
stated by Geoff Hall in
Canadian Contractual Interpretation Law,
1st ed.
(Markham: LexisNexis, 2007).
[20]
At pg. 8, Hall writes:
The
interpretation of a contract always begins with the words it uses. All of the
various aspects of contractual interpretation are rooted in the actual language
used by the parties.
[21]
Hall further states at pgs. 9-10:
While the words of a contract must always be
the starting point for interpretation, it is an overstatement to say that the
interpretive exercise can ever end with them because context is always
important to discerning meaning accurately ...
Context has two separate aspects ...
The first aspect, the context of the
document, is important because words are never used in isolation. As a result,
interpretation of a word or group of words must have regard for the way
language is used in the document as a whole. This element of context is given
effect by the rule that contracts must be read as a whole with meaning given to
all provisions ...
The second
aspect is the context of the surrounding circumstances which give rise to the
contract. There is always a background to a contract. Whether simple or
complex, the background is essential to discerning its correct meaning. In
contractual interpretation, this aspect of context is given effect by the rule
that the factual matrix must be considered when interpreting a contract.
The Contract
[22]
Clause 14.5 has three parts. The words preceding
It is agreed provide the factual matrix. The second part is the agreement
concerning the transfer of refunds and tax payable on the refunds. The third
part records the purchasers agreement to assist L&P in any attempt it
might make to obtain a refund.
Part 1
[23]
As Hall states, above, the second contextual
aspect to contractual interpretation is the surrounding circumstances which
gave rise to the contract. The factual matrix of this contract is described in
the first part of clause 14.5.
[24]
It states:
Since May 22,
2002, The United States Customs and Border Protection Agency has been
collecting cash deposits in respect of countervailing duties on softwood lumber
at the time of entry of applicable product from Canada to the U.S. at a net
duty rate of 18.8% (herein the CVD Deposits). Additionally, the United States
Customs and Border Protection Agency has also been collecting cash deposits in
respect of antidumping duties on softwood lumber at the time of entry of
applicable product from Canada to the U.S. at a net duty rate of 8.4% (herein
the ADD Deposits). The CVD Deposits and ADD Deposits are herein referred to
collectively as the Subject Deposits. The Subject Deposits have been paid by
or on behalf of the Company to and are held by the United States Customs and
Border Protection National Finance Center in respect of each shipment of
applicable product by the Company from Canada to the United States. The
mechanism for collection of the Subject Deposits involves the declaration by
the Company through a customs broker of the value of the product being shipped
with a corresponding actual payment being made via wire transfer from Leggett
& Platt, Incorporated, the indirect ultimate parent of the Company.
The
legitimacy of the duties represented by the Subject Deposits
are currently
the subject of a dispute between Canada and the United States which
may
result in full or partial refunds being made to the payers of such deposits.
[Emphasis added.]
[25]
The opening part of clause 14.5 records a number
of important circumstances in which the contract was made. It records that the softwood
lumber duties have been paid to the United States government on behalf of PVR.
It records that L&P was the party that paid the duties on behalf of PVR. It
records that mechanisms had been implemented by the US government to enable the
payment of such duties.
[26]
The clause also records that the softwood lumber
dispute between the US and Canada was then unresolved. It was unclear to the
parties whether the dispute would be resolved, when it would be resolved, or on
what terms. The parties were aware, however, that the dispute
may result
in
full or partial refunds. The contract was entered into in a climate of
uncertainty as to the resolution of the dispute, and the parties contracted
with that uncertainty in mind and in contemplation of a possible resolution
that would result in a refund.
[27]
With this context in mind, one can consider the
meaning of the agreement recorded in the second part of clause 14.5
Part 2
[28]
As the possibility of a future refund existed,
the parties made the refund an express term of their agreement. The SPA
recognizes that because L&P had paid the duties while it owned PVR, it was
entitled to them in the event of a refund.
[29]
Thus, clause 14.5 states:
It is agreed
that any return or refund of all or any portion of the Subject Deposits in
respect of the period up to and including October 30, 2003
shall be for the
benefit of the Vendor
. [Emphasis added.]
[30]
Since any refund was to be for the benefit of
L&P, the next clause states:
In the event
that all or any portion of the Subject Deposits in respect of the period up to
and including October 30, 2003 are refunded or otherwise returned to the
Company, the Purchaser
shall immediately
cause the Company to
pay
over
to the Vendor the
full amount
of all such refunds or returns.
[Emphasis added.]
[31]
This clause provides that if there is a refund,
Brink shall immediately cause PVR to pay over to L&P the full amount of all
such refunds. This recognizes not only that any refund is for the benefit of
L&P. It also implicitly recognizes that any such refund would likely go to
PVR, given that it was technically the exporter of record. The agreement is
based on the premise that if a refund were to be made, it would likely be the exporter
of record, which was also the party with the relevant documentation, that would
have to deal with the US and would obtain the refund in the first instance.
[32]
The above provision, however, must be read in
light of the next provision, that states:
It is agreed
that the amount of
such payment shall be reduced
by an amount equal to
any income tax
imposed
on the Company as a result of such refunds or
returns being
characterized
as taxable income of the Company pursuant to
the
Income Tax Act (Canada)
. [Emphasis added.]
[33]
These two sentences must be read together. The
second sentence limits the first. In the event that PVR had tax imposed on it
as a result of the refund, the payment to the plaintiff shall be reduced by
the amount of that tax.
[34]
Tax is imposed by law. However, as noted by Vern
Krishna in
Income Tax Law,
(Toronto: Irwin Law, 1997) at pg. 14:
One of the basic
features of the Canadian income tax system is that it relies heavily on
taxpayers to self-assess their income on an annual basis on a prescribed form
and in a prescribed manner ... Thus, in a sense, the system relies on voluntary
compliance.
[35]
While the law imposes tax, it is for each
taxpayer to comply voluntarily with the tax laws and to self-assess income tax.
It was for PVR, who received the refund, to determine whether the refund was
taxable in its hands.
[36]
Read together, the two sentences interact to
permit PVR to receive the refund, to self-assess whether it was subject to
income tax, and if tax was payable, to reduce the amount of the payment to
L&P by the amount of the tax. The effect of the two provisions is to
require Brink to pay L&P the full amount of the refund
minus
the amount of any tax that is assessed against PVR.
[37]
As correctly found by the learned trial judge, these
two sentences achieve two purposes:
[23] The
plaintiff was selling its shares in the company when both parties were aware of
the possibility of a future refund. The plaintiffs parent company had paid the
duties and the new owners of PVR
would receive an unearned windfall in the
absence of a contractual term calling for repayment to the plaintiff. The
purpose of the agreement was to make clear that the plaintiff was entitled to
the refund. The provision allowing PVR to deduct tax is secondary to that major
purpose and provides protection to defendants in the event they could not with
reasonable efforts avoid paying tax on the refund
. [Emphasis added.]
[38]
The main purpose was to ensure repayment to the
plaintiff, who had paid the Duties. This provision would prevent a windfall to
Brink, which had not paid the Duties and had not bargained for the benefit of any
refund with L&P. The first sentence therefore requires that Brink transfer
the refund to L&P.
[39]
The second purpose recognized that while Brink
had not bargained for a windfall, it had also not bargained for a loss. The
underlying assumption of the agreement was that PVR would receive the refund since
it was the exporter of record. The parties recognized that PVR or Brink might
be obliged to pay tax as a result of receiving the refund. The contract was
written so as to avoid this by adding the second sentence. If PVR had tax
imposed on it as a result of the refund, it could reduce the amount of the
payment to L&P by that amount.
Did Brink Breach This Portion of the
Contract?
[40]
Based on this interpretation, and as held by the
trial judge, Brink did not breach this portion of the contract. When PVR received
the refund, Brink was permitted to determine whether that refund was subject to
tax. Having found that it was required to pay tax, Brink was then permitted to
reduce the amount it sent to L&P by the amount of the tax. Clause 14.5 contemplated
that Brink would send L&P a net amount.
[41]
The trial judge correctly found that there was
no breach of this part of the SPA. He said:
[24]
I do not find that there was any
breach of contract in PVR's initial deduction of income tax from its payment to
the plaintiff. Both Mr. Janzen, the company's accountant, and Mr. Brink, the
president of both defendant companies, have sworn that they believed tax was
payable and there is no evidence to suggest those were anything other than
honest opinions reached in good faith. PVR advised the plaintiff that it was
deducting tax and of the amount it was deducting. It was open to the plaintiff,
at that point, to dispute the deduction and advise the defendants of its views
on the taxability of the refund. The plaintiff did not raise the issue at that
time and, in the absence of any protest or notice of the plaintiff's position,
the defendants were entitled to proceed as they did.
[42]
It is to be noted that Brink received a notice
from EDC that the duties were being refunded on 29 November 2006. On 1 December
2006, Brink sent an e-mail to L&P informing it that the refund had been
received, that tax had been assessed, and that the net amount would be forwarded
by cheque. On 8 December 2006 a cheque was issued. This series of events is
consistent with both the immediacy requirement under the first sentence of this
part, and the language of the second sentence.
[43]
Accordingly, the trial judge did not err in
finding that there was no breach of this part of clause 14.5
Part 3
[44]
The third part of clause 14.5 states:
If the Company
or the Purchaser receive any notices, notices of assessment, requests or other
communication
from the United States Customs and Border Protection National
Finance Center or any other government entity or agency or any third party in
respect of the Subject Deposits
, the Purchaser covenants and agrees to
immediately provide to the Vendor or to immediately cause the Company to
provide to the Vendor full legible copies of all such notices, notices of
assessment, requests or other communications.
The Purchaser shall cooperate
in good faith at the expense of the Vendor in any attempt made by the Vendor to
obtain the return or refund
of all of [sic] any part of the Subject
Deposits including, without limitation, making available to the Vendor those
employees and other persons whose assistance is necessary for the purposes of
evaluating any request for or any notice, notice of assessment, request or
other communication in respect of the Subject Deposits and by making available
to the Vendor all books and records of the Company required for the same
purpose. [Emphasis added.]
[45]
The trial judge interpreted this part of the
contract as requiring Brink to permit L&P to participate in its dealings
with the CRA in relation to the tax assessment. The trial judge said:
[25]
However, the defendants became aware of the plaintiff's position six
months later, when this action was begun. At that point, the defendants sought
a ruling from CRA, seeking confirmation of the tax treatment they had already
decided upon.
[26]
The commencement of the action did
not, in my view, put an end to the contract and the obligations under it.
When
they sought a CRA ruling at that point, the defendants still had an obligation
to co-operate in good faith with the plaintiff's efforts to obtain the refund.
In the circumstances, that meant advising the plaintiff of their dealings with
CRA and either putting the plaintiff's proposed tax treatment to CRA or
allowing the plaintiff to do so directly. The defendant's decision to seek a
CRA ruling based on their position without advising the plaintiff was, in my
view, a breach of their obligation under the contract. [Emphasis added.]
[46]
The trial judge held that Brink had breached the
contract because it did not consult with L&P on the tax issue and had not
given L&P the opportunity to argue that the tax assessed by Brink did not
need to be paid because the refund was not taxable in PVRs hands and that
L&P should have received the entire refund before tax. The trial judge held
that L&P had lost the opportunity to argue its tax position to the CRA.
[47]
With respect, in my opinion the trial judge
erred in his interpretation of this part of the contract.
[48]
As noted above, the factual matrix of clause
14.5 is the uncertainty that existed with regard to the softwood lumber dispute
and the possible ways in which it would be resolved. The parties did not know
if the dispute would be resolved. They did not know if a refund would be
available. They did not know the mechanism through which a refund would be
available. That the government of Canada would designate EDC to administer the
deposit refund does not appear to have been within anyones contemplation when
the SPA was made.
[49]
Because of this uncertainty, the contract was
drafted on the basis of a number of assumptions. The parties appear to have
assumed that L&P would be the party to attempt to obtain a refund because
it had the incentive to do so. However, because PVR was the exporter of record,
the parties recognized that it possessed the knowledge, information, and
personnel likely necessary to obtain a refund. Thus, PVRs and Brinks
assistance and co-operation would be essential to L&P obtaining a refund.
[50]
Within this context, it is clear that Brinks
good-faith obligation related solely to situations where L&P (in any
attempt made by the Vendor) attempted to
obtain
the refund. The
contract was written on the assumption that L&P would be the party that
would attempt to obtain the refund and that it would likely have to do so from
the US government. Thus, this part of clause 14.5 ensured that L&P would
receive the co-operation necessary to succeed in that attempt.
[51]
However, as matters turned out, the negotiations
were between the governments, the EDC mechanism was put in place, and it was
not necessary for any of the parties to deal directly with the US government.
L&P, thus, did not need to make any attempt to obtain the refund from the
US government. Rather, the refund was obtainable from EDC. As noted above,
Brink proceeded to make the claim from the EDC. There is no suggestion that it
did not do so properly, fully, and in good faith. It was successful and, as a
result, PVR, as the exporter of record, received the refund from EDC.
[52]
Brink then proceeded to self-assess the tax
imposed on the refund. In doing so, there was not, contrary to the trial
judges holding, a good faith obligation on it to consult with L&P over the
tax issue. Rather, for the reasons noted above, the good faith obligation
applies solely to
obtaining
the tax either from the US
government, as the parties assumed would be necessary, or as it turned out,
from the EDC. Once EDC sent PVR the refund, the refund had been obtained. At
that point, the good faith obligation no longer applied. Instead, the two
clauses requiring immediate transfer and permitting the reduction for tax became
operative. Nowhere in the contract is there a requirement that Brink consult
with L&P during its self-assessment of tax or during its dealings with the
CRA. Thus, Brinks actions in self-assessing and paying the tax were in
accordance with the provisions of the contract.
[53]
In my opinion, therefore, the defendant did not
breach any part of the contract. Because there was no breach of contract, it is
unnecessary to consider the issue of damages for loss of opportunity.
[54]
I would dismiss the appeal.
The
Honourable
Chief Justice Finch
I agree:
The Honourable
Madam Justice Kirkpatrick
I agree:
The Honourable
Madam Justice D. Smith
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Edgewater Casino Inc. (Re),
2010 BCCA 16
Date: 20100118
Docket: CA035922
In the Matter of the
Companies Creditors Arrangement Act
,
R.S.C. 1985, c. C-36, as amended
In the Matter of the
Business Corporations Act
,
S.B.C. 2002, c. 57, as amended
In the Matter of Edgewater Casino Inc. and
Edgewater Management Inc.
Between:
Canadian Metropolitan Properties Corp.
Appellant
(
Applicant
)
And
Libin Holdings Ltd., Gary Jackson Holdings Ltd.
and Phoebe Holdings Ltd.
Respondents
(
Respondents
)
Before:
The Honourable Mr. Justice Mackenzie
The Honourable Mr. Justice Lowry
The Honourable Madam Justice Neilson
On Appeal from:
Supreme Court of British Columbia, March 5, 2008,
(
Edgewater Casino Inc. (Re): Property Tax Issue,
2008 BCSC 280,
Docket S062842)
Counsel for the Appellant:
J. Hunter, Q.C.
J. Henshall
Counsel for the Respondents:
M. Buttery
A. Folino
Place and Date of Hearing:
Vancouver, British
Columbia
December
8 and 9, 2009
Place and Date of Judgment:
Vancouver, British
Columbia
January 18, 2010
Written Reasons by
:
The Honourable Mr. Justice Mackenzie
Concurred in by:
The Honourable Mr. Justice Lowry
The Honourable Madam Justice Neilson
Reasons for Judgment of the
Honourable Mr. Justice Mackenzie:
[1]
This appeal arises as a result of a dispute between a lessor and lessee
over the premises housing the Edgewater Casino in downtown Vancouver. As with
most commercial leases, the disposition of this matter turns on how the parties
intended to, and how they in fact did, arrange their mutual responsibilities
for the premises.
[2]
These reasons address two issues raised on this appeal, the
apportionment of property taxes between landlord and tenant, and whether the
tenant is obliged to contribute to the costs of a successful property tax
appeal. Both issues turn on the interpretation and application of provisions
in clause 3.05 of the lease between the parties.
The
Property Tax Issue
[3]
Clause 3.05 provides that the respondent tenant will indemnify the
appellant landlord for the portion of the increase in property taxes arising
from improvements to the property made by the tenant.
[4]
The lease, technically a sublease, covered part of land leased by the
landlord on the north side of False Creek in Vancouver, known as the Plaza of
Nations site. The site included three buildings, designated A, B, and C, and a
plaza stage for outdoor entertainment. Building A and most of building B
remained in the landlords possession and were not included in the lease. The
tenant extensively renovated building C to convert it to a class II casino and
also renovated a small part of building B for commercial offices. The tenant
was reported to have spent up to $20 million on the renovations of building C,
including the cost of gaming equipment installed in the casino.
[5]
Immediately after the renovations were completed, the property tax
assessed value of the landlords parcel (including the leased premises) increased
from $32,972,000 in 2004 to $59,600,000 in 2006 (reduced on appeal to
$47,500,000).
[6]
The material part of clause 3.05 of the Lease states:
3.05 Taxes for the Lands
The Landlord will be solely responsible for the payment of
all real property taxes for the Lands, except that commencing in 2005, and
continuing in each calendar year thereafter, the Tenant will reimburse the
Landlord for that portion of the increase in the property taxes assessed
against the Lands over the amount of taxes that were payable for the Lands in 2004
which is solely attributable to the increase in the assessed value of the Lands
as a result of the improvements made to the Lands and the Premises by the
Tenant,
determined using the principles and methods used by the British
Columbia Assessment Authority in determining the assessed value of the Lands
.
[Emphasis added.]
Within the lease Lands is
defined to mean lands and all improvements thereon.... Premises is defined
to mean the premises leased by the tenant, including building C, part of building
B, and the plaza building.
[7]
The first issue is the proper basis for determining what portion of the
increased property tax came as a result of the tenants improvements. The
chambers judge concluded that the portion should be determined on the basis of
the increased building values on the property assessment notices from 2004 to
2006. The difficulty arises from the fact that while the buildings value
increased from $1,268,000 in 2004 and 2005 to $5,455,000 in 2006, the total value
of the landlords property rose from $32,972,000 in 2004 to $47,500,000 in
2006. This was largely a result of an increase in value assigned to land from
$30,504,000 in 2004 to $40,777,000 in 2006. The landlord contended that a
substantial portion in the increase in value assigned to the land resulted from
the tenants improvements.
[8]
The chambers judge rejected that submission. He concluded that the
increase in taxes allocated to the tenant should be based on the increased
building values set out in the property assessment notices.
[9]
The landlord submits that the chambers judge erred in failing to give
effect to the provision in clause 3.05 that the increase in property tax
assessment solely attributable to the tenants improvements should be
determined using the principles and methods used by the British Columbia
Assessment Authority in determining the assessed value of the Lands. The
evidence demonstrates that the Assessment Authority (BCAA) adopted an income
capitalization approach to the valuation of the subject property. Essentially
the approach involved determining an estimated net operating income (NOI) and
applying a capitalization percentage rate to produce a valuation of the
improved portion of the property. The report of Philip Gertsman, the expert
employed by the landlord for the conduct of the assessment appeals, explains
the income method in more detail:
·
The square footage of the rentable areas of the various
components is determined
·
Market rents are determined for the various components
·
The rentable areas are multiplied by the market rents (Gross
Potential Rent)
·
A stabilized vacancy and non-recoverable expense allowance is
deducted from the Gross Potential Rent to calculate a net operating income
·
A market capitalization rate is determined
·
The net operating income is divided by the capitalization rate.
[10]
The NOI did not change significantly between 2004 and 2005, when the
casino was under construction, but it jumped from $1,600,000 to $2,881,592 in
2006, when the casino was completed. There were no other material improvements
to the Plaza of Nations site in the relevant period and Mr. Gertsman attributed
the increase in the NOI to the casino. The increase in NOI flowed through to
the increase in total assessed value of the Plaza of Nations site from approximately
$33 million in 2004 to $47.5 million in 2006.
[11]
However, given the process for building value attribution used in
producing the property assessment notices, the increase attributable to the
casino improvements on the income approach is not reflected in the allocation
between land and buildings on the notices. Instead, the notices show a
much more modest increase for buildings from $1.2 million in 2004 to $5.5
million in 2006. The allocation to buildings on the original 2006 assessment
notice was $17.5 million but as a result of submissions by Mr. Gertsman it was
reduced in successive appeals to $5.5 million. He deposed that approximately
$2.7 million of this reduction reflected a reduction of the value of the casino
as a result of a change in capitalization rate, and increases in the vacancy
and non-recoverable expense allowances. The balance of the reduction,
approximately $9.5 million, resulted from a reduction of an excess density
factor by the assessor under the income approach. A summary explanation of the
excess density factor is provided in the report of real estate appraiser Russ
Reynolds:
[T]he reductions obtained through appeal relate exclusively
to Buildings A & B, thus they are inconsequential when analyzing the
increase solely attributable to Building C. Mr. Gertsman successfully argued
that part of the assessment as it relates to Buildings A & B was redundant
(double counting) as the Assessor was valuing both the income value of
Buildings A & B as well as the value of the excess density that could only
be maximized if Buildings A & B were demolished. This is evidenced by the
2006 Property Assessment Appeal Board recommendation, which stated the
following:
The net income from two of the buildings had to be
revised because the income stream would be negatively affected in order to take
advantage of excess density on site.
This explanation demonstrates
how the reduction in value as a result of the excess density factor is only attributable
to buildings A and B and not attributable to building C, the casino.
[12]
Mr. Reynolds also provided an explanation for why so little of the
increase in the property value was allocated to buildings on the assessment
notice, and why this effect was further exaggerated by the application of the
2006 appeal reductions entirely to the buildings line:
The reason Building values appear
low, relative to their value by the Income Approach is because under the
Assessment
Act
there is a requirement to allocate values between Land and Buildings.
Consequently, values shown on the assessment notice have been allocated based
upon current (actual) market value and Building values have been allocated
based upon a residual valuation technique. Therefore, the Building assessed
values as shown on the property assessment notice and property tax bill, do not
correspond to the overall improvement value as established by the Income
Approach as shown on the Assessors Property Valuation Summary.
[13]
The tenant challenged the opinion of Mr. Gertsman with the expert report
of Tim Down. Mr. Down opined that the Tenants 2006 property tax obligation
should be determined by measuring the difference between the 2004 Property
Assessments income approach to value and the 2006 Property Assessment Appeal
Board Decision Notice Value. Mr. Down argued that no portion of the increase from
$30.5 million to $40.8 million allocated to land should be attributed to the
tenant because the result of the 2006 appeal meant that little or none of the increase
was assigned to the tenants improvements. Mr. Reynolds disagreed. In his
opinion, Mr. Downs comparison was inconsistent as it compared different
figures. He argued that Mr. Downs erred in comparing values determined by the
income approach in 2004 to residual allocated values in 2006, instead of using the
properly comparable 2006 income approach valuations. Mr. Reynolds agreed with
Mr. Gertsman that the combined effect of the income approach applied by the
assessor and the residual allocation used in the assessment notice embedded the
increase in value resulting from the tenants improvements in the land line
of the assessment notice. He also agreed that the excess density reductions
achieved by Mr. Gertsmans submissions on appeal were properly assigned to
buildings A and B retained by the landlord and not to the building C casino
where the tenants material improvements were made.
[14]
The chambers judge did not address these issues as he relied solely on
the values allocated to buildings on the face of the assessment notices. In my
view, that approach was in error as it failed to follow the terms of clause
3.05 and determine the values using the principles and methods used by British
Columbia Assessment Authority, namely the income approach. Under that
approach used in this case, the values allocated to buildings on a notice
result from a residual calculation and do not reflect the income approach value
of the tenants improvements.
[15]
The chambers judge gave some weight to a 2006 invoice sent by the
landlord to the tenant that reflected a different approach than the income
approach. The 2005 and 2006 invoices were inconsistent and were apparently
prepared by a clerk in the landlords office without regard to the principles
and methods used by the assessor. In my view, they are of no assistance in
determining the proper application of clause 3.05.
[16]
The three experts agree that the assessor applied an income approach to
valuation. Mr. Down disagreed with Mr. Gertsman and Mr. Reynolds on the amount
that is solely attributable to the increase in value as a result of the
tenants improvements. I am persuaded that Mr. Reynolds critique of Mr. Downs
analysis is correct and Mr. Down erred in comparing 2004 income values to 2006
allocated values in determining the increase in assessed value solely
attributable to the tenants improvements. Lands as defined includes both
land and improvements. Consequently it is the increase in both resulting from
the improvements irrespective of whether it is reflected in the assessment
notice allocation between land and buildings.
[17]
I would allow the landlords appeal on this issue and direct that the
increase in value solely attributed to the tenants improvements be determined
as calculated by Mr. Gertsman and Mr. Reynolds.
The
Appeal Costs Issue
[18]
The second issue to be decided is whether the tenant is liable for expenses
claimed by the landlord for the successful 2006 assessment appeals, primarily
the fees paid to Mr. Gertsman as agent. The chambers judge rejected that claim
on the ground that the lease did not require contribution as the tenant did not
participate in the appeals. This issue, as with the prior one, turns on the
application of a provision in clause 3.05 of the lease which reads:
The Tenant is entitled to appeal
any assessment of the value of the Lands for property tax purposes or any
assessment of property taxes against the Lands, and the Landlord will
co-operate with the Tenant in any such appeal and permit the Tenant to conduct the
appeal in the name of the Landlord if necessary, and the Tenant will indemnify
the Landlord against the expenses and costs of the appeal.
If the Landlord
also wishes to appeal any such assessment that the Tenant wishes to appeal,
then the Landlord will allow the Tenant to participate in such appeal, at the
Tenants own cost, and the Landlord will take into account the interests and
position of the Tenant in prosecuting that appeal
. [Emphasis added.]
The landlord contends that the conclusion that the tenant
did not participate in the appeal is unreasonable. It argues that the appeals
benefited both landlord and tenant and that the tenants representative, Gary
Jackson, met with Mr. Gertsman and the landlords representative and expressed
dissatisfaction with the 2006 assessment
[19]
Mr. Gertsman had acted as the landlords property tax consultant for
several years. He was engaged by the landlord pursuing this appeal as the
party to which the assessment notice was directed. Mr. Gertsman deposed that he
understood at the end of the meeting that he was authorized by the tenant as
well as the landlord to appeal the assessment. The landlords representative,
Daisen Gee-Wing, supported that understanding.
[20]
Clause 3.05 contemplates two alternatives, either a tenants appeal in
which the landlord lends its name if necessary in return for an indemnity
against costs, or a landlords appeal in which the tenant is allowed to
participate, at its cost. In this instance, the evidence supports the
conclusion that the landlord appealed and engaged Mr. Gertsman. The formal
letter of engagement is solely between the landlord and Mr. Gertsmans firm,
Deloitte & Touche. The tenant had no involvement in pursuing the appeals
after the meeting referred to above.
[21]
The chambers judge concluded that the tenant did not participate in the
appeals and I think that it was open to him to find that Mr. Jacksons comment
at the meeting was insufficient to amount to participation in the appeal within
the terms of clause 3.05. In my view that clause contemplates more active tenant
involvement and some attention to the cost exposure reflected in that active
involvement. Those elements are lacking here. Furthermore, the engagement
letter is a contract only with the landlord. Clause 3.05 does not contemplate
the tenants liability for costs other than as a result of willing
participation in the appeal and in my view there is no equitable basis for a
cost-sharing obligation outside its terms.
[22]
Accordingly, I would not give effect to the landlords appeal on the
assessment appeal costs issue.
[23]
In the result, I would allow the appeal on the property tax issue and
dismiss the appeal on the issue of the costs of the assessment appeals.
The
Honourable Mr. Justice Mackenzie
I AGREE:
The Honourable Mr. Justice Lowry
I AGREE:
The Honourable Madam Justice Neilson
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Edgewater Casino Inc. (Re),
2010 BCCA 17
Date: 20100118
Docket: CA035924
In the Matter of the
Companies Creditors Arrangement Act
,
R.S.C. 1985, c. C-36, as amended
In the Matter of the
Business Corporations Act
,
S.B.C. 2002, c. 57, as amended
In the Matter
of Edgewater Casino Inc. and
Edgewater Management Inc.
Between:
Canadian Metropolitan Properties Corp.
Appellant
(
Applicant
)
And
Libin Holdings Ltd., Gary Jackson Holdings Ltd.
and Phoebe Holdings Inc.
Respondents
(
Respondents
)
Before:
The Honourable Mr. Justice Mackenzie
The Honourable Mr. Justice Lowry
The Honourable Madam Justice Neilson
On appeal from: Supreme
Court of British Columbia, December 18, 2007, (
Edgewater Casino Inc. (Re):
Utilities Issue
, 2007 BCSC 1829, Docket S062842)
Counsel for the Appellant:
J.J.L. Hunter, Q.C.
and J.A. Henshall
Counsel for the Respondents:
M. Buttery and A.
Folino
Place and Date of Hearing:
Vancouver, British
Columbia
December
8 and 9, 2009
Written Submissions Received:
December
15, 2009
Place and Date of Judgment:
Vancouver, British
Columbia
January 18, 2010
Written Reasons by
:
The Honourable Mr. Justice Lowry
Concurred in by:
The Honourable Mr. Justice Mackenzie
The Honourable Madam Justice Neilson
Reasons for Judgment of the
Honourable Mr. Justice Lowry:
[1]
The question is whether, under the terms of a commercial lease, the costs
of utilities incurred over several months during the fixturing of the premises
were to be borne by the tenant, and, if not, whether the terms are to be
rectified so that the tenant would bear those costs.
[2]
The landlord, Canadian Metropolitan Properties Corp., is the owner of
the Plaza of Nations. The tenant, Edgewater Casino Inc., leased one of the
buildings on the site, Building C, to open and operate a casino. It also leased
office space in another building, Building B. The named respondents were at the
material times the owners of Edgewater. The question arises in the context of
the tenant seeking a set-off of the utility costs in issue, which it has in
fact paid, against claims made by the landlord in proceedings under the
Companies
Creditors Arrangement Act
, R.S.C. 1985, c. C-36 (
CCAA
) taken for
the benefit of the tenant. The proceedings involved other creditors in addition
to the landlord. The set-off is sought on the basis the utility costs were paid
to the landlord by mistake. The landlord maintains the parties agreed the
tenant would pay those costs.
[3]
The claims of all of the other creditors have been satisfied and an
amount sufficient to meet the landlords claims has been placed in trust. The
judge who had conduct of the proceedings concluded a mistake had been made. The
landlord contends the judge erred and now appeals.
[4]
Before us, the landlord initially took the position it was not open to
the judge to grant a judgment against it as a claimant in the
CCAA
proceedings. The suggestion was that any amount the tenant was entitled to set off
would be less than a complete reimbursement for the utility costs at issue. But
the position has been abandoned such that the appeal can be considered as a
claim made by the tenant for the return of costs paid to the landlord which are
said to have been paid by mistake.
The
Lease
[5]
The circumstances and the provisions of the lease that are material to
the appeal can be briefly stated.
[6]
Discussions between the parties appear to have begun in the summer of
2003. They led to the tenant preparing a proposal for the lease of the premises
which it gave to the landlord in the form of a Term Sheet in September and
amended in October. The tenant set out the principal provisions for a formal
lease having a three-year term commencing on the opening of the casino
(expected to be in 2004) with the annual rent being approximately $2.2 million,
increased in October to $2.5 million. There was apparently no express
acceptance of the terms proposed but the landlord authorized the tenant to
apply in the landlords name for rezoning necessary to the operation of a
casino. The tenant engaged architects to design improvements to the buildings,
apply for the rezoning, and obtain development permits. The tenant then
renovated the office space to be leased in Building B at a cost of $500,000. It
moved into that space and took possession of Building C in May 2004. It then
undertook extensive demolition and renovation work to construct the casino. A
draft lease was prepared by solicitors for consideration in May, but the lease
was not executed until November. By that time, the tenant had spent in the
order of $10 million on Building C. The casino opened in February 2005.
[7]
In May 2004, when the tenant took possession, the parties negotiated the
rent to be paid from then until the casino opened: the fixturing period. The
tenant proposed what it described as a concept plan and a revised concept
plan in two letters it sent to the landlord early in the month for the
landlords consideration. The tenant proposed to pay $145,833.33 in what became
termed Occupation Rent each month. Payments for May and June were to be made
on June 30 with all further payments being deferred until after the casino
opened.
[8]
The lease provides:
3.01 Rent
The Tenant will pay to the Landlord rent, monthly in advance,
in lawful money of Canada, commencing on the Commencement Date and continuing
on the first day of each and every month thereafter during the Term, calculated
as follows ...
Except as set expressly forth in
Articles 3.03, 3.04 and 3.05, the rent payable under this Article 3.01 includes
all amounts that might otherwise be payable in respect to utilities, taxes,
common area operating expenses and insurance and no additional rent is payable
by the Tenant to the Landlord.
3.02 Utilities for Building B
The Landlord will supply and pay
for all utilities reasonably required by the Tenant for its business operations
in Building B including, without limitation, heating, ventilation and
air-conditioning, power and water, provided that the Tenant will be responsible
for its own telephone and cable service.
3.03 Utilities for Building C
... The Tenant will pay the
Landlord for the steam heat and electricity consumed on the Premises as
determined by check meters where installed, and will pay all charges
attributable to Building C for the supply of ventilation and air-conditioning,
and for steam heat where such supply to Building C is not subject to check
meters....
3.07 Additional rent
All monies other than rent and
goods and services tax which from time to time may be owing by the Tenant to
the Landlord pursuant to this lease are hereby deemed to be additional rent. The
Tenant will pay any such money to the Landlord upon demand by the Landlord
unless other terms for payment are expressly stipulated in this lease....
4.01 Possession of Premises and occupation rent
The Tenant will obtain vacant possession of the Premises on
May 4, 2004 for the purpose of constructing its improvements pursuant to
Article 7.03....
Except as specifically set forth
herein, no rent or additional rent will be payable by the Tenant prior to the
Commencement Date, but the Tenant will otherwise be bound by the Tenants obligations
under this lease. The Tenant will owe to the Landlord occupation rent (the
Occupation Rent) for the period commencing on May 1, 2004 ... and continuing
to and including the day prior to the Commencement Date, in the sum of
$145,833.33 per month, ... The payment of such Occupation Rent ... will be
deferred and paid by the Tenant to the Landlord as follows ...
16.13 Entire agreement
Except as expressly set out
herein, there are no representations, warranties, conditions or collateral
agreements between the Landlord and the Tenant.
[9]
The Commencement Date is defined as the date that the Tenant opens
Building C for business to the public.
[10]
At the end of December 2004, the landlord invoiced the tenant for the
utility costs from May to November. Thereafter, the landlord continued to
invoice the tenant for such costs, and all of the invoices were paid. The
invoices were initialled for payment by the tenants principal who had
negotiated the lease, and the cheques were signed by him and by another of the
tenants principals. The utility costs for the fixturing period that were paid
were about $180,000.
The Judgment
[11]
Before the judge, the landlord argued the parties had entered into a
general oral agreement, predicated on the Term Sheet, under which the tenant
would pay the utility costs for Building C during the fixturing period prior to
the Commencement Date. It then argued clause 4.01 of the lease was to be
interpreted as deferring the tenants payment of the subject utility costs
under clauses 3.03 and 3.07. Finally, the landlord argued that, if necessary,
the lease was to be rectified to provide that the tenant was to pay the utility
costs during the fixturing period.
[12]
The judge gave no credence to the notion of an oral agreement and he
rejected the interpretation of clause 4.01 for which the landlord contended. He
said (2007 BCSC 1829):
[21] The Lease is clear on its face. For the period leading
up to the Commencement Date, no rent or additional rent will be payable by
Edgewater except for the sum of $145,833.33 per month. Regarding the term
sheets relied upon by CMPC, it is clear that all of the references relating to
utility costs refer to what clauses would be included in the Lease and not to
the occupation rent
for the period commencing on May 1, 2004
and
continuing to and including the date prior to the Commencement Date
..
[22] Clause 4.01 could not be any clearer. The parties to
the Lease determined that only rent of $145,833.33 per month would be paid
prior to the Commencement Date and there would be no other provision for any
other rent or any additional rent as that term is defined in the Lease.
* * *
[31] I also reject the submission that the only effect of
Clause 4.01 was to defer the payment of rent and not to preclude the cost of
utilities being collected from Edgewater. First, Clause 4.01 is clear. Second,
the provisions of Clause 3.01 cannot override the clear provisions of Clause
4.01 which deals with the period prior to the Commencement Date. Third, the
rent actually invoiced and paid for May and June, 2004 amounts to $291,666.66
or $145,833.33 per month as was agreed to between the parties. There is nothing
in evidence which would allow me to conclude that the cost of utilities was
ever sought by CMPC for May and June, 2004. I find this as further evidence
that it was never intended that the cost of utilities would be payable over and
above $145,833.33 per month.
[32] I am also satisfied that
the provisions of Clause 16.13 of the Lease result in Clause 4.01 being
conclusive as to what rent, if any, would be paid prior to the Commencement
Date. Clause 16.13 precludes the argument raised by CMPC that there were
collateral agreements between Edgewater and CMPC regarding the alleged
requirement of Edgewater to pay the cost of utilities prior to the Commencement
Date.
[13]
With respect to the landlords contention the lease was to be rectified,
the judge considered that, as a matter of law, it could not be accepted,
principally because it had not been established any agreement concerning the
utility costs for the fixturing period existed before the lease was executed.
[14]
The judge then concluded:
[44] I am satisfied that the payments made on account of
utilities up to and including the Commencement Date were made as a result of a
mistake. The arrangement in place prior to the Commencement Date and the Lease
did not require the payment of those utility charges. Expenditures made by
mistake may be recovered in circumstances where restitution is sought and there
are no mitigating factors such as a change of position or estoppel: ...
[45] As I can find no agreement
that Edgewater would pay for the cost of the utilities prior to the
Commencement Date, as I can find that CMPC in no way changed its position as a
result of the payments made and as I cannot find that Edgewater should be
estopped from claiming that the payments made should be reimbursed to it, I
find that Edgewater should be reimbursed for all utility payments made by it to
CMPC for the period up to and including the Commencement Date.
[15]
Judgment with pre-judgment interest was granted as follows:
[66] [The tenant] will be
entitled to a Judgment against CMPC for all utility charges paid by Edgewater
relating to the period prior to the Commencement Date as defined under the
Lease plus prejudgment interest on the sums paid to and including the
Commencement Date from the date of payment to the date of the Judgment.
Discussion
[16]
Faced with the entire agreement clause in the lease, the landlord puts
its case now on the interpretation of clause 4.01, maintaining the utility
costs payable by the tenant under clause 3.03 for Building C were to be
deferred in the same way as the payment of Occupation Rent was deferred. The
landlord says any ambiguity there may be in that regard is to be resolved with
reference to the negotiations between the parties reflected in the Term Sheet.
[17]
The landlord contends clause 3.03 obligates the tenant to pay the
utility costs for Building C and that under clause 3.07 they are payable as
additional rent on demand. It says the provision that additional rent will not
be payable by the tenant until the Commencement Date has to do with nothing
more than the timing of the payments. The words but the Tenant will otherwise
be bound by the Tenants obligations under this lease in clause 4.01 affirm
that the deferral does not affect the obligation to pay.
[18]
I am unable to read clause 4.01 as deferring the payment of utility
costs. In my view, the clause serves to provide that, except for Occupation
Rent which does not include utility costs, the tenant was required to pay no
rent or additional rent until the Commencement Date when the tenant opened
Building C for business to the public. Clause 3.01 makes provision for the
payment of rent to begin on the Commencement Date. There is no provision for
the commencement of the payment of utility costs, which are additional rent,
other than clause 4.01 which provides neither rent nor additional rent will be
payable until the Commencement Date. Like the judge, I consider it perfectly
clear that, on the terms of the lease as executed, the tenant had no obligation
to pay utility costs for Building C until the casino opened in February 2005.
[19]
The real question is whether clause 4.01 should be rectified to provide
utility costs were to be paid by the tenant from the date it took possession in
May 2004. While I question the judges analysis, I do not consider the landlord
has made out a case for rectification.
[20]
I do not consider what was once seen as a requirement that a prior
agreement be established has continued to be essential to obtain rectification
in the case of a mutual mistake. As discussed in
Fraser v. Houston
, 2006
BCCA 66, 51 B.C.L.R. (4th) 82 at paras. 26-30, what the party seeking
rectification must prove, on evidence which is compelling, is that, up to the
time the agreement sought to be rectified was executed, there existed a
continuing common intention on the point in issue, outwardly expressed, that is
at odds with the executed terms such that what was written was not what the
parties intended.
[21]
The landlord contends the mutual mistake was the inclusion of the words
or additional rent employed in the second paragraph of clause 4.01. It says
their deletion would result in the lease properly reflecting the parties
common intention in November 2004, when the lease was executed, to obligate the
tenant to pay the utility costs for Building C from the time it took possession
in May. It says the evidence in support is to be found in the provisions of the
Term Sheet, statements made to the tenants principals, and in the conduct of
the parties after the lease was executed, when the landlord invoiced the tenant
for the utility costs during the fixturing period and the tenant paid the
invoices.
[22]
Assuming the deletion of the words or additional rent would serve to
render the tenant liable for utility costs for Building C from the date of
possession, I do not consider it can be said the evidence on which the landlord
relies is at all compelling.
[23]
I find no support in the Term Sheet for the contention there was a
continuing common intention the tenant would pay utility costs before the
Commencement Date. The Term Sheet did provide for the tenant to pay utility
costs, but it was a proposal for a lease of the premises for a three-year term
beginning when the casino opened. It contained no provision for any payment by
the tenant before then. I see nothing in the Term Sheet amounting to a proposal
by the tenant that the tenant would pay utility costs before what became the
Commencement Date.
[24]
Similarly, there appears to be little in what was said to the tenant
that is indicative of a common intention the tenant would pay utility costs for
Building C during the fixturing period. There is no evidence the tenants
principals ever said the tenant would pay utility costs before the casino
opened. The most the landlord can say is that its general manager, who
negotiated the lease, had occasion to speak to the tenants principals about
leaving the doors to Building C open when they started the demolition work
there. He testified on discovery he told them it was money out the window and
they were paying for it. Why that would be a concern during the spring and
summer months from May to at least August is not clear to me. The judge
expressed doubt about the evidence, particularly as there was no written follow-up
confirming the landlords expectation that the tenant would be paying the
wasted utility costs. But even taken at face value, the evidence is
indicative of no more than what the landlords general manager had in mind. It
does not equate to a common intention with respect to utility costs during the
fixturing period.
[25]
The only other evidence offered as to the general managers assertion
the tenant would be responsible for the utility costs is a comment he made on
the first draft of the lease in August 2004 that it had been agreed the tenant
would be responsible for any utilities used and a remark one of the tenants
principals noted the following month that the general manager said the tenant
should pay all charges attributable to Building C. There is nothing of a common
intention concerning the subject utility costs in this evidence.
[26]
Finally, I do not consider the parties conduct after the lease was
executed constitutes any support for the rectification sought. While invoicing
the tenant for the utility costs for Building C from May 2004 to January 2005
may well reflect the landlords expectation, the judge found the tenant paid
the invoices by mistake and there is the evidence of the tenants principals
that supports that finding.
[27]
Thus, it is my view that no case certainly no compelling case for
rectification was made out. Clause 4.01 stands as executed and means the tenant
was not required to bear any of the utility costs for Building C prior to the
Completion Date in February 2005.
Ancillary Questions
[28]
The landlord contends the judge erred in his finding the landlord in no
way changed its position as a result of the invoices for the subject utility
costs being paid when he concluded the tenant was entitled to restitution for
its mistake (para. 45 quoted above). The landlord says that there was a
change of position that constitutes a mitigating factor which precludes the
restitution to which the judge concluded the tenant was entitled. The landlord
says that, as part of the sale of the tenant in conjunction with the
CCAA
proceedings, an amendment to the term of the lease was required. The landlord
agreed to the amendment before the tenant claimed the invoices were paid by
mistake. Based on a statement made by its general manager in an affidavit, the
landlord maintains it would not have changed its position by agreeing to the
amendment if it had known the tenant intended to take the position it does and
claim a set-off.
[29]
The landlord accuses the tenant of having waited to disclose its claim
to a set-off until it had successfully manoeuvred through the
CCAA
proceedings, all to the landlords disadvantage. The landlord did not, however,
advance this position before the judge. It appears to have waited and raises it
now, on this appeal, for the first time. I do not consider the contention
should be entertained.
[30]
The point requires a factual determination. The statement of the general
manager relied on by the landlord is not that there would have been no
agreement to the extension of the lease had the tenant disclosed its claim to a
set-off, but rather, had the landlord known of various claims the tenant
eventually raised, including the claim for a set-off concerning the subject
utility costs, the extension to the lease would not have been agreed until
such claims were resolved. That is not the same as saying the landlord would
not have agreed to an extension of the lease and may raise a question as to
whether the landlords position was actually altered as a consequence of the
timing of the set-off claimed in respect of the subject utility costs.
[31]
In any event, the contention rests on accepting what the general manager
says to have been the case and, as indicated, the judge did express doubt about
at least one other aspect of his evidence. I do not consider the point can be
said to be sufficiently factually sound to permit this Court to conclude the
tenant is not entitled to the reimbursement for which the judge gave judgment
because of a mitigating circumstance the landlord did not see fit to raise
before the judge.
[32]
The landlord says the judge erred in awarding pre-judgment interest from
the date the payments for the subject utility costs were paid. It maintains
interest ought to have been awarded only from the time the tenant effectively
made demand for repayment, relying on
Stewart v. Fraser River Bridge
Holdings Ltd.
, 2007 BCSC 1002 at para. 14. But the reasoning for the award
made in that case is not expansive. The tenant cites
Service Packing Co. v.
Fraser Valley Mushroom Growers Co-operative Assn.
, [1985] 3 W.W.R. 474 at
476, 479-80, 60 B.C.L.R. 336 (S.C.) in support of the judges award. The
two decisions of the trial court are at odds on the point.
[33]
Section 1(1) of the
Court Order Interest Act,
R.S.B.C. 1996,
c. 79, provides that a court must add to a pecuniary judgment an amount of
interest calculated from the date on which the cause of action arose. Here, no
demand for repayment was required for the cause of action to arise. It arose when
the mistake was made and the invoices for the subject utility costs were paid. In
my view, the judge made no error in his award of pre-judgment interest.
Disposition
[34]
I would dismiss the appeal.
The Honourable Mr. Justice Lowry
I
agree:
The
Honourable Mr. Justice Mackenzie
I
agree:
The Honourable Madam Justice Neilson
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Larc Developments Ltd. v. Levelton
Engineering Ltd.,
2010 BCCA 18
Date: 20100118
Docket:
CA037113
Between:
Commonwealth Insurance Company
Plaintiff
And
Larc Developments Ltd. and Rita A.
Carle
Appellants
(
Defendants
)
And
Levelton Engineering Ltd.
Respondent
(Third Party)
Corrected Judgment: The paragraph numbering of the judgment was
corrected at paragraph 14; and, from paragraph 33 onwards on March 19, 2010.
Before:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Chiasson
The Honourable Mr. Justice Frankel
On
appeal from: Supreme Court of British Columbia, April 29, 2009 (
Commonwealth Insurance Company v. Larc Developments Ltd.
, S076455)
Counsel for the Appellant:
S.H.
Stephens
Counsel for the Respondent:
E.
Flores
Place and Date of Hearing:
Vancouver
, British Columbia
December 15, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
18, 2010
Written Reasons by
:
The Honourable Mr. Justice Chiasson
Concurred in by:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Frankel
Reasons for
Judgment of the Honourable Mr. Justice Chiasson:
Introduction
[1]
Since 1977 the law of this Province has been that a demand for
particulars is a step in a proceeding that, under applicable legislation,
disentitles a party from obtaining a stay of the proceeding in favour of arbitration.
In this case, the Chambers judge ordered a stay because the demand for
particulars was accompanied by an indication that the demanding party might
seek a stay in favour of arbitration.
[2]
For the reasons that follow, I would allow this appeal and set aside the
stay of proceedings.
Background
[3]
This action concerns claims arising out of the
construction of leaky condominiums. The defendants were involved in the
development of the project. On December 5, 2008 they initiated third party
proceedings against a number of entities including Levelton Engineering Ltd. Levelton
filed an appearance on December 18, 2008.
[4]
The contract between the defendants and Levelton
provided that [a]t the option of [Levelton], all unresolved disputes shall be
referred to and finally resolved by arbitration
.
[5]
On December 29, 2008, counsel for Levelton wrote to counsel for the
defendant stating:
Further to our letter dated December 22 , 2008, we are writing to demand further and better particulars of certain
allegations contained in the Third Party Notice. Specifically:
1.
Paragraph 12 of the
Third Party Notice sets out alleged Defects and Deficiencies. Such alleged
Defects and Deficiencies are then generally referred to in paragraphs 30, 31
and 33 in specific reference to Levelton Engineering Ltd.
2.
With
respect to paragraph 12:
a.
Subparagraph a, is it
alleged that the condensation problems had anything to do with the work or
services provided by Levelton Engineering Ltd.? If it is, what was it that
Levelton Engineering Ltd. did, or failed to do in respect of that alleged defect
or deficiency?
b.
Subparagraph
b, is it alleged that the water ingress in the ceiling assemblies had anything
to do with the work or services provided by Levelton Engineering Ltd.? If it
is, identify all units alleged to have suffered water ingress in the ceiling
assemblies and advise what it was that Levelton Engineering Ltd. did, or failed
to do in respect of that alleged defect or deficiency?
c.
Subparagraph
c, is it alleged that the installation and freezing of frost free hose bibs
had anything to do with the work or services provided by Levelton
Engineering Ltd.? If it is, what was
it that Levelton Engineering Ltd. did, or failed to do in respect of that
alleged defect or deficiency?
d.
Subparagraph
d, is it alleged that the water ingress into units due to the inadequate or
inappropriate application of waterproof membrane had anything to do with the
work or services provided by Levelton Engineering Ltd.? If it is, which units
were involved, when did the water ingress occur in respect of each unit and
what was it that Levelton Engineering Ltd. did, or failed to do in respect of
that alleged defect or deficiency?
e.
Subparagraph
e, is it alleged that the design, installation and/or supply of materials with
respect to the porticos over the entry doorways to the units at Boxwood Green,
and in particular defects in respect to drainage had anything to do with the
work or services provided by Levelton Engineering Ltd.? If it is, which units
are alleged to have suffered this defect or deficiency and what was it that
Levelton Engineering Ltd. did, or failed to do in respect of that alleged
defect or deficiency?
f.
Subparagraph
f, is it alleged that the design and construction of the roof and deck rails had
anything to do with the work or services provided by Levelton Engineering Ltd.?
If it is, what was it that Levelton Engineering Ltd. did, or failed to do in
respect of that alleged defect or deficiency?
g.
Subparagraph
g, is it alleged that the water ingress through cracks in the parking garage
had anything to do with the work or services provided by Levelton Engineering
Ltd.? If it is, what was it that Levelton Engineering Ltd. did, or failed to
do in respect of that alleged defect or deficiency? Further, where and when
did the cracks first appear and was a claim made under the membrane
manufacturer's warranty? If a warranty claim has been made please provide
details of that claim.
We would be grateful if these particulars
could be provided within two weeks of the date of this letter, as they are
required for the preparation of a Statement of Defence.
In addition, we have reviewed the contract
between our client and yours dated July 15, 2003 and note that paragraph 3.6
deals with Dispute Resolution. It is quite clear in our view that the dispute
that is raised in the Third Party Notice is subject to this provision. Therefore,
the litigation cannot proceed until mediation and if necessary, arbitration has
occurred between our clients. In the circumstances we would expect your client
to discontinue the Third Party proceedings against our client in order to avoid
forcing us to apply to the Court for a stay of proceedings. If it is
ultimately found that your client is liable to the plaintiff for any matter
that may have been within the contractual responsibility of our client then we
would be pleased to discuss mediation and arbitration in accordance with
paragraph 3.6.
We look forward
to receiving the particulars or your advice that the Third Party proceedings
will be discontinued against Levelton Engineering Ltd. at your earliest
convenience. If you do not
receive
instructions to discontinue these proceedings then please be advised that we
will be seeking instructions to proceed with an application to the Court for an
order staying these proceedings.
[6]
No particulars were delivered and the third party proceedings were not
discontinued.
[7]
On February 10, 2009, Levelton applied for a stay of proceedings in
favour of arbitration, which was granted on April 29, 2009 pursuant to s. 15(1) of the
Commercial Arbitration Act
, R.S.B.C. 1996, c. 55:
15 (1) If a party to an arbitration
agreement commences legal proceedings in a court against another party to the
agreement in respect of a matter agreed to be submitted to arbitration, a party
to the legal proceedings may apply, before or after entering an appearance and
before delivery of any pleadings or taking any other step in the proceedings,
to that court to stay the legal proceedings.
(2) In an
application under subsection (1), the court must make an order staying the
legal proceedings unless it determines that the arbitration agreement is void,
inoperative or incapable of being performed.
The Chambers
judgment
[8]
The judge referred to the applicable legislation
and contract provisions and noted that the defendants opposed a stay on the
basis Levelton had taken a step in the litigation. This was based on
Fofonoff
v. C and C Taxi Service Limited
(1977), 3 B.C.L.R. 159 (S.C.), which held
that a demand for particulars is a step in a proceeding because Rule 19(17) of
the
Rules of Court
requires a demand before an application for an order
for particulars can be made under Rule 19(16).
[9]
The judge also referred to J. Kenneth McEwan
& Ludmila B. Herbst,
Commercial Arbitration in Canada: A Guide to
Domestic and International Arbitrations,
looseleaf
(Aurora, Ont.:
Canada Law Book, 2004), at paras. 21-23:
[21] The portions of the text said to
be relevant to the application at bar are as
follows.
First under the heading 30.40.40, Step in a Proceeding:
Determining whether a step has been taken
requires an objective approach.
The court must ask itself whether on the facts the parties
should be held
impliedly to have affirmed
the correctness of the proceedings and his or her
willingness to go along with the determination by
the courts of law instead of
arbitration.
In this regard a step in the proceedings means something in the nature of an
application to the court and not mere talk between solicitors or solicitors
clerks nor the writing of letters but the taking of some step such as
taking out a summons or something of that kind
which is in a technical sense a step in the proceedings.
[22] However, the writing of letters exemption
is not absolute. For example a
letter by
counsel suggesting that the other party commence an action in which his or
her clients would file a defence and seek full
discovery of facts and documents is
held to be a waiver of any right to
arbitration that existed prior to the letter. See also the discussion of
demands for particulars in s. 3, 40.40.80 following.
[23] Under that heading the following
is said to be of relevance:
The exchange of letters reflecting a demand for particulars has been
held to be the taking
of a step which amounts to a step in the proceedings such that an application
for a stay is barred where the
rules of court require a demand before the motion can be
brought, as
in British
Columbia.
In
this context but not under legislation where a prior application for
particulars by letter is not mandatory, a demand
for particulars appears
to be a form of proceeding.
[10]
The judge found the defendants submission based
on the law of attornment and their assertion that at common law a party cannot
attorn conditionally unhelpful.
[11]
He distinguished
Fofonoff
stating:
[26]
It is
clear
from Ruttan J.s judgment in
Fofonoff
that what [makes] a demand
for
particulars under Rule 19(17) a
step in a proceeding, is the implicit assertion that it
will, if
necessary, be followed by a formal application under Rule 19(16). Where, as
here, it is clear and explicit in the letter
seeking particulars that the next formal step
contemplated by the applicant was not to bring an application under Rule
19(16),
even if necessary, but rather
to seek to divert the dispute away from the court and
into arbitration. It cannot be said objectively
that the applicant was affirming the correctness of the proceedings or demonstrating
a willingness to go along with a
determination by the courts of law.
Discussion
Step in the proceeding
[12]
Fofonoff
has been followed a number of times in the trial court
(for example:
Reuna Ventures Ltd. v. Refco Futures (Canada) Ltd.
,
[1996]
B.C.J. No. 2148 (S.C.) per Lowry J., as he then was, in Chambers, at para. 4,
A demand is a step in the proceedings. Requiring adherence to the Rules is
not.), but it does not appear to have been reviewed by this Court.
[13]
In
No. 363 Dynamic Endeavours Inc. v. 34718 B.C. Ltd
(1993), 81
B.C.L.R. (2d) 359, this Court considered whether a demand for discovery of
documents was a step in the proceedings. In para. 5 Hollinrake J.A. referred to
the position of the appellant:
[5]
The
appellant submits that this Court should apply the principles set out by Ruttan
J. in
Fofonoff v. C and C Taxi Service Limited
(1977), 3 B.C.L.R. 159
(S.C.) and conclude that service of a demand for discovery of documents is
taking a step in the proceedings which bars a stay order under s.15(1).
[14]
In the result, the Court concluded it did not
have to decide whether the demand was a step in the proceedings as envisioned
in s. 15(1) because the demand was made in the context of s. 15(4) interim
measures of protection.
[15]
It was not contended before us that
Fofonoff
was decided
wrongly. In my view, the reasoning in the case is correct.
The
legislation under consideration in
Fofonoff
was substantively the same
as the present s. 15(1). Mr. Justice Ruttan reviewed and considered
authorities in Ontario and England. He quoted from
Ives & Barker v.
Willans,
[1894] 2 Ch. 478 at 484:
The
authorities shew that a step in the proceedings means something in the nature
of an application to the Court, and not mere talk between solicitors or
solicitors clerks, nor the writing of letters, but the taking of some step,
such as taking out a summons or something of that kind, which is, in the
technical sense, a step in the proceedings.
Ruttan J.
continued on p. 162:
But as Mr. Turnham in our present case submits, we have here not
just an exchange of letters, but a procedure which shall be followed to secure
a statement of particulars. It is the first stage in the proceeding to be
followed by an application to Court if necessary. Thus it is in a technical
sense at law a step in the proceedings.
[16]
I agree with that conclusion. As the authors of
Commercial
Arbitration in Canada
note in para. 3:40.40, the
question is whether a party has affirmed a willingness to have the matter
resolved by the court or in arbitration. A demand for particulars does so.
Effect of demand in this case
[17]
In my view, the issue in this case was not whether Levelton took a step
in the proceeding. In this Province that question is answered by the delivery
of a demand for particulars pursuant to the
Rules of Court
. In this
case, it was clear a demand for particulars was made. The issue is: can the
implications of taking that step be rendered nugatory by considering whether or
not a party intended to embrace the jurisdiction of the court? I think not.
[18]
The authors of
Commercial Arbitration in Canada
commented on s. 15(1) of the Commercial Arbitration Act as follows:
Under
s. 15(1) of British Columbias
Commercial Arbitration Act
and s. 8(1) of
its
International Commercial Arbitration Act
, the application for a stay
of proceedings may be made before or after entering an appearance and before
the delivery of any pleadings or the taking of any other step in the
proceedings. Accordingly, where a defence has been filed and delivered, the
application for a stay of proceedings should be dismissed, even where the
filing party indicated at an early stage that it wished the matter to be
arbitratedthere is no ambiguity in the wording of the section, and, in any
event, taking a purposive approach to interpretation (the section was intended
to prevent the mischief of a party to an arbitration agreement having both the
benefit of the court process and, if that did not achieve its purpose, the
benefit of arbitration) would lead to the same result. (pp. 3-34-.1 3-35)
[19]
I agree with these observations. A party should
not be entitled to take the benefit of the litigation process obtaining
particulars while preserving the ability to reject that process in favour of
arbitration.
[20]
It is instructive to place the stay provision into an
historical legal context.
[21]
In
Boutsakis v. Kakavelakis,
2008 BCCA 13
,
77 B.C.L.R.
(4th) 113, this Court affirmed the fact that, absent a stay provision, a court
cannot refuse to proceed with a case merely because the parties have agreed
contractually to arbitrate. Madam Justice Newbury quoted from
Fletcher Moulton L.J. in
Doleman & Sons v. Ossett Corporation
,
[1912] 3 K.B. 257, a decision of the English Court of Appeal:
... the Legislature by the
Common Law
Procedure Acts
introduced the machinery which is now provided for by s. 4
of the
Arbitration Act, 1889
. It enables the defendant to an action
brought in breach of an agreement to proceed by arbitration to apply to the
Court to stay the action, and the Court is given power so to do. Prior to the
statutable provisions the Court could not refuse to settle any such dispute
which was brought before it, because
it not only had the jurisdiction but
also the duty to decide that dispute if called upon so to do.
It has under
these provisions power to refuse its aid to a person who appeals to it in
breach of an agreement to decide the matter by arbitration.
But the statute
very properly requires that the necessary application so to do should be made
by the defendant immediately on appearance and before taking any step in the
action. If the defendant allows the action to proceed for a while, he cannot
subsequently withdraw it from the Courts.
If the Court thus refuses its
assistance to the plaintiff, he is driven to have recourse to arbitration as
his sole means of obtaining redress, and thus the original agreement to submit
the matter to arbitration is indirectly enforced.
The
present position, therefore, of agreements to refer to private tribunals may be
shortly expressed thus. The law will not enforce the specific performance of
such agreements, but, if duly appealed to, it has the power in its discretion
to refuse to a party the alternative of having the dispute settled by a Court
of law, and thus to leave him in the position of having no other remedy than to
proceed by arbitration. [Emphasis added by Newbury J.A.]
[22]
The stay provision acts to limit access to the
litigation process. The limitation began as discretionary. It now is
mandatory.
[23]
The section under consideration in
Fofonoff
was
permissive. It stated that the court may stay the litigation if satisfied
that there is no sufficient reason why the matter should not be referred
and
that the applicant was, at the time when the proceedings were commenced, and
still remains, ready and willing to do all things necessary to the proper
conduct of the arbitration.
[24]
In its
Report on Arbitration
(Vancouver:
The Commission, 1982) at pp. 30-35, the Commission considered competing
positions favouring complete access to the court, particularly for questions of
law and the evaluation of disputed evidence and upholding a contractual
commitment to arbitrate. It concluded, at p. 34 that the court should
continue to have the power to refuse a stay of litigation
the person commencing
litigation in breach of an arbitration agreement should continue to bear the
onus of convincing the court a stay should not be granted.
[25]
It was the Commissions view that the
conditions as to taking no steps in the litigation, and being ready and
willing to arbitrate, are too rigid, but they are relevant to the exercise of
the courts discretion. Its recommendations were the basis for the original s.
15 in the
Commercial Arbitration Act
, S.B.C. 1986, c. 3, which is the
present legislation.
[26]
The original section provided the court shall
stay unless the party opposing the stay showed good reason why court
proceedings should continue. In determining whether there is good reason, the
court was entitled to consider 12 factors, the last of which was any other
matter the court considers significant. The provision incorporated the
recommendation of the Commissions report
at pp. 34-35.
[27]
In contrast, the
International Commercial
Arbitration Act
, S.B.C. 1986, c. 14, which adopted the United Nations
Model
Law on Commercial Arbitration
, provided in s. 8 for a mandatory stay.
[28]
Pursuant to the
Miscellaneous Statutes
Amendment Act (No. 2)
, S.B.C. 1988, c. 46, s. 11, the original s. 15 of the
Commercial Arbitration Act
was replaced with the provisions of the
international Act, plus s. 9 of that Act which dealt with interim measures of
protection. That section remains today.
[29]
Granting a stay of proceedings no longer is
discretionary if the court is satisfied the commitment to arbitrate is not void,
inoperative or incapable of being performed (
Prince George (City) v.
McElhanney Engineering Services Ltd.
(1995), 9 B.C.L.R. (3d) 368, 61
B.C.A.C. 254 leave to appeal refused [1995] S.C.C.A. No. 467;
MacKinnon v.
National Money Mart Co.
, 2004 BCCA 473, 203 B.C.A.C. 103, 50 B.L.R. (3d)
291, leave to appeal granted). Party autonomy, the ability of parties to chose
their forum, which is a core value of the Model Law, was recognized, but
respect for that right constrains the right of unlimited access to the court.
[30]
Cast in this light, a party who seeks to deprive the
other side of its right of access to the court must not be equivocal. As noted
by Fletcher Moulton L.J., it is appropriate that a party make clear its
intention at the outset and not allow the action to proceed with its
participation.
[31]
Levelton urges an analogy based on the law of attornment. Although
there are significant differences in the law of attornment and the law
applicable to stays in favour of arbitration, in my view, the analogy is not
misplaced. The law generally recognizes the right of litigants to their choice
of forum. While usually the right of an opposing party to challenge that
choice is preserved, at common law any step taken which invokes the
jurisdiction of the court will result in attornment even if the party has
reserved or is pursuing a challenge to jurisdiction.
[32]
It is not inappropriate to apply the same strictures to a stay application
authorized by legislation that permits access to the court to seek a stay
provided a step after appearance is not taken in the proceedings.
[33]
In my view, the judge erred by being concerned with whether Levelton
objectively affirmed its willingness to participate in the litigation process.
This led him to conclude Levelton had not taken a step in the litigation
because it appeared its next action would be to seek a stay and not to obtain
an order for particulars. That inquiry was not relevant in the circumstances
of this case.
[34]
Once it is determined that a demand for
particulars has been made under the
Rules of Court
, a step in the
proceedings has been taken and a stay under s. 15 of the
Commercial
Arbitration Act
no longer is available. A party cannot render the
step nugatory by suggesting it may seek to refer the matter to
arbitration. It cannot undo what has been done. The orderly
administration of justice requires certainty in these matters.
[35]
Whether a request for information is a demand for
particulars under the
Rules
depends on the language of the
request. Although no specific wording is required, the demand in this
case was for information required to prepare a statement of defence. It
clearly was a demand for particulars.
[36]
By making a demand for particulars which were required for the
preparation of a Statement of Defence, Levelton was acting pursuant to Rule
19(17). It was relying on the authority of the
Rules of Court
. The
demand was itself a step in the proceeding. As counsel for the defendants
points out, a party may never seek an order for particulars for any number of
reasons. That does not make the demand any the less a step in the
proceedings. Ruttan J. was alive to this as is evidenced by his use of the
phrase if necessary. Had Levelton sought an order for particulars, it could
not be contended seriously that the defendants could object on the basis no
demand had been made pursuant to Rule 19(17).
[37]
In my view, a request for information solely to
determine whether a claim is subject to arbitration
whether the arbitration agreement is void, inoperative or incapable of being
performed
would not be a bar to obtaining a stay of
proceedings in favour of arbitration. In such a case, a party clearly
would not be relying on the authority of the
Rules of Court
to advance
its position in the litigation. It would not be affirming its acceptance
of the litigation process.
[38]
This was the situation in
No. 363 Dynamic Endeavours Inc.
An
ex
parte
order was obtained freezing funds. The respondent brought an
application to set aside the order and delivered a demanded for discovery of
documents. The order was set aside, in part, based on documents obtained
through the demand. This Court concluded the demand had been made in the
context of s. 15(4), the granting of interim measures of protection, and was
not a step in the proceedings as contemplated by s. 15(1). This Court stated
in para. 23:
[23]
The argument, as I
see it, is that the demand for discovery of documents here was not served with
a view to pursuing the defence of the action, but rather for the purpose of
protecting the rights of the respondent in the face of the ex parte order
obtained by the appellant freezing the funds in the bank.
This led to the observation that it is the pursuit of
the defence itself that brings an activity within s. 15(1).
[39]
I do not decide whether Rule 19(16) would be available to a party to
obtain an order for particulars to determine whether a claim is subject to
arbitration or whether some other procedure would be preferable in the context
of an application for a stay. Generally, an applicant for an order for
particulars under the
Rules of Court
must establish that the particulars
are required to plead, for discovery, or to narrow the issues to be tried.
Conclusion
[40]
I would allow this appeal and set aside the stay of proceedings.
The
Honourable Mr. Justice Chiasson
I agree:
The Honourable Madam
Justice Newbury
I agree:
The Honourable Mr. Justice Frankel
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Ross v. British Columbia (Public Safety),
2010 BCCA 24
Date: 20100119
Docket: CA037601
Between:
David Jonathan
Ross
Appellant
(Plaintiff)
And
Minister of Public
Safety and Solicitor General of British Columbia and Attorney General of Canada
Respondents
(Defendants)
Before:
The Honourable Mr. Justice Hall
(In Chambers)
On
appeal from the Supreme Court of British Columbia, September 28, 2009
(
Ross
v. British Columbia (Public Safety)
, S117620)
Appearing on His Own Behalf by Telephone:
D.J. Ross
Counsel for the Respondent:
M.F. Volk
Place and Date of Hearing:
Vancouver, British
Columbia
November 30, 2009
Place and Date of Judgment:
Vancouver, British
Columbia
January 19, 2010
Reasons for Judgment of the
Honourable
Mr. Justice Hall:
[1]
The applicant respondents, the Minister of Public Safety and Solicitor
General of British Columbia and Attorney General of Canada, apply for dismissal
of this appeal as abandoned on the basis that they were not properly served in
time with the necessary documents. What is sought to be appealed is an order
of Schultes J. pronounced September 28, 2009 striking out the Statement of
Claim as filed and amended by the appellant. In an unsuccessful application
for summary judgment heard before Williams J. in 2008, Williams J.
characterized the allegations in the Statement of Claim as outlandish and
unlikely. It is not entirely easy to decipher the pleading of the appellant
but that observation of Williams J. seems not out of place.
[2]
Schultes J. said this at para. 38 of his Reasons:
[38] The statements of claim
will be struck out on the basis that they disclose no reasonable claim and that
they will embarrass and delay any trial based on them. The absent material
facts, if they exist, are solely within the knowledge of the plaintiff and
there is no way for this court to amend the statements of claim to address
their deficiencies.
[3]
In this case, the failure of the appellant to serve the material on the
respondents in a timely way could be cured by an extension of time to make the
necessary service. There was no great delay here. In such circumstances, I
would usually consider it appropriate for any necessary extension of time to be
ordered. If this was ordered, the application of the respondents to the appeal
for an order that the appeal be dismissed as abandoned could not succeed.
[4]
After hearing from the parties, I adjourned this application so that I
could comprehensively review all the material and the proceedings in the trial
court. Having now had an opportunity to do this, I have reached the firm
conclusion that the proposed appeal has no possibility of success. The
pleadings are so deficient that no relief could be granted by a court based on
the pleadings. In the circumstances, it would be pointless to have the case
considered by a division of this Court.
[5]
In the particular and rather unusual circumstances extant in this case,
I consider that the application of the respondents is one that ought to be granted.
I consider this comment of Esson J.A. in
K & M Crane and Equipment
Rental Ltd. v. Deer Trail Development Ltd.
, 1999 BCCA 696, at para. 7, is
apposite in the circumstances of this case:
I concluded, in all the
circumstances, that the application to dismiss should be allowed now without
putting the parties to any further expenditure of time and money. The appeal
is one which has no chance of success.
[6]
The appeal ought to be dismissed as abandoned.
The
Honourable Mr. Justice Hall
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Lau v. Rai,
2010 BCCA 26
Date: 20100120
Docket:
CA035667
Between:
Yen Ping Lau
Appellant
(
Plaintiff
)
And
Gurnek Rai and Manjit Rai
Respondents
(
Defendants
)
Before:
The Honourable Mr. Justice Lowry
The Honourable Mr. Justice Frankel
The Honourable Madam Justice Neilson
On appeal from: Supreme Court of British Columbia, December 3, 2007
(
Lau v. Rai
, 2007 BCSC 1746, Vancouver Registry No. S042178)
Acting on his own behalf:
Y.P.
Lau
Counsel for the Respondents:
A.J.
Roberts
Place and Date of Hearing:
Vancouver,
British Columbia
December 7, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
20, 2010
Written Reasons by
:
The Honourable Mr. Justice Frankel
Concurred in by:
The Honourable Mr. Justice Lowry
The Honourable Madam Justice Neilson
Reasons for
Judgment of the Honourable Mr. Justice Frankel:
Introduction
[1]
This litigation involves an action in trespass
between owners of two neighbouring residential properties. Yen Ping Lau
purchased his home in 1994. Gurnek Rai and Manjit Rai purchased the vacant lot
next door in 2002. The Rai property is lower than the Lau property. Excavation
work on the Rai property removed lateral support for the Lau property. This
caused a portion of the Lau property to collapse, resulting in damage to some
of Mr. Laus flowerbeds and a portion of his fence. To address this
problem, the Rais built a retaining wall abutting the line between the two
properties. A large quantity of gravel was permanently placed behind the wall,
on the Lau property. Mr. Lau sued, seeking general, special, punitive,
and aggravated damages.
[2]
Following a trial, Mr. Justice Powers of
the Supreme Court of British Columbia found that Mr. and Mrs. Rai had
trespassed on Mr. Laus property. He awarded Mr. Lau $7,243.12 to
restore his property to its original condition, and a further $2,000.00 as
aggravated damages. However, the trial judge declined to award punitive
damages. His reasons for judgment are indexed as 2007 BCSC 1746.
[3]
Mr. Lau contends that the trial judge made
a number of errors in fact and in law, and made an inadequate damages award. Mr. Laus
key assertion is that the trial judge should have found that Mr. and Mrs. Rai
committed a pre-planned intentional trespass on his property in order to
maximize the footprint of the house they were building. Mr. Lau is firmly
of the belief that this is what occurred and that, because of this, he is
entitled to significant punitive damages. To support his case, Mr. Lau
seeks to file, as fresh evidence, the affidavit of his son, to which is
attached the report of a geotechnical engineer.
[4]
The determination of this appeal is hampered by
the fact that Mr. Lau did not file a complete transcript of the evidence
at trial. He filed only the evidence given by three defence witnesses: two
geotechnical engineers and the operator of the excavation equipment. In
addition, the last 50 pages of his appeal book consist of documents that were
not before the trial judge and are, therefore, not properly before this Court.
[5]
For the reasons that follow, I would dismiss
this appeal.
Factual
Background
[6]
Mr. Laus property is located at 6708 Mason
Court, Burnaby, British Columbia. Mr. and Mrs. Rais property is
located at 7922 Mayfield Street. The Rais plans called for their house to be
constructed five feet from the property line, the closest allowed by building
by-laws.
[7]
In mid-May 2003, excavation began on the Rai
property. As a portion of the bank created by the excavation at the property
line between the Rai and Lau properties was saturated with water and appeared
ready to give way, it became apparent that some form of retaining wall was needed.
[8]
On Friday, May 23, 2003, Mr. Rai retained Paullus
Yeung, a geotechnical engineer. Mr. Yeung attended at the building site that
afternoon, and met with Mr. Rai and his structural engineer, Cesar
Parayno. After examining the site, Mr. Yeung prepared a Field Inspection
Report recommending that a two lock-block high retaining wall back-filled with
drain rock (i.e., gravel) be used to prevent further subsidence. He also prepared
a sketch indicating that both the lock-blocks and gravel were to be placed entirely
on the Rai property. That same day, the Rais asked Mr. Lau for permission
to remove a portion of his fence to facilitate construction of the retaining
wall. Mr. Lau refused.
[9]
Excavation relating to the installation of the
retaining wall took place on Saturday, May 24, 2003. This caused a 16-foot
section of Mr. Laus fence to fall. When Mr. Lau learned of this, he
and his family became very upset. They believed the fence had been pulled down
deliberately. The trial judge, however, accepted the excavator operators
evidence that he did not intentionally tear down any portion of the fence. On
that day, Mr. Rai told Mr. Lau that he would pay for any damage to
his property, and would restore it to its original condition.
[10]
Mr. Lau confronted the workers and demanded
that they stop. A heated argument developed between members of the Lau and Rai
families. Eventually, the police were called. No further work took place that
day, or on the following day.
[11]
On Monday, May 26, 2003, Burnaby building
inspectors visited the Rai property and attempted, unsuccessfully, to mediate
the dispute. Mr. Rai again said that he would pay for any damages to the Lau
property and restore it to its original condition. Mr. Lau doubted Mr. and
Mrs. Rais sincerity.
[12]
Mr. Yeung returned to the building site on
the morning of May 26, 2003. He found that the excavation and the retaining
wall practically were completed. The retaining wall that had been installed
was four lock-blocks high. Mr. Yeung prepared another Field Inspection
Report together with a sketch showing the lock-blocks abutting the line
between the two properties and back-filled with gravel. The gravel was entirely
on the Lau property. Because Mr. Yeung did not want to be involved in the
dispute between Mr. and Mrs. Rai and Mr. Lau, he resigned from
any further involvement in the project. Mr. Rai then retained another
geotechnical engineer, Edward C.C. Yip. Mr. Yip first visited the building
site on Wednesday, May 28, 2003.
[13]
The retaining wall was completed on May 28,
2003. It is approximately ten feet high and 40 feet long. It is back-filled
with approximately 1260 cubic feet (i.e., 60 tons) of gravel. During
construction of the wall, approximately 42 feet of Mr. Laus fence was damaged,
and a considerable amount of soil was removed from his property. A number of
his flower beds and rose bushes were also destroyed.
[14]
Mr. Yip provided Mr. Rai with a report
containing a number of recommendations with respect to the construction of the
residence on his property. That report deals with the retaining wall as a
completed installation.
Trial
Judges Decision
[15]
As mentioned above, the trial judge found that
the removal of the first section of fence that was damaged was not deliberate.
He also found that it was not the Rais intention at the outset to encroach on Mr. Laus
property, and that when subsidence occurred during the initial stages of the
excavation, building a retaining wall was a reasonable and acceptable way of
addressing the problem. In this connection he noted that there was a danger
of further subsidence if there were heavy rains.
[16]
In finding that Mr. and Mrs. Rai
trespassed, the trial judge said:
[20] I find
that the defendants have commit[ted] trespass on the plaintiffs property.
Actionable trespass occurs when a party enters onto lands without the
permission of the occupier. (Linden, Allen M.,
Canadian Tort Law
7th
ed. (Toronto: Butterworths, 2001) at 639.) It does not depend upon fault,
negligence or consequential damage. (Klar, Linden et al.
Remedies in Tort
at 23-11.) The defendants acknowledge that they committed trespass on the
plaintiffs property when their actions resulted in the subsidence of the
plaintiffs property and subsequent encroachment in order to build a retaining
wall.
[17]
The trial judge then assessed damages. He held
that Mr. Lau was entitled to recover the costs of restoring his property to
its original condition. With respect to the fence, the trial judge held that
the entire 92 feet along the property line should be replaced and painted, not
just the 42 feet that had been damaged. However, he denied compensation for an
additional 50-foot section of undamaged side-fencing. He also made an award
for the cost of replacing the top soil that had been removed, and for
replanting rose bushes and other plants. Based on the estimates before him,
the trial judge assessed compensatory damages at $7,243.12. In arriving at
this figure, the trial judge rejected Mr. Laus contention that general
damages should be assessed at approximately $50,000.00. Mr. Lau had
arrived at this figure based on his estimate that the excavator had trespassed
on his property approximately 256 times to either remove earth or deposit
gravel, and that he should receive $200.00 for each time.
[18]
The trial judge also held that Mr. Lau was
entitled to aggravated damages to reflect the upset and distress he suffered as
a result of the damage to and encroachment onto his property. Those damages
were assessed at $2,000.00.
Grounds
of Appeal
[19]
There is a lack of precision in how Mr. Lau
has stated his grounds. On the basis of his factum and his oral submissions, I
take his grounds to be that the trial judge erred in:
(a) not finding that it was the Rais intention from the outset
to trespass on his property;
(b) not finding that the removal of the fence was deliberate;
(c) not finding that the deposit of 60 tons of gravel on his
property constitutes a continuing trespass;
(d) misapprehending certain evidence;
(e) disallowing certain questions in his cross-examination of Mr. Yeung
and Mr. Yip;
(f) failing to take into account that construction of the
retaining wall continued after he had refused to permit any further
encroachment onto his property;
(g) calculating the cost of restoring his property; and
(h) failing
to award punitive damages.
[20]
In Part 4 of his factumnature of order soughtMr. Lau
seeks an increase in compensatory damages to $27,948.56, and $30,000.00 in
punitive damages. The compensatory damages include the cost of removing the
gravel and a charge relating to the use of his property from May 2003, until
the removal of the gravel.
Analysis
Fresh
Evidence
[21]
Mr. Lau seeks to tender the affidavit of
his son, Eric Lau. That affidavit contains a detailed recitation of the
construction of the retaining wall and the dispute that arose between the two
families, all from Eric Laus perspective. It also contains references to
aspects of the trial, including the testimony of witnesses, and rulings made by
the trial judge.
[22]
Attached as an exhibit to the affidavit is a
report prepared by Sean Riley, a geotechnical engineer. That report is dated
November 6, 2009, i.e., one month before the hearing of this appeal. Mr. Riley
takes issue with the efficacy of the lock-block retaining wall that was
installed. He also opines that, over time, the earth underneath the Lau
property could migrate into the void spaces in the gravel, resulting in
settlement or collapse of a portion of that property. He suggests steps that
could have been taken during the construction of the retaining wall to prevent
this migration.
[23]
Eric Laus account of what occurred in 2003 and
at the trial is clearly not fresh evidence. All of this is part of the trial
record that Mr. Lau has chosen not to file.
[24]
Mr. Lau says that he retained Mr. Riley
prior to the trial, with a view to calling him as a witness. He further
says that, because he did not have a written report from Mr. Riley, the
trial judge, on two occasions, refused to permit Mr. Riley to testify. Mr. Lau
has not included those rulings in his material.
[25]
It would appear that the trial judges rulings
are grounded in Rule 40A of the
Rules of Court
, B.C. Reg. 221/90, which
deals with Evidence of Experts. In particular, Rule 40A(3) requires that,
before a party can call an expert witness, a written statement setting out the
experts opinion must be served on the opposing party 60 days before the expert
testifies.
[26]
Mr. Rileys report is not fresh evidence.
It is, in written form, the very evidence Mr. Lau unsuccessfully attempted
to call at trial. That evidence cannot now be received unless Mr. Lau
establishes that the trial judge erred in not permitting Mr. Riley to
testify. Mr. Lau has neither provided those rulings, nor challenged their
correctness.
[27]
I would refuse the application to admit Eric
Laus affidavit on this appeal.
Challenges
to Findings of Fact / Misapprehension of Evidence
[28]
A substantial portion of Mr. Laus factum
and his oral submissions are directed at challenging findings of fact made by
the trial judge. For example, Mr. Lau contends, as he did at trial, that
his fence was intentionally pulled down, and that the Rais intention from the
outset was to encroach on his property, because it was less expensive to build a
lock-block retaining wall than to use other means to provide lateral support
along their shared property line.
[29]
The limits on appellate review of findings of fact are
well known. Recently, in
Manjit International Development Ltd. v. Ng
,
2009 BCCA 429, Mr. Justice Tysoe said this:
[10] The role of this Court is not to
retry the case. This Court is a court of review and of error correction. It
does not receive evidence or hear witnesses. That is the role of the trial
court. Consequently, this Court will not interfere with findings of fact by a
trial judge, absent palpable and overriding error plainly seen:
Housen v.
Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235. As stated by the majority in
that case:
[22]
[Although] it is open to an appellate court to find that an inference of fact
made by the trial judge is clearly wrong, we would add the caution that where
evidence exists to support this inference, an appellate court will be hard
pressed to find a palpable and overriding error. As stated above, trial courts
are in an advantageous position when it comes to assessing and weighing vast
quantities of evidence. In making a factual inference, the trial judge must
sift through the relevant facts, decide on their weight, and draw a factual
conclusion. Thus, where evidence exists which supports this conclusion,
interference with this conclusion entails interference with the weight assigned
by the trial judge to the pieces of evidence.
[11] That is the same standard of
review applicable to a trial judges findings of fact based on the credibility
of a witness. In
Lu v. Mao
, 2007 BCCA 609, Madam Justice Saunders
stated as follows:
[12]
this
Court does not interfere lightly with findings of credibility. It is the trial
judge who is in the best position to assess credibility. Only if the
assessment of credibility is based upon a significant misapprehension of
evidence or displays an error in principle will this Court interfere.
Hence, this
Court cannot interfere with the trial judges findings on credibility and
findings of fact unless it is demonstrated that she made an obvious error that
affected the outcome of the decision.
[30]
The trial judge had before him a great deal of conflicting evidence. He
analyzed that evidence, assessed the credibility of the witnesses, and made
findings of fact. Given that Mr. Lau has not provided all of the evidence
that was before the trial judge, it is not possible for this Court to generally
reconsider those findings. It is, however, possible to consider Mr. Laus
contention that the trial judge misapprehended one piece of evidence.
[31]
At paragraph 11 of his reasons, the trial judge states
that the plan approved by the Rais engineer was to place lock-blocks near the
bank with gravel filling the space behind the blocks. The trial judge then
refers to Mr. and Mrs. Rai having testified that when they began to
remove the soil for this purpose, the bank gave way and some soil from Mr. Laus
property caved in, causing the fence to fall. The Rais further testified that
they moved quickly to put the lock-blocks in place to prevent further
subsidence.
[32]
Mr. Lau submits that in paragraph 13 of his
reasons, the trial judge made an error with respect to the order in which
events occurred:
[13]
The defendants did retain an
engineer to give them advice as to how to proceed once the subsidence occurred.
The engineer recommended the placement of the lock blocks and gravel backing. The
engineer noted that the soil was of fairly high moisture content where it had
subsided and was concerned that the retaining wall be put into place as soon as
possible.
This resulted in the blocks being placed closer to the plaintiffs
property line or just on the plaintiffs property line than originally
anticipated.
I am not satisfied that the defendants proceeded in this
fashion intentionally for the purposes of making it easier to construct their
house within 5 feet of the property line. The placing of gravel behind the
lock blocks has aided in the drainage of any moisture that may accumulate
against the retaining wall from the plaintiffs property as well as any seepage
that may have passed through the defendants property from other locations.
[Emphasis
added.]
[33]
It is clear that the trial judges reference to
an engineer is to Mr. Yeung. Mr. Lau contends that in this
paragraph the trial judge erroneously refers to Mr. Yeung as having
recommended the retaining wall be placed right at the property line, with the
gravel on the Lau property.
[34]
Mr. Yeungs evidence is that he was
consulted before any significant subsidence occurred. When he first visited
the building site on May 23, 2003, he was advised by Mr. Rai and Mr. Parayno
that they had encountered some soft ground and were concerned about the
stability of the excavation. Mr. Yeung testified that when he looked at
the bank it appeared to be stable, but when he examined it more closely, he
found a layer of sand with groundwater in it. Based on this observation, he
recommended the erection of a lock-block retaining wall with gravel filling the
space behind the wall. Mr. Yeung prepared a sketch showing both the wall
and the gravel on the Rais side of the property line. When Mr. Yeung
returned on Monday, May 26, 2003, he found that the retaining wall had been
placed at the property line, with the gravel on the Lau property. How and why
the wall came to be in that location is not discussed in the transcripts filed
on this appeal.
[35]
I do not agree that paragraph 13 evinces a
misapprehension of the evidence. The trial judge is not saying that the
retaining wall was built in the location recommended by Mr. Yeung. What
the judge is saying is that the unstable soil conditions noted by Mr. Yeung
resulted in the wall being placed closer to the property line than originally
anticipated, which I take to be a reference to Mr. Yeungs recommended
location. In other words, the trial judge found that circumstances
necessitated the wall being built closer to the Lau property than Mr. Yeung
had recommended because of what occurred on Saturday, May 24, 2003. As the
judge stated in paragraph 19 of his reasons, [t]he subsidence of soil occurred
on [Mr. Laus] side of the property line and required that the loose soil
be removed and the gap between the lock block and the remaining soil be back
filled with gravel.
Disallowance
of Questions In Cross-Examination
[36]
Mr. and Mrs. Rai called both Mr. Yeung
and Mr. Yip as witnesses. Mr. Lau attempted to cross-examine them
with a view to establishing that alternative methods of supporting the bank
created by the excavation could have been used, and that the Rais chose the
least expensive method. It would appear that Mr. Lau sought to elicit
that evidence to support his contention that it was always the Rais intention
to trespass on his property.
[37]
In response to the first questions asked of him
in-chief, Mr. Yeung said that he is a professional engineer, specializing
in geotechnical engineering. He then answered questions designed to bring out
what he had done on his two visits to the building site. During Mr. Yeungs
examination in-chief his two Field Inspection Reports and sketches were
marked as exhibits. Those reports are written on the letterhead of a
geotechnical engineering firm. As for Mr. Yip, the first question asked
of him in-chief elicited that he is a geotechnical engineer. During his
examination in-chief, Mr. Yip referred to two reports he had written setting
out his observations and recommendations. One report includes a sketch of the
building site and retaining wall. Those reports had previously been marked as
exhibits. Both are written on the letterhead of a geotechnical engineering
firm and bear Mr. Yips seal as a professional engineer.
[38]
During Mr. Laus cross-examination of Mr. Yeung,
counsel for Mr. and Mrs. Rai objected to the witness being asked
hypothetical questions regarding alternate methods that could have been used to
shore up the bank. Counsel submitted that Mr. Yeung had been called as a
lay witness to testify as to what he heard, what he said, what he did, and
that it was improper for Mr. Lau to attempt to elicit expert opinion
evidence from him, as no notice had been given. Although not specifically
mentioned, it is apparent that counsel was referring to the notice requirements
in Rule 40A. In sustaining that objection, the trial judge stated:
I will not allow
this line of questioning. It is trying to put in expert opinion evidence when
there has been no notice given, and it would be unfair and contrary to the
rules of court if I allowed that to occur.
[39]
The same objection was raised during Mr. Yips
cross-examination. Once again, Mr. and Mrs. Rais counsel successfully
argued that Mr. Laus questions should be limited to what was done,
said, or heard by Mr. Yip, and could not extend to matters involving Mr. Yips
professional opinion.
[40]
Mr. Laus complaint regarding the
restrictions placed on his cross-examination of Mr. Yeung and Mr. Yip
raises the issue of whether, and if so to what extent, the requirements of Rule
40A apply when one party seeks to elicit an opinion that is within the
expertise of a witness called by the other party, when that opinion did not
form part of the witnesss evidence in-chief. However, I do not propose to deal
with this issue for two reasons.
[41]
The first reason is that neither party addressed
the interpretation and application of Rule 40A in their respective arguments.
The second is that I am unable to see how Mr. Laus case could have been
improved had he obtained the sought-after opinions. Even if both Mr. Yeung
and Mr. Yip had testified that there were more costly alternative methods
of addressing the subsidence problem that did not involve encroaching on Mr. Laus
property, that evidence would not have advanced Mr. Laus position that Mr. and
Mrs. Rai always intended to encroach. It is clear that Mr. Yeung was
consulted shortly after the first subsidence occurred, and that he recommended
constructing the retaining wall on the Rais side of the property line. There
is nothing to suggest this was not a reasonable way of dealing with the problem
that had arisen. There is also nothing in the limited transcripts that have
been filed that supports Mr. Laus contention that the final placement of
the wall was premeditated on the part of the Rais.
Assessment
of Damages
[42]
Mr. Lau submits that damages awarded do not
adequately compensate him. He further submits that the trial judge erred in not
awarding punitive damages.
[43]
With respect to the cost of replacing and
painting his fence, Mr. Lau says that the trial judge erred in not
including the 50-foot section of side-fencing that is continuous with, and
perpendicular to, the fence that separates his property from the Rais. In
deciding not to include that section, the trial judge stated that it had not
[been] affected. As it has not been shown that the judge erred in that
finding, there is no basis on which to increase this aspect of the award.
[44]
As he did at trial, Mr. Lau argued that he
should be awarded damages for each time the excavator encroached on his
property to either remove soil, or to deposit gravel. There is no merit in that
argument. I agree with the trial judge that what occurred is essentially one
trespass.
[45]
Mr. Lau next submits that he is entitled to
compensation based on the fact that the gravel placed behind the retaining wall
remains on his property. He says that the gravel should be removed and that
the trial judge erred in not addressing this question.
[46]
That the trial judge did not address the removal
of the gravel is explained by the fact that he was not asked to consider this
question. There is nothing in Mr. Laus statement of claim (prepared by a
solicitor) seeking removal of the gravel. Further, there is nothing in that
portion of the trial record that has been filed indicating that this point was
taken before the trial judge.
[47]
While it is true that the gravel remains behind
the retaining wall, there is no evidence that its presence has, or will have,
any detrimental effect on Mr. Laus property. The trial judge awarded
compensatory damages based on the cost of restoring Mr. Laus property to
its original state. That award includes the cost of new fencing and the cost
of replacing the top soil and plants that were removed. There is nothing to
indicate that the condition of Mr. Laus property is now different from
what it would have been had the area behind the wall been returned to its
original state by putting in the same substances removed during the excavation,
i.e., layers of topsoil, fill, silt, and sand. The case at bar is, therefore,
unlike
Epstein v. Cressey Development Corp.
(1992), 65 B.C.L.R. (2d) 52
(C.A.), where the plaintiff was awarded damages as compensation for the decrease
in the value of her property caused by a continuing trespass, i.e., remnants
from improperly installed anchor rods that had been removed remained beneath
the surface of her property. Rather, it is comparable to
Vancouver Block
Ltd. v. Empire Realty Company Ltd.
(19 June 1979), No. CA780018 (B.C.C.A.),
wherein a compensatory damages award for a continuing trespass was set aside
because anchor rods left beneath the surface of the plaintiff property had no affect
on the use or value of that property.
[48]
Mr. Lau submits that he is entitled to
punitive damages because Mr. and Mrs. Rais conduct was arrogant and
high-handed. That description is, however, not supported by the trial judges
findings. The trial judge found Mr. and Mrs. Rai to be credible
witnesses. More specifically, in declining to award punitive damages, the
judge said:
[28] I do
not award anything for punitive damages. I accept that the defendants were
acting reasonably when they immediately offered to be responsible for restoring
the plaintiffs property to its original condition. They provided a letter of
apology which was delivered through city hall, who was also trying to mediate
this dispute. I am satisfied that they were willing to pay reasonable
compensation to restore the plaintiffs property to its original condition. The
parties may have disagreed as to what was reasonable, but I am satisfied the
defendants were genuine in their efforts to try and resolve the dispute. I am
also satisfied that the defendants did not simply ignore the plaintiffs wishes
and encroach on their property in order to save money or to allow them to
improve their view from their home by building closer to the plaintiffs
property.
[49]
As recently discussed in
Bowen Contracting
Ltd. v. B.C. Log Spill Recovery Co-operative Assn.
, 2009 BCCA 457, not
every act of trespass warrants an award of punitive damages. What is required before
such an award can be made is extreme or exceptional conduct deserving of
punishment and disapprobation. No such conduct was proven in the case at bar
and Mr. Lau has not been able to show that the trial judge erred in coming
to the conclusions he did.
Conclusion
[50]
I would dismiss this appeal.
The Honourable Mr. Justice Frankel
I agree:
The Honourable
Mr. Justice Lowry
I agree:
The
Honourable Madam Justice Neilson
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Marchen v. Dams Ford Lincoln Sales
Ltd.,
2010 BCCA 29
Date: 20100120
Docket:
CA036991
Between:
Tyler Marchen
Respondent
(
Plaintiff
)
And
Dams Ford Lincoln Sales Ltd.
Appellant
(
Defendant
)
Before:
The Honourable Madam Justice Saunders
The Honourable Mr. Justice Chiasson
The Honourable Mr. Justice Groberman
On
appeal from the Supreme Court of British Columbia, March 26, 2009 (
Marchen
v. Dams Ford Lincoln Sales Ltd.
, 2009 BCSC 400, S053163)
Counsel for the Appellant:
R.D.
Lee & M.B. Gehlen
Counsel for the Respondent:
A.C.
Kempf & U. Gabie
Place and Date of Hearing:
Vancouver
, British Columbia
December 3, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
20, 2010
Written Reasons by
:
The Honourable Mr. Justice Chiasson
Concurred in by:
The Honourable Madam Justice Saunders
The Honourable Mr. Justice Groberman
Reasons for
Judgment of the Honourable Mr. Justice Chiasson:
Introduction
[1]
This case concerns the assessment of damages for
wrongful dismissal in a contract which expressly limits an employers
obligation to employ to the availability of work, whether so-called
consequential damages are available to a wrongfully dismissed employee and the
relationship between an award of punitive damages and special costs.
[2]
Mr. Marchen entered into an Apprenticeship
Agreement (the Agreement) with the appellant, which was terminated
wrongfully. He was unable to find another sponsor and did not complete his
apprenticeship. The judge awarded Mr. Marchen damages for wrongful dismissal and
consequential damages based on his loss of training and loss of the status of
journeyman. He also awarded punitive damages and special costs on the basis
that shortly after the termination the appellant gave an incorrect explanation
for the termination and advanced that explanation unsuccessfully at trial.
[3]
In the result, the judge awarded Mr. Marchen: $18,151.73
damages for wrongful termination; $25,000 for consequential damages; $2,036
special damages; $100,000 punitive damages; special costs. His reasons are
indexed at 2009 BCSC 400. The appellant appeals contending the
Agreement was terminable on reasonable notice and challenges the awards of
damages for termination, consequential damages, punitive damages and special
costs.
[4]
For the reasons that follow I would, set aside
the award of punitive damages and the award for damages for wrongful
termination and would remit the matter to the Supreme Court to determine the
amount payable to Mr. Marchen in lieu of notice. Otherwise I would affirm the
order of the trial judge.
Background
[5]
On November 13, 2002 the parties entered into the Agreement. It provided for Mr. Marchen to apprentice in the appellants
body shop.
[6]
Mr. Marchens brother, Anthony, worked in the
parts department of the appellant. In the summer of 2004, after failing to
return to work after a scheduled vacation, Anthony confessed to stealing parts
to support a drug habit. He no longer was employed by the appellant. In
November 2004 the R.C.M.P. advised the appellant that Anthony was to be arrested
for violating his parole arising out of a conviction for the possession of a
stolen motor vehicle. The president of the appellant, Mr. Dams, was shocked
because he understood Anthony had no previous difficulties with the law and
because the stolen vehicle had been repainted in the appellants body shop.
[7]
On January 27, 2005, Mr. Marchen was dismissed summarily and without explanation by the appellant.
[8]
Mr. Marchens father testified that on January 28, 2005 he was told by Mr. Dams that Mr. Marchen had been fired because the
criminal investigation had spread to the body shop and charges might be laid
against both Mr. Marchen and his brother. Mr. Dams denied this conversation.
The judge accepted the evidence of Mr. Marchens father.
[9]
On February 8, 2005, the General Service Manager of the appellant advised a federal government employee that Mr. Marchen
had been terminated due to a police matter. The employee contacted Mr. Marchen
who denied the allegation. He subsequently was approved for unemployment
insurance.
[10]
On June 16, 2005, shortly after this action was initiated, Mr. Dams called the government employee and advised her that the
criminal investigation involved Mr. Marchens brother and that Mr. Marchen was
terminated because the appellant was downsizing its body shop operation. At
trial, the appellant advanced this as the reason for the termination. The
judge concluded it was not the reason and that Mr. Marchen had been terminated
because he was suspected of criminal activity.
[11]
Mr. Marchen took fairly extensive steps to
obtain another sponsor so he could complete his apprenticeship, but was
unsuccessful.
Trial judgment
[12]
The Agreement was made pursuant to the
Industry
Training and Apprenticeship Act
, S.B.C. 1997, c. 50 (the
Act
).
[13]
The judge addressed the terms of the Agreement
in paras. 7 and 8:
[7] The term of the Apprenticeship
Agreement was from November 13, 2002 to November 12, 2006. Its provisions included:
1. The
EMPLOYER agrees:
(a) to
receive the Apprentice/Trainee for the period stated herein and to teach
efficiently the trade or occupation specified in this Agreement; and
(b) to
fulfill the other obligations of an Employer as set out in Schedule A.
2. The APPRENTICE/TRAINEE agrees:
(a) to
place himself/herself as an apprentice/trainee in the trade/occupation listed
in this application/agreement for the period of time as stated below;
(b) to
complete the prescribed hours of technical training;
(c) to
share school and examination results with the Employer;
3. The EMPLOYER and
APPRENTICE/TRAINEE further agree:
(d) that
the term of this agreement may be extended at the sole discretion of the
Industry Training and Apprenticeship Commission for a period of not more than
13 months, upon written notification to the parties.
[8] Schedule A of the
Apprenticeship Agreement includes the following provisions:
3. Every
Employer shall:
(c) Keep
each Apprentice/Trainee employed so long as work is available for the
Apprentice/Trainee;
(g) Notify
the CEO and obtain the approval of the Industry Training and Apprenticeship
Commission before making any change affecting the Industry Training and
Apprenticeship Agreement;
(h) Notify
the CEO immediately of any difficulty that occurs which could interfere with
the fulfillment of the terms of the Industry Training and Apprenticeship
Agreement; and
(i) Notify
the CEO in writing immediately when, for any reason, an Apprentice/Trainee is
laid off or terminated from employment.
4. Every
Apprentice/Trainee shall:
(a) Render
faithful, honest, and diligent service to the Employer during the period of
apprenticeship;
5. (a) The
period of apprenticeship shall be as set out in the Industry Training and
Apprenticeship Agreement.
[14]
The Agreement also states a Start Date of November 13, 2002 and an Anticipated Completion Date of November 12, 2006.
[15]
The
Act
provides for the registration of apprenticeship
agreements and states in s. 15(6): [a] party to a registered
apprenticeship
agreement may terminate it without the consent of the other parties. The
Agreement was registered. The CEO (Chief Executive Officer of the Industry
Training and Apprenticeship Commission) was not notified by either party when
Mr. Marchens employment was terminated.
[16]
The judge reviewed Mr. Marchens extensive
efforts to find a sponsor and his job history, concluding in para. 44:
[44] Since
leaving Dams, Tyler has been unable to find a new apprenticeship sponsor. He
has not been credited with any on-the-job training credits. While it is
possible that he may, through a statutory declaration, earn some credits for
the hours he has worked in recent years, such credits must be approved by a new
sponsor.
[17]
In paras. 4547 the judge summarized the
evidence and positions of the parties:
[45] Mr. Dams, Mr. Penner and Mr.
Delion all testified. All acknowledged that Tyler was a good employee. All
denied that Tyler was dismissed because of the criminal activities of his brother.
Their evidence was that Tyler was let go because the dealership had decided to
downsize its body shop operations in order to increase its capacity to repair
commercial trucks.
[46] Tyler submits that the
Apprenticeship Agreement was a four-year fixed term contract and he is entitled
to damages based on the difference between what he has earned subsequent to
termination of his employment and what he would have earned if he had completed
the apprenticeship. He also seeks moral damages arising from the way in which
he was terminated and consequential damages arising from the premature
termination of the Apprenticeship Agreement. In addition, he seeks punitive
damages. He submits that subsequent to his termination Dams has acted in a
reprehensible manner that departs to a marked degree from the ordinary
standards of decent behaviour.
[47] Dams
submits that Tylers employment was terminated because of a lack of work
arising from the decision to downsize the body shop. Pursuant to the
Apprenticeship Agreement, an employer is only obligated to continue an
apprentices employment if there is available work. Alternatively, it submits
that the Apprenticeship Agreement was terminable on reasonable notice. It
relies on s. 15(6) of the
Act
in support of this submission. It
submits that reasonable notice would be six to eight weeks. Dams submits that
consequential damages are not recoverable at law and that the method of
termination does not give rise to moral damages. Finally, Dams says that in
the circumstances of this case, there are no grounds to award punitive damages.
[18]
The judge observed that the evidence indicates
that the body shop was ultimately downsized but stated the evidence did not
establish this was the reason for Mr. Marchens termination. He concluded in
paras. 56 and 57:
[56] I find that Tylers termination
arose from Mr. Dams unfounded suspicion that Tyler was somehow involved in his
brothers activity. There was no evidence whatsoever to support that
suspicion. The evidence is that Tyler at all times was a loyal and faithful
employee.
[57] I
reject and do not believe the evidence of Mr. Dams, Mr. Penner and
Mr. Delion that Tyler was terminated because of the decision to downsize
the body shop. That evidence is inconsistent with the facts as I have found
above based on the evidence which I do accept.
[19]
The judge began his analysis of damages by
considering whether the Agreement was for a fixed term. It was his view that
the provision permitting termination by either party without the consent of the
other did not allow termination on reasonable notice. He found the Agreement
to be for a fixed term: that the appellant agreed to employ [Mr. Marchen] for
the period set out in the contract so long as work was available.
[20]
In para. 61, the judge concluded Mr. Marchen was
entitled to damages based on the amounts he would have received to the end of
the fixed term less money he actually earned subsequent to his termination.
This resulted in an award for lost wages of $18,151.73.
[21]
The judge then turned to moral damages and the
comments of the Court in
Honda Canada Inc. v. Keays
, 2008 SCC 39, [2008]
2 S.C.R. 362, stating in para. 63:
[63]
The
Court concluded that damages resulting from the manner of dismissal are
available only if they result from circumstances in which the employer engages
in conduct during the course of dismissal that is unfair or in bad faith. The
Court emphasized that the normal distress and hurt feelings resulting from
dismissal are not in themselves compensable.
[22]
In para. 66, the judge concluded:
[66] When
[the appellant] terminated [Mr. Marchen] it had an honest, albeit mistaken,
belief that he may possibly have been involved in some criminal activity. While
that belief did not justify his dismissal, I find, given that belief that [the
appellants] conduct at the time of termination was not unfair, unfaithful,
misleading or unduly insensitive. There is no evidence that [Mr. Marchen]
suffered emotional distress in excess of the normal distress and hurt feelings
that result from any dismissal.
[23]
The claim for moral damages was dismissed.
[24]
The judge began his consideration of
consequential damages by referring to
Fidler v. Sun Life Assurance Co. of
Canada
, 2006 SCC 30, [2006] 2 S.C.R. 3, which confirmed the applicability
of the rule in
Hadley v. Baxendale
(1854), 9 Exch. 341, 156 E.R. 145
(Eng. Ex. Div.). He then turned in para. 68 to
Addis v. Gramophone Co.
,
[1909] A.C. 488 (H.L.), which articulated the general rule governing damages in
a wrongful dismissal action:
[68]
Damages allocated in such actions are confined to the loss suffered as a result
of the employers failure to give proper notice. No damages are available to
the employee for the actual loss of his or her job, pain and distress that may
have been suffered as a consequence of being terminated or for the loss he or
she may sustain because of the fact that having been dismissed of itself makes
it more difficult to obtain fresh employment.
[25]
In para. 69 the judge stated that
Dunk v.
George Waller & Son
, [1970] 2 All E.R. 630 (C.A.), recognized
apprenticeship contracts as an exception to the
Addis
principle:
[69]
Dunk v. George Waller & Son
,
[1970] 2 All E.R. 630 (C.A.) recognized an exception to this general rule in
regard to apprenticeship contracts. At 634, Widgery L.J. described a
contract of apprenticeship as follows:
A
contract of apprenticeship is significantly different from an ordinary contract
of service if one has to consider damages for breach of the contract by an
employer. A contract of apprenticeship secures three things for the
apprentice: it secures him, first, a money payment during the period of
apprenticeship, secondly, that he shall be instructed and trained and thus
acquire skills which would be of value to him for the rest of his life, and,
thirdly, it gives him status, because the evidence in this case made it quite
clear that once a young man, as here, completes his apprenticeship and can show
by certificate that he has completed his time with a well-known employer, this
gets him off to a good start in the labour market and gives him a status the
loss of which may be of considerable damage to him.
Lord Denning noted at 633:
The very object of an apprenticeship
agreement is to enable the apprentice to fit himself to get better employment.
If his apprenticeship is wrongly determined, so that he does not get the
benefit of the training for which he stipulated, then it is a head of damage
for which he may recover.
[26]
The judge continued in paras. 70 and 71:
[70] Those comments are consistent with
the principles set out in
Hadley
. The wrongful termination of the
Apprenticeship Agreement has significantly set back Tylers career. Instead of
learning his trade at a well-established dealership, he has been forced to
scramble to find employment. His wages remain well below what he would have
earned as a journeyman. In spite of his best efforts, he has been unable to
find a new sponsor to complete his apprenticeship. He has not had the benefit
of the training for which he contracted. The termination of the Apprenticeship
Agreement has dimmed his future prospects.
[71] I find
in the circumstances of this case that Tyler is entitled to damages in respect
of the loss of training and loss of status which has resulted. Such an award
cannot be calculated with any precision. I award $25,000 for this loss.
[27]
Mr. Marchen was awarded $2,036 as special
damages, which were his relocation expenses to find work. At the hearing of
the appeal, the appellant advised it took no exception to this award.
[28]
The basis on which the judge awarded punitive
damages was stated by him in paras. 7678:
[76] In this case, the claim for
punitive damages arises not from Tylers dismissal but Dams attempt throughout
this litigation to cover up the real reason for his dismissal. If Dams had
been able to establish that Tyler was dismissed for a lack of work, Tylers
claim would have been dismissed, as lack of work was a proper ground to
terminate the contract.
[77] Dams attempt to justify Tylers
dismissal on the ground of downsizing was a planned and deliberate attempt to
mislead this court as to its true motives. Its conduct persisted over a
lengthy period of time. The misconduct commenced shortly after the issuance of
the writ when Mr. Dams contacted Ms. Mahovlich to rewrite the reasons given for
Tylers termination.
[78] I find
that Dams actions are reprehensible and a substantial departure from the
conduct and practices reasonably to be expected from an employer such as the
defendant. It breached its obligation to Tyler to act fairly and in good
faith. It is particularly reprehensible that Dams acted in this manner in
regard to a young apprentice whom it wrongfully terminated from his first
full-time job because of unfounded suspicions. Tyler was a hard working, loyal
employee. He deserved better. While I have found that method of termination
did not warrant moral damages, I find that Dams attempt to cover up the true
reasons for the termination merit an award of punitive damages.
[29]
He held that the appellants conduct was
planned and deliberate and intended to mislead the court. The motive was to
keep [Mr. Marchen] from receiving damages to which he was entitled. The
conduct began within days of the commencement of the litigation.....
[30]
The judge addressed special costs in para. 81:
[81] Dams
attempt to mislead the court as to the true reasons for termination is
reprehensible conduct deserving of rebuke:
Garcia v. Crestbrook Forest
Industries Ltd. (No. 2)
(1994), 119 D.L.R. (4th) 740 (B.C.C.A.). The
plaintiff is entitled to special costs.
Positions of the parties
[31]
The appellant asserts in its factum that the
judge erred:
1. in
law, when he construed the
Act
as not permitting termination of Mr.
Marchen on reasonable notice; accordingly, the awards of damages for wrongful
dismissal and consequential damages cannot be sustained;
2. in principle, awarding punitive
damages;
3. in
principle, awarding special costs.
[32]
The respondent supports the conclusions of the
trial judge.
Discussion
Wrongful dismissal
[33]
Although it specifies an approximate term, in my
view, it is not helpful to characterize the Agreement as a fixed term contract
because there are a number of variables. It specifies a starting date and an
anticipated end date. The uncertainty flows from the nature of an
apprenticeship, which is a period of educational training and experience
tailored somewhat to individual participants. In addition, by the terms of the
agreement the employment can end before the conclusion of the apprenticeship if
work is not available.
[34]
In para. 7, the trial judge stated the term of
the agreement was from November 13, 2002 to November 12, 2006. This appears
to have been carried forward as the period of the fixed term as expressed in
para. 60: [the appellant] agreed to employ [Mr. Marchen]
for the period
set out in the contract
so long as work was available (emphasis added).
[35]
The judge continued:
If [the appellant] had terminated [Mr.
Marchen] because of a lack of work, the termination would not have given rise
to a claim for breach of contract. Clause 3(c) is clearly intended to
encourage employers to hire apprentices without fear that they may be liable
for damages if they no longer have work available.
[61] In
this case, however, the termination did not arise from a lack of work but from
unfounded suspicions concerning [Mr. Marchens] conduct. In the
circumstances, [he] is entitled to damages based on the amounts he would have
received to the end of the fixed term less the money he actually earned
subsequent to his termination.
[36]
In my view, the judge erred in this analysis
because, subject to the availability of work, the contract was for a period of
training, experience and education resulting in journeyman status; the dates
expressed in the contract were approximate only. They could not define a fixed
term, but more importantly, as the judge noted, the obligation of the appellant
was conditioned on the availability of work. The fact that Mr. Marchen was not
terminated because work was not available does not change this. By focusing on
whether the contract was for a fixed term and so concluding, the judge does not
appear to have considered whether there was work available through to November
2006.
[37]
The duration of the agreement was approximately
four years or as long as work was available. That is, the minimum period was
the availability of work; the maximum was the completion of the required
educational training and experience.
[38]
Generally, termination of a non-fixed term
employment contract is not unlawful. The actionable wrong is the failure to
give proper notice, which is an implied term of an employment contract (
Vorvis
v. Insurance Corporation of British Columbia
, [1989] 1 S.C.R. 1085;
Machtinger
v. HOJ Industries Ltd.
, [1992] 1 S.C.R. 986).
[39]
Section 15(6) of the
Act
allowed the
parties to terminate the Agreement without the consent of the other, but
termination must be consistent with the provisions, expressed or implied, of
the employment contract. The section may be recognition that many
apprenticeships take place under collective agreements which usually constrain
termination. In the non-unionized employment context, the provision confirms
the common law right to terminate a non-fixed term contract, but it does not
obviate the need to give reasonable notice.
[40]
I observe that the present provision replaced
previous legislation that provided an apprenticeship agreement could be
terminated only by mutual agreement and with the approval of the Provincial
Apprenticeship Committee or for cause (
Apprenticeship and Tradesmens
Qualification Act
, R.S.B.C. 1960, c.13, s. 15).
[41]
I do not agree with the judges position that if
there were no work available for Mr. Marchen his termination necessarily would
not have been a breach of contract. In my view, the question would remain
whether or to what extent he was entitled to reasonable notice. Clearly
relevant to that inquiry would be the fact the parties agreed Dams did not have
to employ Mr. Marchen if no work was available. In assessing what notice, if
any to which Mr. Marchen was entitled the court must take into account all of
the circumstances of the relationship.
[42]
Mr. Marchen was terminated in January 2005. The
anticipated end of the Agreement was November 2006. The appellant contends six
weeks notice is sufficient. The respondent asserts reasonable notice would be
to the end of the term, that is, to November 12, 2006; approximately 22 months.
[43]
The Supreme Court of Canada addressed
determining an appropriate period of notice in
Honda
:
[28] In determining what constitutes reasonable notice
of termination, the courts have generally applied the principles articulated by
McRuer C.J.H.C. in
Bardal
, at p. 145:
There can be no catalogue laid down as to what is reasonable
notice in particular classes of cases. The reasonableness of the notice must
be decided with reference to each particular case, having regard to the
character of the employment, the length of service of the servant, the age of
the servant and the availability of similar employment, having regard to the
experience, training and qualifications of the servant.
[29] These
four factors were adopted by this Court in
Machtinger v. HOJ Industries Ltd.
, [1992] 1
S.C.R. 986. They can only be determined on a case-by-case basis.
[44]
The judge concluded in para. 49 that the
evidence indicates that the body shop was ultimately downsized, but he made no
finding of fact when this occurred.
[45]
The appellant could have given Mr. Marchen
notice it was downsizing the body shop and there would be no work for him at a
certain date in the future. It did not do so. Mr. Marchen was not entitled to
employment beyond the date when there was no work for him, but we do not know when
that was, although the evidence suggest it was the autumn of 2005 or later.
[46]
Although the appellants General Service Manager
testified he believed the truck shop took over body shop bays in March 2005,
other evidence placed the event in the fall of 2005. Reviewing this evidence
as a whole it appears that the truck shop made some use of body shop bays in
March 2005, but the actual surrender of the bays took place sometime later.
[47]
There also was evidence the appellant hired a
journeyman to work in the body shop after the termination of Mr. Marchen.
There was evidence this person could do work that Mr. Marchen could not do, but
there is little to establish whether Mr. Marchen could do work done by the new
journeyman. The judge did not address this issue.
[48]
In this case, Mr. Marchen was not terminated
because work was not available. He was terminated because Dams incorrectly
suspected him of criminal conduct. Because the judge did not consider the
implication of the parties agreement Dams did not have to employ Mr. Marchen
if work no longer were available, made no finding of fact when work no longer
was available and did not consider what would be reasonable notice in the
circumstances of this case, I would remit this matter to the Supreme Court to
determine the pay in lieu of notice to which Mr. Marchen is entitled.
Consequential damages
[49]
The claim for consequential damages arose out
of Mr. Marchens inability to find a sponsor to complete his apprenticeship.
The appellant contends the apprenticeship could have been completed without a
sponsor and referred to a form entitled Prior Work-based Training Credit
Application, Motor Vehicle Body Repairs. Mr. Marchen testified he had never
seen the document. His conduct was consistent with this assertion. When
seeking employment after his termination he looked for employers who would be
prepared to sponsor him and on occasion pressed them to do so.
[50]
The judge awarded Mr. Marchen $25,000
consequential damages in respect of the loss of training and loss of status
which has resulted from his termination. The judge observed such an award
could not be calculated with any precision.
[51]
The starting point in considering whether this award
is sustainable is the decision of the Supreme Court of Canada in
Honda
.
The Court there began its analysis as follows:
[50] An action for wrongful dismissal
is based on an implied obligation in the employment contract to give reasonable
notice of an intention to terminate the relationship in the absence of just
cause. Thus, if an employer fails to provide reasonable notice of termination,
the employee can bring an action for breach of the implied term (
Wallace
,
at para. 115). The general rule, which stems from the British case of
Addis
v. Gramaphone Co.
, [1909] A.C. 488 (H.L.), is that damages allocated in
such actions are confined to the loss suffered as a result of the employer's
failure to give proper notice and that no damages are available to the employee
for the actual loss of his or her job and/or pain and distress that may have
been suffered as a consequence of being terminated. This Court affirmed this
rule in
Peso Silver Mines Ltd. (N.P.L.) v. Cropper
, [1966] S.C.R. 673,
at p. 684:
[T]he damages
cannot be increased by reason of the circumstances of dismissal whether in
respect of the [employee's] wounded feelings or the prejudicial effect upon his
reputation and chances of finding other employment.
[51]
Later
in
Vorvis v. Insurance Corp. of British Columbia
, [1989] 1 S.C.R. 1085,
McIntyre J. stated at p. 1103:
I would
conclude that while aggravated damages may be awarded in actions for breach of
contract in appropriate cases, this is not a case where they should be given.
The rule long established in the
Addis
and
Peso Silver Mines
cases has generally been applied to deny such damages, and the
employer/employee relationship (in the absence of collective agreements which
involve consideration of the modern labour law régime) has always been one
where either party could terminate the contract of employment by due notice,
and therefore the only damage which could arise would result from a failure to
give such notice.
[52]
The judge in this case concluded damages for
loss of training and loss of status could be awarded following
Dunk
as
consistent with
Hadley v. Baxendale
.
[53]
I would not adopt
Dunk
as part of the law
of Canada. It has been referred to a number of times in this country, but not
followed. The English system of apprenticeship is not necessarily consistent
with Canadian practice. I do find some support for the judges approach in the
Supreme Courts consideration of
Hadley v. Baxendale
in
Honda
.
[54]
Honda
was a
wrongful dismissal case. As part of its analysis whether the conduct of the
employer could attract damages absent an independent cause of action, the Court
referred to and quoted from its previous decision in
Fidler
.
[55]
Fidler
concerned
the denial by the defendant of long term disability benefits. The plaintiff
sought damages for mental distress. The Court summarized its conclusion in
para. 2:
[2]
Since mental distress of the kind experienced by Ms. Fidler
was reasonably within the contemplation of the parties when they entered into
the contract of disability insurance, we see no reason to deny her compensation
for the damages for mental distress directly flowing from the breach. However,
the trial judge's finding that Sun Life did not act in bad faith should not be
interfered with and precludes an award of punitive damages. Accordingly, we
reverse the Court of Appeal's order as to punitive damages and restore the
award made by the trial judge.
[56]
The Court explained its conclusion in para. 44:
[44]
We conclude that damages for mental distress for breach of
contract may, in appropriate cases, be awarded as an application of the
principle in
Hadley v. Baxendale
: see
Vorvis
. The court should ask what did the contract
promise? and provide compensation for those promises. The aim of compensatory
damages is to restore the wronged party to the position he or she would have
been in had the contract not been broken. As the Privy Council stated in
Wertheim v. Chicoutimi Pulp Co.
, [1911] A.C. 301, at p.
307: the party complaining should, so far as it can be done by money, be placed
in the same position as he would have been in if the contract had been
performed. The measure of these damages is, of course, subject to remoteness
principles. There is no reason why this should not include damages for mental
distress, where such damages were in the reasonable contemplation of the
parties at the time the contract was made. This conclusion follows from the
basic principle of compensatory contractual damages: that the parties are to be
restored to the position they contracted for, whether tangible or intangible.
The laws task is simply to provide the benefits contracted for, whatever their
nature, if they were in the reasonable contemplation of the parties.
[57]
In
Honda
, the Court concluded damages
could be awarded arising out of an employers conduct at the time of dismissal
regardless of the existence of a separate cause of action, stating in para. 59:
[59]
To be perfectly clear, I will conclude this analysis of our
jurisprudence by saying that there is no reason to retain the distinction
between true aggravated damages resulting from a separate cause of action and
moral damages resulting from conduct in the manner of termination. Damages
attributable to conduct in the manner of dismissal are always to be awarded
under the
Hadley
principle. Moreover, in cases
where damages are awarded, no extension of the notice period is to be used to
determine the proper amount to be paid. The amount is to be fixed according to
the same principles and in the same way as in all other cases dealing with
moral damages. Thus, if the employee can prove that the manner of dismissal
caused mental distress that was in the contemplation of the parties, those
damages will be awarded not through an arbitrary extension of the notice
period, but through an award that reflects the actual damages.
[58]
In my view, the Court in
Honda
broke away
from the strictures of
Addis
and the jurisprudence that limited damages
in wrongful dismissal cases solely to the period of notice. There is
recognition that some employment contracts involve more than the provision of
services for remuneration and that damages flowing from a wrongful dismissal
may take that fact into account.
[59]
The journey began with
Vorvis
with the
Courts recognition that aggravated damages could be awarded. In
Wallace v.
United Grain Growers Ltd.,
[1997] 3 S.C.R. 701 at para. 95, the Court held
that employers have an obligation of good faith and fair dealing in the manner
of dismissal, which led to an extension of the period of notice. The Court in
Fidler
concluded damages for mental distress were recoverable if such
damages were in the reasonable contemplation of the parties at the time they
entered into the contract. In
Honda
the Court extended this conclusion
into the employment relationship. The Court rejected the need for a separate
actionable wrong and stated damages should not be dealt with through an
extension of the notice period, but through an award of monetary damages.
[60]
Returning to the root of contract damages, the
question becomes: what was in the reasonable contemplation of the parties at
the time they entered into the contract? As stated in
Fidler
,
the
task of the court is to ask what did the contract promise and what was in the
reasonable contemplation of the parties if what was promised was not provided?
[61]
In this case, the Agreement contemplated the
completion of an apprenticeship and the conferring on Mr. Marchen of the status
of journeyman. The appellant was obliged to teach efficiently the trade or
occupation and to [p]rovide adequate training...in all branches of the trade
so far as the facilities and the scope of the business will permit. Mr.
Marchen was to work and to take courses to become a qualified journeyman.
[62]
It is clear that subsequent to his dismissal,
Mr. Marchen was not paid at the journeymens level. He would not have been
entitled to that amount before the end of 2006, but, in my view, the clear
objective of the Agreement and the clear anticipation of the parties was that
he would earn a journeymans wage after that date. It also was the clear
objective of the Agreement and the clear anticipation of the parties that Mr.
Marchen would have the status of journeyman.
[63]
The importance of that status was illustrated by
the appellants evidence concerning its hiring of an employee in the body shop
after Mr. Marchen was terminated, despite downsizing the operation. He was
retained because he was a journeyman and was described as much more valuable to
the appellant because of that training and status.
[64]
I view the apprenticeship contract as somewhat
unique, but I would not uphold the judges award of consequential damages on
that basis alone. In my view, it is supportable on first principles, on
Hadley
v. Baxendale
. The special circumstances under which this contract was made
were known to the appellant. It was in the reasonable contemplation of the
parties that Mr. Marchens loss of the opportunity to earn a journeymans wage
and a loss of the status of journeyman would result from the appellants breach
of contract; the loss of the education and steps to qualification he would have
enjoyed had he been employed to the time work became unavailable made it more
difficult to complete the apprenticeship successfully. On the facts as found
by the trial judge, Mr. Marchen was not able to secure a further apprenticeship
that would have allowed him to become a journeyman. On the evidence, it is
likely downsizing did not occur until late autumn 2005, which would have entitled
Mr. Marchen to at least 10 months additional employment and training as an
apprentice.
[65]
In the circumstances of this case, I would
sustain the judges award of damages in the amount of $25,000.
Punitive damages
[66]
Punitive damages are awarded to express
approbation and to punish in circumstances where the global amount of damages
awarded, including aggravated damages in appropriate circumstances, is
insufficient (
Whiten v. Pilot Insurance Co.
, 2002 SCC 18, [2002] 1
S.C.R. 595 at para. 94;
B.P.B. v. M.M.B.
, 2009 BCCA 365 at para. 59).
The trial judge was well aware of this, but, in my view, he erred making such
an award in this case.
[67]
In breach of contract cases, punitive damages
flow out of egregious conduct of a defendant at the time of the breach. In
this case, when dismissing the claim for moral damages, the judge held that the
appellants conduct at the time of termination was not unfair, unfaithful,
misleading or unduly insensitive. He also held that Mr. Marchen did not
suffer undue distress. On these findings of fact, punitive damages are not available.
[68]
I would set aside the award of punitive damages.
Special costs
[69]
The judge conflated the analysis of punitive
damages and costs. Punitive damages are a remedy for breach of contract that
reflects the conduct of a party at the time of the breach. Costs reflect the
results and conduct of parties leading to and in the course of litigation.
They are not a remedy for breach of contract.
[70]
Although the judge conflated the analysis
damages and costs analysis, he made findings of fact relevant to and supportive
of his award of special costs. They can be summarized as concluding that very
shortly after this action was commenced, the appellant began to lay the
groundwork for a defence that was based on facts it knew to be untrue: that Mr.
Marchen was terminated as a result of downsizing the body shop operations. It
persisted with this defence throughout the trial and it was rejected by the
trial judge. He concluded the appellants conduct was planned and deliberate
and intended to mislead the court.
[71]
The appellant contends it is condemned for
pursuing a defence it was entitled to pursue and that an award of special costs
has a chilling effect on the ability of defendants to advance legitimate
defences that ultimately are rejected.
[72]
In my view, the appellants concern is
misplaced. There is no question a defendant is entitled to advance defences in
good faith.
[73]
In this case, the judges conclusions go far
beyond merely rejecting a defence. Looking at the evidence overall, he
concluded the appellant sought to mislead the court and to drive Mr. Marchen
from the judgment seat. No palpable and overriding error has been shown in the
judges findings of fact. They are based on his appreciation of the evidence.
There is no basis in principle on which this Court could interfere.
[74]
I would sustain the judges award of special
costs.
Conclusion
[75]
I would allow this appeal to the extent of
setting aside the order for payment of $18,151.73 as damages for wrongful
termination, would remit this matter to the Supreme Court to determine the
amount payable to Mr. Marchen in lieu of notice and would set aside the award
of punitive damages. In all other respects, I would affirm the order of the
trial judge.
The
Honourable Mr. Justice Chiasson
I agree:
The Honourable Madam
Justice Saunders
I agree:
The Honourable Mr. Justice Groberman
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Carpenter,
2010 BCCA 27
Date: 20100120
Docket:
CA036162
Between:
Regina
Respondent
And
Michael Wayne Carpenter
Appellant
RESTRICTION ON PUBLICATION: An order has been
made in this case directing that the identity of the complainants and any
information that could disclose the identity of the complainants should not be
published in any document or broadcast in any way pursuant to s. 486.4(2)
of the
Criminal Code
.
Before:
The Honourable Madam
Justice Ryan
The Honourable Mr. Justice Hall
The Honourable Madam Justice Garson
On appeal from the Supreme Court of British Columbia, November 29,
2006,
(
R. v. Carpenter
,
2006 BCSC 1936,
78175-3)
Counsel for the Appellant:
D.
Layton
Counsel for the Crown Respondent:
M.
Mereigh
Place and Date of Hearing:
Vancouver,
British Columbia
November 3, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
20, 2010
Written Reasons by
:
The Honourable Mr. Justice Hall
Concurred in by:
The Honourable Madam Justice Ryan
The Honourable Madam Justice Garson
Reasons for
Judgment of the Honourable Mr. Justice Hall:
[1]
Michael Wayne Carpenter appeals against
convictions for sexual assault and confinement of two women on separate dates
in July and September, 2005. He was found guilty after a jury trial on 29
November 2006. After taking into consideration two years of prior custody, he
was sentenced by Silverman J. on 31 August 2007 to a global sentence of
eight years of additional imprisonment. Because there was some delay in the
appointment of counsel, the notice of appeal was not filed in time. The Crown
takes no objection to an extension of time and I would grant an order extending
the time for filing the notice of appeal.
[2]
The two complainants were both young women engaged
in cleaning hotel rooms at the times of the respective assaults. Although both
complainants had a very limited opportunity to observe their assailant, both
observed him to be either naked, or semi-naked from the waist down, as he was
leaving the respective rooms in the hotels where the assaults occurred. Both
women had been vacuuming when they were assaulted from behind without warning.
Each of the victims had something described as a pillowcase or pillowcase
protector pulled over her face which obviated her ability to observe the
assailant. Both women were jabbed with an item, possibly a pen, and told to
cooperate with the assailant. The victims were pushed to the floor or a bed
and a sexual assault was perpetrated upon them by their assailant. Fortunately,
both were able to make a sufficient commotion to soon scare off the assailant.
[3]
The victim of the July assault, Ms. V.,
could not identify anyone from a set of photographs shown to her by police and
no forensic evidence was developed at the scene of the assault. All she had
seen was a man exiting the room pulling up his trousers as he left. Ms. B.,
the victim of the September assault, also had a very limited opportunity to
observe her assailant because a pillowcase or pillowcase protector was thrown
over her head. All she noted out of the corner of her eye as the person
entered the room from behind her was that the individual appeared to be wearing
nothing below the waist. A pen found on the floor at the scene of the
September assault yielded a DNA match to the appellant. Fingerprint evidence linked
to the appellant was also discovered on a doorknob at this hotel room.
[4]
Soon after the September incident, the appellant
was arrested and charged with the sexual assaults of Ms. V. and Ms. B.
and, as well, with the sexual assault of a female in her early teens who had
been assaulted in somewhat similar circumstances in March 2005. In the March
case, the complainant could not identify the assailant because she too had had
a pillowcase placed over her head. Ultimately, the trial judge was persuaded
that he ought to sever this count from the other two counts because of possible
prejudice to the appellant.
[5]
The appellant advanced three grounds of appeal.
It was submitted the trial judge erred in ruling the similar fact evidence was
admissible absent some evidentiary link between the appellant and both
incidents. In the July incident, there was nothing aside from the similar act September
evidence that linked the appellant to this assault. The appellant also submits
that because the similar fact evidence regarding the September incident bears
the entire weight of proving identity concerning the July incident, the trial
judge erred in not using a criminal standard of proof in deciding whether to permit
this evidence to go before the jury. Additionally, it was submitted that the
verdict of the jury convicting the appellant of the July incident was
unreasonable as the only evidence connecting the appellant to this assault was the
September incident.
[6]
The learned trial judge allowed the evidence of
both incidents to be placed before the jury. He said this at para. 53 of
his reasons:
On a review of the cases, I am
satisfied that there does not have to be any independent evidence linking the
accused and the offence in question so long as there are two preconditions
present, and they are as follows:
1. a
likelihood that the offence in question and the similar fact incident sought to
be relied on in support of the offence in question, were committed by the same
person. I have already made that determination.
2. that
there be an evidentiary link between the accused and the similar fact evidence
sought to be relied upon.
If both of those
factors are present, there does not have to be a link between the accused and
the offence which is sought to be supported by the similar fact evidence.
[7]
The judge instructed the jury that they could
only convict the appellant of the September incident, where DNA evidence and
fingerprint evidence existed, if they were convinced beyond a reasonable doubt
that the appellant had assaulted Ms. B. in the hotel room on that
occasion. They were not to consider any of the circumstances of the July
assault in their consideration of this incident of assault in September. He
instructed them that if they were so satisfied, the jury would have to go on to
consider whether or not they were satisfied beyond a reasonable doubt that the
individual who committed the September assault was the same individual who had committed
the July assault. Thereafter, they would have to go on to consider whether
they were convinced beyond a reasonable doubt that the appellant was the person
who assaulted Ms. V. in July. As I understand it, it was not argued before
the trial judge that he ought to be convinced beyond a reasonable doubt that
the same assailant committed the offences before admitting the similar act evidence.
It seemed then to have been accepted at trial that the test for determining the
admissibility of this evidence was to be on a balance of probabilities standard.
[8]
In ruling on the admissibility of this evidence,
the learned trial judge referred to the leading case on the use of similar act
evidence to prove identity,
R. v. Arp
, [1998] 3 S.C.R. 339, 129 C.C.C.
(3d) 321. In
Arp
, the question was whether or not similar act evidence
was admissible to prove that the appellant, Arp, killed two young women who
died in the Prince George area. There was some evidence linking the appellant
to the first victim, who was probably murdered, and significant evidence
linking him to victim number two who was proven to have been murdered.
Ultimately, the similar act evidence concerning the second victim was allowed
to be considered by the jury on the issue of whether or not the appellant was
guilty of killing both women. The convictions were sustained on appeal. In
the course of holding that the similar act evidence was properly admitted, Cory J.,
speaking for the Court, said this at para. 48:
... Where the
fact in issue is the identity of the perpetrator of the crime, then in the
usual course of events the trial judge must assess the degree of similarity
demonstrated by the manner in which the acts in question were committed to
determine whether it is
likely
the same person committed the alleged
similar acts. Once it is determined on a balance of probabilities that the
same person committed the alleged similar acts, the similar fact evidence may
be admitted to prove that the accused committed the offence or offences in
question.
[9]
He went on to say at para. 50:
In summary, in considering the
admissibility of similar fact evidence, the basic rule is that the trial judge
must first determine whether the probative value of the evidence outweighs its prejudicial
effect. In most cases where similar fact evidence is adduced to prove identity
it might be helpful for the trial judge to consider the following suggestions
in deciding whether to admit the evidence:
(1) Generally
where similar fact evidence is adduced to prove identity a high degree of
similarity between the acts is required in order to ensure that the similar
fact evidence has the requisite probative value of outweighing its prejudicial
effect to be admissible. The similarity between the acts may consist of a
unique trademark or signature on a series of significant similarities.
(2) In
assessing the similarity of the acts, the trial judge should only consider the
manner in which the acts were committed and not the evidence as to the accuseds
involvement in each act.
(3) There
may well be exceptions but as a general rule if there is such a degree of
similarity between the acts that it is likely that they were committed by the
same person then the similar fact evidence will ordinarily have sufficient
probative force to outweigh its prejudicial effect and may be admitted.
(4) The jury
will then be able to consider all the evidence related to the alleged similar
acts in determining the accuseds guilt for any one act.
Once again these
are put forward not as rigid rules but simply as suggestions that may assist
trial judges in their approach to similar fact evidence.
[10]
This Court pointed out in
R. v. Brisbin
(1995),
101 C.C.C. (3d) 334, 64 B.C.A.C. 54, and in
R. v. Bush
, 2001 BCCA 447,
159 C.C.C. (3d) 161, that similar act evidence is a species of circumstantial
evidence. The Court said this in
Brisbin
, a case in which similar act
evidence was used to prove the identity of the appellant as an arsonist, about
the test for admissibility of similar act evidence:
[32] ... The more striking the
similarities the more probative the evidence will be. In a paper prepared for
the 1994 Federation of Law Societies National Criminal Program, Marc Rosenberg
analyzed the issue in this way:
It is, of course, impossible to
generalize as to the degree of similarity which makes the evidence probative of
the issue. Whether one uses Wigmore's notion of common features or the
concept of striking similarity [or startlingly similar]
what is really
being sought is some cluster of features which makes mere coincidence so
unlikely as to give the evidence real probative value
. Since what is
involved is the concept of a system or design, there will usually be some nexus
between the acts in time and in place. The cluster of similar features should,
on the whole be distinctive. (Emphasis added.)
[33] In my
view, counsel for the appellant cannot be said to be wrong when he submits that
where the only evidence of identity offered by the Crown is similar fact
evidence the similarities ought to be strikingly similar. But, as Mr. Rosenberg
makes the point, to say that the evidence must be strikingly similar is really
just to underline the necessity that the evidence possess real probative value
in light of the purpose for which the evidence will be used. The prejudice
inherent in similar fact evidence is significant. There is always a serious
risk that the trier of fact will over-estimate the value of the evidence. At
the end of the day the probative value of the similar fact evidence must
outweigh its prejudicial value and to do so the evidence of similarity must be
powerful.
[11]
In the present case, the essence of the
appellants argument is that as the only way to connect him to the July offence
is through evidence from the September assault, such evidence should not be
admissible as similar fact evidence unless the trial judge is satisfied beyond
a reasonable doubt that the same individual committed both crimes. Though
usually questions of admissibility are determined on a balance of
probabilities, there are exceptions where the trial judge must be satisfied of
certain pre-conditions to admissibility beyond a reasonable doubt. One such
exception is that the voluntariness of a statement must be proven beyond a
reasonable doubt before it is placed before a jury. Counsel for the appellant
relied on this language found in the judgment of Cory J. in
Arp
:
70 ... The general principles
enunciated in these cases indicate that the jury should determine, on a balance
of the probabilities, whether the similarities between the acts establish that
the two counts were committed by the same person. If that threshold is met,
the jury can then consider all the evidence relating to the similar acts in
determining whether, beyond a reasonable doubt, the accused is guilty.
71 However,
the general rule that preliminary findings of fact may be determined on a
balance of probabilities is departed from in those certainly rare occasions
when admission of the evidence may itself have a conclusive effect with respect
to guilt. For example, where the Crown adduces a statement of the accused made
to a person in authority, the trial judge must be satisfied beyond a reasonable
doubt of the voluntariness of the statement. That evidence may of itself, if
accepted as true, provide conclusive proof of guilt. Since doubt about the
statements voluntariness also casts doubt on its reliability, proof beyond a
reasonable doubt is warranted. See
Ward v. The Queen
, [1979] 2 S.C.R.
30. If this were not the rule, the jury would be permitted to rely on evidence
which it could accept as extremely cogent even though the inherent reliability
of that evidence was in doubt.
[12]
Counsel for the appellant also referred to comments
made by the Supreme Court of Canada in
R. v. H.(L.T.)
, 2008 SCC 49,
[2008] 2 S.C.R. 739, a recent case concerned with the
Charter
rights of
an accused young offender. The issue in that case was whether as a
pre-condition for admissibility the Crown had to prove beyond a reasonable
doubt not only the voluntariness of a statement but also that the police had
made an explanation to the young person of his rights. Fish J., writing
for the majority, referred to the passage above from the judgment of Cory J.
in
Arp
. I note that the case of
H.(L.T.)
involved the
admissibility of a statement, the sort of situation referred to by Cory J.
in para. 71 of his reasons in
Arp
. In
Arp
, Cory J.
went on to say:
72 Similar fact evidence, on the
other hand, as circumstantial evidence, must be characterized differently,
since, by its nature, it does not carry the potential to be conclusive of
guilt. It is just one item of evidence to be considered as part of the Crowns
overall case. Its probative value lies in its ability to support, through the
improbability of coincidence, other inculpatory evidence. As with all
circumstantial evidence, the jury will decide what weight to attribute to it.
The mere fact that in a particular case, similar fact evidence might be
assigned a high degree of weight by the trier is entirely different from the
concept that, by its very nature, the evidence has the potential to be decisive
of guilt.
73 As the
intervener the Attorney General for Ontario concedes, it is, of course,
conceivable for a single item of circumstantial evidence to be the only
evidence of an essential element of the offence in a given case. The criminal
standard of proof would have to be applied in those circumstances in order to
ensure compliance with the requirement that every essential element in a
criminal prosecution must be proven beyond a reasonable doubt. Thus where the
Crowns case on the issue of identity is based entirely on the underlying unity
between the similar acts, it follows that the standard of proof beyond a
reasonable doubt will govern the jurys determination whether one person must
have committed both acts.
[13]
Counsel for the appellant suggested in argument
that there seemed to be some difference between the test being enunciated by
Cory J. in the earlier passage in his reasons and this later passage in
his reasons. It seems to me that this difference is perfectly explicable along
these lines: in the later passage in his reasons in
Arp
, Cory J.
was dealing with the methodology by which a jury ought to be instructed to deal
with the issue. He was not there dealing with the question of admissibility, a
question for the trial judge to decide in a case held with a jury. I see no
inconsistency in the two passages. The passages are simply dealing with
different subject matters at different stages of a trial. I observe that the
judgment in
H.(L.T.)
is entirely consistent with the remarks of Cory J.
in
Arp
concerning the test for admissibility of statements since this
was essentially what was at issue in the case of
H.(L.T.)
.
[14]
In the instant case, the evidence about the
September assault on Ms. B. was, having regard to the striking similarity in
the incidents, very powerful circumstantial evidence that the September
assailant was the person who assaulted Ms. V. in July. But this sort of
evidence is of a different genus from evidence such as a statement. Similar
act evidence is circumstantial evidence, whereas a statement is an admission
which, if accepted, is conclusive evidence of guilt. Circumstantial evidence
will have greater or lesser weight depending on the view the jury takes of it
and is thus subject to a different threshold for admissibility, as was explained
by Cory J. in
Arp
.
[15]
It was submitted that a charge to a jury in a
case like the instant one is so complicated that it could be impossible for a
jury to properly appreciate its task. I do not consider that to be the situation
in the present case. Here, in my view, the charge to the jury was quite
straightforward. The jury had to be satisfied beyond a reasonable doubt that
the appellant was the assailant in the September incident before they could
convict the appellant of that offence and they were so instructed. The jury
was correctly instructed not to consider evidence about the July incident in
making this determination. There seems nothing difficult about that. If the
jury concluded beyond a reasonable doubt that both incidents were committed by
the same person, then they could use evidence of the September incident to
conclude beyond a reasonable doubt the guilt of the appellant on the July
incident. That is entirely consistent with what Cory J. articulated in
R.
v. Arp
. I do not regard this reasoning path or process to be particularly
difficult or convoluted.
[16]
This was a case in which there were a number of
striking similarities between the incidents. The judge enunciated several of
these in his reasons:
[37] The two which continue to have
striking similarities with each other when the details are considered are the
Coast incident and the Days Inn incident. Some of the detailed similarities
between these two are as follows:
1. The
victims were both young women in their twenties;
2. They
were both working as housekeepers/chambermaids at the time of the incidents;
3. They
were both working on the second floor of their respective hotels where guest
rooms are located;
4. They
were actually working at the time in a guest room, each in their own hotel,
cleaning it up after the guest has left for the day;
5. Their supply
cart was in the hallway outside the room they were working in;
6. The door
to the room that they were in was left unlocked;
7. They had
both finished the entirety of their cleaning routine in the room they were in
except for the chore that they always left to the last, which was vacuuming;
8. They
were both engaged at the time the assault commenced in that final chore of
vacuuming the rug with an operating, noisy vacuum cleaner at the time;
9. They
were both attacked from behind;
10. There was
a pillowcase or something similar placed over their heads at the commencement
of the attack;
11. Pillowcases
were items that were visible and accessible to anybody walking by the cart in
the hallway outside;
12. The pants
of the assailant were either down at the ankles or completely off;
13. They were
both sexually assaulted with touching and attempts to touch them in a sexual
way;
14. They were
both threatened that they would be stabbed or cut if they resisted or made
noise;
15. They both
had an object held against a part of their body, a different part for each,
consistent with the threat that they would be stabbed or cut;
16. The
assailant ran out and fled after the victim resisted and after he, the
assailant, unsuccessfully attempted to overcome that resistance;
17. The
entirety of the assault occurred within the same room that the victim was in
when the assault started.
The striking similarities pointed to an
unlikelihood of coincidence see
R. v. Handy
, 2002 SCC 56, [2002] 2
S.C.R. 908, at paras. 41-42.
[17]
The trial judge did not in my opinion err in his
approach to admissibility. Having found a very high degree of similarity
between the circumstances of the two incidents, the judge then correctly
instructed the jury on the approach it was required to take concerning proof of
the two incidents. For the reasons I have enunciated, I would not accede to
the heads of argument advanced on behalf of the appellant concerning
admissibility and the instructions about the use of the evidence by the jury.
[18]
As regards the argument that the verdict of
guilty registered on the July incident was unreasonable as it rested wholly on
similar act evidence from the September incident, I am of the view that the
similarities were indeed striking. This evidence in my opinion affords a
proper basis for the guilty verdict of the jury. Applying the standard
adverted to in the cases of
R. v. Biniaris
, 2000 SCC 15, [2001] 1 S.C.R.
381, and
R. v. Yebes
, [1987] 2 S.C.R. 168, 43 D.L.R. (4th) 424, I am not
of the view that the verdict of guilt on the July offence was unreasonable. I
would dismiss this appeal from conviction.
The Honourable Mr. Justice Hall
I agree:
The Honourable
Madam Justice Ryan
I agree:
The
Honourable Madam Justice Garson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Riach,
2010 BCCA 38
Date: 20100120
Docket:
CA034846
Between:
Regina
Respondent
And
Harvey
Riach
Appellant
Before:
The Honourable Chief Justice Finch
The Honourable Madam Justice Prowse
The Honourable Madam Justice D. Smith
On
appeal from: Provincial Court of British Columbia, September 22, 2006,
(
R. v. Riach
, Vancouver Registry 173632-1-D)
Oral Reasons for Judgment
Counsel for the Appellant:
P.D.
Angly
Counsel for the (Crown) Respondent:
A.
Budlovsky, Q.C.
Place and Date of Hearing:
Vancouver,
British Columbia
January
20, 2010
Place and Date of Judgment:
Vancouver,
British Columbia
January
20, 2010
[1]
FINCH C.J.B.C.
: Mr.
Riach applies for leave to appeal, and if leave is granted, appeals from a
sentence of eight years imprisonment imposed in Provincial Court on 22
September 2006 on one count of aggravated assault. In the circumstances of this
case, the Crown agrees with the submission of appellants counsel, which is
that the sentence should be reduced by giving credit for time served in custody
before trial, on a two-for-one basis.
[2]
At trial, the appellant was convicted on one
count of robbery and one count of aggravated assault. The trial judge imposed a
sentence of 12 years for the robbery conviction, but gave the appellant credit
for 18 months in recognition of the 9 months he had served in pre-trial custody.
The net sentence for the robbery was therefore 10 1/2 years. For the aggravated
assault conviction, the judge imposed a sentence of eight years imprisonment
concurrent.
[3]
The appellant appealed his convicted to this
Court. On 10 October 2009, the Court allowed the appeal against the robbery
conviction, and ordered that conviction be set aside, and an acquittal entered.
The appeal against the conviction for aggravated assault was dismissed: See
2009 BCCA 442.
[4]
The two charges arose from one incident on 30
December 2005 when the appellant stabbed one of two victims whom he was
evidently trying to rob. This Court held that the evidence could not support
the robbery charge, because there was no evidence of an assault on the person
alleged to have been robbed. In imposing the global sentence of 10 1/2 years,
it is clear that the judge intended to give the appellant credit for time
served. The result of the successful appeal against the robbery conviction is
that the appellant is left with an eight year sentence for the aggravated
assault, against which no credit for pre-trial custody has been given.
[5]
It is not contended that the eight year sentence
for the aggravated assault was unfit. However, the appellant submits, and the
Crown agrees, that the eight year sentence should be reduced by 18 months to
give credit for the time served in pre-trial custody.
[6]
I would grant leave to appeal and would allow
the appeal by reducing the eight year sentence to one of 6 1/2 years.
[7]
PROWSE J.A.
: I
agree.
[8]
D. SMITH J.A.
: I
agree.
[9]
FINCH C.J.B.C.
:
So ordered.
The Honourable Chief Justice Finch
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Kerr v. Baranow,
2010 BCCA 32
Date: 20100121
Docket:
CA035724
Between:
Margaret Patricia Kerr
Respondent
(
Plaintiff
)
And
Nelson Dennis Baranow
Appellant
(
Defendant
)
Before:
The Honourable Madam Justice Levine
The Honourable Mr. Justice Tysoe
The Honourable Madam Justice D. Smith
Supplementary
Reasons to: Court of Appeal for British Columbia, March 13, 2009
(
Kerr v. Baranow
, 2009 BCCA 111)
Counsel for the Appellant:
S.
Label
Counsel for the Respondent:
A.
Petronio
Place and Date of Hearing:
Vancouver,
British Columbia
January 8, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
March
13, 2009
Written Submissions received:
July
17 and July 29, 2009
Date of Supplementary Judgment:
January
21, 2010
Supplementary Reasons by
:
The Honourable Madam Justice D. Smith
Concurred in by:
The Honourable Madam Justice Levine
The Honourable Mr. Justice Tysoe
Supplementary
Reasons for Judgment of the Honourable Madam Justice D. Smith:
[1]
The appellant seeks an order for costs of the
appeal and, as a result of its disposition, an order for costs in the court
below.
[2]
The action was commenced by the respondent following
the break-down of the parties long-term common law relationship. The
respondent sought a declaration of a resulting trust in real property owned by
the appellant, or in the alternative a monetary award for unjust enrichment as a
result of her direct and indirect contributions during the relationship. The
respondent also sought an award of spousal support.
[3]
The appellant opposed all of the respondents claims
and counterclaimed for a monetary award for unjust enrichment, or alternatively
a declaration of trust in the assets held by the respondent, as a result of his
direct and indirect contributions during the relationship.
[4]
The trial judge granted the respondent a
declaration of resulting trust in a one-third interest in the real property
owned by the appellant and awarded her a monetary sum for the value of that
interest. He also awarded the respondent indefinite monthly spousal support,
retroactive to the date upon which the action was commenced, even though the
respondent had not requested retroactive spousal support to that date and had
made no application for interim spousal support.
[5]
The appellants counterclaim was not addressed
in the entered order from the trial court.
[6]
On appeal this Court: (i) dismissed the
respondents application to adduce fresh evidence; (ii) allowed the appeal from
the declaration of resulting trust, or in the alternative constructive trust, and
the attendant monetary award for the respondents trust interest; (iii)
remitted the appellants claim for unjust enrichment back to the lower court
for determination; (iv) dismissed the appellants appeal from the award of spousal
support but allowed the appeal from the retroactive aspect of the award. This
last order was based on a ground of appeal that was framed in the alternative;
namely, if the entitlement and amount of the spousal support award was not in
error, then in the alternative the retroactive aspect of the award was in
error.
[7]
The general rule is that costs follow the event.
Section 23 of the
Court of Appeal Act,
R.S.B.C. 1996, c. 77 (the
Act
)
provides:
Unless the court
or a justice otherwise orders, the party who is successful on an appeal is
entitled to costs of the appeal including the costs of all applications made in
the appeal.
[8]
In my view, the appellant was substantially successful
in the appeal and therefore is entitled to his costs pursuant to s. 23 of the
Act.
[9]
The appellant also seeks an order for costs in
the court below. Given the disposition of the appeal, I am not persuaded the
appellant can be said to have achieved the same degree of success on the claims
before the trial court. While he has succeeded in having the respondents trust
claims dismissed, the respondent succeeded on her claim for spousal support,
which the appellant opposed at trial and which was upheld on appeal.
[10]
In view of the parties divided success on their
respective claims advanced at the trial of the action, I would order that each
bear their own costs in the court below.
The Honourable Madam Justice D. Smith
I AGREE:
The Honourable
Madam Justice Levine
I AGREE:
The
Honourable Mr. Justice Tysoe
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. B.S.B.,
2010 BCCA 40
Date: 20100122
Docket:
CA036573
Between:
Regina
Respondent
And
B.S.B.
Appellant
RESTRICTION ON PUBLICATION: A
N ORDER
HAS BEEN MADE IN THIS CASE PURSUANT TO S. 486.5 OF THE C
RIMINAL CODE
THAT PROHIBITS ANY INFORMATION THAT COULD IDENTIFY A VICTIM OR WITNESS BEING
PUBLISHED, BROADCAST OR TRANSMITTED.
SECTION 16(4)
SEX OFFENDER INFORMATION AND REGISTRATION ACT
:
THIS SECTION PROVIDES THAT NO PERSON SHALL DISCLOSE ANY INFORMATION THAT IS
COLLECTED PURSUANT TO AN ORDER UNDER SOIRA OR THE FACT THAT INFORMATION
RELATING TO A PERSON IS COLLECTED UNDER SOIRA.
Before:
The Honourable Madam Justice Saunders
The Honourable Madam Justice Neilson
The Honourable Mr. Justice Groberman
On
appeal from: Supreme Court of British Columbia, November 7, 2008
(R. v. B.S.B
, 2008 BCSC 1526 New Westminster Registry X070471)
Oral Reasons for Judgment
Counsel for the Appellant:
M.D.
Sanders
Counsel for the (Crown) Respondent:
W.
Rubin, Q.C.
Place and Date of Hearing:
Vancouver,
British Columbia
January
19, 2010
Place and Date of Judgment:
Vancouver,
British Columbia
January
22, 2010
[1]
NEILSON J.A.
: The
appellant appeals his custodial sentence of two years less a day and three
years probation for sexual assault, imposed by a Supreme Court judge on
November 7, 2008. He says that the sentencing judge erred in deciding he was
not a suitable candidate to serve the custodial portion of his sentence in the
community pursuant to s. 742.1 of the
Criminal Code
, R.S.C. 1985,
c. C-46.
[2]
The facts underlying the appellants conviction
were summarized in the reasons for judgment dealing with his conviction appeal,
indexed at 2009 BCCA 520:
[2] The complainant found herself
naked in the appellants bed one morning with no memory of how she got there or
what had happened the night before. She became increasingly troubled as the day
wore on and phoned the appellant. After some hesitation, he said they had sex
and that he wore a condom at the time. The complainant went to the hospital
where she was checked for sexual assault. The examining nurse found 19 bruises
and two vaginal tears. A vaginal swab and DNA testing revealed the presence of
the appellants semen. Although testing for the date rape drug was negative,
an expert testified that the drug quickly passes through the system and would
not have been detected in the interval between the event and the testing in
this case.
[3] The complainant testified that
she went out with the appellant on one prior occasion, having made his
acquaintance under the name of Dion on the Internet. On the second occasion,
the evening in question, she accepted his invitation to join him and friends at
his home. The appellant, the complainant and another couple (referred to in the
evidence as Jo. and Me.) had a few drinks, a meal, and then the four of them
prepared to go out to a nightclub. At this point, Me. noticed that the
complainant was behaving strangely and made a lewd advance towards her. The
complainant testified that she was fading in and out. The two couples went to
a nightclub. The complainant has no memory of how she got there, and apart from
a few scattered recollections, no memory of what happened at the club.
[4] According to Jo. and Me., her
behaviour on the dance floor was bizarre and embarrassing: she was grinding
her buttocks into groins of both the appellant and Me., and moving her arms up
and down completely out of time with the music.
[5] The appellant and the complainant
left the club on their own. The complainant could not remember leaving the
club, arriving at the appellants home or how she ended up in his bedroom. Her
only memory was of lying on the sidewalk, feeling unable to get up.
[6] The
appellant testified that on the way home the complainant had vomited all over
her clothing, which he removed when they got there. He said she went into his
bed after vomiting again, passionately kissed him, fondled his penis and guided
it into her vagina. He explained his hesitancy on the phone with her the next
day because he was surprised that she would ask him if they had sex, given her
seductive behaviour in bed.
[3]
While the circumstances were suspicious, the
judge found there was no proof that the appellant had drugged the complainant. He
found the complainant credible and forthright. He made these findings as to the
appellants credibility:
[45] I must
say that I have great difficulty believing anything the accused said in his
testimony. He lied when he told Cst. Chahil that he did not know Ka.; he lied
when he said he did not tell Ka. that his name was Dion; he lied when he told
Ka. that he had used protection during sexual intercourse with her; he lied
when he told the complainant that he was half French; and, he lied when he told
the complainant that she had taken off her clothes because she had vomited on
them. In addition to all of this, I find his description of how he was seduced
by Ka. to be simply ludicrous, given the circumstances.
[4]
The appellant was 30 years old at the time of
sentencing and had no criminal record. He had worked as a prison guard with
Corrections Canada since 1999, but lost his job and his hopes of becoming a
police officer as a result of the offence. He filed a large number of letters
that demonstrated strong support from his family and fellow employees. Two
women colleagues testified to his good character.
[5]
The Crown took the position that a four year
custodial sentence would be appropriate. The defence argued that the appellant
was a proper candidate for a conditional sentence order.
THE REASONS FOR JUDGMENT
[6]
The reasons of the sentencing judge set out a
comprehensive review of the principles that govern sentencing, including
conditional sentence orders. He reviewed authorities that dealt with similar
cases, and determined that an appropriate range of sentences for sexual assault
that involved intercourse was two to six years.
[7]
He used the list of fa
ctors from
R. v.
J.-J. L.
, [1998] R.J.Q. 971, 126 C.C.C. (3d) 235 (C.A.)
as
the framework for assessing the circumstances of the offence. He noted the
gravity and pervasiveness of sexual assault generally as a crime. He described
this
sexual assault as particularly heinous. He referred to it as a
rape and found the violence used was an aggravating factor. He observed that
the a
ssault had had a devastating effect on the complainant,
and
that the
appellant had shown no remorse or empathy
for her, although the judge emphasized that he did not consider the lack of
remorse an aggravating factor.
[8]
The sentencing judge stated his conclusion as to an appropriate
term of imprisonment in this way:
[48] After instructing myself on the
law as enunciated above, I have concluded that the offence committed by this
accused should result in a period of imprisonment of two years less one day. I
conclude the such a sentence would be proportionate to the offence committed by
him and his degree of responsibility for it because of the following factors:
(a) the
vulnerability of the victim;
(b) the
insidious nature of the offence;
(c) the
accuseds high degree of moral responsibility for the offence;
(d) the requirement for the sentencing
principles of general deterrence and denunciation to be stressed.
[9]
He then turned to consider whether it would be
appropriate for the appellant to serve his sentence in the community, pursuant
to s. 742.1 of the
Code
, and
R. v. Proulx,
2000 SCC 5,
[2000] 1 S.C.R. 61. At the time of the offence, the amendment excluding sexual
assault from s. 742.1 had not been enacted. The sentencing judge focussed
on whether a conditional sentence would satisfy the requirements of deterrence
and denunciation, and whether it would endanger the safety of the community,
particularly women in the community. He concluded that a custodial sentence was
necessary:
[60]
With respect to the prerequisite
involving the safety of the community, the Supreme Court of Canada held at
para. 68 of
Proulx
, that the focus
of the analysis at this point should clearly be on the risk posed by the
individual offender while serving his sentence in the community. The danger
to the public is evaluated by reference to (1) the risk of re-offence in
light of the conditions attached to the sentence, and (2) the gravity of
the danger in the event of a re-offence.
[61] B.S.B. has no previous convictions.
This supports the proposition that he does not constitute a danger to the
public, but only in a simplistic manner. The nature of the sexual offence
committed by B.S.B. raises serious concerns for the Court. This was an offence
involving an accused who had non-consensual sex with a female when she was in a
very vulnerable state; this is an offence where the accused inflicted violence
on the complainant when he committed the assault upon her; this is a case where
the accused transmitted gonorrhoea to the complainant because he decided to have
unprotected sex with her. The Court must conclude that B.S.B. committed this
offence solely in order to satisfy his sexual desires. Obviously, B.S.B.s
behaviour raises serious concerns as regards the safety of the community. I
conclude that allowing B.S.B. to serve a period of imprisonment in the
community would result in the safety of women in the community being
endangered.
[62] With respect to the
prerequisite involving the principles of sentencing, the Supreme Court of
Canada held in
R. v. Wells
, 2000 SCC 10,
[2000] 1 S.C.R. 207 at para. 29, that the court is to undertake a
comprehensive consideration of the principles of sentencing set out in
ss. 718 to 718.2 of the
Criminal Code
.
As in
R.A.R.
, the principles of
denunciation and deterrence are of prime importance in this case. In my view, a
conditional sentence
would fail to reflect the seriousness of
the offence committed by B.S.B. and would fail to satisfy the sentencing
principles of denunciation and general deterrence.
GROUNDS OF APPEAL
[10]
The appellant says the sentencing judge made
four errors in concluding that a conditional sentence would endanger the safety
of the community:
a) he found the appellant had transmitted
gonorrhoea to the complainant and treated this as an aggravating factor when
this was a disputed fact and the Crown had not proved it beyond a reasonable
doubt;
b) he erred in finding that the fact that
the appellant committed the offence to satisfy his sexual desires was an
aggravating factor;
c) he misapprehended the degree of violence
inflicted on the complainant during the offence, and erred in treating this as
an aggravating factor;
d) he rejected
uncontradicted psychological opinions that the appellant was not a danger to
society.
ANALYSIS
[11]
An appellate court must apply a deferential
standard of review in considering whether a sentence is fit. Sentencing judges
are given a broad discretion under the
Code
to determine what is a just
and appropriate sentence. They are uniquely placed to assess the submissions of
counsel, the social and community context for the offences, and the moral
blameworthiness of the offender. Absent an error in principle, failure to
consider a relevant factor, or over-emphasis of proper factors, a court of
appeal will intervene only if a sentence is demonstrably unfit:
R. v. M.
(C.A.)
, [1996] 1 S.C.R. 500, 105 C.C.C. (3d) 327 at paras. 89-92;
R.
v. L.M.
, 2008 SCC 31, [2008] 2 S.C.R. 163 at paras. 14-16.
1. Did the sentencing judge err in
referring to the transmission of gonorrhoea when this was a disputed fact?
[12]
This issue was raised for the first time in the
complainants Victim Impact Statement entered at sentencing. It stated:
The Sane Kit
that was conducted at Surrey Memorial Hospital brought back positive results
for gonorrhoea after the assault. Prior to September 2004 I had no Sexually
Transmitted Diseases. Dion could have had AIDS. Could you imagine if I was
diagnosed with AIDS for instance? Then, truly, my life would have been taken
from me. Its such a heinous thought that someone would have not only done this
to me, but would also have the audacity not to use protection.
[13]
During submissions, the Crown raised the
positive test for gonorrhoea in the context of its argument that engaging in
unprotected sex during the crime was an aggravating factor. The defence replied
that it could not be an aggravating factor because there was no evidence that
the appellant had a sexually transmitted disease or was reckless as to that
possibility, or that he had transmitted it to the complainant.
[14]
The appellant says the transmission of
gonorrhoea was thus a disputed fact, and the Crown was obliged to prove it
beyond a reasonable doubt pursuant to s. 724(3) of the
Code
. It did
not do so, and the sentencing judge was therefore precluded from relying on it.
Instead, he improperly treated the transmission of gonorrhoea as an aggravating
feature, and also referred to it as a fact that militated against a conditional
sentence.
[15]
The appellant is incorrect in saying the
sentencing judge used this as an aggravating factor. He did, however, mention
it in his assessment of the gravity of danger to the community if the appellant
received a conditional sentence. Like the Crown, he raised it as a consequence
of having unprotected sex.
[16]
I agree the sentencing judge was wrong in doing
so. While he could consider the danger of unprotected sex in his analysis, the
question of whether the appellant transmitted gonorrhoea to the complainant
during that act was disputed, and had to be established pursuant to s. 724(3).
2. Did the sentencing judge err in
treating satisfaction of sexual desire as an aggravating feature?
[17]
The appellant says that satisfaction of sexual
desire is no more than a definitional element of the offence of sexual assault,
and the sentencing judge erred in treating it as an aggravating factor, or as
something relevant to community safety.
[18]
Taken in context, I do not find the comment
objectionable.
As set out previously, the sentencing judge was not
dealing with aggravating factors at para. 61 of his reasons where this comment
occurs.
[19]
As to the issue of community safety, the sentencing judges
reasons demonstrate that he was j
ustifiably disturbed by the
circumstances of this offence. A previously blameless young man with an
unblemished career in the justice system had committed a serious sexual assault
on a vulnerable victim in unusual circumstances. There was no indication that
substance abuse played a role in his actions.
The appellant and
complainant hardly knew each other, so it could not be explained by some
historical dispute or dynamic in the relationship. The appellant
lied to the complainant and the police. He had shown no remorse or
insight into the offence, and continued to maintain their sexual encounter was
consensual. In the context of assessing danger to the community, the judge was
trying to determine why this assault had occurred, and whether the appellants
behaviour was so unpredictable that he might offend again if he served his
sentence in the community.
[20]
In that context, I view the comment complained
of simply as the sentencing judges observation that there was nothing to
explain the assault other than the obvious that the appellant wanted to
satisfy his sexual desires.
[21]
I would not accede to this ground of appeal.
3. Did the
sentencing judge misapprehend the evidence as to the degree of violence?
[22]
The appellant argues that the sentencing judge
misapprehended the evidence in concluding that this sexual assault was
heinous, and that the violence was an aggravating factor. The appellant
maintains that the degree of violence inflicted was no greater than the
violence inherent in the offence itself.
[23]
The injuries to the complainant were described
by the judge in his reasons for conviction. Ms. Hildebrand, an expert in
examining complainants of sexual assault, testified that the complainant had 19
recent bruises caused by blunt force on her arms, hands, breast, abdomen,
thighs, foot, back and pubic area. As well, her vagina was tender and had two
small lacerations. Ms. Hildebrand said that some of the injuries were
consistent with sexual assault, and the complainant ranked in the top third
with respect to the number of injuries she had observed in sexual assault
victims.
[24]
The complainants victim impact statement stated
that she was not able to cross her thighs for days due to the injuries.
[25]
The judge found the injuries had been caused by
the appellant, and that they indicated that the complainant had struggled to
resist his assault.
[26]
The appellant argues that Ms. Hildebrand
used an ultraviolet lamp to detect the 19 injuries, and some of them would not
have been visible without that aid. As a result, the severity of the injuries
is overstated. As well, he complains that nothing identified the population to
which Ms. Hildebrand referred in placing the complainant in its top third.
Without that, he says that evidence is meaningless and prejudicial.
[27]
I find no error in the sentencing judges
conclusions that this was a heinous assault and that the violence was an
aggravating factor. The list of 19 injuries includes many that were clearly
visible and painful. The sentencing judge found the complainant credible and
was entitled to accept her account of their impact on her. Their statistical
import was not a necessary component of his conclusion that the violence was
both an aggravating factor and a feature to be considered in the context of
community safety.
4. The trial judges treatment of the
psychologists reports
[28]
The appellant provided two reports from
psychologists at the sentencing proceeding. The first was an extensive
assessment from Dr. Williams, a clinical forensic psychologist. He
concluded that the appellant was not inclined to violence or hostility, and
statistically represented a low risk for sexual or violent recidivism.
[29]
The second was a report from Ms. Cherry, a
counselling psychologist who had seen the appellant for six sessions over the
two months between his conviction and his sentencing. Her report deals
primarily with the appellants personal circumstances and progress in coming to
terms with the changes in his life as a result of the offence. She provides her
view that he appears to pose no threat to anybody.
[30]
The appellant argues that the sentencing judge
erred in principle in implicitly rejecting this uncontradicted evidence.
Further, his failure to provide reasons for doing so precludes meaningful
appellate review.
[31]
The sentencing judges treatment of these
reports is confined to mentioning Dr. Williams conclusions in summarizing
the defence position, and later noting that there were a number of positive and
mitigating circumstances in the appellants circumstances. The judge did not,
however, enlarge on these.
[32]
I agree that it would have been preferable if
his reasons had explicitly dealt with these reports.
5. Was the sentence unfit?
[33]
I have concluded that the sentencing judge erred
in referring to a disputed fact, and I have found that he did not set out his
reasons for rejecting the psychologists reports. Despite those shortcomings,
this Court may only modify the sentence if it finds it was unfit. While the
presence of reasons will assist in that determination, their absence will not
automatically result in a reduction of the sentence. The issue is whether the
sentence was reasonable and fell within the expected range for sentences for
offences of this nature:
R. v. Shropshire
, [1995] 4 S.C.R. 227, 129
D.L.R. (4
th
) 657.
[34]
With respect to the reference to the
transmission of gonorrhoea, I am not persuaded that this played a significant
role in the sentencing judges determination of a fit sentence. As set out
previously, it arose in the context of the appellants unprotected sex with the
complainant. It was that reckless practice that was the prime concern. The
appellant had lied to the complainant about this, telling her he had used a
condom. Ms. Cherry described him as immature, and a long-time participant
in the bar scene, given to frequent one-night stands. In that context, the
trial judge could properly consider unprotected sex a legitimate concern with
respect to community safety. While the transmission of a sexually transmitted
disease as a result of such activity is an acknowledged risk, whether or not it
occurred here was not the primary point.
[35]
With respect to the sentencing judges treatment
of the psychological reports, although they suggested that the appellant was
not at risk to re-offend,
both reports were limited in the assistance
they could provide the judge. Dr. Williams noted that the appellant
continued to deny that he had committed the crime. Dr. Williams could
offer no insight into the reasons or motive for the assault, other than perhaps
the appellants feelings of inadequacy. Ms. Cherrys
report
similarly contains no suggestion that he has admitted responsibility for the
crime, or has any insight into it.
[36]
I am not satisfied that the sentencing judges failure to deal
with these reports in his reasons must lead to a modification in the
appellants sentence. This was an unusual offence. The appellants background
strongly suggested he was not a person who would commit a sexual assault. The
psychologists opinions regarding future risk point to that. Yet the appellant
did commit a serious sexual assault.
They were unable to
explain this. The appellants continuing denial, and the absence of any insight
as to why he committed the offence, significantly diminished their
psychological opinions as to his future risk.
[37]
Both parties have provided the Court with
authorities that deal with sentences in other sexual assault cases. The Crowns
authorities predictably affirm that a custodial sentence is appropriate. The
appellants recount cases in which the complainants were subjected to
devastating sexual assaults, but the offender received a conditional sentence.
While these cases provide some guidance in affirming the appropriate sentencing
range, each has its own unique constellation of circumstances and for that
reason they are of limited assistance. For example, in the five authorities
provided by the appellant, all involved offenders who were seriously
intoxicated at the time of the offence, and took steps to deal with their
substance abuse thereafter; four referred to family financial obligations as a
primary reason for deciding the offender could serve his sentence in the
community; and three had express findings that the offender did not present a
danger to the community. None of those factors is present in this case.
[38]
The appellant argues that his sentence does not
reflect the fact he lost his job and future employment prospects because of the
offence. He says this provided sufficient denunciation and deterrence and
supports his argument that incarceration is unreasonable. However, this
argument addresses individual deterrence. General deterrence remains a
significant consideration.
[39]
The sentencing judge properly found that this
was a serious offence, both in terms of its impact on the complainant and the
moral culpability of the offender. There was a factual foundation for his
concern that the appellant may present a danger to the community. He correctly
emphasized the importance of denunciation and deterrence in sentences for such
offences.
Having considered all of the circumstances, I am not persuaded
that the sentence is unfit.
[40]
I would dismiss the appeal.
[41]
SAUNDERS J.A.
: I agree.
[42]
GROBERMAN J.A.
: I agree.
[43]
SAUNDERS J.A.
: The appeal is dismissed.
The Honourable Madam Justice Neilson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Ashton Mining of Canada Inc. v. Vesuna
,
2010 BCCA 79
Date: 20100125
Docket:
CA035361
Between:
Ashton
Mining of Canada Inc.
Respondent
(Petitioner)
And
Rumi
Vesuna
Appellant
(Respondent)
Before:
The Honourable Mr. Justice K. Smith
(In Chambers)
On
appeal from: British Columbia Supreme Court, August 3, 2007
(
Ashton Mining of Canada Inc. v. Vesuna
, 2007 BCSC 1374 Van. Reg.
S97638)
Oral Reasons for Judgment
Appellant appearing In Person:
Counsel for the Respondent:
C.A.B.
Ferris
Place and Date of Hearing:
Vancouver,
British Columbia
January
25, 2010
Place and Date of Judgment:
Vancouver,
British Columbia
January
25, 2010
[1]
K. SMITH J.A.
: Mr.
Vesuna, who is the appellant in this appeal, has conducted this proceeding in
person in this court and below. His appeal was dismissed on June 6, 2008 in
oral reasons given at the conclusion of the hearing: see 2008 BCCA 248. He
applied for leave to appeal to the Supreme Court of Canada but leave was
refused on July 3, 2009.
[2]
He now applies in respect of the costs that have
been assessed against him by the Registrar following the dismissal of his
appeal. His contention is that he did not receive notice of the appointment to
settle the order of this Court, which included an order that he pay costs of
the appeal, and he did not receive notice of the appointment to assess costs. According
to his evidence, he left the country just after the decision in the appeal on
June 6, 2008 and did not return until the end of November 2008, at which time these
matters came to his attention. By then, the order of the Court had been settled
and costs had been assessed against him.
[3]
He brought this application by way of notice of
motion filed on December 31, 2009. He seeks an order varying an order I made in
chambers on February 8, 2008 to include a provision that he recover costs of that
application in any event. He also seeks leave to extend the time for review of
the costs assessed by the Registrar, and he seeks a review of those costs on
the ground that in many respects they are excessive.
[4]
I will deal first with the interlocutory motion.
On February 8, 2008, Mr. Vesuna successfully resisted the respondents application
for an order that he post security for costs of the appeal: see 2008 BCCA 51. I
did not mention costs in my reasons for judgment. The formal order resulting
from my reasons was entered on June 9, 2008. It contained no provision for
costs of the application. Mr. Vesuna now asks that the order be varied to
insert an order that he be awarded those costs in any event of the cause. It is
Mr. Vesunas position that he should have the costs of the respondents
unsuccessful application and that they should be set off against any costs he
might be ordered to pay to the respondent.
[5]
I have no jurisdiction or power to vary that
order. The power to vary an order is vested in the Court by s. 9(6) of the
Court
of Appeal Act
and, as a single justice sitting in chambers, I do not have
that power. Therefore, that aspect of Mr. Vesunas application cannot succeed.
[6]
I would add that had Mr. Vesuna insisted on a
provision in the order that he recover his costs of that application it was
within the power of the Registrar to insert such a provision in the order. The Registrar
has no jurisdiction to assess costs where the formal order is silent as to
costs, but the Registrar does have authority in settling an order to insert a
provision to give effect to the normal rule that costs follow the event: see
G.W.L.
Properties Ltd. v. W.R. Grace & Co. Conn.
(1991), 62 B.C.L.R. (2d)
161. However, Mr. Vesuna did not request an order for costs. Rather he endorsed
his approval on the form of order which, as I have noted, made no provision for
costs of the application. In the absence of some circumstance of which I have
not been made aware, the Registrar was entitled to take Mr. Vesunas approval
at face value and to assume that if he wanted his costs of the application he
would make that known to the division hearing the appeal and ask them to take
the costs into account in the order for costs of the appeal.
[7]
As for the costs assessed on the appeal, a party
dissatisfied with an assessment may apply within 7 days to a single justice in
chambers pursuant to Rule 70 of the
Court of Appeal Rules
for a review
of the assessment under s. 10(3) of the
Act
, which confers the power to
vary an assessment.
[8]
The oral reasons for judgment of the Court
dismissing Mr. Vesunas appeal were silent as to costs. The respondent prepared
a form of order which provided that the Respondent be and is hereby granted
its costs of this appeal. On June 9, 2008, counsel for the respondent mailed a
draft order to Mr. Vesuna at the address for delivery he specified in his
notice of appeal and mailed it, as well, to a residential address at which Mr.
Vesuna sometimes resided in Calgary, Alberta. In his covering letter, counsel
asked Mr. Vesuna to endorse his approval of the form of the order and return
it. The letter contains the following paragraph:
I draw your attention to the second
paragraph of the Order, which provides that the Respondent, Ashton Mining of
Canada, Inc. is entitled to its costs. Section 23 of the
Court of Appeal Act
reads;
Unless the court
or a justice otherwise orders, the party who is successful on an appeal is
entitled to costs of the appeal including the costs of all applications made in
the appeal.
Given this
provision, I have included the provision for the payment of costs in the Order.
If you have any questions arising from the Order, please telephone me so that
we may discuss them. If I do not hear from you, I will expect to receive a
signed copy of the Order back from you by Friday, June 20, 2008. If I do not
receive the Order by that time, I will make an application to settle the Order
before the Registrar of the Court of Appeal. In that circumstance, I will seek
additional costs against you for your failure to approve the enclosed order as
to form.
[9]
On July 14, 2008, counsel for the respondent wrote
again to Mr. Vesuna by letter addressed to his address for delivery and to his
Calgary residential address enclosing an appointment to settle the order of the
division made on June 6, and an appointment for an assessment of the bill of
costs, both set for July 22, 2008 at 10:00 a.m. These letters were sent by
registered mail. I am advised that, at the hearing, the Registrar indicated
that the order would have to be settled before the costs could be assessed and,
as a result, the assessment of costs was adjourned to August 7, 2008 at 10:00
a.m. The settlement of the order went ahead that day and it was settled in a
form including the provision that the respondent recover its costs of the
appeal.
[10]
On July 22, 2008, counsel wrote again to Mr.
Vesuna at his address for delivery and at his address in Calgary, enclosing an
appointment to assess the bill of costs, a copy of the requisition adjourning
that assessment to August 7, 2008, and a copy of the proposed bill of costs. These
letters were sent by both regular and registered mail. The registered letter
enclosing these documents was signed for on July 25, 2008, by a person Mr.
Vesuna advises is his friend, who apparently was at one of those residences
when the letter was delivered.
[11]
After reducing some claimed disbursements in
relatively small amounts, the Registrar assessed the respondents costs on
August 7, 2008 at $5,712 for costs and taxes and $4,533.39 for disbursements,
for a total of $10,245.39. The respondent subsequently registered a certificate
of costs in that amount against title to some property owned by the appellant in
Powell River, B.C. Counsel mailed a copy of the certificate by regular mail to
Mr. Vesuna, again at the address for service and the Alberta residential
address.
[12]
Mr. Vesuna says that, while he was out of Canada
from about June 8, 2008 until the end of November 2008, none of his mail was
forwarded to him during his travels and that he did not see any of the
materials sent to him by the respondent and did not learn of the certificate of
costs until December 2008. He says on February 9, 2009 he filed an application
for leave to appeal this Courts judgment and the award of costs to the Supreme
Court of Canada. That application for leave was refused in July 2009.
[13]
As noted, the Rules provide for a review of an
assessment within seven days of the assessment. Thus, the time limit for Mr.
Vesunas application was August 14, 2008. He filed his motion December 31,
2009, more than a year and four months out of time. Although it is a fair
inference from what Mr. Vesuna has told me that he formed an intention to
appeal the assessment when he learned of it, it does not appear that he
notified the respondent of this intention until the past week or so. The
circumstances do not warrant an extension of time. Nevertheless, I will deal
with Mr. Vesunas submissions.
[14]
Mr. Vesuna contends the order awarding the
respondent costs of the appeal should not have been settled because he did not
signify his approval of its form. However, since the order was settled by the
Registrar, his approval was not necessary. Even had Mr. Vesuna appeared on the
application to settle the order, it is highly unlikely that an order granting
costs of the appeal to the successful respondent would not have been inserted
in the order. Costs of the appeal follow the event and as stated in s. 23 of
the
Act
, the successful party on an appeal is entitled to costs of the
appeal including all applications brought in the appeal.
[15]
It is regrettable that Mr. Vesuna did not receive
actual notice of the appointments to settle the order and to assess costs.
However, the respondent proceeded in compliance with the Rules. The requirement
that a party provide an address for service is designed to avoid problems with
proving delivery of documents in an appeal. Delivery to an address for service
is sufficient. That is the very purpose of the rule. If Mr. Vesuna was going to
be away from his address for service for a lengthy period of time, as he says
he was, then it was his responsibility to advise the Registry of a new address
for service or to leave instructions at his address for service to notify him
of the receipt of any documents relating to the appeal. He must have been aware
that the appeal proceedings were not concluded by pronouncement of judgment
orally at the end of the hearing, and that the questions of costs and entry of
the formal order remained to be worked out. As I say, it is regrettable he
received no actual notice, but that is not the fault of the respondent, who has
complied with the Rules.
[16]
The respondents bill of costs as assessed contains
an allowance of five units under Item 3 for preparation for the respondents
unsuccessful application for security of costs. It is not surprising that Mr.
Vesuna is upset that not only did he not receive those costs but that they have
been assessed against him as part of the costs of the appeal. However, s. 23 of
the
Act
is clear. Unless the Court orders otherwise, the successful
party on an appeal is entitled to costs of the appeal including the costs of
all applications made in the appeal. There was no order otherwise in this case.
Had Mr. Vesuna asked the Court when it dismissed his appeal to order that the
costs of the respondents unsuccessful chambers application be excepted from
the costs of the appeal, the Court might have so ordered. However, he did not
do so and, since the Court did not order otherwise, the Registrar had no
power to disallow the costs to which Mr. Vesuna now objects. Rather, the
Registrar was required to assess the costs in accordance with the order. Nor is
it within my power as a single justice sitting in review of the assessment to
disallow those costs.
[17]
Mr. Vesuna has challenged specific items in the
bill of costs on the basis that they were excessive in all of the
circumstances. It is the Registrars responsibility to determine whether a bill
of costs is a reasonable bill of costs. In this case, the Registrar made that
determination. I am not in a position today to say that the Registrar made any
error in principle or that the Registrar was clearly wrong. I do not know what
evidence was before the Registrar and Mr. Vesuna has not presented any evidence
in respect of these items, apart from his oral assertions, that would support
his objections. I am therefore unable to accede to Mr. Vesunas submission that
the Registrars decision should be varied and I reject that aspect of his
application, as well.
[18]
In the result, Mr. Vesunas applications are
dismissed.
The Honourable Mr. Justice K. Smith
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Smith,
2010 BCCA 35
Date: 20100125
Docket: CA034307
Between:
Regina
Respondent
And
Ricky John Smith
Appellant
Before:
The Honourable Madam Justice Rowles
The Honourable Madam Justice Kirkpatrick
The Honourable Madam Justice Neilson
On appeal from:
Supreme Court of British Columbia, March 22, 2006
(Prince George Docket No. 19616-3)
Counsel for the Appellant:
R. Fowler
Counsel for the Respondent:
O. Kuzma
Place and Date of Hearing:
Vancouver, British
Columbia
September
15, 2009
Place and Date of Judgment:
Vancouver, British
Columbia
January 25, 2010
Written Reasons by
:
The Honourable Madam Justice Neilson
Concurred in by:
The Honourable Madam Justice Rowles
The Honourable Madam Justice Kirkpatrick
Reasons for Judgment of the
Honourable Madam Justice Neilson:
INTRODUCTION
[1]
The appellant appeals his conviction for second degree murder on March
22, 2006, following a trial with his co-accused, Cameron Miller, before a judge
and jury. The jury found Mr. Miller, who was also charged with second degree
murder, guilty of manslaughter.
[2]
The charges arose from an altercation between the appellant, Mr. Miller,
and the victim, Brent Melanson, on March 30, 2004, in which the appellant admitted
using a machete. In the course of the altercation Mr. Melanson suffered six
wounds one of which, an injury to the right side of his neck, was fatal.
[3]
At trial, a central issue was whether the appellant inflicted the fatal
wound with his machete, or whether it was caused by a knife wielded by Mr.
Miller. There was no direct evidence that Mr. Miller had a knife. The evidence
related to that issue came primarily from two pathologists who testified to the
characteristics of Mr. Melansons wounds and their likely cause. Dr.
McNaughton, who performed the autopsy on Mr. Melanson, testified for the Crown and
said that all six injuries could have been caused by a machete. Dr. Rice, who
testified for the appellant, disagreed and opined that several of the injuries,
notably the fatal incision to the neck, were not caused by the appellants
machete.
[4]
The sole issue on the appeal is the fairness of the trial judges
instructions to the jury about the expert evidence of Dr. Rice. The appellant
maintains that the judge unfairly and inaccurately summarized her evidence, and
inappropriately commented on and emphasized the fact that she had not directly
observed Mr. Melansons wounds. He says this demeaned her evidence on a
critical issue and resulted in an unfair trial.
BACKGROUND
[5]
There is no dispute about the facts. In the early morning of October 30,
2004, the appellant and Mr. Miller were at a party at an apartment in Prince George.
The appellant had a machete with him. At one point he sprayed beer on Mr. Melansons
younger sister. She was upset and called her brother to come and pick her up.
[6]
Mr. Melanson arrived at the party in his pickup truck with his fiancée,
Nicole Middlemiss. He became involved in an altercation with some of the
party-goers, including the appellant and Mr. Miller, during which the appellant
struck Mr. Melansons truck with his machete. Mr. Melanson and Ms.
Middlemiss quickly drove away to a nearby pay phone to call the police.
[7]
The appellant and Mr. Miller left the party shortly after this, as
passengers in a vehicle with two girls. When they passed Mr. Melansons truck
at the pay phone, they told the girls to stop and let them out, and ran toward
the truck. The appellant was carrying the machete. No one saw Mr. Miller
carrying a weapon.
[8]
Ms. Middlemiss saw them and warned Mr. Melanson. He ran to his truck,
got in the drivers side, and closed the door. Ms. Middlemiss did not have time
to get to the truck, so ran into the street to flag down help.
[9]
Coincidentally, two police officers were driving by. They stopped just
in time to see the appellant and Mr. Miller fleeing the scene on foot. Less
than a minute transpired between the end of Mr. Melansons 911 call and the
officers first radio communication after they stopped. The police found Mr.
Melanson bleeding heavily from the wound to his neck. He was transported to the
Prince George Regional Hospital, and was in cardiac arrest due to blood loss
when he arrived. Dr. Rowe, an emergency physician, commenced life support
measures and called for Dr. Wankling, a surgeon. Dr. Wankling surgically
extended the neck wound in an attempt to locate the source of bleeding and stop
it, but Mr. Melanson died of hemorrhagic shock before that could be done.
[10]
None of the Crown witnesses saw whether the appellant, Mr. Miller, or
both caused Mr. Melansons injuries. Ms. Middlemiss and another witness could
only say that they saw the appellant on the drivers side of the truck with the
machete at some point.
[11]
The appellant testified that while he was mad at Mr. Melanson and intended
to hurt him, he did not intend to kill him. He denied hitting him in the neck
with the machete. He said he tried unsuccessfully to open the drivers door to
get at Mr. Melanson, and then struck the drivers window with the machete,
breaking it on the second swing. Mr. Melanson then went out the passenger side
of the truck, so the appellant ran to that side where he saw Mr. Melanson
struggling with Mr. Miller, who was holding him in a headlock. The appellant said
he struck Mr. Melanson once in the leg with the machete. He was shocked by what
he had done, threw the machete to the ground, and ran away. He looked back as
he ran and saw Mr. Melanson and Mr. Miller still fighting, and the police
coming.
[12]
Mr. Miller did not testify, but gave a statement to the police which was
entered at trial. He said he did not intend to hurt or kill Mr. Melanson. He
was on the passenger side of the truck when Mr. Melanson came out and almost
knocked him over. They grappled until the appellant struck Mr. Melanson with
the machete, distracting him. Mr. Miller said he then ran away, while the
appellant continued the attack on Mr. Melanson.
[13]
Cpl. Steinhauser, an expert in forensic identification, testified that
there was a trail of blood inside the trucks cab from the drivers side to the
passengers side.
THE
EXPERT EVIDENCE
[14]
Dr. McNaughton testified to his observations of Mr. Melansons wounds at
the autopsy on November 2, 2004. Dr. Rices opinion was based on the autopsy
report, photos of the injuries taken at the autopsy, forensic laboratory
reports, and a short summary of the treatment Mr. Melanson received from Drs.
Rowe and Wankling. She agreed that it is always better to see the material personally.
[15]
In his autopsy report, Dr. McNaughton numbered and described the six
injuries as follows:
Wound 1 a 4.5 cm incised wound to the
back of the head close to the hairline, caused by a sharp object;
Wound 2 a 5 cm vertical abrasion at the
base of the neck in the shoulder region, caused by blunt force;
Wound 3 a Y-shaped incision on the right
side of the neck, comprised of the original wound and Dr. Wanklings surgical intervention;
Wound 4 a 2.5 cm chop wound to the lower
left shin, extending into the tibia;
Wound 5 two superficial incisions in the
left anterior scalp caused by a sharp instrument;
Wound 6 two abrasions on the
right chest caused by blunt force.
[16]
The characteristics of Wounds 1, 3, and 4 provided the primary basis for
the divergent opinions of the pathologists. As set out previously, Dr.
McNaughton opined that all six injuries could have been inflicted by a machete,
and said he saw nothing to suggest that another weapon may have been involved. Dr.
Rice was of the view that only Wound 4 was clearly from a machete. She
testified that Wounds 1 and 3 could not have been caused by a machete because
they were more sharply incised, indicating that they had been inflicted by a weapon
with a sharper blade, likely a knife. She thus concluded that Mr. Melansons
injuries had been caused by more than one weapon.
[17]
With respect to Wound 4 to the leg, both pathologists agreed this was a
chop wound, caused by a heavier instrument like a machete. Dr. McNaughton
described it as an incised wound with sharp edges and no tearing. Dr. Rice
disagreed, testifying that the margins of the wound showed crushing of the skin
and tissues typical of force from a heavier weapon.
[18]
With respect to Wound 1, near the hairline, both pathologists agreed
this was an incised wound with sharply divided edges, and that the weapon used
had cut the hair in the area as well. Dr. McNaughton testified it could have
been caused by a chopping action that both drew across and penetrated down into
the area. Dr. Rice disagreed, saying that it had none of the characteristics of
a chopping wound. She pointed out that there was no crushing of the wound edges
as in the case of Wound 4, and said Wound 1 had been caused in a very different
manner from a chopping wound. In her view, the appellants machete was
inconsistent with having produced Wound 1 as its cutting edge was rough and
dull and it would not cut the hair and skin as cleanly as shown in the photos
of the wound.
[19]
With respect to Wound 3, the testimony of Dr. Rowe and Dr. Wankling was
important in describing how Dr. Wanklings surgical exploration of the injury changed
its original appearance. He first made a straight vertical incision to the
right of the wound. He then made a bridging incision, which connected that
vertical incision to the original wound, creating a Y-shaped incision in which
the original wound was at the outer end of the left hand branch of the Y. At the
autopsy, Dr. McNaughton measured the vertical incision made by Dr. Wankling as
14.5 cms long, and the branch comprised of the original wound and the bridging
incision as 8.5 cms long.
[20]
Dr. Rowe and Dr. Wankling agreed that they had not made any reliable
assessment of the size of the original neck wound at the time of their
treatment as there was too much blood in the area and they were focussed on
saving Mr. Melansons life. However, on being shown photos of the wound from
the autopsy, each was able to give some indication of the location and size of
the original wound. Dr. Rowe said he could not do this with one hundred per
cent confidence, but he believed the original wound could be seen at the end
of the left arm of the Y covered by four surgical staples with the fifth staple
marking the start of the bridging incision. Referring to a scale in one of the
photos of the wound, he estimated the original injury was 3.5 to 4 cm long. Dr.
Wankling said he thought the original wound was at least 3 cms long and could
have been as long as 6 cms, but acknowledged his estimate could be out a
significant amount. When shown photos of the wound, he pointed out that the
edges of the original wound were more ragged than those of the surgical wound,
and he was able to identify the former by reference to the same four surgical
staples mentioned by Dr. Rowe.
[21]
Dr. McNaughton testified that he could not identify how much of the left
branch of the Y incision was attributable to the original wound and how much
was a surgical incision. He believed Wound 3 had been caused by a machete for
two reasons. First, the sternomastoid muscle was completely severed, and this
would require a very wide blade. Second, the wound was 10 cms deep and extended
through the pharynx. The size of the injuries where the blade penetrated the
two sides of the pharynx indicated a significant widening of the blade over a
short distance, which was compatible with the shape of the appellants machete.
Dr. McNaughton agreed that if Wound 3 was only 4.5 cms long, the machete
could not have caused it. He said he had looked at the machete in a plastic bag
at the inquest, but did not remove it to examine it. He agreed that it did not
have a perfectly straight edge and was duller than what would be expected for
normal use, but said it still had a significant edge to it.
[22]
Dr. Rice testified that she was able to distinguish Wound 3 from the
bridging incision in the photos. Like Drs. Rowe and Wankling, she placed the
original wound at the last four staples of the left branch of the Y-incision.
She said that Dr. Wanklings bridging incision was very straight and had
rolled edges typical of a surgical incision. It met the original wound at a bit
of an angle where there was a gap. She roughly estimated the length of the
original wound at 3.5 to 4 cms, and said that the appellants machete could not
have caused it. It was too large to have caused an incision of that size that
was 10 cms deep. The surface wound would have had to be considerably larger if
caused by the machete. As well, its rough cutting edge would have torn the
tissues rather than sharply dividing them. In her view, Wound 3 was most likely
caused by a knife. She said that the sternomastoid muscle could have been
severed by a knife with a very sharp cutting edge and a blade that was 10cms
long and 4 cms wide at the 10 cm point. While she agreed that Dr. McNaughtons
measurements of the injuries to the pharynx matched the dimensions of the
machete, she said that the machete could not be matched to other aspects of the
wound. As well, she noted that the weapon causing this injury would have had
large quantities of blood on it, but little blood was detected on the
appellants machete.
[23]
The characteristics of Wounds 2, 5, and 6 did not contribute significantly
to the debate between the pathologists. Both agreed that Wounds 2 and 6, which
were caused by blunt force, could have been produced by any number of
instruments, including a machete. Dr. McNaugton described Wound 5 as an incised
wound but said it could be caused by a machete. Dr. Rice said the photographs of
Wound 5 were not clear enough for her to say one way or the other, and so she
could not rule out a machete as the cause of Wound 5. However, she thought this
was highly unlikely based on Dr. McNaughtons description of it and the fact it
appeared superficial.
THE RELEVANT
PROCEEDINGS AT TRIAL
[24]
At the opening of the trial on February 20, 2006, the trial judge gave
the jury oral instructions about their role as judges of the facts. This
included the standard direction that it would be their memory and opinion of
the evidence that would govern their determination, and that they were not
bound by any view or opinion that he expressed.
[25]
Until Dr. Rice testified at the end of the trial, the theory of the Crown
was that the appellant was the principal offender and inflicted all of Mr.
Melansons injuries with his machete, while Mr. Miller aided or abetted him. After
Dr. Rice testified that she believed Mr. Melansons wounds were caused by two
weapons, the Crown expanded its theory and alleged that the appellant and Mr.
Miller may also have been co-principles in committing second degree murder.
[26]
The trial judge charged the jury on March 21, 2006. At the outset, he
gave them binders that contained a copy of his remarks at the beginning of the
trial, two mid-trial instructions, and his written charge. He did not, however,
reiterate his opening instructions during the charge, except for the instruction
on reasonable doubt, and a reminder to the jury to review his earlier direction
on circumstantial evidence.
[27]
The trial judge began his charge with a lengthy review of the evidence
of each witness. Before embarking on this, he told the jury that his summary
may not be complete, and reminded them that they were the judges of the facts.
He told them they should not rely on it as complete or more accurate than their
own recollection of the evidence.
[28]
In summarizing the medical evidence about the size of Wound 3, the trial
judge said Dr. Rowe had not been able to assess this at the time because of the
bleeding, and had agreed with counsels estimate of the original wound as 3.5
to 4 cms. As to Dr. Wankling, the trial judge said he estimated it as 3 or up
to 6 cms in length, he had not measured it, and he agreed that an object with a
dull edge could stretch the skin to some extent due to its elasticity.
[29]
In reviewing Dr. McNaughtons evidence, the trial judge noted it was his
opinion that all of the injuries were consistent with being inflicted by the
machete. He summarized Dr. McNaughtons evidence about the significant
characteristics of Wound 3 in these terms:
The first was the complete
severing of the external mastoid muscle, which suggested a very wide blade was
used, and that where the wound extended right through the pharynx the length of
the incision on the left side of the pharynx was approximately two centimetres,
and on the right side it was 3.5 centimetres. He considered this significant
widening in a relatively short distance suggested an instrument shaped like the
machete, which went from a point to wide quickly. He said that although the
width of the pharynx was 2.5 to three centimetres in the centre, the cut was
towards the back where the distance between the cuts was less than that and
consistent with the 1.3 centimetre distance between the point along the machete
blade where it is two centimetres wide and the point where it is 3.5
centimetres wide.
He also said that Dr. McNaughton
testified he could not distinguish between the surgical incision and the
original wound to determine the length of the latter, and that while an
incision in the skin is usually a good indication of the width of a blade, it
could be smaller due to the elasticity of the skin.
[30]
This is the entirety of the trial judges summary of Dr. Rices evidence.
I have underlined those aspects that are the basis of the appellants
complaints:
The final witness of the trial was Dr. Jennifer Rice, who was
qualified to give opinion evidence as a forensic pathologist. She rendered
opinions in disagreement with those of Dr. McNaughton on several points.
She
testified that in her view the injury shown in photograph T72 to the back of
the head
is not consistent with it having been inflicted by the machete. In
her view the machete edge is very rough and quite dull and probably capable of
cutting tissue but not of cutting hair.
I note that she was not asked if
hair could be cut by chopping, in light of Dr. McNaughtons opinion that that
wound was partly incised, and partly chopped.
Looking at photograph T50,
the neck wound, she demonstrated where she believed the surgical incision ended
and the original wound began.
From the photograph she estimated the length
of the original wound at 3.5 to four centimetres, although she acknowledged
that the photograph showed a flat ruler and rounded neck
.
Dr. Rice said that it was impossible to cause a smaller wound
than the instrument cutting it.
Asked about elasticity of skin, she seemed
to agree skin had elasticity, but suggested a cutting instrument can only cut
or tear tissue.
She testified that she did not think a person could inflict
the neck wound without getting blood on them. Dr. Rice disagreed with Dr.
McNaughtons view that the machete was consistent with the neck wound. She
expressed the opinion that the neck wound was caused by a single edged knife,
approximately four centimetres wide and with a very sharp cutting edge.
Cross-examined by Mr. Kaun, Dr. Rice agreed that the
doctor actually attending at the autopsy would be in a better position to make
observations.
She said that from the photographs she disagrees that the
wound at the back of the head could also have been partly from chopping. She
agreed that the neck wound would not necessarily bleed on the perpetrator if he
was far enough away or behind the victim at the time of the stabbing.
Looking at the photographs of the wound number 5, namely the
front of the scalp wound, she said the photograph was not good enough to enable
her to rule the machete in or out, but she thought it was highly unlikely to
have been used to cause that wound.
In cross-examination by Mr.
Swanson she said that the machete was not sharp enough to be capable of
inflicting sharply incised wounds and, in her opinion, Brent Melansons wounds
were caused by two or more different instruments.
[31]
The trial judge next embarked on a discussion of the elements of the
offences of second degree murder and manslaughter, and the law with respect to parties.
He described the question of who stabbed Mr. Melanson in the neck as one of
the key factual issues in this trial, and noted that since no one saw who
inflicted that wound, the Crowns case depended on circumstantial evidence. In
reviewing the evidence on this issue he said:
Other evidence that you will consider on the question of the
relative involvement of each of the accused is the physical and medical
evidence of the nature of the neck wound itself in relation to the dimensions
of the machete.
The evidence on this question includes the rough estimates of
Drs. Rowe and Wankling as to the length of the original wound and the latters
evidence about the elasticity of human skin as well as the evidence of the
pathologists Dr. James McNaughton and Dr. Jennifer Rice. Dr. McNaughtons
opinion, which I have already summarized, is that the characteristics of the
neck wound are consistent with an instrument shaped like the machete in
evidence as Exhibit 6, and inconsistent with a narrow knife being moved back
and forth as suggested by Mr. Jones, which he said would have created a longer
wound in the skin.
You will also consider Dr. Rices evidence that two or
more different weapons were used to inflict the various wounds and that the
neck wound as it appears in the photographs is inconsistent with being caused
by the machete, because the wound is too small and does not show tearing.
Bear
in mind that Dr. Rice did not view the body herself and is using the
photographs and the ruler included in photograph T50 to make conclusions about
size. Her conclusions as to the point where the incision started are based on
the photograph, and Dr. McNaughton testified it was not possible to determine
exactly where the surgical incision ended and the wound began.
It is of course open to you to reject or doubt expert opinion
evidence as you may do with any evidence, but you should not do so lightly in
view of the expertise and stated reasons for the expert opinions. I will say
more in general about expert evidence later.
There is no other evidence of any
weapon other than the machete being in the possession of either of the accused
at the material time, and there is no evidence that the machete was in Mr.
Millers hands, but it is Dr. Rices testimony that two different weapons were
used and the possibility that you might accept that as reasonably possible that
requires the Crown to advance the alternative theories that it does in this
case. If you conclude that the machete was not the weapon that inflicted the
fatal wound, or have a reasonable doubt about that, there is not much evidence
to support inferences as to which of the two accused had possession of another
weapon. You may well infer that it could only have been one or the other of
them from all the circumstances and the extremely short window of time during
which Mr. Melanson was wounded.
[32]
Later on the issue of co-perpetrators he said:
If you are satisfied beyond a
reasonable doubt that the two accused acted in concert as a joint endeavour in
a chain of events from start to finish to hurt Mr. Melanson, with a shared
intention, knowledge of dangerousness and recklessness, then it is not necessary
to decide which of them inflicted the fatal wound. They are both
co-perpetrators and they are both responsible for the death of Mr. Melanson.
This is probably not something that you would consider unless you accepted Dr.
Rices evidence of there being two knives used by both accused to inflict the
injuries.
[33]
In dealing with aiding and abetting, he reminded the jury that either
accused might have personally committed the murder, and the other accused could
have aided or abetted him depending on your view of the evidence after you
have resolved the conflicting evidence of the two pathologists.
[34]
The trial judge instructed the jury about the nature of opinion evidence
from experts, essentially using the standard instructions from
CRIMJI:
Canadian Criminal Jury Instructions
, 4th ed. (Vancouver: Continuing Legal
Education Society of British Columbia, 2005). He told them they should assess
expert evidence in the same way as that of other witnesses, and that they were
not obliged to accept any experts opinion. He suggested they use a three step
process of first, examining the experts qualifications and impartiality,
second, considering whether their assumptions were supported by the evidence,
and third, examining the opinion and the process used to reach it. On the
second point, he said this:
Second, you should examine the facts or assumptions or
observations that each expert relied upon to form their opinions. The more an
expert relies on facts not proved in evidence, the less weight you should give
to his or her testimony. If, for example, there is no evidence of any facts or
assumptions upon which the expert relied to form his or her opinion, then you
would attach no weight to the opinion.
One point of difference that
you will have noted between the experts who testified in this trial is that Dr.
McNaughton conducted the autopsy and directed the taking of the pictures that
were taken there, whereas Dr. Rices opinions on matters such as length and
margins of wounds and sharpness of wound edges were formed from viewing the
photographs. It is for you to decide whether that is or is not significant
.
ANALYSIS
[35]
The appellant says that Dr. Rices testimony was the foundation of his
defence. It went to the critical issues of whether two weapons were used to
inflict Mr. Melansons wounds, and whether the appellant struck the fatal
blow with his machete. It also assisted in bolstering his credibility in the
face of conflicting accounts of the events. If accepted, it minimized his role
to the extent that there was a reasonable doubt as to his culpability for second
degree murder, and he would have been acquitted or convicted of manslaughter.
The appellant argues that the trial judges treatment of Dr. Rices evidence in
his charge unfairly demeaned it both explicitly and implicitly in a manner that
invited the jury to discount it. He raises three particular complaints:
1. the
trial judges summary of Dr. Rices evidence on the pivotal issue of whether
the machete could have caused Wound 3 was inaccurate and incomplete;
2. the
trial judge unfairly emphasized Dr. McNaughtons opportunity to observe Mr.
Melansons wounds at the autopsy;
3. the
trial judge improperly expressed his own view that Dr. Rices evidence was
limited because she had not seen the wounds herself.
[36]
The appellant says this resulted in an unfair trial, and his conviction
must be set aside and a new trial ordered.
[37]
When considering the fairness of a trial judges instructions to a jury,
an appellate court must adopt a functional approach, and take care not to
divorce the charge from the trial as a whole. While an accused is entitled to a
properly instructed jury, a trial judge is not required to meet a standard of
perfection:
R. v. Jacquard
, [1997] 1 S.C.R. 314, 113 C.C.C. (3d) 1 at
paras. 32-33.
[38]
In
R. v. Cooper
, [1993] 1 S.C.R. 146 at 163, 78 C.C.C. (3d) 289, Cory
J., writing for the majority, set out these guidelines for assessing the adequacy
of a charge, which have been affirmed many times subsequently:
... Directions to the jury need
not, as a general rule, be endlessly dissected and subjected to minute scrutiny
and criticism. Rather the charge must be read as a whole. The directions to the
jury must, of course, set out the position of the Crown and defence, the legal
issues involved and the evidence that may be applied in resolving the legal
issues and ultimately in determining the guilt or innocence of the accused. At
the end of the day, the question must be whether an appellate court is
satisfied that the jurors would adequately understand the issues involved, the
law relating to the charge the accused is facing, and the evidence they should
consider in resolving the issues.
[39]
It is therefore necessary to provide some context for the appellants
complaints. This was a four week trial with two accused, many witnesses, and
multiple theories of culpability. The charge was necessarily lengthy and
complex. The Crown correctly points out that the appellants complaints relate to
a relatively small segment of the evidence in that overall picture. I am nevertheless
satisfied that Dr. Rices evidence bore on issues that were pivotal to the
appellants defence, and the jurys view of the respective culpability of the
two accused. The issues of whether Mr. Melanson had been attacked with one or
two weapons, and who struck the fatal blow, were clearly before the jury. The
trial judge was obliged to ensure that his instructions on those issues, and on
the divergent views of the pathologists that provided the basis for them, were
fair to both accused.
[40]
Dealing first with the trial judges summary of Dr. Rices evidence, in
R.
v. Daley
, 2007 SCC 53, [2007] 3 S.C.R. 523 at paras. 54-57, Justice
Bastarache, writing for the majority, affirmed this classic statement from
R.
v. Azoulay
, [1952] 2 S.C.R. 495 at 497-498, 104 C.C.C. 97, about a trial
judges duty to review the evidence in a charge to the jury:
... The rule which has been laid
down, and consistently followed is that in a jury trial the presiding judge
must, except in rare cases where it would be needless to do so, review the
substantial parts of the evidence, and give the jury the theory of the defence,
so that they may appreciate the value and effect of that evidence, and how the
law is to be applied to the facts as they find them. ... The pivotal questions upon
which the defence stands must be clearly presented to the jury's mind.
[41]
Justice Bastarache went on to say that trial judges are not required to
undertake an exhaustive review of the evidence in their charges. Non-direction
on a matter of evidence will be a reversible error only when the item of
evidence in question is the foundation of the defence. The extent to which the
evidence must be reviewed comes down to a test of fairness to the accused in
each case. In some cases, the addresses by counsel may fill gaps in the charge.
[42]
I have set out the trial judges summary of Dr. Rices testimony at
para. 30 of these reasons. The appellant argues it was inaccurate and unfair in
several respects. First, the trial judge mistakenly referred to photo 72, which
depicted Wound 4 to the leg, as a head wound inconsistent with infliction by a
machete, thereby conflating Wounds 1 and 4 and confusing the jury on an
integral part of Dr. Rices evidence. Second, he unfairly discounted Dr.
Rices opinion by remarking that she was not asked whether hair could be cut by
chopping. This was a hypothetical question that bore no relevance to her
testimony since her opinion was Wound 1 showed no evidence of chopping. Third,
his summary of the most critical aspect of her opinion that Wound 3 was not
caused by the machete was so incomplete that it rendered her opinion
virtually worthless. The size of the original wound was critical to the
opposing views of the pathologists as to what weapon caused it. Dr. McNaughton
was unable to say where the original neck wound intersected with the surgical
incision, whereas Dr. Rice could discern this in the photographs, as could Dr.
Rowe and Dr. Wankling. Instead of relating this evidence, the trial judge inaccurately
implied that Dr. Rices estimate of the wounds length was qualified by using a
flat ruler to measure a round neck, and by her opinion on the elasticity of
skin. Further, the summary did not mention Dr. Rices response to the points made
by Dr. McNaughton in support of his view that the machete caused Wound 3.
[43]
In my view, the trial judges error in confusing Wounds 1 and 4 was inconsequential.
The jury had the photos and would not be confused by this.
[44]
I agree that the reference to a question not asked was an unnecessary
editorial comment by the trial judge, and tended to denigrate Dr. Rices
evidence by wrongly suggesting that she failed to address some significant
point. However, I am not persuaded that this comment, by itself, created
unfairness.
[45]
The appellants more significant complaint relates to omissions and
inaccuracies in the trial judges summary of Dr. Rices evidence about the
likely cause of Wound 3. Her view that the wound was smaller than the machete
was key to her opinion. Yet the trial judge did not fully deal with her
evidence on this point. Instead, he suggested that her measurement of the wound
at 3.5 to 4 cms was inaccurate because she relied on a flat ruler to measure
the round neck. That comment ignored Dr. Rices evidence that she had adjusted
for that factor in estimating the wound size. As well, the trial judge weakened
her evidence about whether the elasticity of the skin affects the size of a
wound by misquoting it. Dr. Rices evidence on this point was clear that
elasticity of the skin did not affect wound size, which is governed by the
width of the instrument that caused it. Further, the trial judges review of
the medical evidence failed to mention that Dr. Rice, Dr. Rowe, and Dr.
Wankling were each able to identify the original wound by its characteristics
in the photographs and were consistent in describing its location and size.
Finally, the trial judge did not mention Dr. Rices response to Dr. McNaughtons
opinion that the severance of the sternomastoid muscle demonstrated Wound 3 had
been caused by the machete.
[46]
I recognize that a trial judge is not obliged to mention all of the
evidence in his charge, particularly after a trial of this length. In deciding
whether the shortcomings in his account of Dr. Rices evidence resulted in an
unfair trial, it is necessary to examine them in the context of the trial as a
whole, the addresses of counsel, and the balance of the charge.
[47]
Dr. Rice was the last witness to testify, and gave her evidence just
four days before the judge charged the jury. Her evidence was therefore fresh
in the jurys mind. The appellants counsel included a comprehensive review of
her evidence and a critique of Dr. McNaughtons differing views in his address
to the jury. He also drew the jurys attention to the consistencies between the
evidence of Drs. Rice, Rowe and Wankling as to the location and size of Wound
3. As well, the trial judge told the jury at the outset of his charge that his
summary of the evidence may not be complete or accurate, and it was their view
of it that governed.
[48]
Given this context, if the deficiencies in the judges summary of Dr.
Rices evidence were the only basis for complaint, I would not be persuaded
that the trial was unfair. However, the appellant raises two further complaints.
He says that the trial judge also demeaned Dr. Rices evidence by unfairly
emphasizing Dr. McNaughtons opportunity to personally observe Mr.
Melansons wounds at the autopsy, and by improperly expressing his own view on
that point.
[49]
It is apparent that the trial judge formed the view that there was a
significant distinction between the medical evidence based solely on the
autopsy photographs and Dr. McNaughtons evidence based on his personal
observations at the autopsy. During Dr. Rices evidence, an issue arose as to
whether Dr. Wankling had been able to identify the original incision in the
photographs, which led to this exchange:
THE COURT: I dont know. I
mean in fairness, I might be able to clarify some of the the problem that Dr.
Rice is having with the question. Dr. Wankling was was youre referring to
Dr. Wanklings evidence relating to the photograph?
MR. KAUN: Thats right.
No. I had asked him. I had asked him a series of questions that had to do
with he was busy saving a life
THE COURT: Okay. So there is
a distinction. I mean, Dr. Wankling was was referred to photographs, asked to
if he could tell us from the photographs where one started and one ended and
he couldnt.
MR. KAUN: Right.
THE COURT: But Dr. McNaughton wasnt doing that about
photographs. He he was he was the he was at the autopsy, a very a very
significant distinction there.
[50]
As an aside, the trial judge was in error in his recollection that Dr.
Wankling could not identify the original wound in the photographs. The main
point, however, is that the trial judge was clearly of the view that Dr.
McNaughtons evidence was enhanced by the fact it was based on personal
observations.
[51]
During his charge, the trial judge reiterated that view three times in dealing
with Dr. Rices evidence. Those comments are set out at paras. 30, 31, and 34
of these reasons.
[52]
I see nothing objectionable in his first comment on this topic, made in
summarizing Dr. Rices evidence. He simply repeated her concession on
cross-examination that the doctor doing the autopsy is in a better position to
observe the wounds. I am persuaded, however, that his subsequent emphasis of
this point unfairly denigrated Dr. Rices evidence for the following reasons.
[53]
First, while Dr. Rice conceded the obvious ‒ that personal
observation was preferable ‒ there was nothing to suggest that in this
case her inability to personally see the wounds had any bearing on the validity
of her opinion. That was not explored with her, and the evidence suggested the
contrary. As noted earlier, she, Dr. Rowe and Dr. Wankling were all able to
identify the size and location of Wound 3 in the autopsy photos, and their
evidence about this was consistent. Oddly, Dr. McNaughton was the only
medical witness who could not do so, despite his advantage of having personally
seen it. Given this evidence, it would have been a reasonable inference that
the opportunity to personally examine Wound 3 was irrelevant to identifying its
original size. I am persuaded that in these circumstances it was unfair for the
trial judge to emphasize Dr. Rices failure to see the wounds in contrasting
her opinion with that of Dr. McNaughton.
[54]
Moreover, an uneven opportunity to personally observe relevant material
is only one factor to consider in deciding how to deal with conflicting expert
testimony.
R. v. Parnell
(1983), 9 C.C.C. (3d) 353 at 362-64, 1 O.A.C.
161, leave to appeal refd [1984] S.C.C.A. No. 331, is a case with some
similarities to this one. There, the Court allowed an appeal in part because
the trial judge had undermined the theory of the defence by the instructions he
gave the jury about the conflicting evidence of two pathologists. The judge
pointed out that the pathologist called by the defence was at some disadvantage
because he had not been at the autopsy, and then said this:
Now there is nothing miraculous
about the opinion of an expert and you may throw out that evidence entirely if
you see fit. You are not bound to accept the evidence of an expert, any one or
any of them. Medicine is not an exact science and experts quite often disagree.
I would think, however, that you would give serious consideration to the
evidence of experts. They operate in the field in which you and I are not too
familiar and when there is a conflict, perhaps it would not be out of place for
you to ask yourselves, well, which expert really had the best opportunity to
examine the evidence about which he spoke and from which he drew his
conclusions. Which based his opinion on his own observations and which had to
depend on the observations of others. Now I leave the resolution of the
apparent conflict of the medical opinions to you and I just ask you to use your
own common sense and good judgment in resolving that particular problem.
The Court held that while the Crowns pathologist, who did
the autopsy, had a better chance to make direct observations, the trial judge
should have told the jury that this was only one factor to consider in weighing
the experts opinions. Instead, his emphasis on that point unnecessarily and
inappropriately denigrated the defence theory.
[55]
I find those comments apposite here. In my view, it was unnecessary and
inappropriate to emphasize the pathologists respective opportunities to
observe in this case.
[56]
Finally, the appellant argues that the trial judges repeated comments
on this point were compounded by suggesting to the jury that it was his personal
view that Dr. Rices evidence should be discounted.
[57]
In
R. v. Dove
, 2004 BCCA 338, 187 C.C.C. (3d) 506 at paras. 35-47
this Court observed that while trial judges may voice personal opinions on the
evidence or a witnesss credibility during a charge to the jury, they should do
so with caution. The judge occupies an authoritative position in the jurys
eyes, and such comments may interfere with the fairness of the trial if they
are made without advising the jury that they are not bound by the judges
opinion, or if they are expressed so strongly that they usurp the function of
the jury. A general instruction about the division of responsibility between a
judge and jury may not overcome the prejudice arising from a judges strongly
stated view of the evidence.
[58]
In
Daley
at paras. 59-62, Bastarache J. dealt with these
principles in the context of expert evidence, and affirmed that it is the role
of the jury to decide what inferences should be drawn from such evidence. The
trial judge should not encroach on that role by offering a view as to how the
jury should interpret the expert testimony. If the judge does so, he or she
must take great care to impress upon the jury that they need not accept that
view.
[59]
Here, the trial judges comments about the pathologists comparative
opportunities of observation were not overtly directive, in the sense that he did
not tell the jury they must ignore Dr. Rices evidence. His repeated comments
nevertheless strongly suggested that they should draw the inference that
Dr. McNaughtons evidence should be accepted, thereby inappropriately
discounting Dr. Rices opinions.
[60]
I appreciate that at the outset of the charge, and again when he
referred to the importance of personal observation for the third time, the
trial judge told the jury it was their opinion of the evidence that mattered,
but these were passing comments. While he had given them the more extensive
standard direction that it was their opinion and memory that mattered in his
opening comments, that had been a month before and, while the jury had a copy
of those comments, he did not direct them to review them during his charge. In
the context of this trial, and the pivotal nature of Dr. Rices testimony, I am
not satisfied that those comments were sufficient to restore her opinions to
the same stature as Dr. McNaughtons.
[61]
I also recognize that the appellants counsel did not object to the
trial judges treatment of Dr. Rices evidence at trial, and these issues are
raised for the first time on appeal. While that is a factor to be considered,
it does not foreclose their consideration by this Court:
Jacquard
at
paras. 35-8,
Daley
at para. 58.
[62]
I am satisfied that the cumulative effect of the errors and omissions in
the charge to the jury related to Dr. Rices evidence unfairly demeaned her
opinions on the pivotal issues of whether more than one weapon was used in
assaulting Mr. Melanson, and whether the appellant struck the fatal blow
to his neck. I would therefore allow the appeal, set aside his conviction, and
order a new trial.
The Honourable Madam Justice Neilson
I Agree:
The Honourable
Madam Justice Rowles
I Agree:
The Honourable Madam Justice Kirkpatrick
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
The Owners, Strata Plan LMS3259 v. Sze
Hang Holding Inc.
,
2010 BCCA 80
Date: 20100125
Docket:
CA037092
Between:
The
Owners, Strata Plan LMS3259
Respondent
(Plaintiff)
And
Sze
Hang Holding Inc. and Leon Lam
Appellants
(Defendants)
Before:
The Honourable Mr. Justice K. Smith
(In Chambers)
On
appeal from: Supreme Court of British Columbia, April 27, 2009
(
The Owners, Strata Plan LMS3259 v. Sze Hang Holding Inc.
, 2009 BCSC
473,
Vancouver Registry L050030/L052756)
Oral Reasons for Judgment
Counsel for the Appellant:
R.P.
Hamilton
Counsel for the Respondent:
P.G.
Mendes
Place and Date of Hearing:
Vancouver,
British Columbia
January
25, 2010
Place and Date of Judgment:
Vancouver,
British Columbia
January
25, 2010
[1]
K. SMITH J.A.
: The
respondent applies for three things. First, they ask me to order, as a
condition of the appellants being able to pursue this appeal, that the
appellants first pay judgments extant against them in other proceedings in the
trial court and in another appeal on the basis that those judgments are related
to the matters in issue in this appeal. The relationship is said to arise out
of the facts that they involve, at least to some extent, the same parties, the
appellants being the same parties all proceedings, the respondent being either
a party or represented by parties in the other proceedings, and that they all
arise out of a dispute that has been ongoing between the appellants and the
Strata corporation in which the appellants own two units. Remarkably, the
dispute between these parties has been going on for many years and has
generated, if I am not mistaken, seven lawsuits, at least one of which has gone
to appeal other than this one.
[2]
Counsel cited no authority for the proposition
that as a single justice in chambers I could make the order sought but refers
to s. 10 of the
Court of Appeal Act
, which allows a single justice in
chambers to make any order required by the interests of justice. In my view,
there is nothing in the
Court of Appeal Act
that would confer authority
on me sitting here today to order as a condition of continuing with this appeal
that judgments in favour of the respondents in other matters be paid.
[3]
The second order the respondent seeks is an
order for security for costs of this appeal. It is not contested that there are
orders for costs outstanding on both sides in other proceedings between these
two parties. It appears that the total owing to the respondent in costs by far exceeds
what might be claimed by the appellants in costs in the proceedings in which
they have been successful. Nevertheless, there are judgments against the appellants
for costs and on substantive matters that have been outstanding and that have
not been paid despite, in one case, an order made by the Registrar that
judgment be paid in instalments. Nothing has been paid on that order.
[4]
The burden on the application for security for
costs of the appeal rests on the appellants to show why security should not be
required. The relevant considerations are the financial means of the appellants,
the merits of the appeal, the timeliness of the application, and whether costs
will be readily recoverable. No objection has been made to the timeliness of
the application here. The appeal has been extant since June of 2009. The appeal
record was filed in July and it appears the matter has not progressed beyond
that stage. So timeliness in the sense that the appellants would be unduly
prejudiced by an order for security is not a factor.
[5]
Counsel have spent a lot of time on the merits
of the appeal. The order under appeal was made in chambers under Rule 19(24) of
the
Supreme Court Rules
, and it ordered that the appellants statements
of defence and counterclaims be struck out in their entirety on the ground that
they were an abuse of process. They were described as prolix and confusing and
that description is accepted by both counsel on this application.
[6]
However, counsel for the appellants says that
the chambers judge erred in that, while she quite justifiably should have
struck out the greatest portion of the statements of defence and the
counterclaims, she failed to examine those documents to see if any parts of
them could stand as valid defences and claims. He identifies certain
paragraphs, particularly in the statement of defence, that meet the allegations
in the statement of claim directly. For purposes of this application, the
merits showing only has to meet a low threshold and I am satisfied that has
been established here.
[7]
The next question is the appellants financial
means and, together with that, whether the costs will be readily recoverable.
The submissions on this point have turned around the fact that the appellants
own these two units and that together they have an assessed value in the order
of some $200,000. It is common ground that they are encumbered by mortgages
that in total amount to about $10,000. So there is, at least on the face of it,
some $190,000 in equity available.
[8]
The respondents have registered certificates of
judgment in the Land Title Office against the titles to these two properties
and they have pending, at the moment, an application in the Supreme Court for
leave to sell those properties and that they have conduct of sale. The
properties are listed for sale by the appellants at prices that appear to be
substantially above their assessed values. The respondents position is that
although there is equity in the properties that may ultimately be sufficient to
cover at least the bulk of the costs and the judgments outstanding, that they
will not be readily recoverable.
[9]
After considering the submissions in the context
of the overarching principle that the order must be one made in the interests of
justice, I am satisfied that an order for security for costs of the appeal
should be made. Counsel for the respondents has not submitted a draft bill of
costs suggesting any amount. In the circumstances, I am going to set the amount
at $5,000. It will be a term that there be no further proceedings in the appeal
until the security for costs is posted. The respondents also ask for liberty
to apply to dismiss the appeal as abandoned if the security is not posted by a
stipulated date. I would not make that order. If the appellants do not post the
security and proceed with the appeal then it will be open to the respondent to
take that step if and when it considers it appropriate to do so.
[10]
The final order sought is one for security for
the costs of the judgment below. The costs below are special costs and are in
the amount of some $43,000. The judgment below is in respect of fines levied by
the corporation against the appellants which total some $157,000. These amounts
are hotly in dispute on this appeal. The burden on this application is on the
respondent to satisfy me that the interests of justice require the posting of
security for the trial judgment costs and prejudice if the order is not made,
and I am required to consider the merits of the appeal, which I have already
discussed.
[11]
The prejudice, if such an order is not made, is
that respondent may be delayed in recovering the judgments, but I do not
understand there to be any serious dispute over the proposition that the
judgments are secured by the equity in the two properties in question.
[12]
In all of the circumstances, I am not satisfied
that the applicant respondent has made out a case for security for the costs of
the trial judgment and the trial costs. I would not grant that application.
There has been mixed success here and, in view of that fact, I would not make
any order for costs on this application.
The Honourable Mr. Justice K. Smith
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Westnav Container Services Ltd. v. Freeport Properties
Ltd.,
2010 BCCA 33
Date: 20100125
Docket: CA036928
Between:
Westnav Container Services Ltd.
Appellant
(
Petitioner
)
And
Freeport Properties Ltd.
Respondent
(
Respondent
)
Before:
The Honourable Madam Justice Saunders
The Honourable Madam Justice D. Smith
The Honourable Madam Justice Garson
On appeal from: Supreme
Court of British Columbia, February 17, 2009
(
Westnav Container Services Ltd. v. Freeport Properties Ltd.,
2009 BCSC
184, Docket No. S087300)
Counsel for the Appellant:
M. Andrews, Q.C.
S. Coval
Counsel for the Respondent:
J. Fraser
Place and Date of Hearing:
Vancouver, British
Columbia
October
26, 2009
Place and Date of Judgment:
Vancouver, British
Columbia
January 25, 2010
Written Reasons by
:
The Honourable Madam Justice Saunders
Concurred in by:
The Honourable Madam Justice D. Smith
The Honourable Madam Justice Garson
Reasons for Judgment of the
Honourable Madam Justice Saunders:
[1]
At issue is the jurisdiction of an arbitrator to issue a corrected
award. The corrected award confirmed the original decision while deleting portions
of the award that discussed an erroneous fact and supplementing the discussion
of the basis of the award. The Supreme Court of British Columbia dismissed a
petition to quash the award, and that dismissal is appealed to this Court.
[2]
The arbitration was conducted under the
Commercial Arbitration Act
,
R.S.B.C. 1996, c. 55, to settle the fair market rent for a property leased by
the appellant Westnav Container Services Ltd. The property, near the Fraser
Surrey Docks, was leased by the owner to the respondent Freeport Properties
Ltd., and subleased to Westnav. Westnav exercised a right to renew the sublease
in December 2004, extending the lease through January 2019.
[3]
Disputes arose between Westnav and Freeport and were settled by an
agreement remitting the determination of rent, on the basis of fair market value,
to arbitration.
[4]
The arbitration was held in April 2008 before Mr. Leon Getz, Q.C. Each
party presented expert evidence tendered by an appraiser. The appraiser called
by Westnav, Mr. Dybvig, described the premises as generally poor; the appraiser
called by Freeport, Mr.Johnston, described the premises as fair to average. The
arbitrator stated he was inclined to the assessment of the Westnav tendered
appraiser.
[5]
The appraisers utilized different methods in determining the fair market
rental value of the property. The appraiser called by Westnav employed a method
described as rate-times-value method, and estimated the fair market rent at $282,500
per year. The appraiser called by Freeport used a direct comparison approach
and estimated the fair market rent at about $740,000 per year.
[6]
The arbitrator accepted the direct comparison method used by the
appraiser called by Freeport, but not his conclusion as to the fair market
rental value. The arbitrator found the fair market rent to be $660,000 per
year.
[7]
The direct comparison approach required the arbitrator to review the
comparability of other properties. In his analysis the arbitrator mistakenly
said the rent for a property known as the Ewen property was $4.38 per square
foot for the building. In fact that rent represented the rent for both the
building and the land.
[8]
In light of this error, Westnav applied to the arbitrator for correction
of what appears to be an accidental or arithmetical error in paras. 90 to 94
of the Award, or alternatively for clarification pursuant to s. 27 of the
Act
.
Freeport contended the award should remain as it was, arguing the error could
make no difference to the original award.
[9]
On September 17, 2008 the arbitrator released the corrected award. The
covering letter acknowledged the error, but stated that the decision as to rent
was the same. The corrected award deleted the mention of the Ewen property from
the analysis and included fresh passages explaining the original conclusion.
Westnav characterizes the additional explanation as an alternate explanation.
Freeport characterizes it as an expanded explanation.
[10]
Westnav objected to the arbitrators actions. It sought, by petition, a
declaration that the arbitrator had exceeded his powers by amending the award
to correct an error, a declaration the arbitrator had committed an arbitral
error by failing to observe the rules of natural justice when amending the
award, and an order in the nature of
certiorari
setting aside the award
and ordering a new arbitration before a new arbitrator.
[11]
Mr. Justice Silverman dismissed the petition. He concluded the
arbitrator had not engaged in new analysis, but rather had clarified his
original reasoning as permitted by s. 27 of the
Act
, and thus had
not exceeded his jurisdiction. He held, further, the arbitrator had not
violated principles of natural justice. He concluded there was therefore no
basis on which to set the award aside.
[12]
Westnav appeals from the order dismissing its petition. It contends Mr.
Justice Silverman erred in law in finding the arbitrator had not exceeded his
powers under the
Commercial Arbitration Act
to correct errors, and in finding
the process comported with the principles of natural justice.
The
Commercial
Arbitration Act
[13]
The arbitrator relied upon s. 27 of the
Act
. That section
provides:
27 (1) On the
application of a party or on the arbitrator's own initiative, an arbitrator may
amend an award to correct
(a) a clerical or typographical
error,
(b) an accidental error, slip,
omission or other similar mistake, or
(c) an arithmetical error made in a
computation.
(2) An application by a party under
subsection (1) must be made within 15 days after the party is notified of the
award.
(3) An amendment under subsection
(1) must not, without the consent of all parties, be made more than 30 days
after all parties have been notified of the award.
(4) Within 15 days after being
notified of the award, a party may apply to the arbitrator for clarification of
the award.
(5) On an application under
subsection (4), the arbitrator may amend the award if the arbitrator considers
that the amendment will clarify it.
(6) Within 30 days after receiving the award, a party may
apply to the arbitrator to make an additional award with respect to claims
presented in the proceedings but omitted from the award, unless otherwise
agreed by the parties.
[14]
By definition in s. 1 the award is both the result and the reasons:
"award" means the decision of an arbitrator on the
dispute that was submitted to the arbitrator and includes
(a) an interim award,
(b) the reasons for the decision,
and
(c) any amendments made to the award under this Act;
[15]
A party may apply to the Supreme Court of British Columbia to set aside an
award under s. 30:
30 (1) If an
award has been improperly procured or an arbitrator has committed an arbitral
error, the court may
(a) set aside the award, or
(b) remit the award to the
arbitrator for reconsideration.
(2) The court may refuse to set
aside an award on the grounds of arbitral error if
(a) the error consists of a defect
in form or a technical irregularity, and
(b) the refusal would not
constitute a substantial wrong or miscarriage of justice.
(3) Except as provided in section 31, the court must not set
aside or remit an award on the grounds of an error of fact or law on the face
of the award.
[16]
Arbitral error, referred to in s. 30, is defined in s. 1:
"arbitral error" means an error that is made by an
arbitrator in the course of an arbitration and that consists of one or more of
the following:
(a) corrupt or fraudulent conduct;
(b) bias;
(c) exceeding the arbitrator's
powers;
(d) failure to observe the rules of
natural justice;
Discussion
1.
Jurisdiction
[17]
Westnav complains that the corrected award removes all reference to the
Ewen property in Part Nine of the original award and inserts a new section
discussing properties not referred to in the arbitrators original analysis in
place of reference to that property. It contends the arbitrator was permitted
to correct the ruling to deal with his misstatement of the rent of the Ewen
property but was not permitted by the
Act
to remove his reliance on the
Ewen property rent as a comparable, having relied upon it in the original
award. It submits that in deleting the fact of his reliance upon it, the
arbitrator deleted something that is not in error (his reliance), and so acted beyond
his jurisdiction. Nor was he empowered by the
Act
, says Westnav, to
alter the balance of his analysis.
[18]
Freeport agrees the arbitrator made an accidental error regarding the
Ewen property rent, but says it was open to him to both correct the error (by
deleting it) and to clarify the basis of his award by explaining that the erroneously
described comparable, the Ewen property, was not the foundation for the award.
It characterizes the corrected award as saying the arbitrator did not rely upon
the Ewen property in the original award, and says the arbitrator, having said he
had omitted to explain how he reached his decision on value in the first
instance, was entitled to explain how he arrived at the valuation. Freeport
says this discussion is within the powers of an arbitrator set out in
s. 27. It submits the challenge is more akin to an allegation that the
arbitrator has backfilled his reasons to support a knowingly incorrect result
and so would seem to be more a complaint of arbitral error under (a) of the s.
1 definition (corrupt or fraudulent conduct), than of exceeding the
arbitrators powers or failing to observe the rules of natural justice referred
to in (c) and (d) of that definition. Freeport urges us to put trust in the
arbitrator, and to conclude his corrections are in the nature of correcting
an accidental slip (s. 27(1)) and clarification (s. 27(5)).
[19]
The question is both one of characterizing the nature of the changes to
the award made by the arbitrator, and of interpreting the statute to determine
the scope of an arbitrators authority after an arbitration award is published.
It is not, with respect, a matter of trusting the arbitrator. Nor is it a
matter of his integrity, which is unquestionably high. Rather, it is,
objectively
,
a question of where the permissible boundary of change is, so as to preserve
the integrity of commercial arbitration and to keep the arbitrator within his role
as contemplated by the Legislature.
[20]
Prior to passage of the
Act
in 1996 the ability of an arbitrator
to alter the face of the decision was limited to the traditional slip rule,
which allows correction of accidental slips, omissions and clerical errors. Interpretation
of the
Arbitration Act
, which had remained much the same from its
initial passage in 1893, prohibited an arbitrator from clarifying an award once
it was published, on the basis the arbitrator was
functus officio
. Any
re-working of an award could be done only after application to a court and an
order remitting the matter to the arbitrator. See, for example,
Gulf Islands
Intermediate and Personal Care Society v. Hospital Employees Union Local No.
180
, [1984] B.C.J. No. 184 (B.C.S.C.).
[21]
In 1986, in a comprehensive rewriting of the regulatory framework for
commercial arbitration as part of a bid to make commercial arbitration a more
attractive dispute resolution process, provision was made for clarification of
an award by an arbitrator.
[22]
In other jurisdictions, though the model is not identical, the trend in
legislation and jurisprudence also has been to give more scope for post-award
alterations by an arbitrator. Thus, for example, in
Mutual Shipping Corp. of
New York v. Bayshore Shipping Co. of Monrovia (The Montan)
, [1985] 1 All.
E.R. 520 (C.A.);
Gannet Shipping Limited v. Eastrade Commodities Inc.
,
[2002] 1 Lloyds Rep. 713 (Q.B. Comm. Ct); and
AHT v. Tradigrain
,
[2002] 2 Lloyds Rep. 512 (Q.B.), the courts discuss the scope of an
arbitrators jurisdiction to remedy an error in an award as part of the slip
rule.
[23]
In
Mutual Shipping Corp.
, Sir John Donaldson M.R. addressed the
distinction in the slip rule between a clerical error and an error arising from
an accidental slip or omission, and an intended decision which the arbitrator
later accepts as erroneous, saying at p. 526:
The High Court slip rule (RSC Ord 20, r 11), which is
similarly worded, was considered only recently by this court in
R. v.
Cripps, ex p Muldoon
[1984] 2 All ER 705, [1984] QB 686. We there pointed out
the width of the power, but also drew attention to the fact that it does not
enable the court to have second thoughts (see [1984] 2 All ER 705 at 711-712,
[1984] QB 686 at 697).
It is the distinction between having second thoughts or
intentions and correcting an award of judgment to give true effect to first
thoughts or intentions, which creates the problem
. Neither an arbitrator nor
a judge can make any claim to infallibility. If he assesses the evidence
wrongly or misconstrues or misappreciates the law, the resulting award or
judgment will be erroneous, but it cannot be corrected either under s 17 or
under Ord 20, r 11. It cannot normally even be corrected under s. 22. The
remedy is to appeal, if a right of appeal exists. The skilled arbitrator or
judge may be tempted to describe this as an accidental slip, but this is a
natural form of self-exculpation. It is not an accidental slip. It is an
intended decision which the arbitrator or judge later accepts as having been
erroneous.
[Emphasis
added.]
[24]
In
Gannet Shipping Ltd.
the court permitted the arbitrator not
only to correct an agreed error, but also to correct the order of costs which
followed upon the original incorrect conclusion. Langley J. said at para. 24:
...
The authorities draw distinctions between errors
affecting the expression of the tribunals thought (which can be corrected) and
errors in the tribunals thought process (which cannot)
and to not
permitting corrections to reflect second thoughts. I do not think such
distinctions are material in the present context. Granted an error in the
amount of the award was properly corrected, I do not think these principles
preclude the tribunal from addressing the question whether the corrected figure
may reveal other errors. If an error properly falls to be corrected, how it is
to be corrected and its consequences is always likely to involve some new
consideration.
[Emphasis
added.]
[25]
In
AHT v. Tradigrain
the court considered s. 57 of the
Arbitration
Act
1996
(U.K.), 1996, c. 23, a provision in substance much like our
s. 27. The section permits an arbitrator to correct an award so as to remove
any clerical mistake or error arising from an accidental slip or omission or
clarify or remove any ambiguity in the award. The court concluded that inadequate
rationale or incomplete reasons would require clarification, and that such
clarification is permitted under the arbitration scheme. The court held that issuing
further reasons, where reasons are incomplete, and providing reasons, where
none are given, can be within the jurisdiction of an arbitrator. However
AHT
does not deal with the question of an arbitrator resiling from reasoning earlier
set out.
[26]
Westnav contends that under our
Act
an arbitrator should be
subject to the same limitation on correction of his thought process. Further it
submits that the provision allowing the Arbitrator to clarify the award does
not permit the arbitrator to substantially re-write his rationale for the
decision which, it says, he did in this case. The appellant urges us to
conclude the changes made in the corrected award are corrections in the
tribunals thought processes second thoughts, as it were.
[27]
Freeport contends the arbitrator was within his jurisdiction in
clarifying the award by setting out more fully his reasoning process, and did
not cross the line described in these cases.
[28]
Section 27, in permitting correction of accidental errors and slips, and
in permitting clarification, contemplates amendment of an original award
through change to the reasons for the decision, whether or not the change affects
the result. Yet there is a line between permitted correction and clarification,
and alteration that strays into the thought processes. The distinction drawn in
Mutual Shipping Corp.
and
Gannet Shipping Ltd.
between expression
of the tribunals first thoughts, and corrections that reflect second thoughts,
is equally applicable here. While the expanded language in s. 27 from the
provisions of the former legislation is intended to assist with finality of the
arbitration process and limit applications that bounce the final determination
between the arbitrator and the courts, it does not contemplate any shift of the
well understood prohibition, founded in the concept of
functus officio
, against
subsequent alterations in either the thought processes or the basis of the
award. Such amendments step beyond correction of an accidental slip or error,
and beyond clarification. Indeed the word clarification implies adherence to
the same thought processes, but with more precise expression of the thought.
[29]
By appealing, Westnav assumes the task of persuading us the judge erred
in law in his analysis, or reached a conclusion not supported by the record
before him.
[30]
In stating the applicable principles on the issue of jurisdiction and
distinguishing between correcting expression and having second thoughts, the
judge correctly referred to the distinction discussed in
Gannet Shipping
Ltd.
and
Mutual Shipping Corp.
, and adopted the statement of the
principle in J. Kenneth McEwan, Q.C. & Ludmila B. Herbst,
Commercial
Arbitration in Canada: A Guide to Domestic and International Arbitrations
(Aurora, Ont.: Canada Law Book, 2008) at 9-50 9-51:
Authorities draw a distinction between errors affecting the
expression of the tribunals thought (which can be corrected) and errors in the
tribunals thought process (which cannot) and do not permit corrections to
reflect second thoughts.
... If the arbitrator assesses
the evidence wrongly or misconstrues or misappreciates the law, the resulting
award or judgment will be erroneous, but it cannot be corrected as an
accidental slip or omission. The remedy is to appeal, if a right of appeal
exists.
[31]
I am, however, respectfully of the view that in spite of reference to
the correct principles, the judge erred by imputing to the arbitrator a view of
the relevance of the Ewen property to his original thinking not expressed by
the arbitrator, and by failing to consider the objective view of the events.
[32]
I consider it to be of assistance to refer directly to the two awards.
The original award was structured in thirteen parts. The first eight described
the issues, the property, the evidence of valuation adduced by both parties and
their responses to each others case, including correct references to the Ewen
property. Analysis of the material before him started in Part Nine, entitled
CONCLUSIONS AS TO MARKET RENT FOR LEASED PREMISES, leading with this line:
[81] Given the state of the
evidence and in particular the contrasting approaches and opinions of Messrs.
Dybvig and Johnston, it seems virtually inescapable that in essence I must
choose between their respective approaches. ...
[33]
The arbitrator made his choice known later in Part Nine:
[84] I have come to the
conclusion, on balance and taking account of Westnavs criticisms, that Mr.
Johnston has the better view on this and that the indices that in the end he
relies on [footnote deleted] can fairly and without distortion and for the
reasons that he gave be considered comparables. ...
[34]
The arbitrator then said he did not agree, however, with that
appraisers final opinion as to value, and went on to express his own
conclusions. Under the heading Building value the arbitrator discussed two
properties that had been advanced as comparables, the Topco property (in his
para. 89) and the Ewen property (in his para. 90). As to the Topco property, the
arbitrator found the appraisers seemingly heavy reliance upon it to support
his valuation was not justified. The arbitrator then said as to the Ewen
property, wrongly referring to the rent as for the building only:
[90]
It was common
ground between Mr. Johnston and Mr. Dybvig that, at least in terms of size,
site coverage, building quality and rail access, the Ewen Avenue property is
comparable to the Leased Premises;
and both of them seemed to agree that
the $3.75 per square foot building rental rate in effect there as at July 1,
2006 was low as a guide to the market rent of the building component of the
Leased Premises and required upward adjustment. As indicated, in 2005 the
building rent effective as of October 1, 2006 for that property was fixed at
$4.38. Mr. Johnston, as I have said, [footnote deleted] considered Ewen Avenue
significantly inferior to the Leased Premises. My own view is that he has
exaggerated the relative merits and demerits of Ewen Avenue as compared to
those of the Leased Premises.
[Emphasis
added.]
[35]
The arbitrator then concluded:
[91] Making the best
judgment that I can of the information in evidence, I have reached the conclusion
that the fair market rent for the building component of the Leased Premises,
was $5.35.
[36]
From there, still in Part Nine of his award, the arbitrator went on to
value canopies and the surrounding land, concluding:
[94] In summary, then, I conclude that the market rental
value for the Leased Premises as at July 1, 2006 was:
Building
64,057 sq. ft
$5.35
$342,705
Canopies
21,701 sq. ft
$3.00
$65,103
Land
290,133 sq. ft
$0.87
$252,415
TOTAL*
$660,223.00
* rounded
In the result the fair market rental
value of the Leased Premises for the five year term from July 1, 2006 to June
30, 2011 is $3,300,000.
[37]
In his ruling on the application to correct or clarify the award, the
arbitrator said:
[13] Since paragraph [90] is the only place in this
section of the Award in which any reference is made to the Ewen Avenue lease,
deleting it might appear to respond comprehensively to Mr. Covals point.
I
think, however, that this is a superficial view of that point which goes,
rather, to my apprehended reliance on Ewen Avenue as the principal basis for my
conclusion.
[14]
I can understand how a reader might form that
view. It is clear, in retrospect, that this section of the Award simply fails
to explain how and why I reached my conclusion as to building value.
[15] As a result, the mere removal of paragraph [90] is
not enough. If it is removed, the components of this section are:
(a) an
observation concerning the condition of the building (paragraph [88]);
(b) a
reservation about the weight attributed by Mr. Johnstone to the Topco lease
(paragraph [89]); and
(c) a
statement of my conclusion that the fair market rent for the building component
was $5.35 (paragraph [91]).
[16] While the conclusion
in paragraph [91] is perhaps not technically a
non sequitur
it is
certainly not explained by paragraphs [88] and [89]. In this sense this section
of the Award is simply defective. It fails to provide what the parties have a
right to expect and an arbitrator must deliver, namely, a reasoned decision
[footnote deleted]. I acknowledge the failure. I cannot think of a creditable
explanation for it.
[Emphasis
added.]
[38]
The arbitrator then deleted para. 90 of the original award, rewrote the
two previous paragraphs and supplemented the award with eight paragraphs
discussing the Topco property and other properties referred to in the summary
of evidence. He made no reference at all to the Ewen property in this
discussion.
[39]
In reviewing this trail of writing the judge said:
[53] I am satisfied that the Correction Ruling in this case
is the type of clarification contemplated by s. 27. It is a clarification of
the Arbitrators reasoning in the original Award. He did not embark upon a new
analysis or rationale. He acknowledged in the ruling that the building value
component of the Award had been inadequately explained, and he proceeded to
make it more understandable. He indicated that the reasoning in the Correction
Ruling is not a new analysis. I am satisfied that this is so.
[54] The Arbitrator could have simply deleted the word
building from paragraph 90 and permitted everything else to remain as it was.
I accept that his reason for not doing so was because he felt compelled to
provide the comprehensive analysis of his reasoning, which he acknowledges
should have been present in the original Award.
[55] The Arbitrator changed nothing from the Award. He
simply augmented it to fill in a gap in his analysis by explaining how he
determined building rent in the first place.
[56] The Correction Ruling
provides supplemental reasons to the Award. Supplemental reasons are not the
same as changed reasons.
[40]
The trial judge then found that the Ewen property was not the principle
factor in the reasoning of the arbitrators original award, and that the
valuation was based on all the information in the evidence, not just that
particular site.
[41]
With respect, I do not consider it can be said, as the judge did in
para. 55, that the arbitrator changed nothing in his award.
[42]
The arbitrator deleted, in the discussion as to valuation in his
corrected ruling, all reference to one of only two properties he had originally
specifically referred to in his comparative analysis. While it is correct to
say, as the judge did at para. 58, that the arbitrator referred in para. 91 of
the original award to the information in evidence and thus broadly recognized
the body of evidence before him, this ignores the specific reference to the
property. It must be taken by the reference to the Ewen property in para. 90 of
the original award that the evidence of this property was material to the
decision. It was not open to the arbitrator, in my view, to simply delete all
reference to evidence which was sufficiently cogent to him as to comparability
that he made prominent mention of it in the original award.
[43]
Objectively, the appearance is that the arbitrator has changed his mind
as to the comparability of the subject property to the Ewen property. I do not
understand the arbitrator to deny that he originally considered the Ewen
property comparable to the property in issue. If the Ewen property was
reasonably comparable, the fact that the rent was for both land and buildings would
be relevant to valuation. Nevertheless, it was ignored entirely in the analysis
in the corrected award.
[44]
The arbitrator did say he recognized he had failed to give reasons for
reaching his conclusion, and proceeded to provide reasoning in several
paragraphs discussing other properties referred to in the evidence. It may have
been open to him to write these paragraphs in the spirit of completing
incomplete reasons as suggested in
AHT v. Tradigrain
, and I make no
final determination of that issue, but it was not open to him to do so without
any reference to evidence he had earlier put into a position of prominence.
[45]
The arbitrator recognized this difficulty in his corrected award in the
passages at paras. 13 and 14 of his correction ruling, replicated and underlined
above.
[46]
The matter of releasing additional reasons after a decision has been
announced is delicate. Certainly in the realm of arbitration the
Act
contemplates additional and corrective, to a degree, rulings.
[47]
As I earlier stated, the issue is not one of the integrity of the
arbitrator. I recognize in this unfortunate situation the arbitrator has sought
to rescue the arbitration process through his correction ruling. However, and
with respect, I have come to the view that in doing so he has stepped outside
his jurisdiction. The matter is one of the integrity of the arbitration
process. Viewed objectively one may ask whether an objective bystander, reading
these awards, could have confidence in the outcome in light of the arbitrators
silence in the corrected award on the effect of the Ewen property as a
comparable on his analysis, given its prominence in the analysis in the
original award. I conclude the answer is in the negative. I consider an
objective review of the award reveals a correction in reasoning through
exclusion from the reasons of a factor previously considered material, creating
objectively an impression the corrected award was an alternate explanation for
the result rather than clarification of the original reasoning.
[48]
This, in my view, goes beyond s. 27. As it is not permitted by s. 27, it
exceeded the arbitrators powers and is an arbitral error. I conclude the judge
erred in finding it was not.
[49]
The question, then, is remedy. Freeport urges us, if we find error, to
remit the matter to the arbitrator. It says reference to a new arbitration goes
beyond the remedy originally available to Westnav under s. 30 of the
Act
.
[50]
Section 30 permits this Court to do nothing in respect to the award even
if arbitral error is found, to set the award aside, or to refer the matter back
to the arbitrator.
[51]
In my view, given the sequence of events and the basis for my
conclusion, neither doing nothing nor sending it back to the arbitrator are
appropriate responses, even recognizing the delay and expense that is attendant
on my decision. I would allow the appeal and set the award aside.
The
Honourable Madam Justice Saunders
I AGREE:
The Honourable Madam Justice D. Smith
I AGREE:
The Honourable Madam Justice Garson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Bryans Transfer Ltd. v. British
Columbia,
2010 BCCA 89
Date: 20100126
Docket:
CA037508
Between:
Bryans
Transfer Ltd.
Respondent
(Plaintiff)
And
Her
Majesty the Queen in Right of the Province of British Columbia
Appellant
(Defendant)
And
City
of Trail and Regional District of Kootenay Boundary
Respondents
(Defendants)
Before:
The Honourable Mr. Justice K. Smith
(In Chambers)
On
appeal from: British Columbia Supreme Court, September 1, 2009
(
Bryans Transfer Ltd. v. Trail (City)
, 2009 BCSC 1198, Kamloops Reg.
39822)
Oral Reasons for Judgment
Counsel for the Appellant:
K.
Horsman
Counsel for the Applicant Intervenor:
Surveyor General of British Columbia
A.R.Westmacott
Place and Date of Hearing:
Vancouver,
British Columbia
January
26, 2010
Place and Date of Judgment:
Vancouver,
British Columbia
January
26, 2010
[1]
K. SMITH J.A.
:
This is an application by the Surveyor General to intervene in an appeal
between Her Majesty the Queen in Right of the Province as appellant and Bryans
Transfer Ltd., the respondent and the plaintiff in the action below. The City
of Trail is not opposing the application, nor is Her Majesty the Queen. The
respondent Bryans Transfer Ltd., however, does oppose the application,
although its counsel has not appeared in response to the motion today. Rather,
he has filed a letter setting out in point form objections to the intervention
and a short memorandum of argument.
[2]
The question in the action involves the accretion
of what was formerly Crown land covered by the Columbia River. The land, which
was uncovered on a reasonably permanent basis after a dam was constructed
upstream on the River, is adjacent to land owned by Bryans Transfer Ltd.,
which claims title to the land under the common law principle of accretion. Since
it was uncovered, the land has been used by the City of Trail and by the
Province for their purposes and the action below claims against them for
trespass.
[3]
In the trial court, the Province argued that the
statutory scheme established by the
Land Title Act
, R.S.B.C. 1996, c.
250 and the
Land Title Inquiry Act
, R.S.B.C. 1996, c. 251, have altered
or abrogated the common law, and that ss. 94, 95, and 96 of the
Land Title
Act
are a complete code dealing with the accretion of Crown land formerly
covered by water into an upland owners title.
[4]
Bryans Transfer Ltd. was successful below but
on a ground that was not argued by either party and I gather is not supported
by either party on appeal.
[5]
The Surveyor General takes the position that the
judgment adversely affects his ability to carry out his statutory functions and
that he is directly affected by the judgment and, as well, that he has a useful
perspective to bring to the appeal from the public interest point of view.
[6]
The Surveyor General is appointed under s. 34(1)
of the
Land Title and Survey Authority Act
, S.B.C. 2004, c. 66, to administer
the Surveyor General Division of the Land Title and Survey Authority of British
Columbia, which has separate legal existence from the Provincial Crown. It is
responsible for managing, operating and maintaining the land title and survey
systems of British Columbia. It is a statutory delegate responsible under the
Land
Act
and the
Land Title Act
for adjudicating various applications
brought under those statutes, including applications affecting natural
boundaries submitted under s. 94(1) of the
Land Title Act.
[7]
I am satisfied that the Surveyor General has a
direct interest in the appeal. It raises a fundamental issue with respect to
the scope of his jurisdiction, and the interpretation of the applicable
provisions of the statute adopted by the learned chambers judge has had a
significant impact on the applicants operations. It was restricting his
ability to process accretion and natural boundary adjustment applications that
do not involve the deposit of a subdivision plan. That effect of the order has
been stayed pending disposition of the appeal by an order made earlier in this
proceeding by Madam Justice Neilson. Of course, if the appeal is unsuccessful,
those effects will continue and, as a result, the survey community and land
owners will be deprived of an administrative process for clarifying the
boundaries of waterfront properties and will be left to common law principles.
[8]
Bryans Transfer Ltd. sets out several
objections to the intervention.
[9]
It objects that the Surveyor General took no
position with respect to the matter when it was in Supreme Court and, by
implication, asserts it therefore should not be allowed to take a position on
the appeal. I am advised by counsel for the Surveyor General that the Surveyor
General held a watching brief at trial and did not participate. As I have
already noted, the ground of appeal that has caused such concern for the
Surveyor General was not argued by either party at the trial and there was
therefore no occasion for the Surveyor General to take a position on that
ground.
[10]
Bryans Transfer Ltd. is also concerned that the
Surveyor General will attempt to adduce fresh evidence on the appeal. I am
assured by counsel for the Surveyor General that he has no such intention.
There is afoot some thought of introducing fresh evidence relevant to this
issue but that is an initiative that Her Majesty the Queen may take, rather
than the Surveyor General.
[11]
Bryans Transfer Ltd. also objects that the
position the Surveyor General wishes to take will be adequately covered by the
Provincial Crown and there is no need for the Surveyor General to intervene.
However, I am advised by counsel that the Surveyor General does not intend to
argue any points made by the Provincial Crown but simply to adopt what the
Provincial Crown has to say, that the Surveyor General wishes to make submissions
as to the effect of the judgment on his statutory duties and responsibilities
as opposed to the merits of the issues as between the parties.
[12]
I repeat that I am satisfied that the Surveyor
General has a direct interest in the appeal and will bring a useful and unique
perspective to an issue of public law. Accordingly, I grant leave to the
Surveyor General to intervene. The Surveyor General will have leave to file a
factum that does not exceed 20 pages. The Surveyor General asks for an order
that it be permitted to make oral submissions at the hearing. I will leave that
request to the division hearing the appeal.
(discussion
with counsel)
[13]
K. SMITH J.A.
:
The intervenors factum is to be submitted by March 5, 2010, and the respondent
Bryans Transfer Ltd. will file his factum by March 19, 2010.
The Honourable Mr. Justice K. Smith
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Dykeman v. Porohowski,
2010 BCCA 36
Date: 20100126
Docket:
CA035701
Between:
Megan Martha Dykeman, Ronald
Wellington Dykeman,
and Monica Diane Dykeman
Appellants
(
Plaintiffs
)
And:
Stephen Porohowski, Ajit Singh Hothi,
and Bertha Rogers
Respondents
(
Defendants
)
Before:
The Honourable Madam Justice Prowse
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Lowry
On appeal from the Supreme Court of British Columbia, pronounced
December 5, 2007, New Westminster Registry, Docket S75643
Counsel for
the Appellant
Megan M. Dykeman:
W.D.
Mussio
Counsel for the Respondent
Stephen Porohowski:
L.G.
Harris
Place and Date of Hearing:
Vancouver,
British Columbia
November 20, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
26, 2010
Written Reasons by
:
The Honourable Madam Justice Newbury
Concurred in by:
The Honourable Madam Justice Prowse
The Honourable Mr. Justice Lowry
Reasons for
Judgment of the Honourable Madam Justice Newbury:
[1]
The plaintiff/appellant, Ms. Dykeman, was
injured in two motor vehicle accidents, the first on September 5, 2000 (the
accident involving the defendants Porohowski and Hothi), and the second on
August 28, 2001 (involving the defendant Rogers). The plaintiffs damage claims
were tried by a jury over several days in late 2007 after the question of
liability for the second accident had been settled in her favour. The jury
awarded Ms. Dykeman total damages of $44,400, consisting of $15,000 for non-pecuniary
damages, $4,400 for past income loss, $5,000 for special damages, $20,000 for
costs of future care and nil for loss of income-earning capacity. Since the
defendant Porohowski was found to be entirely at fault in respect of the first
accident, he was ordered to pay one-half of the damages plus court order
interest and one-half of the plaintiffs assessable costs and disbursements.
[2]
The plaintiff appeals the jurys award on four
discrete bases namely that the jurys verdict was inconsistent and should
therefore be set aside; that the trial judge erroneously permitted the jury in
effect to draw an inference adverse to the plaintiff due to her failure to call
certain evidence; that the trial judge erred in refusing to put to the jury the
plaintiffs in-trust claim; and last, that he erred in allowing the defence
to cross-examine her on various Internet postings which the plaintiff says had
not been disclosed to her counsel prior to trial in accordance with R. 26 of
the
Supreme Court Rules
. For the reasons that follow, I am of the view
that the appeal must be allowed on the third and fourth grounds and that a new
trial must be ordered.
Factual Background
[3]
At the time of the first accident, Ms. Dykeman,
then approximately 23 years old, was a passenger in the front seat of a vehicle
being driven by Mr. Porohowski (whom she married three months later). He was
attempting to leave a parking lot by making a left turn onto Highway No. 10 to
proceed westbound. In the course of making the turn, he collided with a
vehicle driven by the defendant Hothi, who was also travelling westbound on
Highway No. 10. Ms. Dykeman, who had been wearing her seatbelt, struck her
right temple on the passenger window and struck her right knee and ankle. She
also suffered a vitreous detachment of her right eye and a neck injury.
[4]
At the time of the second accident, Ms. Dykeman
had been driving an extended cab truck heading north on 184th Street in
Surrey. She had stopped at the four-way stop sign at 32nd Avenue and when it
appeared safe to do so, proceeded through at which point the vehicle driven
by the defendant Rogers entered the intersection without stopping. The two
vehicles collided.
[5]
Immediately following the first accident, Ms.
Dykeman felt some initial soreness and disorientation. She testified that the
following day, she noticed blood on her pillow and went to a walk-in clinic,
where the doctor suggested she go to the emergency room at Surrey Memorial
Hospital. She was discharged without the necessity of a CT scan, as hospital
personnel felt she did not have a serious enough concussion. She said she began
to experience shooting pain down her neck, problems with depth perception and
balance, floaters in the vision of her right eye, sensitivity to light, headaches
and difficulty focussing. Although her knee, ankle and back problems cleared
up, she continued to suffer headaches and pain in her neck and indeed alleged
that most of her other symptoms were continuing even up to the time of trial
seven years later. The low back and hip injuries she suffered in the second
accident, on the other hand, were quite distinct from those suffered in the
first and had largely cleared up by the time of trial.
[6]
The plaintiff had been working at a restaurant in
September 2000, but her passion was horseback riding and she had ambitions to
become a Grand Prix show jumper. In late 2000, she and Mr. Porohowski had
formed a partnership to carry on the business of providing agrarian and
equestrian services. That partnership was dissolved in May 2001, but shortly
thereafter, Ms. Dykeman and her parents formed another partnership under the
name Freedom Fields Farm. It carried on the business of farming and
equestrian activities (including horse-boarding) and required a great deal of
time and labour. Ms. Dykeman claimed that due to the accidents, and
particularly their effects on her balance and depth perception, she was limited
in the duties she could perform on the farm and in her ability to ride and jump
horses. How her injuries had affected her capacity to earn income was the
subject of various reports and testimony from experts, including Dr. Shukett,
a rheumatologist; Dr. OBreasail, a psychiatrist; Dr. Van Rijn, a physiatrist;
Dr. Hohmann, a vocational expert; Dr. Anderson, an ophthalmologist; Dr. Longridge,
an otolaryngolist; Ms. Sharma, a vocational expert; Ms. Dobbin, an occupational
therapist; Mr. Maynard, an expert on equestrian competition in Canada; Dr.
Jones and Dr. Keyes, both neurologists; and Mr. Benning, an economist who
provided calculations of estimated wage losses.
[7]
The plaintiff claimed out-of-pocket expenses in
the amount of $94,788.21 (much of which was attributable to wages paid to
replacement workers in the equestrian operation) and future care costs of
$476,817 as calculated by Mr. Benning. He also quantified the plaintiffs
past and future wage loss at $325,300 if she had 50% residual capacity and
$451,448 if she had 25% residual capacity as a self-employed horse trainer/farm
operations foreman. Subsequently, based on Mr. Maynards report concerning
wages in the horse industry, Mr. Benning provided a further calculation that
estimated Ms. Dykemans past and future wage loss as ranging between
$1,205,192 and $3,796,811.
[8]
The plaintiff also asserted an in-trust claim,
which was duly pleaded, in respect of the losses and labour of her parents in
providing assistance in the operation of the Freedom Fields Farm business. (As
well, her parents were themselves plaintiffs in the action and claimed damages
for having expended additional money and efforts in the business and otherwise
as a result of Ms. Dykemans injuries and inability to work after the
accident.) There was evidence that her mother, a psychologist, helped in the
Freedom Fields business by giving tours of the farm, doing filing, answering
the phone, and by babysitting once Ms. Dykeman had children. This entailed her
delaying her planned return to the practise of her profession. Ms. Dykemans
father was employed full-time during the week but did whatever was needed in
the evenings and on weekends, to the extent of one to two hours per day. He
estimated that he used up about $40,000 in vacation leave to support the farm
enterprise.
[9]
The plaintiffs treating doctors, whose reports
and diagnoses were based in large part on her subjective reports, were cross-examined
extensively at trial. The defence position was that the appellant was
suffering from soft tissue injuries that had never totally disabled her and
which had little or no objective basis in terms of medical diagnosis; and that
her claims that but for the accident, she would have achieved considerable
success and earned substantial income in the show jumping business were
contradicted by other evidence and were exaggerated. Thus Ms. Dykemans
credibility was clearly in issue, and the Internet postings on which she was
cross-examined provided some basis for the defendants position that her
injuries were less severe and less persistent than she had claimed, and that
her earnings prospects prior to the accident had been much less promising than
Mr. Bennings reports had assumed.
[10]
Obviously, the amounts awarded by the jury in
respect of Ms. Dykemans first accident $15,000 for non-pecuniary damages,
$5,000 for special damages, $4,400 for lost income and $22,000 for future care
costs were considerably less than what she had sought. No award was made
for the in-trust claim, since the trial judge ruled that the evidence did not
meet the applicable threshold for such claims to be put to the jury. This ruling
is the basis of one of the four grounds of appeal, to which I now turn.
On Appeal
Inconsistent Verdict?
[11]
The plaintiffs first ground of appeal is that the
jurys award was clearly inconsistent in that the $15,000 award for non-pecuniary
damages cannot be reconciled with the future care award of $20,000. On this
point, counsel relies on
Novak v. Lane,
2000 BCCA 267, in which a
plaintiff was awarded $3,000 for non-pecuniary damages and $4,000 for loss of
future care, and nothing for past income loss or loss of income-earning
capacity. The plaintiffs credibility had not been seriously attacked at
trial. Chief Justice McEachern for the Court observed that it was very
difficult to determine the basis on which the jury could have concluded that
she required $4,000 for future care costs and yet was entitled to only $3,000
for pain and suffering, given that the case was similar to others in which
non-pecuniary damages had ranged as high as $20,000 or $25,000. In the result,
the Court ordered a new trial, although expressing the hope that some
accommodation could be found by the parties in order to save the cost of
another jury trial.
[12]
A rather different view of inconsistency was
taken by this court in 2003 in
Ferguson v. Lush
, 2003 BCCA 579. As in the
case at bar (and unlike
Novak
), the plaintiffs credibility in
Ferguson
was at issue and her self-reporting was the foundation of much of the expert
testimony and reports. The Court,
per
Thackray J.A., acknowledged that
there was support in a general sense for the notion that inconsistent
verdicts can result in appellate interference (see
White v. Nuraney,
2000
BCCA 536, [2000] 80 B.C.L.R. (3d) 307 at 325, and the cases cited therein).
However, his Lordship also noted
Gunderson v. Hoogerdyk
[1995] B.C.J.
No. 1602 (C.A.), in which a jury had awarded damages of $1,920 for pain and
suffering and $16,000 for loss of income. The Court in that instance had reasoned
that the plaintiffs argument rested on the proposition that the jurys award
for pecuniary loss should be taken to be incontrovertibly correct a
proposition for which no authority had been cited. In the analysis of Rowles
J.A.:
This is a case
in which the jury had to resolve various conflicts in the evidence, including
the opinions provided by the medical doctors. The jury was also required to
consider the credibility of the plaintiff, that is, how reliable her evidence
was in respect to the nature and duration of the injuries she sustained in the
two accidents. There were virtually no facts which were not in dispute. Had the
jury award for pecuniary loss been based on facts not in contention, there
might be some foundation for the appellant's argument but that is not the case
here. [At para. 7.]
The Court in
Ferguson
applied this
reasoning, emphasizing that the awards were made by the jury on the basis of
the weight that it gave to the evidence. (See also
Moskaleva v. Laurie
2009 BCCA 260, 94 B.C.L.R. (4th) 58, at paras. 134-7.)
[13]
Similarly here, it seems to me that the jurys
award was based on the facts it found, which we will never know, and that there
is no basis to assume that the award for future care costs was incontrovertibly
correct, as opposed to the lower award for pain and suffering. As in
Moskelova,
supra
, it cannot be said the jury must necessarily have misapprehended the
principles to be applied in making the awards in question. Put another way, it
is possible to conceive of a logical and rational basis for the awards for
pain and suffering on the one hand, and future care costs on the other: see
Holmes
v. Hawka
1994 1 B.C.L.R. (3rd) 341 (S.C.) at paras. 12-20.) In all the circumstances,
I would not accede to this ground of appeal.
Adverse
Inference
[14]
The second ground of appeal advanced on behalf
of the plaintiff relates to the trial judges handling of an argument made to
the jury by counsel for the defence. Following the calling of one of the
expert doctors, the trial judge inquired of counsel for the plaintiff whether
Dr. Englebrecht, Ms. Dykemans treating doctor, would be giving evidence. Mr.
Mussio, counsel for Ms. Dykeman, advised the trial judge that ... she hasnt
seen the patient for some time and wasnt going to write me a report. And
theres also a CL-19 thats available to my learned friends, so if they raise
adverse inference, then .... The following exchange then took place:
THE COURT: No, they can call her, if that's
the case.
MR. MUSSIO: I'm sorry?
THE COURT: They can call her.
MR. MUSSIO: Exactly.
THE COURT: It's just ...
MR. MUSSIO: They're -- It's available for them to call her. They
have ... an expert report from her, and -- and similarly I wrote and tried to
get a report, but was unable to, and I can tell the jury that. So it's not as
if I'm --
THE COURT: No, but it -- it's going to be important about how I
approach it in directing the jury.
MR. MUSSIO: Yes.
THE COURT: Or whether we're going to have any argument about
adverse inference.
MR. MUSSIO: Okay. Well, --
THE COURT: That may be -- That may be a legal issue that we're
going to have to --
MR. HARRIS: Yes.
THE COURT: -- get sorted out before I give directions.
MR. GIBB: Yes.
[15]
Thereafter, the trial judge commented that if the
plaintiff had requested Dr. Englebrechts attendance, and she had declined
to come, ... thats one thing. Because it means equally if your friends are
on notice of that, then they could have subpoenaed her also. Counsel for the
defence, Mr. Harris, told the Court he intended to argue before the jury as a
part of the plaintiffs case in general that you havent heard from any of the
doctors who treated her in a primary way, that its open for us to call any
of these people, but it is also the plaintiffs onus to prove her case, and
that Dr. Englebrechts absence would be raised as one of the points about the
proof of the plaintiffs case. Mr. Harris seemed to accede to the trial
judges assumption that he would not be seeking to draw an adverse inference
from Dr. Englebrechts absence.
[16]
In making his summation to the jury, defence counsel
said this:
Ladies and gentlemen, there's a real
critical area of evidence where things were just missing, and that is in the
very first year. In that first year the plaintiff has met Mr. Porohowski, she has
-- she is dating him, she eventually marries him, she separates from him, she
gets back together later on. She --.... The family clears the farm. ...
Freedom Fields Farm Services is formed and then stops operating. What happened
during this period of time? ... What would have happened to make the
plaintiff's life different had these accidents not occurred? We don't know.
It wasn't called. It could have been called as medical evidence, except for
the eye doctor, Dr. Parsons, who ... if you read his report, he said there was
a partial vitreous detachment. And I should say that we completely accept
that. There is no evidence about how the plaintiff's injuries affected her
during that first year.
That could have come from the family doctor, Dr.
Engelbrecht, but doesn't need to.
Now, I don't want to make more of that ...
than I ought to. Mr. Mussio can say, and he would be quite correct in saying,
that I could have subpoenaed Dr. Engelbrecht to come to court if I'd wanted
to. But that's just another ... brick that wasn't in the wall. That's just
another ... piece of the puzzle that was missing.
...
I said there's no corroborating medical evidence in the first
year. Similarly, there's no corroborating lay evidence of what happened in that
critical first year. The plaintiff's mother and father attempted to
corroborate, but I'm going to suggest to you in a moment that their evidence is
suspect.
In view of these questions it
would have been important to have corroborating evidence from independent
sources, friends, stable mates, people in the business, but no such evidence
was called. [Emphasis added.]
[17]
In response, Mr. Mussio for the plaintiff told
the jury that the law did not require him to call every piece of evidence in
existence, but only enough to make the plaintiffs case. He noted that many of
Ms. Dykemans former trainers were not around and that many of the records
relating to her jumping performance prior to 2000 were simply not available.
He continued:
Mr. Harris also
made the comment about the family doctor, and there has been explanation as to
why he's not here. As Mr. Harris noted, if necessary he can call the same
individual to testify.
And there ought not be an adverse inference drawn
from -- from the failure for -- for a doctor to be called
. Because surely,
as you see the list of special damages and the number of doctors and therapists
that Ms. Dykeman saw over the course of her injury, it would be dozens and dozens
that would be here if that was the test to be applied in these courts. And it
isn't. [Emphasis added.]
[18]
The trial judge then charged the jury,
mentioning the defence submission as follows :
He [Mr. Harris] said
there was a lack of evidence, and he touched on various aspects: As to a lack
of corroboration of Ms. Dykeman's riding ability in 2000. There was a lack of
information on the farm operation, on how it started up and how the plaintiff's
activities were affected with the effect of having her children. He questioned
the credibility. He actually pointed to [the plaintiff] on an issue of
fainting, and I think properly, if I may say, it was the mother's evidence, not
the daughter's. He pointed out an issue about ear bleeding, or a bleeding ear,
and whether there was any other evidence of it. He mentioned the second
accident and the third accident, and I might say on that aspect he was simply
saying that there is not a lot of evidence. There is a reason, of course, we
have not heard much about the second accident, but the reality of it is you
heard Ms. Dykeman's evidence. She was T-boned. There was injury to the hip.
There was a third accident. That was said to be minor by the plaintiff. There
is no contrary evidence.
[19]
In the absence of the jury, counsel for Ms.
Dykeman objected that Mr. Harris summation had effectively asked the jury to
draw an adverse inference from the failure to call not only the family doctor
but also various individuals in the horse industry and so forth. After
further discussion, the trial judge called for the jury to be brought back, but
the following exchange took place before they returned:
MR. HARRIS: Sorry. I'm not sure what your
ruling is going to be yet. It was my respectful submission that I had not made
such a comment as Mr. Mussio suggests that I made.
THE COURT: Oh, what I was going to do was
say this:
That there was
some comment on the lack of evidence, that not all people were called. That it's
for the plaintiff to call who they deem necessary to establish their case, that
there is no suggestion that they take an adverse inference, but they are to
decide the case on all of the evidence presented to them.
[20]
Defence counsel argued that to underscore the
matter would give it undue weight, to which the Court said Yes. Counsel
for the plaintiff nevertheless pressed the issue and repeated his argument that
although defence counsel had not used the words adverse inference, the only
logical conclusion to be drawn from his summation was that such an inference
should be drawn. The trial judge at this point simply asked if there were any
other issues to be discussed. After hearing submissions on other topics, he
told counsel that:
The more we
go on, the more I am convinced that I shouldnt mess with the jury in where
they are right now. I am not going to concede to any of the various concerns.
The points of view were very well put in argument on both sides yesterday, and
I have tried to provide what little guidance I can in this, I think, legally
complex, case ...
He made no further comment on this subject to
the jury prior to their return with a verdict later that day.
[21]
In this court, counsel for the plaintiffs
submits that the jury was left with the clear impression that most aspects of
the appellants case should be dismissed due to a lack of evidence. He says
that the summation of defence counsel to the jury was highly prejudicial to
her, and that if comments of the kind made by Mr. Harris to the jury were
permitted, plaintiffs would be obliged to call all possible witnesses in order
to avoid the drawing of adverse inferences.
[22]
With respect, I am not persuaded that the
defence argument to the jury effectively amounted to an invitation to draw an
adverse inference. Certainly the comments were close to the line, but as I
read it, the argument was devoted to showing the weaknesses of what evidence
the plaintiff
had
adduced, rather than speculating as to why other
evidence was
not
adduced. Mr. Harris did not invite the jury to assume
the missing evidence had not been called because it would have been adverse to
the plaintiff. In my view, he was entitled to point to holes in the wall and
to ask the jury to reach a verdict that reflected the deficiencies in the plaintiffs
case, if such they were. Having said this, it certainly would have been
preferable if the trial judge had simply taken the matter in hand and warned
the jury not to draw anything one way or the other from the fact there were
potential, but uncalled, witnesses.
[23]
I would not accede to this ground of appeal.
In-Trust
Award
[24]
As noted earlier, Ms. Dykeman advanced a claim for the losses and
labour of her parents in providing assistance to her in the Freedom Fields
business and in coping with her family responsibilities. This was in addition
to claims brought by her parents, who were also plaintiffs in the action and claimed
compensation for their own efforts and expenditures necessitated by their
daughters (and partners) injuries. The transcript indicates that in
correspondence with Mr. Harris prior to trial, however, plaintiffs counsel had
agreed that Ms. Dykemans parents themselves should not have advanced claims
for what were essentially business losses of their partner and that indeed they
were not proper plaintiffs.
[25]
It is not entirely clear whether as part of their correspondence,
counsel had also agreed, or assumed, that the plaintiff herself would not be
asserting a claim for services rendered gratuitously by her parents in respect
of the Freedon Fields business. Recovery for assistance provided by family
members to a family enterprise has been approved by this court in previous
cases: see
Hall v. Miller
(1989), 41 B.C.L.R. (2d) 46 (C.A.), discussed in
Kroeker v. Jansen
,
infa
, and
Johnson v. Shelest
(1988) 22
B.C.L.R. (2d) 230 (C.A.). In any event, there remained the plaintiffs claims
for personal and household services provided by her parents. The defence
argued there was no evidence of the extraordinary circumstances required
for such a claim to succeed. In Mr. Harris submission, the decided cases,
especially
Dufault v. Kathed Holdings Ltd
. 2007 BCSC 186, all involved
both
serious
injury and services that went above and beyond what would
naturally be expected under the natural love and affection. [
Sic.
] For
his part, Mr. Mussio responded that various other cases, including
Boren v. Vancouver
Society for the Physically Disabled
2002 BCSC 1134 (revd in part at 2003
BCCA 388), show that in-trust awards for family services do
not
require
serious injury and that in any event, the question was one for the jury. The
trial judge expressed the tentative view that he needed something more than
the fact that father perhaps has got a lot more physical exercise than he ever
planned and mothers perhaps not being able to go back to her profession, but
asked for further argument the following week.
[26]
After further argument, the trial judge pronounced his
ruling on December 4, 2007. He began by reviewing the evidence of Ms.
Dykemans parents, the cases provided by counsel, and other authorities,
including
Bystedt (Guardian ad litem of) v. Hay
2001 BCSC 1735. In the
latter case, D. Smith J. (as she then was) had referred to the well-known judgment
of Gibbs J.A. for the majority of a five-person division of this court in
Kroeker
v. Jansen
(1995) 4 B.C.L.R. (3d) 178, to which I shall return below.
The trial judge then continued:
... It was noted that the services provided
must replace services necessary for the care of the plaintiff as a result of
the plaintiffs injuries, and that
if the services are rendered by a family
member, they are over and above what might be expected from the family
relationship
, and then a number of factors going to evaluation, if I can
put it that way.
The foundation in each case is the
grievousness of the injuries
, and where an in-trust
award may be made for compensation for services provided in the nature of
personal care
if those services are of a kind that is above and beyond the
type of service undertaken by friends and relatives out of love, friendship or
family duty.
Here there are two aspects in my view:
Firstly, that
the injuries are not of that serious grievous nature as
described in the decisions; and secondly, that they are more to the business
aspect and loss that may have been sustained by the plaintiff.
In sum, I will
not put a question to the jury regarding the claim for an in-trust award. [At
paras. 10-13; emphasis added.]
[27]
On appeal, counsel for the plaintiff contends
that the trial judge was wrong to suggest that an in-trust award may be made only
where the plaintiffs injuries are particularly grievous. He relies on this
courts more recent judgment in
Ellis v. Star
, 2008 BCCA 164, in which
the plaintiff was a police officer whose wrist had been injured. At trial, he received
an in-trust award of $3,500 as compensation for household services (which he would
otherwise have performed) carried out by his wife. Mackenzie J.A. noted the
defendants submission that the cases in which awards for gratuitous personal
services have been made had involved seriously injured plaintiffs
or other
support services beyond those normally expected in a marital relationship for
minimal debilitating injuries
. (Para. 18; my emphasis.) The Court found
that yard maintenance services undertaken by Ms. Starr were not sufficiently
extensive or related to the injury to support an in-trust award. The appeal
was allowed to the extent of deleting the in-trust award.
[28]
Since
Kroeker
, it has been settled law in
this province that housekeeping and other spousal services have economic value
for which a claim by an injured party will lie even where those services are
replaced gratuitously from within the family. In
Kroeker
, such
recovery was allowed under the heading of loss of future ability to perform
household tasks, but obviously, damages for loss of such ability
prior
to trial may also be properly claimed and recovered: see, e.g.,
McTavish
v. MacGillivray
, 2000 BCCA 164 at paras, 43, 51-7,
per
Huddart
J.A.;
West v. Cotton
(1995) 10 B.C.L.R. (3d) 73 (C.A.) at para. 25; and
Campbell
v. Banman
2009 BCCA 484. The reasoning in
Kroeker
has been extended
beyond spousal services to services rendered by other members of a family:
see
Boren v. Vancouver
Resource Society, Dufault, McTavish v.
MacGillivray
;
Bystedt v. Hay
, all
supra
. Such awards
are colloquially referred to as in trust even though it is the plaintiff who
recovers them, and British Columbia courts do not generally impose trust terms in
their orders, regarding the loss as that of the plaintiff: see
Feng v.
Graham
(1988) 25 B.C.L.R. (2d) 116 (C.A.) at 9-10
; McTavish, supra.
[29]
The majority in
Kroeker
was alive to the
possibility that awards for gratuitous services by family members of plaintiffs
could unleash a flood of excessive claims (
supra
, at para. 29) and for
that reason, urged courts to be cautious in making such awards. In the words
of Gibbs, J.A.:
... as the law
has developed it would not be appropriate to deny to plaintiffs in this
province a common law remedy available to plaintiffs in other provinces and in
other common law jurisdictions.
It will be the duty of trial judges and this
Court to restrain awards for this type of claim to an amount of compensation
commensurate with the loss. With respect to other heads of loss which are
predicated upon the uncertain happening of future events measures have been devised
to prevent the awards from being excessive
. It would be reasonable to
expect that a similar regime of reasonableness will develop in respect of the
kind of claim at issue in this case. [At para. 19; emphasis added.]
I do not read
Kroeker
or
Ellis
,
however, as establishing a threshold of grievousness in terms of the injuries
which may necessitate such services. A plaintiff who has a broken arm, for
example presumably not a grievous injury and who is obliged to seek
assistance in performing various household tasks should not be foreclosed from
recovery on this basis. This was recognized in
Ellis
in the quotation
reproduced above. Thus I disagree with the trial judges reference to grievous
injury as a threshold that the plaintiff was required to surmount if her claim was
to go to the jury. Instead, claims for gratuitous services must be carefully
scrutinized, both with respect to the nature of the
services
were they
simply part of the usual give and take between family members, or did they go
above and beyond that level? and with respect to causation were the
services necessitated by the plaintiffs injuries or would they have been
provided in any event? Finally, if these questions which I would have
thought are appropriate for determination by a jury are answered
affirmatively, the amount of compensation must be commensurate with the
plaintiffs loss. The assessment of such loss has been the subject of several considered
judgments in this province, most notably
McTavish
and
Bystedt,
both
supra
.
[30]
The trial judges second reason for not putting
the claim to the jury in this case was that the services which were the subject
of the in-trust claim were not personal or household services but were related
to the business operated by the plaintiffs family. As mentioned above,
counsel evidently agreed that the plaintiffs parents claim for business
losses had not properly been made. It is not correct to say, however, that the
plaintiff herself could not claim for assistance provided by family members in
a family enterprise (see
Johnson v. Miller, supra
) or that there was no
evidence of personal or household services having been provided by Ms. Dykemans
parents to her. The mother testified that she was supposed to spend a third
of her time on the farm in accordance with the partnership agreement in
evidence and had planned on going back to practice on a part-time basis. Instead,
she found herself spending at least 10 to 12 hours per week assisting in the
business and babysitting her grandchildren when her daughter had medical
appointments or migraine headaches. At the time of trial, she testified, she
was caring for her grandchildren pretty well every day plus assisting in the
equestrian business. The plaintiffs migraines had become less frequent, but
the medication she took for them essentially knocked her out for 12-14 hours
during which Ms. Dykemans mother slept in the same room with her
granddaughter. The thrust of her evidence was that at least until her
grandchildren were in school, she would not be able to return to practice even
on a part-time basis. Mr. Dykemans services, on the other hand, related
almost entirely to physical work in the Freedom Fields Farm operation.
[31]
In all the circumstances, it seems to me that
there was evidence of household and other assistance provided by Ms. Dykemans
parents that could have been the basis of an award and that the trial judge
erred in effectively granting a no evidence motion in respect thereof. I
would allow the appeal on this ground.
Disclosure
of Internet Documents
[32]
The plaintiffs fourth and final ground of
appeal relates to the disclosure and use at trial of certain Internet postings
by counsel for the defendant Mr. Porohowski. Mr. Gibb, counsel for the
defendant Hothi, had purported to list these in Part III of his Form 93 as
follows:
Doc #
Source
Description
Dates of Records
77
ICBC
Diskette containing an index to the Plaintiffs web
postings
Various
78
Themanestreet.com
Copy of bundle of printouts of articles regarding
the Plaintiffs horse business
Various
79
Various
Copy of various pictures printed out from the
internet regarding horse riding
Undated
80
Internet
Copy of bundle of printouts of articles regarding advertising
of the Freedom Fields Farm
Various
Plaintiffs counsel had, he said, received
this list only a few days before trial and had not sought production pursuant
to Rule 26(8).
[33]
The issue of disclosure arose in the context of
Mr. Harris cross-examination of Ms. Dykeman. Mr. Harris began by
soliciting her confirmation that she had posted various writings on a website
known as thewomensplace.ca and on another entitled themanestreet.ca and had
corresponded with various other members of those websites concerning her interest
in and activities with horses. Mr. Harris then informed the trial judge that:
... Id like to
refer in the next part of my cross-examination to some of the website writings
of the plaintiff. And the reason for doing so will appear.
There are
approximately 8000 such writings
. ... I now propose to
release
privilege on those blogs for the purpose of the following questions and answers
with the plaintiff
. [Emphasis added.]
[34]
Mr. Mussio on behalf of Ms. Dykeman objected
that his client was being subjected to trial by ambush in that the documents
in question had not been produced within seven days of the trial and he had
not seen any of them or discussed them with his client. (Later he clarified
that he had received Mr. Gibbs list a few days before trial, when he had been
out of town.) The jury was excused to permit counsel and the trial judge to
discuss the matter further. Mr. Mussio submitted that the real issue
was that because the documents had (he said) been produced (i.e., brought
into existence) by Ms. Dykeman, they
could
not properly be the subject
of solicitors brief privilege. As well, since the postings had not been
properly disclosed, he was taken by surprise by Mr. Harris application to
use them, or some of them, to cross-examine the plaintiff.
[35]
For his part, Mr. Harris referred to
Blake v.
Gill
(1996), 4 C.P.C. (4th) 158 (S.C.) and
Williams v. Vancouver (City)
,
2006 BCCA 556, 60 B.C.L.R. (4th) 89, in support of his position that
plaintiffs counsel had been put on a train of inquiry by the index listed at
item 77 of the Form 93. In any event, he contended, the plaintiff could hardly
be taken by surprise by writings she herself had written.
[36]
The trial judge issued his ruling after an
adjournment. He began by recounting the factual background of the application.
He rejected Mr. Mussios position that the defence had not produced a list
that properly disclosed the Internet items. In the trial judges analysis, ...
discovery is met by the listing
. As a separate step, there is
production, and if a copy was required, that would have been obtained by
request. (My emphasis.) He declined to read R. 26(14) in conjunction
with R. 40(13), presumably on the basis that an Internet posting did not
qualify as a plan, photograph or object. (It is Rule 40(13) that contains a
reference to a time-period ending seven days prior to trial.) After reviewing
Blake
v. Gill, supra; Robitaille v. Vancouver Hockey Club Ltd.
(1981) 30
B.C.L.R. 286 (C.A.);
Daruwalla v. Shigeoka
(1992) 72 B.C.L.R. (2d)
344 (S.C.);
Carol v. Gabrielle
(1997) 14 C.P.C. (4th) 376 (S.C.);
Ball
v. GAP (Canada) Inc
. 2001 BCSC 824; and
Jones,
Gable &
Co. v. Price
(1977) 5 B.C.L.R. 103 (S.C.), the Court concluded:
As I noted when I came into the courtroom
and Mr. Harris kindly provided me his blue folder of documents, I have now had
the opportunity of looking through the plaintiffs documents, or at least the
web postings of various documents. I do not know how far counsel will go with them,
but some of them plainly are very personal statements of a young lady that may
or may not be used by counsel. Some are plainly relevant to the issues before
the jury in terms of the nature of the injuries sustained by the plaintiff, how
the injuries said to be sustained by the plaintiff affect her ability to ride
horses or how well she rides a horse, and how much it may have affected her
plans as she hoped them play out.
In
Jones, Gable & Co. v. Price
(1977), 5 B.C.L.R. 103 (SC) Anderson J. met one of the early cases where this
situation arose, and there he directed that there be a brief adjournment. As he
put it:
I believe that
the ends of justice will
be served by permitting counsel for the defendants to consult with Mr. Price in
respect of the documents delivered
...
Anderson J. said this is not to be used as a
precedent, but there is a very delicate balance in this case in terms of the
plaintiff as a witness and the fact that it is a jury trial, and at least on my
brief view of the documents,
the ends of justice are best met by allowing
the plaintiff and her counsel to view the documents
.
It is now two oclock. The plaintiff will
only have until the end of the half hour to go over the documents, but that
should be sufficient, and then we will resume the trial and I will permit Mr.
Harris to use the documents, but plainly to keep focused on the issues at
trial, the evidence she has given and where the documents are on point. There
are plainly, on my very quick look at it, some very personal statements that
have been made by the plaintiff, and there could be real prejudice, and I know
I am in the hands of senior counsel here who I am sure will direct himself
along that path.
So what I will
allow, Mr. Mussio, is that you and Ms. Dykeman will have until 2:35 p.m. to
review the document book so that she is aware of them. If there is an objection
as to the authenticity of any of the documents, I want that to be brought to me
forthwith, But other than that, then
Mr. Harris will be permitted to cross
examine on the documents
. [At paras. 26-31; emphasis added.]
[37]
Mr. Harris was permitted to introduce a book of
Internet postings which was marked Exhibit D for identification only and which,
we are now told, consisted of 124 pages of the approximately 8000 writings
encompassed by the list. (Counsel are unable to agree whether the 124 pages
contained 63 or 35 articles plus one photo.) Mr. Harris cross-examined Ms.
Dykeman on 30 of the postings and made fairly extensive submissions to the jury
on them and her testimony relating thereto.
[38]
In this court, the plaintiff submits that the trial
judge erred in allowing Mr. Harris to cross-examine her on the Internet
postings and to use them in closing summations. Again it is said that the
postings were not properly listed on any list of documents before trial and
that accordingly, R. 26 was not complied with.
[39]
The salient sub-rules of R. 26 provide as
follows:
(1) A party to an action may deliver
to any other party a demand in Form 92 for discovery of the documents which are
or have been in the party's possession or control relating to any matter in
question in the action, and the other party shall comply with the demand within
21 days by delivering a list, in Form 93, of the documents that are or have
been in the party's possession or control relating to every matter in question
in the action.
...
(1.3) Documents to which there is no
objection to production must be enumerated in a convenient order and include a
short description of each.
...
(2) Where it is claimed that a document is privileged
from production, the claim must be made in the list of documents with a
statement of the grounds of the privilege.
(2.1) The nature of any document for which privilege
from production is claimed must be described in a manner that, without
revealing information that is privileged, will enable other parties to assess
the validity of the claim of privilege.
...
(8) At any time a party may deliver a notice to any
other party, in whose pleadings or affidavits reference is made to a document,
requiring the other party to produce that document and, within 2 days, the
other party shall deliver a notice stating a place where the document may be
inspected and copied during normal business hours or stating that he or she
objects to producing the document and the grounds of the objection.
(13) Where, after a list of documents has been
delivered under this rule,
(a) it comes to the attention of the party delivering
it that the list was inaccurate or incomplete, or
(b) a document relating to a matter in question in the
action comes into the party's possession or control,
the party shall deliver forthwith a supplementary list
specifying the inaccuracy or document.
(14) Unless the court
otherwise orders, where a party fails to make discovery of or produce for
inspection or copying a document as required by this rule, the party may not
put the document in evidence in the proceeding or use it for the purpose of
examination or cross-examination.
[40]
Rule 26(2) and (2.1) were recently considered at
length by this court in
Stone v. Ellerman
2009 BCCA 294, 92
B.C.L.R. (4th) 203 in connection with a pain journal of the plaintiff over
which privilege had been asserted. The journal was not specifically mentioned in
the Form 93 but the plaintiff submitted it came within the phrase notes and
documents, correspondence, minutes of evidence, memoranda being the work
product of plaintiffs legal advisors in respect of which privilege was
claimed in Part III of the form. The Court found that the description was
inadequate, since nothing in it would enable other parties to assess the
validity of the claim of privilege or to anticipate that anything like a pain
journal existed among the notes and documents, even in the most general
terms. (Para. 22.) Chief Justice Finch for the majority elaborated:
The information that must be included in the
description of a document over which privilege is claimed will vary depending
upon the document, but
it must be sufficiently described so that if the
claim is challenged it can be considered by a judge in chambers
:
Babcock
v. Canada (Attorney General)
, 2004 BCSC 1311, 246 D.L.R. (4th) 549, citing
Visa
International Service Assn. v. Block Bros. Realty Ltd.
(1983), 64 B.C.L.R.
(2d) 390 (C.A.).
In
Saric v. Toronto-Dominion Bank
,
1999 BCCA 459, Mr. Justice Hall, in chambers, cited
Shaughnessy
Golf and Country Club v. Uniguard Services Ltd. and Chahal
(1986), 1
B.C.L.R. (2d) 309 (C.A.), for the proposition that
the grounds for privilege
have to be established in respect of each document which is said to be
privileged
. He added (at para. 12) a litigant, (and presumably the
court), has to have some proper basis upon which to determine issues of
privilege as they relate to documents.
It has been held that since Rule 26(2.1)
came into force in mid-1998 the bundling of documents under a broad
description is no longer sufficient and that each document must be listed
separately.
In Leung v. Hanna
(1999), 68 B.C.L.R. (3d) 360 (S.C.),
solicitor-client privilege was claimed over documents that were described as
documents marked P3 [through P10], the same having been initialled by the
handling solicitor. Mr. Justice Burnyeat found that each document
had been listed separately as the new sub-rule required. He found that
the descriptions themselves otherwise satisfied the requirements articulated in
Hodgkinson v. Simms
(1988), 33 B.C.L.R. (2d) 129, under the old rule,
which permitted quite generic descriptions in favour of protecting privileged
information. Burnyeat J. held that such descriptions now of individual
documents remained sufficient under the new rule.
In
Bajic v. Friesen
, 2006 BCSC 1290,
a master in chambers explained the decision in
Leung
this way:
It is clear from the decision of Mr.
Justice Burnyeat that the sanctity, if you will, of solicitor/client privilege
in his mind trumps any attempt to describe documents in part 3 such that they
provide any conceivable understanding to the other party as to the nature of
the document. It would appear it then forces a party concerned with the
description or lack of same in part 3 to bring an application to the court
which then leaves the judge or master hearing the matter to review the document
and then conclude whether or not it is appropriately within part 3. [At paras.
23-6; emphasis added.]
[41]
Applying these observations to the case at bar,
can it be said that the descriptions reproduced above were such as to enable
the plaintiff and her counsel, or a judge in chambers, to assess the validity
of the claim of privilege? In my opinion, none of the items was sufficiently
described for this purpose. Item 77, an index to the plaintiffs web
postings, could contain any number of writings posted on any number of
websites, relevant or irrelevant to the case. With respect to item 78, one
does not know who wrote the articles regarding the plaintiffs equestrian
business or the date of such articles; with respect to item 79, there is no
description of the pictures printed out from the Internet regarding horse
riding, where they are from or what connection, if any, the plaintiff had with
them; and with respect to item 80, there is again no description of the
articles, who wrote them or when. Counsel told the court below that the
postings had all been written by the plaintiff, but even that was not apparent
from the disclosure document. Thus I disagree with the trial judges ruling
that the postings had been adequately listed for purposes of R. 26. (For a
discussion of e-discovery generally, see The Sedona Conference Working Group
7,
The Sedona Canada Principle: Addressing Electronic Discovery
(2008).)
If the defence had been more forthcoming, counsel for Ms. Dykeman might well
have challenged the claim of privilege asserted by Mr. Harris
via
the
Form 93 filed by Mr. Gibb.
[42]
Assuming, then, that the defence failed to make
proper discovery of the Internet documents, the next question is whether it can
be said the trial judge nevertheless properly exercised his discretion under
the opening words of R. 26(14) to permit Ms. Dykeman to be cross-examined
on some of those documents. In
Stone v. Ellerman
, the majority stated
that the factors relevant to the exercise of such discretion include the
question of prejudice to the party being cross-examined, whether there was a
reasonable explanation for the other partys failure to disclose, whether
excluding the document would prevent the determination of the issue on its
merits, and whether in the circumstances of the case, the ends of justice
require that the document be admitted. In this case, counsel did not provide
any
explanation for the non-descriptiveness of Mr. Gibbs list and argued only
that disclosure
had
been sufficient. The trial judge therefore had no
explanation to consider, even if he had been of the view that the listing was
deficient.
[43]
It is difficult to square the trial judges ruling
on this second question with his prior ruling that the documents had been
properly disclosed or listed. If the latter was correct, there was no need to
balance the interests of justice in avoiding trial by ambush against the interests
of justice in assessing Ms. Dykemans credibility by cross-examining her on the
Internet postings. Given that her lawyer had only half an hour to discuss the
124 pages with her, it cannot be said with any certainty that she was not
prejudiced by what transpired. At the end of the day, I am not confident that
the apparent exercise of the trial judges discretion was fair to the plaintiff
or rested on a correct understanding of the Rule. I would therefore allow the
appeal on this basis as well.
[44]
The final question is whether a new trial must
be ordered. Although retrials are not to be ordered unless the interests of
justice plainly require it (see
Arland v. Taylor
[1955] 3 D.L.R.
358 at 364-5, [1955] O.R. 31 (C.A.), recently discussed in
Knauf v. Chao
2009 BCCA 605), this is not an appeal in which the quantum of an award is all
that is at issue. Here, there was no award on the in-trust claim because it was
not put to the jury, and any award we would make would depend at least in part
on the view of the plaintiffs credibility and that of her parents taken by the
finder of fact. Not having seen them, we are not in a position to determine
the validity or quantum of an award. As well, the plaintiff was taken by
surprise by the Internet postings which were not adequately disclosed, and that
fact may have prejudiced her case. In all the circumstances, I see no
alternative but to order a new trial of the plaintiffs claims. Of course, it
is to be hoped that this may be avoided by agreement of the parties.
[45]
I would allow the appeal and order a new trial.
The Honourable Madam Justice Newbury
I agree:
The Honourable Madam Justice Prowse
I agree:
The Honourable Mr. Justice Lowry
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
McLachlan v. Trident Foreshore Lands
Ltd.,
2010 BCCA 37
Date: 20100126
Docket:
CA036643
Between:
Ian
McLachlan
Appellant
(Petitioner)
And
Trident
Foreshore Lands Ltd., Christopher J. Barratt, Robert Bruce,
William
E. Ireland, Gordon R. Kleaman, James L. Mercier, and
Burrard
Yacht Club
Respondents
(Respondents)
Before:
The Honourable Mr. Justice Hall
(In Chambers)
On appeal from the Supreme Court of British Columbia, November 3,
2008,
(
Brown v. Trident Foreshore Lands Ltd.
, L051651)
Agent for the Appellant:
C.
McLachlan
Counsel for the Respondent:
M.
Pontin
Place and Date of Hearing:
Vancouver,
British Columbia
December
2, 2009
Place and Date of Judgment:
Vancouver,
British Columbia
January
26, 2010
Reasons for
Judgment of the Honourable
Mr. Justice Hall:
[1]
In this case, the applicant seeks an extension
of time to file a factum and appeal books. Some history of the background of
this matter is set out in a judgment of this Court dated June 25, 2008 (
Struchen
v. Burrard Yacht Club
, 2008 BCCA 271, 46 B.C.L.R. (4th) 228):
[5] Mr. McLachlan was a
long-standing member of the Yacht Club. Historically, and while Mr. McLachlan
was a member, the Yacht Club was required to relocate from Coal Harbour to the
North Shore of Burrard Inlet. As part of that relocation and to protect the
club from future dislocation, Trident Foreshore was incorporated. It acquired
lands now occupied by the Yacht Club. In order to finance the acquisition,
existing members purchased shares in the company. New members of the Yacht
Club were required to purchase a share and an arrangement was made whereby the
shares of retiring members would be repurchased. Thus, initially, all
shareholders of Trident Foreshore were members of the Yacht Club.
[6] To supplement the Trident
Foreshore lands, the Yacht Club entered into a lease with a neighbour. Today,
some docks are on the neighbours water lots and some are on Trident Foreshores
lots. The terms of the lease with the neighbour have caused Mr. McLachlan,
as a member who experienced the earlier move, to have concerns about the
long-term security of the Yacht Clubs moorage. This has been a factor in the
dispute which culminated in his expulsion from the Yacht Club.
[7] In 1989, the rules as to
shareholding in Trident Foreshore were changed so that share ownership in the
company was no longer a condition of membership in the Yacht Club. At that
time the Yacht Club began to acquire shares of the company. Ultimately, corporate
governance issues arising from the change in ownership rules resulted in the
proceedings before the Supreme Court of British Columbia. Reasons for
judgment, indexed as 2004 BCSC 1365 and 2006 BCSC 2036, explain some
of this dispute. Mr. McLachlan was a party to those proceedings and
orders for costs were made against him.
[8] It would be fair to say that the
corporate governance issues and the ensuing litigation both resulted from
acrimony and deepened that acrimony between Mr. McLachlan and certain
other members of the Yacht Club, including in particular the then Commodore, Mr. Mercier.
[9] The dispute over the changes in
ownership of Trident Foreshore, the acrimony caused by the differing views of
the best way to secure the Yacht Clubs future, distrust and resentment
generated on both sides, and intemperate comments made during these events led
eventually to the expulsion of Mr. McLachlan from membership, bringing an
end to his long association with the Yacht Club and resulting in his loss of moorage
at the marina. Clearly, in addition to his loss of membership, Mr. McLachlan
has lost a right (to moor his boat at the marina) that was an important element
of his social life and his family life. As well, he was required to divest
himself of his share in Trident Foreshore because membership in the Yacht Club
was a condition of share ownership.
[10] The process leading to Mr. McLachlans
expulsion started with a petition to the Directors signed by thirty members
asking for disciplinary procedures against members who had initiated the
Trident Foreshore lawsuit, those who signed an information circular in
respect to Trident Foreshore, and those who stood for election as Trident
Foreshore directors at an
ad hoc
Trident Foreshore takeover meeting. The
Directors struck an investigative committee comprised of three past Yacht Club
Commodores, to decide if members who had contested the Trident Foreshore share
issues had violated the bylaws.
[11] The investigative committee made
enquires, but did not receive input, oral or written, from any of the three
members ultimately disciplined by the Board. The committees report detailed
findings in respect to the share dispute and concluded that Mr. McLachlan
and his two co-petitioners had conducted themselves in a manner which most
seriously and injuriously affected the well being of individual members and
threatened the very survival of the Yacht Club.
[12] The Board of Directors
received the report of the Investigative Committee on May 4, 2005, and resolved
to proceed with charges.
[2]
Mr. McLachlan and another member were
ultimately expelled from membership in May 2005. On an appeal to the Club Membership
in June 2005, a vote of members disclosed a majority were opposed to
reinstatement of those expelled. A petition was filed in Supreme Court by Mr. McLachlan
seeking to quash his expulsion and order his reinstatement. A chambers judge
refused this relief but this Court reversed and made an order quashing the
expulsion and ordered reinstatement on the basis that the petitioner, Mr. McLachlan,
had not been afforded a fair hearing. Although the petitioner was reinstated,
he apparently did not obtain the moorage position he earlier had possessed.
Further proceedings followed including the present matter which was one of two
decided by Pitfield J. It appears certain proceedings instituted earlier
had not proceeded to resolution until the petition about expulsion was
resolved.
[3]
Pitfield J. observed at paras. 2 and 3
of his Reasons of November 4, 2008:
[2] The petitioners Peter Brown, Ian
McLachlan and Alfred Struchen apply for the relief set forth at paragraphs (d)
and (e) in petition L041335, namely, an order that the board of directors
elected at the special meetings of the shareholders of Trident Foreshore Lands
held on April 22, 2004 are the directors of Trident until the next annual
general meeting; and (e), in the alternative, if the board of directors elected
at the special general meeting of shareholders of April 22, 2004 are not the
duly elected board of directors of Trident, that Trident hold a meeting to
elect directors of Trident under the supervision of a court-appointed
representative in accordance with the articles of Trident as at November 6,
2003, and the parties entitled to vote being the shareholders of Trident as at
November 6, 2003.
[3] By
way of overview, I will say that on July 18, 2006, I dismissed the prayers for
relief set forth in paragraphs (a) through (c) of the petition on the grounds
that the subject matter of those requests for relief had been dealt with by
Madam Justice Ross in a proceeding to which I will make reference in due
course.
[4]
The judgment of Ross J. was delivered on
October 25, 2004 and is indexed as 2004 BCSC 1365. In this judgment, Ross J.
had granted orders sought by the petitioner, Trident Foreshore Lands Ltd. I
have had an opportunity to read that judgment. Pitfield J. concluded his
November 4 reasons as follows:
[34] At the meeting of April 22, 2004,
as I believe I previously indicated and if not I will state, Messrs. Brown,
Struchen, McLachlan, Ellis and McMahon were elected or purportedly elected as
directors. I conclude that that election of directors did not proceed at a
meeting which was lawfully convened in the manner contemplated by the
Business
Corporations Act
and the articles of the company. The resolution was of no
force and effect and those individuals were not lawfully elected as directors
on April 22, 2004, or indeed at any other time. It follows that the
application for relief in paragraph (d) of the petition is dismissed.
[35] The next claim for relief is that
the court order the conduct of a meeting which will be directed to the election
of directors in conformity with the articles as they existed at November 6,
2003.
[36] In my opinion, that application
cannot proceed and must be dismissed. Events subsequent to November 6, 2003
have overtaken any deficiencies in the conduct of the vote to elect directors
at November 6, 2003. Firstly, certain acts of the directors purportedly
elected on that date have been validated first by Madam Justice Ross who
validated the transfer of shares by Burrard Yacht Club to a number of its
members, transfers which were approved by Trident; and secondly, by a meeting
of the shareholders of Trident on November 26, 2004, which was properly
requisitioned by members pursuant to s. 167 of the
Business
Corporations
Act
, the conduct of the meeting on that date, the
adoption of the three resolutions to which I have already made reference, the
fact that McLachlan, Brown and Struchen were in attendance and have taken no
steps in any way, shape or form to challenge that which was done on November
26, 2004, properly convened meetings have lawfully elected directors in
accordance with the amended articles of the company. No challenge has been
mounted and the resolutions remain valid and binding.
[37] It
follows that the board now in place, by that I mean the directors other than
Brown, McLachlan, Struchen, McMahon and Ellis, has been lawfully elected by
those entitled to vote in accordance with the articles of the company as
amended, and there is no justification whatsoever for concluding that any of
Brown, McLachlan, Struchen, McMahon or Ellis is now or ever has been a lawfully
elected director of Trident Foreshore Lands Ltd.
[5]
On November 3, 2008, Pitfield J. delivered
Reasons in Docket Number L051651, a petition that had been stayed pending
resolution of other proceedings. In this proceeding, the petitioner, Mr. McLachlan,
apparently sought relief under various heads, including s. 227 of the
Business
Corporations Act
, S.B.C. 2002, c. 57. This is sometimes termed the
oppression section of the
Act
. Those claims for relief were dismissed
by Pitfield J. on the basis that the relief sought could not be granted
under the provisions of the statute. Also, Mr. McLachlan had sought
relief under provisions of the
Company Act
, S.B.C. 1999, c. 27. As
to this, Pitfield J. said:
[30] The
next item is a prayer that the court direct an investigation to be made under
Division 3 of the
Company Act
, S.B.C. 1999, c. 27. There is no
evidence before me which suggests in any way, shape or form that any
investigation is required. The sole issue in dispute is a difference of
opinion and philosophy as to the manner in which the affairs of the Yacht Club
and Trident should be conducted. As I have said in the course of Ms. McLachlans
submissions, there is no claim to be advanced under s. 227 of the
Business
Corporations
Act
, unless it appears that the board has been acting
to the detriment of Mr. McLachlan as a shareholder or member, as opposed
to acting in a manner which he may regard as non-beneficial from the point of
view of all members, unless of course there is some element of self dealing of
which there was no evidence.
[6]
In the present appeal from the dismissal of the
petition ordered by Pitfield J. in his reasons of November 3, 2008, the
appellant seeks the following relief:
136. An investigation be made under
Division 1 of the Companies Act from 1989 to the present with special emphasis
on the details of compliance with the BC Securities Act on how the take-over
was accomplished by BYC; how the company, Trident Foreshore Lands Ltd., was
made a subsidiary of BYC, a nonprofit society, and how the assets were
transferred from TFL to BYC when BYC, being a society, cannot have a capital
divided into shares.
137. All costs: legal, personal,
substitute moorage, damages to boat due to being without a shelter, and other
related expenses that would not have been incurred but for the prejudice and
oppression carried out to justify expelling Mr. McLachlan, Mr. Struchen
and Mr. Brown from BYC for the express purpose of ridding the petitioners
of their shares and shareholders rights.
138. All members of BYC and shareholders
of TFL are to be advised by letter and in the Trident newsletter that the
expelled members of BYC had not committed the acts of which they were accused,
that the Court of Appeal had set aside Justice Edwards order, and Ian
McLachlans membership was reinstated with all privileges, seniority and
moorage.
139. Damages
for pain and suffering, not just to himself, his wife, (co-owner of the Sunny
Seas), but also his beloved granddaughters, who are both Intermediate members
of BYC and need their grandfathers name to be cleared and the truth known to
all.
[7]
The respondents submit that the application for
extension of time ought not to be granted because the materials should have
been filed in the Spring of 2009 and there has been unjustifiable delay. They
also submit that the appeal has no prospect of success and that the application
for an extension of time to file material should be dismissed. As set forth in
Davies v. Canadian Imperial Bank of Commerce
(1987), 15 B.C.L.R. (2d)
256 (C.A.), on an application for extension of time, a judge must consider
whether the extension will prejudice a respondent and whether the appeal has
merit, that is, some possibility of success.
[8]
These factors are to be considered in deciding
whether it is in the interests of justice that an extension of time be granted
to perfect an appeal.
[9]
I may say that if I concluded that this appeal
proceeding had any possibility of success, the delay factor would not militate
against granting an extension of time. While delay is not to be encouraged,
the delay here of some six or seven months is not what I would view as
inordinate. As well, in my view, the appellant has in argument set out a
series of events that accounts for much of the delay in preparation of
materials. Thus, I would not accede to the submission of the respondents that
the application for an extension of time to file necessary material to perfect
the appeal should be refused on the basis of delay on the part of the applicant.
[10]
I have had a full opportunity since the hearing
of this application to review the material and previous decisions in related
proceedings. The factum of the applicant appellant sets out in considerable
detail a comprehensive history of disputes between the appellant and
respondents. It is clear to me on reviewing what is sought to be filed that
there is no possibility that a division of this Court could or would grant any
of the relief sought by the appellant on this appeal from the judgment of
Pitfield J. In such circumstances, it is my considered view that it would
not be in the interests of justice to grant an extension of time to file
material. As Kirkpatrick J.A. observed in
Westbank Holdings Ltd. v.
Westgate Shopping Centre
Ltd.
, 2009 BCCA 370, If the appeal is
bound to fail, then that is a good reason for refusing an extension of time.
The application for an extension of time to file material is accordingly
dismissed.
The Honourable Mr. Justice Hall
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Dalen,
2010 BCCA 30
Date: 20100126
Docket:
CA035883
Between:
Regina
Respondent
And
Ryan Dalen
Appellant
RESTRICTION ON PUBLICATION: AN ORDER HAS BEEN MADE
PURSUANT TO SECTION 486.5(1) AND 486.5(9) OF THE
CRIMINAL CODE
PROHIBITING ANY INFORMATION THAT COULD IDENTIFY
THE UNDERCOVER OFFICER INVOLVED IN THESE PROCEEDINGS
BEING PUBLISHED, BROADCAST OR TRANSMITTED
Before:
The Honourable Chief Justice Finch
The Honourable Mr. Justice Hall
The Honourable Mr. Justice Chiasson
On
appeal from: Supreme Court of British Columbia, March 2, 2008
(
R. v. Dalen
, 24001)
Counsel for the Appellant:
J.
Bahen, Q.C.
Counsel for the Respondent:
F.
Tischler
Place and Date of Hearing:
Vancouver,
British Columbia
December 17, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
26, 2010
Written Reasons by
:
The Honourable Chief Justice Finch
Concurred in by:
The Honourable Mr. Justice Hall
The Honourable Mr. Justice Chiasson
Reasons for
Judgment of the Honourable Chief Justice Finch:
I. Introduction
[1]
The appellant, Ryan Dalen, appeals from his
conviction in the Supreme Court of British Columbia on 2 March 2008 following
his trial by judge and jury on one count of attempting to obstruct the course
of justice, between 9 and 12 August 2005. The jury could not reach a verdict
on two counts of uttering threats on 10 August 2005, and the Crown entered a
stay of proceedings on those two counts. The jury found the appellant not
guilty on an amended Count 4, [Using] an imitation firearm while committing or
attempting to commit the indictable offence of obstructing justice, on or
about 10 August 2005.
[2]
The main issue at trial was the appellants
identity as one of three young men who entered the home of two brothers,
Mandave and Balkar Heer on 10 August 2005, and by threats and intimidation
attempted to persuade the brothers to make Balkars friend, Mitul Devia, change
his evidence in the pending trial of the appellants father, Roy Dalen, from
what Devia had said in a statement to police.
[3]
Counsel for the appellant on appeal contended
that the guilty verdict on Count 1 and the not guilty verdict on Count 4 were
inconsistent. He said the verdict on Count 1 was therefore unreasonable and
should be set aside. Counsel for the appellant also submitted that the learned
trial judge erred in failing adequately to answer questions from the jury
concerning its verdicts on the different counts. The appellant seeks a new
trial.
[4]
For the reasons that follow, I am of the opinion
that the verdict on Count 1 was not unreasonable, that the trial judge made no
material error in answering the jurys questions, and that the appeal should be
dismissed and the conviction affirmed.
II. Background
[5]
The appellants father, Roy Dalen, was charged
with first degree murder in the stabbing death of his social worker, John David
Bland, on 19 January 2005. A potential witness at Roy Dalens trial was Mitul
Devia, a friend of Balkar Heers. Devia had given a statement to the police in
which he said he had driven Roy Dalen to and from the place where Mr. Bland was
killed. Devia said he witnessed the murder.
[6]
In August 2005, when the events giving rise to
the present appeal occurred, the preliminary inquiry into the murder charge
against Roy Dalen had not yet occurred. It was the Crowns theory that Roy
Dalens son, the appellant Ryan Dalen, together with two others, set out to
have Devia change his evidence, by persuading the Heer brothers to intervene on
Roy Dalens behalf with Devia.
[7]
The alleged plan did not succeed. The police
were notified of the events at the Heer home on 10 August 2005. Roy Dalen was,
in due course, tried and convicted. Devia gave evidence in accord with his statement
to the police. Dalens appeal from conviction to this Court failed: (See
R.
v. Dalen
(2008), 240 C.C.C. (3d) 557 (B.C.C.A)).
[8]
The trial of Ryan Dalen on the charges of
obstruction and threatening commenced before a judge and jury on 18 February
2008. The appellant was originally charged jointly with Alexander Radocina,
who is alleged to be one of the three men who entered the Heer home on 10
August 2005. Radocina, however, pleaded guilty to Counts 1 and 4 before a
different judge. He did not testify at the appellants trial.
III.
The Case Against Ryan Dalen
[9]
Mandave Heer (Mandave), aged 26 at the time of
trial, is the younger brother of Balkar Heer. Mandave met Mitul Devia through
his brother in about 2003. In January 2005, shortly after Mr. Blands murder,
Devia was arrested in connection with that offence in front of the Heer house.
[10]
Mandave next saw Devia at the latters bail
hearing in the courthouse at Richmond, B.C. That was the occasion on which
Mandave first saw the appellant, Ryan Dalen. Ryan Dalen was a young white
male, 18 or 19 years old, five-foot nine or ten inches in height, about 150 to
160 pounds, with short dark hair, and no facial hair.
[11]
On 10 August 2005, Mandave got home from work in
the late afternoon and lay down for a nap. He was awakened between 7:00 and
8:00 p.m. by a knock on the door. As Mandave walked towards the front door,
three men entered. Mandave said the appellant was one of the three. He did
not know the other two. The three men walked into the house uninvited.
[12]
The shorter of the other two men, Radocina, was
five-foot nine or ten inches tall, about 170 pounds, 23 or 24 years old, and
completely bald. The third man, later identified as Jason Porter, was six-foot
one or two inches tall, about 225 or 230 pounds, and also completely bald.
Mandaves evidence was that during the course of their stay in the Heer house,
the appellant, Ryan Dalen, said:
You know Roy,
you know hes crazy, and even though hes in jail he has ... hes got his
connections.
[13]
Later the appellant told Mandave to tell Devia
to change his story, not to rat Roy out, and that Roy Dalen is not the guy
youd mess around with.
[14]
Radocina assumed control of the situation in the
Heer house. He asked Mandave if he knew Devia. Mandave replied that he did.
[15]
While the appellant and the taller bald male
remained in the living room with Mandave, Radocina went into the dining room
where he sat down and took out a handgun from behind him. He placed the gun
on the dining room table while still holding it. As far as Mandave could
recall, Radocina never said anything about using the gun. One or more of the
three intruders told Mandave to call Devia and tell him to come over. Mandave
telephoned Devia. This was about 5 or 10 minutes after the men first arrived.
Mandave spoke first to his brother Balkar, and told him to tell Devia to come
to the house. The call lasted about one minute. Mandave could not recall if
the gun was still out at the time he made the phone call.
[16]
The three men said they would wait until Devia
arrived. Radocina took out a pair of handcuffs and placed them on the coffee
table in front of Mandave. He said Devia would be coming with them. Radocina
searched the house and asked Mandave if he had any guns.
[17]
Balkar arrived about 15 minutes after the three
men had first entered the house. He was upset to see them in the home. He
wanted to know what they were doing in the house and said, Who do you think
you are? Radocina became angry and produced the gun for the second time, once
again from behind his back. He spoke directly to Balkar and said, Who do you
think you are? Balkar became quiet. Radocina then patted down Balkars body
to see if he was carrying anything and then directed Balkar to sit down.
[18]
The three men waited a short time longer for
Devia. While waiting, Radocina said, Id kill Mitul for free, I hate rats.
He also said he would shoot the Heers mother, that he did not care that she
was 40 years old, and that he was not afraid of blasting anybody.
[19]
When it became apparent that Devia was not going
to arrive, Radocina said to the Heers they should tell Devia to change his
story about what happened and that they would come back in a week to tell
Devia to change his story. They told the Heer brothers to tell Devia that he
should say the Crown told him he would get out of jail if he changed his
story. They said they had talked to A.J. Chima and that he would not be
showing up in court. Radocina also told the Heer brothers not to associate
with Devia because it would get them killed. He told them they were idiots
for hanging out with Devia and that Radocina was not afraid to shoot them.
While Radocina said those things, the appellant and Porter stood in front of
Mandave. Five or ten minutes after Balkar returned home, the three men left.
Throughout the time in the house the taller man, Porter, just stood there,
basically and on occasion whispered in Radocinas ear.
[20]
Mandave identified the appellant in court.
[21]
Balkar Heer (Balkar) was 28 years old at the
time of trial. He and Devia were friends. In January 2005, Devia told Balkar
about Mr. Blands murder, including how he, Devia, had driven Roy Dalen to the
scene. Balkar attended Devias bail hearing at the Richmond courthouse, and
saw Roy Dalen at that time. Roy Dalen made a zip your mouth gesture to his
son Ryan, and to another man, Pavan Yadav, with whom Ryan was sitting.
[22]
On 10 August 2005, Balkar was working at his
auto body shop installing a stereo in Devias vehicle when Mandave called and
spoke to Devia. After the call, Devia said someone was at the Heer house
looking for him (Devia) and that he would not go to the house. Balkar decided
to go home and see who was looking for Devia.
[23]
Balkar arrived at his home ten minutes later.
As he entered the house, three men, including the appellant, came around the
corner from the dining room. The shorter bald male patted Balkar down for
weapons, tried to intimidate him and told him to sit down. When Balkar refused
and asked why they were in his house, Radocina pulled out a handgun from the
back of his pants. The gun was cocked and looked ready to fire. Balkar also
saw a pair of handcuffs. Mandave, who was sitting on a sofa, very frightened,
told Balkar to shut up and sit down. Balkar realized that the men were
serious and sat down. Radocina then tucked the gun back in the back of his
pants. The three men remained standing throughout the time they were in the
house. Porter did not do much and only whispered in the ear of Radocina a
couple of times.
[24]
Radocina and the appellant repeatedly asked
Balkar where Devia was. Balkar replied that Devia was not coming to the
house. The appellant told the Heers that they should not mess with his
father, that Roy had connections out of jail, and that Roy was a person not to
be messed with.
[25]
Balkar testified that the appellant said he
wanted Devia to change his statement and told him to tell Devia to change his
statement so that the both of them could get off. He said if Devia did not
change his story, Devia would be killed and that he, Balkar, could be shot
while driving with Devia.
[26]
Radocina said that he killed rats for fun and
that he would shoot and kill the Heer brothers and Devia if Devia did not
change his statement.
[27]
The appellant repeatedly told Balkar to tell
Devia to change his statement, and that Roy Dalen was not a person to mess
with.
[28]
After Balkar told the men that Devia was waiting
at a park, the men left. Radocina wrote down Balkars licence plate number and
told Balkar in a sarcastic tone that he had a nice car and should keep it
polished and enjoy driving it.
[29]
Balkar saw the three men walking towards a
parked white Mustang. He was unable to record the licence plate number.
[30]
On 11 August, Balkar recognized the men who
entered his house in photos shown to him in a police photograph identification
procedure.
[31]
Sergeant Young, of the Delta Police Department,
told the court that one member of the Dalen family owned a 2002 Mustang
convertible, grey in colour.
[32]
Bruce Funk, an expert on cellular telephone
communication, examined call records, and linked calls from the appellants
telephone to both Radocina and Porter. Two of those calls linked the appellant
and Porter shortly after 6:00 p.m. on 10 August 2005.
[33]
Officer X acted in an undercover role on 11
August 2005. Officer X posed as a friend of Devia and persuaded the appellant
to meet with him at a coffee shop in Steveston. The appellant told Officer X
he did not know who was there last night and that he was not present. He
later corrected himself to say he did know who was present, but that he was
not. He told Officer X that Devia knew what to do, that he needed to change
his story, and to tell the police he had lied.
[34]
Admissions at trial established that the
appellants mother owned a 2002 Ford Mustang convertible, and that the car was
seen parked at the appellants place of work on 11 August 2005. Admissions
were also filed concerning the identity of persons in the photo line-up which
included Jason Porter and Alexander Radocina. There were no photographs of the
appellant in the photo line-up materials used by the police.
Evidence for the defence
[35]
The appellant testified to an alibi defence
involving his work schedule on 10 August 2005. He worked at Georges Taverna
Restaurant in Steveston, and finished his shift about 5:00 p.m.
[36]
At around 8:00 p.m. he went to the home of a
friend, Evan Hatsispiru, in Richmond, whose father owned Georges Taverna. He
spent virtually the whole evening with Hatsispiru until about 1:00 a.m. on the
morning of 11 August 2005.
[37]
Members of Evans family testified to various
aspects of the appellants alibi defence, and the appellants work schedule.
IV. The Judges Discussions With Counsel, The Charge To The Jury,
and Answers To The Jurys Questions
Pre-charge discussions with counsel
[38]
It was apparent from the course of the trial
that the central issue was whether the Crown had proven that the appellant was
one of the three intruders into the Heer home on 10 August 2005.
[39]
In discussing with counsel the law relating to
parties in cases where identity was the main issue, the judge said:
THE COURT: -- where, I think, the only live
issue is -- is, has the Crown proved beyond a reasonable doubt the man in the
dock was one of the three culprits. Okay, it goes like this, our Court of
Appeal recently -- well, recently to me, is three years ago -- confirmed in
the case of Andy Davis, that it is appropriate, in a case such as that, for the
judge to do what the judge has to do, which is to give them the nutshell
version of the elements of the offence, tell them that nothing is decided until
they decide it, but then say to them, I am going to perceive [sic], on the
premise, which may be wrong, that the only issue that youll be actively
considering is identification, and then go on from there.
So
with respect to s. 21, what they will hear now, and itll go by in about four
seconds, is that with respect to Sections 1, 2, and 3, they are all 21(1)(a)
co-actual committers. With respect to Section 4, on the face of it, the fellow
with hair, in other words, the second culprit who talked, he is the one with
hair -- we are lucky weve got bald, hair, bald; and weve got bald short, bald
tall -- the second culprit, the one with hair, who also did talking, is caught
on Count 4 by reason of 21(2), because on the face of the evidence, he did
know. And when I am using 21(2), I knock out the or ought to know --
[40]
In response to a question from Crown counsel
concerning the appellants statements to the undercover police officer on 11
August about the passing of a message to Devia, the judge said:
THE COURT: No. This whole case has gone
before them on the basis of the 10th. The events of the 10th, at the house,
are whats in issue. Thats the way this whole case has gone, the way -- the
whole way its been fought. The fact that on the face of it, youve got the
9th to the 12th, doesnt change my understanding, as the trial judge, of whats
been going on in this courtroom, and so the answer is no. I am going to
instruct them simply, subject to what I heard in the submission --
Well, I didnt ask defence
counsel. Sorry, let me just break away for a second. As I say, I see it as a
case where its one issue, really, has the Crown proved beyond a reasonable
doubt, the man in the dock was one of the three culprits. Is that the way you
see it?
MR. MORRISON: Yes,
My Lord.
[41]
Neither counsel asked the judge to instruct the
jury that if they acquitted on Count 4 they must also acquit him on Count 1.
Nor did either counsel ask the judge to instruct the jury that if they found
the appellant guilty on Count 1 they must also convict on Count 4.
The charge to the jury
[42]
The trial judge gave the jury standard
instructions on their role as triers of fact and their duty to assess and
interpret the evidence. No exception is taken to any aspect of this
instruction. He also instructed the jury correctly on the concept of reasonable
doubt.
[43]
The trial judge clearly identified what he saw
as the issue for the jury:
The
live issue, and youll hear this over and over as I talk, in this case is this,
Has the Crown, upon whom the onus lies, convinced you beyond a reasonable
doubt that the man in the dock, Dalen, was the culprit with hair? Thats the
live issue.
[44]
The trial judges instruction concerning Count 4
was as follows:
On the evidence here, the short
bald culprit waved about what was either a real or imitation gun. That is to
say a firearm for your purposes. The fact that it was only the short bald
culprit who held the firearm and revealed it to the Heer brothers, thereby
obviously using it within the meaning of Count 4, is no bar to conviction of
the man in the dock before you, Ryan Dalen, on Count 4, if -- if you are
convinced beyond a reasonable doubt that the accused was that second culprit,
the one with hair. Because on the evidence before you, the only reasonable
inference to be drawn from the events that occurred in the house is that at the
very least the short bald culprit and the culprit with hair had formed an
intention in common to carry out an unlawful purpose, obstruct justice, or
utter threats, or both, and to assist each other therein. And the short bald
culprit in carrying out the common purpose committed the offence charged in Count
4. And as there is no evidence to the contrary, the second culprit, the one
with hair, in these circumstances knew that the commission of the offence
charged in Count 4 would be a probable consequence of carrying out the common
purpose. In the result, the culprit with hair is, in law, just as guilty of
committing the offence charged in Count 4 as the short bald culprit.
As a matter of law, if you do
not find the accused before you, Dalen, guilty on Count 1 or Count 2 or Count
3, you must find him not guilty on Count 4.
With respect to Counts 1, 2, and
3, on the indictment on the evidence before you, at least the short bald
culprit and the culprit with hair, were what the law calls co-actual committers
of the offence and are therefore guilty. The Crown alleges that the man in the
dock before you, Ryan Dalen, was the culprit with hair.
Now ladies and gentlemen, in a
trial, in a criminal case by jury, nothing is decided until the jury decides
it. With respect to whichever of the four counts on the indictment you are
looking at, the Crown must prove beyond a reasonable doubt each element of the
offence, including proof of the specific intent stated on the face of the
count. Whether the Crown has proved each element of the offence is in your
hands. But I will proceed on the basis that it is obvious that each element of
each of the four counts on the indictment has been proved by the Crown beyond a
reasonable doubt, and that the live issue with respect to whichever of the four
counts you are looking at is, Has the Crown, on whom the onus lies, proved
beyond a reasonable doubt that the accused before you, Ryan Dalen, was one of the
three culprits who entered the Heer house on August 10th 05?
If you are so convinced beyond a
reasonable doubt, you will find him guilty on whichever count you are looking
at. If you are not so convinced beyond a reasonable doubt, you must find him
not guilty on whichever count you are looking at.
Now,
for all practical purposes the verdicts you will return, if you are able to
arrive at a verdict, is guilty on all four counts or not guilty on all four
counts.
[45]
Towards the end of his charge, the judge said:
As a matter of law you must
return a separate verdict, if you are able to arrive at one, on each count on
the indictment. On the other hand, the law recognizes the obvious. In this
case, obviously if you are not convinced that the Crown has proved beyond a
reasonable doubt that Ryan Dalen, the man in the dock, was one of the three
culprits at the Heer house on August 10th, 05, you must find him not guilty on
all four counts. If you are convinced beyond a reasonable doubt that he was
one of the three culprits at the Heer house on August 10th, 05, then as a
matter of law the verdict on each count is in your hands with only this
reservation. If you do not find him guilty on at least one of Counts 1, 2, or
3, you must find him not guilty on Count 4.
And
now, to be practical, because the only live issue at the end of the case is
whether the Crown, on whom the onus lies, has proved beyond a reasonable doubt
that the accused was one of the three culprits at the Heer house on August
10th, 05, you will find him guilty on all four counts on the indictment if you
are so convinced beyond a reasonable doubt, and not guilty on all four counts
if you entertain even so much as a reasonable doubt that the accused was one of
the three culprits who were at the Heer house on August 10th, 2005.
[46]
The charge was completed on 29 February 2008.
Neither counsel took objection to any aspect of the judges charge to the jury.
[47]
The jury asked for a playback of the evidence of
Mandave Heer, Balkar Heer, and Manjit Tatla, the Heers next door neighbour.
The following day, 1 March, was spent playing tape recordings of those three
witnesses.
Questions from the jury
[48]
On the late afternoon of 2 March 2008, the jury
sent this question:
Please review
the law regarding returning a verdict on all four counts. That is to say, do
they all need to be the same verdict?
[49]
After discussions with counsel, the trial judge
gave the jury this further instruction:
THE COURT: All right. Here is my answer as
to the law.
(1) As
a matter of law, you must return a separate verdict, if you are able to arrive
at a verdict, on each of the four counts on the indictment.
(2) That
is so, with one qualification. As a matter of law, if you do not find the
accused guilty on Count 1 or Count 2 or Count 3, you must find him not guilty
on Count 4.
Next, to be
brief, the verdicts you return do not, as a matter of law, have to be the same
on each and every count on the indictment.
[50]
Shortly thereafter, the jury sent a further
question as follows:
We have a
verdict on Count 1, but we are hung on Counts 2 and 3. How do we proceed?
[51]
The judge discussed with counsel various
possible responses to this question. After a short adjournment, Crown counsel
advised that she proposed to enter a stay of proceedings on Counts 2 and 3, and
to request an amendment to Count 4 to delete the references to Counts 2 and 3.
[52]
When the jury was recalled, the judge told them
that the Crown had exercised its power to enter a stay on Counts 2 and 3, and
that Count 4 was amended by deleting the reference to uttering threats, which
was the substance of those two counts.
[53]
The judge then said:
Now what happens now? The
indictment before you is now simply Count 1, and Count 4 as it now is. Thats
all youve got. Forget 2 and 3.
You will proceed to consider
your verdicts on Counts 1 and 4, but you will remember, as Ive told you
before, and what it comes to now because 2 and 3 have disappeared, if you find
the accused not guilty on Count 1, you must find him not guilty on 4.
If
you find him guilty on Count 1, you may return a verdict of guilty or not
guilty on Count 4, whichever is the verdict you return, if you are able to
arrive at a verdict.
[54]
The judge then excused the jury to consider
whether he had answered their question adequately, and if not, to provide a
further question.
[55]
After these events, neither counsel asked the
judge to instruct the jury that if they acquitted the appellant on Count 4 they
must also acquit him on Count 1. Nor did either counsel ask the judge to
instruct the jury that if they found the appellant guilty on Count 1 they must
also find him guilty on Count 4.
[56]
Shortly after being excused, the jury advised
they had a verdict. On their return to the courtroom, the following exchange
took place:
THE COURT: All right. Now I have to do
this in stages. Let me talk to the Foreperson for a second.
When last you were in here,
which was a couple of minutes ago, you went out to consider whether anyone had
any further questions arising out of the answer Id given you, is what it
basically came to.
So I just say to you, Madam
Foreperson, does -- do you have any further question you want to give me?
JURY FOREPERSON: No,
My Lord.
[57]
The jury then reported their verdicts, holding
the appellant guilty on Count 1 and not guilty on Count 4.
V. Parties Positions on Appeal
For the
Appellant
[58]
Counsel for the appellant submitted that the
verdicts on Counts 1 and 4 were inconsistent, and that the guilty verdict on Count
1 was therefore unreasonable. The trial judge had emphasized throughout his
instructions to the jury that the appellants identity as one of the three
intruders was the key issue. The appellant says that no reasonable jury could
have found the appellant not guilty on Count 4 (and must hence have had a
reasonable doubt as to whether he was a person who committed that offence), but
at the same time have found him guilty on Count 1.
[59]
Counsel for the appellant supported his
submission with reference to what the trial judge said when giving reasons for
sentence on 9 April 2008:
[5] Because of the course of the
proceedings and what passed between counsel and me on March 31, I think it meet
that the following be plainly stated:
(a) Whether the
finding of guilty on Count 1 is bad-in the sense of unreasonable within the
meaning of s. 686(1)(a)(i) - is for the Court of Appeal, not for me. The case is
a classic of its kind: in law, the jury had to return a separate verdict on
each count; in fact, there was but one live issue in the case and that live
issue was common to all four counts; the jury found the accused guilty on one
count and not guilty on another; inconsistency of verdicts is apparent; whether
the differing verdicts are necessarily and irreconcilably inconsistent and must
result in the conviction on Count 1 being set aside is for the Court of Appeal
(
R. v. Pittiman
, [2006] 1 S.C.R. 381). But for my part, I must ignore
all of that. I must proceed to sentence the offender on Count 1 on the premise
that the finding of guilty is good. I must not let the problem with the jurys
verdict on Count 1 affect in any way, shape, or form what I do in sentencing
the offender.
[60]
Counsel for the appellant also submits that the
trial judges answers to the jurys questions were unduly brief, inadequate,
and may have left the jury confused. He says this perhaps explains why the
jury returned inconsistent verdicts that are irreconcilable on any rational or
logical basis.
For the
Crown
[61]
Counsel for the Crown submitted that the
verdicts on Counts 1 and 4 were not inconsistent, and that the verdict on Count
1 was not unreasonable. He points out that Count 4 required proof of an
element not found in Count 1, namely, knowledge that Radocina had a firearm
before it was produced inside the Heer home, and that he intended to use it in
the attempt to obstruct justice. There was no evidence that the appellant had
such knowledge, or that he at any time exercised possession or control over the
firearm.
[62]
The Crown points out that the learned trial
judge erred in his charge to the jury on Count 4 when he said:
And as there is
no evidence to the contrary, the second culprit, the one with hair [i.e. the
appellant], in these circumstances knew that the commission of the offence
charged in Count 4 would be a probable consequence of carrying out the common
purpose.
[63]
Counsel says that in saying there was no
evidence to the contrary, the trial judge placed an improper reverse onus on
the appellant to disprove knowledge of the weapon. Counsel says that while the
direct evidence would have permitted the jury to draw the requisite inference
of knowledge on the appellants part, that inference was not one that had to be
drawn.
[64]
Thus, the Crown says the jury correctly applied
the trial judges final instructions following amendment of the indictment that
if they found the appellant guilty on Count 1:
... you may
return a verdict of guilty or not guilty on Count 4, ...
[65]
Finally, the Crown says the judges responses to
the jurys questions were correct, responsive and unobjectionable. After
giving the jury the answers to their last question, he invited them to advise
him if they were not satisfied. No further question was asked.
VI. Discussion
[66]
In
R. v. McShannock
(1980), 55 C.C.C.
(2d) 53 (Ont. C.A.), Mr. Justice Martin, for the Court, said at p.55:
Where an
indictment contains more than one count and the jury convicts on one count and
acquits on another count an inconsistency in the verdicts does not of necessity
require the conviction to be set aside. The onus is on the appellant to show
that the verdicts are so at odds that no reasonable jury who understood the
evidence could have properly arrived at that verdict. We think that onus on
the peculiar facts of this case has been discharged. Where on any realistic
view of the evidence, the verdicts cannot be reconciled on any rational or
logical basis the illogicality of the verdict tends to indicate that the jury
must have been confused as to the evidence or must have reached some sort of
unjustifiable compromise. We would, on the ground that the verdict is
unreasonable alone, allow the appeal, set aside the verdict, and direct an
acquittal to be entered.
[67]
This passage was cited with approval by the
Supreme Court of Canada in
R. v. Pittiman
, [2006] 1 S.C.R. 381, where
Madam Justice Charron, for the Court, said:
[7] The onus of establishing that a verdict
is unreasonable on the basis of inconsistency with other verdicts is a
difficult one to meet because the jury, as the sole judge of the facts, has a
very wide latitude in its assessment of the evidence. The jury is
entitled to accept or reject some, all or none of any witnesss testimony.
Indeed, individual members of the jury need not take the same view of the
evidence so long as the ultimate verdict is unanimous. Similarly, the
jury is not bound by the theories advanced by either the Crown or the
defence. The question is whether the verdicts are supportable on any
theory of the evidence consistent with the legal instructions given by the
trial judge. ...
[8] The search
for a rational or logical basis for the verdicts does not mean that where a
narrative of the events is not readily apparent from the jurys findings that
the impugned verdict must necessarily be set aside as unreasonable. The
jurys task is not to reconstruct what happened. Rather, it is to
determine whether the Crown has proven each and every element of the offence
beyond a reasonable doubt. Therefore, in the case of a single accused
charged with multiple offences, different verdicts may be reconcilable on the
basis that the offences are temporally distinct, or are qualitatively
different, or dependent on the credibility of different complainants or
witnesses. ...
[68]
Where inconsistent verdicts are the foundation
of an appeal, the question is not whether the acquittal is reasonable, but
whether the conviction is reasonable: See
R. v. Mackenzie
(1997), 97
B.C.A.C. 251,
R. Pittiman
(
supra
),
R. v. Koury
, [1964]
S.C.R. 212.
[69]
In this case, it cannot be said that the
conviction on Count 1 is unreasonable. There was ample evidence which, if
accepted by the jury, showed that the appellant was guilty of obstruction of
justice. Apart from the question of the appellants identity, both counsel and
the judge proceeded on the basis that all elements of the offence charged in Count
1 had been proven. The only live issue was whether the appellant was a
perpetrator, and the jury was satisfied that he was.
[70]
The additional element necessary to a conviction
on Count 4 was use of an imitation firearm while committing or attempting to
commit the offence of obstruction of justice.
[71]
The evidence was that the only person who
possessed a firearm during the offence was the shorter bald man, Radocina. The
appellants culpability on this count depended upon his being a party to the
use of the firearm within the meaning of s. 21(2). To prove that charge
against the appellant, the Crown bore the onus of establishing that the
appellant knew in advance that Radocina possessed a weapon, and intended to use
it.
[72]
That is not an inference that the jury was bound
to draw from the evidence. The gun was not seen when the three men entered the
house. Radocina first produced it after the obstruction of justice had been
underway for some time, and when he was in the dining room and the appellant
was still in the living room. The appellant never possessed or had control of
the gun at any time during the intrusion.
[73]
There is no direct evidence that the appellant
knew Radocina was in possession of a gun at any time prior to Radocinas
producing it in the dining room. None of the three men made any statements that
would indicate that the appellant had any prior knowledge of the gun, or of its
possible use, or exercised any control over it.
[74]
The trial judge correctly instructed the jury
that a conviction on Count 1 did not require them also to convict on Count 4.
He left it open to them to do so, but equally left open the possibility of an
acquittal on Count 4.
[75]
In my respectful opinion, the verdicts on Counts
1 and 4 are entirely supportable on the evidence and consistent with the
instructions provided by the trial judge. The acquittal on Count 4 is not
inconsistent with the conviction on Count 1, and the latter cannot be said to
be unreasonable.
[76]
With respect to the judges answers to the
jurys questions, counsel for the appellant did not point to anything that the
judge said, or that he failed to say, in answering the questions that might
have left the jury confused or uncertain, or that was objectionable or
incomplete. There is nothing on the record to suggest the jury was confused.
The judge specifically left open the opportunity for the jury to ask further
questions if necessary. No further question was asked.
[77]
Counsel were fully consulted before the judge
answered the jurys questions, and no objection was taken after the answers
were given.
[78]
I would not give effect to this ground of
appeal.
[79]
I would dismiss the appeal.
The Honourable Chief Justice Finch
I Agree:
The
Honourable Mr. Justice Hall
I Agree:
The
Honourable Mr. Justice Chiasson
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Port Chevrolet Oldsmobile Ltd.,
2010 BCCA 47
Date: 20100126
Docket:
CA035360
Between:
Regina
Respondent
And
Port Chevrolet Oldsmobile Ltd. and
Michael Wolfe
Appellants
Before:
The Honourable Madam Justice Saunders
The Honourable Madam Justice Bennett
The Honourable Madam Justice Garson
On
appeal from: Supreme Court of British Columbia, August 27, 2007
(
R. v. Port Chevrolet Oldsmobile Ltd.
, New Westminster Reg. X065157
Oral Reasons for Judgment
[The sentence appeal of Mr. Wolfe was dismissed as abandoned. These
reasons for judgment address the Crowns sentence appeal, although in the style
of cause the Crown is named as respondent]
Counsel for the Appellant:
R. Peck, Q.C.
A.M. Willms
Counsel for the (Crown) Respondent:
J.
Hyman
Place and Date of Hearing:
Vancouver,
British Columbia
January 25 ,2010
Place and Date of Judgment:
Vancouver
, British Columbia
January
26, 2010
[1]
SAUNDERS J.A.
: The
Crown appeals from the sentence imposed August 27, 2007 on Mr. Wolfe for
seven counts of GST offences contrary to ss. 327(1)(c) and (d) of the
Excise
Tax Act
, R.S.C. 1985, c. E-15. Mr. Wolfe was the president of the
co-accused Port Chevrolet Oldsmobile Ltd., also convicted of GST offences.
[2]
The learned sentencing judge, Madam Justice
Gill, sentenced Mr. Wolfe to two years less a day incarceration on each
of seven counts on which he was convicted, to be served concurrently, along
with fines on those counts totalling $6,904,071.06, to be paid by August 31,
2014, with a further eight months incarceration should he be in wilful default
of the fines.
[3]
The charges arise from a scheme created by
Sameer Mapara, owner of Rags to Riches Motorcars. Mr. Wolfe, Mr. Mapara,
Port Chevrolet and two other individuals were charged on a 13 count indictment
for events between May 1995 and November 1998. Following Mr. Maparas
conviction for a murder committed in 1998 on which he was sentenced to a life
sentence, and dismissal of Mr. Maparas appeal, the Crown stayed the
charges against Mr. Mapara relating to these GST offences. The Crown also
stayed the charges against the other two individuals. The trial proceeded,
therefore, against only Mr. Wolfe and Port Chevrolet on 12 counts.
[4]
After a 70-day trial, a jury convicted Mr. Wolfe
on seven counts. In doing so it acquitted him of two counts relating to the
period May 1995 to February 1996, and one count of fraud contrary to s. 380
of the
Criminal Code.
[5]
Mr. Wolfe and Port Chevrolet appealed
unsuccessfully against conviction: 2009 BCCA 357, 246 C.C.C. (3d) 355.
[6]
The charges against Mr. Wolfe and Port
Chevrolet arose out of the purported purchase, sale and export of vehicles from
Canada to Asia between 1995 and 1998. It is accepted the scheme was devised by Mr. Mapara. He
approached Mr. Wolfe, seeking assistance in financing the GST on luxury
vehicles for export to Asia.
[7]
As described in the reasons for judgment of
this Court on the conviction appeal, the
Excise Tax Act
requires
suppliers of goods and services to collect GST from their customers and to
remit it to the taxing authority. Purchasers of goods who subsequently sell the
goods to others are entitled to input tax credits for the amount of the GST
paid on the goods they acquired to sell. That is, there is an application to
the government for a GST rebate. GST is not collected on goods that are
exported. An exporter will pay GST on the goods it acquires and is entitled to
input tax credits, but will not collect GST from its customers.
[8]
The scheme was one in which Mr. Mapara and
his business Rags to Riches purported to sell automobiles to Port Chevrolet. The
vehicles did not exist and false documents and invalid vehicle identification
numbers were used in the paper work. Port Chevrolet paid Rags to Riches the
purchase price plus 7% for GST. Port Chevrolet then purported to sell the
vehicles back to Rags to Riches or its nominee, without imposing GST because
the vehicles were said to be sold to Mr. Mapara and his business for
export. The price of the resale by Port Chevrolet to Rags to Riches was the
initial sale price plus 1.5%. This left a profit in the hands of Rags to Riches
of 5.5% on the original purchase price.
[9]
Port Chevrolet then claimed the input tax credit
on its original purchase, that is 7% of that purchase price. Having originally
paid 107% of the purchase price for the car, and received 101.5% from Rags to
Riches and 7% rebate from the government, Port Chevrolet was ahead by 1.5% and
Rags to Riches by 5.5%.
[10]
The judge held the fraudulent transactions
involved about 1600 non-existent vehicles, over 200 transactions between Mr. Wolfe
and Mr. Mapara and approximately $6.9 million in GST input tax credits
obtained by Port Chevrolet.
[11]
The Crown contends the sentence of two years
less a day imposed by the trial judge was inadequate and unfit, given the size,
sophistication and duration of the offences. The Crown acknowledges that Mr. Wolfe
was not the principal in the fraudulent scheme whereby these GST input tax
credits were refunded to Port Chevrolet and says that had he been the main
proponent of the scheme a sentence of six or seven years would have been
appropriate on the authorities, demonstrating that a sentence of two years
less a day for being a party to such a large scale fraud on the public purse is
an inadequate sentencing response.
[12]
The Crown submits a sentence of two years less
a day departs markedly from the range of sentence normally imposed for
substantial and prolonged involvement in an on-going fraud on the public purse,
urges us to interfere with the sentence on the basis it is demonstrably unfit,
and suggests a sentence of four or five years is the appropriate sentencing
response. In support of its submission the Crown cited several cases of fraud,
tax and otherwise, including
R. v. DiGiuseppe
, 2008 ONCJ 127, [2008] 5
C.T.C. 3;
R. v. Bjellebo
(2003), 177 O.A.C. 378, 2003 D.T.C. 5659;
R.
v. Wilder
, 2008 BCCA 370, [2009] 1 C.T.C. 246;
R. v. Elless
, 2007
BCSC 962;
R. v. Alexander Street Lofts
, 2007 ONCA 309, 86 O.R. (3d) 710;
R. v. Surani
, (10 September 2008), Vancouver 487 (P.C.);
R. v.
Davda
, 2007 BCPC 463, 2008 G.T.C. 1309; and
R. v. Hofbauer
, 2004
BCSC 1810. These cases, says the Crown, establish a range of sentence in this
case of six to seven years for the principle offender in the scheme, and four
to five years for a party.
[13]
Counsel for Mr. Wolfe also refers to a
number of cases including cases of fraud under the
Criminal Code
. These
cases, it is said, demonstrate that the range of sentence for like offences is
not as high as the Crown submits:
R. v. Biller
, 2005 BCSC 1278;
R.
v. Bortolussi
(1997), [1998] 1 C.T.C. 145, 36 O.T.C. 189 (Ont. Gen. Div.);
R.
v. Ellis
, 2008 ABQB 40, 428 A.R. 334;
R. v. Gray
(1995), 76 O.A.C.
387, 95 D.T.C. 5262 (C.A.);
R. v. Khan
, 2002 BCCA 703, 183 B.C.A.C. 3;
R.
v. Minnie
, 2007 BCSC 433;
R. v. Prokofiew
(No. 2), [2004] O.J. No. 5133
(S.C.J.) and
R. v. Tulloch
, [2002] O.J. No. 5446 (S.C.J.). We are
also referred to cases involving the
Excise Tax Act:
R. v. Brown
,
2003 BCPC 537, and
R. v. Lempen
, 2006 NBQB 246, 302 N.B.R. (2d) 29.
[14]
It is well known that this Court may not
interfere with a sentence where there is no error in principle alleged, unless
the sentence is demonstrably unfit:
R. v. Fraser
, 2009 BCCA 179, 269
B.C.A.C. 200;
R. v. Johnson
(1996), 112 C.C.C. (3d) 225, 84 B.C.A.C.
261;
R. v. C.A.M.,
[1996] 1 S.C.R. 500, 105 C.C.C. (3d) 327.
[15]
In determining whether a sentence is
demonstrably unfit, the question is whether the sentence imposed by the trial
judge is a substantial and marked departure from the sentences customarily
imposed for similar offenders committing similar crimes:
R. v. C.A.M.
[16]
Given the nature of the offences in this case,
it bears mentioning that the principle of general deterrence and denunciation
must play a significant role in the sentence imposed. No doubt it is that
principle that caused the judge to impose a period of incarceration even though
the length of sentence is one which could attract a conditional sentence. Yet
at the same time, the sentence must be nuanced to reflect the degree of
culpability of the offender, reflect the particular circumstances of the
offender and the offence including considerations specific to the offender,
have a degree of parity to cases involving like offenders and like offences,
and
fit within the sentencing provisions of the governing statute
.
[17]
The sentence was imposed under the
Excise
Tax Act.
The maximum sentence for an offence under s. 327 is five
years, in contrast to the maximum sentence for fraud under the
Criminal Code
of 14 years. However, the
Excise Tax Act
requires the court to
impose a fine in an amount between 100% and 200% of the amount involved in the
fraud. This provision produced the fines totaling just over $6.9 million. As
each sentence was comprised of two distinct portions, and there are seven
offences, totality of sentence is a proper consideration, such that in total,
the sentences imposed fully but not excessively respond to the offences.
[18]
A key aspect of any sentencing decision is
determination of the culpability of the offender. Where, as here, the person is
not the principle offender, the degree of participation of the offender in the
scheme and the state of mind of the offender is important. In this case the
judge started her reasons for sentence addressing Mr. Wolfes state of
mind
[1] ...Counsel
are agreed that the verdict of the jury reflects a finding that Mr. Wolfe
was wilfully blind to the non-existence of the vehicles which were the subject
matter of the transactions. There were acquittals on counts 1 and 2
It is
agreed that the jury must have concluded that at some point in 1996, Mr. Wolfe
had the requisite mental element but it is simply not possible to be more
specific as to when in that year. For present purposes, I therefore proceed on
the basis that the offences occurred over a period of approximately two years.
[19]
The judge first discussed certain submissions
made with respect to the mandatory fine, and then focused on the sentence to be
imposed. Mr. Wolfe was then 58 years old (now 60). She said Mr. Wolfe
has been a respected member of the community, has no criminal record,
continues to be supported by his family, by his friends, and by his business
associates, and had advanced letters that are a testament to his character. As
to Mr. Wolfes participation in the offences, the effect of the events
upon Mr. Wolfe, and the absence of any direct personal benefit she said:
[16] The amounts in question were
received by the company not Mr. Wolfe and as has been noted, Port
Chevrolet could not continue to carry on business after it was reassessed. I
would emphasize that there is no evidence that Mr. Wolfe received any
personal benefit beyond that benefit associated with his affiliation to the
company. The reassessment and these charges have been financially consequential
to the family as a whole. The family has paid both a large personal and
financial price. As his counsel said during submissions, Mr. Wolfe has
been visibly humbled and emotionally devastated and is no doubt remorseful.
[17] What is not apparent from the
evidence is the nature of the scheme, the players involved, the role of each,
and the benefits each received. Given the verdict on Counts 1 and 2,
however, one can say that Mr. Wolfe was not involved at the outset and in
respect of his involvement, it was not premeditated. It is, in my view,
unfortunate that it would appear that those who are responsible for the
planning of this scheme or who benefited most directly and most significantly
will not or cannot be prosecuted. Nor is Mr. Wolfes motivation for
turning a blind eye clear from the evidence. Although the Crown led evidence to
support the suggestion that Port Chevrolet would otherwise have been out of
business and that was Mr. Wolfes motivation, I have difficulty accepting
that. Defence counsel characterized the role of the accused using the word
facilitation. On the evidence, I must agree with that description and I
proceed on that basis.
[18] In determining what sentence is
appropriate, regard must be had to the mandatory minimum fine. Although Mr. Wolfe
and Port Chevrolet are jointly and severally liable for the amounts, in reality
Mr. Wolfe will be solely responsible and it is a fiction to suggest that
there is any impact at all on Port Chevrolet.
. . .
[20] In all
of the circumstances, including consideration of the fine for which Mr. Wolfe
will be solely responsible and his personal circumstances as set out in the
presentence report and the evidence of Mr. Wolfe and his family members,
it is my view that a sentence of two years less a day on each of Counts 3
through 9 to be served concurrently is appropriate.
[20]
Crown counsels observation is correct that had
the principal offender in this scheme been convicted, he could have expected a
sentence much greater than was imposed upon Mr. Wolfe, commensurate with
pre-meditation, the scope of the fraud, the duration of the fraud, and his role
in involving others in this illegal activity.
Crown counsel is also
correct to observe that the scale of the fraudulent activity and the duration
of the scheme are factors that bear as well upon the sentence of a facilitator
of a scheme.
[21]
Notwithstanding the forceful submissions of the
Crown, I am unable to conclude, on the facts as found by the judge,
the
sentence imposed
is demonstrably unfit.
In this case,
in my view, the sentencing judge properly considered the mental element of Mr. Wolfe
implicit in the convictions, the fact he did not derive direct personal benefit
from the crime, the fact he had no criminal record, his remorse and shame, and
the burden of the fine he carries which bears upon the totality of the
sentence, as influencing the length of sentence.
[22]
I do not propose to review each of the cases
presented to us, but I would observe they demonstrate a broad range of sentence
reflecting the many ways cases of fraud, particularly tax fraud, may present. One
theme that emerges is that such an offence committed by the principal fraudster
often attracts a period of penitentiary incarceration. Yet while it may be said
the jail sentence imposed, in this case, is towards the lower end of the
spectrum, I do not consider the cases demonstrate that this sentence, for this
offender and these offences, considering the very large fine that has been
imposed upon Mr. Wolfe and the potential for his further incarceration,
is, in the words of
R. v.
C
.A.M.
a
substantial and marked
departure from the sentences customarily imposed for similar offenders
committing similar crimes
.
[23]
I conclude there is no proper basis to interfere
with the sentence imposed. I would dismiss the appeal.
[24]
BENNETT J.A.
: I
agree.
[25]
GARSON J.A.
: I
agree.
[26]
SAUNDERS J.A.
:
This sentence appeal is dismissed.
The
Honourable Madam Justice Saunders
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
S.J.C. v. S.-J.C.A.,
2010 BCCA 31
Date: 20100126
Dockets: CA036735, CA036816, CA37634
Docket:
CA036735
Between:
S.J.C.
Appellant
(
Plaintiff
)
And
S.-J.C.A.
Respondent
(
Defendant
)
Docket:
CA036816
Between:
S.J.C.
Respondent
(
Plaintiff
)
And
S.-J.C.A.
Appellant
(
Defendant
)
Docket:
CA037634
Between:
S.J.C.
Appellant
(
Plaintiff
)
And
S.-J.C.A.
Respondent
(
Defendant
)
Before:
The Honourable Chief Justice Finch
The Honourable Madam Justice Prowse
The Honourable Mr. Justice Mackenzie
On appeal from the Supreme Court of British Columbia, Victoria
Registry,
Docket
07-1775,
S.J.A. v. S-J.C.A
.
December
3, 2008, 2008 BCSC 1670; April 22, 2009 (unreported); and
October 7, 2009, 2009 BCSC 1377
Counsel for S.J.C.:
W.
Murphy-Dyson
Counsel for S-J.C.A.:
K.
Melbye
Place and Date of Hearing:
Vancouver,
British Columbia
December 7, 2009
Place and Date of Judgment:
Vancouver
, British Columbia
January
26, 2010
Written Reasons by
:
The Honourable Madam Justice Prowse
Concurred in by:
The Honourable Chief Justice Finch
Written Reasons Concurring in the
Result:
The Honourable Mr. Justice Mackenzie (page
26, para. 76)
Reasons for
Judgment of the Honourable Madam Justice Prowse:
INTRODUCTION
[1]
Two of the three appeals before the Court
involve the custody of a four year old girl (J). The third appeal raises an
issue relating to costs.
[2]
The parties to these appeals, Ms. C and Ms. A,
began living together in 1994 and married in May 2005. They became parents in
October 2005 when J was born as a result of Ms. Cs impregnation through
artificial insemination from an anonymous sperm donor. The parties separated
in May 2007 when J was 19 months old. At that time, the parties listed their
home in Victoria for sale and Ms. C left with J to live with her parents
in Qualicum Beach. Since then, Ms. C and Ms. A have been engaged in an ongoing
dispute concerning the custody of, and access to, J.
[3]
Prior to the parties separation, Ms. A had
entered into a new relationship which was ongoing at the time of the appeal.
Following the separation, Ms. C gave birth to a son (S) in March 2008, again
by artificial insemination from the same anonymous sperm donor. S lives with
Ms. C and his custody is not in issue.
[4]
The key aspects of the three orders in issue
may be summarized as follows:
1.
December 3, 2008
The trial judge
ordered that the parties have joint custody and guardianship of J, structured
so that J would spend equal time with each parent, on the basis of 4 days with
one parent the first week and 3 days with that parent the second week,
alternating on a 4 day/3 day schedule thereafter and with equal holiday time.
That parenting schedule was to begin as of February 1, 2009, if possible. Ms.
A was awarded costs, with liberty to apply.
2.
January 28, 2009
The original costs order was modified to award Ms. A costs for her
preparation and conduct of the trial as determined by the Registrar, but not to
include the custody and access report. Ms. As application for double costs
based on her offer to settle was dismissed.
3.
October 7, 2009
The order of December
3, 2008 was varied to provide that Ms. C would have primary care of J, with
specified access to Ms. A and with an effective parenting regime whereby Ms. A
would have access for one 9 or 10 day block of time each month. Ms. C was
awarded her costs of that application and of a prior application relating to
daycare arrangements.
[5]
There were other orders made in the action to
which I will refer later in these reasons.
ISSUES
ON APPEAL
1.
The December 3, 2008 Order (the first
order)
[6]
Ms. C submits that the trial judge erred in
making an award of joint custody and guardianship with an equal parenting
regime. She also submits that he erred in awarding Ms. A costs. Ms. C
acknowledges that the custody and parenting provisions of the first order have
been superseded by the variation order made October 7, 2009, and that the
appeal from the first order is, to that extent, moot. She submits, however,
that the question of whether the trial judge erred in making an order for equal
shared parenting in the first order is relevant in determining whether, and to
what extent, he erred in continuing the shared parenting regime in his
variation order of October 7, 2009, and in relation to the issue of costs.
2.
The January 28, 2009 Order (the costs
order)
[7]
Ms. A submits that the trial judge erred in
failing to award her double costs of the trial in circumstances where the
results she achieved at trial were better than her offer to settle made prior
to trial. In reply, Ms. C reiterates that the trial judge erred in failing to
order that each party bear her own costs.
3.
The October 7, 2009 Order (the
variation order)
[8]
Both parties submit that the trial judge erred
with respect to the terms of the variation order. Ms. C submits that, given
Ms. As unexpected move to Victoria, the trial judge should have awarded more
limited access to Ms. A. Ms. A submits that the trial judge should have
continued the equal parenting regime, with alternate week access. Both parties
submit that the trial judge erred in failing to make an order which would
continue in effect when J commences kindergarten in September 2010.
[9]
In the event the Court determines that the trial
judge erred in making any of these orders, the parties wish this Court to make
the appropriate order, rather than refer the issues back to the trial court.
[10]
Both parties led further evidence on the appeal
as to what had transpired since the first order was made. Counsel agree that
the Court should have recourse to that evidence to determine these appeals,
with the exception of two affidavits filed on behalf of Ms. A with respect to
the variation order. Ms. C successfully objected to the introduction of those
affidavits at the variation hearing. Counsel for Ms. A did not actively pursue
their admission on appeal. I am satisfied that the trial judge was correct in
excluding those affidavits which, in any event, do not shed light on the proper
disposition of these appeals.
CONCLUSION
[11]
I would dismiss the appeal from the first order,
except with respect to the issue of costs, since the issues of custody and
access were rendered moot by the variation order. I would allow the appeal
from the first order with respect to costs by ordering that each party bear her
own costs. I would dismiss Ms. As appeal from the order refusing her double
costs. I would allow the appeal from the variation order by setting aside the order
and substituting the provisions set forth in paras. 56-57 of these reasons for
judgment.
[12]
I would grant Ms. C her costs of all three
appeals.
DISCUSSION
1.
The Trial
[13]
The trial took place over 12 days in September
and October 2008. It is not possible, or necessary, to detail the evidence led
at trial, which is set out in considerable detail in the reasons for judgment
of the trial judge. I will refer to the evidence of the key witnesses in
summary form.
[14]
Ms. C and Ms. A testified at considerable
length. Ms. Cs position at trial was that she should be the sole custodial parent
of J with specified access to Ms. A, including alternate weekends, some weekday
access and limited holiday access. In Ms. Cs submission, Ms. A had a history
of depression and related mental health problems, and lacked the consistency
and stability to be a full-time or equal parent to J. Ms. C also expressed
reservations about the impact of Ms. As new relationship on J and on the
suitability of Ms. As partner as a potential influence on J. Evidence in
support of her application for custody was provided by, amongst others, her
parents and her brother.
[15]
Ms. Cs counsel cross-examined Ms. A extensively
about her past mental health and other problems with a view to demonstrating
that she was subject to recurring depressions which, if triggered by adverse
circumstances, could represent a risk to J. Counsel for Ms. C also
cross-examined Ms. As family doctor and psychiatrist concerning their opinions
that Ms. A did not represent a potential risk to J. During that
cross-examination, it became apparent that Ms. A had not fully disclosed her
history of emotional and mental health problems, nor a related family history
of mental health problems,
to those doctors
. Counsel
for Ms. C also demonstrated that Ms. A and her counsel had effectively dictated
the affidavits of those doctors by directing them in a very specific way as to
what should be included.
[16]
The principal argument of Ms. C at trial was
that, as birth mother, she had been the constant and stabilizing force in Js
life both before and after the separation; that she had always put Js
interests first; and that she was able to spend more time with J since she was
on extended maternity leave and could do a lot of her work from home when she
returned to work. In her submission, Ms. A had chosen her own interests over
those of J in breaking up the family and taking up with her new partner, and
that Ms. As history of mental health problems created the potential for risk
to J if she were placed in Ms. As care for extended periods. Ms. C also
expressed reservations about Ms. As new partner who, in Ms. Cs view,
represented an uncertain, and potentially negative, influence on J at a time
when the family was in distress.
[17]
Ms. A denied that she currently had mental
health problems or that her past problems had the potential for placing J at
risk. She relied on the evidence of her doctors in support of her position
that she was fully capable of being an equal parent to J in all respects. She
stated that Ms. C and her family had made it very difficult for her to exercise
access following the separation, particularly since she had to travel from
Victoria, where the parties had been living until the separation, to Qualicum
Beach in order to exercise access. She testified that she had taken a teaching
job in the Comox Valley in order to be closer to J and that her priority was to
fully participate in Js upbringing.
[18]
Ms. As new partner, who is also a teacher,
supported Ms. As plan to fully participate in Js life, and contradicted the
suggestion that Ms. A suffered from any mental health or other problems which
would place J at any risk in her care.
[19]
Ms As submission was that there should be joint
custody and access under an equal parenting arrangement. She expressed serious
reservations about Ms. Cs willingness, and the willingness of Ms. Cs family
members, to support her as a co-parent and to permit her reasonable access if
sole custody were given to Ms. C.
[20]
Expert evidence was provided in the form of a
lengthy custody and access report authored by Dr. Korpach, who was examined on
her report at trial by counsel for both parties. While that report was
consistent with a shared parenting regime being in Js best interests, it
favoured Ms. A if sole custody were to be granted to one of the parties.
2.
The Decision At Trial
[21]
The trial judge observed that the principal
issue before him was the best interests of J. He stated, at para. 4, that this
issue was made more complicated by the very strong aversions that the parties
demonstrated during the trial. Both parties seem very angry. He attributed
Ms. Cs anger to the fact that Ms. A had chosen to break up their relationship
and their family. He attributed Ms. As anger to Ms. Cs challenge to her
emotional and mental fitness to parent J. He, nonetheless, concluded, at para.
6, that both parents were qualified and fit to be full-time parents so long as
they can set aside their antipathies and act in the childs best interests.
[22]
The trial judge concluded that it was in Js
best interests to have maximum contact with both parents. He expressed concern
about whether Ms. C and her parents would encourage, or readily facilitate, maximum
contact between J and Ms. A. He expressed greater confidence in Ms. As
willingness to facilitate such contact between J and Ms. C. He also found that
Ms. Cs fears about Ms. As emotional and mental stability if Ms. A were
granted extensive parenting rights were not justified, and that J would not be
at risk of harm in Ms. As care.
[23]
The trial judge observed that Ms. A had not been
fully candid with her personal doctors or with Dr. Korpach with respect to some
of her medical and other history. He was also critical of the extent to which
Ms. As counsel and Ms. A were involved in drafting the doctors affidavits,
and found that this seriously undermined the weight to be given to the doctors
evidence. At para. 32, he concluded, however, that the doctors did not agree
with Ms. Cs counsel that learning of the [omitted] history required any
change in their opinion as to [Ms. As] current mental health status and the
risk of her falling again into a cyclical depression. The trial judge also
rejected Ms. Cs suggestion that Ms. As new partner represented any risk to
Js well-being.
[24]
The trial judge reviewed in some detail each of
the parties positions with respect to the parenting arrangement which would be
in Js best interests. In that regard, Ms. As submission mirrored, to a large
extent, the recommendations of Dr. Korpach. Included in her submission
was a proposal that, as long as Ms. C was not working, she could have access to
J while Ms. A was working, rather than having J placed in daycare.
[25]
As earlier stated, the trial judge concluded
that the best interests of J would be served by a joint custody and
guardianship regime with J spending approximately equal time with each parent.
He recommended that this regime be put in place as soon as possible, but not
later than June 30, 2009. His conclusions in that regard are set forth at
paras. 88-91 of his reasons for judgment:
It is in Js best
interests that she have as much contact as possible with each parent. They are
the two foremost adults in her life. The maximum contact principle set out in
s. 16(10) of the
Divorce Act
requires me to give effect to the principle
that J. should have as much contact with each parent as is consistent with the
best interests of the child. That is best accomplished here by moving to an
equal shared parenting regime. I must also consider and am satisfied that [Ms.
A] is willing to facilitate such contact.
Dr. Korpach expressed a concern
that [Ms. C] and her family might not willingly support the relationship
between [Ms. A] and J. While I do not discount those concerns, I am satisfied
that they apply mainly to [Ms. Cs] father and brother. So long as she sets
aside her anger over the failed relationship, [Ms. C] will better understand
and act on the need to facilitate contact.
In all the circumstances, I am
persuaded that it is in the best interests of J. that I order joint custody and
joint guardianship.
J.
is now three. She should move to a shared living arrangement as soon as
possible. I am satisfied that it is in the best interests of J. that she live
with each parent. To that extent, I accept [Ms. As] long-term proposal. The
practical question that arises is: When should the transition occur.
[26]
In the result, the trial judge rejected Ms. As
short-term plan whereby J would live with her five weekends out of six until
June 30, 2009 , but he accepted her long-term equal parenting plan.
[27]
The trial judges initial reasons with respect
to costs are contained at para. 109 of his reasons:
I am satisfied that this is an appropriate case to award costs.
[Ms. A] was largely successful. Assuming there was no formal Offer to Settle,
she is entitled to her costs calculated on Scale B. She will have liberty to
apply if the parties cannot agree on the applicability of any formal Offer to
Settle.
3.
The Costs Decision
[28]
Both parties made offers to settle. Ms. A made
a formal Offer to Settle on September 8, 2008 in terms similar to those
contained in Dr. Korpachs report and tracking the submissions made by counsel
for Ms. A at trial. Ms. C made an offer to settle by letter dated October 10,
2008, which included joint custody and guardianship, but with conditions
attached, and with specified access to Ms. A until September 2009, at which
time the order would be reviewed. Neither offer was accepted.
[29]
The parties made further submissions with
respect to costs. The principal issue was whether the trial judge should award
Ms. A double costs given her success at trial. A secondary issue involved
adjusting the original order of costs to take into account the fact that
counsel had succeeded in resolving some issues before trial and had agreed to share
the cost of Dr. Korpachs report.
[30]
As to costs generally, the trial judge referred
to the decision of this Court in
Gold v. Gold
(1993), 106 D.L.R. (4
th
)
452, 82 B.C.L.R. (2d) 180 (C.A.) which held that Rule 57(9) of the
Rules
of Court
applies to all civil proceedings, including family law
proceedings. He referred to the discretion available to the trial judge under
Rule 57(9) and quoted from para. 20 of
Gold
which refers to some of the
factors the court could consider in declining to award costs to a successful
party, including hardship, earning capacity, the purpose of the particular
award, the conduct of the parties to the litigation, and the importance of not
upsetting the balance achieved by the award.
[31]
The trial judge then referred to a division of
opinion in the trial court about the principles governing any departure from
the general rule of costs in custody cases. He set out the divergent streams
of authority at paras. 9-12 of his reasons for costs:
One line of
authority in this court, referred to as the Special Rules Cases by Judge
Martinson in
S.D.W. v. C.W.W.
, 2006 BCSC 162, at para. 2, holds that
child custody cases are unique in that there are no winners or losers in the
usual sense because the court is only considering the best interests of the
child. Some of those cases, including two of my previous decisions:
Morrison
v. Morrison
, 2001 BCSC 909, and
P.E.P. v. D.W.P.
, 2004 BCSC 1590,
arose in mobility cases involving opposing parents, each of whom conducted the
litigation solely according to their legitimate and understandable perception
of the best interests of the child.
According to the above
authority, each parent should bear his or her own costs to avoid the
potentially chilling effect of a prospective adverse cost award for a parent
acting under an honestly held belief as to what is best for the child.
[Further citations omitted]
The other line of authority,
referred to by Martinson J. in
S.D.W.
, as the Usual Rule Cases, holds
that the general costs rule applies to child custody cases in the same way that
it applies to all other family law proceedings under
Gold
. [Further
citations omitted.]
Unfortunately,
this debate continues and likely will do so until the Court of Appeal rules on
the question in an appropriate custody case. As I stated in
P.E.P.
, at
para. 8, I would prefer the Court of Appeal address the important question of
whether some child custody cases fall outside the general rule regarding costs
or within a recognized exception in
Gold
. I need not address the
question further here as I am not persuaded that [Ms. C], the unsuccessful
party in the present case, was motivated solely by a genuine consideration of
the childs best interests.
[32]
The trial judge found that Ms. C resisted joint
custody and guardianship and shared custody for reasons that I attribute more
to her unhappiness at the breakdown of the parental relationship than to
legitimate concerns for the best interests of the child. In the result, he
found no basis to depart from the usual rule that costs follow the event.
[33]
The trial judge then turned to the issue of
double costs. He noted that the previous rule which had been in effect with
respect to offers to settle
, R. 37(26.1),
had been
repealed effective July 1, 2008 and replaced with R. 37B, effective July 2,
2008. He observed that the previous rule had been interpreted to limit the
discretion to award double costs, whereas R. 37B, by its express terms,
provided a broad discretion as to whether to award double costs where there was
a successful offer to settle. He stated that the first decision of the trial
court to apply R. 37B in the context of a custody dispute was
Chera v. Chera
,
2008 BCSC 1640 (upheld on appeal but without reference to costs, 2008 BCCA 374,
298 D.L.R. (4
th
) 462) where Josephson J. held that barring
egregious conduct, costs, including double costs, should not be awarded in
custody cases. In so doing, Josephson J. made reference to similar language
employed by the trial judge in
P.E.P.
The trial judge expressed doubt
about the wisdom of restricting the awarding of double costs to cases involving
egregious conduct, but concluded that he was bound by the
Chera
decision. He found that Ms. Cs conduct was not egregious and that, therefore,
Ms. A was not entitled to double costs. He went on to state that, if he had
not been bound by
Chera
, he would have awarded Ms. A double costs for
preparation and trial.
4.
Further Orders
[34]
Following the release of reasons for judgment,
Ms. C filed a Notice of Appeal and sought an order staying the custody order
and the costs order pending appeal. The trial judge dismissed the application
by order dated April 22, 2009. At the request of Ms. C, that order also
provided that, before using third party daycare providers, Ms. A and Ms. C
would ask the other parent if she were available to care for J. Ms. C
requested this order because Ms. A had registered J in a daycare without Ms.
Cs knowledge or consent and contrary to the recommendation made by the trial
judge in his original reasons for judgment.
[35]
In June 2009, Ms. C learned that Ms. A had
accepted a job in Victoria to commence in September 2009 and that A had enrolled
J in daycare there. Ms. C had not been consulted or advised of Ms. As plans,
despite the fact that Ms. A had applied for the position in Victoria in
February 2009 and had been accepted in early April 2009. Ms. A did not advise
the trial judge of these developments at the time of the stay application in
April.
[36]
By Notice of Motion dated July 29, 2009, Ms. C brought an
application to vary the first order based on a material change in circumstances,
namely, Ms. As imminent move to Victoria. On August 1, 2009, Ms. A moved to
Victoria to take up the teaching position she had accepted in April and to proceed
with her plans for J to attend daycare there.
[37]
The parties were unable to get a date for a
hearing before the trial judge until September 28, 2009. Pending the parties
return before the trial judge, Madam Justice Dorgan made an order on August 21
requiring Ms. A to produce documents relating to her change in employment and
her enrolment of J in daycare in Victoria, but adjourning the issue of changes
to the parenting regime to the trial judge. Mr. Justice Metzger made a
further order dated September 14, 2009 suspending Js attendance at the new
daycare pending resolution of these issues by the trial judge.
5.
The Variation Decision
[38]
After hearing further evidence and submissions,
the trial judge made the variation order on October 7, 2009, on the basis of a
material change in circumstances and after taking into account the principles
applicable to parental mobility set forth in
Gordon v. Goertz
, [1996] 2
S.C.R. 27, 134 D.L.R. (4
th
) 321. He stated that, at the time of his
first order, he had anticipated that Ms. C would be moving to Cumberland,
closer to where Ms. A was living at the time of trial, and he had structured
his first order accordingly. He found that Ms. As move to Victoria was a
material change in circumstances which made the first order impracticable.
Despite this change, he concluded that J would continue to benefit from
significant contact with both parents, but that equal parenting was not in Js
best interests because of the amount of time she would be in transit if an
equal parenting regime were continued. As a result, he modified his earlier
order to provide, in effect, that J would spend two thirds of the time each
month with Ms. C and one third of the time with Ms. A. This significantly
reduced the amount of travel time which would have been required under the
first order.
[39]
In his reasons for judgment, the trial judge was
critical of the fact that Ms. A had acted in breach of both the letter and
spirit of his earlier orders, including his order of April 22, 2009 requiring
each parent to give the other parent the opportunity to care for J before
placing J in third party daycare. It is apparent from his reasons that he felt
he had been misled by Ms. A with respect to where she intended to live at the
time he made the first order. Based on her conduct since then, he was no
longer persuaded that she was committed to ensuring positive contact between J
and Ms. C. Despite his misgivings regarding Ms. As conduct, however, he
remained of the view that significant contact with both parents was in Js best
interests.
[40]
It is apparent that the trial judge contemplated
that his variation order would likely require further variation prior to J
commencing kindergarten in September 2010. Both parties criticize the
short-term nature of his order in that respect as being contrary to Js best
interests.
ANALYSIS
OF THE ISSUES
1.
The
First Order
[41]
As earlier stated, Ms. C concedes that the first
order has been overtaken by the variation order with respect to the issues of
custody and access. The correctness of the first order remains an issue for
her, however, since it is the basis of the trial judges initial order for
costs, and the foundation for Ms. As appeal relating to double costs.
[42]
The standard of review to be applied by this
Court with respect to the provisions of the first order relating to custody,
guardianship and access, is that set forth by the Supreme Court of Canada in
Van
de Perre v. Edwards
,
2001 SCC 60
,
[2001] 2 S.C.R. 1014, at
para. 11:
In reviewing the
decisions of trial judges in all cases, including family law cases involving
custody it is important that the appellate court remind itself of the narrow
scope of appellate review. LHeureux-Dubé J. stated in
Hickey v. Hickey
,
[1999] 2 S.C.R. 518, at paras. 10 and 12:
[Trial judges] must
balance the objectives and factors set out in the
Divorce Act
or in
provincial support statutes with an appreciation of the particular facts of the
case. It is a difficult but important determination, which is critical to the
lives of the parties and to their children.
Because of its fact-based and
discretionary nature, trial judges must be given considerable deference by
appellate courts when such decisions are reviewed.
There are strong
reasons for the significant deference that must be given to trial judges in
relation to support orders. This standard of appellate review recognizes that
the discretion involved in making a support order is best exercised by the
judge who has heard the parties directly.
It
avoids giving parties an incentive to appeal judgments and incur added expenses
in the hope that the appeal court will have a different appreciation of the relevant
factors and evidence.
This approach promotes finality in family law
litigation and recognizes the importance of the appreciation of the facts by
the trial judge. Though an appeal court must intervene when there is a
material error, a serious misapprehension of the evidence, or an error in law,
it is not entitled to overturn a support order simply because it would have
made a different decision or balanced the factors differently.
[Emphasis
added in
Van de Perre
.]
Hickey
involved the appellate review of
support orders, but the principles related to appellate review discussed
therein are equally applicable to orders concerning child custody.
[43]
In my view, the trial judge did not err in
ordering joint custody and guardianship of J and an equal parenting regime in
the first order. He heard a considerable body of evidence in making that
order, including the evidence of an independent expert, Dr. Korpach. Despite
what appears from the transcript to have been very effective cross-examination
of Ms. As doctors and Dr. Korpach, which revealed that Ms. A had not fully
disclosed her medical and other history to them, the trial judge was not
persuaded that Ms. A presented a risk to J if J should be placed in her care
for extended periods of time. In other words, although the trial judge was
made aware of Ms. As non-disclosure, he found that her prior mental and
emotional history did not give rise to a significant concern regarding Ms. As
current parenting abilities or her capacity to be a fit and equal parent of J.
In that respect, Ms. Cs concerns that Ms. A lacked the emotional or mental
stability to be a fit parent have not been borne out over time.
[44]
It is important to note that the trial judge
found that Ms. C was driven to a noticeable extent at trial by her anger at Ms.
A for breaking up the family, and that this anger may have clouded her
perception of Js best interests. There was evidence, including that of Dr.
Korpach, to support that conclusion. There was also evidence before the trial
judge that both Ms. C and members of her family, particularly her father, may
not assist in ensuring that J had positive and significant contact with Ms. A
if Ms. C were granted sole custody. The trial judge was entitled to rely on that
evidence in determining the best interests of J. The fact that this Court may
have accorded different weight to some of the evidence, or drawn different
conclusions from the evidence, is of no moment unless it is established that
the trial judge made errors of the type identified in
Van de Perre
. I
am not persuaded that such errors have been established with respect to the
parenting aspects of the first order.
[45]
It is evident that there was a power struggle
between these two parents which the trial judge attempted to resolve in the
best interests of J by attempting to ensure a balance between them. At that
time, he considered it more likely that Ms. A, rather than Ms. C, would
cultivate maximum and positive contact between J and her other parent. As events
later transpired, he had reason to question his judgment in that regard. In
the circumstances prevailing at the time of trial, however, I am not persuaded
that he erred in any significant respect in making the first order with respect
to custody, guardianship and access. As is often the case in contested custody
matters, however, the circumstances giving rise to the first order have been
overtaken by subsequent events leading to the variation order.
[46]
I will address the variation order
before
turning to the issue of costs.
2.
The
Variation Order
[47]
Both parties challenge the variation order. Ms.
C challenges it on the basis that the deception practised by Ms. A on herself
and on the court demonstrates that she could not, and cannot, be relied on to
act in Js best interests, and that the only reasonable variation in the
circumstances was an award of primary care in her favour with reasonable, but
more limited, access to Ms. A.
[48]
Ms. A submits that the trial judge erred by
reducing her time with J, and that he should have continued his order of equal
parenting, but modified it to provide that J spend alternate weeks with each
parent. She submits that the variation order does not take proper cognizance
of the trial judges prior findings, including his finding that Ms. C and
members of her family would not facilitate a good relationship between J and
Ms. A.
[49]
Both parties submit that the trial judge erred
in effectively requiring them to return to court by the end of June 2010, with
attendant emotional and financial costs, in order to address custody and access
before J enters kindergarten next September.
[50]
Like the first order, the variation order made
by the trial judge must be approached by this Court with considerable
deference. This is particularly so, since the trial judge has had the
continuous charge of the custody and access issues involving these parties over
the past two years, with the exception of two interim orders made in his
absence. He is well-placed to gauge the most effective manner in which to
determine the best interests of J and to protect her relationship with both
parents. That has been a very difficult task in this case since there is every
appearance that both parents have been constantly manoeuvring for position in
order to protect their own relationship with J. In that respect, both parents
seem to have difficulty separating their own interests from Js interests,
resulting in an ongoing tug-of-war between them. There is some indication,
particularly in the new evidence, that J is feeling the effects of this battle,
and she will undoubtedly suffer if her parents to do not find a way to change
their attitudes. It is a sad commentary on the inability of these parents to
settle their differences that the court has been forced into the role of
referee.
[51]
It is apparent from his reasons for judgment in
the variation proceedings that the trial judge was very concerned about the
manner in which Ms. A had apparently shifted her position from one of promoting
contact between J and Ms. C to one of unilaterally and secretly imposing her
own view of Js best interests. It is difficult to interpret her actions in
hiding her intended move from the Comox Valley to Victoria from the court and
from Ms. C during the stay application in April 2009, and her action in
unilaterally enrolling J in a daycare facility in Victoria, as anything other
than self-serving. She took these actions in the face of a court order (in the
case of the daycare registration) and without any regard or respect for Ms. Cs
equal parenting rights. I see in her actions an unfortunate consistency with
her earlier failure to disclose important information to her doctors and to Dr.
Korpach in order to avoid the possibility of unfavourable opinions from them.
There is an element of bad faith in her actions which the trial judge found
troubling, and which he could not ignore in determining the extent to which she
is willing to act in Js best interests.
[52]
Despite his concerns with respect to Ms. As
conduct, however, the trial judge remained of the view that it was in Js best
interests to continue to have as much contact with each parent as the new
circumstances permitted. It is again important to emphasize that he had the
benefit at trial of seeing and hearing the parties testify. He also had the
benefit of Dr. Korpachs report and testimony. It is clear from that evidence
that J had significant bonds with both parents. In making his variation order,
the trial judge endeavoured to preserve those bonds, but he was legitimately
concerned about the amount of travelling for J which would be required to
maintain an equal parenting arrangement. For that reason, he rejected Ms. As
suggestion of alternate week parenting. Instead, he arrived at a compromise
which would still give J large blocks of time with each parent, but which would
cut down on the amount of travel time. It may not have been an ideal solution,
but the new circumstances were less than ideal for maintaining equally close
ties with both parents. In my view, the new access regime pending Js entry
into kindergarten was a reasoned compromise between the positions then being
taken by Ms. C and Ms. A.
[53]
I am also satisfied that, in making his
variation order in relation to access, the trial judge had due regard for the
rights of both parents and that he weighed the relevant factors set out in
Gordon v. Goertz
(referred to at para. 11 and following of his reasons). I
note that one significant factor informing his variation order was the need to
foster the developing relationship between J and her younger sibling, S, who
was in the sole custody of Ms. C. That factor does not appear to have been
given much weight at trial because of the young age of the children.
[54]
In my view, the variation order made by the
trial judge is sustainable on appeal except in two respects. Firstly, it is
apparent that the joint custody order has not worked. The parties have not
been communicating effectively about Js care in many significant respects. Ms.
As actions in moving to Victoria and registering J in daycare there in the
circumstances I have described are the most significant example of the
inability of the parties to work together in Js best interests. There was
also a recent incident at Js daycare which caused general consternation due,
in large part, to ineffective communication between the parents.
The
optimism of the trial judge has not been borne out in practice. (
That is not to say that he erred in ordering joint custody and
encouraging the parties to work through their differences in the first instance
it was only time that made it clear that these parties were incapable of
cooperating to the extent necessary to maintain a joint custody regime.)
[55]
Secondly, I agree with both parties that the
trial judge should have made an order which would continue during Js entry
into kindergarten in September 2010 to avoid the necessity of the parties
returning to court. The present order encourages the parents to continue their
search for failings in the other parent with a view to demonstrating that the
primary residence of J in September 2010 should be with one of them, rather
than the other.
[56]
In order to avoid the possible confusion that
may ensue if this Court simply varies the variation order, I would set aside
the variation order and substitute the following order:
(a)
Ms. C shall have sole custody and primary care of J.
(b)
Ms. C and Ms. A shall be joint guardians of Js person and estate on
the following terms:
(i)
In the event of the death of either parent, the
remaining parent will be the sole guardian of the person and the estate of J;
(ii)
Both parents will advise the other of any
significant matters affecting J;
(iii)
Ms. C will consult with Ms. A about all
important decisions concerning J, including health, education, and religious
instruction, with a view to reaching agreement, but, in the event the parties are
unable to agree, Ms. C is entitled to make the relevant decision (except that
Ms. A shall be entitled to make any decisions of an emergency nature while J is
in her care);
(iv)
Both parents shall have the right to request
information concerning J directly from third parties, including teachers,
counsellors, medical professionals, and third-party caregivers.
(v)
Ms. C shall inform Ms. A about all important
kindergarten, school and daycare activities which involve parent participation,
with a view to enabling both parents to participate, or share, in such
activities.
(c)
The parents will continue to have access to J on the basis of the
two thirds/ one third regime established by the trial judge in the variation
order up to June 30, 2010, with the pickups and drop-offs to be as stipulated
in that order. Thereafter, the parents will share access in July and August in
two week blocks, with J to be with Ms. C for the last two weeks of August and
the first week of September up to and including September 9, 2010 (and to the
end of the first week of September in every year following) so that she can
ensure Js smooth transition into kindergarten or school. Apart from that
period, Ms. A shall have first choice of summer holiday access in 2010 and the
parents shall alternate choice of summer holiday periods every summer
thereafter.
(d)
Ms. A shall have access to J every second weekend commencing Friday,
September 10 after kindergarten until Sunday at 5 p.m., with Ms. A to pick J up
at kindergarten at the beginning of the access visit and drop her off at a
mutually agreed location in Nanaimo at the end of the access visit. If either
the Friday and/or Monday of Ms. As access weekend is a statutory holiday or
professional day for both Ms. A and J, Ms. As access shall be extended to
include the extra day or days.
(e)
Commencing as of September 13, 2010, Ms. A shall also be entitled to
exercise access one Sunday per month on a weekend when Ms. A does not have
access to J, from 10 a.m. to 6 p.m., with Ms. A to pick J up and drop J off at
Ms. Cs home.
(f)
The parents shall share equally Js Christmas
holiday period, such half to include Christmas Day in even years commencing
2010 and not to include Christmas Day in odd years, commencing 2011, with Ms. A
to have the first choice of Christmas holiday time in 2010. Ms. A shall pick
up J at the beginning of the access visit and shall drop her off at a mutually
agreed location in Nanaimo at the end of the access visit.
(g)
The parents shall equally share Js spring break vacation period
with Ms. C to have the first choice of time in 2010 and in alternating years thereafter.
Ms. A shall pick J up at the beginning of the access visit and shall drop her
off at a mutually agreed location in Nanaimo at the end of the access visit.
(h)
Each of the parents shall be entitled to make whatever third party childcare
arrangements they may consider appropriate when J is in that parents care and,
for greater certainty, Ms. A is not required to offer Ms. C the opportunity to
care for J when Ms. A is working.
(i)
Each parent will have reasonable and generous
telephone access to J when she is in the care of the other parent.
(j)
The parents may alter any of these access
arrangements by agreement.
(k)
The parties may agree to a third party or parties doing the pick-ups
and drop offs at the beginning and end of the access periods. Such third parties
shall include Ms. Cs parent or parents and Ms. As current partner.
(l)
Ms. A will continue to pay child support to Ms. C, to be adjusted
in accordance with the Federal Child Support Guidelines, with liberty to either
party to apply to the Supreme Court for an order in the event the parents are
unable to agree on the appropriate amount.
[57]
In my view, this order gives effect to the trial
judges intention in the variation order that Ms. C should have primary care of
J, albeit with as much contact between Ms. A and J as is reasonable consistent
with Js best interests. It takes account of the reality that it is not
possible to have both parents play an equal parenting role in light of their
inability to effectively communicate and Ms. As new living arrangements.
[58]
I would encourage the parties to have any
disputes regarding access dealt with in the first instance by a mutually agreed
upon third party, failing which, either of the parties may apply to the Supreme
Court to have the matter determined.
3.
Costs
(i)
Ordinary
Costs
[59]
I have summarized the trial judges decision with
respect to costs at paras. 27-33,
supra.
In summary, in his first order,
the trial judge awarded Ms. A costs of the trial. In his subsequent costs
order, he clarified his first order by awarding Ms. A costs limited to
preparation for trial and excluding her costs for preparation of Dr. Korpachs
report. He also stated that he would have ordered double costs except for his
conclusion that he was bound by a previous decision,
Chera
, which held
that double costs in custody and access trials should only be awarded against a
party whose conduct had been egregious. Since he found that Ms. Cs conduct
had not been egregious, he did not award double costs.
[60]
An award of costs is essentially a discretionary
order and the standard of review to be applied by this Court is strict. One
statement of the standard of review is found in
Hamilton v. Open Window
Bakery Ltd.
, 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27, which states
that A court should set aside a costs award on appeal only if the trial judge
has made an error in principle or if the costs award is plainly wrong.
[61]
Counsel have suggested that this Court should
take the opportunity to clarify the extent to which the usual rule that costs
follow the event should be applied in custody and access cases. This has been
the subject of considerable discussion in the B.C. Supreme Court as reflected
in the authorities summarized by the trial judge in this case and by Madam
Justice Martinson in
S.D.W. v. C.W.W.
, 2006 BCSC 162, 55 B.C.L.R. (4
th
)
101.
[62]
While it is apparent there are different
approaches to the issue of costs in matters of custody and access in the B.C.
Supreme Court, this Court has previously stated that the usual rule that costs
follow the event (that is, that the successful party is entitled to costs)
applies in matrimonial proceedings, subject to a discretion to refuse costs to
the successful party in certain circumstances. The authority for that
proposition is
Gold
, in which this Court sat with five judges in order
to determine that question. Although
Gold
was decided in the context of
a dispute concerning the division of assets, it has been applied by this Court
in several cases where issues concerning the custody of children were involved,
albeit in the context of costs of the appeal. See, for example,
Karpodinis
v. Kantas
, 2006 BCCA 400,
Yassin v. Loubani
, 2007 BCCA 102, 67
B.C.L.R. (4
th
), and
Falvai v. Falvai
, 2009 BCCA 387, [2009]
10 W.W.R. 453. (As noted in
S.D.W.
, the
Gold
approach to costs
in matrimonial matters also appears to be in keeping with the approach in other
provinces, including Alberta
and Manitoba.) In my view, it is not open
to this division of the Court to re-open the debate and come to a different
conclusion than that expressed in the prior decisions of this Court.
[63]
The first question, therefore, is whether the
trial judge erred in awarding ordinary costs to Ms. A on the basis that she was
substantially successful in the result. In particular, did the trial judge err
in finding that this case did not fit into any of the exceptions in
Gold
,
which permit a court to exercise its discretion to refuse costs to the
successful party. As earlier stated, the court may refuse to apply the usual
rule as to costs on the basis of factors including hardship, earning capacity,
the purpose of the particular award, the conduct of the parties to the
litigation, and the importance of not upsetting the balance achieved by the
Court.
[64]
In this case, I find that the conduct of Ms. A,
in particular, and the importance of maintaining the balance achieved by the
court, were relevant factors in determining costs which were not adequately
dealt with by the trial judge.
[65]
In my view, the trial judge failed to appreciate
that the principal reason for the prolongation of the trial in relation to Ms.
As fitness to be an equal parent to J was attributable to Ms. A, rather than
to Ms. C. It was Ms. A who failed to disclose relevant medical information to
her treating doctor and psychiatrist. The doctors acknowledged during
cross-examination that the information they had not been provided by Ms. A was
relevant, although it did not affect their ultimate conclusion that she was
capable of equal parenting in relation to J. As it turned out, because of the
way the doctors affidavits were prepared (which was only revealed through
effective cross-examination by Ms. Cs counsel), their evidence was given
little weight.
[66]
The trial judge was aware that the doctors had
been misled by Ms. As non-disclosure, but he does not appear to have placed
any significance on the fact that the deception practised by Ms. A was not
simply on the doctors, but on the court. Ms. A was obviously concerned that
her past medical history would prejudice her ability to obtain an equal
parenting arrangement. She chose to edit the information she made available to
her doctors, much in the same way she later chose to edit the information she
made available to Ms. C and to the trial judge with respect to her plans to
move to Victoria.
[67]
While more recent events have demonstrated a pattern of behaviour
on the part of Ms. A that reflects a lack of candor, not only with Ms. C, but
also with the court, the evidence of Ms. As willingness to obscure relevant
information in order to place herself in the best possible light was there to
be seen at the time of trial. In the circumstances, I find it difficult to see
how competent counsel had any choice but to bring Ms. As repeated
non-disclosure to the attention of the court so that the decision as to the
care of J could be made on the facts. In my view, Ms. As
lack
of candour with the doctors and, through them, with the court, is relevant
conduct which should have been taken into account by the trial judge in making
his award of costs, in accordance with one of the exceptions to the usual rule
concerning costs discussed in
Gold
.
[68]
I am also satisfied that the trial judge erred
in failing to recognize that an award of costs against Ms. C would have the
likely, and unintended, effect of forcing Ms. C, J and S out of their home in
Cumberland. In that respect, the Court was advised that the estimated amount
of Ms. As costs is $60,000. Ms. Cs equity in her home is approximately
$35,000. Even if she increased her hours at work, it is unlikely she would be
able to retain her home. Although Ms. A does not own her own home, she is
sharing a home in Victoria with her present partner and is earning a
substantially higher salary than is Ms. C.
[69]
There have been many transitions for J in the
last three years. The latest is Ms. As move to Victoria. To the extent that
the award of costs would require her to sell her home and move once again, I am
satisfied that it would unduly upset the balance which the trial judge found
was essential to Js best interests.
[70]
In my view, in the rather unusual circumstances
of this case, the trial judge overlooked, or underestimated, significant
factors in his award of costs. Taking these factors into account, I find that
the appropriate order in this case would be one requiring each party to bear
her own costs of the trial.
(ii)
Double
Costs
[71]
Because I have concluded that each party should
bear her own costs of the trial, I do not find it necessary to go on to
consider the issue of double costs. That issue will have to await another day
in this Court.
(iii)
Costs
of the Appeals
[72]
I would award Ms. C costs of all three appeals.
Although the first appeal was effectively moot with respect to the issues of
custody and access, it was necessary to engage in a full analysis of those
issues in relation to the issue of costs.
DISPOSITION
[73]
I would dismiss the appeal from the first order
with respect to custody and access on the basis that it has been rendered moot
by the variation order. I would allow the appeal from the first order with
respect to costs and substitute an order that each party bear her own costs of
the trial.
[74]
Having concluded that each party should bear her
own costs of the trial, I would dismiss Ms. As appeal from the order refusing
her double costs.
[75]
I would allow Ms. Cs appeal from the variation
order. I would set aside that order and substitute the provisions set forth in
paras. 56 and 57 of these reasons for judgment.
The Honourable
Madam Justice Prowse
I Agree:
The
Honourable Chief Justice Finch
Reasons for
Judgment of the Honourable Mr. Justice Mackenzie:
[76]
I have had the opportunity to read in draft the
reasons for judgment of Madam Justice Prowse. I agree with the result and the
reasons, with one qualification on the issue of costs. My colleague gives two
alternative grounds for overturning the trial judges award of trial costs to
Ms. A and directing that each party bear their own costs of trial. I would
prefer to limit the reasons for varying the costs order to the second ground as
stated by my colleague.
[77]
The trial judge concluded, at para. 23 of his
supplemental reasons on costs, that the trial was prolonged by Ms. Cs anger
towards Ms. A over the break-up of their relationship. That anger resulted in
an attack on Ms. As fitness as a parent and her mental stability. The trial
judge concluded that Ms. Cs accusation that Ms. A was not a fit parent
was unfounded. As I read his reasons, he attributed the prolonged trial to Ms.
Cs misguided effort to pursue that allegation against the best interests of
the child and he awarded costs of the trial to Ms. A on that ground. Ms. As
dissembling was apparent to the trial judge and he was in the best position to
judge its importance at the trial in the context of the issues and the trial
dynamics. I am not persuaded that he made any reviewable error in his
assessment that it was pursued at inordinate length in a failed effort to
undermine Ms. As parental fitness.
[78]
The second ground involves the impact of a costs
order against Ms. C on the best interests of the child. As my colleague has
noted, a costs order would likely require Ms. C to sell her home and move. The
resulting disruption and reduced family circumstances would have a negative
effect on the child. This implication of the costs order has come to the fore
largely as a result of post-trial developments and was not emphasized before
the trial judge. I therefore agree that the costs order should be varied as
directed by my colleague on the ground that the variation is required in the
best interests of the child.
The
Honourable
Mr. Justice Mackenzie
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Miller v. British Columbia,
2010 BCCA 39
Date: 20100127
Docket:
CA037166
Between:
Mark Andrew Miller
Respondent
(
Petitioner
)
And
Her
Majesty the Queen in right of British Columbia
(
Respondent
)
And
The Attorney
General of British Columbia
Appellant
(
Respondent
)
Before:
The Honourable Mr. Justice Donald
The Honourable Madam Justice Levine
The Honourable Mr. Justice Lowry
On
appeal from: Supreme Court of British Columbia, April 30, 2009
(
R. v. Miller
, 2009 BCSC 591, Docket S-082860)
Counsel for the Appellant:
J.
Penner
Appearing for the Respondent:
No
one
Place and Date of Hearing:
Vancouver,
British Columbia
January 13, 2010
Place and Date of Judgment:
Vancouver
, British Columbia
January
27, 2010
Written Reasons by
:
The Honourable Mr. Justice Lowry
Concurred in by:
The Honourable Mr. Justice Donald
The Honourable Madam Justice Levine
Reasons for
Judgment of the Honourable Mr. Justice Lowry:
[1]
The question is whether a deemed guilty plea for
a motor vehicle regulatory violation constitutes a breach of the
Charter
rights
to the presumption of innocence and a fair public hearing.
The Plea
[2]
Mark Miller has a remarkably bad driving record:
15 convictions within five years resulting in driving prohibitions of four
months in duration in each of 2006 and 2007. In April 2008, he was given
notice pursuant to s. 93(1) of the
Motor Vehicle Act
, R.S.B.C. 1996, c.
318, that the Superintendent of Motor Vehicles intended to impose a third four-month
prohibition. Mr. Miller had 34 penalty points on his driving record, recorded
by the Insurance Corporation of British Columbia as required by s. 28.01
of the
Motor Vehicle Act Regulations
, B.C. Reg. 26/58, five points
having been added since the end of his second prohibition.
[3]
From his record, which was attached to the
notice, he determined three of the points pertained to a violation of s. 7A.01
of the
Motor Vehicle Act Regulations
for which he received a ticket on
26 December 2007. That section prohibits operating a vehicle in a manner that
causes any loud or unnecessary noise from the exhaust system. The amount of
the fine, which was written by the attending officer on the ticket, was $109.
[4]
Under s. 16(1) of the
Offence Act,
R.S.B.C.
1996, c. 338, Mr. Miller was deemed to have pleaded guilty to the violation on
26 January 2008 because he did not dispute the ticket within 30 days. The
ticket was in the form prescribed by s. 2 of the
Offence Act Forms Regulation
,
B.C. Reg. 422/90, en. B.C. Reg. 122/2008, Sch. 2, s. 1, and contained
the following statements:
If the
allegations or fines are not disputed (see reverse) within 30 days, this ticket
will be treated as not disputed, you will be deemed to have pleaded guilty to
the alleged offence(s) and to owe the Crown the ticketed amounts. Your
signature indicates you have received this ticket and is not an admission of
guilt.
* * *
what
happens if I do not pay?
If you do not pay or dispute this ticket
within thirty (30) days of the Date of Service, the ticketed amount shown on
the front will be payable to the Crown. The described offence(s) will be added
to your record as convictions. In addition, you will be subject to collection
activity.
[5]
Mr. Miller paid the fine. He maintains that,
although he had determined the exhaust system on his vehicle complied with the
applicable government standards, he paid the fine because it was not then worth
his time to dispute the ticket.
[6]
In April 2008, when he received notice of the
intended third prohibition, and realized the s. 7A.01 violation added three
points to his driving record, he changed his mind. However, by virtue of s.
16(2.1) of the
Offence Act,
he was precluded from disputing the ticket
before a Judicial Justice of the Peace because he had no genuine intention to
do so before the 30-day dispute period expired, as required by subsection (2.1)(b).
[7]
Mr. Miller applied by way of judicial review
before the Supreme Court for an order quashing his deemed guilty plea on the
basis that s. 16 of the
Offence Act
was contrary to the right to the
presumption of innocence guaranteed by s. 11(d) of the
Charter.
The
judge who heard the application granted the relief sought but on a much
different basis. The reasons he gave are indexed as 2009 BCSC 591.
The Judgment
[8]
The judge permitted Mr. Miller to convert his
petition to a writ and statement of claim as being the proper form in which to
challenge the constitutionality of legislation, but he made no determination
that any part of s. 16 of the
Offence Act
was unconstitutional. Indeed
he concluded otherwise. However, he determined the deemed guilty plea was,
nonetheless, to be quashed under s. 24(1) of the
Charter
because Mr.
Miller was not sufficiently informed of the consequences of failing to dispute
the ticket when it was given to him or before the 30-day dispute period had
expired. In particular, he was not informed a deemed guilty plea would result
in three points being added to his driving record. That was not stated on the
ticket.
[9]
The judge purported to apply what was said in
R.
v. Richard
, [1996] 3 S.C.R. 525, 110 C.C.C. (3d) 385. There, in
considering a constitutional challenge to New Brunswick legislation that was,
in material respects, comparable to the motor vehicle legislation in this
province, speaking for the court, La Forest J. concluded:
[32] In my view, in a context in which
litigants cannot be imprisoned for offences of a regulatory nature, it is open
to both the provincial legislatures and Parliament to infer from the
failure
of those litigants
to act
that they have waived their right to be presumed
innocent and their right to a hearing and at the same time to have consented to
a conviction made against them, provided that under the procedural scheme
applicable to them, they are fully informed of the consequences of failing to
act and there are sufficient safeguards to prevent injustices from occurring.
[Emphasis of La
Forest J.]
[10]
The judge quoted that passage emphasizing the
words they are fully informed of the consequences of failing to act. Indeed,
that phrase is the basis of his judgment. He reasoned that, while a failure to
dispute a ticket within the time prescribed constitutes a waiver of
constitutional rights, there was no valid waiver attributable to Mr. Miller
because he did not have full knowledge of the consequences of not disputing the
ticket he was given.
[11]
Thus, rather than striking down s. 16 as being
unconstitutional, the judge effectively created a constitutional exemption in
relation to undisputed tickets. He concluded the deemed guilty plea for which
s. 16(1) provides is constitutionally sound but inapplicable unless the person
receiving the ticket is informed of all the consequences of not disputing the
ticket including, in particular, the addition of any penalty points to the
persons driving record.
Discussion
[12]
In my view, it was not open to the judge to
grant the remedy he did fashioned on a constitutional exemption. It is a
remedy that was not sought, and the Supreme Court of Canada appears to have
largely foreclosed remedies of that kind in
R. v. Ferguson
, [2008] 1
S.C.R. 96, 87 Alta. L.R. (4th) 203. Although the case was concerned with
mandatory minimum sentences, it is seen as having a broad application: Kent Roach,
Constitutional Remedies in Canada
, looseleaf (Aurora, Ont.: Canada Law
Book, 1994) at 14-28‒14-29 and 14-34‒14-35; and Peter W. Hogg,
Constitutional
Law of Canada
, 5th ed., Supp., vol. 2, looseleaf (Toronto: Thomson
Carswell, 2007) at 40-22. That view was taken by this Court in
Victoria
(City) v. Adams
, 2009 BCCA 563. While there may remain some place for
constitutional exemptions, the inherent case-by-case uncertainty to which they
can give rise precludes such remedies being granted in other than very limited
circumstances: see paras. 132-145.
[13]
The issue then is whether s. 16 of the
Offence
Act
, which imposes a deemed guilty plea in the absence of a ticket being
disputed within 30 days, impairs the
Charter
rights to the presumption
of innocence and a hearing such that it is constitutionally invalid, mandating
a remedy under s. 52(1) of the
Constitution Act, 1982
.
[14]
I consider s. 16 to be constitutionally sound.
It does not impair any
Charter
rights but provides for a waiver of such which
the recipient of a ticket may choose by not disputing it. I consider that,
pursuant to s. 16(1) of the
Offence Act
, Mr. Miller chose to waive his
s. 11(d) rights to the presumption of innocence and a hearing when he decided not
to dispute the ticket he received within 30 days time, even though he did not
know three penalty points would be added to his driving record by ICBC.
[15]
There is no suggestion in
Richard
that
knowledge of penalty points being added to a driving record is essential to an
informed waiver. There was no consideration of the significance of penalty
points in that case and, in my view, such cannot be said to be part of the
consequences, as that term was employed by La Forest J., of which the
recipient of a ticket must be aware before an informed waiver can be made.
What La Forest J. said rendered the New Brunswick legislation sufficient
to defeat the same kind of constitutional challenge made here was that the
legislation required: the recipient be informed that failure to act may result
in conviction; the ticket be delivered to the recipient personally; and the
recipient be made aware of the possibility of, and procedure for, having the
conviction set aside: see paras. 33-34.
[16]
In my view, what is to be taken from
Richard
for present purposes is that, before an informed waiver of the right to be
presumed innocent can be made, the recipient of a ticket must be informed that
if the ticket is not disputed within 30 days he or she will be deemed to have consented
to a conviction or, here, pleaded guilty. The recipient will have waived the
Charter
rights of presumed innocence and a hearing such that the court will
then have no part in making a determination of guilt or imposing the prescribed
fine. It is only the deemed guilty plea, and hence the loss of the recipients
s. 11(d) rights, that are the consequences of not disputing a ticket which
are germane to a valid waiver. It is those consequences of which the recipient
who chooses not to dispute a ticket must be informed.
[17]
The addition of penalty points to a driving
record is an administrative function in which the court takes no part. Points
do not affect any right a driver has but, rather, may affect what is a drivers
privilege to hold a licence. Depending on the number of points that a driver
may have previously accrued, or may subsequently have added to his driving
record, the points added as a result of an undisputed ticket being issued may
have no immediate effect and be of no consequence to the exercise of the
privilege. What may, in a broad sense, be said to be consequences of a
deemed guilty plea will differ from one driver to another depending on the
drivers record. These cannot, in my view, be consequences contemplated by
what was said in
Richard
. They are not matters of which any given
recipient of a ticket must be informed before his or her s. 11(d)
Charter
rights
can be waived under s. 16(1) of the
Offence Act
.
[18]
It follows that I consider the judge erred in
concluding Mr. Miller had not made an informed waiver of his s. 11(d)
Charter
rights under s. 16(1) of the
Offence Act
in choosing, as he did, not
to dispute the ticket he received for having contravened s. 7A.01 of the
Motor
Vehicle Regulations
. By virtue of the statement on the ticket, he was
properly informed of the consequences germane to his choosing not to dispute
the ticket and so waived his right to be presumed innocent and his right to a
hearing by not disputing it within 30 days.
Disposition
[19]
I would allow the appeal, set aside the order
quashing the deemed guilty plea, and dismiss what the judge converted from an
application for judicial review to an action.
The Honourable Mr.
Justice Lowry
I agree:
The Honourable Mr. Justice Donald
I agree:
The Honourable Madam Justice Levine
|
COURT
OF APPEAL FOR BRITISH COLUMBIA
Citation:
Pearlman v. ICBC,
2010 BCCA 49
Date: 20100128
Docket:
CA037135
Between:
David Pearlman
Appellant
(
Plaintiff
)
And
Insurance Corporation of British
Columbia and
Kelly Winn
Respondents
(
Defendants
)
Before:
The Honourable Mr. Justice Hall
The Honourable Mr. Justice Chiasson
The Honourable Madam Justice Garson
On
appeal from: Supreme Court of British Columbia, April 24, 2009
(
Pearlman v. ICBC
, Vancouver Registry S064665)
Oral Reasons for Judgment
Appellant appearing In Person:
D.
Pearlman
Counsel for the Respondent:
V.
Critchley
Place and Date of Hearing:
Vancouver,
British Columbia
January 28, 2010
Place and Date of Judgment:
Vancouver
, British Columbia
January
28, 2010
[1]
GARSON J.A.
: The
appellants application is made pursuant to s. 9(6) of the
Court of Appeal
Act
, R.S.B.C. 1996, c. 77. to discharge or vary the order of a chambers
judge pronounced July 3, 2009, in which the chambers judge, Madam Justice
Kirkpatrick, refused the appellants application for indigent status and
granted the respondents application for an order requiring the appellant to
post security for costs of the appeal in the amount of $5,000. The underlying
litigation concerns the appellants claim against ICBC. He claims loss and
damages incurred as a result of ICBCs alleged wrongful procurement of a
medical report concerning his motor vehicle accident related injuries. The
chambers judges reasons for judgment were pronounced July 3, 2009.
[2]
An appellate court will only interfere with the
exercise of discretion by a chambers judge if the chambers judge misdirects him
or herself, acts on a wrong principle, or acts on irrelevant considerations, or
if the decision is so clearly wrong as to amount to an injustice (
Ward v.
Kostiew
(1989), 42 B.C.L.R. (2d) 121 at 127. See also
Named Person v.
Vancouver Sun
, 2007 SCC 43, [2007] 3 S.C.R. 252,
Dhillon v. Pannu
,
2008 BCCA 514, 263 B.C.A.C. 142).
[3]
For the reasons that follow, I would dismiss the
application to discharge or vary the decision of the chambers judge.
Background
[4]
The chambers judge carefully described the
lengthy procedural history to this application, as well as the related
litigation, in her reasons for judgment. She recounted the history of the
related litigation because it provides the necessary context to the litigation
that underlies the action that is the subject of this appeal. This appeal and
the related litigation all stem from injuries Mr. Pearlman says he sustained in
a motor vehicle accident that occurred on November 24, 2004. I quote at some
length from the reasons for judgment of the chambers judge:
[3] On 24 November 2004,
Mr. Pearlman was involved in an automobile accident. He says that, in
addition to suffering neck and back injuries, he suffered dental injuries which
ultimately required extensive and costly restorative work.
[4] Mr. Pearlman brought four
actions following the accident:
(a) He sued
the owner and operator of the other vehicle (the Atlantic Trading Company Ltd.
and Rebecca Lee Spence), who were insured by ICBC;
(b) He sued
his own American automobile insurer, the American Commerce Insurance Company
(ACIC);
(c) He
brought a claim against his former family doctor, Dr. Stan Lubin; and
(d) He sued
ICBC and Kelly Winn, the adjuster handling his claim.
[5] Mr. Pearlmans claim against
Atlantic Trading Company Ltd. and Rebecca Spence was tried before a judge and
jury on 17 December 2008. The jury determined that Mr. Pearlman had not
been injured in the automobile accident and declined to assess any damages.
[6] In the appeal from that decision,
Mr. Pearlman applied on 29 October 2008 for indigent status before
Mr. Justice Chiasson. That application was refused, both on the ground
that Mr. Pearlman had not established that requiring him to pay the fees
would deprive him of the necessaries of life and on the basis that there was no
merit in his appeal. Mr. Justice Chiasson also ordered Mr. Pearlman
to post $5,000 of security for the costs of the appeal on or before 19 December
2008. When that security was not posted, Madam Justice Newbury dismissed his
appeal as abandoned on 18 February 2009.
[7] In the action against American
Commerce Insurance Company, the insurer applied under Rule 18A to have
Mr. Pearlmans action dismissed, which application was heard in August
2008. Mr. Justice Meiklem dismissed the insurers application but this
Court allowed ACICs appeal in February 2009 and the action has been dismissed.
[8] The action against Dr. Lubin
relates to a medical report prepared by Dr. Lubin, at ICBCs request, for
the trial of the tort action. In a portion of the report, Dr. Lubin
indicated that he felt the problems Mr. Pearlman was experiencing with his
teeth were not caused by the motor vehicle accident. Mr. Pearlmans
complaint, among many, is that Dr. Lubin was not qualified to opine on
dental issues and his remark led to problems for him in the other actions. He
sued, alleging breach of confidence, defamation and libel, fraud, deceit and
negligence, as well as medical malpractice.
[9] That action was tried before
Madam Justice Morrison in December 2008. She dismissed the claim. She held that
when ICBC requested the report, Dr. Lubin was obliged to provide it,
pursuant to s. 28 of the
Insurance (Motor Vehicle) Act
, R.S.B.C.
1996, c. 231. She also found Mr. Pearlman had failed to provide proof that
Dr. Lubin, in providing the report to ICBC, caused him to lose his action
against the defendant driver.
[10] Mr. Pearlman subsequently
filed a notice of appeal, an application for leave to appeal, and sought a
declaration of indigent status. On 17 April 2009, Mr. Justice Bauman ruled
that leave to appeal was not required and declined to grant indigent status to
Mr. Pearlman. Bauman J.A. adjourned Dr. Lubins application that
Mr. Pearlman be required to post security for costs. That application was
heard on 11 May 2009 by Madam Justice Neilson, who ordered that
Mr. Pearlman post $5,000 of security for costs on or before 12 June 2009. She
also ordered the appeal against Dr. Lubin be stayed until the security was
posted. In her reasons for judgment, Neilson J.A. stated:
[18] Mr. Pearlman
has failed to convince me that there is merit in his appeal. My view is
reinforced by the fact that Mr. Justice Bauman reached a similar conclusion
on Mr. Pearlmans application for indigent status. Moreover, the breadth
of the grounds of appeal that Mr. Pearlman wishes to pursue suggests that
if his appeal proceeds it will be a lengthy and costly process for both
parties.
[11] The action underlying these
applications concerns Mr. Pearlmans claim against ICBC and Ms. Winn
alleging,
inter alia
, bad faith, fraud, negligence and
misrepresentation.
[12] On 4 May 2007, Mr. Justice
Cullen dismissed the action against Ms. Winn and dismissed all claims against
ICBC except for an allegation of negligence against ICBC based on the alleged
unauthorized use of an authorization provided by [Mr. Pearlman] dated 1
December 2004.
[13] On 25 July 2007, Mr. Pearlman
brought an application for indigent status before Mr. Justice Hall. Mr. Justice
Hall dismissed the application for indigent status holding that although Mr.
Pearlmans financial circumstances supported a finding of indigency, there was
no possibility of success of his proposed appeal:
Pearlman v. ICBC
, 2007
BCCA 451.
[14] Mr. Pearlman sought a review
of Mr. Justice Halls order refusing him indigent status. On 20 September
2007, this Court dismissed his application stating that:
[11] Mr. Pearlman
was unable to persuade Mr. Justice Hall that there was arguable error on
the part of Mr. Justice Cullen. This panel can review the chambers order
only on the ground that the chambers judge committed a legal error. We cannot
substitute our discretion for that of the chambers judge.
[
Pearlman v. ICBC
, 2007 BCCA 464]
[15] The current application concerns
the remaining claim in the ICBC action as to Mr. Pearlmans allegation of
wrongful conduct by ICBC in obtaining the medical report from Dr. Lubin. The
report was obtained after Mr. Pearlman withdrew an authorization he had
previously given ICBC to obtain such information.
[16] The application was brought before
Mr. Justice Smith, sitting with a jury, beginning on 20 April 2009. Facts
relevant to the action include the following.
[17] For more than a year following the
accident, Mr. Pearlman was seen on several occasions by Dr. Lubin or
other doctors in Dr. Lubins office. He also met with Ms. Winn, who
obtained his signed authorization to obtain medical information. That
authorization was dated 1 December 2004. The authorization states that
Mr. Pearlman was authorizing any medical practitioner to prepare a report
or certificate including, but not limited to, the diagnosis, treatment, current
condition and prognosis, in any format specified by ICBC, relating to issues raised
by his claim for injuries in the accident. The ICBC form states that the
information is collected in accordance with both the Freedom of Information and
Protection of Privacy Act, R.S.B.C. 1996, c. 165 and the Insurance Corporation
Act, R.S.B.C. 1996, c. 228.
[18] Approximately one year later,
Mr. Pearlman retained counsel, who advised Ms. Winn that any previous
authorizations had been revoked. However, on 4 April 2006, Ms. Winn wrote
to Dr. Lubin seeking a narrative medical report and enclosed the
authorization of 1 December 2004 which had been revoked.
[19] The letter to Dr. Lubin and
the authorization do not state in what capacity ICBC was requesting the report.
Mr. Justice Smith noted that it is well established that in matters of
this kind, ICBC may act in two different capacities: as the plaintiffs own
insurer for the purpose of benefits payable under Part 7 of the
Insurance
(Motor Vehicle) Regulation
, B.C. Reg. 447/83, pursuant to the
Insurance
(Motor Vehicle) Act
, R.S.B.C. 1996, c. 231, and as the insurer of other
drivers or vehicle owners who may be liable to the plaintiff in tort for
injuries suffered in the accident. Mr. Justice Smith concluded that, in
this case, the request could only have been as the insurer for the defendants
in an anticipated tort action because Mr. Pearlman had been driving a
vehicle registered in Washington State and was insured by an American insurer. ICBC
did not accept Mr. Pearlmans claim for benefits under Part 7 of the
Regulation
and said that he must look to his American insurer.
[20] Dr. Lubin prepared a report
which briefly discussed Mr. Pearlmans medical history prior to the date
of the accident, including the results of a physical examination that occurred
the day before the accident on 24 November 2004. The report described 12
occasions between 27 November 2004 and 4 April 2006 at which either
Dr. Lubin or one of his colleagues dealt with matters related to the
accident.
[21] Dr. Lubins report stated that
Mr. Pearlman suffered:
... whiplash
associated disorder grade 2 of the cervical and lumbar spine. I again
recommended neck exercise and physiotherapy. Mr. Pearlman also complained
of a problem with his upper teeth, which he attributed to the motor vehicle
accident. On examination, there was some looseness of the upper front tooth. I
felt his dental problem was not likely connected to the motor vehicle accident.
Mr. Pearlman asserts that by stating an
opinion on the cause of his dental injuries, Dr. Lubin sabotaged his
tort claim. At the trial of the tort action, Dr. Lubins report to
Ms. Winn was not put into evidence and no evidence from Dr. Lubin was
put before the jury in any form by either party. Mr. Pearlman did not call
dentists or dental specialists who had treated him because Mr. Pearlman
says he could not afford to pay the fees those dentists would have charged for
attending in court.
[22] At the close of
Mr. Pearlmans case on 24 April 2009, ICBC made application under Rule
40(8) for the dismissal of the action on the grounds there was no evidence to
support Mr. Pearlmans case.
[23] In his reasons for granting the no
evidence motion, Mr. Justice Smith noted that it was not, as a matter of
law, open to the jury to reconsider whether Dr. Lubin was obliged to
provide the report when Ms. Winn requested it because in the trial against
Dr. Lubin Madam Justice Morrison found that he was. He also concluded that it
was not open to the jury to decide whether or not Dr. Lubin honestly
believed what he wrote in his report because Madam Justice Morrison found that
he did. Mr. Justice Smith also observed that it was not an issue whether
Dr. Lubin was right or wrong in his opinion about the dental injuries. The
question of what injuries, if any, Mr. Pearlman suffered in the accident
was the very issue before the previous jury, which clearly decided on the basis
of the evidence before it that there were no such injuries.
[24] Mr. Justice Smith framed the
issues and his conclusions as follows:
[27] The
question is whether there is any evidence on which this jury could reasonably
conclude that ICBCs requesting the report caused the plaintiff to lose either
his accident case or his case against the American insurer. In the accident
case, the plaintiff had to prove a causal link between the accident and both
his orthopaedic and his dental conditions. Dr. Lubin was a necessary
witness on the orthopaedic injuries. His opinion on that issue would clearly
have been helpful to the plaintiff, and his evidence was in fact the best
evidence available on the nature of those injuries and their causal link to the
accident. No evidence from Dr. Lubin was put before the jury in the
accident case; that was because of the plaintiffs belief that Dr. Lubins
passing comment about his dental injuries destroyed his case on that issue.
[28] The
plaintiff must prove that but for ICBC obtaining the report from Dr. Lubin
the result of his accident case would have been different. If ICBC had not
obtained that report, the plaintiff could have and indeed would have had to
obtain a medical report from Dr. Lubin for use in that trial. There is no
evidence before this jury that such a report would have been any different from
the one that was produced. Indeed, the only evidence is from Dr. Lubin,
who says he would have written the same report and expressed the same opinions
no matter who requested it.
[29] Even if
the plaintiff could have somehow persuaded Dr. Lubin to omit his comment
on the cause of the dental injuries from his report, the same comment appeared
in his clinical records written long before ICBC requested a report. Such
clinical records are subject to orders for production and are routinely entered
into evidence in personal injury cases. There is no evidence in this case from
which this jury could conclude that the plaintiff could have proven his neck
and back injuries without Dr. Lubins views on the dental injuries also
coming before the jury in the accident case.
[30] As for
Dr. Lubins view regarding the dental injuries, that was never put before
the jury in the accident case and could not in any way have led to that jurys
negative conclusion on that issue. That conclusion flowed from the plaintiffs
failure to call dental experts who could have supported him on that point. The
plaintiff says he could not afford to call those witnesses. While I sympathize
with the financial predicament in which the plaintiff found himself, that does
not lessen the legal burden on him to prove his case. In any event, there is no
evidence that his failure to call the dental experts was the result of ICBC
obtaining a report from Dr. Lubin.
[25] Mr. Justice Smith also noted that
Mr. Pearlman had failed to prove that if an offer of $25,000, consistent
with a reserve of $25,000, had been made to him that he would have accepted
that offer. Similarly, the trial judge rejected, for lack of evidence, the
notion that Mr. Pearlman lost his case against his American insurer by
reason of ICBCs request for Dr. Lubins report citing this Courts reasons
at para. 33:
[34] Similarly,
there is no evidence that ICBC requesting a report from Dr. Lubin caused
the plaintiff to lose his case against the American insurer. It appears
Dr. Lubins report did come to the attention of ACIC and that may indeed
have been improper, but there is nothing to suggest it played any role in the
outcome of his claim. The Court of Appeal in dealing with that case said at
para. 33:
[33] In the proceeding by the
plaintiff against ACIC, the latter obtained an independent medical examination
of the plaintiff, and a report of 15 July 2008, from Dr. Burton H.
Goldstein, a certified oral and maxillofacial surgeon. This report, which was
also before the judge, contains an extensive review of the plaintiffs
dentition prior to the accident of 25 November 2004, and of the many and
various treatments the plaintiff received for his dental problems both before
and after the accident. Dr. Goldstein concludes that most, if not all, of
the various dental expenses which the plaintiff claimed from the defendant and
the defendant paid in full, were not required because of any injury or
injuries suffered by Mr. Pearlman in the accident of November 4, 2004, and
were related to the patients pre-existing dental status.
Indigent Status Application
[5]
The chambers judge set out the two
well-established criteria determining whether indigent status should be
granted. Those two criteria are: 1) the likelihood of success of the appeal;
and 2) the financial position of the appellant (
Duszynska v. Duszynski
,
2001 BCCA 155, 149 B.C.A.C. 153).
[6]
The chambers judge noted that on November 21,
2008, and on April 17, 2009, two justices of this Court found that Mr. Pearlman
did not meet the financial criteria for indigent status. The chambers judge
observed that she had before her substantially the same financial information
as was before the other two justices. In Mr. Pearlmans affidavit in
support of his application for indigent (at page 47 of his motion book on this
application), and sworn on June 22, 2009, he deposed that he does not have
funds with which pay court fees, to swear affidavits, or to pay photo copying
expenses. In an earlier Affidavit sworn on May 20, 2009 (both before the
chambers judge), he itemized his income and expenses as follows:
Estimated net monthly income from all sources
Employment
Nil
Pension OLD AGE, CPP AND GIS
$1,338.48
Dividends
Nil
Interest
Nil
Other
Nil
Total
$1,338.48
ESTIMATED MONTHLY EXPENSES
Estimated monthly expenses related to housing RENT
$250.00
Estimated monthly
expenses related to transportation
350.00
Estimated monthly
expenses related to household expenses
350.00
Estimated monthly
expenses related to medical and dental
143.48
Expenses
----
Estimated monthly
expenses, not included in above, related to dependent children
N/A
Estimated monthly
debt payments (specify) ICBC ($100.00),
CABLE ($60.00), PHOTOCOPYING ($245.00), HYDRO ($25.00), Parking ($60.00)
TOTAL (Estimated
monthly expenses)
$1,338.48
[7]
He says he has no assets of any value. He
estimates his debts at $33,000.
[8]
The respondent on this appeal filed an affidavit
of Tina Robbins, defence counsels paralegal. Ms. Robbins deposed at para. 14
of her affidavit as follows:
I have been
informed by Mr. Critchley and verily believe that the Appellant has suggested
in this Appeal that he is indigent. I do know, however, that he was able to
come up with sufficient funds to pay the initial Jury fees in the Action as
well as the Jury fees for the 5 days of trial as requested by the Sheriffs
office.
[9]
As to the merits of the appeal, the chambers
judge said at para. 30:
Having read the
reasons for judgment, the materials filed on this application, as well as
Mr. Pearlmans submissions, I do not consider it at all likely that a
division of this Court could be persuaded to reverse the findings of the trial
judge.
[10]
Mr. Pearlman argues before this Court that Mr.
Justice N. Smith usurped the jurys function by granting the defendants
no-evidence motion at the conclusion of his case. Mr. Pearlman made the same
arguments before the chambers judge.
[11]
I am unable to apprehend any error on the part
of the chambers judge in concluding that there was no likelihood that a
division of this Court would be persuaded to reverse the findings of the trial
judge.
[12]
As to Mr. Pearlmans financial status, the
chambers judge examined his financial circumstances and reached the same
conclusion as the ones reached earlier by two other justices of this court. I
see no error in her conclusion that Mr. Pearlmans financial circumstances,
although constrained, are not such that he cannot pay the necessary filing fees
as indeed he has done on other occasions. In any event, the first ground, that
is the question of merits, is dispositive of this application.
[13]
In my view Mr. Pearlmans application for
indigent status fails on both grounds.
Security for
Costs
[14]
The issue before the chambers judge was whether
the appellant had established that the interests of justice require security
for costs not be posted (
Southeast Toyota Distributors, Inc. v. Branch
(1997), 45 B.C.L.R. (3d) 163, 99 B.C.A.C. 12). The chambers judge concluded
that the appeal had no reasonable prospect of success, that there was a serious
risk that the respondents would not be able to recover their costs if they were
successful on appeal, and finally, that the appellant had not satisfied the
onus upon him to establish that the interests of justice requires security for
costs not be posted.
[15]
In my opinion the chambers judge did not err in
her disposition of the respondents application.
[16]
Accordingly, I would dismiss the appellants
application.
[17]
HALL J.A.
: I
agree.
[18]
CHIASSON J.A.
: I
agree.
[19]
HALL J.A.
: The
application for review is dismissed.
The Honourable Madam Justice Garson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Dhaliwal,
2010 BCCA 50
Date: 20100128
Docket:
CA037223
Between:
Regina
Respondent
And
Jasvir
Singh Dhaliwal
Appellant
Before:
The Honourable Madam Justice Newbury
The Honourable Madam Justice Saunders
The Honourable Madam Justice Bennett
On
appeal from: Provincial Court of British Columbia, May 22, 2009
(
R. v. Dhaliwal
, New Westminster Registry 70160
Oral Reasons for Judgment
Counsel for the Appellant:
P.
McMurray
Counsel for the (Crown) Respondent:
U.
Botz
Place and Date of Hearing:
Vancouver,
British Columbia
January
26, 2010
Place and Date of Judgment:
Vancouver,
British Columbia
January
28, 2010
[1]
NEWBURY J.A.
: On
July 30, 2008, Mr. Dhaliwal pleaded guilty to the attempted murder of his wife
Parmjit Deol. The attempted murder was the climax to years of abuse he had
inflicted on her since their marriage (an arranged one) in 1999 had made it
possible for him to immigrate to Canada from India. With one exception (on
which occasion police did not arrive until after Mr. Dhaliwal had fled) Ms.
Deol did not report the escalating violence to the police out of consideration
to her familys honour and their children.
[2]
On the evening of January 18, 2007, Mr. Dhaliwal
was angry with his wife and apparently jealous of her paying attention to the
children and to the fact a movie was being made across the street. According to
an agreed statement of facts put before the court below, Mr. Dhaliwal came up
behind her and began beating her, then got a knife and pushed her down, telling
her I will kill you today. I dont care. I am not afraid of the police. They
can deport me back. I might get jailed. I dont care if I dont get
citizenship and Im going to stab you so many times that no one would be able
to recognize you and I would bury you in the garage. Ms. Deol was cut twice,
though only superficially, and Mr. Dhaliwal sexually assaulted her. While he
was in the bathroom cleaning up, Ms. Deol phoned her mother and asked her to
come over right away, which she did. Mr. Dhaliwal locked himself in the master
bedroom after her arrival. Ms. Deols sister-in-law was also asked to come over
to try and speak with Mr. Dhaliwal but Mr. Dhaliwal was unresponsive.
[3]
The three women then decided to gather up the
children so that Ms. Deol and the children could sleep at the sister-in-laws
house. Mr. Dhaliwal then came out of the bedroom and told them they were not
taking the children and that he would kill Ms. Deol wherever she goes. He
returned to the kitchen, grabbed a knife and went after his wife, who ran
downstairs and over to her mothers house nearby. She locked the door but Mr.
Dhaliwal kicked through the glass in the door, saying he wanted to kill her. He
then stabbed her in the side and was screaming at her as the mother and
sister-in-law arrived.
[4]
Fortunately, there were police officers in the
neighbourhood that night, in connection with the making of the movie. They
heard the commotion and saw Mr. Dhaliwal trying to get into the house and
holding a knife. One of the police officers told him to step away from the door
and Mr. Dhaliwal dropped the knife onto the ground. Once his wife came out of
the front door, however, he lunged at her, and grabbed her around the throat
with both hands. Eventually the police forced him to the ground and handcuffed
him and other police arrived on the scene.
[5]
Ms. Deol was taken to the hospital by ambulance.
She was treated for a stab wound to the rear left side of her abdominal cavity
which had cut her lower left lung and diaphragm, and punctured her spleen. She
required emergency surgery to repair the cuts and stop the internal bleeding.
Her injuries were described as life- threatening.
[6]
Mr. Dhaliwal was sentenced on May 22, 2009, and
had been in custody since his arrest in January 2007, a total of 27 months. The
Crown took the position that the appropriate range was between six and eight
years, i.e., another two to three years after doubling the time in custody to five
years. Defence counsel said he did not generally quarrel with the range
proposed by the Crown or the calculation of credit at five years. In his
argument, defence counsel stressed that Mr. Dhaliwal had no criminal record,
had good prospects of returning to his job as a trucker, and had been trying to
address his alcohol abuse problem. A psychiatric report prepared by Dr.
Lohrasbe opined that if Mr. Dhaliwal abstains from alcohol, his risk for future
acts of violence is low. In more general terms, the defence argued that the
objectives of denunciation and deterrence could be satisfied by a sentence of
two years less a day, as opposed to three years. As well, he emphasized that
Mr. Dhaliwal did not have a history of violence outside the home and that he
had made efforts to rehabilitate himself during his time in custody.
[7]
Defence counsel submitted, however, that the
real question before the Court was that of additional punishment. He placed
before the sentencing judge a letter of opinion from an immigration lawyer
dealing with loss of appeal rights ... on the grounds of serious criminality
under s. 64(2) of the
Immigration and Refugee Protection Act
. The
bottom line of the opinion was that if a sentence does not
refer
to
time served, then time served will not be taken into account for the purpose of
ss. 64(2). Defence counsel therefore suggested to the sentencing judge that in
order to try to preserve Mr. Dhaliwals right of appeal under the
Act
,
she refrain from mentioning the double credit for time served and simply impose
two years less a day in hopes such a sentence would pass muster with the
immigration authorities.
[8]
After taking time to consider the matter, Judge
Alexander gave her reasons for sentence. She set out the facts surrounding the
attempted murder, counsels position and the aggravating and mitigating
factors, and stated that she agreed with the range of sentence set out by the
Crown. She concluded that two years less a day did not meet the criteria in s.
718 of the
Code
. In her words:
[21] I agree with the range of sentence
set out by the Crown, and the court must therefore balance the s. 718 factors.
At the end of the day, any sentence imposed must be a fit and proper sentence.
Two years less a day does not meet the criteria. I am alive to the potential
immigration consequences and, as I have said, as to the wishes of the family
that the defendant return to them.
[22] The defence concedes that this offence
is at the most serious end of the range of this type of offence, and submitted
that, but for the intervention of the police, the result could have been
tragically different.
[23) The sentence, as I have indicated, must
reflect the gravity of the offence and societys denunciation for domestic
violence, as well as general and specific deterrence. The sentence proposed by
the defence does not achieve those goals and would send the wrong message to
the community at large.
[24] I impose a
further sentence of three years in custody in addition to time served.
The sentencing judge also noted for the
record that she had given Mr. Dhaliwal credit for time served at five years
added to the additional three years, this resulted in an
effective
eight-year sentence.
[9]
On appeal, the basic argument of defence counsel
was that although he could not say that a sentence of three years was not fit,
a sentence two years less a day would also have been fit and would have
accomplished the goals of denunciation and deterrence just as effectively as
the sentence actually imposed. As well, he submitted that the sentencing judge
had erred in failing to consider what I will call the
Kanthasamy
line of
authorities (
R. v. Kanthasamy
2005, BCCA 517,
R. v. Q.A.N
. [2005]
B.C.J. No. 2700, and
R. v. Leila
, 2008 B.C.J. No. 30, all decisions of
this court). In each of these, the sentencing judge had been unaware of the
offenders possible loss of appeal rights for immigration purposes and the
Court of Appeal reduced a sentence of two years down to two years less a day in
order to avoid an unintended consequence of great significance. Obviously,
this case does not involve an immigration consequence that was unintended or
unforeseen by the sentencing judge.
[10]
As this court made clear in
R. v.
Martinez-Marte
, 2008 BCCA 136, the question before this Court whether the
sentence
was
that imposed is a fit one. In my view, it has not been
shown that it was not fit and no error has been shown in the sentencing judges
reasons. Defence counsel acknowledged that the offence here was a very serious
one. It was certainly open to the sentencing judge to conclude that the
circumstances warranted an effective sentence of eight years and I know of no
authority for the proposition that an appellate court should intervene and
change what is otherwise an appropriate sentence in order to avoid the
consequences of a statutory provision of which the sentencing judge was fully
aware.
[11]
In my view, leave should be given to appeal, but
the appeal should be dismissed.
[12]
SAUNDERS J.A.:
I
agree.
[13]
BENNETT J.A.:
I
agree.
[14]
NEWBURY J.A.
:
Leave is granted but the appeal is dismissed.
The Honourable Madam Justice Newbury
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
St. Pierre v. Chriscan Enterprises
Ltd.,
2010 BCCA 78
Date: 20100128
Docket:
CA037703
Between:
Ernie
and Marilyn St. Pierre
Appellants
(Plaintiffs)
And
Chriscan
Enterprises Ltd. and Len Suchocki
Respondents
(Defendants)
Before:
The Honourable Mr. Justice K. Smith
(In Chambers)
On
appeal from: Supreme Court of British Columbia, November 20, 2009
(
St. Pierre v. Chriscan Enterprises Ltd.
, Kelowna Registry 84835)
Oral Reasons for Judgment
Counsel for the Appellant:
A.
C. Kempf
Counsel for the Respondent:
D.P.
Church, Q.C.
Place and Date of Hearing:
Vancouver,
British Columbia
January
28, 2010
Place and Date of Judgment:
Vancouver,
British Columbia
January
28, 2010
[1]
K. SMITH J.A.
:
This is an application for leave to appeal from a judgment staying an action
brought in the Supreme Court in favour of an arbitration pursuant to an
arbitration clause in a building contract.
[2]
The appellants were the owners of some property.
They hired the respondents as project manager to build them a house on what is
essentially a cost plus contract for a fee calculated as a percentage of the
ultimate cost. After the contract had been completed, the appellants discovered
that one of the contracts let by the respondents for a major part of the
construction was to a company in which the respondent Mr. Suchocki was a
principal. The appellants had not been aware of that. They commenced action in
the Supreme Court alleging that this constituted a breach of fiduciary duty as
a result of which the respondents received secret profits.
[3]
The question of the merits of those allegations
is immaterial on this application. The question here is whether there is any
merit in the appellants submission that the chambers judge erred in granting a
stay of proceedings in favour of arbitration. The arbitration clause in
question provided:
In the event of
any disagreement between the parties hereto as to the interpretation of this
contract... such dispute shall be referred to a single arbitrator and settled
pursuant to the terms of the
Commercial Arbitration Act
of British
Columbia...
The clause also referred to disputes as to
the quality of materials and construction arranged by the respondent and to deficiencies,
which are also matters of dispute between the parties but do not bear directly
on the question that I have to determine here.
[4]
The chambers judge decided that whether there
was a fiduciary relationship between the parties in these circumstances that gave
rise to a right to damages based on secret profits depended on an
interpretation of the contract and that it was therefore within the terms of
the arbitration clause and could not be pursued in the trial court. He relied
heavily on a decision of the trial court in
James v. Thow
, 2005 BCSC
809, [2005] B.C.W.L.D. 4918, which considered an arbitration clause that
differed somewhat from the one in question. The arbitration clause considered
in
James v. Thow
provided, so far as it is relevant:
If at any time
any dispute, difference or question shall arise concerning the interpretation
of this Agreement or the rights or liabilities of the General Partner or the
Limited Partners... such dispute, difference or question shall be referred to a
single arbitrator
[5]
The allegations in that case were of fraud and
other similar allegations, and it was held, as I understand the decision in
James
v. Thow,
that they were within the phrase the rights or liabilities of the
General Partner or the Limited Partners in the arbitration clause and therefore
were required to be submitted to arbitration.
[6]
The chambers judge in this case considered that
it was on all fours with
James v. Thow
even though it did not contain
the reference to arbitration of rights and liabilities of the parties to the
contract.
[7]
Mr. Church, in his very thorough submission,
argued that makes no difference because the real question is whether the
contract must be examined and interpreted in order to determine what the
relationship was between the parties for purposes of establishing whether there
was a relationship that would give a right to damages for taking secret
profits. He says that is clear in this case, that without looking at what his
client promised to do under the contract, it is not possible to determine what
the relationship was so as to provide a foundation for the appellants claim,
and that since one must look to the contract for those things it is
self-evident that it is a matter of interpretation of the contract and that it
must go to arbitration.
[8]
Mr. Kempf responds that there is no dispute
about the interpretation of the contract in this case, that it is clear on its
face what the relationship was. He makes the point that if an allegation of
fiduciary duty and secret profit must go to arbitration on a clause such as
this, then even allegations of theft or fraud in contractual situations would
be required to go to arbitration on that wording.
[9]
The test for merits on an application for leave
to appeal is not a high one. I do not have to be satisfied that the appellants
will succeed if the matter goes to appeal, but only that there is an arguable
case. The authority on which Mr. Church primarily relies is a decision of the
trial court in our province, and I have no reason to question the correctness
of the decision, but there has been no appellate pronouncement on this question
in this province and it is an issue that I think may attract the interest of a
division of this Court.
[10]
Taking all of those matters into account, I am
satisfied that the low threshold standard has been met and that the other
criteria that I must take into account on an application for leave to appeal
are satisfied.
[11]
Leave to appeal is granted.
The Honourable Mr. Justice K. Smith
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. MacDuff
,
2011 BCCA 2
Date: 20110106
Docket: CA036919
Between:
Regina
Respondent
And
John William
MacDuff
Appellant
Before:
The Honourable Madam Justice Kirkpatrick
The Honourable Mr. Justice Tysoe
The Honourable Madam Justice Bennett
On appeal from:
Provincial Court of British Columbia,
(
R. v. MacDuff
, Kelowna Docket 63050)
Counsel for the Appellant:
N. Cobb
Counsel for the Respondent:
P. Eccles
Place and Date of Hearing:
Vancouver, British
Columbia
September 29, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 6, 2011
Written Reasons by:
The Honourable Madam Justice Bennett
Concurred in by:
The Honourable Madam Justice Kirkpatrick
The Honourable Mr. Justice Tysoe
Reasons for Judgment of the Honourable
Madam Justice Bennett:
[1]
John MacDuff was convicted in the Provincial Court of production of
marihuana contrary to s. 7(1) of the
Controlled Drugs and Substances Act
(
CDSA
), possession of marihuana for the purpose of trafficking,
contrary to s. 5(2) of the
CDSA,
and theft of electricity, contrary to
s. 326(1)(a) of the
Criminal Code.
[2]
The police executed a search warrant at Mr. MacDuffs residence which
was issued for theft of electricity. They found a sophisticated, multiple room
grow operation in the basement. There were 1,619 marihuana plants in two
stages of production. The plants were valued between $94,000 - $141,000 per
crop. The operation was capable of producing several crops per year.
[3]
The police also found a hydro bypass which was how the theft of
electricity was committed.
[4]
The trial judge quashed the search warrant, but admitted the evidence
pursuant to s. 24(2) of the
Charter of Rights and Freedoms
(the
Charter
).
Mr. MacDuff appeals the decision to admit the evidence pursuant to s. 24(2) of
the
Charter.
Overview
[5]
On January 4, 2006, two employees of FortisBC Inc. (Fortis) conducted
a service check at premises in Kelowna. The check revealed that electricity
was being stolen by the occupant. They conducted a test that lasted 6.2 seconds
and disclosed that 19,225 watts of electricity was stolen during that brief
time. They submitted a report to the RCMP which stated the amount of wattage
which they believed was being stolen.
[6]
Constable Bellamy of the Kelowna RCMP applied for a telewarrant to
search the premises on the basis of the theft report from Fortis as well as
other investigations he conducted. The Information to Obtain the warrant (ITO)
stated that Constable Bellamy was applying for a telewarrant because it is
impracticable for the Informant to appear personally because: There are no
JJPs available at the local courthouse today, or any time this week.
[7]
At trial the evidence of the impracticability of appearing in person was
amplified by Constable Bellamy. He testified that he called the Kelowna Courthouse
prior to commencing the paperwork for the warrant to see if there was a JJP
(Judicial Justice of the Peace) available. He was told, as he wrote in the
ITO, that there were none available that day nor would there be any available
for the rest of the week. Constable Bellamy was asked if he inquired about the
availability of a judge to hear the warrant. He replied that he did not. He
said:
A Ive been advised
that the procedure is to contact the courthouse for a local JJP. If they are
not available, then we are to contact the JJP centre because they are to screen
the
Criminal Code
warrants and
CDSA
warrants so that the judges
are not inundated during the day. They have more important things to do than
just the warrant applications.
[8]
Constable Bellamy did not say who advised him that judges were not
available. He did not refer to the practice directive of the Chief Provincial
Court Judge issued on March 4, 2005 which states that [u]nder no circumstances
may a search warrant application be referred to a judge by a judicial
administrative assistant or a court registry without the approval of the
applicable Administrative Judge. The Crown did not refer to the practice
directive and it was not before the judge who heard the trial.
[9]
The trial judge set aside the telewarrant on the following basis:
[12] Section 487.1(4) provides
that the officer must include a statement of the circumstances that make it
impracticable for the peace officer to appear personally before a justice.
Cst. Bellamy failed to do this.
However, the trial judge admitted the evidence pursuant to
s. 24(2) of the
Charter
.
Issues on Appeal
[10]
Mr. MacDuff submits that the trial judge erred in admitting the evidence
pursuant to s. 24(2). He submits that the decision was made prior to the
decisions of the Supreme Court in
R. v. Grant
, 2009 SCC 32
and
R.
v Harrison
, 2009 SCC 34. He submits that under the revised analysis, the
evidence must be excluded.
[11]
The Crown takes the position that the trial judge erred when he quashed
the warrant and that there was no breach of the
Charter
. The Crown also
submits that if the trial judge was correct in his decision to quash the
warrant, he was correct in his conclusion that the evidence obtained as a
result of the search was admissible under s. 24(2).
Quashing the search warrant
[12]
The Crown submits that the trial judge erred in quashing the search
warrant by finding that Constable Bellamy had to inquire whether any judges
were available to hear the application before he applied for a telewarrant.
The Crown submits that Constable Bellamy referred indirectly to the practice
directive when he stated that it was his understanding that judges would not
hear these applications.
[13]
The Crown at trial did not put the practice directive before the judge
nor was Constable Bellamy asked about the source of his knowledge regarding
judges being unavailable for search warrants.
[14]
Despite finding a breach of s. 8 in the obtaining of the warrant, the
trial judge admitted the evidence based on s. 24(2). As I would not interfere
with his decision to admit the evidence, I find it unnecessary to address the
issue of whether he was correct in his decision regarding the breach of s. 8
[15]
However, because the seriousness of the breach is something which must
be considered in a s. 24(2) analysis, I would make the following observations
regarding the practice directive.
[16]
The practice directives as issued by the Chief Judge of the Provincial Court
have been referred to in several judgments. Although there have been several
practice directives issued since 2002, I reproduce below the directive which
was in force at the time Constable Bellamy applied for the telewarrant. The
directive was provided to the court without objection. It is also set out in
the reasons of Humphries J. in
R. v. Passon
,
2009 BCSC 192:
Directive of March 4,
2005
Practice Direction
Pursuant to Section 11 of the Provincial Court Act
Daytime Search Warrant Applications
This Practice Direction confirms and clarifies the
information contained in a
Practice Note dated June 6, 2003
sent to the
Provincial Judiciary, and a memorandum of the same date sent to police
agencies, Administrative Judges, the Ministry of the Attorney General,
Department of Justice, and Court Services Branch. Copies of these
documents may be obtained from the office of the Chief Judge.
Pursuant to section 11 of the Provincial Court Act, search
warrant applications made during court sitting hours (daytime search
warrants), other than applications that are required by the relevant statutory
provisions to be heard by a judge (judge warrants), are assigned to be heard
in person by available judicial justices of the peace (JJPs), at the Justice
Centre in Burnaby and in all court locations in which JJPs are normally
resident or regularly preside in traffic court. This does not include
circuit courts where there is no registry.
Police agencies within a reasonable distance of a location
where there is or may be a JJP presiding are instructed that when they
contemplate applying for a daytime search warrant, before they prepare the
paperwork, they are required to telephone the judicial administrative assistant
or court registry in the relevant location to inquire whether a JJP is
available to hear the application in person.
JJPs are considered to be available to hear applications in
person when court is not sitting during scheduled court sitting hours, but
not
during scheduled breaks or lunch adjournments, when presiding in court, or
outside sitting hours.
Judges are not assigned to hear
any
daytime
search warrant applications other than judge warrants. Under no
circumstances may a search warrant application be referred to a judge by a
judicial administrative assistant or a court registry without the approval of
the applicable Administrative Judge. Judge warrants must be referred to
the Justice Centre or the Administrative Judge in the applicable district.
If a JJP is not available to hear a daytime search warrant
application in person, either because there is no JJP in or near the location
or because inquiry has been made and no JJP is available, and the application
is one that may be made by telewarrant, application may be made to the Justice
Centre at the number below. The application must set out the reasons that
it cannot be heard in person.
In rare cases, a daytime search warrant application must
be heard in person by a judge for specific reasons of sensitivity or
security. Requests for a judge to be assigned to the specific application
must be made through the Office of the Chief Judge or the Justice Centre at the
numbers shown below.
Office of the chief Judge (604)
660-2864 Justice Centre (604) 660-3263
Carol Baird Ellan, Chief Judge
March 4, 2005
[Emphasis added.]
[17]
As can be seen above, Constable Bellamy complied with the directive;
however, it is unfortunate that the directive was not placed before the trial
judge. Issues relating to the directive itself are not on appeal and the
reference to the directive should not be read beyond the scope of these
reasons.
Admission of the evidence
[18]
The trial judge gave two sets of reasons in relation to the s. 24(2)
issue. In his first set of reasons, he stated that there was no evidence that
the police officer had received training in the preparation of an ITO, nor was
there evidence that he was supervised by a more experienced officer. He also
found that the police officer did not intentionally try to avoid the
requirements of the telewarrant provisions. As a result, he did not find that
there was bad faith by the police officer.
[19]
The trial judge added other comments in relation to the reputation of
the administration of justice. He said:
[43] In a similar vein, an unfulfilled pre-condition to
a telewarrant was a defect that should have been obvious to the justice. The
consideration and granting of the warrant implies that the justice did not know
the pre-conditions to considering a telewarrant or was not paying attention to
what he or she was doing.
[44] This incompetence is
inconsistent with the reputation of the administration of justice. It allows
searches where searches are not justified and opens the door for successful
defences for reasons apart from the merits of the case.
[20]
In my respectful opinion, the JJP would have been well aware of the
directive of the Chief Provincial Court Judge. I appreciate that the trial
judge was not provided with that directive; however, in the face of the reality
of the situation, there was nothing incompetent about the actions of the JJP.
The Chief Judge had given express directions that JJPs were to hear all day time
search warrant applications unless there was a special and overriding reason
why a judge had to hear the application. While the directive was before this
Court, it was not introduced as fresh evidence. Therefore, I am considering
the appeal on the basis of the findings of fact made by the trial judge.
[21]
The trial judge concluded, in his first set of reasons, that the
Collins
factors had been met (see
R. v. Collins
, [1987] 1 S.C.R. 265). The
offence was serious, the evidence was real evidence and the breach of the
Charter
was unintentional and not serious. He admitted the evidence.
[22]
This ruling was given on November 19, 2007. The trial judge permitted
the application to be re-opened for further argument which was heard on August
22, 2008. On September 18, 2008, the trial judge again dismissed the
application to exclude evidence but provided more reasons. The basis for
re-opening the motion, which was consented to by the Crown, was that the trial
judge had overlooked or misstated some evidence in his original ruling. In
particular he overlooked the evidence that an officer senior in rank to
Constable Bellamy did review the ITO before it was submitted to a JJP and that the
trial judge failed to take into consideration Constable Bellamys considerable
experience with the RCMP.
[23]
The trial judge concluded that the two investigators for Fortis misled
Constable Bellamy by:
i) failing
to comply with company policy that two tests should be taken before determining
that electricity was stolen;
ii) overstating the amount
of missing electricity;
iii) failing
to advise that the missing electricity was worth less than a cent; and
iv) failing
to advise that there could be non-criminal explanations for the discrepancy.
[24]
In his second set of reasons, the trial judge made several gratuitous statements.
He stated that Constable Bellamy should have treated the two investigators for
Fortis as informants of an unknown reliability. However, had Constable
Bellamy said this in the ITO, he would have misled the JJP. He had known one
of the investigators for over 20 years and knew of the second investigator, as
both were retired RCMP officers. In my respectful view, the trial judges statement
that the investigators were of unknown reliability was an error in favour of
Mr. MacDuff.
[25]
Next, he stated that the informants (referring to the Fortis investigators),
claimed not to have known that their alleged theft was for less than a
penny. He further said:
[12] ... Their excuse for
exaggerating the amount of missing electricity was that Fortis commonly dealt
with electricity in terms of kilowatt hours. The Informants were hired
specifically to investigate electricity thefts. I do not accept that they did
not know the value of the very thing they were hired to investigate.
[26]
I have read the transcript of the trial. Neither investigator said that
they did not know that their alleged theft was for less than a penny. One
investigator agreed with defence counsel that it would be a fraction of a cent
and the other investigator agreed with defence counsel that it would have been
around $1.50. What the investigators did not do was state in their report that
the measurement relied on to demonstrate that electricity was being stolen was
only 6.2 seconds long. This evidence was sufficient to give grounds to believe
that there was a bypass, which is what the search warrant was issued for. The small
value of the 19,225 watts stolen during the 6.2 second measurement period was
irrelevant because with a bypass, the theft is on-going.
[27]
The next statement is that [t]he Informants gave only the flimsiest
excuse for why they did not do two measurements as was required by policy.
They also did not explain why they kept the policy breach a secret. There is
no evidence that there was a policy to take two measurements. The
investigators testified that sometimes they take two measurements, and sometimes
they do not. This is another error in favour of Mr. MacDuff.
[28]
The trial judge then said:
[14] The explanations of the
informants were unsatisfactory. They showed themselves to be at best
unreliable and at worst intentionally misleading. In future Information from
them should not be relied on.
[29]
As noted above, the trial judges comments were based on his
misapprehension of the evidence. His comments regarding the investigators, and
in particular, any future treatment of their evidence, were in my opinion, not
founded on the evidence. It was an unfair comment and may well have had a
deleterious effect on their careers.
[30]
He then characterized Constable Bellamys investigation as sloppy
because he did not investigate the matter further than the report he was
given. In fact, Constable Bellamy testified to several other steps he took in
the course of investigating this matter prior to seeking the telewarrant.
Again, in my view, this comment was based on the trial judges misapprehension
of the evidence.
[31]
Despite his findings, the trial judge found again that the police
officer did not act in bad faith, that the evidence was real, and that the
seriousness of the offence weighed in favour of admitting the evidence.
[32]
Since this decision was rendered, the Supreme Court of Canada released
its decisions in
Grant
and
Harrison
where a revised approach to
s. 24(2) was developed. I will now turn to analyzing the findings of the trial
judge through this new lens.
[33]
In summary, the trial judge quashed the telewarrant to search Mr.
MacDuffs premises because the police officer did not confirm that a judge
would not hear the daytime search warrant application.
[34]
There was nothing on the face of the warrant, save the lack of reference
to the impracticality of having a judge hear the application, which would
render the warrant otherwise unlawfully or improperly obtained.
[35]
On amplification, the only evidence that appears to not have been
disclosed to the JJP was the time it took to test the meter and the cost of the
theft for that timeframe. As noted above, in my view, that information is
irrelevant in the circumstances of this case.
[36]
Under the framework for the application of s. 24(2) of the
Charter
established in
Grant
(paras. 72-86) and
Harrison
, a court must
consider:
i) the seriousness of the
Charter
-infringing
state conduct
ii) the
impact of the breach on the
Charter
-protected interests of the accused;
and
iii) societys interests in an adjudication
on the merits.
Seriousness of the
Charter
-infringing state
conduct
[37]
The trial judge concluded that this was a relatively minor
Charter
violation. I agree. The police officer obtained a warrant from a member of
the judiciary. He provided the JJP with all of the information he had
obtained. He ensured that there was no JJP who could hear his application in
person within a reasonable time frame. His only error was to fail to confirm
that a judge was unavailable to hear the application, based on his (correct)
understanding that judges were not to be asked to issue daytime warrants. The
trial judge found no bad faith on the part of the officer. This conduct is at
the minor end of the
Charter
breach spectrum (
Grant
at para. 74).
The impact of the breach on the
Charter
-protected
interests of the accused
[38]
Here, the unreasonable search intruded on the privacy interests of Mr.
MacDuff. The police searched his home, where his privacy interests are
significant. Therefore, the impact of the breach is serious from this
perspective (
Grant
at para. 78).
Societys interests in an adjudication of the case on its
merits
[39]
Several factors are examined under this heading of analysis which takes
into account the truth-seeking function of the criminal trial process. They
include the reliability of the evidence and the importance of the evidence to
the Crowns case. The evidence seized is highly reliable and is key to the
case against Mr. MacDuff. Without the evidence from his home, there is no case
against Mr. MacDuff.
Conclusion
[40]
All of these factors weigh in favour of the inclusion of evidence and I
would not interfere with the finding of the trial judge in admitting the
evidence.
[41]
Therefore I would dismiss the appeal.
The Honourable Madam Justice Bennett
I agree:
The Honourable Madam Justice
Kirkpatrick
I agree:
The Honourable Mr. Justice
Tysoe
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Olson,
2011 BCCA 8
Date: 20110106
Docket: CA038370
Between:
Regina
Respondent
And
Michael Bernhard
Olson
Appellant
Before:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Hall
The Honourable Madam Justice D. Smith
On appeal from:
Provincial Court of British Columbia, July 13, 2010
(
R. v. Olson
, Prince George Registry 30997-KC-3; 30997-A-2; 30258-K-2)
Oral Reasons for Judgment
Counsel for the Appellant:
J.M. Duncan
Counsel for the (Crown) Respondent:
J.M.I. Duncan
Place and Date of Hearing:
Vancouver, British
Columbia
January 6, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 6, 2011
[1]
D. SMITH J.A.
: The appellant, Michael Bernhard Olson, applies for
leave to appeal sentence, and if leave if granted, appeals his eight-month
conditional sentence order in Provincial Court (plus the equivalent of 10
months pre-disposition custody) for the following
Criminal Code
offences
that were charged in three separate Informations and to which he pleaded
guilty:
a)
assault, contrary
to s. 266, and uttering threats to cause death or bodily harm, contrary to s.
264.1(1)(a), both on July 8, 2009, in regard to the first victim, and for which
the Crown proceeded summarily;
b)
assault, contrary
to s. 266, between October 22, 2009 and November 12, 2009; uttering threats to
cause death and bodily harm, contrary to s. 264.1(1)(a), on January 19, 2010;
obstruction of justice, contrary to s. 139(2), between January 19, 2010 and
January 24, 2010; and breach of an undertaking under s. s. 499(2), contrary to
s. 145(5.1), all in regard to the second victim and for which the Crown
proceeded by indictment; and breach of recognizance, contrary to s. 145(3), on
February 9, 2010, in regard to the second victim for which the Crown proceeded
summarily.
c)
breach of
recognizance, contrary to s. 145(3), on February 9, 2010, in regard to the
second victim for which the Crown proceeded summarily.
[2]
The appellants sentence further included a three year probation order,
a five year firearms prohibition, an order that he provide a sample of his DNA
for registration with the DNA national databank(a secondary or discretionary
order), and a restitution order of $847.32 to the second victim. None of these
orders are at issue in this appeal.
[3]
The appellants principal ground of appeal is that the sentencing judge
erred in law in rejecting the joint submission of the Crown and defence for a
global three month conditional sentence order for all of the above-noted
offences.
[4]
For the reasons that follow I would dismiss the appeal.
Background
[5]
The circumstances of the offences involved brutal attacks and threats of
death and bodily injury on two successive and unrelated live-in girlfriends,
two breaches of a no-contact court order made for the protection of the second
victim, and an attack on the administration of criminal justice by the
appellants intimidation of the second victim to drop her complaint to the
police. The appellants second breach of a no-contact order in regard to the
second victim (the February 9, 2010 breach of recognizance) resulted in the
appellants ongoing detention for five months until his guilty pleas on all of
the offences on July 13, 2010.
[6]
The sentencing judge summarized the circumstances of the offences as
follows:
[3] The circumstances of these events are ... very
troubling to the Court because of the nature of the offences, the manner in
which they were committed, and who they were committed against.
[4] Mr. Olson entered into a spousal relationship with
Candice Chadwick. They met through an online dating service. She moved into his
residence, and she agreed to pay $800 a month to live with him. She had two
children to support and, as a result, worked two jobs. She describes Mr. Olson
a being controlling. He had many rules. He was abusive when drinking, and there
were several incidents that occurred between them before July 8, 2009, which is
the date on which the criminal offences to which Mr. Olson had pled guilty
arose.
[5] Prior to July 8, 2009, Ms. Chadwick felt it
necessary to leave the relationship but returned. On July 8, 2009, Mr. Olson
was drinking. He became angry over money issues. Ms. Chadwick was in the living
room, and according to her, Mr. Olson pounced on her, screamed at her, and told
her that she needed to learn a lesson. He pinned Ms. Chadwick down and began
licking her like a dog. He then began to bite her. He bit her in various places
on her body and particularly in her breast and nipple region. He eventually let
her up briefly but re-assaulted her, banged her head against the wall, and
pressed his thumbs into her temples. He then left her, returning soon after
saying he was sorry but that she needed to be taught a lesson. He told her that
if she tried to leave him, he would have her fired and have another woman, a
friend of his kick her ass.
[6] Ms. Chadwick remained in the home for
approximately a week after that. After about a week, Mr. Olson became angry
again because Ms. Chadwick had done him the indignity of having her boss drive
her home after a late-night shift. On this occasion she fled, called the RCMP,
and they arrived at the residence; however, Mr. Olson refused them entry. They
did not enter the residence on that occasion because there was some concern
that he may be in possession of firearms. Later, they came, arrested him, and
released him on bail.
[7] I have no doubt, although the bail documents were
not put before me, that the bail terms and conditions required him to stay away
from Ms. Chadwick, and thankfully he has.
[8] That was in July. By the fall of 2009, Mr. Olson
had moved onto a new and different relationship, this one with Ms. Butress. He
moved into her residence. It is reported that he was controlling and abusive of
her as well. On one occasion, he became angry when they were in bed. He flipped
the bed over on top of her (it was a mattress) and began kicking it.
[9] This type of behaviour continued between October
and December. In December, Mr. Olson became upset regarding Ms. Butresss
former boyfriend. He began to call every name in the phone book that had the
same last name as her former boyfriend. He assaulted her. He bit her ear. The
police came and arrested him. They released him, however, with a no-contact
provision, but that apparently did not stop Mr. Olson, who returned to Ms.
Buttresss residence and was there for some time. When he returned, he again
threatened Ms. Butress, threatened to kill her and her family, and he refused
to leave.
[10] On January 19 of this year, they were arguing.
Again, Mr. Olson assaulted her in the bathroom, hitting her head striking her,
and said that he would kill her. He got a knife. He said he would keep her in
the bathroom. She pleaded with him to let her out. He disconnected the phone.
He threatened to stab her 100 times, cut off her head and put it in the toilet.
He said he would kill her cat; then he would kill his dog; then he would kill
himself.
[11] Ms. Buttress says that during the time she lived
with Mr. Olson he had a terrible drinking problem, drinking at least a case of
beer a day.
[12] The next day after that incident Ms. Butresss face
was swollen. Mr. Olson brought her some ice but in doing that kind gesture also
repeated the threats he had made the day before. He embellished on how he was
going to kill himself.
[13] On January 24, the RCMP called Ms. Butresss
residence to discuss with her the previous incident that resulted in Mr.
Olsons arrest and his subsequent release. Mr. Olson was present when that call
was made, and because of the threats he had made against Ms. Butress, she
attempted to dissuade the police from proceeding with those charges. That is
the obstruction of justice to which he has pled guilty. She was afraid of Mr.
Olson. She was afraid that if she said to the police, Oh, by the way, he is
standing right here, that other violence would be visited upon her.
[14] On January 25, 2010, Mr. Olson again began to the
threaten Ms. Butress, but she fled the home, called the police this time; they
came and arrested him.
[15] He was released again. Again, I was not advised as
to whether that was as a result of a bail hearing or a simple police release.
If it was the former, I expect that one of my colleagues would have heard all
of the facts and duly considered the past history before deciding to release
Mr. Olson. If it was the latter, it is concerning because the police obviously
would not necessarily have had before them all of his history.
[16] However, Mr. Olson was
not deterred in his contact with Ms. Butress. He went back near her residence
on February 9. That was in breach of his bail release documents. He walked
around the residence and then left. He was arrested and has been held in
custody ever since.
[7]
At the time of the sentencing hearing, the appellant was a 37-year old
unemployed logger. He had an admitted drinking problem but no criminal record.
A pre-sentence report was not sought or ordered.
[8]
The joint submission by Crown and defence for a three-month conditional
sentence order was broken down as follows:
(a) July 8, 2009 assault of Ms. Chadwick:
2 months
(b) July 8, 2009 uttering threats to Ms. Chadwick:
4 months (concurrent)
(c) October 22-November 12, 2009 assault of Ms. Butress,
January 19, 2010 uttering threats to Ms. Butress, January 24, 2007
obstruction of justice in regard to Ms. Butress, and January 24, 2007 breach
of undertaking in regard to Ms. Butress:
a global sentence of 8
months consecutive to (a) and (b)
(d) February 9, 2010 breach of recognizance in regard to
Ms. Butress:
1 month consecutive to all
of the other sentences
[9]
The proposed global sentence of 13 months was to be reduced by 10 months
based on the two-for-one credit the appellant was entitled to receive at that
time for his five months pre-sentence custody, resulting in a net global
sentence of three months to be served in the community under a conditional
sentence order.
[10]
The sentencing judge expressed concern about the joint submission, the
lack of victim impact information, and the lack of a pre-sentence report. He
acknowledged the import of the decisions of this Court in
R. v. Bezdan,
2001
BCCA 215, 154 B.C.A.C. 215 and
R. v. Nome,
2002 BCCA 468, 172 B.C.A.C.
183, and the need for a sentencing judge to give careful consideration to a
joint submission and not reject it unless he or she explains in what way it is
contrary to the public interest and would bring the administration of justice
into disrepute. However, he found the similarity between the nature and manner
of the offences between the two victims, both within a relatively short period
of time, to be of particular concern. He advised counsel that he was
considering rejecting the joint submission and adjourned the hearing to the
following day for further submissions and authorities from counsel that might
explain and support the joint submission.
[11]
The following day both counsel made further submissions. The Crown
acknowledged that the obstruction of justice offence would likely require a
consecutive sentence but maintained his position that the joint submission for
a global conditional sentence order of three month remained appropriate. In
support of his position he relied on the following authorities:
R. v.
Cooper,
2009 BCCA 208, 270 B.C.A.C. 247;
R. v. Maynard,
2008 ONCJ
445, 79 W.C.B. (2d) 63;
R. v. Rollins,
2006 Carswell Ont. 7998;
and
R. v. Fuentes
(1994), 51 B.C.A.C. 154, 84 W.A.C. 164. Counsel for the
appellant reiterated his submissions from the previous day, but submitted in
the alternative that if the sentencing judge rejected the joint submission he
could address his concerns by imposing a longer conditional sentence order with
more onerous terms.
[12]
The sentencing judge ultimately rejected the joint submission. He
distinguished the Crowns authorities on their facts, expressly referred to s.
718.2 (a) (i) and (ii) of the
Criminal Code,
which provide for an
increase in sentence where aggravating circumstances that include the abuse of
an offenders spouse or the abuse of a person by an offender in a position of
trust are established, and underscored the seriousness of the obstruction of
justice offence which strik[es] at the heart of the criminal justice system
and our societys norms, concluding:
[46] ... When people attempt
to subvert or obstruct justice, they are attempting to subvert or obstruct the
very pillars of our civilization, and that requires, in my view, a very firm
sentence.
[13]
He then imposed an eight-month conditional sentence order (in addition
to the equivalent of 10 months pre-sentence custody), which he broke down as
follows:
(a) July 8, 2009 assault of
Ms. Chadwick:
2 months
(b) July 8, 2009 uttering threats to Ms. Chadwick:
4 months concurrent to (a)
(c) October 22-November 12, 2009 assault of Ms. Butress:
6 months concurrent to (a)
January
19, 2010 uttering threats to Ms. Butress:
6 months concurrent to (b)
January
24, 2010 obstruction of justice in regard to Ms. Butress:
9 months consecutive to (c)
and (d)
January
24, 2010 breach of undertaking in regard to Ms. Butress:
2 months concurrent to (a)
and (b)
(d) February 9, 2010 breach of recognizance in regard to
Ms. Butress:
3 months consecutive to all
other sentences
[14]
From the global sentence of 18 months, the sentencing judge credited the
appellant with the equivalent of 10 months pre-disposition custody, leaving a
net global sentence of 8 months. In acceding to the joint submission for a
conditional sentence order the judge stated:
[69] I have given careful consideration to the
provisions of s. 742.6 and the provisions set out in the case of
R. v.
Proulx
[2000 SCC 5, [2000] 1 S.C.R. 61]
in coming to a decision as
to whether or not a sentence should be served in the community or not. I have
to consider a number of factors. First of all, is there a minimum term of
imprisonment? There is not here. Second of all, is imposing imprisonment less
than two years being sought? That is what is happening here, so you qualify on
that basis. The third and fourth tests are whether or not I am satisfied
serving the sentence in the community would not endanger the safety of the
community. I have to also be satisfied that serving the sentence in the
community would be consistent with the fundamental purpose and principle of
sentencing as set out in ss. 718 to 718.2.
[70] I have considered those
terms, sir, and I have considered whether or not you are a suitable candidate
to serve your sentence in the community, and although unfortunately Ms. Butress
and Ms. Chadwick may disagree with my view on this, I have come to the
conclusion, in large part because you have already spent five months in custody
and in large part because of the terms and conditions I am going to impose on
you with regard to the conditional sentence, that you may serve your sentence
in the community rather than being held in jail further.
[15]
The difference between the joint submission and the sentence imposed
focused largely on the increase in sentence for the obstruction of justice
offence to nine months, and the increase in the breach of recognizance offence
from one to three months, both of which were made consecutive to the other
sentences. However, the sentencing judge appeared alive to the totality
principle by making the sentences for the assault, uttering threats, and breach
of undertaking in regard to the second victim concurrent with the sentences for
the assault and uttering threats in regard to the first victim.
Positions of the parties
[16]
The appellant submits that the sentence proposed by way of joint
submission was not contrary to the public interest, would not have brought the
administration of justice into disrepute, and was not unfit for any other
reason. He contends that the nine month sentence imposed for the obstruction of
justice offence was excessive and exceeds the sentences in all of the cases
cited by the Crown that involved offenders with criminal records in similar
circumstances. In that regard, counsel for the appellant places considerable
weight on this Courts decision in
Cooper
to support his position that a
two month consecutive sentence for obstruction of justice, in the circumstances
of this case, would have been appropriate and adequately reflected the
seriousness of the offence.
[17]
The Crown submits the sentencing judge was not bound to accept the joint
submission and that it was not an error in principle for him to reject the
joint submission by imposing a longer conditional sentence order. Moreover, the
sentence that was imposed, the Crown submits, was not unfit given the
seriousness of the offences and the appellants breaches of the court orders
made for the protection of the victims leaving it open to him to have found
that the appellant did not meet the requirements for a conditional sentence
order and instead to have imposed a conventional custodial sentence. In support
of its position, the Crown relied on the following authorities:
R. v.
Hunter,
2006 BCCA 433, 231 B.C.A.C. 55;
R. v. Frigenette
(unreported),
November 29, 1994, Vancouver Registry No. CA019359;
R. v. Hall,
2001
BCCA 74, 150 B.C.A.C. 313 and
R. v. Titchener,
2009 BCCA 554, 280
B.C.A.C. 23.
Discussion
[18]
The standard of review on sentence appeals is that absent an error in
principle, failure to consider a relevant factor, or an overemphasis of the
appropriate factors, an appellate court should only intervene to vary a
sentence if the sentence is demonstrably unfit:
R. v. M. (C.A.),
[1996]
1 S.C.R. 500 at para. 90.
[19]
It is common ground that a joint submission is not binding on a
sentencing judge who retains his or her discretion to impose a fit sentence
that may differ from the joint submission. However a joint submission should
not be rejected lightly and the sentencing judge should give reasons for doing
so. While the sentencing judge is not required to inform the offender that he
or she proposes to depart from the joint submission it is preferable for the
judge to articulate his or her concerns and provide counsel with an opportunity
to make further submissions and provide additional material where available to
address those concerns:
R. v. Grisson
(1997), 100 B.C.A.C. 249;
R. v.
Bezdan,
2001 BCCA 215, 154 B.C.A.C. 122;
R. v. Pretty
, 2005 BCCA 52,
208 B.C.A.C. 79;
R. v. Fuller,
2007 BCCA 353, 244 B.C.A.C. 158;
R. v.
Furey,
2007 BCCA 395, 245 B.C.A.C. 67 395;
R. v. Penney,
2010 BCCA
307, 288 B.C.A.C. 209.
[20]
These principles and recommended procedure for a sentencing judge who is
not inclined to accede to a joint submission were succinctly summarized by Mr.
Justice Low in
Pretty
at para. 2:
The appellant contends that the
appeal judge erred in not finding error on the part of the sentencing judge in
imposing a sentence greater than that proposed in the joint submission without
advising counsel and without having a good reason for the departure. It is
clear from the cases that a sentencing judge is not bound by a joint
recommendation from counsel as to the appropriate sentence. The judge can
reject the joint submission but ought to give reasons for doing so and not
disregard it or overlook it. The authorities in this Court state that it is
preferable for the judge to make plan the reasons for the concern with the
joint submission so that counsel can place any additional relevant material on
the record for a possible appeal. However, the fact that the judge does not,
before giving reasons for sentence, state concerns he has with respect to the
joint proposal does not mean that an appeal court must find the sentence to be
unfit and reduce it to that proposed in the joint submission.
[21]
An additional reason for the sentencing judge to advise counsel of his
or her concerns with a joint submission, as was noted by Madam Justice Saunders
in
Penney
at para. 8, is to permit the offender to consider whether he
or she should make an application for withdrawal of his or her guilty plea(s).
[22]
Ultimately, however, the sentencing judge has the duty of imposing what
he or she believes to be a fit sentence after considering the circumstances of
the offences, the circumstances of the offender, and the purpose and principles
of sentence as codified in ss. 718 to 718.2 of the
Criminal Code.
[23]
The appellant contends that s. 718.2(b) if the
Criminal Code
requires
that a sentence should be similar to sentences imposed on similar offenders
for similar offences committed in similar circumstances. In that regard, he
relies on
Cooper
in support of his position that this Court has endorsed
a sentence of two months for the offence of obstruction of justice (the
proposed sentence for that offence in the joint submission) and therefore the
proposed sentence was a fit one. With respect, I do not agree with that
analysis of
Cooper.
[24]
Cooper
involved an appeal of a six-month jail sentence that was
imposed by a provincial court judge in regard to seven offences committed by
the offender between June and December 2007. The offender had pleaded guilty to
criminal harassment, assault, mischief (wilful damage to a vehicle), attempting
to obstruct justice, breaches of an undertaking and breaches of a recognizance,
all in regard to conduct toward his estranged wife. He was also found guilty of
assault causing bodily harm to a stranger who had simply asked his wife for a
dance. Counsel made a joint submission for a 15-18 month conditional sentence
order for the six offences to which Mr. Cooper had pleaded guilty, and one day
for the offence of assault causing bodily harm for which Mr. Cooper was
convicted, based on the roughly double time he had spent in pre-disposition
custody that amounted to about seven months. Mr. Cooper, age 52, had a criminal
record dating back some years that included offences of violence, weapons
offences and breaches of court orders. The central issue on appeal in that case
was whether the sentencing judge had erred in principle by rejecting the joint
submission for a conditional sentence order and in imposing a jail sentence in
circumstances where the appellant alleged that he had a negotiated deal that
resulted in his guilty pleas on the first six offences.
[25]
The Court dismissed the appeal noting that neither counsel had advised
the trial judge that the appellants guilty pleas were the result of negotiated
admissions of guilty. In the result, the Court found no error in principle in
the trial judges rejection of the joint submission for a conditional sentence
order, stating:
[25] The trial judge was not prepared to give effect to
the joint submission and gave his reasons for departing from the bargain. The
judge recognized, correctly in my view, that a sentence emphasizing
denunciation and deterrence was required in this case and to impose a
conditional sentence would not have been in accord with the purposes and
principles of sentencing to which he referred. Moreover, the appellants many
past breaches of probation and recognizance of bail demonstrated that, in any
event, the appellant was unlikely to adhere to the terms of a conditional
sentence if the terms did not suit his purposes.
[23] In summary, I am of the
view that the trial judges rejection of a conditional sentence in this case
was not unreasonable and that the six-month sentence he imposed for various
offences to which the appellant had pleaded guilty was not unfit.
[26]
While the circumstances in this case were similar in some respects to
those in
Cooper,
they were also more serious in that they involved two
spousal victims. On the other hand, the appellants personal circumstances
were not as egregious as the offender in
Cooper,
in that he was a first
offender and potentially met all of the conditions for a conditional sentence
order under s. 742.2 of the
Criminal Code.
[27]
More significantly,
Cooper
involved a sentence appeal by an
offender. The Court was not asked to vary the sentence for the appellants
conviction for attempted obstruction of justice and given the limited
jurisdiction for appellate intervention as outlined in
M.(C.A.)
would
not have had any basis to interfere with the trial judges exercise of
discretion in that regard in the absence of a demonstrated error in principle.
Consequently, the dismissal of the appeal did not amount to an affirmation by
the Court of a sentence of two months for the offence of obstruction (or rather
an attempted obstruction) of justice but reflected a finding that the appellant
had failed to demonstrate any error of principle that would have permitted the
Court to intervene and vary the sentence.
[28]
While the crafting of an appropriate sentence is very much an
individualized process unique to the circumstances of each case and each
offender, the authorities relied upon by the Crown suggest that the global
sentence imposed in this case was well within the range of sentences imposed
on similar offenders for similar offences committed in similar circumstances.
[29]
In my view, the sentencing judge correctly followed the recommended
procedure outlined in
Pretty
and the other authorities on joint
submissions before imposing a sentence that the appellant has failed to
demonstrate was unfit. I would grant leave to appeal, but dismiss the appeal.
[30]
NEWBURY J.A.
: I agree.
[31]
HALL J.A.
: I agree.
[32]
NEWBURY J.A.
: The extension of time is granted. Leave is granted
and the appeal is dismissed.
The
Honourable Madam Justice D. Smith
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Sander v. Sun Life Assurance Company of Canada
,
2011 BCCA 3
Date: 20110106
Docket: CA037572
Between:
Kenneth Sander
Appellant
(Plaintiff)
And
Sun Life Assurance
Company of Canada
Respondent
(Defendant)
Before:
The Honourable Chief Justice Finch
The Honourable Madam Justice Saunders
The Honourable Madam Justice Neilson
On appeal from:
Supreme Court of British Columbia, September 24, 2009
(
Sander v. Sun Life Assurance Company of Canada
, 2009 BCSC 1301)
Counsel for the Appellant:
M. Clemens, Q.C.
Counsel for the Respondent:
V.R.K. Orchard, Q.C.,
A.M. Gunn
Place and Date of Hearing:
Vancouver, British
Columbia
October 15, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 6, 2011
Written Reasons by:
The Honourable Chief Justice Finch
Concurred in by:
The Honourable Madam Justice Saunders
The Honourable Madam Justice Neilson
Reasons for Judgment of the Honourable
Chief Justice Finch:
I.
Introduction
[1]
Dr. Sander appeals from the judgment of the Supreme Court of British
Columbia pronounced 24 September 2009 following a summary trial under Rule 18A,
holding that the action he commenced by writ of summons filed on 9 November
2004 was barred by s. 22(1) of the
Insurance Act
, R.S.B.C. 1996, c. 266
(the
Act
). The section mandates that ... every action on a contract
[of insurance] must be commenced within one year after the furnishing of a
reasonably sufficient proof of loss or claim under the contract .... The summary
trial judge held that the one year limitation period was triggered when the
respondent insurer provided Dr. Sander with clear and unequivocal notice of
denial by letter dated 29 June 2001. The limitation period for issuing a writ
therefore expired on 29 June 2002, and the writ issued 9 November 2004 was out
of time.
[2]
Dr. Sander contends that by the terms of the policy of insurance the
limitation period did not begin to run until his counsel provided the insurer
with proof of loss or claim by letter of 23 April 2004. He says that the
writ of 9 November 2004 was therefore well within that one year statutory
limitation.
[3]
Dr. Sander further submits that in this case, the governing limitation
period is that contained in the policy of insurance, which is two years after
the date the insurance money became payable ... (the Policy Limitation). He
says that because this policy provided for periodic income replacement benefits
there was a continuing cause of action with a rolling limitation period that
applies to each monthly benefit payable. He says the date the limitation was
triggered cannot be determined until there is a finding on the merits of his
case, and whether he had a valid continuing claim after 14 June 2001, the date
of the insurers last payment.
[4]
For the reasons that follow, I am of the view that the learned summary
trial judge erred in law in failing to apply the two year limitation period
contained in the policy, rather than the one year limitation period provided by
s. 22(1) of the
Act
. When that two year limitation period commenced to
run cannot be determined until there is a determination on the merits as to the
time during which Dr. Sander had (or has) a valid claim under the policy. I
would allow the appeal.
II.
Background
[5]
Dr. Sander, a former dentist, was diagnosed as having cataracts in both
eyes in early 1998. The cataracts interfered with his ability to carry on the
practice of dentistry.
[6]
On 13 July 1998, Dr. Sander filed a claim for disability benefits under
a group insurance policy between Sun Life and the Canadian Dental Association
(the Insurance Policy) which provided for income replacement benefits to be
paid if a participant (as defined by the Insurance Policy) became unable to
perform the essential duties of the practice of dentistry. Dr. Sanders claim
was approved and on 31 July 1998, he began receiving monthly benefits.
[7]
On 20 September and 30 October 2000, Sun Life wrote to Dr. Sander
advising him that it would not continue to pay benefits indefinitely and that
it expected him to undergo corrective cataract surgery. If he elected not to
do so, Sun Life stated that it would extend payment for a time frame equivalent
to what would have been expected had he proceeded with the surgery and then it
would close his claims file.
[8]
Dr. Sander took issue with Sun Lifes position that the terms of the
Insurance Policy required him to undergo corrective surgery. Dr. Sanders
position was that corrective surgery was not a precondition to coverage.
[9]
On 2 February 2001, Dr. Sander commenced a petition in the Supreme Court
to resolve the issue. By consent, the petition was converted into an action
around March 2001 at the request of Sun Lifes counsel in order that an
examination for discovery of Dr. Sander could be conducted. An application for
summary judgment pursuant to 18A, brought by Dr. Sander, was heard by Madam
Justice Dillon on two days in June 2001, with reasons for judgment released on 24
October 2001:
Sander v. Sun Life Assurance Company of Canada
, 2001 BCSC
1445. Dillon J. denied Dr. Sanders application and, at para. 36, found his
refusal to undergo corrective surgery unreasonable within the terms of the
Insurance Policy.
[10]
While the judgment was under reserve, Sun Lifes counsel wrote Dr.
Sanders counsel the following letter dated 29 June 2001:
We are writing to confirm that Sun Life Assurance Company of
Canada (Sun Life) will be discontinuing benefits payable to Dr. Sander under
the long term disability coverage.
As you are aware, Sun Life informed Dr. Sander by letters
dated September 20, October 25 and 30, 2000 that it was prepared to continue
payment of benefits for a period within which Dr. Sander could make
arrangements to undergo cataract surgery and also for a period of
post-operative recovery. Copies of those letters are enclosed for your
reference.
As we understand matters, Dr. Sanders surgery was scheduled
for March 13 or 14, 2001. If Dr. Sander had proceeded with the surgery, one
would have expected a period of recovery not to exceed three months.
Dr. Sander has received payments
up to May 31, 2001. Accordingly, Sun Lifes final payment will be for the
period June 1 to June 14, 2001.
[11]
In accordance with the above letter, Sun Life ceased monthly benefit
payments to Dr. Sander as of 14 June 2001.
[12]
Dr. Sander commenced an appeal from the judgment of Dillon J. in
November 2001. On 29 January 2003, the Court of Appeal dismissed his appeal:
2003 BCCA 55.
[13]
Following dismissal of his appeal, Dr. Sander underwent corrective
cataract surgery to his right eye on 27 February 2003 and to his left eye on 18
December 2003. Despite the surgeries, Dr. Sander maintains he still does not
possess the required visual acuity to practice dentistry.
[14]
On 9 November 2004, Dr. Sander commenced an action against Sun Life for
a declaration that he was entitled to disability payments. On 24 September 2009,
Sun Life was successful in its application under Rule 18A to dismiss the action
as outside the limitation period.
III.
Summary Trial Judges Decision
[15]
The summary trial judge first considered the commencement of the
limitation period. He considered and dismissed the limitation period provided
for in the Insurance Policy, which states:
No action or proceeding against
the Company for recovery of a claim under this policy shall be commenced more
than two years after the date the insurance money became payable or would have
become payable if it had been a valid claim.
[16]
The summary trial judge held that applying this limitation period to Dr.
Sanders case would produce an absurd result. He said at para. 19: Dr. Sander
would have had to sue by July 31, 2000, even though he was then receiving
benefits and continued to receive benefits until June 14, 2001.
[17]
The summary trial judge then addressed s. 22(1) of the
Act
which
provides:
Every action on a contract must
be commenced within one year after the furnishing of reasonably sufficient
proof of a loss or claim under the contract and not after.
[18]
The summary trial judge held that s. 22(1) similarly produced an absurd
result if it were read literally as Dr. Sander would have had to commence his
action against Sun Life by 13 July 1999, one year after the furnishing of
reasonably sufficient proof of a loss ....
[19]
Relying on this Courts decision in
Balzer v. Sun Life Assurance Co.
of Canada
, 2003 BCCA 306, 15 B.C.L.R. (4th) 6, he held that s. 22(1) of the
Act
has been interpreted to mean that the limitation period on filing a
claim commences to run at the point that the insurer provides the insured with
clear and unequivocal notice of denial of coverage or cessation of benefits.
[20]
The summary trial judge then considered the question of whether Dr.
Sander was clearly put on notice by the 29 June 2001 letter that the limitation
period to commence an action had started to run. He considered the context of
events both before and at or about the date of the letter. He canvassed the
discussions of Dr. Sanders counsel, Mr. Dives, and Sun Lifes counsel, Mr.
Samuels, regarding a proposed standstill agreement (which was never completed)
that would have preserved the payment of benefits to Dr. Sander while at the
same time preserving the rights of Sun Life in the event that Dr. Sanders
claim was dismissed and the surgery was eventually successful. He also
reviewed various correspondences after Dr. Sanders unsuccessful appeal between
counsel for Sun Life and Dr. Sander and his counsel noting that Sun Lifes
position had been steadfast throughout.
[21]
In light of all the circumstances leading up to and after the 29 June 2001
letter, the summary trial judge noted
Balzer
provides that any doubt or
ambiguity in the giving of clear and unequivocal notice must be resolved in
favour of the insured. However, upon review of the relevant jurisprudence, he
held that even taken in context with the surrounding circumstances of the
outstanding litigation and discussions between counsel which were continuing at
the time, including the standstill agreement, the 29 June 2001 letter
constituted clear and unequivocal notice to Dr. Sander that his benefits were
being terminated and his file closed.
[22]
The summary trial judge concluded:
[63] In this case, I do not find there is anything in
the conduct of the defendant which derogates from or lessens the import of the
June 29, 2001 letter advising Dr. Sander of its intention to cease payments and
close its file after June 14, 200[1]. In my view, the notice (the effect of
which was that benefits had ceased) contained in the letter should have been
more, not less, clear given the surrounding circumstances. Sun Life, had made
its position clear from the outset and had been consistent. It insisted Dr.
Sander have corrective eye surgery and have it within a reasonable period of
time. It advised him and his counsel that if he did not have surgery within
such reasonable time, it would set a notionally reasonable period of time for
him to have it and recover and then stop the payment of benefits.
[64] While Sun Life entered into negotiations for a
standstill agreement, no such agreement was concluded. In any event, during the
negotiations for such agreement the terms sought by Sun Life were consistent
with its position.
[65] ... I accept all
parties contemplated the issue would be resolved in the summary trial. No one
contemplated that there would be an appeal. It was assumed by all involved that
the litigation as well as the possibility of surgery (in the event the
litigation found against Dr. Sander) would occur well within the one-year
limitation period which commenced June 29, 2001.
[23]
Based on the above reasons, the summary trial judge concluded that the
latest Dr. Sander could have commenced his action was one year after 29 June 2001.
Thus, his claim was statute barred.
IV.
Issues on Appeal
[24]
This appeal raises the following issues:
(1) Which limitation period
governs Dr. Sanders claim, the Policy Limitation or s. 22(1) of the
Act
?
(2) If the Policy Limitation
applies, was Dr. Sanders claim commenced out of time?
(3) If s. 22(1) of the
Act
applies,
should the section be interpreted literally or should the clear and
unequivocal notice test, as set out in
Balzer
,
govern Dr.
Sanders claim?
V.
Position of the Parties
A. Dr. Sanders Position
[25]
Dr. Sander argues that the summary trial judge erred in applying the
statutory limitation period in s. 22(1) of the
Act
instead of the Policy
Limitation. Dr. Sanders position is that s. 22(1) of the
Act
does not
displace the Policy Limitation as the
Act
only sets minimum requirements
and the insurer may choose contractual terms that are more favourable to the
insured than those provided by the statute.
[26]
Dr. Sander says the summary trial judge further erred by concluding that
insurance money became payable for the purposes of applying the Policy
Limitation on only a single occasion. According to the Policy Limitation,
insurance money becomes payable when the participant has entitlement to it.
Relying on this Courts decision in
Holme Estate v. Unum Life Insurance Co.
of America
, 2000 BCCA 627, 83 B.C.L.R. (3d) 108, insurance money becomes
payable, and the limitations period triggered anew, at each successive time
benefits are to be paid. Accordingly, Dr. Sander was well within the
applicable Policy Limitation when he issued a writ of summons in November 2004
because the monthly benefits payable following his unsuccessful cataract
surgeries raise a continuing cause of action with a rolling limitation that
applies to each monthly benefit instalment.
[27]
If this Court determines that the appropriate limitation period is that
found in s. 22(1) of the
Act
, Dr. Sander argues that the summary trial
judge erred in applying the clear and unequivocal notice test enunciated in
Balzer
rather than applying the section literally. In Dr. Sanders case, the
reasonably sufficient proof of a loss or claim for the post cataract surgery
disability benefits was provided to Sun Life on 23 April 2004 by Dr. Sanders
counsel. The writ of summons was issued on November 9, 2004, well within the
limitation period provided for in s. 22(1) of the
Act
.
[28]
Dr. Sander did not advance the preceding arguments in the Court below.
Rather, Dr. Sander argued that Sun Life had not met its onus to establish that
it had given clear and unequivocal notice to him that his benefits were being
discontinued. Dr. Sander takes this position again as an alternative in this
appeal.
[29]
According to Dr. Sander, if the clear and unequivocal notice test
applies, there is no evidence reasonably capable of supporting the summary
trial judges conclusion that Sun Life issued a clear and unequivocal denial of
further benefits in the 29 June 2001 letter. The 29 June 2001 letter was
nothing more than a suspension of benefits. Dr. Sander supports this position
by emphasizing the context in which the letter was sent, and the conduct of the
parties after Dillon J. dismissed Dr. Sanders application, specifically the
fact that Sun Life defended the appeal from Dillon J.s order after the alleged
limitation period had passed.
B. Sun Lifes Position
[30]
Sun Life argues the summary trial judge correctly interpreted and
applied s. 22(1) of the
Act
rather than the Policy Limitation. However,
even if the Policy Limitation prevails, Sun Life maintains that Dr. Sanders
claim is time-barred. According to Sun Life, the 29 June 2001 letter denied
entitlement not only to the next scheduled payment of benefits but also to any
future payment of benefits. Dr. Sanders entitlement to benefits terminated on
that date and any rolling entitlement under the Insurance Policy stopped
rolling on that date.
[31]
In response to Dr. Sanders position that
Balzer
should be
distinguished from this proceeding because the wording of s. 22(1) of the
Act
would not create the same absurdity here as it did in
Balzer,
Sun
Life argues Dr. Sanders counsels letter of 23 April 2004 was merely an
attempt to resume discussions regarding Dr. Sanders alleged ongoing
disability. Reasonably sufficient proof of loss for that claim was furnished six
years ago, on 13 July 1998. Accordingly, a literal interpretation of s. 22(1)
leads to Dr. Sanders action being time-barred, but only by way of the
absurdity identified by the summary trial judge that the action would have had
to have been commenced while Dr. Sander was still receiving benefits.
[32]
Sun Lifes position is that the clear and unequivocal notice test
applies and that the determination of whether clear and unequivocal notice
had been given by Sun Life is a question of fact. The summary trial judge was
correct to conclude on the evidence that the circumstances surrounding the 29 June
2001 letter met the test.
VI.
Analysis
A. Preliminary Matters
[33]
Dr. Sander raises two issues on appeal that were not raised below: first,
that his action is governed by the Policy Limitation; and secondly, that if s.
22(1) displaces the Policy Limitation, Dr. Sander provided reasonably
sufficient proof of claim for his post cataract surgery disability benefits to
Sun Life on 23 April 2004 by way of a letter from his counsel to Sun Life.
[34]
In its written and oral submissions, Sun Life did not oppose Dr. Sander
raising the first issue of whether his action is governed by the Policy
Limitation, provided the issue could be adjudicated as a pure question of law.
To the extent that adjudication of the issue required additional findings on
entitlement not made below, Sun Life opposed the issue being raised in this
Court.
[35]
Sun Life did not take a position with respect to whether the second
issue may be raised. Given my reasoning on this appeal, I need not deal with
whether this Court could properly address the issue and therefore make no
comment on it.
[36]
Sun Life relies on
Athey v. Leonati
, [1996] 3 S.C.R. 458 at
478-479, 140 D.L.R. (4th) 235 in support of its position that Dr. Sander should
not be allowed to raise a new issue that requires additional findings of fact
for the first time in this Court.
[37]
In my view, whether Dr. Sanders action is governed by the Policy
Limitation or s. 22(1) of the
Act
is a pure question of law. Because
the summary trial judge held that s. 22(1) applied, he did not address the
meaning of the Policy Limitation. Its interpretation, like the question of
which limitation period applies, is also a question of law. In my opinion, it
is open to this Court to interpret the policy language and then to apply it to
the facts as found by the summary trial judge.
[38]
Insurance policies are a special category of contracts. Where ambiguity
in the terms of a policy of insurance exist, interpretation will involve a
combination of general contractual interpretive principles and special
interpretive principles unique to the insurance context:
Jesuit Fathers of
Upper Canada v. Guardian Insurance Co. of Canada
, 2006 SCC 21, [2006] 1
S.C.R. 744 at para. 27;
Co-operators Life Insurance Co. v. Gibbens
, 2009
SCC 59, [2009] 3 S.C.R. 605 at paras. 20-28. Given the standard form nature of
most insurance policies and a preference for uniformity, courts are reluctant
to depart from authoritative judicial precedent interpreting the terms of a
policy in a particular way: see
Gibbens
at para. 27.
[39]
As noted by the learned author G.R. Hall in
Canadian Contractual
Interpretation Law
(Markham, Ont.: LexisNexis, 2007) at pp. 182-183,
relying on
David Polowin Real Estate Ltd. v. Dominion of Canada General
Insurance Co.
, 76 O.R. (3d) 161 at para. 110 (Ont. C.A.), leave to appeal
to S.C.C. refused [2005] S.C.C.A. Nos. 388-395:
The case for the application of
precedent is even stronger in the case of interpretation of statutory
conditions which must be included in all contracts of insurance, as it would be
anomalous for conditions which are mandated by statute to mean one thing in one
contract and something else in another. [Citation omitted.]
[40]
As indicated in the next section of these reasons, the statutory
conditions found in Part 4 of the
Act
do not apply to the Insurance
Policy. However, the relevant wording of statutory condition 12 in Part 4 of
the
Act
relating to limitations of actions is exactly the same as the
wording found in the Policy Limitation, except for the term of two years
instead of one. Extending the reasoning found in the passage from Hall above,
it would be anomalous given the preference in insurance law for uniformity to
interpret the same wording differently simply because in one case it is
mandated by statute and in the other by contract.
[41]
Interpretation of a statute is undoubtedly a question of law.
Interpretation of a contract may involve questions of law, questions of fact
and questions of mixed fact and law:
Keefer Laundry Ltd. v. Pellerin Milnor
Corp.
, 2009 BCCA 273, 94 B.C.L.R. (4th) 205 at para. 58.
[42]
Given the similarity in wording between statutory condition 12 and the
Policy Limitation, it is my opinion that if the Policy Limitation governs, its
interpretation in this case is a question of law. I agree with the insurer
that the application of the Policy Limitation in this case would necessarily
involve a review of the facts, but in my view it would not require this Court
to make any new findings.
B. Applicable Limitation
Period
[43]
The first step in determining the
applicable limitation period is to classify the insurance policy in question.
Specific classes of insurance are not defined in the
Act
. Rather,
pursuant to section 1(2) of the
Act
,
the Lieutenant Governor in
Council may make regulations defining what is deemed to be a class of
insurance. The
Insurance Classes Regulation
, B.C. Reg. 337/90 provides
the following definitions:
disability insurance
means insurance undertaken by an insurer as part of a
life insurance contract whereby the insurer undertakes to pay insurance money
or to provide other benefits in the event that the insured becomes disabled as
a result of bodily injury or disease;
...
sickness insurance means
insurance against loss resulting from the illness or disability of a person and
against expenses incurred for dental care, other than illness or disability or
dental care arising from accident, but does not include disability insurance;
[44]
In this case, the Insurance Policy
is a group policy providing for income replacement benefits upon disability
with no life insurance component and thus is properly categorized as sickness
insurance. Part 4 of the
Act
governs Accident and Sickness Insurance
and contains statutory conditions deemed to be part of every contract:
89 Subject to section 90 the
conditions set out in this section are deemed to be part of every contract
other
than a contract of group insurance
, and must be printed on or attached to
the policy forming part of the contract with the heading
"Statutory Conditions".
STATUTORY CONDITIONS
...
Limitation of actions
12. An action or proceeding
against the insurer for the recovery of a claim under this contract must not be
commenced more than one year after the date the insurance money became payable
or would have become payable if it had been a valid claim.
[Emphasis added.]
[45]
Because the Insurance Policy is a
group policy, the statutory conditions under Part 4 of the
Act
,
including the statutory condition for the limitation of actions, do not apply.
Despite not being applicable, the language in statutory condition 12 is
relevant in this case because, as noted in para. 40 of these reasons, it is the
same as the Policy Limitation, except for the term.
[46]
According to Part 2, section 3, of
the
Act
, in the absence of other provisions under the
Act
dealing
with a subject matter, the general provisions of Part 2 apply:
3. This Part has effect,
despite any law or contract to the contrary, except that
(a) if any section
or statutory condition contained in Part 3, 4, 5 or 7 is applicable and deals
with a subject matter that is the same as or similar to any subject matter
dealt with by this Part, this Part does not apply, ...
[47]
As the Insurance Policy is not
covered by the specific limitation period provision in Part 4, the limitation
period of general application found in Part 2, section 22(1), would apply:
Every action on a contract must
be commenced within one year after the furnishing of reasonably sufficient
proof of a loss or claim under the contract and not after.
[48]
Dr. Sander relies upon
K.P. Pacific Holdings Ltd. v. Guardian
Insurance Co. of Canada
, 2003 SCC 25, [2003] 1 S.C.R. 433, revg 2001 BCCA
469, 202 D.L.R. (4th) 235 for the proposition that s. 22(1) of the
Act
acts
as a floor of protection beneath which an insurance contract cannot descend.
Accordingly, Dr. Sander argues it is open to an insurer to exceed the minimum
period prescribed in the
Act
and include a more generous limitation
period in the policy, should it choose to do so.
[49]
K.P. Pacific
concerned the limitation period applicable to an
all-risks insurance policy, which included fire insurance. The question was
whether statutory condition 14 of Part 5, the Fire Insurance Part, or the
general provisions of Part 2 applied to the policy. Chief Justice McLachlin
writing for the Court determined that a tangled historical thicket guards
entry to Part 5 and that, absent contrived reinterpretation and anomalous
consequences, statutory condition 14 could not apply. Rather, Part 2,
although not ideal, applied.
[50]
This interpretation left an alternative argument that even if Part 2
applied, the shorter limitation period found in the contract of insurance, superseded
the longer period in Part 2. In addressing this argument, McLachlin C.J.C.
stated:
21 ... I cannot accept this argument. The issue is
governed by s. 3(a) of the Act, which provides:
This Part has effect, despite any
law or contract to the contrary, except that
(a) if any
section or statutory condition contained in Part 3, 4, 5, 6 or 7 is applicable
and deals with a subject matter that is the same as or similar to any subject
matter dealt with by this Part, this Part does not apply....
This provision does not permit
the insurer to substitute harsher terms than those provided in Part 2. The
plain language of the section indicates the Legislatures intent that the
provisions in Part 2 operate as a floor of protection beneath which insurance
contracts cannot descend. If a contract falls within one of the enumerated
Parts, then that Part is engaged and provides a different floor. Otherwise, the
insured is guaranteed, at a minimum, the statutory protections contained in
Part 2. The insurers attempt to argue that the shorter limitation period is
more advantageous to the insured because it is more certain verges on the
disingenuous.
[51]
Sun Life seeks to distinguish
K.P. Pacific
from this case on two
grounds. First, it says
K.P. Pacific
dealt with an all-risk policy and
Part 5 of the
Act
. Second, it says the argument advanced was that a
less generous contractual limitation period displaced the more generous
statutory limitation period rather than the other way around: a more generous
contractual limitation period displacing a less generous statutory limitation
period.
[52]
In my view, while
K.P. Pacific
dealt with a different Part of the
Act
, the interpretation of the wording in section 3(a) of the
Act
is
still applicable to this case. It is clear from the decision of McLachlin
C.J.C. that the limitation period in Part 2 of the
Act
guarantees a
minimum level of protection. The question that arises is whether section 3(a)
permits insurers to offer a more generous level of protection than that
required by the
Act
.
[53]
The reasoning in
K.P. Pacific
does not specifically address
replacing section 22(1) of the
Act
with more favourable contractual
terms, but it also does not foreclose the possibility that a contract of
insurance may vary the provisions of Part 2 of the
Act
. McLachlin
C.J.C. describes the provisions in Part 2 as a floor beneath which insurance
contracts cannot descend and reasons that unless a different Part of the
Act
is engaged and provides a different floor, an insured is guaranteed at a
minimum, the statutory protections of Part 2. Flowing from the use of the
word floor and the idea of minimum protection is the inference that Part 2
leaves it open to an insurer to exceed that standard if it chooses to do so.
[54]
In my view, Sun Life must be held to the terms of the contract it provided
in this case, as they are more favourable to its participant than the
provisions of the statute. Insurers are only prohibited from providing a less
generous limitation period than that which is prescribed in Part 2. Nothing in
section 3(a) prevents an insurer from stipulating for a limitation period
greater than that in the
Act
itself.
[55]
In my respectful opinion, the summary trial judge erred in law by
applying the wrong limitation period to Dr. Sanders claim. The summary trial
judge dismissed the Policy Limitation because he found it resulted in
absurdity. This finding stems from the trial judges interpretation of the
Policy Limitation as being triggered upon the occurrence of a single event:
i.e.
Dr. Sander becoming disabled as defined in the Insurance Policy. Dr.
Sander challenges this interpretation.
[56]
I will now turn to the proper interpretation of the Policy Limitation
and to its application to Dr. Sanders claim.
C. Interpretation of the
Policy Limitation
[57]
For convenience I set out the Policy Limitation again:
No action or proceeding against
the Company for recovery of a claim under this policy shall be commenced more
than two years after the date the insurance money became payable or would have
become payable if it had been a valid claim.
[58]
Dr. Sander argues that the wording in the Policy Limitation has been
interpreted in cases involving continuous entitlement to benefits as creating a
rolling limitation period where the cause of action accrues at each
successive interval at which benefit instalments are to be paid. In other
words, so long as Dr. Sander continues to be entitled to benefit payments as a
result of his continuous disability, his cause of action against Sun Life is
renewed every time a benefit becomes payable.
[59]
Dr. Sander relies on
Holme Estate
as establishing that the words
the date that the insurance money became payable refer to the entitlement to
benefits. In
Holme Estate
, Mr. Justice Donald, writing for
this
Court, was concerned with the interpretation of s. 89 statutory condition 12 of
the
Act
,
which as explained in para. 45 of these reasons, does
not apply to this case. However, as discussed, the relevant wording of the
Policy Limitation is exactly the same as the wording in statutory condition 12,
except for the term, two years instead of one. Despite the fact that the
policy in
Holme Estate
was not a group policy, both that policy and the group
policy in this case were sickness insurance and insured against the same
risk: continuous total disability as defined in the respective policy. As
discussed above in para. 40, the interests of uniformity in insurance law weigh
in favour of interpreting the words in the Policy Limitation in the same manner
as statutory condition 12. Therefore, Donald J.A.s interpretation of
statutory condition 12 is equally applicable to the Policy Limitation.
[60]
In determining when the limitation period began to toll, Donald J.A.
stated at para. 34:
The benefits under the policy
thus initially became payable at the end of the limitation period, and were
then payable on a bi-monthly basis thereafter. The limitation period required
the action to be commenced one year from that date or from the date when each
payment became payable.
[61]
It appears to me that the reference to limitation period in the first
sentence of para. 34 of the decision may be a typographical error and should
read elimination period. Reading this passage with the suggested correction,
it is clear that each benefit payment gives rise to its own limitation period.
[62]
Donald J.A. concluded that the insured had a continuing claim through
the period of disability and it was not extinguished by the failure to sue
within one year of the commencement of that continuum. The only effect of the
limitation clause was to bar recovery of insurance money payable earlier than
one year prior to the action being commenced.
[63]
This approach was affirmed by this Court in
Balzer
at para. 38
where Madam Justice Huddart stated:
While the reasoning in
Holme
Estate
,
supra
, will always be appropriate where the cause of action
accrues monthly and the limitation period is determined by the date the
insurance money becomes payable, as is apparent from my reasons in the
companion appeal
Watterson v. Sun Life Assurance Co. of Canada
, 2003
BCCA 305 (B.C. C.A.), I would not apply s. 22(1) as a general rule to limit
recovery under disability coverage to benefits for the year preceding the
action. I agree with Pitfield J. to do so would be to ignore the wording of s.
22(1).
D. Applying the Policy
Limitation to this Case
[64]
Upon review of the Insurance Policy, it is clear that a participant has
a right to monthly benefit payments so long as the participant meets the
conditions of the Insurance Policy with regard to total disability. The
Insurance Policy provides for income replacement benefits upon total
disability, which is defined as: the inability to perform the essential duties
of dentistry; be under the regular care of a physician; and, not be engaged in
any gainful employment by reason of sickness or injury (also both defined in
the Insurance Policy). Benefits are payable under the following conditions:
INCOME REPLACEMENT
BENEFIT
1. If a participant becomes Totally Disabled, the Company
will make income replacement payments in accordance with the following
conditions and provisions of his policy:
a) Total Disability must
commence while insurance under this Income Replacement Benefit is in force on
behalf of the relevant Participant;
b) Total Disability must exist
for not less than the applicable Elimination Period while the relevant
Participant is alive; and
c) during Total
Disability, the Participant must be under the continuing care of a Physician.
2. So long as a Participant is Totally
Disabled, the amount payable each month under his Income Replacement Benefit
will be the Monthly Income applicable to such Participant, subject to any
reduction by the other provision of the policy.
[65]
So long as Dr. Sander continued to satisfy the above conditions and any
other relevant provisions included in the Insurance Policy, he was entitled to
income replacement benefits. The risk insured against was continuing total
disability and in that sense insurance money was also payable on a continuing
basis after the prescribed elimination period. Dr. Sanders claim therefore
accrued monthly and the limitation period, in light of the jurisprudence, must
be viewed as commencing anew on each successive entitlement.
[66]
This case differs from
Holme Estate
in that a determination of continuous
disability beyond 14 June 2001 has not been made and is in dispute. However,
in my view, interpreting the Policy Limitation as giving rise to a rolling
limitation period is correct and accords with precedent. Following the
reasoning of Donald J.A., the Policy Limitation should be applied so as to bar
Dr. Sanders claim for the recovery of insurance money payable earlier than two
years preceding the date on which he issued the writ of summons.
[67]
I do not agree with Sun Life that Dr. Sanders claim is time-barred
under the Policy Limitation despite the recurring cause of action because the 29
June 2001 letter denied entitlement not only to the next scheduled payment of
benefits but also to any future payment of benefits. In my view, this position
cannot be sustained as it ignores the wording in the latter part of the Policy
Limitation: would have become payable if it had been a valid claim.
[68]
Whether Dr. Sander has a valid claim is yet to be determined. In my
respectful opinion, the summary trial judge erred in viewing the Policy
Limitation as being triggered by a single occurrence and in applying instead s.
22(1) of the
Act
. As a result of the summary trial judges approach, no
determination was made as to whether Dr. Sander continued to be disabled and
therefore entitled to benefits after 14 June 2001. It must be remembered that
Dr. Sander may have continued to be disabled as a result of his refusal to
undergo the corrective surgery, which, as found by Dillon J. and affirmed by
this Court, was required by the Insurance Policy. The resulting unanswered question
is whether Dr. Sander continued to be entitled to benefits despite his initial
refusal to have corrective surgery until after the court gave its opinion that
such surgery was reasonably required under the terms of the Insurance Policy.
This question requires a determination of the merits of Dr. Sanders claim.
VII.
Disposition
[69]
In my opinion, the appeal should be allowed and the order of the learned
summary trial judge set aside.
[70]
The action should be remitted to the trial court for a determination of
whether Dr. Sander is entitled to benefits under the Insurance Policy for the
period of two years preceding the date on which he issued the writ of summons
and anytime thereafter.
The
Honourable Chief Justice Finch
I agree:
The Honourable Madam Justice
Saunders
I agree:
The Honourable Madam Justice
Neilson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Angus v. Themis Program Management and Consulting Ltd.,
2011 BCCA 37
Date: 20110107
Docket:
CA038461; CA038469
Docket: CA038461
Between:
Robert Michael
Angus
Respondent
(Plaintiff)
And
Themis Program Management
and Consulting Ltd.
Appellant
(Defendant)
And
Her Majesty the
Queen in Right of the Province of British Columbia
as represented by the Ministry of Attorney General
Defendant
Docket
CA038469
Between:
Robert
Michael Angus
Respondent
(Plaintiff)
And
Her
Majesty the Queen in Right of the Province of British Columbia
as represented by the Ministry of Attorney General
Appellant
(Defendant)
And
Themis
Program Management and Consulting Ltd.
Defendant
Before:
The Honourable Mr. Justice Groberman
(In Chambers)
On appeal from: Supreme
Court of British Columbia, August 30, 2010
(
Angus v. Themis Program Management and Consulting Ltd.
,
Vancouver Registry S064911)
Oral Reasons for Judgment
Counsel for the Appellant/Defendant, Themis Program
Management and Consulting Ltd.
A.S. Dosanjh
Counsel for the Appellant/Defendant, Ministry of the
Attorney General
B.A. Mackey
Counsel for the Respondent:
D.J. O'Donnell
Place and Date of Hearing:
Vancouver, British
Columbia
January 7, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 7, 2011
[1]
GROBERMAN J.A.
: These are two applications for leave to appeal a
judgment of a Supreme Court judge dismissing a summary trial application.
[2]
The plaintiffs claims arise from actions taken by the Family
Maintenance enforcement program against him. He alleges that the defendants
transmitted his social insurance number to certain companies without a legal
right to do so, and so committed a statutory tort under the
Privacy Act
,
R.S.B.C. 1996, c. 373. He also alleges that the programs actions in
having the government of Canada refuse to issue a passport to him violated his
constitutional rights.
[3]
The summary trial application in the Supreme Court was brought on by the
defendants, and concerned only the
Privacy Act
claim. The summary trial
judge found that claim unsuitable for summary determination. Her finding was
based on her view that as the
Privacy Act
claim should not be dealt with
separately from the other claim.
[4]
Although I have heard from counsel for Mr. Angus at some length, it is
not apparent to me that there are inter-connections between the two claims that
would make summary disposition of the
Privacy Act
claim inappropriate.
The judgment from which the defendants seek leave to appeal also fails to refer
to any specific inter-connections.
[5]
The tests that I must consider on leave to appeal, however, are not
concerned primarily with the merits of the decision below. I must, as a
threshold matter, consider whether the appeal has some merit, that is, whether
it has a possibility of success, but that is merely one issue before me.
[6]
Having heard the arguments of the parties, I am left in no doubt that
the proposed appeal has at least some merit and, indeed, has considerable
strength. An argument can be made that the claim under the
Privacy Act
was wholly distinct from the claim with respect to the denial of a passport. It
is arguable that it should have been dealt with by summary disposition. In
short, I am satisfied that there is a case of sufficient merit to warrant an
appeal.
[7]
The other questions on an application for leave to appeal deal with
whether an appeal is an appropriate manner in which to deal with an
interlocutory ruling. In particular, the practice of this Court requires that I
consider whether the matter is one of importance to practice generally, whether
it is of important to the litigation, whether it will in some way hinder or
delay the disposition of the matter in the trial court; and, finally, whether
it is in generally the interests of justice that an appeal go forward.
[8]
Counsel for the proposed appellants have suggested two manners in which
this matter is important to practice generally. First, they say that, as a
matter of principle, the summary trial judge ought to have considered the fact
that two different causes of action were present here rather than simply two
different issues. Counsel say that this Court has not fully considered the
question of whether the general concerns about litigating in slices ought to
apply where there are two distinct causes of action.
[9]
While it is correct that the Court has not specifically addressed that
issue, the Court has discussed the importance of inter-connectedness of issues
in determining suitability of summary trial. I am not convinced that there is,
as a matter of principle, a distinct principle that applies when there is more
than one cause of action. It seems apparent to me that the question of whether
an issue can be hived off from the balance of a claim will turn on the question
of whether the issue is inter‑connected factually or legally with the
balance of the claim. I am not persuaded that the question of whether, from the
standpoint of pigeon-holing the claim into causes of action, two separate
causes of action can be stated has any bearing on the suitability of a summary
trial. In any event, I am not satisfied that, as a matter of practice, it is
important for this Court to address that issue.
[10]
The other issue that is said to be of importance to practice is the recent
amendments to the Supreme Courts
Rules of Court
. The rules now enshrine
a principle that procedures should be proportional to the matters in issue.
This is one of the first cases in which the rule governing proportionality of
procedures is in play.
[11]
Counsel says that this case would be an opportunity for the Court to
address the place of the proportionality principle in the test for summary
trial. While I agree that that principle could tangentially be brought into
play within this appeal, it does not appear to me to be an issue that is front
and centre in the proposed appeal. I do not see this case as a particularly
suitable one for this Court to embark upon the interpretation of the
proportionality principle, particularly since the principle is a new one and
particularly since it was not addressed by the chambers judge in this matter.
[12]
There will be other more suitable times for this Court to address that
principle, and the possibility that it could be addressed in this case does
not, standing alone, convince me that the issues in this case are of importance
generally to practice.
[13]
The fact that the proposed appeal is not of general importance to
practice. Is not conclusive of this application. I must take into account other
considerations, as well.
[14]
The question of whether the case is of importance to parties is the next
issue. I understand that in this case discoveries have been completed and the
matter was ready to go for trial in October, but it was not heard at that time
due to some confusion as to the necessity of a pre-trial conference. The case is,
therefore ready for trial. It does not appear that any great amount of time or
effort in pre-trial preparations will be saved by having the appeal proceed.
[15]
The trial is set for nine days in October 2011. As I remarked during the
course of the hearing of this application, that seems to be very lengthy period
for a case that does not, on the face of it, appear to be factually or legally
complex. I acknowledge, however, that I do not have the full appreciation for
the complexities of the case.
[16]
It does not appear to me that a great deal of time at trial will be devoted
to the
Privacy Act
issue, which, on the face of it, is factually
uncomplicated. Indeed, the very facts and arguments that the applicants put
forward in favour of having this matter dealt with on a summary trial suggest
to me that not a great deal of time will be expended at trial in dealing with
this matter as opposed to the passport matter.
[17]
In the circumstances, I am unable to conclude that there will be great
prejudice to the applicants in this matter proceeding to trial or any great
saving in the litigation if the matter goes to this Court on an interlocutory
appeal.
[18]
In terms of delay of the trial proceedings in this matter, I am
convinced by the submissions of Mr. Dosanjh that the appeal could be completed
in advance of trial and that the appeal proceedings would not be disruptive to
the trial process.
[19]
The final issue is whether there are considerations of justice generally
that impinged on the granting of leave. None of the parties has referred to any
particular injustice that would be a result of either granting or withholding
leave, and I do not see that there would be any such injustice in this case.
[20]
To summarize, there is a strongly arguable case on appeal, but it does
not appear to me that there is an issue of general principle involved or a
matter of importance to practice or, indeed, to the parties. There is no real
detriment to the trial process that would result from granting leave, nor is
there any great saving to the parties or to the justice system that would
result from granting leave.
[21]
I am not convinced in the circumstances that there is any great value in
an appeal going forward and it is for that reason that I am denying leave to
appeal on both of these applications.
(discussion with
counsel re. costs)
[22]
GROBERMAN J.A.
: On the issue of costs, Mr. Dosanjh and Mr. Mackey
suggest that the appropriate order is that each party bear its own costs. Ms.
O'Donnell is seeking costs and suggesting that they might be fixed summarily.
[23]
There is some merit in the arguments of Mr. Dosanjh and Mr. Mackey that
certain aspects of the application were accepted, that a great deal of time on
this application was spent on issues of whether it was meritorious, which I
have determined in favour of the defendants. That said, I am not convinced that
I should depart from the ordinary rule that costs follow the event. Mr. Angus
will have his costs of these leave applications. I am going, however, to provide
that because the applications were heard together and a single response was
made, there will be only one set of costs and not two. Those will be divided
between the respondents. Hopefully, the respondents are able to agree on a
manner of dividing it between them; if not, that can be dealt with.
[24]
With respect to the suggestion that the costs be set summarily, if you
want to pursue that, I will consider it, otherwise the costs should be agreed
between the parties or assessed by the Registrar.
(discussion
with counsel re. costs)
[25]
GROBERMAN J.A.
: As I indicated, my order is that leave to appeal
on both matters is dismissed with one set of costs. I am making a further
order, and this is by consent, that those costs be assessed in the amount
$1,752.80, including HST.
(discussion re. when
costs should be paid)
[26]
GROBERMAN J.A.
: The costs will be payable forthwith.
The
Honourable Mr. Justice Groberman
|
COURT OF APPEAL FOR BRITISH
COLUMBIA
Citation:
Jones v. Donaghey,
2011 BCCA 6
Date: 20110107
Docket: CA038412
Between:
Cody Jones by his
Litigation Guardians,
Keith Jones and Crystal Seward
Respondent
(Plaintiff)
And
Julie Ann Donaghey
Appellant
(Defendant)
Corrected
Judgment:
the date of the lower Court Order was corrected and the citation
for the lower Court judgment was removed.
Before:
The Honourable Madam Justice
Newbury
The Honourable Mr. Justice Mackenzie
The Honourable Mr. Justice K. Smith
On appeal from: the
Supreme Court of British Columbia, August 6, 2010,
(
Jones v. Donaghey,
Victoria Registry No. 08-1842)
Counsel for the Appellant:
R. Harper
Counsel for the Respondent:
N. Foley, F. Sierecki
Place and Date of Hearing:
Vancouver, British
Columbia
November 30, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
November
30, 2010
Date of Reasons:
January
7, 2011
Written Reasons by:
The Honourable Mr. Justice K. Smith
Concurred in by:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Mackenzie
Reasons for Judgment of the Honourable
Mr. Justice K. Smith:
[1]
After hearing this appeal, we allowed the appeal with reasons to
follow. These are my reasons.
[2]
Julie Ann Donaghey, a defendant in the underlying action, appeals with
leave from an order of the Honourable Mr. Justice Macaulay of the Supreme
Court of British Columbia by which, on application of the plaintiff, he ordered
her to attend for a psychiatric examination pursuant to Rule 7-6(1) of the
Supreme
Court Civil Rules
, (the successor of Rule 30(1) of the
Rules of Court
),
which provides,
(1) If the physical
or mental condition of a person is in issue in an action, the court may order
that the person submit to examination by a medical practitioner....
[3]
The question is whether the chambers judge erred in concluding that Ms. Donagheys
mental condition is an issue in the litigation and consequently ordering Ms. Donaghey
to attend for a psychiatric examination pursuant to Rule 7-6(1) on the basis
that evidence of her mental condition is potentially ... relevant to an issue
or issues in the case. In my view, he did and I would allow the appeal.
[4]
The
Supreme Court Civil Rules
prescribe the rules that regulate
practice and procedure in the Supreme Court they set out the administrative
system under which disputes are taken to the court and adjudicated. Clearly,
such a system must have an orderly method of determining the precise point or
points to be decided in each case. In the Supreme Courts administrative
system, this method is known as pleading. The rules governing pleading are
set out in Part 3 of the
Rules
. Thus, the law of pleading is an element
of the law of practice and procedure.
[5]
Part 7 of the
Rules
sets out another element of this system. It
is entitled Procedures for Ascertaining Facts. Rule 7-6(1), pursuant to
which the order under appeal was made, regulates part of this component of the
administrative system.
[6]
It is trite to say that words take their meaning from their context.
The modern principle of statutory interpretation mandates that words are to
be read in their entire context in their grammatical and ordinary sense
harmoniously with the scheme of the Act, the object of the Act, and the
intention of Parliament: Elmer A. Driedger,
The Construction of Statutes
,
2d ed. (Toronto: Butterworths, 1983) at 87. This approach is equally
applicable to subordinate legislation, like the
Supreme Court Civil Rules
,
enacted by the provincial legislatures. Thus, the meaning of issue in Rule
7-6(1) must be ascertained by considering it in the context of the
Rules
as a whole in accordance with this modern principle.
[7]
In the law of pleading, issue is a term of art. As was said in
Farrell
v. Secretary of State for Defence
, [1980] 1 All E.R. 166 at 173 (H.L.), the
primary purpose of pleadings is to define the issues and thereby to inform the
parties in advance of the case they have to meet and so enable them to take
steps to deal with it. In D.B. Casson,
Odgers on High Court Pleading and
Practice
, 23rd ed. (London: Sweet & Maxwell/Stevens, 1991) at 123-124, issue
is explained in this way:
The pleadings should always be conducted so as to evolve some
clearly defined
issues
, that is, some definite propositions of law or
fact, asserted by one party and denied by the other, but which both agree to be
the points which they wish to have decided in the action.
...
The function of pleadings then is to ascertain with precision
the matters on which the parties differ and the points on which they agree; and
thus to arrive at certain clear issues on which both parties desire a judicial
decision.
[Emphasis in original.]
[8]
Thus, an issue of fact is a disputed question of fact. However, not
every disputed question of fact is an issue. In
Howell v. Dering
,
[1915] 1 K.B. 54, Lord Justice Buckley, discussing the meaning of issue in a
rule of court that provided for costs to follow the event of an issue tried
before a jury, said, at 62,
It is impossible to say that
every question of fact which is in dispute between a plaintiff and a defendant
is an issue. The word can be used in more than one sense. It may be said
that every disputed question of fact is in issue. It is in a sense, that is to
say, it is in dispute. But every question of fact which is in issue and
which a jury has to determine is not necessarily an issue within the meaning
of the rule. I should define issue for the purposes of this rule in some
such words as these:
An issue is that which, if decided in favour of the
plaintiff, will in itself give a right to relief, or would, but for some other
consideration, in itself give a right to relief; and if decided in favour of
the defendant will in itself be a defence
. [Emphasis added.]
[9]
Accordingly, an issue is a disputed fact the resolution of which will,
without more, have legal consequences as between the parties to the dispute.
[10]
Such facts are referred to as material facts in
Danyluk v.
Ainsworth Technologies Inc.
, 2001 SCC 44 at para. 54, [2001] 2 S.C.R.
460:
[54]
A cause of
action has traditionally been defined as comprising every fact which it would
be necessary for the plaintiff to prove, if disputed, in order to support his
or her right to the judgment of the court:
Poucher v. Wilkins
(1915),
33 O.L.R. 125 (C.A.). Establishing each such fact (sometimes referred to as
material facts) constitutes a precondition to success.
[11]
Professor James B. Thayer called them ultimate facts in
A
Preliminary Treatise on Evidence at the Common Law
, Reprint (South
Hackensack, N.J.: Rothman Reprints Inc., 1969) at 194, where he said, ... [R]easoning
... intervenes ... between the primary facts, what may be called the raw
material of the case, and the secondary or ultimate facts, and at 197, where
he stated, When it is said that a fact is for the jury, the fact intended ...
is that which is in issue, the ultimate fact, that to which the law directly
annexes consequences.
[12]
The
Rules of Court
, which governed when the underlying action was
commenced, adopted the description material in Rule 19(1):
(1) A pleading shall be as
brief as the nature of the case will permit and must contain a statement in
summary form of the material facts on which the party relies ....
[13]
The
Supreme Court Civil Rules
has continued this traditional usage
in Rule 3-1(2)(a):
(2) A notice of civil claim must do the following:
(a) set out a concise statement of the material facts
giving rise to the claim....
[14]
Accordingly, since the purpose of pleadings is to define the issues of
material or ultimate fact as between the parties, whether a proposition of fact
is in issue for purposes of Rule 7-6(1) must be determined from an
examination of the pleadings:
Astels v. Canada Life Assurance Co.
, 2006
BCCA 110 at para. 4, 23 C.P.C. (6th) 266.
[15]
Relevant, the term used by the chambers judge, belongs to the law of
evidence.
[16]
The relationship between relevance and issues of material or ultimate
fact was explained in
R. v. Watson
(1996), 30 O.R. (3d) 161 at 172, 108
C.C.C. (3d) 310 (C.A.):
Relevance ... requires a
determination of whether as a matter of human experience and logic the
existence of Fact A makes the existence or non-existence of Fact B more
probable than it would be without the existence of Fact A. If it does then Fact
A is relevant to Fact B. As long as Fact B is itself a material fact in
issue or is relevant to a material fact in issue in the litigation then Fact A
is relevant and
prima facie
admissible.
[17]
This concept is succinctly illustrated, albeit using different
terminology, in
R. v. White
, [1926] 2 W.W.R. 481 at 485, 45 C.C.C. 328
(B.C.C.A.), where the Court adopted a passage from S. L. Phipson, ed.,
Best
on Evidence
, 12th ed. (London: Sweet & Maxwell, 1922) at 6 that
included these words:
The fact sought to be proved is
termed the principal fact; the fact which tends to establish it, the
evidentiary fact. When the chain consists of more than two parts, the
intermediate links are principal facts with respect to those below, and
evidentiary facts with respect to those above them.
[18]
Thus, a material fact is the ultimate fact, sometimes called ultimate
issue, to the proof of which evidence is directed. It is the last in a series
or progression of facts. It is the fact put in issue by the pleadings.
Facts that tend to prove the fact in issue, or to prove another fact that tends
to prove the fact in issue, are evidentiary or relevant facts. And, as
Professor Thayer said at 197, Issues are not taken upon evidential matter.
[19]
In the case at bar, the plaintiffs litigation guardians are his natural
parents. The plaintiff was born on July 9, 2006. In September 2006, he was
removed from the custody of his parents by the Director of Child Development
pursuant to the provisions of the
Child, Family and Community Service Act
,
R.S.B.C. 1996, c. 46 and, following a presentation hearing in the
Provincial Court, he was ordered, over the opposition of his parents, into the
interim custody of the Director. In the late fall of 2006, the Director placed
him in the foster care of Ms. Donaghey and her partner, Erana King. In
December 2006, while he was in their care, the plaintiff claims, he suffered a
traumatic brain injury when either Ms. Donaghey or Ms. King shook
him.
[20]
The plaintiff pleaded intentional assault (i.e., battery) and
negligence against Ms. Donaghey, as follows:
16. On or about December 20, 2006, while the Infant was
in a Director appointed foster home with the Defendants, Donaghey and King, the
Defendant Donaghey intentionally assaulted the Infant by:
(a) Violently shaking the
infant; or
(b) Such further particulars
which are not yet known to the Plaintiffs.
...
27. In addition and/or in the alternative to the
allegations set out in paragraph 16 hereof, the Defendant, Donaghey was
negligent and breached her duty of care to the Infant, the particulars of which
include:
(a) agreeing to act and/or
to continue to act as a foster parent when she knew or ought to have known that
she and/or King were not adequately trained, supervised or supported by the Director
or that she and King were unable to meet the needs of the Infant;
(b) failing to care for
and/or adequately meet the needs of the Infant;
(c) failing to adequately
supervisor [
sic
] and/or support King;
(d) interfering with the
proper and/or appropriate fostering of the relationship between the Infant and
the Parents;
(e) causing harm to the
Infant by negligent and/or inappropriate physical handling of the Infant;
(f) failing to adequately
discharge her duties as locus parentis to the Infant;
(g) failing to protect the
Infant from harm;
(h) leaving the Infant with
King when she knew or ought to have known that King was prone to violence
and/or prone to take inappropriate and potentially dangerous behaviours in
relation to the Infant;
(i) such further particulars as are not yet know[n]
to the Plaintiff.
[21]
Ms. Donaghey denied these allegations in her statement of defence.
[22]
The plaintiff also pleaded negligence against Ms. King and the
Director in these terms:
28. In addition and/or in the alternative to the
allegations set out in paragraph 18 hereof, the Defendant, King was negligent
and breached her duty of care to the Infant, the particulars of which include:
...
(d) Leaving the Infant with Donaghey when she knew or
ought to have known that Donaghey was prone to violence and/or prone to take
inappropriate and potentially dangerous behaviours in relation to the Infant;
...
29. The Director and/or its agents were negligent and
breached its duty of care to the Infant, the particulars of which include:
...
(n) placing the Infant into the care of Donaghey
and/or King when the Director knew or ought to have known that such a placement
was and/or continued to be unsafe, inappropriate or unsafe and/or inconsistent
with the best interests of the Infant.
[23]
Ms. King and the Director denied these allegations in their
respective statements of defence.
[24]
On his application, the plaintiff relied on evidence that Ms. Donaghey
had admitted on examination for discovery to anger management issues as a
young woman (more than 20 years ago) for which she had received psychological
counselling and that she had yelled at a co-worker in 2009, and on expert
psychiatric opinion evidence that, during a videotaped statement she gave to a
police officer investigating the plaintiffs injury, she displayed an
exaggerated emotional response; that although such responses can occur in the
general population, they are more likely to occur in a person with a
personality disorder; that although anger management problems may occur in
the general population, they are more likely to occur in persons with
personality disorders; and that to determine whether Ms. Donaghey has a
personality disorder would require a psychiatric examination. Accordingly, he
contended, Ms. Donagheys mental condition was in issue in the action and
he was therefore entitled to an order that she attend for examination by a
qualified psychiatrist to investigate whether she suffers from a personality
disorder.
[25]
The chambers judge agreed. He began his reasons by noting that the
plaintiffs specifically allege that Ms. Donaghey was prone to violence and/or
prone to take inappropriate and potentially dangerous behaviours in relation to
the infant and that
[v]irtually identical allegations
are made against the co-defendant, King, who was also a foster parent at the
material time. In addition, the plaintiffs claim that Her Majesty the Queen,
as represented by the ministries responsible, negligently approved the personal
defendants as foster parents when they knew, or ought to have known, that the
foster parents were prone to violence as set out above.
[26]
After stating that [t]he plaintiffs expressly raised the question of
pre-disposition in their pleadings, the chambers judge said,
Whether proof of a personality
disorder with associated anger management problems may go more to the question
whether the ministry, having known of the past counselling, should have made
further inquiries into Donagheys background rather than to proving that
Donaghey committed the alleged assault, is an open question. Potentially, such
evidence is relevant to one or both issues, depending on the actual content.
[27]
He concluded,
In my view, the plaintiffs are
entitled to the order sought. I am satisfied that Donagheys mental condition
at the relevant times is an issue in the litigation.
[28]
Thus, he concluded that whether Ms. Donaghey has a personality
disorder is relevant to one or both issues he identified and, as well, that
her mental condition is an issue in the litigation.
[29]
In my view, the chambers judge erred. The test under Rule 7-6(1) is not
whether the mental condition of a person is relevant to an issue; rather, it
is whether the mental condition is itself in issue. Moreover, Ms. Donagheys
mental condition is not put in issue by the pleadings.
[30]
The issue raised by Ms. Donagheys denial of the allegation in
paragraph 16 of the statement of claim is whether she intentionally assaulted
the plaintiff by violently shaking him. That Ms. Donaghey suffered from a
personality disorder is not a material fact in respect of this issue, that is,
proof that she suffered from a personality disorder would not in itself have
legal consequences as between these parties.
[31]
The issue raised between the plaintiff and Ms. Donaghey in
paragraph 27 is whether Ms. Donaghey breached her duty of care to the
plaintiff in any one or more of the specified ways. None of these allegations
put Ms. Donagheys mental condition in issue.
[32]
The issues raised as between the plaintiff and Ms. King and as
between the plaintiff and the Director respectively in paragraphs 28(d) and
29(n) of the statement of claim are whether these defendants breached their
duty of care to the plaintiff by leaving him with Ms. Donaghey when they knew
or ought to have known one or more of the particularized facts. Thus, the
issue in each case is the state of mind of these defendants. Proof that Ms. Donaghey
suffered from a personality disorder would not entitle the plaintiff to success
on these issues. Her mental condition is not a definite proposition of ...
fact, asserted by [the plaintiff] and denied by [Ms. King/the Director],
... which both agree to be the point which they wish to have decided: Odgers,
supra
, at para. 5.
[33]
Ms. Donagheys mental condition might be an evidentiary fact
relevant to the issues raised in the paragraphs under discussion, as the
chambers judge concluded. However, as I have said, relevance of the mental
condition of a person to an issue is not the test under Rule 7-6(1). Rather,
the persons mental condition itself must be in issue to warrant an order
pursuant to the rule and none of these allegations put Ms. Donagheys
mental condition in issue.
[34]
This situation may be contrasted with the more common situation in which
a plaintiff claims damages on the basis that a defendant has negligently caused
him or her personal injury. In such a case, the defendants denial puts the
plaintiffs condition, whether physical or mental or both, in issue. The
plaintiffs injury is a material fact and the failure to prove it will be fatal
to the action. Accordingly, the defendant may be entitled to a medical
examination pursuant to Rule 7-6(1) to obtain evidence of the plaintiffs
physical or mental condition. However, as I have explained, this is not such a
case.
[35]
For those reasons, I would allow the appeal, set aside the order that Ms. Donaghey
attend for a psychiatric examination, and dismiss the plaintiffs application.
The
Honourable Mr. Justice K. Smith
I agree:
The Honourable Madam Justice
Newbury
I agree:
The Honourable Mr. Justice
Mackenzie
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Kerton v. Workers Compensation Appeal Tribunal,
2011 BCCA 7
Date: 20110110
Dockets:
CA038134, CA038146
Docket: CA038134
Between:
Fred Kerton
Respondent
(Appellant on Cross-Appeal)
(Petitioner)
And
Workers
Compensation Board of British Columbia
Appellant
(Respondent on Cross-Appeal)
(Respondent)
And
Workers
Compensation Appeal Tribunal
Respondent (Respondent
on Cross-Appeal)
(Respondent)
-and-
Docket: CA038146
Between:
Fred Kerton
Respondent
(Appellant on Cross-Appeal
(Petitioner)
And
Workers
Compensation Appeal Tribunal
Appellant
(Respondent on Cross-Appeal)
(Respondent)
And
Workers
Compensation Board of British Columbia
Respondent (Respondent
on Cross-Appeal)
(Respondent)
Corrected Judgment: The text of the judgment was corrected
at paragraphs
4, 5, 32 and 33 where changes
were made on January 12, 2011
Before:
The Honourable
Chief Justice Finch
The Honourable Madam Justice Kirkpatrick
The Honourable Mr. Justice Groberman
On appeal from: Supreme
Court of British Columbia, 5 May 2010,
(
Kerton v. Workers Compensation Appeal Tribunal
, Docket S081267)
Counsel for the Appellant, Workers
Compensation Appeal Tribunal:
T.J. Martiniuk, C.
Berkey
Counsel for the Appellant, Workers
Compensation Board
L. Courtenay, S.A.
Nielsen
Counsel for the Respondent, Kerton,
Appellant on the Cross-Appeal:
V.A. Ishkanian
Place and Date of Hearing:
Vancouver, British
Columbia
December 2, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 10, 2011
Written Reasons by:
The Honourable Chief Justice Finch and The Honourable Mr.
Justice Groberman
Concurred in by:
The Honourable Madam Justice Kirkpatrick
Reasons for Judgment of the Honourable
Chief Justice Finch and the Honourable Mr. Justice Groberman:
I. Introduction
[1]
The Workers Compensation Appeal Tribunal (WCAT) and the Workers
Compensation Board (WCB) appeal from the order of the Supreme Court of
British Columbia pronounced 5 May 2010. That order granted judicial review of
two decisions of WCAT, quashed both decisions, and remitted the matter to WCAT
for reconsideration. Both of the impugned WCAT decisions depended upon that
tribunals interpretation and application of s. 243(3) of the
Workers Compensation
Act
, R.S.B.C. 1996, c. 492, governing its discretion to extend time for
filing a notice of appeal.
[2]
The first decision, 20 October 2006, denied the petitioners request for
an extension of time (the EOT Decision). The second decision, 8 January
2008, denied the petitioners request for reconsideration of the earlier
decision (EOT Reconsideration Decision). The effect of the two decisions was
to bar the petitioners intended appeal from the decision of the Workers
Compensation Review Division on 19 December 2005.
[3]
The learned chambers judge held that the two WCAT decisions addressed a
jurisdictional issue, and were therefore reviewable on the standard of
correctness. He held that the decisions refusing an extension of time, and
refusing reconsideration, were incorrect and should therefore be set aside.
[4]
For the reasons that follow, we are of the opinion that the learned
chambers judge erred in characterizing the issue as one of jurisdiction, and
erred in applying the standard of correctness. The applicable standard of
review, as prescribed by the
Administrative Tribunals Act
, S.B.C. 2004,
c. 45, is patent unreasonableness. In our opinion, neither of the impugned
decisions can be said to be patently unreasonable. We would allow the appeal.
[5]
The petitioner, Mr. Kerton, cross-appeals from the order of the Supreme
Court of British Columbia, arguing that the court should have made an order in
the nature of
mandamus
compelling WCAT to grant the extension of time. We
would dismiss the cross-appeal.
II. Facts
[6]
The learned chambers judge summarized the background of Mr. Kertons
case as follows:
[2] Mr. Kerton injured his left leg and knee on the job in
1991 and the Board compensated him for his injuries at that time. In 2005, as a
result of on-going knee difficulties, the Board re-opened his claim under s.
96(2) of the
Workers Compensation Act
, R.S.B.C. 1996, c. 492
[
WCA
].
The date of re-opening was set by the Board as April 1, 2005, the date of his
knee surgery. The Board paid his temporary benefits under s. 29 (wage loss and
benefits).
[3] Where a claim is re-opened after three years, s. 32(1)
of the
WCA
gives the Board discretion to determine compensation benefits
by reference either to the workers average earnings before the original injury
or before its recurrence.
[4] Mr. Kerton attempted to
make four appeals in this case, but one was not filed in time. It is this
fourth late appeal that is in issue in this case. For completeness, I will
briefly outline the four appeals below:
[7]
It is not necessary for these reasons to review the first three
appeals. With respect to the fourth appeal, the only one at issue here, the
learned chambers judge said:
[8] On June 10, 2005, the Board
determined Mr. Kertons average net earnings for long-term and short-term wage
rates. Mr. Kerton requested a review of that decision by the Review Division,
which issued its decision on December 19, 2005, confirming the Boards decision.
Mr. Kerton filed an appeal of that Fourth Review Division decision to WCAT.
Section 243(1) of the
Act
provides that an appeal from a decision of the
Review Division must be filed within 30 days after the decision being appealed
was made. WCAT allows for an 8-day mailing period to ensure receipt of the
Review Division decision. Mr. Kertons filing was approximately 186 days late.
[8]
As indicated above, the WCAT EOT Decision of 20 October 2006 refused the
petitioner an extension of time . The WCAT EOT Reconsideration Decision of 8
January 2008 refused the petitioners request for a reconsideration of the earlier
refusal.
[9]
WCATs authority to extend time for the filing of a notice of appeal is
set out in s. 243(3) of the
Workers Compensation Act
. That section
provides:
(3) On application, and where the chair is satisfied that
(a) special circumstances existed which
precluded the filing of a notice of appeal within the time period required in
subsection (1) or (2), and
(b) an injustice would otherwise
result,
the chair may extend the time to
file a notice of appeal even if the time to file has expired.
[10]
In the EOT Decision of 20 October 2006 WCAT held that the petitioner had
shown the existence of special circumstances within the meaning of subsection
3(a). WCAT was further satisfied that an injustice would otherwise result if
an extension of time were refused. The tribunal held, however, that the
petitioner had failed to explain adequately the delay in bringing the appeal,
and exercised its discretion against extending time.
[11]
In the EOT Reconsideration Decision of 8 January 2008 WCAT held that the
earlier decision was to be reviewed on a standard of patent unreasonableness,
as provided for by s. 58 of the
Administrative Tribunals Act
. The
tribunal concluded that the decision under review was not only a rational
interpretation of s. 243(3) but was also a correct interpretation. As grounds
to set aside and reconsider the earlier decision had not been established, it
was declared to stand as final and conclusive in accordance with section 255(1)
of the Act.
III. Reasons for
Judgment in the Supreme Court of British Columbia
[12]
In considering the standard of review to be applied on the application
for judicial review, the learned chambers judge directed his attention to s. 58
of the
Administrative Tribunals Act
. It provides:
58 (1) If the tribunals enabling Act contains a privative
clause, relative to the courts the tribunal must be considered to be an expert
tribunal in relation to all matters over which it has exclusive jurisdiction.
(2) In a judicial review proceeding relating to expert
tribunals under subsection (1)
(a) a finding of fact or law or an
exercise of discretion by the tribunal in respect of a matter over which it has
exclusive jurisdiction under a privative clause must not be interfered with
unless it is patently unreasonable,
(b) questions about the application
of common law rules of natural justice and procedural fairness must be decided
having regard to whether in all of the circumstances the tribunal acted fairly
and
(c) for all matters other than
those identified in paragraphs (a) and (b), the standard of review to be
applied to the tribunals decision is correctness.
(3) For the purposes of subsection (2) (a), a discretionary
decision is patently unreasonable if the discretion
(a) is exercised arbitrarily or in
bad faith,
(b) is exercised for an improper
purpose,
(c) is based entirely or
predominantly on irrelevant factors, or
(d) fails to take statutory requirements into account.
[13]
The judge identified the privative clause in the
Workers Compensation
Act
, at ss. 254 and 255, which provide:
254 The appeal tribunal has exclusive jurisdiction to inquire
into, hear and determine all those matters and questions of fact, law and
discretion arising or required to be determined under this Part and to make any
order permitted to be made, including the following:
(a) all
appeals from review officers decisions as permitted under section 239;
(b) all
appeals from Board decisions or orders as permitted under section 240;
(c) all
matters that the appeal tribunal is requested to determine under section 257;
(d) all
other matters for which the Lieutenant Governor in Council by regulation
permits an appeal to the appeal tribunal under this Part.
255 (1) Any decision or action of the chair or the appeal
tribunal under this Part is final and conclusive and is not open to question or
review in any court.
(2) Proceedings by or before the chair or appeal tribunal
under this Part must not
(a) be
restrained by injunction, prohibition or other process or proceeding in any
court, or
(b) be removed by certiorari or otherwise into any
court.
[14]
The judge considered that it is important to parse out when WCAT was
operating within its exclusive jurisdiction and when it was not. He referred
to some decisions of the Supreme Court of British Columbia which held the
standard of review for WCAT decisions was patent unreasonableness, but he held
the view that those cases were not determinative.
[15]
The learned chambers judge then engaged in a standard of review
analysis as described in
Dunsmuir v. New Brunswick
, 2008 SCC 9, [2008]
1 S.C.R. 190. With respect to the tribunals expertise the judge said:
[51] Turning to the nature of the issue in question; in my
view, it is best characterized as a decision as to whether the word may in s.
243(3) of the
WCA
confers a residual discretion upon WCAT to reject
requests for extensions of time, even if WCAT determines that the two criteria
of special circumstances and injustice have been met. It is true that this
is a matter of statutory interpretation of WCATs home statute. However, it is
a different sort of matter than, for example, the definition of special
circumstances or injustice under s. 243(3). The question at hand is more
general than that, and lies more towards the general legal reasoning end of
the spectrum.
[52] A look at the authorities
cited by WCAT in the EOT Reconsideration when it determined the question bears
out the foregoing contention. In considering the meaning of the word may, the
Reconsideration Panel considered the words dictionary definition, the
Interpretation
Act
, R.S.B.C. 1996, c. 238 (which is, incidentally, not its home statute),
a textbook on statutory interpretation, and a structural and contextual
analysis of the
WCA
. I take these to be indicia (although I stress that
they are not determinative in this regard) that WCAT was engaged in general
legal reasoning, rather than invoking its specialized knowledge of workers
compensation issues. This tends to tilt the balance back toward the
correctness end of the deference spectrum. The Legislature could not have
intended WCAT to have the last word on matters of general legal interpretation
for issues that determine the extent of its own powers.
[16]
As to the purpose of the legislation he said:
[56] ... As stated before, the
issue cannot simply be characterized as who should be granted an extension of
time? but rather it is more properly described as what is the extent of
WCATs discretionary power? When viewed in this manner, the issue is not only
a matter of balancing the interests of a respondent and appellant in an appeal
process, but also encompasses the larger issue of balancing delegated power
between administrative bodies. Determinations of that nature are the province
of the judiciary.
[17]
And as to the nature of the question in issue, the judge said:
[61] As can be seen from the foregoing discussion, the
characterization of the nature of the question in issue is critical in the
functional and pragmatic approach. WCAT takes the position that the issue in
question here is one of statutory interpretation of its own statute, and thus
it should be granted deference:
Council of Canadians with Disabilities v.
Via Rail Canada Inc.
, 2007 SCC 15, at para. 92.
[62] However, WCAT recognizes
that a true jurisdictional question will not be one over which it has exclusive
jurisdiction (
Dunsmuir
, at para. 59). It nevertheless argues that the
question here is not a true jurisdictional question because the dispute is not
whether
WCAT has the power to extend the time to appeal a decision but rather
when
that power should be exercised. I disagree. This dispute encompasses both
questions whether WCAT has a residual discretionary power to refuse to extend
the time to appeal (a true jurisdictional question), and when that power should
be exercised (not jurisdictional).
[18]
He concluded:
[63] Considering all the factors set out above, I conclude
that the legislature did not intend the question of whether WCAT has residual
discretion under s. 243(3) of the
WCA
to be one within the exclusive
jurisdiction of WCAT.
Conclusion on Standard of Review
[64] Since an application of the
functional and pragmatic approach to the residual discretion question in the
case at bar leads me to the conclusion that the question was not one within the
exclusive jurisdiction of WCAT, I thus conclude that in this case, the
appropriate standard of review for WCATs decision on that question is
correctness.
[19]
The judge then applied the standard of correctness to WCATs
interpretation of s. 243(3) and concluded that it was incorrect. He said:
[116] In my view, the presence of
the injustice clause, as well as the legislative intent evinced in the
Core
Services Review
and elsewhere provide the appropriate clear case of
impelling context as contemplated in the jurisprudence. In such a context, the
word may in s. 243(3) of the
WCA
should be construed as being
imperative, and not conferring upon WCAT a residual discretion to reject
applications for an extension of time under that section, once the two
statutory criteria are met. Thus, the decision on this issue in the EOT
Reconsideration is incorrect.
[20]
The judge refused the petitioners request for mandatory relief and
referred the case back to WCAT for reconsideration.
IV.
Discussion
[21]
As may be seen from the passages of the judges reasons quoted above, he
characterized the issue before WCAT as the extent of WCATs discretion under
s. 243(3) to extend time (para. 32); or as whether the language of s.
243(3) conferred a residual discretion to reject a request to extend time even
where the criteria of s. 243(3)(a) and (b) were met (para. 51); or as whether
WCAT has a residual discretionary power to refuse to extend the time to appeal
(a true jurisdictional question), and when that power should be exercised (not
jurisdictional) (para. 62).
[22]
All of these formulations characterize the issue for WCAT as a question
of jurisdiction. In framing the issue in that way, the learned chambers judge
asked the wrong question, and consequently came to the wrong conclusion (at
paras. 63 and 64).
[23]
Section 58 of the
Administrative Tribunals Act
governs the
standard of review where, as in this case, the tribunals enabling Act contains
a privative clause. The correct question for the judge to ask was which of the
standards set out in s. 58 applied to WCATs interpretation of its home statute.
The issue at the standard of review stage is not the manner in which WCAT
interpreted s. 243(3), or the outcome of its interpretation, but rather the
degree of deference to be accorded to WCATs interpretation of the section, as prescribed
by s. 58 of the
Administrative Tribunals Act
.
[24]
To decide whether the tribunals findings are to be reviewed on a
standard of patent unreasonableness or a standard of correctness, the court
must determine whether the matter under consideration falls within the
tribunals exclusive jurisdiction under a privative clause.
[25]
In
United Brotherhood of Carpenters and Joiners of America, Local 527
v. British Columbia Labour Relations Board)
, 2006 BCCA 364, this Court
was of the opinion that that determination should be made by applying the
pragmatic and functional approach, taking into account four factors: the presence
or absence of a privative clause; the tribunals expertise relative to the
court; the purpose of the statute as a whole and the provision in particular;
and the nature of the problem under consideration.
[26]
There is some incongruity in using these factors to determine whether a
tribunal is acting within its exclusive jurisdiction for the purposes of s. 58,
because the section makes explicit use of them at other stages of the
analysis. The presence or absence of a privative clause, for example, is the
threshold criterion for the applicability of s. 58. The issue of whether a
question is one of fact, law, discretion, procedural fairness, or something
else determines the appropriate standard of review under s. 58(2) of the
Administrative
Tribunals
Act
. Finally the expertise of the tribunal is, under s. 58(1)
determined by asking whether the tribunal is acting within its exclusive jurisdiction.
To use it as a factor in determining exclusive jurisdiction would be circular.
[27]
Since
United Brotherhood
was decided, there have been further
developments in the law. The pragmatic and functional approach was
significantly refined in
Dunsmuir v. New Brunswick
. In that case, the Court
warned against a mechanical application of what it preferred to call the
standard of review analysis and noted that it will not always be necessary to
undertake an analysis of all four factors in the test to determine the appropriate
standard of review.
[63] The existing approach to determining the appropriate
standard of review has commonly been referred to as pragmatic and functional.
That name is unimportant. Reviewing courts must not get fixated on the label at
the expense of a proper understanding of what the inquiry actually entails.
Because the phrase pragmatic and functional approach may have misguided
courts in the past, we prefer to refer simply to the standard of review
analysis in the future.
[64] The analysis must be
contextual. As mentioned above, it is dependent on the application of a number
of relevant factors, including: (1) the presence or absence of a privative
clause; (2) the purpose of the tribunal as determined by interpretation of
enabling legislation; (3) the nature of the question at issue, and; (4) the
expertise of the tribunal. In many cases, it will not be necessary to consider
all of the factors, as some of them may be determinative in the application of
the reasonableness standard in a specific case.
[28]
Most recently, in
Rio Tinto Alcan Inc. v. Carrier Sekani Tribal
Council
, 2010 SCC 43, the Supreme Court of Canada was called upon to
determine the standard of review applicable to the B.C. Utilities Commission, a
tribunal protected by a privative clause, and to which s. 58 of the
Administrative
Tribunals Act
applies. While the reasoning of the Court is not entirely
explicit, it would appear that the Court simply considered the language of the
applicable privative clause to determine whether the matters addressed by the
tribunal were within its exclusive jurisdiction.
[29]
The approach endorsed by the Supreme Court of Canada, then, is somewhat
different than the one that this Court followed in
United Brotherhood of
Carpenters
. Rather than considering all factors in the pragmatic and
functional approach to determine whether a matter is within the exclusive
jurisdiction of a tribunal under its privative clause, the preferred approach
is simply to examine whether the privative clause covers the matters in
issue. While the common law standard of review analysis is instructive,
particular attention must be paid to the governing legislative provisions, such
as s. 58 of the
Administrative Tribunals Act
.
[30]
In the case before us, the matter in issue is the extension of an appeal
period under s. 243(3) of the
Workers Compensation Act
. The language of
s. 254 of the
Workers Compensation
Act
manifestly places such a
matter under the exclusive jurisdiction of WCAT:
254 The appeal tribunal has
exclusive jurisdiction to inquire into, hear and determine all those matters
and questions of fact, law and discretion arising or
required
to be
determined under this Part ....
[31]
In the result, s. 58(2) of the
Administrative Tribunals Act
establishes the appropriate standard of review in this case. The standard is
one of patent unreasonableness.
[32]
The decisions of WCAT cannot be said to be either irrational or
unreasonable. Its interpretation of s. 243(3) is well within the range of
interpretive options, and is, in fact, the most reasonable interpretation. In our
respectful opinion, WCATs decision is not only not patently unreasonable, it
is the same decision that a court would reach.
[33]
We would allow the appeals of both WCAT and WCB against the order
pronounced 5 May 2010. It follows that the petitioners cross-appeal for
mandatory relief must be dismissed.
[34]
As the appellants did not seek costs, none are awarded.
The Honourable Chief Justice Finch
The Honourable Mr. Justice Groberman
I agree:
The Honourable Madam Justice
Kirkpatrick
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Wong,
2011 BCCA 13
Date: 20110111
Docket: CA037954
Between:
Regina
Respondent
And
Elizabeth Wong
Appellant
Before:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Hall
The Honourable Mr. Justice Hinkson
On appeal from: Supreme
Court of British Columbia, October 16, 2009
(
R. v. Wong
, Vancouver Registry 25186)
Oral Reasons for Judgment
Counsel for the Appellant:
H. Rubin, Q.C.
Counsel for the (Crown) Respondent:
S.J. Brown
Place and Date of Hearing:
Vancouver, British
Columbia
January 7, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 11, 2011
[1]
NEWBURY J.A.
: The appellant Ms. Wong was convicted in Provincial
Court of operating a motor vehicle while her blood alcohol level exceeded .08. A
conditional stay was entered with respect to a charge of impaired driving and
she was acquitted of failing to remain at the scene of an accident. Ms. Wong
appealed her conviction to the Supreme Court, where it was affirmed by Mr.
Justice Bowden for reasons delivered orally on February 12, 2010. Ms. Wong
now appeals Bowden J.s decision and seeks a new trial on the charge under
s. 253(1)(b) of the
Criminal Code
, R.S. 1985, c. C-46.
Factual background
[2]
The basic facts are that early in the morning of February 6, 2009,
Constable Bell, an officer with over five years experience, was on duty in
West Vancouver. He received a report of a motor vehicle accident in the 2600
block of Marine Drive. The report stated that one of the vehicles involved was
a silver SUV, and that it had collided with another car and then left the scene
of the accident driven by a woman with long hair. The vehicle had an Alberta
plate. Constable Bell was also told that a bus driver had seen the damaged
vehicle proceeding northbound on 23rd Street from Marine Drive. A few minutes
later, he was told that a damaged SUV had been found at an address on Orchard
Way. Constable Bell drove to that location, where he saw two women, one older
and one younger, standing in the street near a silver SUV that was damaged and
had an Alberta plate. A Constable Wood was talking to the older woman and
Constable Bell approached the younger one, Ms. Wong.
[3]
As recounted by Bowden J. at para. 10 of his reasons, Constable Bell made
the following observations about Ms. Wong:
[10] Insofar as they are relevant to Constable Bell's
decision to demand a sample of the appellant's breath, his observations of the
appellant were as follows:
1.
There was
a strong odour of liquor emanating from her breath.
2.
Her face
appeared flushed, and her cheeks and nose appeared to have a reddish tinge to
them.
3.
From
overhearing a conversation between Constable Wood and the older woman, he
concluded that the appellant had been driving the SUV and that it had been in
an accident. He did not have any information regarding the collision, other
than he knew that it had occurred; that the SUV had extensive damage; that the
young female was the driver of the SUV; and that she had left the scene of the
accident.
4.
She walked
very slowly, slower than a normal person with a normal gait, and each step
appeared to be quite deliberate.
5.
As she stood at the back of the police car, she had a slight sway,
approximately two inches front to back and side to side.
In cross-examination, Constable Bell acknowledged that he
had not noticed that Ms. Wong had watery or bloodshot eyes, dilated or
constricted pupils, slurred speech, that she was stuttering, confused or
incoherent; nor was she "staggering" or "wobbling". Ms.
Wong testified that it was very cold at the time, that the road looked as
though it might be icy, and that that was why she was walking slowly. She also
testified that she swayed back and forth when she was nervous or cold.
[4]
Constable Bell formed the opinion Ms. Wong had been operating the SUV
within the preceding three hours while her ability to do so was impaired by
alcohol. He arrested her and read her her rights to counsel under the
Charter
and then read the usual demand for a breath sample to her, together with a warning
about her right to silence. He did not inform her that he was investigating a 'hit
and run'.
[5]
At police headquarters, Ms. Wong was asked if she wanted to speak
to a lawyer and said she did. She did not know any lawyers in British Columbia
and was therefore given the number for Legal Aid and spoke to a Legal Aid
lawyer almost immediately. After doing so, she said she was satisfied with the
advice she had received. She then provided two breath samples, which produced
readings of .140.
[6]
The trial judge stated in his reasons on the
voir dire
that the constable
had not known the circumstances under with the SUV had left the scene of the
accident and that he was still trying to find out what involvement, if any,
Ms. Wong might have had in the SUV accident on Marine Drive, suggesting
this was why the constable had not arrested Ms. Wong for leaving the scene.
The trial judge did not refer expressly to the constables evidence in
cross
-examination
that he had had reasonable and probable grounds to believe Ms. Wong was
involved in the hit and run but that at that point, he had not reviewed all
the evidence in terms of determining all the charges and had been unsure
whether the offence should be charged under the
Code
or under the
Motor
Vehicle Act.
[7]
The trial judge found at the end of the
voir dire
that if the
officers failure to warn the appellant that she was a suspect for such an
offence had constituted a breach of the
Charter,
it had at best been a
fleeting and technical breach rather than something profoundly intrusive, and
that the truth-seeking function of the criminal process would be better
served by the admission of the evidence rather than its exclusion. As well, he
found Ms. Wong had provided the breath samples voluntarily, and that she was articulate
and appeared to have no difficulty with the English language. He rejected her
testimony that she was shocked and intimidated and that she had told the
police she was satisfied with the Legal Aid advice only because she wanted to
be polite.
[8]
With respect to the question of reasonable and probable grounds, the
trial judge did not mention Ms. Wongs explanation of why she had walked
slowly or why she was swaying back and forth. He simply concluded that what
Constable Bell, whose evidence he said he accepted in its entirety, had
observed had been sufficient to give him reasonable and probable grounds to
form the opinion he did. In the trial judges words:
[34] These factors, in my view, constitute reasonable
and probable grounds for Constable Bell, a fairly experienced officer, to form
the opinion he did and the form the basis for the breathalyser demand that he
properly read to the accused.
[35] Accordingly I rule the
statements of the accused and the certificate are admissible.
[9]
The defence called no evidence when the trial proper resumed, and the
trial judge found Ms. Wong guilty on Count 2.
Summary Conviction
Appeal
[10]
On the summary conviction appeal in Supreme Court, Bowden J. noted that
the standard of review to be applied where the existence of reasonable and
probable grounds is challenged is one of correctness, since whether particular
facts amount to reasonable and probable grounds is a question of law: see
R.
v. Shepherd,
[2009] S.C.J. No. 35. Counsel for Ms. Wong does not challenge
this statement of the appropriate standard on this appeal.
[11]
Bowden J. also enunciated the fact that there is both a subjective and
objective element to establishing reasonable and probable grounds, citing
Shepherd
and
R. v. Daggitt,
[1991] B.C.J. No. 3210. He inferred that the
trial judge had accepted that Constable Bell honestly believed Ms. Wong had
committed an offence under s. 253 of the
Code
. Again, as I
understand the appellants argument, this conclusion is not challenged on
appeal.
[12]
This leaves the question of whether the constable's subjective belief was
reasonable in the circumstances. Bowden J. noted that in accordance with this
courts decision in
R. v. Todd
[2007] B.C.J. No. 892, the trial judge
had been required to consider all of the factors together, rather than
separately or on a fragmentary basis. Bowden J. was of the view that the
trial judge had not erred in failing to consider, or consider expressly, the
explanations Ms. Wong gave in her testimony regarding the slowness of her
pace and her swaying, and had not erred in failing to refer to these
explanations. On this point, he cited
R. v. Feder
[1996] B.C.J. No.
1380, in which Low J. (as he then was) ruled that a trial judge had erred in
finding that a police officer had not had reasonable and probable grounds to
request a breath sample. The officer had not questioned the accused about his
medical condition or possible causes for stutter-stepping at the scene of the
accident. The summary conviction appeal judge found that the trial judge had
erred in dealing separately with various indicators on which the officer had
relied, without considering the collective effect of those indicators in
objectively assessing the officers subjective belief. Further, she had erred
in placing an onus on the officer to inquire as to other possible causes of all
or some of the indicators. (Para. 13.)
[13]
At the end of the day, Bowden J. concluded in the case at bar that the
trial judge had considered all the evidence and had not erred in failing to
refer to the possible explanations of some of the indicia of intoxication noted
at trial. Further, he found the trial judge had applied the correct test in determining
that the constable had had reasonable and probable grounds to demand a breath
sample. Ms. Wongs appeal was dismissed.
On Appeal
[14]
In this court, Ms. Wong asserts the following three grounds of appeal:
1. The trial judge
ignored the cross examination of Constable Bell, the picture showing an icy
road and the explanations of the appellant for walking slow on the ice and
moving side to side because she was cold. It is impossible to infer as the
summary conviction did infer, that the learned trial judge considered the
totality of the evidence.
2. When considering the
totality of the evidence the minimal indicia of impairment are grounds only of
suspicion and sufficient only for an ASD demand. These issues are not
sufficiently articulated by the trial judge, to allow an appellate court to
conclude that the trial judge applied the correct test.
3. The
trial judge misapprehended parts of the evidence, resulting in an unfair
hearing of the
voir dire
.
[15]
It is difficult to analyse these arguments in watertight compartments. The
so-called misapprehension ground of appeal in fact was three arguments rolled
into one i.e., that the trial judge failed to address contradictory evidence
and failed to address the officers inability to answer questions with respect
to the road and weather conditions and ... failed to accurately address the
cross examination with respect to the officers reasons for not arresting the
accused for leaving the scene of the accident or warning her that she was a
suspect for that offence before questioning her. It will be convenient to deal
with these latter grounds and the first stated ground, together. They formed
the focus of Mr. Rubins oral submissions.
[16]
The cross-examination of Constable Bell at trial included the following
questions and answers:
Q: What youve got in your report is she walked
slower than an average person and took longer to take each step. But if a
person was concerned about black ice or snow that wouldnt be unusual, would
it?
A: Well, I believe that if I was concerned about
my footing or a black ice situation then I would be walking slow as well so it
would feel like your normal pace or both of us walking slowly together, but
unfortunately I dont have any notes in terms - - or anything in the report in
terms of the road conditions, but I have referred to her walking slower than
normal, and to me this would indicate that I was forced to slow down quite a
bit because she was walking quite slow.
Q: Okay. And more important than that is this is
February, one of the colder months of the year, weve just looked at a
photograph, theres still snow on the road and it was cold, right?
A: Unfortunately, I dont have any notes in
terms of the weather, but I would assume that in February, yes, it would be
relatively cold at night.
Q: Well, if theres still snow beside the road
then it has to be cold enough that the snow hasnt been able to completely
melt, right?
A: Correct. But I wear short-sleeves all year
round so cold I guess is a - -
Q: But were talking of a young woman who comes
from Hong Kong and
Im going to suggest to you that when youre cold people
sometimes sway a little bit to keep themselves warm. In fairness, youd agree
with that, wouldnt you?
A:
I dont know if Im in any position to
make a comment in terms of that.
I can only speak for myself and I havent
noted anything in terms of myself being cold or anything like that, and I know
for myself - - like I said, I guess I handle cold maybe differently than other
people.
Q; All right. Thats fine. Can we leave it this
way, if Ms Wong says that she was cold and moving from foot to foot you have
nothing - - no reason to dispute that. Well leave it there.
A: I would assume that Ms. Wong will have her
own explanation as to what occurred.
[17]
Ms. Wong testified in the
voir dire
as follows:
Q: Now, Im going to take you to that morning of
February 6
th
. What can you say about any snow? Tell us about that?
A: Umm, it was definitely cold. I remember there
was snow on the side of the road.
I just remember it being very cold and the
road looked a little maybe slippery, icy.
Q: Okay. So the officer has said that you swayed
two inches side by side. What can you say about that?
A: Umm, I believe at that point I was standing
somewhere and he was asking me questions and I was very cold and I was just
going, like, this.
Thats something that I do when I get nervous or - - and
Im cold.
Q: And he said that you were walking very slow.
What can you say about that?
A:
Well, the road
looked slippery so I was taking my time and being careful.
I dont want to
trip or stumble right there by a police officer.
[18]
Constable Bell in his cross-examination was shown a photograph taken by
the West Vancouver Police of the location where the arrest had taken place. He
acknowledged that there appeared to be snow on the ground, but said he had no
recollection of whether the road had been icy or wet. The photograph was not
entered as an exhibit, but another photo was. It is of little, if any,
assistance regarding the condition of the road. No further evidence of
prevailing weather conditions was adduced.
[19]
It is perhaps trite law, and counsel for Ms. Wong acknowledged,
that in deciding whether an officer had reasonable and probable grounds to
demand a breath sample, the court is concerned only with the circumstances
known
to the officer
. There is no evidence that Constable Bell knew Ms. Wong was
from Hong Kong or that she might have a lower tolerance for cold than other
persons; nor was there any evidence Ms. Wong told him she swayed when she was
cold. As we have seen from
Feder
, there was no onus on the constable to
enquire as to possible causes of any of the factors noted by the officer.
With respect to Ms Wongs explanation for walking very slowly, it appears the
trial judge accepted the officers response in cross-examination, which did not
necessitate or equate to a finding that Ms Wongs testimony was not credible.
[20]
As the Ontario Court of Appeal noted recently in
R. v. Wang
, 2010
ONCA 435, the test of whether the constable's belief was reasonable in the
circumstances is not an overly onerous one. A
prima facie
case need not
be established. Rather, when impaired driving is an issue, what is required is
simply that the facts as found by the trial judge be sufficient objectively to
support the officers subjective belief that the motorist was driving while his
or her ability to do so was impaired, even to a slight degree, by alcohol (Para.
17). In my respectful view, even if the trial judge had discounted the slow
walking factor. In this case, there was ample evidence to support,
objectively, the constables opinion.
[21]
The appellant submits, however, that before turning to the evidence as a
whole, or in its totality, to determine whether reasonable and probable
grounds existed, the trial judge was required to resolve
any factual
dispute
on the evidence. (My emphasis.) On this point, he notes
R. v.
Usher,
2010 BCSC 1745 at para. 24,
R. v. Todd,
2007 BCCA 176 at
para. 36,
R. v. Armbruster,
2010 SKCA 25 at para. 29; and on the general
duty to give reasons,
R. v. Vanloon
(1997) 39 O.T.C. 140 at paras. 15
and 23, and
R. v. Stewart,
Ont. C.A., January 31, 2003 at para. 16. In
Mr. Rubins submission, the trial judge in this case was required at least to
mention and ideally, to address, what counsel regards as an inconsistency in
Constable Bells testimony as to why he had not arrested Ms. Wong for
leaving the scene of an accident, given his acknowledgement that he had had
reasonable and probable grounds to do so. Thus Ms. Wongs factum asserts:
Of the five grounds of reasonable
and probable cause for the demand for a breathalyzer sample referred to by the
trial judge, all but item 1 referred to leaving the scene of the accident. The
admission of the statement on leaving the scene is not
per se
a ground of
appeal. But there is a contradiction in finding that the police officer knew
nothing about the details of leaving the scene and yet the trial judge could
rely on the details of leaving the scene of the accident when it came to
reasonable and probable grounds for the demand. See paragraph 12 above and
pages 12 and 13 of the transcript. Moreover, Constable Bell could not describe
or say anything at trial about any damage.
[22]
However, I see no contradiction between Constable Bells statement
that he had not reviewed all the evidence in detail at the time he formed his
opinion, and the
nine
factors listed by the trial judge at para. 33 of
his reasons. Four of these factors did refer to the accident and they tended to
confirm that Ms. Wong had been driving the SUV and that the vehicle had been in
an accident. This belief that she had been driving while intoxicated was not
"contradicted or weakened by the constable's decision to review the evidence
further and to consult the
Code
and the
Motor Vehicle Act
before deciding
whether she would be charged for leaving the scene. Again, the test of whether
the constable's belief that he had reasonable grounds to demand a breath sample
is not an onerous one.
[23]
With regard to Mr. Rubins submission on the sufficiency of the trial
judge's reasons, none of the authorities he cited stands for the proposition
that every factual uncertainty or inconsistency arising on the evidence must be
resolved in a trial judges reasons. Even in
R. v. McMillan
, for
example, the Court noted that a trial judge does not have to specifically
address every argument raised by the defence. The Court went on to say that
surely he or she must engage
the most important ones
, at least to the
extent the parties can have some understanding of what she/he decided and why.
(My emphasis.)
[24]
The point relied on by Ms. Wong, regarding the other charge was hardly
an important one even if it was an inconsistency (which I doubt). The same is
true of the slow walking factor. While a trial judge must of course give
reasons that fulfill the functional requirement of preserving and enhancing
meaningful appellate review of the correctness of the decision in question (see
R. v. Sheppard
[2002] 1 S.C.R. 869, 2002 SCC 26, at para. 24), I cannot
agree that the trial judge in this case was required to mention and/or
resolve the two points raised by Ms. Wong. The trial judge's reasons did
permit meaningful review, as do the reasons of Bowden J.
[25]
With respect to the remaining ground of appeal that the indicia of
impairment were grounds only of suspicion and sufficient only for an ASD
demand" the appellant did not elaborate on these at all in her
factum and counsel did not pursue them in oral argument. We were not referred
to any legal authority for the proposition that a higher degree of suspicion
or evidence of impairment is necessary to justify a request for a breath sample
as opposed to the taking of an ASD test.
[26]
In the result, I would grant leave but dismiss the appeal.
[27]
HALL J.A.
: I agree.
[28]
HINKSON J.A.
: I agree.
[29]
NEWBURY J.A.
: The appeal is dismissed.
The Honourable Madam Justice Newbury
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Rainbow Country Estates Ltd. v. Whistler (Resort
Municipality of),
2011 BCCA 38
Date: 20110113
Docket: CA038022
Between:
Rainbow Country
Estates Ltd.
Respondent
(Plaintiff)
And
Resort
Municipality of Whistler
Appellant
(Defendant)
Before:
The Honourable Mr. Justice K. Smith
(In Chambers)
On appeal from: Supreme
Court of British Columbia, March 10, 2010
(
Rainbow Country Estates Ltd. v. Whistler (Resort Municipality of)
2010 BCSC 300, Vancouver Registry
Oral Reasons for Judgment
Counsel for the Appellant:
S. Manhas
Counsel for the Respondent:
G.K. Macintosh, Q.C.
J. Leong
Place and Date of Hearing:
Vancouver, British
Columbia
January 13, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 13, 2011
[1]
K. SMITH J.A.
: This is an application by the respondent to
dismiss the appeal as abandoned for the failure of the appellant to file a
factum within the time limited by the
Rules
.
[2]
The appeal arises out of a valuation determined at a hearing in the
Supreme Court before Madam Justice Adair of some property on Alta Lake in
Whistler, which was expropriated from the respondent in 1987. The trial judges
decision was handed down on April 3, 2010 and she assessed the market value of
the property at $1.3 million. There was an advance of $367,000 paid into court in
1991 and it appears that some portion of that was paid out to the respondent in
early 2003, although the evidence does not disclose how much.
[3]
The appellant filed notice of appeal on April 9, 2010, and filed an
appeal record on June 8, 2010. Following the judgment there were negotiations
about the possibility of some sort of a settlement, but the respondent made it
clear that the negotiations should not affect the progress of the appeal and
that the appellant would be expected to get on with it. As it turned out, the
negotiations did not bear fruit.
[4]
In the result, the appellant's factum was due by July 8, 2010, as
required by Rule 21(1) of the
Court of Appeal Rules
. The appellant has
not yet filed its factum. It is more than six months out of time, as are the
appeal books and transcripts.
[5]
In early August the respondent wrote to the appellants counsel (not
counsel on this application, Mr. Manhas) inquiring about the factum and when it
would be filed, advised that it would, perhaps, be a waste of the clients
money and counsels time to apply to dismiss, and that the respondent would
like the appeal to get on. Counsel followed up on August 27, 2010 with a phone
call and appellant's counsel promised the factum would be submitted within a
week. On September 17, 2010, counsel for the respondent wrote again reminding counsel
for the appellant that the factum had been promised within a week and had not been
delivered, but no response was received. There were other communications
between counsel about the filing of the factum, both orally and in writing, in
which counsel for the respondent was either assured that the factum would be
delivered soon or received no response at all.
[6]
The appellant did nothing to advance the appeal after filing the record
until after this application to dismiss its appeal was filed. Since then there
has been a flurry of activity and counsel for the appellant filed an affidavit
yesterday and Mr. Manhas has arrived in court this morning with a written
argument, a brief of authorities, and a draft factum.
[7]
The property in question was owned by the respondent, which was
essentially a family corporation for the Saxton family. According to the
evidence it was purchased in the late 1970s at the instance of Mrs. Saxton, the
matriarch of the family. Although Mrs. Saxton has given each of her children an
unregistered lot on the property, she is still the beneficial owner of the
proceeds of the expropriation, as I understand it, and she has been actively
involved in the court proceedings since 1987. Her health has declined during
that period of time. The property had been her main source of income and that
income was lost to her when the property was expropriated. As I said, she may
have received some compensation from the advance payment in 2003 but, if so,
the evidence does not disclose how much. The evidence is that because of her
personal and financial involvement in the property, she has a strong interest
in the outcome and remains continuously updated on the proceedings. She is in
frail health. She suffered multiple strokes during 2003 and 2004. She is unable
to speak. In the last year she has broken both hips and she is now confined to
a wheelchair. She is 82 years old, the state of her health is deteriorating,
and, according to her son's affidavit, her outlook is not optimistic.
[8]
I have listened to counsels submissions for at least an hour and a half
this morning in which they have reviewed the evidence and explained their
positions. I do not intend to deal with the submissions in any detail.
[9]
The test to dismiss an appeal as abandoned is set out in
Davies v.
Canadian Imperial Bank of Commerce
(1987), 15 B.C.L.R. (2d) 256 at 260
(C.A.). The submissions here focus on three of the relevant factors: prejudice,
the merits of the appeal, and the overall interests of justice. This case, I
find, is very similar on its facts to the decision in
Redpath v. Redpath,
2009 BCCA 168, in which Mr. Justice Lowrys decision dismissing an appeal as
abandoned was affirmed on review.
[10]
Mr. Manhas has striven valiantly to convince me that there is an error
of law that should be heard by a division of this Court, but I am not persuaded
that is so. He says the error is that, in arriving at a valuation, the trial
judge relied on the comparable value of a property that had a different highest
and best use than the property being valued. This point turned on the evidence
of Mr. O'Mara, a witness at the trial, who said that the subject property, if
re-zoned RR1 for commercial development, would have been worth $1.925 million.
The trial judge relied on that figure in part in assessing the value of the
subject property. As I understand his submission, Mr. Manhas argues that was an
error because the property was not in fact viable for commercial development as
it turns out, but only for golf course use. He says also that Mr. O'Mara's
evidence on that point was inconsistent.
[11]
However, the trial judge was entitled to accept some or all of Mr.
O'Mara's evidence and it was up to her to weigh any inconsistencies in his
evidence, if any, of which I am not convinced. That is not a ground for
interfering with the judgment. And I am not persuaded that there is any reasonable
prospect that the error of law asserted by counsel would be successful in this
Court.
[12]
When considering the relevant factors, I am most influenced by the last
factor, the overall interests of justice. The matter has gone on, despite the
urgings of counsel for the respondent, for over six months with nothing being
done since the record was filed. Mr. Manhas says the appellant should not
suffer for the failings of its counsel. I appreciate that that is a factor to
consider but, in the circumstances of this case, I do not consider it an
overriding factor.
[13]
Given the inordinate delay and the explanation given by counsel for the
delay, which essentially was that he was too busy on other matters to attend to
this matter, and given the circumstances of Mrs. Saxton and her ill health, I
consider that it is in the interests of justice that this matter be finally
resolved and that she not be put through the further stress and anxiety of a
continuing appeal in which it is apparent that no active interest has been
displayed for such a long time.
[14]
I have concluded that the application must be granted and the appeal
dismissed as abandoned for failure to file the factum within the time specified
in the
Rules of Court
.
The Honourable Mr. Justice K. Smith
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Lac,
2011 BCCA 12
Date: 20110114
Docket: CA038576
Between:
Regina
Respondent
And
Edward Kam Hong Lac
Appellant
Before:
The Honourable Madam Justice Prowse
(In Chambers)
Appellant Appearing in Person
(Via Video):
E. Lac
Counsel for the Respondent:
W.J.S. Bell
Place and Date of Hearing:
Vancouver, British
Columbia
January 11, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 14, 2011
Reasons for Judgment of the
Honourable
Madam Justice Prowse:
[1]
Mr. Lac is applying for the appointment of counsel pursuant to s. 684 of
the
Criminal Code
, R.S.C. 1985, c. C-46 (the
Code
). He is also
applying for release pending his conviction appeal.
[2]
On May 28, 2010, Mr. Lac was convicted by a provincial court judge of
breaking and entering a dwelling house, extortion, assault with a weapon (a
baseball bat) and aggravated assault. He was sentenced to five-and-a-half
years imprisonment on October 7, 2010, after receiving credit on a 2 for 1
basis for time spent in pre-sentencing custody. The effective sentence of
imprisonment was seven years.
[3]
Mr. Lac has been appearing in person by videoconference from the
institution in which he is being held in custody. He initially provided
written submissions supporting his request to be released on bail. I directed
that he be permitted to attend in person by videoconference for hearings on
December 23rd, January 4th
and January 11th so that he could fully
participate in the proceedings. At the hearing on December 23rd, Mr. Lac
advised that he had further documents which he wished to file in relation to
bail, and it was necessary to adjourn the bail hearing to enable those
documents to be provided to the Court. These documents are now available and
consist of a client profile assessment, which I understand was prepared by
psychologists for the North Fraser Pretrial Centre, and an inmate application
by Mr. Lac for employment within the institution. Mr. Lac also provided an
affidavit attesting to the truth of information he had previously provided the
Court.
[4]
Subsequent to filing materials relevant to his bail application, Mr. Lac
also filed the requisite materials for an application for the appointment of
counsel pursuant to s. 684 of the
Code
.
[5]
The January 4, 2011 hearing had to be adjourned because transcripts of a
significant portion of the trial which I had requested had not yet been
received. Since that date, I have received further written submissions and
materials from Mr. Lac, and a substantial portion of the trial
transcript. The Crown also filed an affidavit from defence counsel at trial in
response to Mr. Lacs ground of appeal alleging ineffective assistance of
counsel.
[6]
At the January 11th hearing, I invited Mr. Lac and Crown counsel to
address both applications together based on all of the materials before the
Court. I advised the parties that if I determined that counsel should be
appointed pursuant to s. 684, then I would leave it to that counsel to make
further submissions with respect to bail.
[7]
For the reasons which follow, I would dismiss both Mr. Lacs application
for the appointment of counsel, and his application for release pending appeal.
[8]
By way of brief background, the trial judge found that Mr. Lac sold used
automobile tires to Mr. Curtis Kirkness via Craigslist. After paying for the
tires, Mr. Kirkness was not satisfied with them and he requested his money
back. Mr. Lac refused to repay Mr. Kirkness, although he did offer him other
tires in return. As a result of this sale transaction, which involved three
meetings between Mr. Kirkness and Mr. Lac, Mr. Kirkness posted a negative
message on Craigslist warning others not to deal with Mr. Lac.
[9]
The trial judge accepted the evidence of Mr. Kirkness and of his
17-year-old daughter, Ms. Keesic, that on December 31, 2009, Mr. Lac attended
at their basement suite late at night with a baseball bat, forced his way in,
and demanded that Mr. Kirkness remove the negative message on Craigslist.
During the course of this confrontation, Mr. Kirkness obtained a knife from his
kitchen and ultimately chased Mr. Lac out of the basement suite onto the
street. Ms. Keesic grabbed a camera and followed Mr. Lac and her father out
of the house. While outside the home, Mr. Lac struck both Mr. Kirkness and his
daughter with the baseball bat. Apparently, Ms. Keesic was attempting to take
a picture of Mr. Lac when this occurred. Mr. Kirkness suffered minor injuries,
but the blow to Ms. Keesics head was potentially life-threatening and resulted
in her undergoing emergency surgery with potential long-term consequences.
[10]
The trial judge found Mr. Kirkness and Ms. Keesic to be credible
witnesses. Mr. Lac did not testify nor call any evidence. At the conclusion
of the Crowns case, defence counsel confirmed a statement he had made to the
court at the outset of the trial that identity was not in issue. Defence
counsels primary submission related to the lack of credibility, reliability,
and probability of the evidence of Mr. Kirkness and Ms. Keesic. In the result,
the trial judge was satisfied beyond a reasonable doubt that Mr. Lac had
committed the offences which are the subject of this appeal.
[11]
Following conviction, the trial judge ordered a pre-sentence report.
The probation officer who prepared the report expressed concern about Mr. Lacs
guarded presentation and unwillingness or inability to provide collateral
contact information. She noted that he did not accept responsibility for the
offences and that he was unwilling to participate in counselling or other
interventions. The trial judge noted the limited information available about
Mr. Lac, including the lack of family or other ties, and the difficulty that
presented in terms of assessing Mr. Lacs level of future risk to the
community. The additional information recently provided by Mr. Lac does not
add a great deal to the limited information available at the time of
sentencing.
[12]
I will deal firstly with Mr. Lacs application for the appointment of
counsel under s. 684 of the
Code
. Section 684(1) provides:
684(1) A court of appeal or a
judge of that court may, at any time, assign counsel to act on behalf of an
accused who is a party to an appeal or to proceedings preliminary or incidental
to an appeal where, in the opinion of the court or judge, it appears desirable
in the interests of justice that the accused should have legal assistance and
where it appears that the accused has not sufficient means to obtain that
assistance.
[13]
Mr. Lac has been in custody since January 2010. It is apparent that he
does not have the money necessary to fund his appeal. Nor does he appear to
have family or other resources he can call upon to assist him with funding.
His application for legal aid funding was refused by letter dated December 24,
2010. I am satisfied, therefore, that he meets the financial criteria for the
appointment of counsel.
[14]
Some of the other factors which must be considered in determining
whether it is in the interests of justice to appoint counsel under s. 684 of
the
Code
are referred to by Madam Justice Levine in
International
Forest Products Ltd. v. Wolfe
, 2001 BCCA 632 at para. 6, 94 B.C.L.R. (3d)
67 [In Chambers] as follows:
Whether it is desirable in the
interests of justice that counsel be assigned requires consideration of such
factors as the points to be argued on appeal; the complexity of the case; any
point of general importance in the appeal; the applicants competency to
present the appeal; the need for counsel to marshall facts, research law or
make the argument; the nature and extent of the penalty imposed; and the merits
of the appeal.
[15]
Two of the arguments Mr. Lac proposes to make on appeal are that the
verdict was unreasonable or unsupported by the evidence, and that the trial
judge should not have accepted the evidence of Mr. Kirkness and Ms. Keesic
because of inconsistencies in their evidence and a general lack of probability
in their version of events. In his written submission filed January 11, 2011,
Mr. Lac also goes on at length about the evidence concerning the circumstances
of the Craigslist advertisements and the evidence of Mr. Kirkness surrounding
the purchase of the tires. Very little of Mr. Lacs submission is directed to
the key events which took place on December 31st as described by these
witnesses.
[16]
Mr. Lac also argues that he did not receive effective assistance from
his counsel at trial. He submits that he requested, but was never provided,
proper or adequate disclosure of the Crowns case by his counsel; that his
counsel made unauthorized admissions, with particular emphasis on the admission
regarding identity; and that his counsel did not accept suggestions he made
with respect to the conduct of his case. Although Mr. Lac did not say that
counsel precluded him from testifying, he suggests that his failure to testify
may be linked to other errors he attributes to his counsel.
[17]
Mr. Lac also suggests that the medical evidence with respect to Ms.
Keesics injuries and/or the type of weapon used in the attack was deficient
and that the experts report was not properly admitted into evidence. He
challenges the adequacy of the reasoning and the reasons for judgment given by
the trial judge. He suggests that certain remarks made by the trial judge
reflect bias or pre-judgment of his guilt.
[18]
The nature and number of grounds of appeal have been enlarged since
Mr. Lac first made his application for bail, and it is fair to say that
there is nothing about the trial process, or result, which he feels was fair or
just. He says that he did not commit these offences.
[19]
In my view, the proposed grounds of appeal raised by Mr. Lac are weak.
I say this after having read all of the extensive materials filed so far in
this matter, with particular emphasis on the transcript, the reasons for
judgment and Mr. Lacs submissions. It is apparent that Mr. Lac is attacking
the trial judges findings of credibility in relation to the two key Crown
witnesses who were the victims of Mr. Lacs behaviour. While the trial
judge noted there were inconsistencies in the evidence of these witnesses on
some points, she did not find that those inconsistencies went to the substance
of the offences charged. In that regard, there is no doubt that Mr. Kirkness
and Ms. Keesic were struck and injured by someone, and the trial judge accepted
the evidence of these witnesses, including their evidence that Mr. Lac was the
perpetrator. As earlier noted, Mr. Kirkness had dealt with Mr. Lac in person
on three occasions prior to the night in question and these two individuals
were face to face inside the basement suite during a significant portion of
their interaction that evening. Even without the admission of identification,
there was a body of evidence from which the trial judge could readily conclude
that Mr. Lac was the perpetrator. Further, the medical evidence with respect to
the nature of the injuries suffered by these witnesses was never seriously in
dispute.
[20]
With respect to Mr. Lacs argument that he was inadequately represented
at trial, his trial counsel has filed an affidavit which essentially denies Mr.
Lacs allegations and provides some detail of the extent of his dealings with
Mr. Lac leading up to and during the trial. It is apparent from that evidence,
and from the transcript that has been provided, that Mr. Lac did take differing
positions as to whether he was making admissions at trial. But the transcripts
also indicate that the court adjourned to permit defence counsel to clarify his
instructions, following which defence counsel confirmed that identity was not
in issue. I advised Mr. Lac that he will have the opportunity to file an
affidavit in response to defence counsels affidavit for consideration by the
Court at trial. In the meantime, I have taken his submission into account in
my assessment of the merits of this ground of appeal. As with the other
grounds of appeal, I find that Mr. Lac faces an uphill battle.
[21]
With respect to the other factors to be considered on the s. 684
application, I do not find that the appeal itself is complex and there are no
questions of general importance raised. Although I am concerned about the
seriousness of these offences and the fact that Mr. Lacs focus in his
materials appears to be on aspects of the evidence which are not critical to
his convictions, I conclude that he is capable of presenting the arguments he
wishes to pursue, and that the Court will be able to address the issues he has
raised without the assistance of counsel on his behalf.
[22]
In the result, Mr. Lac has not persuaded me that it is necessary in the
interests of justice to appoint counsel to represent him at trial. As earlier
stated, I would dismiss his application under s. 684 of the
Code
.
[23]
I now turn to Mr. Lacs application for release pending appeal. The
criteria I must consider are set out in s. 679(3) of the
Code
, which
provides:
(3) In the case of an appeal referred to in paragraph (1)(
a
)
or (
c
), the judge of the court of appeal may order that the appellant be
released pending the determination of his appeal if the appellant establishes
that
(
a
) the appeal or application for leave to appeal is
not frivolous;
(
b
) he will surrender himself into custody in
accordance with the terms of the order; and
(
c
) his detention is not necessary in the public
interest.
[24]
With respect to the first criterion, while I have already stated that I
find Mr. Lacs grounds of appeal are weak, I am not prepared to say that
Mr. Lacs appeal is frivolous. The issue of ineffective assistance of counsel
may be developed more fully when Mr. Lac provides affidavit material of his own
to meet that of his former counsel. Ultimately, Mr. Lac will have to establish
not only that his counsel was ineffective, but that he thereby suffered
prejudice.
[25]
The next criterion is whether Mr. Lac would surrender himself in
accordance with a court order if he were released. In that regard, it is
important to note that Mr. Lac has no criminal record. He is 28 years old
and has provided addresses for himself in the Vancouver area for the past three
years, including 18 months at his last address. He gave the name of his
landlord to the probation officer who prepared his pre-sentence report, but she
was unable to make contact with him, and there is no letter or other
information which indicates whether that accommodation is still available to
Mr. Lac, who has been in custody for almost a year. Nor does Mr. Lac have
any other contacts who will stand surety for him, or attest to his character,
or provide support for him in the community.
[26]
Mr. Lac is estranged from his family and appears to take pride in the
fact that he has supported himself since the age of 17. His main source of
income prior to being incarcerated appears to have been selling items on
Craigslist, with intermittent employment with a security loss prevention
company or companies. He describes himself as an entrepreneur. He also says
that he does not suffer from any substance abuse or other health problems,
including mental health problems. There is some indication in the materials
before the Court that Mr. Lac had a problem with gambling at the time these
events occurred, but he advised the Court that he does not have gambling debts
and I am prepared to accept that is so for the purpose of this application.
[27]
Given the fact that Mr. Lac does not appear to have any significant ties
with either family or members of the community, with the possible exception of
his former landlord, who has not provided any information to the Court, I tend
to agree with Crown counsel that there is a real risk that Mr. Lac will not
attend court when required to do so. He appears to be a loner who has
preferred to work on his own and, in that respect, his skills are portable. He
has no real ties to the community which would hold him here. Although these
offences are first offences, they are extremely serious and quite
inexplicable. Further, Mr. Lac no longer has the presumption of innocence
operating in his favour.
[28]
More significantly, I am not persuaded that Mr. Lacs detention is not
necessary in the public interest. In coming to that conclusion, I rely on the
apparent weakness of his grounds of appeal, the serious nature of the charges,
and Mr. Lacs apparent readiness to resort to the use of violence in response
to a perceived wrong done to him by Mr. Kirkness. His actions, as accepted by
the trial judge, were premeditated, involved a weapon, and apparently involved
a second individual who fled the scene after knocking on Mr. Kirkness door.
The fact that Mr. Lac was also prepared to strike a young, defenceless woman
with whom he had no prior contact is also very troubling, albeit the evidence
suggests that he did not intend the degree of harm which ultimately occurred.
The inmate assessment report does not shed much light on Mr. Lacs
psychological state and one of its authors, Dr. Worth, suggested that the Court
exercise caution in relying on the limited nature of the assessment in the context
of a bail application.
[29]
In the result, Mr. Lac has not satisfied me that he should be released
pending his conviction appeal. I would, therefore, dismiss his application for
bail.
[30]
It follows from my refusal of bail that steps should be taken to ensure
that Mr. Lacs conviction appeal is moved ahead as quickly as possible.
The most significant portions of the transcript are now available. The new
evidence, in the form of the affidavit of former defence counsel and any
evidence which Mr. Lac wishes to lead in reply, or otherwise, will have to be
presented in proper form. Mr. Lac has provided a form of written argument
on these applications which will eventually have to take the form of a factum.
[31]
I suggest that a hearing date be set for a half day for some date toward
the end of March or in early April 2011 with a view to arranging to have other
necessary filings made in relation to that date.
[32]
There should be a further case management hearing as soon as possible to
enable Mr. Lac and Crown counsel to consider their positions arising from these
reasons. I suggest that Crown counsel contact the Registry to arrange an early
date. The principal purpose of that hearing will be to confirm a hearing date,
and to set a filing schedule for factums for the application to adduce new
evidence, and for any other applications which may be necessary to keep this
appeal moving forward.
[33]
In the meantime, I would direct that a copy of these reasons be faxed to
Mr. Lac immediately upon their release. I would also direct that Mr. Lac
be permitted to attend the next scheduled case management conference by
videoconference on a date to be determined.
The Honourable Madam Justice Prowse
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Potts,
2011 BCCA 9
Date: 20110114
Docket: CA037956
Between:
Regina
Appellant
And
Randall Richard
Potts
Respondent
Before:
The Honourable Madam Justice Rowles
The Honourable Mr. Justice Lowry
The Honourable Mr. Justice Hinkson
On appeal from:
Supreme Court of British Columbia, March 12, 2010 (
R. v. Potts
,
2010
BCSC 319, Vancouver Docket No. 24696
)
Counsel for the Appellant:
M.M. Devlin, Q.C.
J.K. Torrance
Counsel for the Respondent:
B. Craig
Place and Date of Hearing:
Vancouver, British
Columbia
September 28, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 14, 2011
Written Reasons by:
The Honourable Madam Justice Rowles
Concurred in by:
The Honourable Mr. Justice Lowry
The Honourable Mr. Justice Hinkson
Reasons for Judgment of the Honourable
Madam Justice Rowles:
I. Overview
[1]
The Crown seeks leave to appeal the sentence imposed on Randall Richard
Potts following his guilty plea to conspiracy to produce and traffic in
methamphetamine, two counts of trafficking in cocaine, and to unlawful possession
of proceeds of crime. The charges arose out of a two-year RCMP investigation
of the East End Chapter of the Hells Angels (EEHA) in which a paid police
agent, Michael Plante, was used for the purpose of infiltrating the EEHA.
[2]
The sentencing judge stated that if Potts had been found guilty after a
trial, he would sentence Potts to 4 ½ years in prison for the conspiracy to
produce and traffic methamphetamine, taking into account the seriousness of the
offence, Potts criminal record, his role in the crime, and his rehabilitation.
For the other offences, the judge said that, on the same basis, he would
sentence Potts to one year for trafficking four ounces of cocaine, to two years
for trafficking 26 ounces of cocaine, and to 18 months for possession of the
proceeds of crime, with all sentences to be served concurrently. From the
resulting global sentence of 4 ½ years, the judge deducted six months on
account of Potts medical condition, one year for Potts guilty pleas, and one
year to take into account the effect of certain police conduct on Potts while
the police were pursuing their investigation, thus making an effective global
sentence of two years. The judge deducted one further year for the time Potts
spent in pre-trial custody, resulting in an actual sentence of one year.
Justice Leasks reasons for sentencing, delivered 12 March 2010, are indexed at
2010 BCSC 319.
[3]
The Crowns submission is that the sentencing judge erred in principle
and arrived at an unfit sentence: (i) in failing to impose sentences that were
proportionate to the seriousness of the crimes and the offenders degree of
responsibility in committing them; (ii) in failing to give proper weight to denunciation
and deterrence and in overemphasizing rehabilitation; (iii) in his approach to
the issue of state misconduct as discussed in
R. v. Nasogaluak
, 2010
SCC 6, [2010] 1 S.C.R. 206, and
R. v. Punko
, 2010 BCCA 365, 258
C.C.C. (3d) 144 at paras. 75 and 82-84; (iv) in making a six-month
reduction in Potts sentence based on his medical condition; (v) in taking a
piecemeal approach to the calculation of sentence; and (vi) in imposing
concurrent rather than consecutive sentences for the cocaine trafficking
offences.
[4]
The Crown argues, as it did during the sentencing proceedings, that fit sentences
would be as follows: a sentence of eight years for the methamphetamine conspiracy
count; concurrent sentences of four years each on the two cocaine trafficking
counts to be served consecutively to the eight-year sentence on the conspiracy
count; and a sentence of three years for possession of proceeds of crime, the
latter to be served concurrently with the sentences on all other counts.
Inasmuch as the Crown seeks consecutive sentences for the methamphetamine conspiracy
and the cocaine trafficking counts, the Crown acknowledges that the overall
sentence would have to be adjusted under the totality principle and suggests, in
that regard, a reduction of the overall sentence by one to two years. The
Crown also acknowledges that credit of one year for Potts pre-trial custody
must be deducted from his sentence.
[5]
In response to the Crowns appeal, Potts takes
issue with the Crowns argument that the sentencing judge failed to give proper
weight to proportionality or that he erred in principle by placing too much
emphasis on rehabilitation at the expense of denunciation and deterrence.
In
Potts submission, much of the Crowns argument is an attempt to recast and
mischaracterize the sentencing judges findings of fact. Potts submits that absent
allegations of palpable and overriding error or unreasonableness in the
findings of fact, the judges findings must be accepted. Potts further argues
that the Crowns arguments ignore the case authorities that require
deference to be accorded the judges discretion on matters relating to the
weighing or balancing of the relevant principles in sentencing, and whether
sentences are to be served concurrently or consecutively. In addition to the
totality principle, that would have to be considered if the sentences for the
drug offences were ordered to be served consecutively, Potts argues that under
the same principle, he ought not to suffer any greater penalty because the
Crown proceeded against him for offences arising out of the E-Pandora
investigation by way of two separate indictments. In that regard, Potts is
referring to the effective sentence of seven years he received for weapons
offences charged on the indictment preferred by the Crown provincial (see
R.
v. Violette
, 2009 BCSC 1025 at paras. 62-92).
[6]
The fundamental principle in sentencing is that a
sentence must be proportionate to the gravity of the offence and the degree of
responsibility of the offender. The proper application of that principle in
this case is contentious. During part of the police investigation, some of
Potts activities in the conspiracy to produce and traffic in methamphetamine
were made to appear to Potts to be successful whereas much of what Potts was
being told by Plante about production and sales was fiction. The false
information was related to Potts by Plante in order to facilitate greater
access to those in the EEHA and to cover up other deceptions. These deceptions
enabled the police to divert drugs from the market. The sentencing judge took
the view that Potts degree of responsibility for the drug crimes was
diminished by the part Plante played in facilitating and directing Potts
criminal activity.
[7]
Potts was addicted to the painkiller, Percocet. During
the investigation, Plante provided Potts with Percocet and alcohol, which the
police supplied. The sentencing judge found that providing Potts with Percocet
was to Potts detriment and reprehensible and, based on the reasoning in
Nasogaluak
,
held that Potts sentence ought to be reduced as a result.
[8]
The judges conclusion that a reduction in sentence should
be made because of Plantes supplying Potts with Percocet and alcohol during
the investigation would arguably fall within the reasoning in
Nasogaluak.
However,
I am of the view that neither the gravity of Potts drug offences nor the
degree of his responsibility in committing them was diminished by Plantes
actions, taken at the direction of or with the complicity of the police.
[9]
The sentencing judge rejected the Crowns submission
that Potts was a sophisticated criminal and accepted the paid police agents
description of Potts as a low end mope. Regardless of Potts status within
the EEHA or his inability or ineptitude in arranging for a second production run
or cook of methamphetamine, it is clear that Potts had succeeded in the first
cook, which produced 18 pounds of methamphetamine intended for sale in the
market. Moreover, there can be no doubt about Potts goal with respect to a
second cook because he put up $60,000 for that purpose.
[10]
The fictions and deceptions in which Plante and the police engaged with
Potts cannot mask or diminish the gravity of the
methamphetamine
conspiracy offence to which Potts pleaded guilty.
[11]
The two cocaine trafficking offences involved the sale, in total, of 30
ounces of cocaine to Plante. The sentencing judge referred to the cocaine sales
as being stage-managed by the police. Entrapment was not raised as a
defence. Regardless of whether Plante solicited the purchases in order to
facilitate his infiltration of the EEHA, it is clear from the wiretap evidence that
Potts, independent of Plante, had a supply of cocaine with which to make the two
sales. Potts received $32,800 from the sale of the cocaine. The fact that Plante
sought to make the purchases and that the police were able to divert the drugs
from the market does not, in my view, diminish
the gravity of
Potts two cocaine trafficking offences.
[12]
In my respectful view, the global sentence the judge
imposed in this case
was not proportionate to the gravity of the drug offences
and to Potts degree of responsibility in committing them. I am also of the
view that the judges reduction of the global sentence in stepped, successive
stages had the effect of giving undue weight to what the judge considered to be
mitigating factors. In this case, the need to emphasize deterrence and
denunciation ought to have been the predominant consideration in sentencing for
the drug offences, given the serious nature of those offences and the
circumstances in which they were committed.
[13]
I would grant leave and allow the appeal.
My
reasons follow.
II. Legislation
and case authorities on sentencing
[14]
Part XXIII of the
Criminal Code
, R.S.C. 1985, c. C-46 (
Code
)
contains the purposes and principles applicable in sentencing. The
fundamental
purpose
of sentencing, the
fundamental principle
in sentencing, and
other sentencing principles are found, respectively, in ss. 718, 718.1,
and 718.2 of the
Code
:
Purpose.
718. The fundamental purpose of sentencing is to
contribute, along with crime prevention initiatives, to respect for the law and
the maintenance of a just, peaceful and safe society by imposing just sanctions
that have one or more of the following objectives:
(
a
) to denounce
unlawful conduct;
(
b
) to deter the
offender and other persons from committing offences;
(
c
) to separate
offenders from society, where necessary;
(
d
) to assist in
rehabilitating offenders;
(
e
) to provide
reparations for harm done to victims or to the community; and
(
f
) to promote a sense of responsibility in
offenders, and acknowledgment of the harm done to victims and to the community.
Fundamental principle.
718.1
A sentence must be
proportionate to the gravity of the offence and the degree of responsibility of
the offender
.
Other sentencing principles.
718.2
A court that imposes a sentence shall also take
into consideration the following principles
:
(
a
)
a sentence
should be increased or reduced to account for any relevant aggravating or
mitigating circumstances relating to the offence or the offender
, and,
without limiting the generality of the foregoing,
(i) evidence that the
offence was motivated by bias, prejudice or hate based on race, national or
ethnic origin, language, colour, religion, sex, age, mental or physical
disability, sexual orientation, or any other similar factor,
(ii) evidence that the
offender, in committing the offence, abused the offenders spouse or common-law
partner,
(ii.1) evidence that the
offender, in committing the offence, abused a person under the age of eighteen
years,
(iii) evidence that the
offender, in committing the offence, abused a position of trust or authority in
relation to the victim,
(iv) evidence that the
offence was committed for the benefit of, at the direction of or in association
with a criminal organization, or
(v) evidence that the
offence was a terrorism offence
shall be deemed to be aggravating
circumstances;
(
b
)
a sentence
should be similar to sentences imposed on similar offenders for similar
offences committed in similar circumstances
;
(
c
)
where
consecutive sentences are imposed, the combined sentence should not be unduly
long or harsh
;
(
d
) an offender
should not be deprived of liberty, if less restrictive sanctions may be
appropriate in the circumstances; and
(
e
) all available
sanctions other than imprisonment that are reasonable in the circumstances
should be considered for all offenders, with particular attention to the
circumstances of aboriginal offenders.
[Emphasis added.]
[15]
The principle of proportionality set out in s. 718.1 of the
Code
is central to the sentencing process:
R. v. Solowan
, 2008 SCC 62,
[2008] 3 S.C.R. 309 at para. 12;
Nasogaluak
at para. 41. What
is meant by proportionality in the context of sentencing was considered in
Nasogaluak
,
at para. 42:
[42] For one, it requires that a sentence not
exceed
what is just and appropriate, given the moral blameworthiness of the offender
and the gravity of the offence. In this sense, the principle serves a
limiting or restraining function. However, the rights-based, protective
angle of proportionality is counter-balanced by its alignment with the just
deserts philosophy of sentencing, which seeks to ensure that offenders are
held responsible for their actions and that the sentence properly reflects and
condemns their role in the offence and the harm they caused (
R. v. M. (C.A.)
,
[1996] 1 S.C.R. 500, at para. 81;
Re B.C. Motor Vehicle Act
, [1985]
2 S.C.R. 486, at pp. 533-34,
per
Wilson J., concurring). Understood
in this latter sense, sentencing is a form of judicial and social censure (J.V.
Roberts and D.P. Cole, Introduction to Sentencing and Parole, in Roberts and
Cole, eds.,
Making Sense of Sentencing
(1999), 3, at p. 10).
Whatever the rationale for proportionality, however,
the degree of censure
required to express societys condemnation of the offence is always limited by
the principle that an offenders sentence must be equivalent to his or her
moral culpability, and not greater than it. The two perspectives on
proportionality thus converge in a sentence that both speaks out against the
offence and punishes the offender no more than is necessary.
[Italic emphasis in original; underlining
added.]
[16]
Thus, in sentencing Potts, the judge had to consider the degree of
censure required to express societys condemnation of the offences, while recognizing
that the degree of censure is limited by the principle that the sentence must appropriately
reflect Potts moral culpability, and not more:
Nasogaluak
, at para. 42.
[17]
The standard of review on a sentencing appeal is a deferential one. The
sentencing judge enjoys considerable discretion because of the individualized
nature of the process:
R. v. L.M
.,
2008 SCC 31, [2008] 2 S.C.R.
163 at paras. 14, 17. [In] the absence of an error in principle, failure
to consider a relevant factor, or overemphasis of the appropriate factors, a
sentence should only be overturned if the sentence is demonstrably unfit:
R.
v. McDonnell,
[1997] 1 S.C.R. 948, 114 C.C.C. (3d) 436 at para. 17;
R. v. Li
,
2009 BCCA 85 at para. 23
.
[18]
At the time of the conspiracy offence, methamphetamine was listed in
Schedule III to the
Controlled Drugs and Substances Act
, S.C. 1996,
c. 19 (
CDSA
), making the maximum sentence ten years. Methamphetamine
was removed from Schedule III and added to Schedule I on 10 August 2005 by SOR/2005-235.
The reclassification had the effect of increasing the maximum penalty from ten
years to life imprisonment because life imprisonment is the penalty that
attaches to a Schedule I drug and that is so regardless of whether the offence
is trafficking (
CDSA
s. 5(3)(a)) or production (
CDSA
s. 7(2)(a)).
[19]
Before methamphetamine was re-scheduled, this Court recognized the drugs
addictive and dangerous properties. In
R. v. A.J.C.
, 2002 BCCA 29,
Donald J.A. said at para. 10:
[10] I also wish to record
my agreement with Mr. Yules position for the Crown that methamphetamine
should be understood as a dangerous drug having highly addictive properties and
the potential for inducing aggressiveness and violent behaviour. It is said
that methamphetamine poses a much greater risk to the users health than does
cocaine by causing brain damage. For sentencing purposes possession of
methamphetamine may be treated as comparable to possession of cocaine, allowing
for the difference that cocaine is a Schedule 1 drug and methamphetamine is a
Schedule 3 drug under the
Controlled Drugs and Substances Act
.
[20]
The Crown acknowledges that the maximum sentence provided in the
CDSA
at the time the methamphetamine conspiracy offence was committed by Potts
applies in this case. That is so because, among other things, s. 11(i) of
the
Canadian Charter of Rights and Freedoms
provides:
11. Any person charged with an offence has the right
(i)
if found guilty of the offence and
if the punishment for the offence has been varied between the time of
commission and the time of sentencing, to the benefit of the lesser punishment.
[21]
The effect to be given to maximum sentences must be considered in light
of the sentencing principles in the
Code
as elucidated in recent case
authorities, rather than the notion that the maximum sentence must be reserved
for a case of the worst crime committed in the worst circumstances by the worst
offender. In
R. v. L.M.
, at paras. 20-22, the Supreme Court referred
to what was said in
R. v. Cheddesingh
, 2004 SCC 16, [2004] 1 S.C.R. 433
and re-iterated that the determination of the appropriate sentence must be
guided by the fundamental principle in s. 718.1 of the
Code
that a sentence
must be proportionate to the gravity of the offence and the degree of responsibility
of the offender. In
R.
v.
L.M.
, LeBel J. said
at para. 20:
[20] In
R. v. Cheddesingh
, [2004] 1 S.C.R. 433,
2004 SCC 16, the Court acknowledged the exceptional nature of the maximum
sentence, but firmly rejected the argument that it must be reserved for the
worst crimes committed in the worst circumstances. Instead, all the
relevant factors provided for in the
Criminal Code
must be considered on
a case-by-case basis, and if the circumstances warrant imposing the maximum
sentence, the judge must impose it and must, in so doing, avoid drawing
comparisons with hypothetical cases:
... terms such as stark horror, worst offence and worst
offender add nothing to the analysis and should be avoided. All relevant
factors under the
Criminal Code
... must be considered. A maximum
penalty of any kind will by its very nature be imposed only rarely ... and is
only appropriate if the offence is of sufficient gravity and the offender displays
sufficient blameworthiness. As is always the case with sentencing, the
inquiry must proceed on a case-by-case basis.
[para. 1]
III. Background
leading to the sentencing proceedings
[22]
Potts was arrested on 15 July 2005 following a two-year RCMP
investigation known as Project E-Pandora, a wide-ranging investigation into the
EEHA which resulted in a large number of people being charged with drug and
other offences. The police used a paid police agent named Michael Plante to
infiltrate the EEHA. Plante, who was then a recruitment member in the EEHA,
was to receive money from the police based on the number of members of the
Hells Angels against whom he collected evidence.
[23]
Others charged as a result of the E-Pandora investigation with respect
to production and trafficking in methamphetamine included John Virgil Punko and
Kerry Ryan Renaud. Punko had attained full patch status in the EEHA in the
spring of 2004. The conspiracy offence date alleged in the indictment charging
Potts was between 1 March 2004 and 3 June 2005. Between March and October
2004, Potts was a prospective member of the EEHA, and in October 2004, he
became a
full patch member. Contemporaneous wiretap
evidence showed that Potts was very proud of that fact.
[24]
As a result of the E-Pandora investigation, indictments were preferred
by the British Columbia Attorney Generals office and the Public Prosecution
Service of Canada against a number of persons including Potts and Punko, which alleged
a number of offences under the
Code
and the
CDSA
. On both indictments
Potts and Punko were charged under the
Code
with criminal organization
offences. The federal indictment was held in abeyance until the Crown
provincial had completed the prosecution on its indictment.
[25]
In the prosecution on the provincial indictment, heard before Justice
Romilly and a jury, Potts stood trial with Ronaldo Lising, Jean Joseph
Violette, and Punko. After a ten-month trial, the accused were found guilty of
7 out of the 26 counts on which they stood charged. They were found not guilty
of any of the criminal organization offences.
[26]
Potts was convicted of four weapons offences charged under ss. 81(1)(d),
95(1), 92(1) and 92(2) of the
Code
. The weapons involved in the most
serious of the counts were four grenades and, on that count, Justice Romilly imposed
a seven-year sentence. The sentences for the other weapons offences were
ordered to be served concurrently and thus the effective global sentence was
seven years. Potts had remained in custody since his arrest in July 2005 and,
as a result of the time he had spent in custody awaiting trial, Justice Romilly
reduced the sentence to one day.
[27]
Before Potts pleaded guilty to the drug and unlawful possession of
proceeds of crime charges in the federal indictment, Justice Leask ruled that
since Potts had been acquitted on the criminal organization offence in the
provincial prosecution, the Federal prosecution could not lead evidence of the
same offence based on the doctrine of issue estoppel: see
R. v. Punko
,
2010 BCSC 70, 251 C.C.C. (3d) 232. I understand that a Crown appeal arising
from that point, which resulted in a stay being entered, is pending. The
appeal was heard by a division of this Court on 30 November 2010 and judgment
has been reserved.
IV. Background
to the offences
[28]
When the E-Pandora investigation began, Potts and Plante had known each
other for a number of years. In March 2004, Potts was looking for a methamphetamine
production cook and Plante arranged to introduce him to Renaud. Potts supplied
a large quantity of ephedrine, an essential ingredient in the manufacture of
methamphetamine, and also financed the purchase of raw materials. Potts relied
on Renaud and other conspirators to physically produce and distribute the
product. Potts monitored the distribution of the drugs and received his share
of the profits through Plante. The scheme involved the production and
distribution of approximately 18 pounds of methamphetamine over an eight-month
period between April 2004 and January 2005. At a later point, Potts invested
$60,000 in a second cook. Although he was led to believe that another cook had
been done and that the product was being distributed to an Alberta buyer, the
information he was given about both was fictitious.
[29]
In the fall of 2004, Potts sold a total of 30 ounces of cocaine to
Plante. The first cocaine transaction took place on 20 September 2004 when Potts
drove to Plantes residence. Plante gave Potts $4,800 in exchange for four
ounces of cocaine. The second transaction took place on 25 October 2004. Potts
again met with Plante at which time Plante gave Potts $28,000. Potts then
arranged to have an EEHA associate, Chad Barroby, deliver 26 ounces of cocaine
to Plante at a local coffee shop. From what Potts said in contemporaneously
recorded, intercepted communications with Plante, it is clear that Potts had
access to a source of supply for cocaine which was independent of Plante. On the
first occasion Potts physically provided the drugs to Plante and, on the second,
he directed someone else to do so. Potts personally received the proceeds from
both transactions.
[30]
The proceeds of crime offence related to the money received by Potts
from the distribution of methamphetamine and cocaine, specifically, $231,500
from the manufacture and distribution of methamphetamine and $32,800 from
trafficking in cocaine. Some of the money he received came, in fact, from the
police.
[31]
Potts was addicted to Percocet, a powerful painkiller. Plante supplied Potts
with large quantities of the drug. Similarly, Plante supplied Potts with
alcohol when Potts was known to be an alcoholic. The police were complicit in
the supply of both Percocet and alcohol.
[32]
Plante quit his role as a police agent on 21 January 2005 and left the
EEHA recruitment program. Thereafter, Plante did not have any further contact
with Potts. The Crown did not allege any attempts by Potts to engage in any
further drug offences after Plante left the program. The wiretap authorization
on Potts various telephone lines continued in force until the end of July
2005.
[33]
When he was arrested on 15 July 2005, Potts had the
following criminal record: 1981, possession of stolen property and use of a
stolen credit card (suspended sentence with probation); 1991, assault ($500, ID
20 days); 2000, careless storage of a firearm ($300, probation) and possession
of property obtained by crime over $5,000 ($500, probation). The sentencing
judge did not regard
Potts pre-E-Pandora record as a serious
aggravating factor in sentencing and noted that Potts had not previously
received a jail sentence.
[34]
Potts participation in the drug offences was not the only criminal
activity that resulted in charges against him as a result of the E-Pandora
investigation. As noted earlier, when he was arrested in July 2005, Potts,
along with Punko, Violette, and Lising were variously charged in an indictment with
extortion, threatening, counselling mischief, weapons possession, and criminal
organization offences. Potts was found guilty of four weapons offences which
were committed between 1 October 2004 and 1 April 2005. The
weapons included four grenades, a loaded Colt .45
calibre
semi-automatic pistol, an Intratec 9 mm
calibre
semi-automatic pistol, a Ruger .22
calibre
semi-automatic rifle (the latter two with readily accessible ammunition),
a
Franchi .22 calibre semi-automatic rifle, a Voere bolt action rifle, and a Ruger
.44 magnum calibre revolver. Potts was also found guilty of possession of
prohibited devices consisting of a magazine for an lntratec 9 mm semi-automatic
pistol, and silencers for the two pistols and the two semi-automatic rifles.
[35]
Potts was sentenced on the weapons offences on 27 July 2009 by Justice
Romilly:
Violette
. Justice Romilly viewed the weapons offences,
particularly the possession of grenades, to be of a very serious nature requiring
a very strong emphasis to be given to denunciation and general deterrence. The
aggravating factors he found included the fact that the grenades could be used
for no purpose other than killing, maiming or the destruction of property, that
the firearms constituted a small arsenal that could be put to use on very
short notice,
that four of the firearms had silencers which suggested
they were not viewed as defensive weapons,
and that the weapons had been
stored at the home of Potts parents. Justice Romilly found that Potts was
holding the weapons for the EEHA.
[36]
In 2008, w
hile Potts was in custody awaiting
determination of the drug offences and the separately-charged weapons offences,
he was found guilty of contempt of court for refusing to testify in the trial
of an EEHA associate, for which he received a six-month sentence.
[37]
Justice Romilly was uncertain about Potts prospects for rehabilitation
and, as I read his reasons, did not regard that as a mitigating factor in sentencing.
[38]
Potts had remained in custody subsequent to his arrest in July
2005 on both the Federal and provincial indictments. In explaining how he
arrived at the sentence to be imposed for the weapons offences,
Justice Romilly summarized the time Potts had spent in custody prior to
sentencing and its effect on the seven-year sentence he deemed fit for the most
serious of the weapons offences:
[90] Potts has spent 4 years
and 12 days in pre-trial custody; he is entitled to credit of 8 years and 24
days. From this I subtract the time he served on the contempt charge, 6 months,
which leaves him with a credit of 7 years, 6 months and 24 days. As this amount
exceeds the sentence I have deemed fit for Potts, I sentence him to 1 day.
[39]
Potts sought leave to appeal the one-day sentence imposed by Justice
Romilly but leave was refused by Hall J.A. (in chambers) who observed, among
other things, that the length of the effective sentence was a matter Potts might
raise in sentencing on the drug offences: BCCA Registry CA037956, 4 May 2010.
[40]
On
7 December 2009, Potts entered a guilty plea to the
methamphetamine
conspiracy, the two cocaine trafficking offences and the
proceeds of crime offence.
[41]
In his sentencing reasons, the judge recounted in some detail the
evidence as to how the methamphetamine, which had been produced for Potts, was
dealt with by the police and Plante and how it came about that Potts sold
cocaine to Plante on two occasions. A summary of the findings made by the
trial judge appears below, along with the paragraph references from the judges
reasons:
·
The E-Pandora operative, Plante, introduced Potts to the
methamphetamine cook, Renaud, and acted as a go-between for them (paras. 5-6).
·
Most of the methamphetamine produced in the first cook was either
purchased or seized by the police (paras. 11, 13, 18, 20, 26, 27).
·
Surrey RCMP were prepared to arrest Potts in April of 2004, but
were prevented from doing so by the E-Pandora investigators. If the Surrey
RCMP had arrested Potts in April 2004, his criminal involvement would have
concluded much earlier without either the cocaine trafficking or possession of
proceeds of crime offences arising (paras. 14-15, 108).
·
The methamphetamine sales of 23 August and 17 September 2004 were
fictional sales intended to cover up the fact that Plante, with Punko, had
stolen 6.7 pounds of Potts methamphetamine (paras. 29-31).
·
The cocaine sales of 20 September and 21 October 2004 were stage-managed
by the police. In both instances the cocaine was purchased by the police and
diverted from the illicit drug market (paras. 36, 43, 66).
·
The police were using Potts as an avenue to get to other members
of the EEHA (paras. 35, 46-47). Potts was a pawn in their investigation
(para. 98).
·
Plante, with the full cooperation of the police, provided Potts
with steroids, Percocet, and alcohol knowing he was a drug addict and alcoholic
(paras. 28, 38, 81).
·
Potts was incapable of organizing or funding his own
methamphetamine cook (paras. 17, 44, 47-48).
·
The second methamphetamine cook, Plantes Alberta buyer, and the
ensuing sales were all fictional (paras. 46-54).
·
Potts was not involved in any criminal or drug offences after
Plante left the E-Pandora investigation in January 2005 (para. 55).
·
Potts criminal record consisted of minor offences, punishments
were at the low end, and prior to E-Pandora, Potts had never received a jail
sentence (para. 64).
·
Potts was less culpable than Renaud, Pearse, and Punko (para. 101).
[42]
The sentencing judge found that Potts could not be regarded as a
sophisticated criminal. In that regard, he said:
[65] The Crown urges me to treat as an aggravating
factor the proposition that Mr. Potts was a sophisticated criminal. On
this subject, I am inclined to agree with the Crowns undercover agent that Mr. Potts
was a low end mope. I cannot satisfy myself on the evidence before me that Mr. Potts
was a sophisticated criminal. He needed Mr. Plantes help to find a
methamphetamine cook. His attempt to distribute his 18 pounds of
methamphetamine led to 2 pounds going to Mr. Ayach which was seized by the
police with no return to Mr. Potts; 2 pounds going to Mr. Barroby
from which Mr. Potts received only $10,000 against a stated price of
$18,000; 6.7 pounds being stolen by Messrs. Punko and Plante and the final 7
pounds being seized from Mr. Plante by the police. Although the
police paid Mr. Potts $74,500 for the seized drugs (notionally sold by Mr. Plante
to the fictional Alberta buyer) and $67,000 to cover up the rip-off, these
events do not support the characterization of Mr. Potts as a sophisticated
criminal.
[66] According to Mr. Plante,
Mr. Potts idea of pricing was out of date; he did not understand the list
of methamphetamine producing equipment he showed Mr. Potts nor would he
have known how to obtain any of it. His sale of cocaine, again at an
unrealistic price, was stage-managed by the police, and their agent Mr. Plante,
to buttress the idea that Mr. Plante was a successful mid-to-high end drug
middleman with purchasers standing by to take whatever drugs he could persuade
various Hells Angels members to offer for sale.
[43]
As to his personal circumstances, Potts was 49 years of
age at the time of the sentencing proceedings in December 2009. He had been
together with his common-law wife since 1988, with the exception of two periods
of separation in 1999 and 2004. Potts had some medical problems, which the
judge described as
relatively severe, and included recurring
diverticulitis; chronic back problems; and a recurring abscess on his buttocks.
At sentencing, Potts had the full support of his common-law
wife and their children and had reportedly made some progress towards
rehabilitation while incarcerated. Potts had worked as a truck driver in the
past and there was some potential for similar employment in the future.
V. The
judges sentencing reasons and the Crowns points on appeal
[44]
Although he did so in the course of giving reasons for sentencing
in Punkos case, the judge did not refer specifically to the proportionality
principle in s. 718.1 of the
Code
in his reasons in Potts case. As
he had in his reasons in Punkos case, Justice Leask began by recognizing the
serious nature of the methamphetamine offence. At para. 58, he referred to
the decision of Justice Ryan in
R. v. Francis
, 2008 BCCA 309 at para. 13,
in which she had quoted with approval what had been said by the sentencing
judge in that case:
[83] These reports, the expert evidence, and the
conclusions drawn by the judges in these authorities all underscore the
dangerous and highly-addictive nature of methamphetamine and related drugs. The
advent of increased availability and use of methamphetamine and like substances
is a true scourge and a tragedy for the people -- often young people -- who
become addicted. Evidence indicates that users are often permanently
harmed. They often become less or non-productive members of society
caught in a downward spiral of addiction. They require additional health care.
Their addictions require medical and psychiatric treatment. They need
financial and emotional support from their families and their communities. Many
remain unsuccessful in overcoming their addictions.
[84] Insofar as courts are
able to impose sentences that denounce and deter the increased use and
distribution of methamphetamine, in my view they must do so. To do otherwise
is to fail to appreciate the harm that these substances cause to the basic
health and life of the people in the community...
[45]
After accepting these remarks regarding the harm that methamphetamine can
cause in communities, the judge took the seriousness of the conspiracy offence
to be an aggravating factor. He then considered the other aggravating and
mitigating factors and specified how some of the factors were to be given
effect in relation to the sentence to be imposed. A summary of the factors,
together with the references to the paragraphs in the judges reasons, are set
out below:
·
The seriousness of the offences and Potts willingness to invest
in a second methamphetamine cook were aggravating factors (paras. 59, 69).
·
Potts pre-E-Pandora criminal record was not a serious
aggravating factor (para. 64).
·
Potts crimes were motivated by greed rather than by his
addiction, which Plante was feeding without demanding payment. Potts was not
entitled to the sentencing benefit normally accorded to addicted traffickers (para. 83).
·
Potts early guilty plea was a mitigating factor entitling him to
one years credit (paras. 76, 107).
·
Potts progress towards rehabilitation while incarcerated was a
mitigating factor entitling him to a six-month reduction in sentence (paras. 77,
101).
·
Potts medical conditions cause him great discomfort and as a
result, time spent in custody is more onerous for him than for a healthy
prisoner, entitling him to a six-month reduction in sentence (paras. 80,
106).
·
The conduct of the police was a mitigating factor warranting a
one-year reduction in sentence. Supplying Potts with drugs and alcohol had a
negative impact on him which diminished his moral culpability. Similarly, preventing
the Surrey RCMP from arresting Potts earlier exposed him to the opportunity to
commit more crimes (paras. 98, 108).
[46]
As to Potts part in the conspiracy, and the
second
methamphetamine cook,
the judge said the
following under the heading
Investor/financial backer:
[68] The Crown argued that Mr. Potts role as an
investor in the conspiracy to produce and traffic in methamphetamine is an
aggravating factor. I agree that his role in Mr. Renauds production of
18 pounds of methamphetamine was analogous to that of an investor. He supplied
a quantity of ephedrine and $14,000 to be used for the purchase of another
ingredient. He then received the 18 pounds of methamphetamine as his share of Mr. Renauds
production. While understanding Mr. Potts role in this conspiracy is necessary
in order to determine the appropriate sentence for him, it is not clear to me
that his role, as such, is an aggravating factor.
[69] His willingness to invest $60,000 in another
methamphetamine cook is a different matter. This is the fictitious cook of
November and December 2004. No methamphetamine was manufactured or
distributed; the police agent simply lied to Mr. Potts; took his $60,000;
and returned $82,000 to him. In the
United States of America v. Dynar
,
[1997] 2 S.C.R. 462 at para. 88, the Supreme Court of Canada had this to
say about criminal conspiracy:
[88] A conspiracy must involve more than one person,
even though all the conspirators may not either be identified, or be capable of
being convicted.
Further, each of the conspirators must have a genuine
intention to participate in the agreement. A person cannot be a conspirator if
he or she merely pretends to agree. ...
a conspiracy requires an actual intention in both parties at
the moment of exchanging the words of agreement to participate in the act
proposed; mere words purporting agreement without an assenting mind to the act
proposed are not sufficient.
Where one member of a so-called conspiracy is a police
informant who never intends to carry out the common design, there can be no
conspiracy involving that person ...
Because of the absence of a
co-conspirator, this transaction cannot be a conspiracy. Nevertheless, I am
prepared to find that Mr. Potts willingness to invest in a second
methamphetamine cook is an aggravating factor.
[47]
As to Potts prospects for rehabilitation,
Justice Leask noted that he was sufficiently impressed with Potts
rehabilitation while incarcerated to reduce the starting point he would have
otherwise taken for the offence by six months, from a five-year sentence to 4 ½
years. He made some specific findings from the sentencing material to support
his determination that Mr. Potts has made use of his time in prison to
rehabilitate himself. In that regard, Justice Leask said at para. 77:
[77] I am satisfied that Mr. Potts
has made use of his time in prison to rehabilitate himself. I have read
the letter he wrote to the Court and I have read the letters of support his
counsel has filed. I am particularly impressed by the letters from Jason
Roy and his father showing the positive influence Mr. Potts exerted on his
fellow inmates. I am also impressed by Mr. Potts commitment to his
church and the support he has in that quarter. I believe that Mr. Potts
has shown true remorse, an understanding of the effects of his crimes on the
community, and the vital importance of overcoming his substance abuse
problems. I am impressed by the level of support he has from his family
and, more importantly, his recognition of his need to change his life to maintain
the love and support of his family. The substantial progress he has made
while incarcerated deserves to be recognized in his sentence.
[48]
The judges findings concerning Potts prospects for rehabilitation were
based on information he had received at the sentencing hearing and the Crown did
not take issue with the introduction of that information.
[49]
The Crown takes issue with Justice Leasks conclusion that the conduct
of the police in relation to Potts continuing criminality during the
investigation merited a reduction in Potts sentence. The judge summarized his
conclusion on the point as follows:
[98] I agree with counsel for Mr. Potts
characterization that Mr. Potts was a pawn in this investigation. Mr. Plante
supplied both Mr. Punko and Mr. Potts with drugs, free of charge, to
gain their favour and infiltrate the EEHA. While this may be a legitimate
investigative technique used by the police to be able to get at targets higher
up in the Hells Angels organization, as recognized by Curtis J., there is no
doubt that this conduct had a negative impact on Mr. Potts, and therefore
should go to diminishing his moral culpability.
While the evidence with respect
to Mr. Potts drug abuse was insufficient to allow this Court to draw an
inference that it affected his intent to commit crime, the conduct of the
police, in supplying drugs and encouraging Mr. Potts addiction, is
clearly conduct that impacted the offender and it is a mitigating factor in
this case. I also find as a fact that the E-Pandora investigators
persuading Surrey RCMP not to arrest Mr. Potts and Mr. Plantes
facilitation of further criminal activity by Mr. Potts has close parallels
with Lebel J.s characterization of the
Kirzner
case, i.e. the police
forces role in exposing the offender to the opportunity to commit the offences:
Nasogaluak
, at para. 54.
[99] Drug addiction is a serious problem and
encouragement of such addictions can be said to be contrary to societys shared
values and concerns. This is why Mr. Potts has been charged and is being
sentenced for his crimes, to reflect societys condemnation of his actions. However,
it cuts both ways. In sentencing Mr. Potts, this Court cannot ignore
the fact that the conduct of the police in this case was contrary to the same
shared values and concerns and this should be considered in sentencing. While
the Court is not sitting in judgment of the police in determining the fitness
of a sentence a court may consider all that is known about the offender and
the offence, along with the realities and complexion of the community
...which are relevant to and bear upon the public perception of justice:
R.
v. Pigeon
(1992), 73 C.C.C. (3d) 337 at 343 (B.C.C.A.); and
Nasogaluak
,
at para. 52.
[Emphasis added.]
[50]
The sentencing judge concluded that the cocaine trafficking offences
should be served concurrently with the methamphetamine conspiracy offence because
the trafficking in cocaine was simply part of a process where the police
agent, Mr. Plante, maintained the illusion of being a competent mid-level
drug dealer and supplied Mr. Potts with money to keep him happy and enhance the
agents chances of advancing in the EEHA organization (para. 102).
[51]
As to the sentences to be imposed on Potts, Justice Leask provided the
following summary at the conclusion of his reasons:
[100] Taking into account the seriousness of the offence, Mr. Potts
criminal record, his role in the crime and his rehabilitation, if Mr. Potts
had been found guilty after a trial, I would sentence him to 4 ½ years in
prison for the conspiracy to produce and traffic methamphetamine.
[101] I arrive at this number primarily by comparing him
to other methamphetamine conspirators charged as a result of the E-Pandora
investigation. I am satisfied that he is less culpable than Mr. Renaud,
Mr. Pearse and Mr. Punko. I have considered all the other cases
supplied to me by both the Crown and defence counsel. The closest
parallel outside of E-Pandora is
R. v. Renaud
, (28 June 2006), New
Westminster Registry No. X068413-2 (B.C.S.C.), affd 2006 BCCA 526, Mr. Justice
Mazckos sentence of Mr. Renaud for his first methamphetamine
offence. At that time, Mr. Renaud was a 26-year-old first time offender
and Mazcko J. considered the appropriate sentence to be five years
imprisonment but reduced that to three years because he was impressed with Mr. Renauds
prospects for rehabilitation. Mr. Potts is older and has a minor
pre-offence record. Like Mazcko J., I would have sentenced him to five
years imprisonment but I was sufficiently impressed with his rehabilitation to
reduce that to 4 ½ years.
[102] Turning to the two counts of trafficking in cocaine,
on the same hypothetical basis I would have sentenced him to one year in prison
for the charge of trafficking 4 ounces of cocaine and two years in prison
for trafficking 26 ounces of cocaine. Those sentences would be concurrent
with each other and concurrent with the methamphetamine conspiracy count.
My reasoning is based on the fact that the trafficking in cocaine was simply
part of a process where the police agent, Mr. Plante, maintained the
illusion of being a competent mid-level drug dealer and supplied Mr. Potts
with money to keep him happy and enhance the agents chances of advancing in
the EEHA organization.
[105] To sum up, without considering Mr. Potts
medical condition, his early guilty plea or the police conduct, I would
sentence Mr. Potts to 4 ½ years in prison for the methamphetamine conspiracy,
one year concurrent for trafficking 4 ounces of cocaine, two years concurrent
for trafficking 26 ounces of cocaine and 18 months concurrent for possession of
the proceeds of crime.
[106] As discussed previously, I have found that Mr. Potts
medical condition makes imprisonment, both on remand and as a convicted
criminal, substantially more arduous for him than for a healthy prisoner.
On that basis, I now propose to reduce his global sentence from 4 ½ years in
prison to four years in prison.
[107] As I indicated when discussing the early guilty
plea, I believe that Mr. Potts should receive one years credit for his
express willingness to plead to all charges except the criminal organization
count on his first appearance before me and his actual pleas as soon as I ruled
that the criminal organization count was precluded. Pausing there, the
proper sentence for Mr. Potts would be three years imprisonment.
[108] As in Mr. Punkos
case, I have found that the police conduct while investigating Mr. Potts
was legal and justifiable based on their plan to collect evidence against other
targets but not justifiable if their only target had been Mr. Potts. In
this case there is the added factor that the Surrey RCMP would have arrested
him in April 2004 as a result of their methamphetamine investigation and his
criminal involvement would have concluded much earlier without either the
cocaine trafficking or possession of proceeds of crime charge. I believe
that Mr. Potts should receive the same reduction in sentence that Mr. Punko
did for this mitigating factor. The effect will be to reduce his sentence to
two years of imprisonment.
[52]
Justice Leask then reduced the sentences, all of
which were to run concurrently, by one year to take into account the time Potts
spent in pre-trial custody to arrive at an actual sentence of one year.
VI. Punkos
sentence and the Crowns appeal of that sentence
[53]
Punko, one of the other methamphetamine conspirators, pleaded guilty before
Justice Leask to the same offences as Potts. However, the circumstances
grounding the offences committed by the two offenders, and their personal
circumstances, differed. Justice Leask found that Punko was more culpable than
Potts with respect to the methamphetamine conspiracy offence and that finding
is supported by the evidence that Punko was at the apex of the conspiracy.
Punko also had a more serious criminal record than Potts.
[54]
On the provincial indictment in which Punko stood trial with Violette,
Lising, and Potts, before Justice Romilly and a jury, Punko was convicted of
counselling to commit mischief (s. 464(
a
) of the
Code
) and
possession of a firearm, an unlicensed semi-automatic handgun (s. 95(1) of
the
Code
). On 3 December 2007, while in custody awaiting trial on the
federal indictment, Punko, Lising and Potts, all full-patch members of the
EEHA, refused to testify in answer to a subpoena issued by the Crown federal at
the trial of three others. Punko was sentenced for contempt to 15 months
incarceration: see
R. v. Giles, Revell, and Rempel
(14
April 2008), Vancouver No. 23505 (S.C.). The sentencing judge in that
case considered Punkos previous conviction in 2002 for attempting to obstruct
justice an aggravating factor. The 2002 conviction arose out of Punkos having
threatened the prosecutor during a trial that led to the convictions of Lising
and another Hells Angels associate on cocaine conspiracy charges. For his
contempt on that occasion, Punko was sentenced to eight months incarceration
and two years probation.
[55]
Following Punkos convictions by the jury in the provincial prosecution,
Justice Romilly sentenced Punko on 27 July 2009 to four years for counselling
to commit mischief and to 15 months consecutive for possession of a firearm, a
global sentence of five years and three months, which he reduced to one day
after giving Punko two-for-one credit for time spent in pre-trial custody:
see
Violette
, at paras. 121-123.
[56]
Justice Leasks reasons for sentence in the case of Punko, released at
the same time as his sentencing reasons in this case, are indexed at 2010 BCSC
320. Justice Leask imposed an effective global sentence of four years on
Punko. In arriving at that sentence, he expressed the view that a fit
disposition would be concurrent sentences of six years for the conspiracy to
produce and traffic in methamphetamine, five years for the trafficking in
cocaine offences, and three years for the possession of proceeds of crime.
However, he considered a one-year reduction should be made for Punkos guilty
pleas and a further year for the adverse effects on Punko of what the judge
characterized as police misconduct in relation to Punko during the course of
their investigation. After giving a credit of 34 months for pre-trial custody,
Justice Leask sentenced Punko to 14 months imprisonment, to be served
concurrently on all counts.
[57]
The Crown sought leave to appeal the sentences imposed on Punko,
asserting that the sentencing judge had erred in principle by failing to impose
a sentence that was proportionate to the seriousness of the crimes and the offenders
degree of responsibility in relation to their commission, by failing to have
due regard to the objectives of denunciation and deterrence, and by over-emphasizing
rehabilitation.
[58]
The same grounds were initially advanced on the Crowns appeal from
Potts sentence. In light of s. 718.2(c) of the
Code
, which
provides that a sentence should be similar to sentences imposed on similar
offenders for similar offences committed in similar circumstances, it would
have been preferable for the two appeals to be heard together, but they were
not.
[59]
The Crowns appeal of Punkos sentence on the drug offences was allowed
on 5 August 2010 in reasons indexed at
R. v. Punko,
2010 BCCA 365 (leave
to appeal to the S.C.C. filed on 1 October 2010: [2010] S.C.C.A. No. 361).
In a summary contained in paras. 95-97 of the majority reasons, Justice Tysoe
(Justice D. Smith concurring) said:
[95] Mr. Justice Smith has concluded that the
sentence imposed by the sentencing judge for the methamphetamine offence was
not fit, and I agree with him in that regard. In addition, as I stated above,
it is my view that the judges piecemeal approach to the mitigating factors of
the guilty plea and the police conduct, together with his treatment of Mr. Plantes
involvement in the offences as being conduct falling within the range of
conduct described in
Nasogaluak
, led him to give undue weight to these
mitigating factors. In my opinion, when all of the sentencing principles
and the aggravating and mitigating factors identified in the reasons of the
sentencing judge and Mr. Justice Smith (including the police misconduct in
supplying Percocet to Mr. Punko) are taken into account, fit sentences for
the two offences, prior to consideration of the totality principle and a credit
in respect of Mr. Punkos pre-sentence custody, are six years
imprisonment for the methamphetamine offence and four and one-half years
imprisonment for the cocaine offence.
[96] The sentences, served consecutively, would produce
an overall sentence of ten and one-half years imprisonment. This combined
sentence would, in my view, be unduly long, and the totality principle,
expressed in s. 718.2(c) of the
Code
, comes into play. It is my opinion
that a combined effective sentence of 8 years imprisonment would appropriately
reflect Mr. Punkos culpability in respect of the two drug offences. Mr. Punko
is entitled to a credit of 34 months in respect of his pre-sentence custody,
which results in an actual sentence of five years and two months.
...
[97] For the above reasons,
I would allow the appeal, set aside the sentence of 14 months imprisonment for
the two drug offences and substitute a combined sentence of five years and two
months imprisonment. I would allocate 38 months of the combined sentence to
the methamphetamine offence and the remaining 24 months to the cocaine offence.
[60]
As may be seen from the sentencing reasons of
Justice Leask and the majority judgment of Justice Tysoe in the Court of
Appeal, each considered that, absent other factors, a sentence of
six
years imprisonment for the methamphetamine conspiracy offence was appropriate.
With respect to the one count of trafficking in cocaine to
which Punko had pleaded guilty, Justice Leask considered that, absent other
factors, five years was the appropriate sentence whereas Justice Tysoe
considered that 4 ½ years would be.
[61]
The difference in the length of the sentence the
Court of Appeal substituted results from the majoritys conclusion that the
sentences for the
methamphetamine conspiracy offence and the cocaine
trafficking offence ought to have been ordered to be served consecutively
rather than concurrently. Justice Leask concluded that the sentences ought to
be served concurrently for the following reason:
[80]
I would make his
sentence concurrent because I see this offence as part of a continuing process
by which the police agent, Mr. Plante, assisted Mr. Punko to make easy
money from drug dealing.
[62]
Justice Tysoe concluded, at paras. 87-89 of his reasons, that the
sentencing judge was in error in ordering the sentences to be served concurrently.
He also concluded at paras. 82-84 that the judge erred in treating the involvement
in the offences of the police agent, Plante, as conduct justifying a reduced
sentence pursuant to the principles established in
Nasogaluak
.
[63]
After this Courts reasons had been issued in
Punko
, the
Crown filed a Supplementary Statement in the Potts sentence appeal to add additional
argument, reflecting the points on which the majority had allowed the appeal.
VII. Points
on appeal
[64]
The Crown alleges that, as a result of errors in principle made by the
sentencing judge, the total sentence imposed on Potts for the drug offences is
demonstrably unfit. In making that argument, the Crown asserts that the
sentencing judge made substantially the same errors in principle in the present
case as he made in
Punko
, resulting in an unfit sentence. The Crowns
main points are considered below.
(a) State
misconduct
[65]
The first question is whether the sentencing judge was in error in his
approach to the issue of state misconduct in relation to Potts and the offences
to which he had pleaded guilty. The judge reduced Potts sentence by one year
to reflect the effect of police conduct on him while the police were pursuing
their investigation. One aspect of that police conduct was the supply of
Percocet and alcohol to Potts. The second was the E-Pandora investigators
stopping the probable arrest of Potts in April 2004 by the Surrey RCMP so that
the investigation of the EEHA could continue without disturbance. The third aspect
was couched in the judges language as follows: the police conduct while investigating
Mr. Potts was legal and justifiable based on their plan to collect
evidence against other targets but not justifiable if their only target had
been Mr. Potts (para. 108).
[66]
In
Punko
, Justice Tysoe drew the following distinction about the
applicability of
Nasogaluak
to aspects of police conduct in the E-Pandora
investigation of Punko, at paras. 80-82:
[80] The sentencing judge considered two aspects of the
police conduct in this case to be mitigating factors under
Nasogaluak
. The
first was the supply of Percocet by Mr. Plante to Mr. Punko. The
second was the involvement of Mr. Plante in the two offences.
[81] I agree with Mr. Justice Smith that, in view
of the sentencing judges findings regarding the supply of Percocet, it was
open to the judge to consider that the police conduct in this case fell within
the range of misconduct accepted by the Supreme Court of Canada in
Nasogaluak
to constitute a mitigating circumstance for sentencing purposes. Although Mr. Plante
was not doing anything illegal in view of the exemptions obtained under the
Controlled
Drugs and Substances Act (Police Enforcement) Regulations
, SOR/97-234,
the
judge found that Mr. Punko was attempting to deal with his Percocet
addiction and that, to the knowledge of the police, the supply of the Percocet
to Mr. Punko was causing him harm because it was affecting his health. In
my view, a right-thinking Canadian would consider the supply of Percocet to Mr. Punko
in these circumstances to be contrary to the shared values of our society.
[82] On the other hand, it is my opinion that
Mr. Plantes
involvement in the offences does not amount to police misconduct
. The
police were attempting to infiltrate an organization they considered to be of a
criminal nature. Their attempt would have been futile unless their agent
participated in the criminal activities engaged in by other members of the
organization. In my view, a right-thinking Canadian would accept that such
tactics are necessary to investigate organizations believed to be criminal and
would not consider these tactics be contrary to the rule of law or shared
values of our society.
[Emphasis added.]
[67]
In
Nasogaluak
, LeBel J. explained how police misconduct directed
to an offender and associated with an offence may be taken into account in
sentencing even though the misconduct does not constitute a
Charter
breach. In
Punko
, the offender had been taking active steps to rid
himself of his addiction to Percocet and the ready supply of the drug being
provided by Plante had an adverse effect on those efforts. I agree with Justices
Smith and Tysoe that, in those circumstances, it was open to the sentencing judge
to hold that the police conduct in supplying Punko with Percocet would fall
within the range of misconduct accepted in
Nasogaluak
as constituting a
mitigating circumstance for sentencing purposes.
[68]
It may be open to question, however, whether Plantes having
supplied Potts with Percocet would lead to the same conclusion as in
Punko
.
In Potts case, t
he
sentencing judge rejected the
defence submission that Potts ought to
be treated as an
addict-trafficker because of his heavy consumption of Percocet and held instead,
that the evidence of Potts drug use was insufficient to draw the inference
that it affected his intent to commit the crimes. It therefore seems
questionable whether Potts moral culpability in committing the offences to
which he pleaded guilty could be found to be diminished or reduced by his use
of Percocet.
[69]
Moreover, unlike Punko,
there was no
evidence that Potts was attempting to free himself of his Percocet addiction.
As to the adverse effect on Potts,
the sentencing judge
appears to have relied on an assumption, related to the use of addictive
substances generally, that harm must have been occasioned to Potts through
Plantes making available a ready supply of Percocet. As we had very limited
argument on this point, I will simply observe that if a sentence reduction is
sought on the basis of police misconduct that inflicts unreasonable or
unnecessary harm on an offender, there ought to be a foundation in the evidence,
not simply assumptions or speculation, put forward to substantiate that harm resulted
from the misconduct.
[70]
The judge held that by preventing the Surrey RCMP from arresting Potts in
April 2004, the E-Pandora investigators provided Potts with the opportunity to
commit more crimes and that interference ought to be treated as a mitigating
factor in sentencing. In that regard, the trial judge relied on
R. v.
Kirzner
(1976), 14 O.R. (2d) 665 (C.A.), in which the court reduced the
offenders sentence for drug trafficking and possession offences on the ground that
the police had used the offender as an informer after he had attempted to cure
himself of his addiction. It does not appear to me that
Kirzner
can be
applied by analogy. In April 2004, Potts was actively pursuing full-patch
membership in the EEHA, an endeavour in which he later, with some pride,
succeeded. In short, there was no indication that Potts was attempting to turn
away from crime at the time the Surrey RCMP wanted to search his residence and
arrest him.
[71]
As to the third point concerning police conduct, I return to Justice
Tysoes reasons in
Punko
, quoted above, and agree with his conclusion,
expressed in para. 82, that Plantes involvement in the offences does not
amount to police misconduct.
[72]
I am also of the view that the sentencing judge was in error in viewing Potts
responsibility for the drug offences as being less serious because of Plantes involvement
in various aspects of the criminal activity grounding the offences. As noted
earlier, the trial judge found that Potts was not a sophisticated criminal and
was of the view that, within the EEHA, Potts and Punko were, as Plante
described them, low level mopes. Regardless of Potts lack of sophistication
as a criminal or how his status might be viewed as an EEHA member, it is clear
from his activities that he was well removed from the level of a street trafficker
or a low-level functionary. The judge found that Potts activities were not
driven by addiction; rather, his criminal misconduct was driven by greed. The methamphetamine
offence to which Potts pleaded guilty involved the production and distribution
of a large quantity of a dangerous and highly addictive drug. Potts was an
investor in the drug business and was able to earn substantial amounts of money
through the distribution of methamphetamine, without directly being involving in
the physical production of the drug or its physical distribution. Thus Potts
was able to limit his risk and exposure to the investment of funds, negotiating
his cut, and receiving the profits.
[73]
The sentencing judge made reference to Potts cocaine trafficking
offences as being stage-managed by the police. There was evidence that Plante
had prompted Potts sale of cocaine to him on the two occasions that grounded
the charges. Entrapment was not advanced as a defence. It is clear from the
wiretap evidence that Potts had his own considerable supply of cocaine available
for trafficking. Neither the police nor Plante had anything to do with Potts
having that supply. Plante thought Potts had difficulty selling his cocaine
because he was mis-pricing it, but the salient facts in determining Potts
culpability for the two cocaine trafficking offences is that Potts had a
sufficient supply of cocaine that he was able to, and in fact did, sell on a
wholesale basis.
[74]
In my view, the fact that the police, through Plante, encouraged, and to
some extent enabled, Potts to commit the drug offences to which he pleaded
guilty does not diminish Potts overall culpability. While Plante introduced Potts
to a cook, it was Potts who was seeking one. Potts also supplied ephedrine, an
essential ingredient for the production of methamphetamine. Potts intention
was to have all 18 pounds of methamphetamine distributed in the illicit drug
market. Potts sold his supply of cocaine to help finance a second
methamphetamine cook. The fact that the police did their job well and
prevented a large percentage of both drugs from reaching their intended
customers does not diminish the gravity of Potts offences or shield him from
responsibility in committing them. In other words, the fact that much of the
actual harm in the distribution of the drug was avoided by the police does not
obviate Potts responsibility for the deliberate actions he took when
committing the drug offences.
(b) Piecemeal approach in taking into account
aggravating and mitigating factors in sentencing
[75]
In
Punko
, both the majority and the minority were in agreement
that the sentencing judges balancing of the relevant factors was unreasonable
although they reached that conclusion for different reasons. The majority held
that the judges piecemeal approach led him to give undue weight to the
mitigating factors (para. 79) whereas Justice K. Smith held that the judge
failed to give reasonably sufficient weight to the objectives of denunciation
and deterrence by overlooking the substantial harm caused by the very large
amount of methamphetamine that was distributed into the illegal market by Punko
and his co-conspirators (paras. 55, 62).
[76]
The majority referred to the decision in
R. v. Evanson
, 2009 BCCA
425, in which Justice Bennett criticized the piecemeal approach the sentencing
judge had taken at paras. 18-19:
[18] I wish to add one final comment, and that is in
relation to how the sentencing judge arrived at his sentence. He concluded
that an appropriate sentence was one of four years, and then ascribed a period
of six months to be deducted from that sentence to reflect the mitigating
guilty plea. In my respectful view, this is not an appropriate way to arrive at
a fit sentence. Sentencing is not an inflexible predetermined procedure (
L.M.
at para 17), and ascribing specific terms of credit for the various sentencing
factors would result in a very fixed procedure. Mr. Justice LeBel in
L.M.
set out the process of arriving at a fit sentence as follows at para. 17:
To arrive at an appropriate sentence in light of the
complexity of the factors related to the nature of the offence and the personal
characteristics of the offender, the judge must weigh the normative procedures
set out by Parliament in the
Criminal Code
:
- the objectives of denunciation, deterrence, separation of
offenders from society, rehabilitation of offenders, and acknowledgment of and
reparations for the harm they have done (s. 718
Cr. C.
) (see Appendix);
- the fundamental principle that a sentence must be
proportionate to the gravity of the offence and the degree of responsibility of
the offender (s. 718.1
Cr. C.
); and
- the principles that a sentence should be increased or
reduced to account for aggravating or mitigating circumstances, that a sentence
should be similar to other sentences imposed in similar circumstances, that the
least restrictive sanctions should be identified and that available sanctions
other than imprisonment should be considered (s. 718.2
Cr. C.
).
[19] Thus, a sentencing
judge needs to consider all the factors in arriving at a fit sentence as
opposed to taking a piecemeal approach. The exception is applying the credit
for pre-trial custody after a fit sentence has been determined.
[77]
In
Evanson
, this Court did not describe the sentencing judges
deduction for the guilty plea as an error in principle and upheld the sentence
(para. 20) but it is clear from Justice Bennetts reasons that making fixed,
stepped reductions in the manner done here is not in accord with the reasoning process
in sentencing described in the Supreme Court of Canadas jurisprudence to which
she referred.
[78]
In
Punko
, Justice Tysoe held that the sentencing judge erred in
his general approach by first determining the appropriate sentence for the two
drug offences and, second, by making deductions in the sentence as a result of
mitigating factors which led him to give undue weight to those factors (paras. 76,
79).
[79]
In this case, Justice Leask first determined that an appropriate
sentence for the methamphetamine conspiracy was five years. Second, he reduced
that sentence by six months based on Potts rehabilitation while in custody.
Third, he determined that an appropriate sentence for the cocaine offences
would be one and two years respectively, but held that those sentences should
be served concurrently. Fourth, he concluded that the sentence for the cocaine
offences should be served concurrently with the methamphetamine sentence.
Fifth, he determined that the possession of proceeds of crime offence warranted
an 18-month sentence also to be served concurrently with the drug offences.
Sixth, he reduced the global sentence by six months to account for Potts
health condition. Seventh, he reduced the global sentence by one year on the
basis of Potts guilty plea. Finally, he reduced the global sentence by an
additional year on account of the police conduct (paras. 100-108).
[80]
The piecemeal approach taken by the sentencing judge, which was
disapproved in
Punko
,
is indistinguishable from the approach that
was taken in Potts case.
[81]
The specific reductions made in Potts case for rehabilitation, health
problems, guilty plea, and police conduct effectively reduced the sentence from
five to two years. The result of that approach was to give the mitigating
factors more weight than the misconduct underpinning the offences. In this
case, as in
Punko
, the judges approach led to undue weight being given to
mitigating factors and resulted in an unfit sentence.
[82]
The correct approach to the determination of a fit sentence, as
explained in
Nasogaluak
at para. 43, requires the sentencing judge
to weight the objectives of sentencing in a manner that best reflects the
nature of the offence and the circumstances of the offender. Mitigating and
aggravating factors may push the sentence up or down the scale of appropriate
sentences for similar offences. The essential point is that the aggravating or
mitigating factors should be considered as part of the determination of an appropriate
sentence rather than independently.
[83]
As in the
Punko
appeal, the Crown argues that the sentencing
judge gave insufficient weight to denunciation and deterrence, over-emphasized
rehabilitation, and failed to consider the overarching principle of proportionality.
In relation to Potts, the Crown argues that the sentences imposed were clearly
unfit. For reasons I have already expressed, I agree with the Crowns
submission in this regard.
(c) Reducing
the sentence on account of Potts health
[84]
The sentencing judge considered that Potts particular health problems
would make serving his sentence more onerous than for a healthy prisoner and,
as a result, took the effect of Potts health into account by reducing the
sentence by six months.
[85]
It is relatively rare for the health of an offender to be taken into
account in sentencing but there are cases in which an offenders health may be relevant.
Although an offenders health status may be relevant at sentencing, in general
these matters are best considered as part of the overall circumstances of the
offender, rather than as a basis for deducting time from an otherwise appropriate
sentence. There are cases in which an otherwise fit sentence may be reduced on
compassionate grounds, but such reduction must be based on current, clear and
convincing evidence: see
R. v. Shah
(1994), 94 C.C.C. (3d) 45
(B.C.C.A.);
R. v. Shahnawaz
(2000), 51 O.R. (3d) 29, 149
C.C.C. (3d) 97 (C.A.) at paras. 30-34;
R. v. Alcius
, 2007
QCCA 213 at para. 53.
[86]
Without challenging the trial judges finding that Potts various
ailments make serving time in custody more arduous than would be the case for
a healthy prisoner, the Crown submits it was inappropriate to reduce Potts
sentence by six months on account of his medical conditions. Drug offenders
convicted of much less serious offences, with less aggravated backgrounds and
more significant medical conditions, have been refused credit or reduction in
an otherwise fit sentence, considering the availability of medical treatment
within the prison system, and the availability of early parole based on medical
necessity: see for example
R. v. Hill
, 2007 BCCA 309, 221 C.C.C. (3d)
472 at para. 42.
[87]
I agree with the Crowns submission on this point.
(d) Imposition
of concurrent sentences
[88]
The test for imposing concurrent sentences is whether the acts
constituting the offence were part of a linked series of acts within a single
endeavour:
R. v. Li
, 2009 BCCA 85 at para. 42. It is important
to repeat, however, that the decision of whether to impose consecutive or
concurrent sentences is a matter of discretion for the sentencing judge:
McDonnell
,
at para. 46:
[46] ... the decision to
order concurrent or consecutive sentences should be treated with the same
deference owed by appellate courts to sentencing judges concerning the length
of sentences ordered. The rationale for deference with respect to the length of
sentence, clearly stated in both
Shropshire
and
M. (C.A.),
applies equally to the decision to order concurrent or consecutive sentences.
In both setting duration and the type of sentence, the sentencing judge
exercises his or her discretion based on his or her first-hand knowledge of the
case; it is not for an appellate court to intervene absent an error in
principle, unless the sentencing judge ignored factors or imposed a sentence
which, considered in its entirety, is demonstrably unfit. The Court of Appeal
in the present case failed to raise a legitimate reason to alter the order of
concurrent sentences made by the sentencing judge; the court simply disagreed
with the result of the sentencing judges exercise of discretion, which is
insufficient to interfere.
[89]
Courts have considered the following non-exhaustive list of factors in
determining whether to impose concurrent or consecutive sentences: the nature
and quality of the criminal acts; the temporal and special dimensions of the
offences; the nature of the harm caused to the community or to victims; the
manner in which the criminal acts were perpetrated; and the offenders role in
the crimes.
[90]
The Crown referred us to
R. v. Grant
, 2009 MBCA 9, 240 C.C.C.
(3d) 462, in which the offender, a high-end drug trafficker, sold two kilograms
of methamphetamine and one kilogram of cocaine to an undercover police officer
in three separate transactions over a five-week period. The sentencing judge
imposed concurrent sentences for the three drug offences but imposed a
consecutive sentence for a related extortion charge. The Court of Appeal
upheld the total sentence of 15 years.
[91]
R. v. Davis
(2006), 218 O.A.C. 267, supports the proposition that
an appellate court will not disturb a consecutive sentence that is overall a
fit one on the basis that, in the circumstances, the trial judge should have
imposed concurrent sentences (paras. 26-27). It seems to me that the
converse of this proposition must also hold true.
[92]
In
Punko
, the majority held that Leask J. erred by considering Mr. Plantes
role in the offences as a reason for imposing concurrent sentences (para. 87)
rather than considering the nature and quality of the specific acts which, in
that case, constituted separate and distinct offences which should have been
made consecutive (paras. 88-89).
[93]
In the case of Potts, the sentencing judge took the same approach as he
had done in
Punko
. He did not undertake an analysis of the two
offences, but instead focused on the continued involvement of the police
operative. He did not consider the fact that the two schemes involved
different drugs and that Potts role in each scheme was different. In my
respectful view, the judges focus was misplaced, although he might have
arrived at the same conclusion by a different path.
[94]
Had the sentencing judge looked at the nature and quality of the
specific acts constituting the offences, it appears to me that he might well have
arrived at a finding that concurrent sentences were appropriate. In the
methamphetamine conspiracy, Potts acted as an investor and provided an
essential ingredient (ephedrine) for the production of methamphetamine. He
anticipated profits from its distribution. On the cocaine trafficking offences,
Potts participated in the cycle of wholesale drug distribution by selling 30
ounces of cocaine with a view to using the profits from the sale of one drug to
invest in the other. The players in the conspiracy remained largely the same.
VIII. Summary
and conclusion
[95]
In my opinion, one of the main errors in judgment in this case was the
failure of the sentencing judge to apply the fundamental principle in
sentencing found in s. 718.1 of the
Code
: a sentence must be
proportionate to the gravity of the offence and the degree of responsibility of
the offender.
[96]
Potts could not be described as being at the high end of the drug trafficking
hierarchy but the nature of his criminality is nonetheless very serious. Recognition
of the serious harm that results from a methamphetamine conspiracy such as this
one seems to have been lost by the judges adoption of the dismissive
description of Potts as a low end mope. The description does not fit the
magnitude of Potts criminal misconduct. As a result of his financial and
other contributions to the first cook, Potts cut was eight pounds of methamphetamine,
for which he was to receive the benefits of its being trafficked in the market,
all without his direct involvement. Putting up $60,000 for a second cook showed
clearly his intention to engage in production and trafficking as an on-going
business. The police were able to divert much of the drug away from the
market through various ruses, but the fact that the police did so does not make
the crime itself less serious or reduce the responsibility of the offender in
committing it.
[97]
A conspiracy such as this one is a despicable endeavour which causes
very substantial harm within society, the nature of which is well described in
the reasons of Justice Ryan in
Francis
, at para. 13, set out in
paragraph 44 above.
[98]
The second error concerns the judges treatment of what he regarded as
mitigating factors. The sentencing judge had to take into account the
sentencing goals and other sentencing considerations set out in ss. 718
and 718.2 of the
Code
, but in this case, his recognition of the mitigating
factors in stepped, successive stages resulted in those factors being given such
weight that they overshadowed the important goals of denunciation and
deterrence of these very serious crimes.
[99]
In combination, the two errors to which I have referred resulted in an
unfit sentence.
[100]
Section
718.2(b) provides that a sentence should be similar to sentences imposed on
similar offenders for similar offences committed in similar circumstances. In this
case, the sentences imposed on Potts should therefore be similar to those
imposed on Punko. The sentencing judge found that Potts was less culpable than
Punko and that finding is consistent with the evidence of Punko being at the
apex of the conspiracy. The amount of methamphetamine the conspiracy produced
was approximately 50 kilograms, although Punkos share of it would have been
much less. While they were part of the same conspiracy, the difference in
culpability of the two offenders must be taken into account in sentencing on
the conspiracy count. As well, Punkos criminal record is more serious than Potts.
Before the E-Pandora investigation, Potts had not received any custodial sentences.
Based on the findings of the sentencing judge, it also appears that Potts may
have made some progress towards rehabilitation.
[101]
In
Punko
,
the majority were of the view that, prior to taking into account the totality
principle and credit for pre-sentence custody, a sentence of six years for the
methamphetamine offence and a sentence of 4 ½ years for the cocaine trafficking
offence, would be fit. If served consecutively, those sentences would result
in a prison sentence of 10 ½ years. Applying the totality principle in
s. 718.2(c), Tysoe J.A. considered that such a global sentence would be
unduly long and reduced the sentence to eight years. He then reduced the
sentence by 34 months to take into account Punkos pre-sentence custody,
which resulted in an actual sentence of five years and two months.
[102]
In this
case, I am of the view that, after taking into account all the applicable goals
and principles in sentencing set out in the
Code
, the following would be
fit sentences: five years for the methamphetamine conspiracy offence; three-year
sentences, concurrent with each other, for the cocaine trafficking offences; and
three years concurrent for the proceeds of crime offence.
[103]
If all
sentences were ordered to be served concurrently, the global sentence would be
five years. If the sentences for the drug offences were ordered to be served
consecutively, the result would be a global sentence of eight years.
[104]
If the
sentences are ordered to be served consecutively, the totality principle must
be applied and, in Potts case, it is more complex than in
Punko
. As a
result of the Crown proceeding on two separate indictments, Potts was sentenced
for offences committed during the E-Pandora investigation at different times.
On the provincial indictment, the effective global sentence he received for the
weapons offences was seven years. If a global sentence of eight years for the
drug offences and a seven-year sentence for the weapons offences were added
together, the result would be an overall sentence of fifteen years. While
s. 718.2(c) does not speak directly to the case where sentences are
imposed at different times, it seems to me that an injustice would be
occasioned in this case if effect were not given to the principle that
sentences, if combined, should not be unduly long or harsh. While the weapons
offences and the drug crimes committed by Potts are very serious, I am of the
view that a sentence of 15 years for a person who had not previously been
incarcerated, as is the case with Potts, would be unduly harsh and excessive.
[105]
Potts
actual sentence on the weapons offences was one day but that resulted from
Potts having been given two-for-one credit for the time he had spent in pre-trial
custody after subtracting the six-month sentence he had received for contempt
of court in 2008. Punko was also convicted of offences on the indictment
preferred by the Crown provincial. The offences were counselling to commit
mischief and possession of a firearm. On the first offence Punko was sentenced
to four years and, on the second, to 15 months consecutive, resulting in a
global sentence of five years and three months. That sentence was reduced, after
subtracting the 15-month sentence Punko had received for contempt in 2008, to
one day after giving Punko two-for-one credit for time spent in pre-trial
custody.
[106]
For the sake
of completeness, I note that both Potts and Punko were arrested on the same
day. In
Punko
, there was no dispute that he was entitled to have
deducted from his effective sentence, a 36 month credit for time spent in
pre-trial custody. In Potts, there is no dispute that he is entitled to a
one-year deduction for pre-trial custody.
[107]
Finally,
with respect to the totality principle and consecutive sentences generally, I
note the helpful reasons given by Justice Frankel in
R. v. Abrosimo
,
2007 BCCA 406, 225 C.C.C. (3d) 253 at paras. 28 and 31.
[108]
I am of
the view, expressed earlier, that it was open to the sentencing judge,
albeit
for reasons other than those he expressed, to impose concurrent sentences for
the drug offences.
[109]
In the
circumstances, I have concluded that it would be in accord with s. 718.2(c)
and not offend s. 718.2(b) of the
Code
if Potts sentences were
ordered to be served concurrently rather than consecutively.
[110]
In the
result, I would grant leave and allow the appeal by setting aside the sentences
imposed by Justice Leask and substitute the following sentences: on the methamphetamine
conspiracy offence, five years; on the cocaine trafficking counts, three years
each; and on the proceeds of crime offence, three years, with all sentences to
be served concurrently. From that effective global sentence, I would deduct
one year, being credit for time spent in pre-trial custody, resulting in an
actual sentence of four years.
The Honourable Madam
Justice Rowles
I agree:
The Honourable Mr. Justice
Lowry
I agree:
The Honourable Mr. Justice
Hinkson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
D. Bacon Holdings Ltd. v. Naramata Vines Inc.,
2011 BCCA 22
Date: 20110118
Docket: CA038315
Between:
D. Bacon Holdings
Ltd., Dr. Barb Astle, Dr. Bill Astle,
Don Bacon, Dr. Danaze Chambers, Mark Smith,
Douglas J. Vincelli Professional Corporation,
Alpenstock Inc. and Sophia Ventures Ltd.
Respondents
(Plaintiffs)
And
Naramata Vines
Inc., Naramata Bench Vineyards Inc.
with an assumed
name of Naramata Vines Inc.,
0792625 B.C. Ltd.,
Tremblant Developments Inc. and James Angrove
Appellants
(Defendants)
Before:
The Honourable Madam Justice Saunders
The Honourable Mr. Justice Lowry
The Honourable Mr. Justice Frankel
On judicial review:
Court of Appeal for British Columbia, November 5, 2010
(
D. Bacon Holdings Ltd. v. Naramata Vines Inc.
, Docket
No. CA038315)
Oral Reasons for Judgment
Counsel for the Appellant:
J. Angrove
Counsel for the Respondents:
M.B. Morgan and L.E.
Cook
Place and Date of Hearing:
Vancouver, British
Columbia
January 18, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 18, 2011
[1]
LOWRY J.A.
: The appellants apply to vary the order of Mr. Justice
Low made 5 November 2010 denying their application to extend the time to post
security for the respondents costs and allowing the respondents application
to dismiss the appeal as abandoned. To succeed, the appellants must establish
the order, which was made in the exercise of a discretion, was based on an
error of law, and error of principle, or a misapprehension of the facts:
Haldorson
v. Coquitlam (City)
, 2000 BCCA 672 at para. 7.
[2]
The respondents allege that the appellants misappropriated funds they
invested in the purchase and development of a vineyard. The action was
commenced in February 2009. Judgment in default of a defence was entered in
April 2009. A notice of motion to set it aside was filed in May but was not
heard. Rather, an assessment of damages proceeded to trial in June 2010. The
appellants chose not to appear. The respondents were granted judgment for
$574,085 and special costs.
[3]
The appellants promptly filed a notice of appeal and the respondents
applied for security for costs both of the trial and the appeal. At the end of
September, Mr. Justice Chiasson ordered the respondents to post security
of $32,000 by 27 October 2010 and stayed the proceedings pending
compliance.
[4]
Mr. Justice Low found there was no reason to extend the time for
compliance with Mr. Justice Chiassons order. The appellants maintained they
were unable to post the required security and the prospects of their being able
to do so in the three or four months they sought were seen to be vague and not
supported by any business documents. Mr. Justice Low discounted the suggestion
the respondents had wrongly impaired the appellants ability to raise the funds
necessary for the security by an Internet publication warning would-be
investors to steer clear of the personal appellant in particular. Finally, he
recognized the respondents were prejudiced by the delay because it prevents
them from registering their judgment in Alberta where they consider they may
have some prospect of undertaking execution proceedings.
[5]
The appellants challenge all aspects of Mr. Justice Lows reasoning but,
in my view, they do not establish any legal error or any misapprehension of the
facts. They simply urge us to take a different view of the evidence. The fact
is they have adduced no evidence of anything more than speculation as to when
they would be able to post the required security and, most importantly, no
evidence of any material change in their circumstances during the 30 days they
were given to post the security. They have established no basis on which we
could interfere with the order they seek to have us vary.
[6]
I would dismiss the application.
[7]
SAUNDERS J.A.
: I agree.
[8]
FRANKEL J.A.
: I agree.
[9]
SAUNDERS J.A.
: The application is dismissed.
The
Honourable Mr. Justice Lowry
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Main v. The Hershey Company,
2011 BCCA 21
Date: 20110118
Docket:
CA038259
Between:
Jacob Stuart Main
Respondent
(Plaintiff)
And
The Hershey
Company and Hershey Canada Inc.
Appellants
(Defendants)
And
Cadbury Schweppes
Plc, Cadbury Adams Canada Inc., Itwal Limited,
Mars, Incorporated, Mars Canada Inc. formerly known as Effem Inc.,
Nestle S.A. and Nestle Canada Inc.
Respondents
(Defendants)
The
front page of the judgment was corrected on April 4 and 7, 2011.
Before:
The Honourable Mr. Justice Hall
The Honourable Madam Justice Levine
The Honourable Mr. Justice Tysoe
On appeal from: Supreme
Court of British Columbia, June 10, 2010
(
Main v. Cadbury Schweppes plc
, 2010 BCSC 816, Vancouver Registry S078807)
Oral Reasons for Judgment
Counsel for the Appellants:
J.S. Maidment
A. Boudreau
Counsel for the Respondent, J.S. Main:
L.P. Brasil
Counsel for the Respondents, Cadbury Schweppes plc &
Cadbury Adams Canada Inc. :
C. Naudie
Counsel for the Respondent, Itwal Ltd.:
M. Lam
D. Houston
Counsel for the Respondents, Mars Inc. & Mars Canada
Inc.:
J.C. MacInnis
Counsel for the Respondent, Nestle S.A. & Nestle
Canada Inc.:
D. Neave
Place and Date of Hearing:
Vancouver, British
Columbia
January 17, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 18, 2011
[1]
LEVINE J.A.
: These appeals are from the orders of a Supreme Court
justice approving a settlement agreement in a class proceeding.
[2]
The class action was brought against four chocolate manufacturers (which
I will refer to in these reasons for judgment as Cadbury, Hershey, Mars, and
Nestle) and a chocolate distributor (ITWAL Limited), alleging price fixing. The
causes of action are the intentional torts of conspiracy and interference with
economic relations, and a statutory claim for damages under s. 36 of the
Competition
Act
, RS 1985, c. C-34, for conduct contrary to Part VI of that
Act
.
[3]
The plaintiff settled with Cadbury and ITWAL. The terms are summarized
in the appellant, Hersheys, factum, as follows:
a)
Cadbury
will pay $5.7 million in respect of the claims of the entire Canadian
settlement class;
b)
ITWAL will
pay no money but instead will assign to the plaintiff any right of action that
ITWAL may have against the NSDs;
c)
The
plaintiff will pursue the NSDs jointly and severally for the alleged
overcharges collected by the SDs;
d)
Any claim
by the NSDs or any other person for contribution and indemnity against Cadbury,
ITWAL or any of the other numerous other Releasees will be prohibited; and
e)
Notwithstanding the settlement with the SDs, the plaintiff will
restrict his claim against the NSDs to the NSDs proportionate share of
liability only if and when the NSDs establish, at trial, that there is a right
of contribution and indemnity. Thus, the NSDs remain exposed to liability for
profits earned and retained by Cadbury and ITWAL.
[4]
The SDs are the Settling Defendants (Cadbury and ITWAL). The NSDs
are the Non Settling Defendants (Hershey, Mars and Nestle), who are the
appellants in the three appeals.
[5]
The approval of the settlement was made pursuant to ss. 12 and 13 of the
Class Proceedings Act
, R.S.B.C. 1996, c. 50:
12. The court may at any time make any order it
considers appropriate respecting the conduct of a class proceeding
to ensure its fair and expeditious determination and, for that purpose, may
impose on one or more of the parties the terms it considers appropriate.
13. The court may at any
time stay any proceeding related to the class proceeding on the
terms the court considers appropriate.
[6]
The chambers judge followed the reasoning of Strathy J. of the Ontario
Superior Court in the related Ontario proceeding:
Osmun v.
Cadbury Adams Canada Inc.
,
2010
ONSC 2643("
Osmun
settlement reasons"). Subsequent to the BC
approval, the settlement was also approved by the Quebec Superior Court, and
the Ontario Court of Appeal upheld the judgment of Strathy J. (2010 ONCA 841). Counsel
informed us at the hearing of these appeals that applications for leave to
appeal to the Supreme Court of Canada will be made from the order of the
Ontario Court of Appeal, and, if these appeals are dismissed, from the order of
this Court.
[7]
The crux of the settlement agreement is a bar order,
which the appellants refer to as injunctions and stays of proceedings. The
bar order prohibits any claim for contribution or indemnity by NSDs against
SDs, and permits the plaintiffs, unless the law permits the NSDs to claim
contribution and indemnity, to claim joint and several damages from the NSDs
for all of their damages, including those that would have been apportioned to
the SDs if they had not settled.
[8]
The salient provisions of the bar order are:
1.
.... (I) Proportionate Liability means
that proportion of any judgment that, had they not settled, this Court would
have apportioned to the Cadbury Releasees; and ...
20.
THIS COURT ORDERS that all claims for
contribution, indemnity or other claims over, whether asserted, unasserted or
asserted in a representative capacity, inclusive of interest, taxes and costs,
relating to the Released Claims (including, without limitation, the ITWAL
Claims, whether held by ITWAL or an assignee) which were or could have been
brought in the Main Proceedings or the Additional Proceedings (whether or not
brought in the Main Proceedings or in the Additional Proceedings), by any
Non-Settling Defendant or any other Person or party, against a Cadbury
Releasee, or by a Cadbury Releasee against any Non-Settling Defendant or any
other Person or party (
), are barred, prohibited and enjoined in accordance
with the terms of this order.
21
. THIS COURT ORDERS
that if the Court determines that there is a right of contribution and
indemnity or other claim over, whether in equity or in law, by statute or otherwise:
(a) the members of the BC Settlement Class shall
not be entitled to claim or recover from the Non-Settling Defendants that
portion of any damages (including punitive damages, if any), restitutionary
award, disgorgement of profits, interest and costs (including investigative
costs claimed pursuant to s. 36 of the
Competition Act
) that corresponds
to the Proportionate Liability of the Cadbury Releasees proven at trial or
otherwise; and
(b) this Court shall
have full authority to determine the Proportionate Liability of the Cadbury
Releasees at the trial or other disposition of this action, whether or not the
Cadbury Releasees appear at the trial or other disposition and the
Proportionate Liability of the Cadbury Releasees shall be determined as if the
Cadbury Releasees are parties to this action and any determination by this
Court in respect of the Proportionate Liability of the Cadbury Releasees shall
only apply in this action and shall not be binding on the Cadbury Releasees in
any other proceedings.
[9]
The chambers judge found, leaving aside the question of the fairness of
the bar orders, that the settlement agreements were fair and reasonable and
... in the best interests of the class (at para. 11). He also found there is
nothing unfair about the terms of bar order (at para. 20):
In summary,
there is nothing unfair about the terms of the bar order. The NSDs continue to
have the ability to claim the right of contribution and indemnity from the SDs.
If they are successful with that argument, the settlement will be
"symmetrical". If they are not successful, it will not. They have not
lost any substantive right as a result of the bar order.
[10]
In their factums, the appellants contended that the broad and sweeping
injunctions are not authorized by ss. 12 and 13 of the
CPA
, and in any
event the chambers judge did not apply the proper legal tests in making the
orders. They maintain that the bar order creates a material risk of unfairness
to the NSDs and others.
[11]
On the hearing of the appeals, counsel for Hershey, who made submissions
that were adopted by the other appellants, argued that the terms of the
settlement are contrary to the intention of the BC Legislature embodied in ss.
4(1) and (2) of the
Negligence Act
, R.S.B.C. 1996, c. 333, and the
principles established by this Court for partial settlements in
British
Columbia Ferry Corp. v. T & N plc
, (1996), 16 B.C.L.R. (3d) 115 (C.A.).
Counsel argued that the
Act
clearly provides that where several
tortfeasers are made subject to joint and several liability, they have a right
of contribution and indemnity against each other: see
Brown v. Cole
(1995), 14 B.C.L.R. (3d) 53 (C.A.), 43 C.P.C. (3d) 111 at para. 29, quoting
Lambert J.A. in
London Drugs Ltd. v. Kuehne & Nagel International Ltd.
(1990), 45 B.C.L.R. (2d) 1, affirmed [1192] 3 S.C.R. 299. He says further that
the
BC Ferry
model for partial settlements embodies the legislative
intent by limiting a plaintiffs claim against non-settling defendants to their
proportionate liability where claims by the non-settling defendants for
contribution and indemnity against the settling defendants are excluded by the
settlement.
[12]
The appellants say that the law in BC is well-established that the
apportionment provisions in the
Negligence
Act
apply to
intentional torts, and therefore the bar order in this case should have
followed the
BC Ferry
model. Counsel for the appellants argued that the
chambers judge erred in approving the bar order ostensibly on the basis that
the law in BC as to apportionment in cases of intentional torts is unsettled,
citing the chambers judges reasons (at para. 19):
Finally,
I reject the suggestion that the law in British Columbia is different such that
any bar order must contain the symmetrical provisions that are usually seen in
a
B.C. Ferry
release. Courts in other provinces have decided that fault
does not include torts other than negligence. The British Columbia courts have
accepted that fault applies to a broad variety of intentional wrongs:
Anderson
v. Stevens
(1981), 29 B.C.L.R. 355 (S.C.);
Aylsworth v. Richardson
Greenshields of Canada Ltd
(1987), 21 B.C.L.R. (2d) 49 (C.A.); and
Brown
v. Cole
(1995), 14 B.C.L.R. (3d) 53 (C.A.). However, the issue has not been
considered by the Supreme Court of Canada. In
Blackwater v. Plint
, 2005
SCC 58, a case from British Columbia, the Court had the opportunity to consider
the issue but decided that it was not necessary to do so in order to render a
decision (para. 67). More importantly, the specific issue that needs to be
considered in this case -- whether there is a right of contribution and
indemnity between co-conspirators in a case involving price-fixing claims and
breaches of the
Competition Act
-- has not been considered by any court
in Canada. The NSDs' suggestion that the law is settled in British Columbia is,
quite simply, without merit.
[13]
Counsel conceded that the chambers judge was correct when he said that
no court in Canada has considered whether apportionment applies to the
statutory claim under the
Competition Act
. He maintained nonetheless
that the chambers judge has introduced uncertainty into the law where there is
none, and erred in approving the settlement on that basis.
[14]
It is my opinion that the appellants arguments are simply untenable. The
chambers judge made no error in summarizing the present state of the law in BC
or Canada, and the provisions of the bar order clearly contemplate these
circumstances. They bar the NSDs claims for contribution and indemnity, but
provide that where there is a legal right of contribution and indemnity, the BC
plaintiffs claim against the NSDs will not include the proportionate
liability of the SDs -- effectively the
BC Ferry
model. Thus, if the
NSDs are found liable for intentional torts to which the contribution and
indemnity provisions of s. 4 of the
Negligence Act
would have applied
but for the bar order, the BC plaintiffs claims will be limited to the NSDs
proportionate liability. If the NSDs are found liable for damages under s. 36
of the
Competition Act
, and it is determined that no apportionment
provisions apply, the
BC Ferry
model does not apply. All of this is
consistent with the appellants arguments about the policy of the Legislature
embodied in s. 4 of the
Negligence Act
and the principles developed by
this Court in
BC Ferry
Corp.
[15]
Appellants counsel could not identify any prejudice to the NSDs from
the bar order, other than the necessity to continue to be involved in the
litigation and establish the nature of their liability, if any. Such prejudice,
however, does not arise from the bar order but from the litigation itself. The
NSDs settlement prospects, and the strategy they follow in seeking settlement,
are not matters in which this Court can involve itself.
[16]
All other matters concerning the fairness of the settlement have been
thoroughly canvassed in the reasons for judgment of Strathy J. in the
Osmun
settlement reasons and by the chambers judge in his reasons for judgment, and
the appellants did not raise any issues other than the terms of the bar order. I
agree with the Ontario Court of Appeal that the bar order does not interfere
with [the appellants] substantive rights, and accordingly, I would dismiss
the appeals.
[17]
HALL J.A.
: I agree.
[18]
TYSOE J.A.
: I agree.
[19]
HALL J.A.
: The appeals are dismissed.
(submissions by
counsel re. costs)
[20]
HALL J.A.
: It occurs to me that the four counsel who are here for
the respective four appellants will want to say something. There are two
approaches that I could suggest. We do have some written material from learned
counsel for the respondents. If counsel for the appellants deem it requisite or
desirable that they have an opportunity to provide something in writing, we
would certainly be open to that suggestion, but we would not foreclose counsel
at the present moment from saying anything they want to orally.
(submissions by
counsel re. filing written submissions)
[21]
HALL J.A.
: I think that we would afford to counsel for the
appellants a period of 21 days to file written material, they think requisite,
with the Registrar, and that following that the respondents would have 10 days
from that period to file anything in writing that they think is requisite in
response. We would then let you know what we think. My intention is that within
about a month we will have the materials from all sides then we can address the
issue. We will reserve on that issue until we receive the material.
The Honourable Mr. Justice Hall
The
Honourable Madam Justice Levine
|
COURT OF APPEAL FOR BRITISH
COLUMBIA
Citation:
R. v. Bi,
2011 BCCA 10
Date: 20110118
Nos:
CA037710; CA037711
Docket:
CA037710
Between:
Regina
Respondent
And
Luo Zhang Bi
Appellant
Docket: CA037711
Between:
Regina
Respondent
And
Jian Yi Deng
Appellant
Before:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Low
The Honourable Madam Justice Garson
On appeal from:
Provincial Court of British Columbia, July 23, 2009,
(
R. v. Bi and Deng
, Vancouver Docket No. 182552-1)
Counsel for the Appellants:
C. Johnson
Counsel for the Respondent:
V. Hartney
Place and Date of Hearing:
Vancouver, British
Columbia
November 26, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 18, 2011
Written Reasons by:
The Honourable Mr. Justice Low
Concurred in by:
The Honourable Madam Justice Newbury
The Honourable Madam Justice Garson
Reasons for Judgment of the Honourable
Mr. Justice Low:
[1]
The appellants are husband and wife. They were convicted by Howard P.C.J.
of unlawful cultivation of marijuana, possession of marijuana for the purpose
of trafficking and theft of electricity. They admit that they were the
upstairs tenants of a Burnaby house in the basement of which police found a
grow operation, and that the evidence supports the conclusion that they had
knowledge of it. However, they contend that the evidence was insufficient to
support the conclusion reached by the trial judge that they were parties to the
offences charged.
[2]
The trial courts in this province hear numerous cases involving offences
arising out of the discovery of marijuana grow operations in single-family
residences. Many of these cases are concerned with whether accused persons
found to be living in the house are criminally implicated in the exposed drug
enterprise. Evidence that establishes mere knowledge of the criminal conduct
taking place in the residence is not enough. There must also be evidence from
which it can be inferred that the accused person owned the marijuana crop,
cultivated the crop, aided or abetted somebody else in the criminal operation,
or otherwise had some control over the crop.
[3]
Neither appellant testified. They called Oy Yen Pat as the only defence
witness. He is the son of the property owner, Ze Ling Xu. The judge discussed
his evidence as follows:
[5] ...
He testified that in early
2007, he was sent by his mother to collect rent from the tenants of this
residence while she was away in Hong Kong. He attended the residence in early
2007 on two occasions. He understood that there were two tenants; Mr. Bi and
Ms. Deng in the upstairs, and a person whose name he could not recall, maybe it
was David, who allegedly rented the basement. Mr. Pat explained that he called
first to say that he was coming to collect the rent. On both occasions, he
knocked on the front door of the residence and collected rent directly from Mr.
Bi for the upstairs, and on both occasions the downstairs tenant met him
outside the suite or the basement to deliver the rent to him in cash. Because
he met the downstairs tenant outside, he never looked inside the basement. He
had no idea there was a marihuana grow operation there.
[6] Mr. Bi is in fact Mr. Pats
uncle, the brother of Mr. Pat's father. Mr. Pat explained that his parents had
been divorced for some 15 years. He had little contact with his father over
those years, and he did not know that Mr. Bi was his uncle although his mother
did. He only learned this fact from his mother sometime after the execution of
the search warrant at the residence.
[7] I have not found Mr. Pats
testimony to be particularly
persuasive.
Even though I am concerned about the reliability of his testimony, I cannot
conclude beyond a reasonable doubt that it must be rejected. There is no
evidence directly contradicting his testimony or any other evidence that leads
me to conclude beyond a reasonable doubt that Bi and Deng were the only
tenants. Given this conclusion,
I am proceeding on the basis that there
were two tenants at the residence
, giving the benefit of the doubt to the
accused. Bi and Deng clearly lived upstairs and rented the upstairs portion.
The unknown David was the basement tenant.
[8] Based on the evidence, it would
be clear that David was a full party to the marihuana production and theft of
electricity that was occurring or that consumed his portion of the residence.
This fact alone does not lead to a reasonable doubt as to the role of the
accused in this operation. However, it is an important fact that must be
considered in context with all the evidence before.
[Emphasis
added.]
[4]
The evidence of Oy Yen Pat did not disprove involvement of the
appellants in the grow operation. It only served to require the court to
examine the evidence on the basis that there was a separate tenant in the basement
who likely owned the marijuana and had access to it.
[5]
It is reasonable in such cases to start with the premise that the owner
of an illicit marijuana crop in a single-family residence would take steps to
ensure that occupants of the premises would be people not disposed to report
the illegal activity to the police. To that end, the owner of the marijuana
might well employ the occupants as gardeners of the crop or give them a
security role, or both.
[6]
Police officers executed a search warrant at the house on 4 April 2007.
The appellants and their teenage son lived on the main floor and all of them
were home at the time of the search. The entire basement was used for the
production of marijuana. There were 375 marijuana plants, 132 grams of dried marijuana
bud and six grams of marijuana shake. The value of the plants was between
$105,000 and $281,250.
[7]
The residence was of modest size. On the main floor, there were two
bedrooms, one bathroom, a kitchen, living room and dining room. There was an
odour of marijuana within this living area and fans used in the production of
marijuana in the basement could be heard. There was condensation on many of
the windows on the main floor. These facts compelled the concession that the
appellants had knowledge of the grow operation in the basement.
[8]
The trial judge described the evidence with respect to basement access:
[4] I
begin by noting that in terms of the structure of the residence, access to the
upper floor from the basement level would normally have been available through
a stairway that ran from the basement up into the kitchen area. However, when
the police attended, that stairwell was blocked by equipment, pipes, exhaust
pipes, and ducting related to the marihuana operation. So the basement was not
accessible from the upstairs kitchen area through these stairs. The police did
find a key that opened the exterior door to the basement. It was found in a
drain pipe near to the basement door.
[9]
The hydro meter was on the outside of the south wall of the house just
above the ground. Opposite the meter inside the basement there was an
unauthorized electrical by-pass. There was evidence of an estimated loss of
hydro billing in the amount of $2,853.60.
[10]
In the living room, police found a current hydro bill and a current natural
gas bill, both in the name of the owner, Ze Ling Xu.
[11]
After noting, as was conceded, that both accused had knowledge of the
marijuana operation, the trial judge discussed the additional evidence that
tended to link the appellants with the illicit activity in the basement:
[10]
There were three other evidentiary
links between the upstairs tenants and the basement. In one of the basement
rooms, the police located an overflowing ashtray full of cigarette butts; there
were two types, Players and a Chinese cigarette called Double Joy, I think is
the word. If I have not got that correct, it is Double something. The officer
confirmed that both cigarettes, both the Players cigarettes and this particular
brand of Chinese cigarettes were very common; the latter being common in the
Chinese community. In the upstairs area where the accused live, the police
located cartons of cigarettes, Players and Double Joy. The defence position is
that this may be mere coincidence given that the two brands are so popular.
The Crown points out, fairly, that there are only two brands of cigarettes
found in the residence and both are located in the upstairs portion and the
downstairs portion of the residence.
[11] In addition, there was a very
amateurish video
surveillance
system set up in the upper bedroom -- upstairs bedroom of the son of Ms. Deng.
A hole was drilled through the drywall of the back wall of his bedroom, all the
way through the exterior wall of the back of the house. Just around the corner
from this hole at the side of the house on the ground hidden amongst bricks was
a video camera pointing down this side of the house. The video camera captured
the pathway from the front of the house to the rear. It also captured that
area where the Hydro metre was located. This is the metre that would be
checked by Hydro employees on a monthly or bi-monthly basis, and it is the same
metre that would be checked by Hydro employees during a possible investigation
or during an investigation of possible Hydro theft. A cable ran from the video
camera up the back wall of the house, through the hole in the wall into the
bedroom and then from there to a VCR device and a monitor in the bedroom. When
the police entered the residence to execute the search warrant, the monitor was
on and the side of the home could be seen on the screen.
[12] Thirdly, in the upstairs area of
the house, the police found a bag of marihuana in the butter section of the
refrigerator door. It was ten grams of marihuana and it was described by one
officer as suitable for smoking. This marihuana would be observable or
visible to anyone opening the refrigerator door.
[13] The Crown relies upon the above
pieces of evidence in support of its position that Bi and Deng were not only knowledgeable
about the marihuana operation in the basement, but they were also parties to
that operation.
[14] The
defence position is that there are innocent explanations for each of the above
three pieces of evidence and that the evidence as a whole does not establish
beyond a reasonable doubt that the accused had any measure of control over the
downstairs operation that, at a minimum, clearly belonged to the downstairs
tenant. At best, it establishes passive acquiescence to an illegal activity
occurring in a part of the residence over which they had no control.
[12]
The judge also took into account the value of the marijuana operation,
including the product and the equipment, in considering whether the owner of
the operation would be content to have upstairs tenants exercising no control
over it.
[13]
Finally, the trial judge explained her conclusion that each of the
appellants was a party to the offences charged:
[17]
In my view, all of the evidence
taken as a whole, leads to only one conclusion. That is that the only
reasonable inference to be drawn is that the accused were indeed parties to the
offences that were occurring in the basement of the residence. Again, the
factors that have led me to this conclusion are the fact that the accused had
to have known about the illegal operation because of the odour and the sounds
from the basement, the presence of marihuana in the butter dish on the door of
the fridge in the accused upstairs residence, the fact that only two types of
cigarettes were found in the residence and both of these, Players and Double
Joy, were found in the accused portion of the residence and in the basement,
the key to the basement that was hidden in the drain pipe near the basement
door which would have been accessible -- which key would have been accessible
to the downstairs tenant and the accused, the video surveillance camera
operated from the back bedroom of the son of Ms. Deng, which was aimed at the
same walkway where the Hydro metre was placed, and the unlikely prospect that
the downstairs tenant would set up this valuable operation in the basement of
this residence without the cooperation or participation of the accused who
lived in the upstairs portion.
[18] In the
end, I am satisfied beyond a reasonable doubt on all of this evidence, that the
accused were indeed parties to the offences before the court. The evidence of
control, although circumstantial, has been established beyond a reasonable
doubt.
[14]
Thus the judge concluded that, together with the basement tenant, the
appellants were parties to the crimes committed.
[15]
The appellants contend that the trial judge erred in para. 16 of her
reasons by stating that it was a common sense inference that the downstairs
tenant would want the upstairs tenants to participate in the illicit operation.
The argument is that this imported the law as to the presumption of intent into
determining a fact other than intent.
[16]
I do not see the use of the phrase in its context to be a flaw in the
reasoning of the judge. The ensuing sentence begins with the phrase (f)rom a
common sense perspective. It is clear to me that the judge simply applied
ordinary human experience in her assessment of the evidence. There was no
speculative reasoning. As I have said above, it is common sense reasoning in
cases such as this that the owner of the marijuana-grow operation would want
exclusive residents of the premises to be involved in some aspect of the
operation. That is part of the context in which the trial judge analysed the
evidence in this case.
[17]
The appellants argue that this court should set aside the verdicts of
the trial judge under s. 686(1)(a)(i) of the
Criminal Code of Canada
on
the basis that they are unreasonable or cannot be supported by the evidence.
The test under that section was stated in
Corbett v. The Queen
, [1975] 2
S.C.R. 275, at 282: The function of the court is not to substitute itself for
the jury, but to decide whether the verdict is one that a properly instructed
jury acting judicially, could reasonably have entered.
[18]
The test was confirmed in
R. v. Yebes
, [1987] 2 S.C.R. 168 and in
R. v. Biniaris
, [2000] 1 S.C.R. 381. In
Biniaris
, Arbour J.
added this:
[37] The
Yebes
test
is expressed in terms of a verdict reached by a jury. It is, however, equally
applicable to the judgment of a judge sitting at trial without a jury. The
review for unreasonableness on appeal is different, however, and somewhat
easier when the judgment under attack is that of a single judge, at least when
reasons for judgment of some substance are provided. In those cases, the
reviewing appellate court may be able to identify a flaw in the evaluation of
the evidence, or in the analysis, that will serve to explain the unreasonable
conclusion reached, and justify the reversal.
[19]
At para. 17 of her reasons, the trial judge stated that the only
reasonable inference to be drawn from the whole of the evidence is that the
appellants were parties to the offences charged. This conclusion contains a
correct instruction as to the applicable law. The judge had to ask herself
whether the only reasonable inference to be drawn from the proven facts was
that each appellant was guilty:
R. v. Cooper
(1977), 34 C.C.C. (2d) 18
(S.C.C.). It is trite law that the court must consider the circumstances
cumulatively and not isolate each one and consider it separately.
[20]
The question of control over the marijuana applies only to the
possession count. This can involve the question of proof of constructive
possession under s. 4(3) of the
Criminal Code
. But that question need
not be specifically addressed if the Crown proves that the accused was a party
to the offences charged as a principal offender or as an aider or abettor.
As I read the trial judges reasons, she found that the only reasonable
inference to be drawn from the whole of the evidence was that each of the
appellants was a party to each of the offences charged. She did not have to
determine whether each was a principal, an aider or an abettor, only that each
was one or the other. The evidence established to her satisfaction that each
appellant was a principal or was otherwise a party to the offences.
[21]
In my opinion, the evidence as a whole supported the conclusion reached
by the trial judge that each of the appellants was a party to the offences
charged. They were the tenants in the small home in which the grow operation
was discovered by the police and they had knowledge of the operation. On the
floor they occupied, there was an electronic surveillance system set up to monitor
the location of the hydro meter, obviously a measure designed to provide
security for the criminal activity below. Marijuana was in plain view in the
refrigerator upstairs. The appellants had ready access to a key for the
outside basement door and therefore had ready access to the grow operation. In
the basement there was an ashtray full of cigarette butts of the same two
brands contained in cigarette packages found upstairs.
[22]
There was expert evidence that the crop was valuable and would have
required tending at least every two days to maintain the plants. The
environment was carefully controlled and advanced cultivation techniques were
in use. The plants were in good condition. These things suggest regular
attention to the crop consistent with at least some of the cultivation being
done by residents in the house.
[23]
Absent an innocent explanation capable of raising a reasonable doubt,
the cumulative effect of these circumstances is to compel the conclusion that
the appellants were parties to the cultivation and possession of the marijuana
and to the theft of electricity. There was no flaw in the reasoning of the
trial judge and the evidence supported the convictions.
[24]
I would dismiss each appeal.
The
Honourable Mr. Justice Low
I agree:
The
Honourable Madam Justice Newbury
I agree:
The Honourable Madam Justice Garson
|
COURT OF APPEAL FOR BRITISH
COLUMBIA
Citation:
Sykes v. Rosebery Parklands Development Society,
2011 BCCA 15
Date: 20110119
Docket: CA037970
Between:
Brian Joseph Sykes
and Mary Jane Sykes
Respondents
(Plaintiffs)
And
Rosebery Parklands
Development Society
Appellant
(Defendant)
Corrected
Judgment: The text of the judgment was corrected
at paragraphs [17], [44], [45], [47] and [48] on 23 February 2011.
Before:
The Honourable Chief Justice Finch
The Honourable Madam Justice Huddart
The Honourable Madam Justice Garson
On appeal from:
Supreme Court of British Columbia, 23 February 2010,
(
Sykes v. Rosebery Parklands Development Society
, 2010 BCSC 227, Kelowna
Docket 75905)
Counsel for the Appellant:
T.W. Pearkes,
A. Fernandez
Counsel for the Respondents:
D.M. Frechette
Place and Date of Hearing:
Kelowna, British
Columbia
November 1, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 19, 2011
Written Reasons by:
The Honourable Chief Justice Finch
Concurred in by:
The Honourable Madam Justice Huddart
the Honourable Madam Justice Garson
Reasons for Judgment of the Honourable
Chief Justice Finch:
I. Introduction
[1]
The defendant Society appeals from the order of the Supreme Court of
British Columbia pronounced 23 February 2010 following a summary trial under
Rule 18A granting the plaintiffs an easement over lands formerly owned by the
defendant, and now owned by the Regional District of Central Kootenay
(RDCK). The easement grants the plaintiffs access from their property across
the defendants parkland for moorage on the waterfront of Slocan Lake.
[2]
The plaintiffs claim to the easement is based on proprietary estoppel.
The learned summary trial judge held that the defendants representations, the
plaintiffs reliance, and the parties conduct established an equity giving
rise to proprietary estoppel in the plaintiffs favour, and that it would be
unjust for the defendant to resile from its earlier position.
[3]
A licence for private moorage tenure must be obtained from the
Integrated Land Management Bureau (ILMB). For this reason the courts order
includes this provision:
3. the easement shall
establish access from Lot 2 across Lot 6 to the waterfront for moorage and
shall be granted in terms which will satisfy the Integrated Land Management
Bureau and result in the grant of a private moorage tenure.
[4]
On this appeal the defendant asserts that the foundation for proprietary
estoppel has not been made out, and attacks the order on several other grounds
as well.
[5]
For the reasons that follow I would not accede to any of the grounds of
appeal advanced, and would dismiss the appeal.
II.
Facts
[6]
In 1989 the Canadian Pacific Railway decided to sell its marshalling
yard located on Slocan Lake in Rosebery, B.C. Some local residents decided to
purchase the land from the CPR and on 24 August 1989 incorporated the defendant
Society for that purpose. Their goal was to create a public, low impact
tourism park.
[7]
Funds for the land purchase were raised from donations, an unsecured
loan, and a registered mortgage. The Society proposed to repay the unsecured
loan and the mortgage by subdividing the land, and selling the subdivided lots.
[8]
The land was subdivided into six lots. Lots 1 through 5 were intended
for sale to individual owners. Lot 6 was retained by the Society for
parkland. Lot 6 is an irregular shaped parcel, varying in width from 75 to 230
feet, and includes a strip of lake front that separates Lots 1 through 5 from
Slocan Lake.
[9]
Prior to the sale of the subdivided lots the Society granted an easement
in favour of Lots 1 through 5 which included this:
The Grantor does hereby grant,
convey and confirm unto the Grantee the full, free and uninterrupted right,
liberty and easement to use the Servient Tenement [Lot 6] for purposes of
ingress and egress from Slocan Lake by foot only.
[10]
Between 1989 and 1995 Lots 1 through 5 were sold to individual owners.
The proceeds of these sales were applied to the Societys mortgage liability.
There remained an balance owing of $68,000.
[11]
In 1994 an additional lot, Lot A, was subdivided from the parkland, Lot
6, but Lot A could not be sold for an amount sufficient to pay for the
Societys outstanding debts. In 1995 Scott Leyland, a founder of the Society,
and its president from 1997 until 2006, loaned the society a sum sufficient to
pay out the mortgage. When Lot A was eventually sold in 2005 the Society
repaid Mr. Leylands loan.
[12]
John Herrmann was also involved in the Society from its inception in
1989. He was vice-president of the Society from about 1995 until 2006.
[13]
The plaintiffs became interested in acquiring a property in the subject
area in 2003. The learned summary trial judge said:
[16] In 2003, the plaintiffs arrived from Alberta and
approached Leyland regarding the possible purchase of the lot owned by the
Society, lot A, as well as in regards to lot 2 which was privately owned but up
for sale. As the plaintiffs wished to moor a boat near any property they would
own, Mr. Sykes made inquiries with the Society regarding access to the lake and
rights of moorage prior to purchase.
Leyland deposes that he advised Mr.
Sykes that all lots in the subdivision had the right of common moorage. This is
confirmed in a facsimile Leyland sent to Mr. Sykes, attached to Leylands
affidavit.
[17]
Based in part on that representation, the plaintiffs
purchased lot 2 in the subdivision in the spring of 2003.
The plaintiffs
eventually built a home on their property. They became members of the Society
in 2003. The plaintiffs attended the Societys Annual Meeting in December 2003.
The only other people in attendance were Herrmann, Leyland and Betty Ann
Lawson. The plaintiffs were asked and became members of the board of the
Society.
[Emphasis added.]
[14]
The plaintiffs inquired about moorage and construction of a common dock,
but the Society took the view it could not afford a dock due to permitting and
insurance costs. The learned judge said:
[19] The plaintiffs, Leyland, and Herrmann carried out
further discussions regarding the construction of a dock. In a letter dated
January 31, 2006, Leyland and Herrmann (writing in their capacities as
President and Vice-President of the Society) stated:
As requested by Brian and Mary Jane
Sykes, I am forwarding this document granting permission to moor a dock on the
shoreline of lot 6 in the Parklands in the northwest corner of the bay.
This subject has been discussed
since the inception of our society in 1989 and there has never been any
wavering. Owners of subdivided lots... will have access across lot 6 to the
shore and rights of moorage in a place we agree with (the corner of the bay as
is being proposed by the Sykes).
...So, to reiterate, we have built
into the covenants of each lot, the right to cross lot 6 to access Slocan Lake.
We have noted in several meetings (including AGMs) that moorage in the corner
of the bay would be a right of each lot owner.
[20] A further letter was sent by Leyland and Herrmann to the
plaintiffs on August 30, 2006, which stated in part:
The second part of this letter is
to confirm that the Society granted permission to the Sykes to place their
float perpendicular to the shore, in-line with the northwest iron-pin of lot 2.
This was after discussion and a site-visit with the architect Michael
Karassowitsch and John Herrmann.
[21] Prior to the dock being constructed, Mrs. Sykes
contacted the ILMB regarding the licencing process. She was informed that the
plaintiffs could install the dock before the licence was granted, and that
obtaining a licence should not be a problem as long as the Society consented.
[22] In the spring of 2006, the
plaintiffs constructed the dock at a cost of $12,000 and placed it in the
location agreed to in consultation with the Society on Slocan Lake, attached to
the Parkland lands. It is deposed by Leyland that the dock constructed by the
plaintiffs does not in any way restrict or limit the use of the Parkland. It is
used by members of the public for walking on and for mooring boats generally.
[15]
The Society held an annual meeting in September 2006. Many more people
attended than had previously taken an interest in the Societys affairs. They
were opposed to the construction of the Sykes dock. Mr. Leyland subsequently
resigned as president of the Society.
[16]
The plaintiffs tried, unsuccessfully, to resolve issues related to the
dock with the Society. This eventually led to the plaintiffs commencing this
lawsuit against the Society on 25 June 2007, and their filing of a certificate
of pending litigation against the parkland. The judge recorded that:
[28] On September 26, 2008, the Society transferred the
Parkland to the Regional District of Central Kootenay (RDCK). RDCK did not
pay for the land and the transfer was essentially a gift from the Society. At
the time of the transfer the Society required RDCK to register a restrictive
covenant on the title of lands. The covenant includes a term which purports to
restrict the rights of moorage.
[29] RDCK took no part in this
proceeding. I am satisfied that they are aware of it. I am satisfied that they
were aware of the nature of this litigation when they took title to the
property. They are aware from reviewing the pleadings that the Court is being
asked to modify the easement and such modification may affect the validity of
the restrictive covenant. They are clearly aware that they took title subject
to any determination to be made in this litigation.
III. The Reasons
for Judgment
[17]
The learned summary trial judge reviewed the law relating to proprietary
estoppel including references to
Zelmer v. Victor Projects Ltd.
(1997),
34 B.C.L.R. (3d) 125 (C.A.),
Trethewey-Edge Dyking District v. Coniagas
Ranches Ltd.
, 2003 BCCA 197, 12 B.C.L.R. (4th) 46,
Erickson v. Jones
,
2008 BCCA 379, 83 B.C.L.R. (4th) 333, and
Crabb v. Arun District Council
,
[1976] 1 Ch. 179 (C.A.).
[18]
He held:
[45] Applying the foregoing principles of law to the facts of
this case, in my view, the plaintiffs have made out a cause of action in
proprietary estoppel. The plaintiffs were unequivocally advised that they had
the legal right to cross lot 6 and construct moorage facilities thereabouts;
they reasonably believed in and relied upon these representations and expended
funds as a result; the Society encouraged this expenditure at the material time
as it meant it would incur no liability for licencing or insurance premiums;
and, the Society now seeks to resile from its earlier position and rely upon
the strict wording of the easement registered against title, which it says conflicts
with the content of the representations.
[46] Having regard to the
representations made, the conduct of the parties, and the detriment incurred by
the plaintiffs in the course of their reliance on the Societys unequivocal
position, I find that an equity giving rise to proprietary estoppel has been
established in the plaintiffs favour, and that in all the circumstances it is
unjust for the Society to rely on its purported strict legal rights.
[19]
The judge held the plaintiffs had shown deprivation in incurring the
expense of constructing the dock in reliance on the Societys representations.
[20]
With respect to the appropriate remedy he held:
[82] Keeping these principles in mind, in my view the
appropriate remedy in the circumstances of this case is to grant a declaration
that an easement to be registered across the Parkland, establishing access from
the plaintiffs lot to the waterfront for moorage, in terms which will satisfy
the ILMB and result in the grant of a private moorage tenure. This remedy is the
minimum required to provide effective relief, and is in keeping with the
defendants representations and the parties mutual understanding at the time
the estoppel arose.
[83] Another issue arises as a result of the conveyance of
the property by the Society to the RDCK. In both
Zelmer
and
Trethewey-Edge
,
the court cited
Stiles v. Tod Mountain Development Ltd.
(1992), 64
B.C.L.R. (2d) 366 (S.C.), with approval. In that case, an equity giving rise to
proprietary estoppel was enforced against a successor in title who took with
notice and where the plaintiff had acted to his detriment.
[84] The plaintiffs filed a
Certificate of Pending Litigation against the Parkland, and it appears that the
RDCK took the property as a volunteer with notice, and as such is not a
bona
fide
purchaser without notice. In those circumstances, it is appropriate to
make it a term of the order that the easement granted is binding against the
RDCK as a successor in title, and that the covenant placed on the Parkland at
the time of its transfer by the Society to the RDCK, as it relates to moorage
rights, be removed from title.
[21]
The trial judge rejected the defendants submission that the
representations of the president, Mr. Leyland, and of the vice-president, Mr.
Herrmann, could not bind the Society. The judge also rejected the allegation
that the plaintiffs should be denied relief because of self dealing or other
alleged breaches of the
Society Act
, R.S.B.C. 1996, c.433.
IV. Issues on Appeal
[22]
The defendant asserts that the learned summary trial judge made a number
of errors in his treatment of the evidence tendered on this summary trial, and
in the inferences he drew from that evidence. The defendant says the judge
failed to consider whether the case was appropriate for determination under
Rule 18A.
[23]
The defendant says the judge erred in his interpretation of the
Society
Act
. The defendant further argues that the plaintiffs failed to establish
a claim in proprietary estoppel, and that the judge erred in granting relief
that was too extensive.
V. Analysis
A. The Evidence Suitability
For Summary Trial
[24]
The defendants first three grounds of appeal relate to the evidence
adduced by affidavit on the summary trial, and on the inferences the judge drew
from that evidence.
[25]
Specifically, the defendant contends the judge erred in preferring the
affidavit evidence adduced on the plaintiffs behalf over the affidavit
evidence of Leah Main, the principal deponent on the defendants behalf. The
defendant says the judge erred in accepting the hearsay evidence of Mary Sykes
concerning a telephone conversation she had with an ILMB representative. And,
the defendant says it was unfair for the judge to accept Mr. Herrmanns
evidence without explaining his rejection of Ms. Mains evidence.
[26]
In the result, the defendant says the summary trial judge erred in
proceeding to try the case under Rule 18A, and in finding facts which cannot
reasonably be supported by the evidence.
[27]
I see no merit in these grounds of appeal. As the judge recorded in
para. 1 of his reasons, neither of the parties suggested that a Rule 18A trial
was inappropriate in the circumstances. There is nothing in the record to
show that the defendant objected to a summary trial at any stage of the
proceedings.
[28]
Counsel for the defendant did not at any time seek to cross-examine any
of the deponents who swore affidavits in support of the plaintiffs case.
[29]
The fact that there is some conflicting affidavit evidence is not an
absolute bar to a trial under Rule 18A: See
Inspiration Management Ltd. v.
McDermott St. Lawrence Ltd.
(1989), 36 B.C.L.R. (2d) 202 (C.A.) at 215-16.
[30]
More importantly, it does not appear to me that there was conflict or
dispute on those matters critical to a determination of whether there was a
basis for proprietary estoppel. There was no conflict concerning the
representations made by Messrs. Leyland and Herrmann to Mr. and Mrs. Sykes at
the time they purchased their lot. No one denies the Societys two
representatives told the Sykes they could build a dock. No one disputes the
Sykes were told consistently that they were entitled to access across the
parkland for moorage purposes.
[31]
Ms. Main was not involved in any of the defendant Societys affairs
between 1995 and 2006, and she had no direct knowledge of the representations
made by Mr. Leyland and Mr. Herrmann during that period of time.
[32]
With respect to Mrs. Sykes telephone conversation with a representative
of ILMB as to whether the Sykes could install a dock before a licence was
granted to them, it does not appear that the trial judge relied on that
evidence for any improper purpose. The evidence of that conversation was
tendered to explain why the Sykes proceeded as they did, and to show they made
reasonable inquiries before commencing to build. It was not tendered for the
truth of its contents and therefore does not fall within the definition of
hearsay: See Bryant, Lederman and Fuerst,
Sopinka, Lederman & Bryant:
The Law of Evidence in Canada
, 3d ed. (Markham, Ont.: LexisNexis, 2009) at
229. In any event, this evidence did not go to any issue fundamental to the
decision on proprietary estoppel.
[33]
In short, although there was some conflicting affidavit evidence, there
was a proper evidentiary basis on which the judge could find the facts he did.
There was no objection to proceeding under Rule 18A and no request to
cross-examine any of the plaintiffs deponents.
[34]
I would not give effect to the first three grounds of appeal.
B. Directors Conflict of Interest and the Society Act
[35]
The plaintiffs became members of the Societys board of directors in
2003, shortly after they purchased their lot. The defendant now asserts that
both they, as well as Mr. Leyland, were in a conflict of interest; and that the
Sykes knew, or should have known, that Mr. Leyland was in a conflict of
interest. The defendant says the plaintiffs knew that the Societys board had
not delegated authority to Mr. Leyland or Mr. Herrmann to grant an interest in
land to the Sykes. The defendant says the courts rectification of the
Societys proceedings was unilateral and made without submissions from
counsel for the defendant.
[36]
Both Mr. Leyland and Mr. Herrmann were directors of the Society at all
material times, and were president and vice-president respectively. They were
clearly authorized by the
Society Act
, and by the bylaws, to exercise
the powers of the Society. The words and conduct of an agent acting within the
ambit of his instructions may effectively give rise to an estoppel: See
Mooregate
Mercantile Co. Ltd. v. Twitchings
, [1976] 2 All E.R. 641 (H.L.), and
Crabb
v. Arun District Council
.
[37]
The learned trial judge said this with respect to the roles of Mr.
Leyland and Mr. Herrmann:
[57] The evidence establishes that at all material times
Herrmann and Leyland were the guiding minds of the Society, who kept it afloat
both financially and operationally. Mr. Sykes contacted Leyland prior to
purchasing the property and sought his advice as the President of the Society,
and it is clear that all negotiations regarding the construction of the dock
were contingent on the plaintiffs obtaining direction and assurances from
Leyland and Herrmann.
[58] Further, the letter of August 30, 2006 authorizing the
plaintiffs construction also describes an unrelated matter pertaining to the
use of the Parkland and the plaintiffs land. In this letter, Leyland and
Herrmann, on behalf of the Society, directed the plaintiffs to remove materials
they had mistakenly placed the Parkland. In my view, this letter further
exemplifies the fact that Leyland and Herrmann were both the
de facto
and the
de jure
managers of the defendants lands, and that they were
viewed as such by the plaintiffs.
[59] On the evidence as a whole
it is clear that, in the words of Lord Denning, these gentlemen were entrusted
to look after the property and interests of the Society, and that the
plaintiffs viewed them as responsible for doing so. I find that Leyland and
Herrmann were capable of, and did as a matter of fact, make representations
that bound the Society in equity.
[38]
The judge rejected, rightly in my view, that Mr. Leyland was in a
conflict of interest. He said:
[65] The defendant submits that the plaintiffs ought to be
denied equitable relief on the ground that they did not declare a conflict of
interest, and that Leyland acted in furtherance of his own self-interest when
discussions took place at meetings regarding moorage, negating the effect of
his representations.
[66] The allegations against
Leyland are nothing more than speculation. Ms. Mains allegations relating to
Leylands future intentions are based on information and belief, and the source
of this information is not provided.
[39]
There is nothing to show that Mr. Leyland gained any benefit from his
dealings with the Sykes. Mr. Leylands loan to the Society was paid out in
2005 when Lot A was eventually sold. There is nothing to indicate that the
Sykes had any role in this transaction.
[40]
As to the courts unilateral rectification of the Societys affairs,
the defendant says that the trial judge should not have addressed this question
because the issue was not properly joined.
[41]
I am not persuaded that resort to relief under the
Society Act
was necessary, but to the extent that it was, the defendant has not advanced
any submission that would demonstrate an error in the judges reasoning, or in
his interpretation or application of s. 85(2) of the
Society Act
.
Moreover as the judge said:
[72] Regarding s. 85(2), there
are no creditors of the Society I am aware of. As for the Society, and its
directors, officers, and members, one could say that as the Society no longer
owns the Parkland, any order curing non-compliance for the limited purposes of
this transaction would have no effect on these parties; in any event, an
order excusing technical non-compliance would simply result in the Society
being bound by the unequivocal representations of its guiding minds, a result
in keeping with equity and justice.
[42]
I see no merit in the technical submissions advanced with respect to the
directors conduct, or their authority to act on the Societys behalf in their
dealings with the Sykes.
[43]
I would not give effect to these grounds of appeal.
C. Proprietary Estoppel
[44]
The learned summary trial judge applied the broad, flexible approach to
proprietary estoppel endorsed by this Court in
Trethewey-Edge Dyking
District v. Coniagas Ranches Ltd.
and
Erikson v. Jones
, which relied
on English authorities such as
Crabb v. Arun
District Council
,
and
Taylors Fashions Ltd. v. Liverpool Trustees Co. Ltd.
, [1982] 1 Q.B.
133 (Ch. Div.).
[45]
At para. 64 of
Trethewey
, Madam Justice Newbury cited with
approval the following test from
Halsburys Laws of England
, 4th ed.
vol. 16 (London: Butterworths, 1992) at para. 1072:
The real test is said to be
whether upon the facts of the particular case the situation has become such
that it would be dishonest or unconscionable for the plaintiff, or the person
having the right sought to be enforced, to continue to seek to enforce it.
[46]
At para. 65 of
Trethewey
Madam Justice Newbury, citing
Taylors
Fashions
, further described the test as whether it would be unconscionable
for the representor to go back on the assumption which he had allowed the
plaintiff to make.
[47]
While detrimental reliance is sometimes identified as a necessary
element, it is perhaps better to consider it as part of the question of unconscionability.
In the absence of detrimental reliance it would rarely, if ever, be
unconscionable to insist on strict legal rights: see Harpum, Bridge and Dixon,
Megarry
& Wade: The Law of Real Property
, 7th ed. (London: Sweet & Maxwell,
2008) at 711.
[48]
The defendant says the question should be framed in this way:
Has the appellant, by words or
conduct, affirmed the respondents right to establish a dock and have access
across its property for that purpose in circumstances making it unfair or
unjust for it now to assert its strict legal rights (citing
Litwin
Construction (1973) Ltd. v. Pan
(1988), 52 D.L.R. (4th) 459, 29 B.C.L.R. (2d)
88 (C.A.)).
[49]
The question as posed by the defendant is very much in accord with the
test referred to in the above authorities, adopting and applying the broad,
flexible approach to proprietary estoppel.
[50]
The defendant contends that the question so posed should be answered in
the negative. It says it did not induce the plaintiffs to change their
position to their detriment. It says it did not covenant to give the
plaintiffs an interest in land, and that it did not contract to apply for
moorage on the plaintiffs behalf. It says it did nothing to encourage the
plaintiffs to go to the expense of building a dock, and that the plaintiffs
took that risk on their own initiative without first obtaining the necessary
moorage tenure from ILMB.
[51]
In my respectful view these submissions do not accord with the facts as
found by the trial judge.
[52]
In 2003, before the plaintiffs purchased their lot, Mr. Sykes spoke to
Mr. Leyland who was then president of the defendant Society. Mr. Leyland told
Mr. Sykes that the lots adjacent to the parkland had the right of access across
the parkland for moorage purposes. He confirmed that in writing. Moorage was
important to the plaintiffs. They purchased the lot relying on Mr. Leylands
representation, and believing they would have a right of access across the
parkland for moorage purposes.
[53]
The Societys subsequent conduct affirmed their original position. When
the Society decided not to build a common dock for reasons of expense, Mr.
Leyland and Mr. Herrmann told the Sykes they could construct moorage adjacent
to the parkland, and have access to it across the parkland. No one has
suggested that the access be by other than foot.
[54]
The representations of the defendant were relied on by the plaintiffs,
at least in part, in their decision to buy Lot 2, and in their subsequent
decision to build a dock. I respectfully agree with the learned trial judges
conclusion at paras. 45 and 46, quoted above at para. 18, that in all the
circumstances it would be unjust for the defendant to rely on its purported
strict legal rights.
[55]
I would not give effect to this ground of appeal.
D. Remedy
[56]
The defendant contends that the declaratory relief granting the
plaintiffs a registrable interest in land for moorage access (quoted above at
para. 3 of these reasons) is too extensive, and well beyond the minimum relief
necessary to balance the equities. The defendant says that rather than a
perpetual interest in land, the relief should have been limited to a licence
for the life of the dock, or alternatively monetary compensation. The
defendant acknowledges the court could not grant a licence, because only the
ILMB has authority to grant such a licence over Crown land.
[57]
The learned summary trial judge directed his attention to the principle
that the remedy in cases of proprietary estoppel should be the minimum equity
necessary to do justice to the claimant, and concluded that a declaration in
the terms granted was appropriate.
[58]
I am unable to say that the learned judge erred in this conclusion. He
considered the relevant legal principles, and the critical facts. He exercised
the wide discretion available in such cases in a way that gave the plaintiffs
essentially what they had been promised, and nothing more.
[59]
I would not interfere with the relief granted.
VI. Conclusion
[60]
I would dismiss the Societys appeal with costs.
The
Honourable Chief Justice Finch
I agree:
The Honourable Madam Justice
Huddart
I agree:
The Honourable Madam Justice
Garson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Dosanjh v. Singh,
2011 BCCA 28
Date: 20110120
Docket: CA038285
Between:
Jaswinder Kaur
Dosanjh
Respondent
(Plaintiff)
And
Rupinder Singh
Appellant
(Defendant)
Before:
The Honourable Mr. Justice Low
The Honourable Mr. Justice Chiasson
The Honourable Madam Justice Bennett
On judicial review
from: Court of Appeal of British Columbia, September 29, 2010
(
Dosanjh v. Singh
, 2010 BCCA 425, Court of Appeal Reg. No. CA038285)
Oral Reasons for Judgment
Counsel for the Appellant:
G.M. Niemela
Counsel for the Respondent:
S.M. Dewar
Place and Date of Hearing:
Vancouver, British
Columbia
January 17, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 20, 2011
[1]
BENNETT J.A.
: This is a review from the decision of Mr. Justice
Lowry refusing to stay an order for sale of a home jointly owned by the parties.
Mr. Singh framed the application as a review of a refusal to grant leave on
this issue. However, Lowry J. A. granted leave; he did not grant the stay of
the order for sale.
[2]
Ms. Dosanjh and Mr. Singh were married in India in 1995. Unbeknownst to
Ms. Dosanjh, Mr. Singh obtained a divorce in British Columbia in 1997. The two
began living together in B.C. in 1999 and, in 2002, bought a home, which was
registered in their names jointly. They separated in 2008. Mr. Singh continues
to reside in the home.
[3]
Ms. Dosanjh commenced this action in 2008. She sought partition and sale
of the home, as well as damages for a fraudulent divorce. Mr. Singh was served
with the writ of summons, but did not enter an appearance. Ms. Dosanjh took
default judgment nine months after he was served. Damages and costs were to be
assessed.
[4]
In January 2010, Ms. Dosanjh applied for an order for the sale of the
home and an accounting of money allegedly owed to her by Mr. Singh. Mr. Singh
was not served with this application. The judge ordered the home to be sold and
the net proceeds divided equally. Ms. Dosanjh was granted conduct of the sale
of the home, but Mr. Singh was permitted to remain in the house pending the
sale, subject to his cooperation with the realtor.
[5]
The judge also ordered a sum of money be paid to Ms. Dosanjh for
occupational rent, as well as $27,630 which Ms. Dosanjh deposed was half of the
rent received from the tenants of a suite in the house. Costs to be assessed
were also ordered.
[6]
Mr. Singh was given copies of these orders, and although he consulted
counsel, no steps to set aside the orders were immediately taken. It was not
until June 2010, after he refused entry to the premises by a real estate agent,
that Mr. Singh brought applications to set aside the default judgment and to
reconsider the order for sale of the house and the corollary relief. The
applications were heard mid-July with judgment rendered the same day.
[7]
Mr. Singh took issue, with, amongst other things, the accounting
regarding rent and mortgage payments.
[8]
The judge dismissed Mr. Singhs application and made an order granting
Ms. Dosanjh possession of the home for the purposes of sale, requiring Mr.
Singh to vacate the home.
Reasons of Lowry J.A.
[9]
Lowry J.A. held that the parties did not require leave to appeal the
order for default judgment as it was a final order. He granted leave to appeal
the order for sale of the home as the fact Mr. Singh was not served with the
application was sufficiently important for the matter to go before the court. Lowry
J.A. applied the test in
RJR - MacDonald Inc. v. Canada (Attorney General)
,
[1994] 1 S.C.R. 311 at 334, in considering the stay applications: whether there
is merit in the appeal, whether failure to stay will cause irreparable harm,
and where the balance of convenience lies.
[10]
He stayed the judgment against Mr. Singh with respect to both the
occupational and collected rent because if the appeal was allowed, then a new
accounting would occur and his claim regarding the mortgage payments would be
considered. Lowry J.A. also stayed the order requiring Mr. Singh to vacate the
home, subject to his cooperation with the process of the sale.
[11]
Lowry J.A. did not stay the order for sale of the home. There was merit
to the appeal based on the lack of service, but he concluded that the sale of
the home was inevitable. Ms. Dosanjh was entitled to partition and sale of the
property. He concluded that the balance of convenience favoured the sale of the
house. This is the part of the order which is under review.
Test on review
[12]
A division of this court will not interfere with the discretionary
decision of a single justice to refuse a stay absent evidence that the judge
applied the wrong test, erred in principle, or misapprehended material facts. See
DeFehr v. DeFehr
, 2002 BCCA 139 at para. 6.
Discussion
[13]
During the course of argument, counsel for Mr. Singh acknowledged that
his clients real concern is that he will not have an opportunity to buy out
Ms. Dosanjhs interest in the house because the order for sale is not subject
to court approval. There appears to be nothing preventing Mr. Singh from
returning to the trial court and seeking court approval as a term of the order
as it was not considered by the judge in the court below.
[14]
Mr. Singhs other concern is that Ms. Dosanjh will sell the property to
a friend or family member for less than market value. The order in the court
below clearly contemplates that the house be listed for sale on the public
market and sold at market value.
[15]
In my respectful view, Lowry J.A. applied the correct test for a stay of
execution of an order, he did not err in principle, and he did not misapprehend
the facts. Ms. Dosanjh is entitled to an order for sale as a joint tenant and
as Lowry J.A. found, the balance of convenience clearly lies with the sale
rather than delaying and possibly relitigating the inevitable.
[16]
Mr. Singh may apply for a remedy in the trial court to alleviate his
concerns regarding the sale of the property.
[17]
I would dismiss the application for review.
[18]
LOW J.A.
: I agree.
[19]
CHIASSON J.A.
: I agree.
[20]
LOW J.A.
: The application for review is dismissed.
The Honourable Madam Justice Bennett
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Johnny,
2011 BCCA 25
Date: 20110120
Docket: CA037577
Between:
Regina
Respondent
And
Kyle Johnny
Appellant
Before:
The Honourable Mr. Justice Hall
The Honourable Madam Justice Levine
The Honourable Mr. Justice Tysoe
On appeal from the
Supreme Court of British Columbia, October 6, 2009,
(
R. v. Kyle Johnny
, Smithers Registry No. 8152-1; and
R. v. Kyle
Dennis Johnny
, Smithers Registry Nos. 8152-2-A, 20758-1, 20758-2-A and
21123-1)
Oral Reasons for Judgment
Counsel for the Appellant:
K.R. Beatch and R.
Thirkell
Counsel for the (Crown) Respondent:
M. Mereigh
Place and Date of Hearing:
Vancouver, British
Columbia
January 19, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 20, 2011
[1]
HALL J.A.
: The appellant, who will be 28 years old in April of
this year, is of aboriginal background. A brief history of his unhappy
background was given by Justice Josephson as part of his reasons for sentence
in the case of
R. v. Edwards
, et al, [2001] B.C.J. No. 1062:
13.
Kyle Johnny, now
eighteen years old, was raised on a reserve near Chase and in various
surrounding communities. The residential school system also had significant
impact on his family. While he was exposed to alcohol abuse and violence, his
childhood was relatively benign. He was not a victim of abuse as a child. He
suffers from attention deficit hyperactivity disorder. There were significant
disruptions in home and school placements. At age eleven or twelve years, he
began abusing alcohol, associating with negative peers and engaging in
aggression. Four or five months of foster care at that time due to behavioural
problems saw no improvement in his behaviour. His mother is well educated,
articulate and strongly supportive of Mr. Johnny. Her band is prepared to
offer an apparently well thought out and professional program of counselling
and treatment.
[2]
He is presently imprisoned in a Federal institution as a result of being
sentenced for a number of crimes on October 6, 2009, after credit for
pre-sentence custody on a two-for-one basis, to a sentence of 10 years and 9½
months. The sentences were imposed by a Provincial Court judge in relation to
seven charges to which the appellant had pleaded guilty. The time period covered
by the charges was from December 8, 2008 to May 27, 2009.
[3]
The chronology of the several incidents for which he was sentenced
commences on December 8, 2008. On that date he turned himself in to the police
detachment in Smithers, at which time he was found to be in possession of a
small amount of cocaine. It seems that he was then apprehensive as to his
safety because of a possible threat of retaliation from others in the cocaine
trade because he considered he had not satisfied certain obligations from
dealing in cocaine. However, at a later time, in a discussion with a probation
officer, he seemed to suggest that he turned himself in because he wanted to
get himself off the street and away from a drug problem. It is not entirely
clear if he remained in custody thereafter until January 22, 2009, but on this
latter date he was in court and was thereafter at liberty on a promise to
appear.
[4]
On March 8 he was involved in an altercation with a person named Cote at
Burns Lake which resulted in a charge of aggravated assault. The victim was in
a coma as a result of this assault and was on life support in Prince George
hospital for a time. The appellant was released again soon after his appearance
on this charge on an undertaking to appear. He was found committing bail
breaches at the end of March and beginning of April by using alcohol but
remained out of custody. Late in April, he failed to appear for a court date. That
resulted in a failure to appear charge, one of the charges for which he was
sentenced. On May 27, 2009, at Smithers he was involved in a serious incident
which resulted in his being detained in custody until he was sentenced in
October 2009. On this date he committed a violent robbery of a jewellery store.
A clerk and an 81 year old customer were assaulted in the course of the
incident. His detention in custody resulted in a credit for time served before
sentencing of some 260 days, being 130 days at two-for-one credit.
[5]
It was apparently intended that the sentencing court would have a
pre-sentence report before it as sentencing on the several charges to which he
had pleaded guilty was scheduled for the latter half of October 2009. However,
counsel for the appellant had the case called forward, apparently at the behest
of the appellant, who expressed concerns for his safety and sought to be
sentenced forthwith. The sentencing proceeded before the Honourable Judge
Struyk on October 6, 2009. At the sentencing, the Judge gave a brief
description of the facts underlying the aggravated assault charge:
[6] ... At some point around the date of the alleged
offence, March 8, 2009, there was a confrontation between Mr. Johnny and
Mr. Cote, and Mr. Johnny struck Mr. Cote in the head area. It is
not certain as to how often that occurred as some of the admissions made by
Mr. Johnny were not clear on that, that is, the frequency of blows, but as
a result of that, it is understood that Mr. Cote then struck his head on
something else and had a severe injury in the way of an intracranial or a
closed head injury.
[7] There were noted to be no defensive injuries on
Mr. Cotes person. Perhaps some of the notable factors here are that
Mr. Johnny then became involved in making sure that Mr. Cote was
delivered to the hospital to receive medical care, though Mr. Johnny did not
stay at the hospital. He left that location in Burns Lake and, on a later date,
after learning the police were looking for him, turned himself over to the
police ... .
[6]
The judge made reference to the results of the aggravated assault upon
the victim, a father of five young children, and his relatives:
[23] With respect to the aggravated assault, I have
reviewed the victim impact statements of Robert Cote, the father, and Barb
Cote, the mother, who I understand are retired and upon whom a significant care
burden has now been placed with respect to Randall Cote. I also note that there
is a victim impact statement from Randall Cote himself.
[24] I have reviewed all the medical reports that have
been filed, particularly the report which is filed as Exhibit 6, that of Karin
Frank, the occupational therapist, who notes there has been some improvement in
Mr. Cotes condition. According to that report:
[He] is walking independently
without any aids ... and is able to feed and dress himself independently. He
also carries out all his personal care without assistance. His balance has
improved greatly ... Mr. Cotes speech is affected greatly. He is able to
have meaningful conversations, but his diction makes it difficult to understand
him. He makes phone calls, keeps appointments and is able to express his needs.
[He does suffer] from some degree of retrograde amnesia and is not able to
recall the time he spent in hospital directly after the injury. He doesnt use
public transport and has to rely on his parents for transportation, as he is
unable to drive a car.
Mr. Cotes quality of life was greatly compromised by
his acquired brain injury. He will never fully recover to his formal level of
functioning, but I expect there will be some improvement made on the quality of
his speech, his community involvement and social networking following his
intensive rehabilitation in Halvar Jonson Rehabilitation Centre [which I
understand is where he was accepted for further rehabilitation in Alberta].
[25] Exhibit 4, that is the report of Dr. Fourie,
indicates that Mr. Cote has a pervasive cognitive deficit at this time. His
communication is very limited. He goes on to say:
He will be dependent on third party
care the rest of his life.
The doctor went on to say:
I cannot ever see him living independently again. We think
he has plateaued and we dont think we are going to see any drastic
improvements in the next six to twelve months.
[7]
The judge thereafter set out the circumstances of the robbery:
[10] ... Mr. Johnny
attended to a jewellery store in Smithers during normal business hours and
proceeded to smash the jewellery cases, to access jewellery. As I understand
it, he managed to get some jewellery into a bag or backpack that he had with
him. He had a hammer in his possession and was wearing gloves. He was then
confronted by an 81-year-old customer who was somewhat successful in slowing
down Mr. Johnnys activities. The owner or manager of the store then
became involved and there was a further violent confrontation with
Mr. Johnny ending up, as I understand it, on the floor being held by the
customer and Mr. Carter when the police arrived.
[8]
The judge noted this about the effect of the robbery on those who were
involved at the scene:
[27] With respect to the
robbery, I have noted already it appears to be premeditated, but I think most
robberies of this fashion are. There was also a violent struggle, and I have
reviewed the four victim impact statements of the clerks that worked at the
store and of the store owner or manager, Mr. Carter. These people, going
about their daily business, have all been significantly impacted in their sense
of security, working in a place such as they do and generally moving about the
community. I expect that is a sense of security that takes a great deal of time
to recover.
[9]
Although the judge did not have before him a pre-sentence report,
dealing with the aboriginal status of the appellant and resources available to
him in that community, he did have evidence from the mother of the appellant
who by telephone gave some background history of the family and as well, he had
a psychiatric report from Dr. Riley, who is associated with the Forensic
Psychiatric Services Commission. According to this report the appellant started
drinking to excess at the age of 12 and about two years prior to the date of
sentence had begun to abuse cocaine. The doctor noted that the appellant told
him that the period of time when he was released from custody on the cocaine
charge in late 2008 until the spring of 2009 when he was involved in the
robbery was the longest he had remained out of custody since the age of 15.
[10]
When the appellant was 15, he was involved in a very disturbing crime in
Kamloops. He was on the date of this incident in company with an 18 year old
and a 22 year old. All three individuals were of aboriginal descent. The three
individuals set upon a man who was returning from his shift at a restaurant,
along a bicycle path across the Overlander Bridge in Kamloops. They assaulted
the victim and delivered kicks to the head of the victim causing him to become
unconscious. The oldest of the three continued the attack with additional kicks.
This resulted in the death of the victim, a young married man with dependents. There
appeared to be no particular motive for this violent activity. The three young
men then left the scene but were soon apprehended. All three of the assailants
had been drinking. He was raised to adult court and convicted of manslaughter.
[11]
The 22 year old was sentenced to life imprisonment for the murder of the
restaurant worker. The judge noted that a mitigating factor in regard to both
of the younger assailants was that they had attempted to pull the older man
Edwards away from the victim, who was continuing his attack on the defenceless
victim. The judge noted that both had participated successfully in treatment
programs while incarcerated, and that there was hope for rehabilitation with
intensive on-going treatment programs. Taking into account time served, the
judge sentenced the 18 year old to imprisonment for three years (the equivalent
to a sentence of seven years when pre-sentence custody was considered) and the
appellant to imprisonment for two years (equivalent to six years when taking
into account pre-sentence custody). The appellant was ordered to be on
probation for two years after his release. The order required him to take
counselling under the direction of a probation officer. He breached his
probation order on a number of occasions after his release. After his release
from the sentence of incarceration near the end of 2002, his record is as
follows:
2002-11-12
Edmonton, Alta
Fail
to comply with probation order
1
day on each chg conc
2002-12-17
Salmon Arm, BC
Fail
to comply with probation order
7
week plus probation 1 yr
2003-07-08
Salmon Arm, BC
Fail
to comply with probation order
9
mos & probation 12 mos
2003-07-08
Salmon Arm, BC
Obstruct
Peace Officer
Jail
30 days
2004-03-02
Salmon Arm, BC
(1)
Fail to comply with probation order
(2)
Theft under $5000
(1)
60 days & probation 2 yrs
(2)
1 day
2004-09-01
Salmon
Arm, BC
Fail
to comply with probation order
1
day
2004-09-09
St
Paul, Alta
Fail
to comply with probation order
3
mos
2005-05-03
Salmon
Arm, BC
Fail
to comply with probation order
1
day
2005-12-21
Kamloops,
BC
(1)
Fail to comply with probation order
(2)
Obstruct Peace Officer
(1 - 2) Time served (1 day) on each chg
2005-12-21
Salmon
Arm, BC
Breach
of Probation Order (2 chgs)
Time
served & Jail 1 day on each chg
2006-06-27
Salmon
Arm, BC
Breach
of Recognizance
9
mos Jail
2007-03-02
Edmonton,
Alta
Fail
to comply with probation order
10
days
2007-04-25
Prince
George, BC
Theft
Assault
Time
served (22 days) & 3 mos Jail & 1 year probation
Time
served (22 days) & 6 mos Jail & 1 year probation
2008-01-28
Prince
Rupert, BC
Possession
of a scheduled substance for the purpose of trafficking
4
mos & mandatory prohibition order sec 109 CC
2008-01-15
Salmon
Arm, BC
Mischief
(2 chgs)
Breach
of Recognizance
Fine
$500
Jail
38 days & 22 days credit
2008-08-25
Smithers, BC
Possession
of controlled substance (2 chgs)
Breach of probation
Jail 3 mos each chg & consec. to Breach of Probation
Jail 30 days
[12]
As can be seen from the record, the appellant was in continuous
difficulty from the date of his release on the manslaughter sentence. It
appears he was involved in an incident of some violence in a theft at a liquor
store which resulted in the April 2007 sentences. His record for drugs appears
to commence in 2008.
[13]
Judge Struyk sentenced the appellant to six and a half years for the
assault of Cote. He referred to previous serious assault cases from this
jurisdiction of comparable facts,
R. v. Rasanen
, [1997] B.C.J.
No. 1260 (C.A.) and
R. v. Tschritter
, 2006 BCCA 202. In the former
case, a sentence of six years was sustained and in the latter an effective
sentence of eight years was sustained. Rasanen was 22 years old and Tschritter
was 21 years old. In both cases, catastrophic injuries resulted to the
respective victims, a situation paralleled in this case concerning the victim Cote.
While the assaults in those cases may have been more aggravated, the accused
were younger and had not accumulated the lengthy record for violence that is
the record of this appellant.
[14]
The judge imposed a sentence of five years consecutive on the robbery
plus three sentences of 60 days each on breaches of orders that occurred in the
Spring of 2009. These were to be consecutive to the sentences on the assault
and robbery. The collective sentences amounted to a total of 11 years and eight
months less credit of 260 days for a total effective sentence of time remaining
of just over 10 years and nine months.
[15]
The respondent notes that the Crown at sentencing had suggested a total
sentence in excess of fifteen years for the various charges. The defence asked
the Court to consider a global sentence in the three to five year range.
[16]
The appellant appeals from his sentence disposition to this Court. The
appellant seeks to have fresh evidence placed before the court, namely a
Gladue
type of report dated June 15, 2010. The appellant submits that the judge fell
into error when he did not refer to the aboriginal background and circumstances
of the appellant at the time of sentence, that the judge erred in failing to
have regard to the totality principle and that the total sentence imposed is
unfit as being too long. It is submitted on behalf of the appellant, as it was
to the sentencing judge, that an appropriate sentence would have been in the
range of three to five years in total, as being proportional to his overall
culpability and one that would properly take into account his circumstances as
an aboriginal offender as required by s. 718.2(e) of the
Criminal Code
.
Counsel for the appellant submits that the many disadvantageous systemic
factors affecting the appellant as disclosed in the material including a rather
chaotic upbringing by persons adversely affected by being residential school
survivors mitigates the moral blameworthiness of this appellant.
[17]
Arguably the judge fell into error when he failed to specifically make
reference to the aboriginal background of the appellant: see
R. v.
Sutherland
, 2009 BCCA 534. From the tenor and content of the sentence
proceedings, it does however appear to me that he was clearly aware that the
accused was of aboriginal descent. Because of this possible error, it falls to
this court to determine whether or not the sentences imposed resulted in a fit
sentence. The report sought to be filed contained considerable information
about this appellant and I consider it would be helpful to have this material
before us: see
R. v. Loring
, 2009 BCCA 166. I would therefore permit
this report to be adduced as fresh evidence. This material indicates there are
agencies that are prepared to work with this appellant upon his release. It
does seem that he has previously had access to resources to address his
problems and issues with alcohol and other addictive substances, but these to
date have not yielded much success as can be seen from the above criminal
record.
[18]
Counsel for the appellant suggests that the judge placed undue emphasis
on the tragic result of the assault and failed to distinguish the cases of
Rasanen
and
Tschritter
, which demonstrated more blameworthy conduct. Counsel
also submitted that the failure of the judge to consider the totality of the
sentences as to whether the aggregate sentences were appropriate discloses
error. It is submitted on behalf of the appellant that the sentences are simply
too long in total. Counsel suggested aggregate sentences in the range suggested
at sentencing would be fit for the circumstances of the offences and the
offender.
[19]
Counsel for the respondent notes that the only version of events about
the assault comes from the appellant since the victim has no memory of the
event. She submits that the absence of defensive type injuries on the victim
must be considered in assessing the circumstances of the assault. The
respondent submits that it was perhaps fortunate that more grave harm did not
result from the robbery incident having regard to the fact the appellant had
armed himself with a hammer and was prepared to engage in a violent struggle
with the staff and an elderly customer aged 81. Counsel for the respondent
submits that given the violent history of this appellant and his continuing
addiction problems, a lengthy period of incarceration was required in a
structured setting to protect the public and deter the appellant from further
offending. She submits the sentences in total were fit.
[20]
The assault charge and the robbery charge, the two most serious matters
for which he was sentenced, and comprise most of the aggregate time of the
sentences he faces, were very troubling crimes. The violence he inflicted in
the assault on Mr. Cote has resulted in the destruction of any normal life
for that person. It has imposed grievous burdens on the parents of the victim
and I am sure has also dramatically altered the prospects of his dependents. The
robbery of the jewellery store may have been motivated by the addiction
problems of the appellant. It is the fact that his activities at the store
manifested a very violent series of actions. I should say it is rather
fortuitous that someone was not seriously injured in that incident. It is in my
opinion of some significance that the appellant undertook this venture when he
was at least observably not in a condition of impairment by drugs or alcohol.
[21]
In the case of
R. v. Wells
, 2000 SCC 10, Iacobucci J. said this:
44. Let me emphasize that s. 718.2(e) requires a
different
methodology
for assessing a fit sentence for an aboriginal
offender; it does not mandate, necessarily, a different
result
. Section
718.2(e) does not alter the fundamental duty of the sentencing judge to impose
a sentence that is fit for the offence and the offender. Furthermore, in
Gladue
,
as mentioned the Court stressed that the application of s. 718.2(e) does
not mean that aboriginal offenders must always be sentenced in a manner which
gives greatest weight to the principles of restorative justice and less weight
to goals such as deterrence, denunciation, and separation (at para. 78).
As
a result, it will generally be the case,
as a practical matter
, that
particularly violent and serious offences will result in imprisonment for
aboriginal offenders as often as for non-aboriginal offenders
(
Gladue
,
at para. 33). Accordingly, I conclude that it was open to the trial judge
to give primacy to the principles of denunciation and deterrence in this case
on the basis that the crime involved was a serious one.
[Emphasis added.]
[22]
If I thought it were at all possible that any proposal suggested on
behalf of this appellant had any likelihood of success, I might be persuaded to
accede to a submission that there should be some alteration of the total
sentence imposed on this offender by the sentencing judge. However, I do not
consider that there is any present likelihood of success from any of the
suggested proposals.
[23]
Section 718 of the
Criminal Code
sets forth the purposes and
principles of sentencing:
718. The fundamental purpose of sentencing is to
contribute, along with crime prevention initiatives, to respect for the law and
the maintenance of a just, peaceful and safe society by imposing just sanctions
that have one or more of the following objectives:
(
a
) to denounce
unlawful conduct;
(
b
) to deter the
offender and other persons from committing offences;
(
c
) to separate
offenders from society, where necessary;
(
d
) to assist in
rehabilitating offenders;
(
e
) to provide
reparations for harm done to victims or to the community; and
(
f
) to promote a sense of responsibility in
offenders, and acknowledgment of the harm done to victims and to the community.
[24]
The provisions of s. 718 that seem particularly applicable here are (b)
and (c) although (a) and (f) are also to be noted. The appellant, as his
counsel has noted, is not wholly to blame for his behaviour, having regard to
his history but that is cold comfort for those who have suffered at his hands. Because
the judge may have erred in failing to expressly have regard at sentencing to
the aboriginal circumstances of this appellant and to specifically advert to
the totality issue, this Court must review the sentences to determine if the
total sentence imposed on this appellant was fit.
[25]
The judge here was faced with an offender and offences that called for
heavy sentences. The appellant has a sad but dreadful history and is clearly a
continuing danger to any community he finds himself in. The only way in which
the public can be protected from further carnage by this unfortunate individual
is by his separation from society for a lengthy period. It may be that as he
progresses into his 30s that he can begin to mature and curb his violent
behaviour. While the judge did not advert to the totality principle, I consider
that the total sentences imposed were appropriate and fit. Nothing less would
have been adequate to recognize the continuing threat this appellant poses to
the safety of the public.
[26]
I think those charged with responsibility for parole will have to
carefully assess when it will be safe for the appellant to be at some form of
liberty. Upon his release he may be able to access resources that can assist
him to avoid further difficulties. That would be a highly desirable outcome,
but only time will tell if he can have any success in future along these lines.
I note that his mother, who has moved to Alberta to be away from what she sees
as a bad environment, stands willing to assist her son if he wishes to have
assistance. That may be a matter the appellant should seriously consider on his
release. Some family involvement could afford a measure of the stability that
has been lacking in the recent life of this appellant. In the result, despite
the able submissions of counsel for the appellant, I am not persuaded that we
ought to make any alteration in the total sentence of incarceration imposed by
the Provincial Court judge. Accordingly, although I would grant leave to
appeal, I would dismiss this appeal from sentence.
[27]
LEVINE J.A.
: I agree.
[28]
TYSOE J.A.
: I agree.
[29]
HALL J.A.
: This appeal is dismissed.
The Honourable Mr. Justice Hall
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Jakubcak v. Dr. R.A. Melnyk Inc.,
2011 BCCA 31
Date: 20110121
Docket: CA037129
Between:
David Jakubcak
Appellant
(Plaintiff)
And
Dr. R.A.
Melnyk Inc.
doing business as Coast Dental Centre
Respondent
(Defendant)
Before:
The Honourable Mr. Justice Hall
The Honourable Madam Justice Levine
The Honourable Mr. Justice Tysoe
On appeal from: Supreme
Court of British Columbia, April 15, 2009
(
Jakubcak v. Dr. R.A. Melnyk Inc.
, Vancouver Registry S090729)
Oral Reasons for Judgment
Counsel for the Appellant:
B.J. Lotzkar
Counsel for the Respondent:
C.D. Martin
Place and Date of Hearing:
Vancouver, British
Columbia
January 19, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 21, 2011
[1]
TYSOE J.A.
: The plaintiff appeals from the order of the summary
trial judge in awarding only $1,426 in damages with respect to the defendants
wrongful dismissal of the plaintiff from his employment with the defendant, and
awarding costs of the entire action to the defendant.
[2]
The defendant operates a dental office, which normally uses the services
of two dental hygienists. The plaintiff is a dental hygienist who had worked
for the defendant on four occasions for one day each prior to the events giving
rise to this litigation.
[3]
In the summer of 2008, one of the defendants full-time dental
hygienists went on maternity leave. She was expected to return to work
following the maternity leave on August 1, 2009. A replacement hygienist was
hired but she also became pregnant, and she terminated her employment in
November 2008.
[4]
The defendants office manager contacted an agency, which was in the
business of supplying temporary dental workers, in search of another
replacement hygienist. It was the same agency which had previously referred the
plaintiff to the defendant in respect of his one-day assignments.
[5]
The defendants office manager was advised by the agency that the
plaintiff had accepted the position. There was a subsequent telephone
conversation between the office manager and the plaintiff, in which they
discussed certain aspects of the employment, including free dental work,
payment of a conference fee and a bonus if the plaintiff continued to work for
the defendant until July 30, 2009 and generated billings in excess of $100,000.
At the plaintiffs request, the office manager sent him a confirmatory e-mail,
which began with the sentence Thank you for taking the maternity leave
position from December 1/08 to July 30/09.
[6]
The plaintiff began working for the defendant on December 1, 2008 but
his employment was terminated with one days notice on December 22, 2008 after
the defendant learned that the full-time hygienist wanted to return from her
maternity leave.
[7]
The plaintiff sued the defendant, asserting that he had a fixed-term
contract of employment and that he was entitled to be paid his remuneration
until July 30, 2009 as well being entitled to damages in respect of the bonus,
the conference fee and the dental work the plaintiff had intended to obtain for
free during the period of his employment with the defendant.
[8]
The matter came on for trial under what was then Rule 18A of the
Rules
of Court
. The summary trial judge had before her affidavits with respect to
the conversation between the plaintiff and the defendants office manager, the
confirmatory e-mail sent to the plaintiff and partial transcripts of the
examination for discovery of the plaintiff.
[9]
The judge concluded that the defendant was entitled to terminate the
plaintiffs employment upon giving him reasonable notice. Her reasoning in this
regard was as follows:
[28] I do accept that a temporary employment contract
may
create a contract for a definite term pursuant to which an employer will be
liable for the entire period of the employment offered. However, in the absence
of a written contract, the court must determine the nature of the bargain
reached between the parties from the discussions that took place between them.
On the basis of the plaintiffs discovery evidence and the affidavit evidence
of both parties, I conclude that the offer of employment in this case
contemplated that work was available on a temporary basis until August 1, 2009,
when the maternity leave of Ms. Tse was expected to end, but not that the
plaintiff was guaranteed employment for that period of time. In my view, the
overriding aspect of the defendants offer of employment was its temporary
nature rather and not its definite term. Although the work was to end at a
specified time, there was no suggestion that the employer could not terminate
on reasonable notice.
[29] I am satisfied that had the plaintiff communicated
to the defendant his assumption or understanding that the offer was for a
fixed-term employment contract, the defendant would have insisted on a
mechanism for termination of the contract on reasonable notice within that
period of time.
[30] I conclude that the
defendant was entitled to terminate the plaintiff on reasonable notice.
[10]
The judge held that the reasonable notice period for termination in the
circumstances was one week and awarded the plaintiff damages in the amount of
$1,426. After judgment was given, the judge was advised that on April 3, 2009,
five days before the hearing of the summary trial, the defendant had delivered
to the plaintiff an offer to settle in the amount of $5,000. After considering
submissions as to whether the defendant was entitled to an award of double
costs from the date of the offer, the judge declined to award double costs but
awarded the defendant its costs of the entire proceeding.
[11]
On appeal, the plaintiff says it is unclear whether the judge found that
there was a contract of definite duration containing a term that the contract
could be terminated by giving reasonable notice, or a contract of indefinite
duration. The plaintiff says that no provision for early termination can be
properly implied in a definite term contract and that a finding of a contract
of indefinite duration did not accord with the evidence.
[12]
In my opinion, there is no uncertainty with respect to the conclusion of
the trial judge. On my reading of the reasons for judgement as a whole, the
judge found that the contract of employment was for an indefinite period and
that it was not an express term of the contract that the defendant could not
terminate on reasonable notice. As with all employment contracts of indefinite
duration that do not contain an express term to the contrary, the result was
that there was an implied term in the plaintiffs employment contract that it
could be terminated by either party upon the giving of reasonable notice of
termination.
[13]
The issue, then, is whether this Court should interfere with the judges
finding that the contract was one of indefinite duration. This was largely a
factual finding, although it could possibly be categorized as a finding on a
question of mixed fact and law.
[14]
In
Housen v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235, the
Supreme Court of Canada thoroughly canvassed the standards of review applicable
to appellate courts reviewing decisions of trial judges. The Court held that deference
should be given to trial judges in respect of findings of fact and findings of
mixed fact and law unless there was a palpable and overriding error or, in the
case of a finding of mixed fact and law, unless the judge made an extricable
error in principle.
[15]
It has not been demonstrated, in my view, that the judge in this case
made a palpable error in a finding of fact. Although the opening sentence of
the confirmatory e-mail was some evidence in support of a finding of a contract
with definite duration, it was not conclusive, and it was open to the judge on
the whole of the evidence to find that the contract was for an indefinite
duration but was not to extend past July 30, 2009.
[16]
The evidence before the judge included the affidavit of the defendants
office manager that she did not intend to employ the plaintiff for a fixed term
and that she would have refused to hire the plaintiff if his employment was
required to continue until July 30, 2009. The judge also had before her the
evidence of the plaintiff on his examination for discovery that he was never
told that his employment would be guaranteed to July 30, 2009 and that he did
not remember whether he was told that his employment would end on July 30, 2009.
It is my view that the judges finding was reasonably supported by the evidence
before her.
[17]
Nor, in my opinion, did the trial judge make an extricable error in
principle. There is no principle of law that a person hired as a replacement
for an employee on temporary leave has entered into an employment contract of
definite duration. Each case turns on its facts. The judge did not err, in my
view, when she held that the plaintiff bore the onus of establishing that the
employment contract was for a definite term: see
Herold v. Marathon
Developments Inc.
, [1999] B.C.J. No. 878 at para. 6 (S.C. Chambers).
[18]
In the alternative, if the employment contract was for an indefinite
term, the plaintiff says that one weeks notice of termination of his
employment contract was inadequate. I am not persuaded that the judge erred in
this regard.
[19]
The plaintiff had been working for the defendant for approximately three
weeks at the time of his termination. The employment was of a temporary nature
that was arranged by a temp agency. I agree with the view of Mr. Justice
Ewaschuk, expressed in
Hedeluis v. Ian Martin Associates Ltd.
, [1984]
O.J. No. 861, 4 C.C.E.L. 9 (Ont. High Ct. Jus.), that notice periods in respect
of temporary assignment employees will be less than the notice periods to which
permanent employees are entitled. Although the notice period of one week was
relatively short, it is my view that it was adequate in the circumstances of
this case.
[20]
Finally, the plaintiff says the judge erred by awarding the defendant
the costs of the entire proceeding as a result of the settlement offer. In my
view, the plaintiff has a valid point on this issue. While Rule 37B(4) of the
Rules
of Court
in effect at the time stated that the court may consider an offer
to settle when exercising its discretion in relation to costs, that discretion
was constrained by the options contained in Rule 37B(5), which read as follows
at the relevant time:
(5) In a proceeding in which an offer to settle has
been made, the court may do one or both of the following:
(a) deprive a party, in whole
or in part, of any or all of the costs, including any or all of the
disbursements, to which the party would otherwise be entitled in respect of the
steps taken in the proceeding after the date of delivery of the offer to
settle;
(b) award double costs of all or some of the steps
taken in the proceeding after the date of delivery of the offer to settle.
[21]
These options did not include the deprivation of costs to which a
plaintiff, who has obtained a judgment in more than a nominal amount (albeit
less than the amount of the settlement offer), is entitled in respect of steps
taken in the proceeding prior to the delivery of the settlement offer. Under
Rule 57(9) of the
Rules of Court
, costs were to follow the event unless
the court otherwise ordered, and there must have been a principled basis for a
contrary order. The judge did not exercise a discretion under Rule 57(15) to
award costs in relation to a particular issue, and there was no other
principled basis for depriving the plaintiff of party and party costs in
respect of steps taken prior to the delivery of the settlement offer. In my
opinion, the judge erred in depriving the plaintiff of those costs, and in awarding
the defendant its costs in respect of steps taken prior to the delivery of the
settlement offer.
[22]
In the result, I would allow the appeal to the limited extent of setting
aside the judges order of costs and replacing it with an order awarding costs
of the steps taken in the action up to April 3, 2009 to the plaintiff and
awarding costs of the steps taken thereafter to the defendant. I would
otherwise dismiss the appeal. In view of the plaintiffs limited success on
this appeal, I would order that each party bear their own costs of the appeal.
[23]
HALL J.A.
: I agree.
[24]
LEVINE J.A.
: I agree.
[25]
HALL J.A.
: This appeal is allowed in part as provided for in the
reasons of Mr. Justice Tysoe.
The Honourable Mr. Justice Tysoe
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Spraggs v. Coldstream Court Resort (1966) Ltd.,
2011 BCCA 32
Date: 20110121
Docket: CA037196
Between:
Marilynn Spraggs
and Lynn Spraggs
Appellants
(Plaintiffs)
And
Coldstream Court
Resort (1966) Ltd.
Respondent
(Defendant)
Before:
The Honourable Madam Justice Saunders
The Honourable Mr. Justice Lowry
The Honourable Mr. Justice Frankel
On appeal from: Supreme
Court of British Columbia, May 21, 2009
(
Spraggs v. Coldstream Court Resort (1966) Ltd.
, Kelowna Registry No.
35613)
Oral Reasons for Judgment
Appellant appearing In Person (via phone):
L. Spraggs
Counsel for the Respondent:
D.G. Sanderson, Q.C.
Place and Date of Hearing:
Vancouver, British
Columbia
January 17, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 21, 2011
[1]
SAUNDERS J.A.
: Ms. and Dr. Spraggs apply pursuant to s. 9(6)
of the
Court of Appeal Act
for an order varying the decision of a
justice refusing leave to appeal an order for costs of a judge of the Supreme
Court of British Columbia.
[2]
The case has taken an unusual path. Ms. Spraggs and Dr. Spraggs filed a
petition seeking to settle the boundary of property owned by them in the
Coldstream area. The original petition did not define with precision the corner
for which they were advocating. The respondents advanced a different location.
On an application under R. 18A of the
Rules of Court
,
Madam
Justice Beames referred the case to full trial, with costs of that application
to be costs in the cause. The case was tried by Mr. Justice McKinnon. He held
that the location advanced by the respondents was not correct and in his order
gave directions for defining the boundary, somewhat in terms favouring the
Spraggs position. However he did not precisely define the boundary because the
evidence adduced by the Spraggs presented two alternative locations which
appeared to derive from work done by the same expert and he made no order as to
costs.
[3]
The Spraggs appealed. This Court set aside the order of Mr. Justice
McKinnon and ordered a new trial. In doing so this Court held on the issue of
costs:
[26] I would allow the appeal, set aside the order, and
remit the matter to the Supreme Court for a new trial on the question of the
location of the northeast corner of the Spraggs' property as determined by Mr.
Tassie.
[27] I would order that the
Spraggs are entitled to the costs of the appeal. I would make no order for
costs of the trial appealed from.
[4]
In accordance with that order the matter returned for trial before Mr.
Justice Cole. By a consent order Mr. Justice Cole determined the location of
the corner demarking the disputed boundary.
[5]
Costs, however, were contested. As to costs Mr. Justice Cole ordered:
1. The Petitioners are entitled to their costs from
January 31, 2007 to the present at Scale B.
2. The issue of costs
between the date of the Petition to the date of the filing of the Notice of
Appeal shall be referred back to Mr. Justice McKinnon for determination.
[6]
No one, apparently, questioned the propriety of costs being referred to
Mr. Justice MacKinnon when the order he had made, for reasons of inadequacy of
the record, had been set aside. Mr. Justice MacKinnon grappled with the costs
of the now long ago trial and ordered that each party would bear their own
costs.
[7]
The appellants seek to appeal that order but have not challenged the
order of Mr. Justice Cole which declined to determine costs for any time prior
to January 31, 2007.
[8]
Mr. Justice Chiasson, in chambers, denied leave to appeal on August 13,
2010. The appellants filed this motion to vary his order.
[9]
Our task on an application to vary a decision of a single justice is
well known. This Court does not undertake a fresh consideration of the
application. Rather we must ask whether the justice was wrong in law or
principle or misconceived the facts:
Halderson v. Coquitlam (City)
(2003), C.P.C. (5th) 225.
[10]
Here the application before the justice was for leave to appeal. That is
an application engaging several factors, also well known, including
consideration of the likelihood of success, the importance to the practice of
the issue, and the interests of justice, remembering in this case the costs
order itself is an order engaging the discretion of a judge.
[11]
In his reasons for judgment refusing leave to appeal Mr. Justice
Chiasson first referred to the test for leave to appeal an order for costs as
set out in
Neufeld v. Foster
, 2000 BCCA 485, and observed that the
applicants bear an onerous burden because of the courts reluctance to
interfere with discretionary orders:
Oliveira v. McIntyre,
[1998] B.C.J.
No. 1682 (C.A.). He observed it is well settled that a court may decline to
award costs when success is divided. He concluded that the fact success was
divided was consistent with the observations of this Court on appeal and
concluded that it was unlikely a division of this Court would disturb the
judges determination. In other words, he found it was unlikely the appeal
would succeed.
[12]
I think it can be said that the costs issue did go astray in the Supreme
Court of British Columbia. This is for two reasons, first this Court had
already said there would be no order of costs of the first trial, and so costs
of the first trial were not on the plate for consideration by the Supreme Court
of British Columbia on the re-trial, and second, the matter should not have
been delegated by the second trial judge to the first trial judge as to any
costs pre-dating the appeal that were not encompassed by this Courts order
declining costs of the first trial.
[13]
As a general proposition, and, in the words of Mark M. Orkin,
The Law
of Costs,
loose-leaf (consolidated on 18 January 2011), (Aurora, Ont.:
Thomson Reuters, 1987) A statement by the court ... to the effect of no order
as to costs is, of course, an order of costs, and means that neither party
shall pay any costs to the other citing
McCune v. Botsford and Macquillan
(1902), 9 B.C.R. 129 (S.C. sitting as a Full Court).
[14]
In this case this Court expressly directed there be no order respecting
costs of the first trial. In other words, because this Court expressly made no
order as to costs, costs of the first trial were a dead letter, with the result
that the parties bore their own costs of the first trial. Coincidentally, this
is the order made by Mr. Justice McKinnon as to costs of the first trial, so an
appeal would accomplish nothing with respect to those costs. It could not
succeed.
[15]
This leaves, perhaps a lacuna as to costs of the proceedings, excluding
costs of the first trial, up to the filing of the Notice of Appeal, which as I
have said ought not to have been delegated to Mr. Justice MacKinnon. However,
an appeal of that aspect of Mr. Justice MacKinnons order would be of no import
because even if it were set aside, there would still be no recovery of those
non-trial costs, given that the order of Mr. Justice Cole is in effect.
[16]
I will say none of this appears to have been brought to the attention of
either judge of the Supreme Court of British Columbia involved, or to the
single justice whose order we are reviewing, but the effect of these aspects
reinforces the conclusion of the chambers judge that leave ought not to issue.
[17]
In these unusual circumstances but with this clarification, I would
dismiss the application to vary the order of a single justice.
[18]
LOWRY J.A.
: I agree.
[19]
FRANKEL J.A.
: I agree.
[20]
SAUNDERS J.A.
: The application is dismissed.
The Honourable Madam Justice Saunders
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
U.S.A. v. Kerfoot,
2011 BCCA 33
Date: 20110121
Docket:
CA037346
In
the Matter of the Extradition Act, R.S.C. 1999, c. 18
Between:
The Attorney
General of Canada on behalf of
The United States of America
Respondent
And
Kevin Donald
Kerfoot
Appellant
Before:
The Honourable Mr. Justice Hall
The Honourable Madam Justice Levine
The Honourable Mr. Justice Tysoe
On appeal from: Supreme
Court of British Columbia, August 4, 2009
(
U.S.A. v. Kerfoot
, Vancouver Registry 24183)
Oral Reasons for Judgment
Counsel for the Appellant (appearing via teleconfernece):
K.I. Tousaw
Counsel for the Respondent:
K.L. Swift
Place and Date of Hearing:
Vancouver, British
Columbia
January 20, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 21, 2011
[1]
HALL J.A.
: This case involves an appeal from a committal order of
Ker J. dated August 4, 2009 and an application for review of an order of
the Minister surrendering the fugitive Mr. Kerfoot, to the United States
on charges of conspiracy and trafficking in cocaine and a derivative of
methamphetamine in Washington State.
[2]
Counsel for the requesting state has placed before us a second
Supplemental Record of Case for Prosecution
in view of a
number of factual developments in this case since it was before Ker J. These
include the death of an alleged co-conspirator
Canupp
,
an American. As a result of his death, it appears from the newly filed material
that very nearly all of the evidence that it was anticipated could be adduced
at any trial in the United States from this individual is now unavailable. Another
alleged co-conspirator,
Purdom
, a Canadian who was
formerly incarcerated in a U.S. prison has now taken up residence in British
Columbia and has purported in affidavit material to resile from statements
given earlier to U.S. authorities. In these statements, he implicated
Mr. Kerfoot in the drug transactions that underpin these extradition
proceedings. It is submitted by counsel for Mr. Kerfoot that the present
location of this witness and his stance adverse to the U.S. prosecution
authorities may place in some doubt the availability of his evidence. Counsel
for the United States submits that the question of the weight of any evidence
of this witness is for a trier of fact in the United States and that as stated
in the Supplemental Record of Case, this evidence remains available.
[3]
There is a reference in the amended case record to telephone
conversations allegedly held between the fugitive and
Canupp
at the time of the alleged transaction of drug trafficking. It appears that
U.S. law enforcement personnel may have overheard at least a portion of such
conversations. Having regard to the state of the record, it is not at present
possible to precisely determine the cogency of such evidence. Counsel for the
United States also adverts to certain circumstantial evidence possibly
supportive of an inference of participation of the fugitive in the drug
transaction, namely a meeting of him with the two persons arrested in the United
States with the drugs. Also present at this meeting was a man called Long who
apparently furnished to the fugitive a phone said to be connected to the drug
transaction. This meeting occurred at the Peace Arch border at a time shortly
before the transaction in Washington State.
[4]
The fugitive through counsel seeks to adduce fresh evidence and suggests
that developments in factual matters after the time of the hearing before
Ker J. should result in a result different from her ruling on disclosure
of additional material by U.S. authorities as well as her ruling declining to
accede to an abuse of process argument.
[5]
The fugitive also seeks to adduce as fresh evidence the opinion of a
British Columbia lawyer, Mr. Botting, touching on the existence of valid
extradition arrangements between Canada and the requesting state.
[6]
Counsel for the requesting state asks this Court to itself consider the
amended
Record of Case for Prosecution
to determine
that presently available material should be found sufficient to sustain the
order of Ker J. directing the committal of the fugitive. Reliance is
placed upon previous cases in this Court, of which
United States v. Costanzo
,
2009 BCCA 120, 243 C.C.C. (3d) 242, is representative where such a course was
adopted and approved by this Court. Counsel for the United States, the
requesting state, also submits that this Court ought not to interfere with the
order of surrender made by the Minister. Counsel also opposes the admission of
certain of the fresh evidence sought to be tendered on behalf of the fugitive.
[7]
There are applications for admission of fresh evidence. We made orders
yesterday marking as Exhibits certain material that was uncontested. Concerning
certain material that was not agreed, we reserved and had some items marked for
identification only.
[8]
I would not receive the Scales affidavit. It is of perhaps rather
doubtful relevance in view of the present state of the evidentiary record and
it is clearly hearsay.
[9]
The United States objects to the Botting material sought to be filed on
the review application. I consider for the reasons adverted to by counsel for
the respondent that there are formidable issues that may prove a bar to the
admissibility of this material. However, in view of our decision on the
committal appeal, I need not reach any concluded decision on this question of
admissibility.
[10]
While it is permissible on the authorities for this Court to receive
supplemental material and rule on the sufficiency of such for the purposes of
committal, I am of the view that in the quite unusual circumstances of this
case, that would not be a fair course to adopt. The case as disclosed in the
Second Supplemental Record of Case discloses very much altered circumstances
from the case that was before Ker J. Her order was certainly supportable
on the then extant material before her.
[11]
However, substantial portions of the case probative of the involvement
of the fugitive sought by the requesting state for trafficking in drugs are now
either unavailable or in a significantly altered condition. This was a case
heavily dependent on incriminating evidence expected to emanate from two
co-conspirators arrested in Washington State, Canupp and Purdom. I have
adverted above to the present situation as it relates to the evidence of these
parties.
[12]
As the Second Supplemental Record of Case stands, it would in my view be
inappropriate for this Court to enter upon a consideration of factual matters
and the conduct of the limited weighing of evidence mandated by previous
authority. That will often be possible at the appellate level but there may
arise cases, such as the present one, where the evidentiary landscape has so
dramatically altered that such a course would not be a prudent exercise of
discretion. It must always be borne in mind that a decision of this Court is
only appealable to the Supreme Court of Canada, often a formidable task. In my
opinion, the only appropriate disposition of this case is to remand
consideration of the revised case to a court of first instance for a new
hearing. It can then be considered by such tribunal whether a plausible case
exists see
United States of America v. Ferras,
2006 SCC 33, [2006] 2
S.C.R. 77. Since there is to be a new hearing, I deem it not necessary to
express any views upon issues such as additional disclosure or arguments
addressing possible abuse of process. I do venture to express the view that I
see nothing to disagree with in the rulings on these subjects made by
Ker J. on the state of the record before her. On any new hearing, it will
be for counsel to determine what arguments to advance on the then state of the
record and for the judge hearing the matter anew to rule on all such issues as
may arise. By this methodology, a proper record may be established for further
review on any future appeal or appeals. I would allow the appeal from the order
of committal and order a new hearing before a judge of the Supreme Court of
British Columbia.
[13]
Because of this disposition of the appeal from committal, it follows
that the order of the Minister for surrender founded on the committal order
cannot be sustained. Therefore, the review application must succeed for that
reason and the surrender order of the Minister is set aside.
[14]
LEVINE J.A.
: I agree.
[15]
TYSOE J.A.
: I agree.
[16]
HALL J.A.
: The judgment is rendered in the terms that I have
outlined, and the matter is remanded to the Supreme Court of British Columbia
for re-hearing.
(discussion with
counsel re. bail)
[17]
HALL J.A.
: Bail in the terms of the previous release terms will
be extended until February 25, 2011. The only additional term in the bail will
be that Mr. Kerfoot is obligated to report before the Supreme Court of British
Columbia on such date as counsel may advise. Counsel can work out the details
of the appearance and it will then be in the hands of that court to deal with
any bail matters that may then arise.
The Honourable Mr. Justice Hall
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Coast Capital Savings Credit Union v. British Columbia
(Attorney General),
2011 BCCA 20
Date: 20110124
Docket: CA037833
Between:
Coast Capital
Savings Credit Union
Respondent
(Petitioner)
And
Her Majesty the
Queen in Right of the
Province of British Columbia
Appellant
(Respondent)
Before:
The Honourable Madam Justice Ryan
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Hinkson
On
appeal from the Supreme Court of British Columbia, December 23, 2009
(
Coast Capital
Savings Credit Union v. British Columbia (Attorney General)
,
2009
BCSC 1768, Vancouver Registry, Docket Number S088755
Counsel for the Appellant:
A.H. Dalmyn
Counsel for the Respondent:
D.G. Cowper, Q.C.
H. Brinton
Place and Date of Hearing:
Vancouver, British
Columbia
November 24, 2010
Written Submissions Received:
December 14, 2010 and
December 21, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 24, 2011
Written Reasons by:
The Honourable Madam Justice Newbury
Concurred in by:
The Honourable Madam Justice Ryan
The Honourable Mr. Justice Hinkson
Reasons for Judgment of the Honourable
Madam Justice Newbury:
[1]
This appeal requires us to consider the meaning of the unlikely phrase
non-equity shares used in s. 7(2) of the
Corporation Capital Tax Act
,
R.S.B.C. 1996, c. 73 (the
CCTA
), a statute that was repealed in
April 2010. At all material times, s. 7(2) specified that the capital
stock of a credit union (one of the main components of paid up capital, on
which the tax was assessed) does not include its non-equity shares as defined
by the
Financial Institutions Act
, R.S.B.C. 1996, c. 141 (the
FIA
).
Section 1(1) of the
FIA
provided a two-pronged definition of
non-equity share that remained unchanged from its enactment in 1992
throughout the relevant period i.e., a share of a credit union that (i) evidences
indebtedness of the credit union and (ii) does not represent an equity
interest therein. Conversely, equity share was defined to mean a share that
represents an equity interest in a credit union.
[2]
Until 2008, s. 1(5) of the
CCTA
specified that the amount[s]
relevant to the computation of the paid up capital of a credit union were to
be the amounts reflected in its financial statements prepared in accordance
with generally accepted accounting principles (GAAP). In 2008, however, when
the Minister of Small Business and Revenue had before him an appeal from the
respondent Coast Capital Savings Credit Union (Coast Capital) in respect of
reassessments of its corporation capital tax for the 2003-6 taxation years, s. 7(2)
of the
CCTA
was amended, retroactive to January 1,
2001
, to
exclude the reference to GAAP in connection with the calculation of capital
stock.
[3]
The chambers judge below, whose reasons are indexed at 2008 BCSC 1768, described
this change as having retroactively expunged the legislative basis upon which Coast
Capital had legitimately been planning its affairs for the past seven years. Nevertheless,
he found that certain Class C shares issued by Coast Capital in 2003 came
within the definition of non-equity share in the
FIA
and thus the
CCTA.
He therefore ordered that the amount paid up on such shares was not
required to be included in the calculation of the credit unions capital stock and
did not constitute part of its paid up capital for purposes of corporation
capital tax.
[4]
For the reasons that follow, I am of the view that the chambers judge,
Mr. Justice Grauer, did not err in so concluding and that Her Majestys appeal
must be dismissed.
Factual Background
[5]
Coast Capital was formed in 2000 as a result of the amalgamation of two
predecessor credit unions under the
Credit Union Incorporation Act,
R.S.B.C.
1996, c. 82
(the
CUIA).
Section 56 thereof permits a credit
union to provide in its constitution or rules for one or more classes of shares
and to attach special rights and restrictions thereto. At all material times, the
Rules of Coast Capital authorized it to issue seven classes of shares, namely
Class A, B, C, D and E Equity shares, Preferred Equity shares, and Class P
Non-Equity shares. Class A Equity shares were required to be purchased as a
condition of membership in the credit union, and were required to be redeemed
upon termination of membership. Money invested in such shares was, the Rules
stated, not guaranteed by the Credit Union Deposit Insurance Corporation
(CUDIC). On the winding-up or dissolution of the credit union, the holders
of Class A shares were entitled to receive its net assets, subject to the prior
rights of the holders of all other classes of shares. All of these
characteristics were consistent with the requirements of the
CUIA
.
[6]
The Class C Equity shares had a par value of $1 each and were to be non-transferable
and non-voting. The directors of the credit union were authorized to fix the
special rights and restrictions to be attached to them generally, but they would
carry a non-cumulative dividend. On the liquidation or winding-up of the credit
union, the holders would, subject to the prior rights of holders of Class P Non-Equity
and Preferred Equity shares, be entitled to receive, rateably with the holders
of the Class B, D and E Equity shares, only their par value plus any declared
but unpaid dividends. According to the Rules, money invested in these shares
was not guaranteed by CUDIC.
[7]
As I understand it, Coast Capital did not issue any Class C Equity
shares until May 2003, when it issued a disclosure statement (the functional equivalent
of an offering memorandum) dated May 6, 2003 offering to issue up to
50,000,000 such shares (which it referred to as Class C shares) to its
members resident in British Columbia. The memorandum described the more
specific rights and restrictions that had been attached to the Class C shares
in accordance with the Rules: they carried a non-cumulative dividend of 6% per
annum and were not only redeemable (for their par value), but were
required
to be redeemed on a fixed date June 27, 2009 (the Maturity Date). As
required by s. 60 of the
CUIA
in respect of equity shares, the offering
document warned that they were not guaranteed by CUDIC and were not transferable
except with the approval of the Board. Thus, the document said, there was no
bona
fide
market through which these shares may be sold or traded. The rights
of Class C shareholders on the liquidation or dissolution of the credit union were
described in terms that tracked the wording in the Rules:
In the event of liquidation,
dissolution or winding-up of Coast Capital, any surplus property remaining
after the satisfaction of the liabilities of Coast Capital, including the costs
of winding up and dissolution, will be distributed first, by payment of a
dividend on any outstanding Non-Equity Shares of Coast Capital at a reasonable
rate determined by the liquidator and second, by distributing the balance
remaining to the holders of Equity Shares in accordance with the Rules of Coast
Capital. The Rules provide that subject to the prior rights of holders of
Non-Equity Shares and Preferred Equity Shares, the holders of Class C Equity
Shares (rateably with holders of Class B Equity Shares, Class D Equity Shares
and Class E Equity Shares) shall be entitled to receive the par value ($1.00)
of the Class C Shares, together with any declared but unpaid dividends thereon,
in priority to holders of Membership Shares upon the dissolution, liquidation
and winding up of Coast Capital.
Holders of Class C Equity Shares shall not
be entitled to any further distribution by Coast Capital
. Each series of
Class C Equity Shares, including the Class C Equity Shares Series 1 described
in this Disclosure Statement, shall rank
pari passu
with every other
series of Class C Equity Shares in regard to payment of dividends and the
distribution of assets in the event of liquidation, dissolution or winding-up. [Emphasis
added.]
[8]
At the time the Class C shares were issued, the legislative provisions relevant
to this appeal were contained in the
CCTA
and
FIA
. Sections 1(5)
and 7 of the
CCTA
read as follows:
1(5) Except as otherwise provided in this Act, for the
purpose of determining the carrying value of the assets of a financial
corporation, or any other amount relevant to the computation of a financial
corporation's B.C. paid up capital for a taxation year, the amounts that must
be used are the amounts reflected in the financial statements of the financial
corporation from the taxation year that have been
(a) prepared
in accordance with generally accepted accounting principles, and
(b) presented to the
shareholders of the financial corporation.
7(1) The aggregate paid up capital of a financial
corporation ... means the aggregate of the amounts, computed at the end of its
taxation year, of its
(a) capital stock,
(b) contributed surplus, and
(c) retained earnings
(2) For the purposes of
subsection (1),
the capital stock of a credit union does not include its non-equity
shares as defined by the
Financial Institutions Act
.
[Emphasis
added.]
[9]
The
FIA
defined equity share and non-equity share as follows:
1(1) In this Act and in the
Company Act
as it
applies for the purposes of this Act:
...
equity share means a share in a
credit union that represents an equity interest in a credit union;
...
non-equity share means a share
in a credit union that
(a)
evidences
indebtedness of the credit union to the holder of the share
, and
(b)
does not represent an
equity interest in the credit union
;
[Emphasis added.]
[10]
The evidence is unchallenged that the Class C shares issued pursuant to
the disclosure statement were shown as liabilities on Coast Capitals financial
statements treatment that, according to the credit unions external auditors,
accorded with GAAP. (Section 3861.11 of the CICA Handbook states that the
substance of a final instrument, rather than its legal form, governs its
classification on the issuers balance sheet and that some final instruments
take the legal form of equity but are liabilities in substance, and others may
combine features associated in equity instruments and features associated in
final liabilities.) In any event, the balance sheet treatment of the Class C
shares meant that, as noted by the chambers judge at para. 9 of his
reasons, the shares did not appear as any form of equity or share capital and
that the credit union did not include them in its computation of paid up
capital for
CCTA
purposes beginning in 2003.
[11]
The Minister seemed at first to have accepted this calculation, but in
July 2007, he issued revised notices of assessment for each of the years 2003-6
which increased the amount of Coast Capitals paid up capital by the aggregate
par value of the issued Class C shares. A senior tax auditor in the Ministers
department wrote in explanation to the credit union:
The
Corporation Capital Tax Act
(
CCTA
), in
subsection 7(2), specifically excludes non-equity shares from the tax base of a
Credit Union. The
CCTA
adopts the same meaning for non-equity shares as
is provided in the
Financial Institutions Act
(FIA).
With reference
to the FIAs
Capital Requirements Regulation,
shares with the
characteristics of the Class C Shares are considered equity shares
.
In addition, the Class C Shares constitute an
investment
in the Corporation
.
The intent behind the
CCTA
has been to
tax such capital.
Finally, the Corporation, in
their disclosure statement of May 6, 2003, described these shares as being
equity shares. [Emphasis added.]
[12]
The Vice-President Finance of Coast Capital responded by letter dated
September 10, 2007, relying heavily on the fact that GAAP required
presentation of the Class C shares as debt. He enclosed a memorandum of law prepared
by the credit unions solicitors. It is not in evidence, but the letter cited
Ford
Credit Canada Ltd. v. Her Majesty the Queen
2006 TCC 441, (
affd.
2007 FCA 225) in support of Coast Capitals position. In
Ford Credit
,
the Court had to determine whether the taxpayer was required by
s. 181.3(3) of the
Income Tax Act
to include the amount of certain redeemable
(i.e.,
redeemable at the companys option from time to time
) preferred
shares in its capital for purposes of the Large Corporations Tax. The tax was
assessed on the capital stock of a corporation and s. 181(3) of the Act contained
a provision similar to s. 1(5) of the
CCTA
quoted above (see
para. 8). The taxpayer adduced evidence from a chartered accountant to
the effect that under GAAP, substance prevails over form and that the salient
features of the shares justified their balance sheet treatment as debt rather
than capital stock.
[13]
Chief Justice Bowman said this about the interpretation of words used by
accountants in statutes:
Without subsection
181(3) the Class C special shares would be capital stock notwithstanding the
fact that as a matter of economic substance, accountants may treat them as
debt. It is true that undefined accounting concepts should generally be given a
meaning that accountants would assign to them:
Canfor Limited
v
.
Minister
of Finance for British Columbia,
[1976] C.T.C. 429 at 431; [1977] C.T.C.
269; [1978] 1 S.C.R. 1047;
Upper Lakes Shipping Ltd.
v.
M.N.R.,
[1998] 3 C.T.C. 281;
Reford v. M.N.R.,
71 DTC 5053. Nonetheless, the
principles stated in those cases do not, in the absence of specific statutory
direction, allow accounting treatment to prevail over the legal meaning of
words in the
Income Tax Act.
In other words, accounting concepts are to
be given in appropriate circumstances a meaning that is familiar to
accountants. This is not, however, the same as saying that if words have a
clear meaning in law, the fact that accountants may, on the substance over form
principle, treat them as having a different meaning, the legal meaning can be
ignored. If, however, Parliament wishes us to do just that, it is clearly
within its power to do so.
He allowed the taxpayers appeal, concluding that:
At all events we have here a balance sheet that is clearly
prepared in accordance with GAAP and the amount of the Class C special shares
is shown as debt (but not long-term debt as defined in section 181) not as
capital stock.
Mr. Erlichman has put forward every argument that is
available but I do not think, with respect, that he can overcome the fact that
Parliament has in this instance given a role to the accountants and to GAAP
that neither Parliament nor the courts have seen fit to do absent a specific
provision. Generally speaking the Canadian courts in tax matters show little
deference to GAAP (see
Ikea Limited v. The Queen
, 94 DTC 1112 (TCC), 96
DTC 6526 (FCA), 98 DTC 6092 (SCC). In Part I.3 they are required to do so. Mr.
Erlichman in paragraph 23 of his written argument said:
If the Court accepts that the Class C Special Shares are
excluded by operation of subsection 181(3) of the Act and that deference should
be given to accounting principles even when terms are not specific to
accounting, it is respectfully submitted that the effect would be to surrender
the determination of the fiscal base of the LCT to a non-elected group of
accountants.
This prospect may be a little
upsetting to lawyers and judges but I think that that is precisely what
Parliament has said should be done, and what this court and the Federal Court
of Appeal have done. [At paras. 23-5.].
[14]
In response to Coast Capitals letter and memorandum, the Ministry simply
acknowledged receipt of the notice of appeal, reminding the credit union that [t]ax
that has been assessed is payable even though a notice of objection is
submitted. The credit union duly complied, remitting approximately $1.9
million to the Province.
[15]
It was another year before Coast Capital received the Ministers substantive
response to its notice of appeal. In the meantime, the Legislature amended
s. 7(2) of the
CCTA
, retroactively to January 1, 2001: see s. 10
of the
Budget Measures Implementation Act, 2008,
S.B.C. 2008,
c. 10. The amended s. 7(2) now provided as follows:
7(2)
Despite subsection 1(5),
for the purposes of
subsection 1 of this section,
(a) subject to paragraph (b),
of the capital stock of a financial corporation
includes all shares in the
financial corporation
, and
(b) the capital stock of a credit union does not
include its non-equity shares as defined by the
Financial Institutions Act
.
[Emphasis added.]
Obviously, the insertion of
the phrase Despite section 1(5) meant that GAAP was no longer determinative
of the components of the capital stock of a credit union for purposes of the
CCTA
.
(Whether the amendment had the effect of making form prevail over substance
remains to be seen.) The amended paragraph (a) also clarified that a financial
corporations capital stock included all shares but this remained
subject
to
paragraph (b), the exception for non-equity shares. (The Minister
neglected to recognize this exception when he stated at para. 44 of his
factum that The Legislature, which sets taxes and regulates the provincial
budget closely, amended s. 7(2)(a) of the
CCTA
retroactively to
provide that the capital stock of a corporation includes all shares in the financial
corporation. The Legislature did not exempt the respondent, which would have
been unfair to other credit unions that had raised working capital by issuing
equity shares. With respect, this submission was inaccurate regarding Coast
Capitals position. It ignores the express exception to para. (a), and the
credit union was not relying on an exemption for itself, but on the exception
in s. 7(2)(b) for non-equity shares issued by any financial corporation, a
term defined to include a credit union.)
[16]
By letter dated September 17, 2008 to Coast Capital, the Minister
distinguished
Ford Credit
on the basis that GAAP was now irrelevant, and
continued:
... in the [
CCTA
], the legislature has provided
specific statutory meaning that must be taken into consideration when
determining which shares of a credit union are to be included in its capital
stock under the Act. Section 7(2) of the Act provides direction that the
legislature intended only those amounts representing shares that are considered
non-equity shares for regulatory purposes to be excluded from a credit
unions tax base.
It is the ministrys position that the Act specifically
adopted the FIA definition for non-equity shares for the exclusive purpose of
determining which shares of a credit union should be included in its tax base.
The
Capital Requirements Regulation to the FIA clearly provides that shares with
characteristics like those of the Class C shares are considered to be shares
which represent an equity interest in a credit union
. By specifically
adopting the meaning of a non-equity share in the FIA, as it relates to
credit unions, the legislature intended that the classification for regulatory
purposes be adopted for corporation capital tax purposes.
Furthermore, the Act was amended
in 2008 to clarify that, effective January 1, 2001, all shares of capital
stock, regardless of presentation as a liability or as shareholders equity on
the corporations balance sheet, must be included in capital stock for the
purposes of calculating B.C. paid up capital under the Act. Only non-equity
shares as defined by the FIA are excluded from the determination of a credit
unions B.C. paid-up capital. I understand that in a Disclosure Statement
regarding the proposed sale and issue of the Class C shares, and for regulatory
purposes, Coast Capital classified these shares as equity shares. Thus, I have
concluded that the inclusion of the Class C shares in the tax base for the
years under appeal was appropriate
.
[Emphasis added.]
[17]
The
FIA
, which is the regulatory statute referred to,
requires
that a financial institution maintain an adequate capital base in relation to
the business carried on by it. The
Capital Requirements Regulation
to
the
FIA
, B.C. Reg. No. 315/90, specifies the components of the capital
base of a financial institution, notably
excluding
non-equity shares of
a credit union (see s. 1(1))
and
redeemable shares unless the
redemption rights are restricted such that the financial institution is not
required under any circumstances to redeem shares of the particular class at a
rate of more that 10% of the issued and outstanding shares during any one-year
period (see s. 3(b)). Clearly, then, Coast Capitals Class C shares would
be excluded from the calculation of its capital base under the regulation on
one basis, if not both. The Minister did not pursue his argument based on the
regulation in Supreme Court or in this court.
[18]
In due course, Coast Capital exercised its right under s. 33(1) of
the
CCTA
to appeal the Ministers decision. The appeal was a new
hearing that was not limited to the evidence and issues already before the
Minister.
[19]
The Class C shares were duly redeemed by Coast Capital on their Maturity
Date in 2009.
The Chambers Judges
Reasons
[20]
Coast Capitals petition came on for hearing before Grauer J. on
September 11, 2009 and he issued his reasons on December 23, 2009. He
began his analysis by noting the two branches of the definition of non-equity
share in the
FIA
. He observed that the Minister was not disputing
that the Class C shares evidenced indebtedness of the credit union as required
by the first branch. (Para. 16.) When we questioned counsel on this
point, Mr. Dalmyn for the Minister told us that this concession had been
made by counsel below but that it had not been precise. We later requested
that counsel for the Minister clarify his position on the point and we received
written submissions from both parties. I will advert to those submissions near
the end of these reasons. In the court below, however, the Minister expressly
did not dispute that Coast Capitals Class C shares evidenced indebtedness on its
part. Thus the remaining issue, as formulated by Grauer J., turned on the
second branch of the definition:
... whether the Class C Shares
represent an equity interest in Coast Capital within the meaning of the second
branch of the definition of non-equity share set out in the
FIA
and
imported into the
CCTA
. [At para. 17.]
[21]
The chambers judge turned to the Ministers argument that since the
Class C shares had been referred to as Class C
Equity
shares (my
emphasis) in the disclosure statement (and, one might add, in Coast Capitals Rules),
they
could not
be non-equity shares for
CCTA
purposes. Grauer
J. rejected the credit unions response that the nomenclature ascribed to the shares
in the offering was irrelevant; but at the same time he accepted that
particularly in the taxation context, form must give way to substance, and
that how these shares were characterized in the disclosure statement is not, by
itself determinative of the issue. (Para. 22.)
[22]
The Court did not find persuasive the fact that deposits, a term
defined by s. 260 of the
FIA
to include money invested in
non-equity
shares, are insured by CUDIC whereas the offering memorandum had warned
investors, presumably in compliance with s. 60(3) of the
CUIA
, that the
Class C shares were
not
insured. Grauer J. stated:
... It follows, submits the respondent, that money invested
in Class C Shares cannot be money invested in non-equity shares as that term
is used in s. 260 of the
FIA
, so that non-equity shares cannot be
interpreted in a manner that would include the Class C Shares. I disagree.
Section 260, which appears in Part 9 of the
FIA
,
governing Deposit Insurance and Stabilization of Credit Unions, is not
concerned with defining non-equity shares. Moreover, the definition of non-equity
shares does not say that they are shares that qualify as deposits in
accordance with s. 260 of the
FIA
,
nor does it include a requirement
that non-equity shares be shares that are insured by the CUDIC, which easily
could have been stated if intended. There could be many reasons why the Class
C Shares are not insured by the CUDIC that have nothing to do with whether they
are equity or non-equity shares
.
With respect, the
respondent's
argument appears to be circular
. The question we are here considering is
this: do the Class C Shares in their substance represent an equity interest in
the credit union? That is the test that the legislature chose. It seems to me
that in order to succeed, the respondent must show that the words equity interest
in a credit union as employed in the second branch of the definition have some
special meaning, when construed contextually, different from their ordinary
meaning. Counsel for the respondent was unable, however, to point me to any
particular usage in the statutes framework that would support such an
approach. In particular
, there was nothing brought to my attention that
would require non-equity shares as defined to be construed as limited to a
particular type of historical non-equity share peculiar to credit unions. That
could have readily been specified if that was what was intended
. [Emphasis
added.]
The Court did not find it necessary to resolve these and
other apparent inconsistencies in the statutory provisions. In Grauer J.s words,
the fact remains that the Legislature has chosen a particular definition of
non-equity share for tax purposes, and it is that which concerns us.
(Para. 24.)
[23]
On the issue of whether the Class C shares represented an equity
interest in Coast Capital, the chambers judge noted
A. Valin Petroleums
Ltd. v. Imperial Oil Ltd.
2007 ABQB 134, (2007) 28 B.L.R. (4th) 60, where
the Court had stated:
The word equity is not ambiguous. It is a word of ordinary
use, particularly in the commercial context ....
Debt and equity are distinct
concepts
. Debt is a claim on the assets of the corporation and is created
when money is borrowed. With that arises an obligation on the corporation to
repay that money. Corporate equity, however, is comprised of the corporation's
total assets unencumbered by debt or other liabilities
.
It is the
residual economic interest in the corporations assets, after all outstanding
debts have been satisfied
. See C. Nicholls,
Corporate Finance and
Canadian Law
(Toronto: Carswell, 2000) at page 9. [At paras. 39-40;
emphasis added.]
Not surprisingly, Coast Capital argued that holders of
the Class C shares could not be said to have a residual economic interest in its
assets, given the fact they were all redeemable for their par value on the
Maturity Date in 2009, and holders were restricted to recovery of the par value
of their shares on a winding-up or dissolution.
[24]
The Ministers first argument in response was that the
CCTA, FIA
and
CUIA
all employ the term non-equity share and thus that the
Legislature must have intended that term to have the same meaning in each of
the three statutes. The chambers judge did not find this submission to be
particularly helpful: as he noted, [o]ne readily accepts that the phrase
non-equity shares means the same thing in all three statutes, as it is
defined precisely the same way in all three statutes. No presumption is
necessary. (Para. 33.)
[25]
On the question of residual interest, the Minister contended that a
shareholder who on dissolution is entitled to receive unpaid dividends and a
return of his or her investment, is considered to hold an equity interest in
accordance within the ordinary meaning of equity. The chambers judge noted
that no authority had been cited for this proposition and that the association
of such rights with non-equity shares in s. 260 of the
FIA,
the
application of GAAP, and the ordinary meaning of debt and equity all
suggested otherwise. He quoted a passage from Coast Capitals Rules which
provided for the rights of the various classes of its shares on winding-up. As
we have seen, these included the restriction that after payment to the holders
of the Class C Equity shares of the amounts so payable to them, they shall not
be entitled to share in any further distribution of the property or assets of
the Credit Union. There was nothing in the attributes of the Class C shares that
gave their holders the right to a residual or equity interest in Coast Capitals
assets. Thus, he concluded:
... given their fixed term, their fixed rate of return, their
lack of conversion rights, their entitlement to no more than the return of par
value plus the non-cumulative dividends of 6% per annum, and their ranking ahead
of those shareholders entitled to a residual interest,
they have all the
characteristics of instruments of indebtedness on the part of the credit union
to their holders, and nothing more.
For these reasons, I conclude
that Coast Capital's Class C Shares are shares in the credit union that (a)
evidence an indebtedness of the credit union to the holders of the shares, and
(b) do not represent an equity interest in the credit union. They therefore
meet the definition of non-equity share in the
CCTA
, imported from the
FIA
.
Just as a taxpayer cannot escape taxation by choosing a
non-taxable form to transact what is taxable in substance, the taxation
authority cannot take advantage of the taxpayer's use of a taxable form to
describe a transaction that in substance is non-taxable by the authority's own
statutory provisions
. [At paras. 46-7; emphasis added.]
[26]
In the result, the Court allowed Coast Capitals appeals from the
Ministers revised assessments for its 2003-6 taxation years and ordered the
Minister to refund the amounts paid by the credit union pursuant to the earlier
notices of revised assessment.
On
Appeal
Legislative Background
[27]
The Ministers submissions on appeal again rest largely on the thicket of
regulatory and tax statute that govern credit unions in this province, but do
necessitate a deeper analysis of the predecessor provisions as well as those
now in effect. The concept of non-equity shares was first introduced in this legislative
context in 1981 by the
Credit Union Amendment Act,
1981,
S.B.C.
1981, c. 3. Before then, the
Credit Union Act
, R.S.B.C. 1979,
c. 29, had simply provided in s. 33 that a credit union could issue
shares having a denomination of $1 each and that special rights or
restrictions could be attached to one or more classes. At least impliedly, a member
was required to own a minimum number of shares specified in the rules:
s. 25. Section 136 provided that money invested in shares of a credit
union was guaranteed by the provincial credit union share and deposit
guarantee fund. The Minister says that credit unions generally issued $1
nominal shares to members, but he provided no evidence as to what kinds of shares,
if any, were regarded by regulatory authorities as non-equity shares at that
time.
[28]
The
Credit Union Amendment Act
,
1981
defined equity
share as a share that was not guaranteed, and non-equity share as one that was
guaranteed, by what was then called the Provincial Credit Union Guarantee Fund
under Part 3 of the
Credit Union Act
. Equity shares were made subject
to various restrictions they could not, for example, be issued unless they
were fully paid up at par value (s. 33(6)); certificates representing
them were required to be marked NON-GUARANTEED (s. 33(8)); they could
not be redeemed if the redemption would reduce the credit unions statutory
reserve below a prescribed amount (s. 33.1(2)); and a credit union could
not give financial assistance to a member for the purchase of such shares
(s. 39.1(a)). The revised s. 34 of the
Credit Union Act
also
stated:
Conversion of existing shares
34. After June 25, 1975, each fully paid share of a
credit union issued under the former Act and
having a denomination of $5 is
converted into one fully paid non-equity share having a denomination of $1 for
each $1 that has been paid on it
and a part payment remaining on a share
having a denomination of $5 is a part payment on an additional non-equity share
having a denomination of $1. [Emphasis added.]
This provision replaced a similar one which had referred
to shares rather than non-equity shares, and on its face, it admits of no
exceptions. It is the only reference to any conversion of shares to
non-equity shares that I have been able to locate.
[29]
The distinction between equity and non-equity shares was carried forward
into the
CUIA
in 1989, which came into force the same year as the
FIA
.
However, as we have seen, the
CUIA
adopted by reference the definitions
of equity share and non-equity share in s. 1(1) of the new
FIA
.
For convenience, I set them out again below:
equity
share means a share in a credit union that represents an equity interest in a
credit union;
...
non-equity share means a share in a credit union that
(a) evidences
indebtedness of the credit union to the holder of the share, and
(b) does not represent an
equity interest in the credit union ...
As Grauer J. emphasized, this definition made no
reference to the question of guarantee by CUDIC, which insured deposits of credit
unions pursuant to s. 265 of the
FIA
. (The
FIA
at
s. 259 defined deposits to include money invested in non-equity shares
of a credit union. These provisions are now found at ss. 260 and 266(1)
of the
FIA
.)
[30]
Like its predecessor, the
CUIA
required that as a condition of
membership, a member purchase a minimum number of equity shares, also referred
to as membership shares. (Section 44). According to s. 64(2), equity
shares were transferable which the Class C shares were not and were subject
to many of the restrictions previously imposed by the
Credit Union Act
.
The
CUIA
did not provide for any conversion of shares issued under the
previous legislation. (Shares issued under rules of a credit union that
pre-dated the
CUIA
were not recognized as membership shares under the
CUIA
unless the rule under which they were issued mirrored s. 44(1) of the
CUIA
:
see
CUIA
, S.B.C. 1989, c. 23, at ss. 44(1)-(3).)
[31]
Sections 33 and 34 provided, and still provide, that on a winding-up of
a credit union, any assets remaining after the payment of liabilities be paid to
the holders of equity shares, or if none are outstanding, to CUDIC.
Presumably, this applies notwithstanding the particular label given by a
credit union to its classes of shares. If Coast Capital were being wound up,
for example, the holders of Class A Equity shares would have a valid complaint
if Class C shareholders were allowed to participate in the distribution of net
assets, since, as seen earlier, the holders of Class C shares are entitled only
to the return of their investment plus unpaid dividends. From this point of
view, one might conclude that the name given to these shares was in fact a misnomer.
Analysis:
Equity Interest?
[32]
The Ministers argument in this court seemed to have three prongs. The
first was not new: it was again contended that because the Class C shares were
called Class C
Equity
shares in Coast Capitals Rules and in the
offering memorandum, and were stated not to be guaranteed by CUDIC, the chambers
judge should have found they were equity shares for purposes of the
CCTA
.
Second, it was argued that the chambers judge should have applied a
contextual and purposive approach to statutory interpretation, which would
have led to the conclusion that non-equity share was intended to mean what counsel
for the Minister referred to as old-fashioned non-equity shares i.e.,
shares that were in existence prior to 1989 but were not required to be
converted into Class A Equity shares and, presumably, continued to be
guaranteed. Thus while the Minister acknowledged that the chambers judges
interpretation of equity interest in the definition of non-equity share was
plausible in an abstract way, he submits it was wrong in context. Third,
the Minister says the chambers judge allowed GAAP to prevail over the
relevant provisions describing non-equity shares in the
CUIA
and
FIA,
and that he erred in so doing.
[33]
It would appear to be common ground that Canadian courts interpret and
apply tax statutes based on the economic and legal substance of transactions
rather than the label attached by the taxpayer to the transaction in question.
Thus the Minister states at para. 18 of his factum:
The Courts apply tax statutes based on the
economic and legal substance of transactions
. The relevant legal
characteristics of a transaction are fixed and do not change for tax purposes.
In
Shell Canada Ltd. v. Canada,
[1999] 3 S.C.R. 622, McLachlin J., as
she then was, said that analysis based on economic realities was subject to a
caveat that
the taxpayers legal relationships must be respected
, and
that recharacterization of legal relationships:
39 ... is only permissible if the label attached by
the taxpayer to the particular transaction does not properly reflect its actual
legal effect:
Continental Bank Leasing Corp. v. Canada
[1998] 2
S.C.R. 298, at para. 21,
per
Bastarache J. [Emphasis added.]
[34]
The Minister also acknowledged that Driedgers modern approach to
statutory interpretation (which Driedger characterizes as a reconciliation of
three older rules of interpretation: see E.A. Driedger,
Construction of
Statutes
(2nd ed., 1983) at 81-7) now applies to taxation statutes with
equal force as it does to other statutes. The chambers judge was obviously
aware of this approach, as he cited several Canadian cases in which it has been
applied, including
Placer Dome Canada Ltd. v. Ontario (Minister of Finance)
2006 SCC 20, [2006] 1 S.C.R. 715. There the principle and its nuances in the
taxation context were described by LeBel J. for the Court:
In
Stubart Investments Ltd. v. The Queen,
[1984] 1
S.C.R. 536, this Court rejected the strict approach to the construction of
taxation statutes and held that the modern approach applies to taxation
statutes no less than it does to other statutes. That is,
the words
of an Act are to be read in their entire context and in their grammatical and
ordinary sense harmoniously with the scheme of the Act, the object of the Act,
and the intention of Parliament
(p. 578): see
65302 British
Columbia Ltd. v. Canada,
[1999] 3 S.C.R. 804, at para. 50. However,
because of the degree of precision and detail characteristic of many tax
provisions,
a greater emphasis has often been placed on textual
interpretation where taxation statutes are concerned
:
Canada Trustco
Mortgage Co. v. Canada,
[2005] 2 S.C.R. 601, 2005 SCC 54, at para.
11. Taxpayers are entitled to rely on the clear meaning of taxation
provisions in structuring their affairs.
Where the words of a statute
are precise and unequivocal, those words will play a dominant role in the
interpretive process.
On the other hand, where the words of a statute give rise to
more than one reasonable interpretation, the ordinary meaning of words will
play a lesser role
,
and greater recourse to the context and purpose of
the Act may be necessary:
Canada Trustco
, at para. 10. Moreover,
as McLachlin C.J. noted at para. 47, [e]ven where the meaning of particular
provisions may not appear to be ambiguous at first glance, statutory context
and purpose may reveal or resolve latent ambiguities. The Chief Justice
went on to explain that in order to resolve explicit and latent ambiguities in
taxation legislation,
the courts must undertake a unified textual,
contextual and purposive approach to statutory interpretation
.
The interpretive approach is thus
informed by the level of precision and clarity with which a taxing provision is
drafted. Where such a provision admits of no ambiguity in its meaning or
in its application to the facts, it must simply be applied.
Reference
to the purpose of the provision cannot be used to create an unexpressed
exception to clear language
: see P. W. Hogg, J. E. Magee and J. Li,
Principles
of Canadian Income Tax Law
(5th ed. 2005), at p. 569;
Shell Canada Ltd.
v. Canada,
[1999] 3 S.C.R. 622. [At paras. 21-3; emphasis added.]
[35]
In my view, the chambers judge clearly strove to give effect to the legal
substance or actual legal effect of the Class C shares. He correctly
concluded that neither the nomenclature of the Class C Equity shares (which
of course Coast Capital could change by amending its Rules) nor the fact they
were stated not guaranteed by CUDIC was determinative of whether they came
within the definition in the
FIA
. I agree with him that if the
Legislature had intended that the phrase non-equity share was to be
restricted to shares that carried or did not carry a guarantee it would have
been an easy matter to so state. (In fact, the legislation did so from 1981 to
1989, when it was amended. Presumably, a change from this circular approach
was intended.) Similarly, if it had been intended that the definition of the
shares was to refer to an historic class of shares that existed under
previous legislation, that could also have been specified. As it is, however, there
is simply no basis for construing non-equity share
as defined in
s. 1(1) of the
FIA
as referring to some very specific type
of share that the Minister was unable to define and that seems to have been
obsolete even before the
FIA
definition was enacted.
[36]
Nor can I agree that the chambers judge fell into the error of allowing GAAP
to prevail over the relevant statutory provisions. He was obviously
cognizant of the 2008 revision which made GAAP no longer determinative of the
components of the capital stock of a credit union for purposes of the
CCTA
.
This made it necessary to interpret the term non-equity share in its
grammatical and ordinary sense harmoniously with the scheme and object of the
statute, as described in
Placer Dome.
In connection with the object of
the Act and the intention of the Legislature, it was not enough in my view for
the Minister to say that the Legislature clearly decided not to extend special
treatment to working capital raised by credit unions by issuing redeemable preferred
shares. The definition makes no reference to redeemable preferred shares and
nothing in the statutory context suggests that the definition should be thus
constrained. The Legislature clearly
did
intend to exempt from the
capital stock of a credit union those shares that satisfied the two branches of
the definition in the
FIA
no more and no less.
[37]
The chambers judge did not find any ambiguity, patent or otherwise, in
construing the definition of non-equity share in the
FIA
. As we have
seen, he referred to the ordinary meaning of equity with reference to the
rights and restrictions attached to the Class C shares under Coast Capitals
Rules. Contrary to a suggestion made by the Minister in his factum, he
regarded equity shares and non-equity shares as mutually exclusive, reasoning
that since the Class C shares did not represent a residual interest in Coast
Capital, they could not be regarded as equity shares within the meaning of
the statute.
[38]
The Minister has not pointed us to any contextual factor, case law or
other authority that calls into question the principle that in its ordinary and
grammatical sense, equity refers to a residual interest in the corporate body
in question (and that conversely, a non-equity share is one that does
not
participate in the residue). Grauer J.s interpretation is consistent with various
dictionary definitions of equity, and with longstanding judicial authority.
Jowitts
Dictionary of English Law
(2nd ed., 1977), for example, defines equity
share capital as issued share capital excluding any part thereof which,
neither as respects dividends nor as respects capital, carries any right to
participate beyond a specified amount in a distribution.
Palmers Company
Law
(25th ed., 1992) similarly states that equity share capital is an
accounting term that includes issued share capital except shares limited to a
specific amount as regards dividends and capital (para. 4012). In
Canadian
Business Corporations Law
(2nd ed., 2007), K.P. McGuinness writes that Common
shares are often referred to as equity shares because they are entitled to
the equity of the company, that is the residue remaining after the payment of
all profits after all prior claims, such as loan interest and preference
dividends and capital after repayment of all prior claims as to capital, such
as tax, creditors, loan capital, and (generally) preference shares. (At
373-4.)
[39]
Unless the restrictions attached to the Class C shares were a sham
(which the Minister did not assert), then, it is clear that these shares, which
were restricted to a 6% non-cumulative dividend and to the amount paid up
thereon on the winding-up or dissolution of the credit union, did not represent
an equity interest in the ordinary meaning of the term. It follows in my view that
the second branch of the statutory definition was met.
Evidence
of Indebtedness?
[40]
I return finally to the first branch of the definition the requirement
that the shares evidence indebtedness of the credit union to the shareholder. In
his written response to our request for clarification of the Ministers
position, Mr. Dalmyn recounted the positions taken below by the Minister
and Coast Capital. He stated that the Minister was
not
withdrawing his
admission that the Class C shares were debt shares
under GAAP
(my
emphasis) and that counsel for the Minister below (not counsel in this court)
agrees that the chambers judge fairly interpreted the Provinces position
when he stated that the Minister did not dispute that the Class C shares
evidenced indebtedness of the credit union without more. At the same time,
Mr. Dalmyn wrote that in
this
court, the Minister had argued the Class C
shares did not evidence indebtedness prior to redemption in 2009 an argument
that, with respect, was not in the Ministers factum or counsels oral
argument. Nor did the Minister provide a substantive argument on the question of
indebtedness in his clarifying letter. Mr. Dalmyns letter stated:
The Provinces Written Submissions were delivered after the
record was complete, a few days before the hearing. There is no suggestion that
the Respondent expected this concession or relied on it in the sense that it
failed to present evidence. The Province submits that there is no prejudice to
the Respondent, as no further evidence could have shed any light on the point.
There is no suggestion that learned counsel for Coast Capital failed to
consider the issues. Indeed, he had presented a thorough Written Submission to
supplement his detailed Outline.
The Province submits that it has
presented an argument on a question of law, involving the interpretation of the
Disclosure Statement, the
Credit Union Incorporation Act
, the
FIA
and the
CCTA
. The Province submits that its arguments in this Court have
been properly raised on the record, and involve elaboration or supplementary
argument to arguments advanced in the Court below and this Court.
[41]
Having given the Minister an opportunity to argue the point, and no
substantive submission having been received, I would in normal circumstances
decide the appeal on the basis that the point was well and truly conceded below
and cannot now be asserted in this court. As Mr. Cowper noted in his
responding submission, this court has warned in the past that A litigant who
deliberately adopts, for whatever reason, a position in the court below, must
live with it in this Court. (
Per
Southin J.A. in
Protection Mutual
Insurance Co. v. Beaumont
(1991) 58 B.C.L.R. (2d) 290 at para. 26,
Armstrong
v. North West Life Insurance Co. of Canada
(1990) 48 B.C.L.R. (2d) 131
(C.A.), at 134.) However, we are concerned here with a taxing statute (albeit
one that is no longer in force), and the issue may be of importance to persons
other than the parties. We are not bound by a concession on a point of law:
see
M v. H
[1999] 2 S.C.R. 3 at para. 45;
Ocean Port Hotel Ltd. v.
British Columbia (General Manager, Liquor Control and Licensing Branch)
[2001]
2 S.C.R. 781 at 44. In my view, we should carry out our own analysis on the
point.
[42]
The possibility that shares may be of a hybrid nature was discussed by
the Supreme Court of Canada in
Canada Deposit Insurance Corp. v. Canadian
Commercial Bank
[1992] 3 S.C.R. 558, where the question was whether funds
advanced by the respondents to the Canadian Commercial Bank, then in a solvency
crisis, had been an investment of capital or a loan (in which latter event
the respondents were entitled to be paid out by the liquidator pursuant to the
Winding-up
Act
, R.S.C. 1985, c. W-11.) The Court held on an examination of the terms
of the parties Participation Agreement and the surrounding circumstances
that the advance was, in substance, a loan rather than an investment of
capital. (At 598.) In reaching this conclusion, Iacobucci J. for the Court
said this about the co-existence of the debt and equity aspects of the transaction:
As I see it, the fact that the
transaction contains both debt and equity features does not, in itself, pose an
insurmountable obstacle to characterizing the advance of $255 million. Instead
of trying to pigeonhole the entire agreement between the Participants and CCB
in one of two categories, I see nothing wrong in recognizing the arrangement
for what it is, namely, one of a hybrid nature, combining elements of both debt
and equity but which, in substance, reflects a debtor-creditor relationship.
Financial and capital markets have been most creative in the variety of
investments and securities that have been fashioned to meet the needs and
interests of those who participate in those markets. It is not because an
agreement has certain equity features that a court must either ignore these
features as if they did not exist or characterize the transaction on the whole
as an investment. There is an alternative. It is permissible, and often
required, or desirable, for debt and equity to co-exist in a given financial
transaction without altering the substance of the agreement. Furthermore, it
does not follow that each and every aspect of such an agreement must be given
the exact same weight when addressing a characterization issue. Again, it is
not because there are equity features that it is necessarily an investment in
capital. This is particularly true when, as here, the equity features are
nothing more than supplementary to and not definitive of the essence of the
transaction. When a court is searching for the
substance
of a particular
transaction, it should not too easily be distracted by aspects which are, in
reality, only incidental or secondary in nature to the main thrust of the
agreement. [At 590-91.]
[43]
In
Re Central Capital Corp.
(1996) 27 O.R. (3d) 494, the Ontario
Court of Appeal split on the question of whether the holders of certain
redeemable preferred shares in Central Capital Corp. (CCC) had a provable
claim against CCC under the
Companies Creditors Arrangement Act
.
Evidently, some of the preferred shares entitled their holders to retract them
at $25 per share on July 1, 1992, while other series of the shares entitled the
holders to retract them on or after September 1994 for $1 per share, subject to
the provisions of the
Canada Business Corporations Act
(
CBCA
).
Section 36(2) of the
CBCA
codified the common law prohibition on the
redemption of shares of a corporation when it was insolvent or where the
redemption would render the corporation insolvent.
[44]
CCC became insolvent in late 1991 and
CCAA
proceedings were
commenced in early 1992. A plan was devised under which certain creditors
would exchange part of their claims for shares and debentures of a new
corporation (Newco) and creditors of CCC would receive 90% of the common
shares in a reorganized CCC. To participate as a creditor in the
reorganization, s. 12(1) of the
CCAA
required that a person have a
claim provable in bankruptcy. Section 121(1) of the
Bankruptcy and
Insolvency Act
(
BIA
) stated that all debts and liabilities,
present or future, were deemed to be provable claims.
[45]
M, the holder of redeemable retractable preferred shares, purported to
exercise his right of retraction in April and May of 1992, but CCC did not
redeem the shares, and obviously could not do so legally. M subsequently sought
to file a proof of claim. In September 1992, SYH, the holder of the series
of preferred shares that were to be retractable in September 1994, also filed a
proof of claim. Both claims were disallowed by the court-appointed administrator
on the basis that it would be contrary to the
CBCA
for CCC to redeem the
shares given its insolvent position, and in the case of SYHs shares, given also
that the date for redemption had not yet arrived. The lower court upheld the administrators
decision, ruling that M and SYH were not creditors because they did not have
claims provable under the
BIA
.
[46]
On appeal, the majority of the Court affirmed the lower court, with Finlayson
J.A. dissenting. Weiler J.A. and Laskin J.A. wrote separate concurring reasons.
[47]
Weiler J.A. noted that the two shareholder groups in question had agreed
that the effect of s. 36(1) of the
CBCA
was to render the
agreement (i.e., the agreement in the articles of the corporation between it
and its shareholders) to redeem the shares unenforceable. She rejected the
notion, based on a 1989 decision of this court (
Re East Chilliwack
Agricultural Cooperative
(1989) 74 C.B.R. (N.S.) 1, 58 D.L.R. (4th) 11)
that the
CBCA
did not extinguish the debt or liability said to have been
created on Ms purported attempt to redeem his shares. In her analysis:
Here, the effect of Central
Capital's inability to redeem its shares due to insolvency is very much in
issue and cannot be ignored. Although the articles provide for the redemption
of all of the shares held by [M] and SYH on or after the retraction date, the
articles also state that Central Capital will only redeem so many of its shares
as would not be contrary to law. Pursuant to s. 36(1) of the
CBCA
, a
corporation may purchase or redeem redeemable shares, but the corporation is
prohibited from doing so if the corporation is unable to pay its liabilities as
they become due or if the assets of the corporation are less than the total of
its liabilities and the amount required for the redemption. Because Central
Capital could not comply with the solvency requirements, redemption would be contrary
to law. [At 525-26.]
[48]
Weiler J.A. also noted that there was nothing in CCCs articles to
support the idea that once a shareholder had requested the redemption of his
shares, he or she ceased to have status as a shareholder. In the alternative,
even if she were wrong that the true nature of the transactions relationship
to the capital structure was one of equity, and even if one adopted a broad
view of the meaning of debt or liability, she considered that CCCs
obligation to redeem the shares did not give M and SYH claims provable in bankruptcy.
In her analysis:
Here, the contract to repurchase
the shares, while perfectly valid, is without effect to the extent that there
is a conflict between the corporation's promise to redeem the shares and its
statutory obligation under s. 36 of the
CBCA
not to reduce its capital
where it is insolvent. As was the case in the
Holowach
decision,
this
statutory overlay renders Central Capital's promise to redeem the appellants'
preferred shares unenforceable
. Although there is a right to receive
payment, the effect of the solvency provision of the
CBCA
means that
there
is no right to enforce payment. Inasmuch as there is no right to enforce
payment, the promise is not one which can be proved as a claim
. [At 533; emphasis
added.]
[49]
Laskin J.A., concurring, acknowledged that redeemable or retractable
preferred shares are somewhat different from conventional equity capital, in
that the right of retraction appears to be a basic characteristic of a debtor-creditor
relationship. (At 536.) This being the case, the Court had to determine the
substance of the relationship between the shareholder and the CCC, as
indicated by
Canada Deposit Insurance Corp., supra
. On an examination
of the Articles of CCC and the share purchase agreements, he noted that the shareholders
had agreed to take preferred shares instead of typical debt instruments such as
bonds or debentures; that the shares were recorded in CCCs financial
statements as capital stock; that the holders continued to be entitled to
receive dividends on their shares and to vote for the election of directors,
both of which were well recognized rights of shareholders; that these rights
continued until the shares were in fact redeemed; and that on a liquidation or
winding-up, the holders ranked with other shareholders and therefore,
implicitly, behind creditors. Laskin J.A. continued:
It seems to me that these
appellants must be either shareholders or creditors. Except for declared
dividends, they cannot be both. Once they are characterized as shareholders,
their rights of retraction do not create a debtor-creditor relationship. These
rights enable them to call for the repayment of their capital on a specific
date (and at an agreed-upon price) provided the company is solvent. Ordinarily
shareholders have to recoup their investment by selling their shares to third
parties. If they have retraction rights, however, they can compel the company
(if solvent) to repay their investment at a given time for a given price. But
the right of retraction provides for the return of capital not for the
repayment of a loan. Certainly the [
CBCA
] treats a redemption of shares
as a return of capital because s. 39 of the statute requires a company on a
redemption to deduct from its stated capital account an amount equal to the
value of the shares redeemed. The shares redeemed are then either cancelled or
returned to the status of authorized but unissued shares. [At 540.]
Laskin J.A. also declined to follow
Re East
Chilliwack,
which he noted was distinguishable in any event. After referring
to some U.S. case law considering the rights of shareholders in the event of
insolvency, he concluded that M and SYH were in substance not creditors and
that neither the existence nor the purported exercise of their retraction
rights had turned them into creditors.
[50]
Finlayson J.A. in dissent was also concerned with the substance of the
transaction that had led to the issuance of the shares in question. In his
analysis, the retraction clauses attached to the shares were promises by CCC
to pay fixed amounts on definite dates to the shareholders and evidenced a debt
to them. (At 512.) He continued:
I have no difficulty in finding that the appellants
preferred shares with their retraction clauses are of a hybrid nature,
combining elements of both debt and equity. As to the equity component, the
appellants are shareholders prior to exercising their retraction rights in that
they have the right to vote in certain circumstances and have a right to
receive dividends when and if they are declared by the board of directors. The
debt component is more significant however. The shares were not issued to
investors, but to vendors of property. The vendors were entitled to receive a
fixed sum at a specified time in payment therefor. Pending payment, the vendors
were entitled to receive dividends which were the equivalent of interest on the
unpaid balance.
I can think of no reason why the
holders of these preferred shares should not be treated as both shareholders
and creditors. It does not concern me that these appellants act as shareholders
before their retraction rights are exercisable. Nor do I see any hardship to
other creditors of Central Capital arising from the ability of these appellants
to claim as creditors in the restructuring of the company given that the
appellants are unpaid with respect to substantial assets sold to the
corporation and now transferred on the restructuring to [Newco]. [At 513.]
[51]
Finlayson J.A. rejected the proposition that because the
CBCA
(like
the common law) precluded CCC from redeeming shares when it was insolvent, the
preferred shareholders could not be said to have a provable claim. He reasoned
as follows:
... regarding the insolvency
argument, these various statutes prohibit payments of any kind to shareholders
by an insolvent company. As I understand it, counsel does not question that
when a dividend has been lawfully declared by a corporation, it is a debt of
the corporation and each shareholder is entitled to sue the corporation for his
proportion: see
Fraser
and
Stewart
,
supra
, at p. 220 for a
list of authorities. However, once a company is insolvent it cannot make
payments to shareholders or creditors so long as it continues to be insolvent.
On the other hand, nowhere in the
CBCA
or elsewhere will we find authority
for the proposition that once a corporation is insolvent, it is no longer
obliged to pay its debts. The obligation is postponed until the insolvency is
corrected or the corporation makes an accommodation with its creditors and
obtains a release with or without the assistance of the various statutes
dealing with insolvency. [At 516.]
[52]
Finally, Finlayson J.A. also rejected the argument that because the
preferred shares were not eligible for redemption or retraction as at the date
of the stay order under the
CCAA
, they did not come within the broad
umbrella of debts and liabilities, present and future, to which [the
corporation] is subject. In his analysis, this fact did not mean that they
were not provable claims under s. 121 of the
BIA,
and the stay
order did not purport to extinguish the debt created by the retraction clause,
even if the debt was payable on a future date. (At 516-17.)
[53]
We are of course not concerned with bankruptcy or insolvency in the case
at bar, nor with an unenforceable obligation; nor are we required to
characterize the Class C shares as anything other than shares. Clearly, they are
shares. Our task here is less difficult than those facing the Court in
Re
Central Capital
, since the
FIA
expressly contemplates shares that
contain debt features. We need only determine whether the Class C shares
evidence indebtedness of Coast Capital to its shareholders.
[54]
The term indebtedness and its root debt may be used narrowly or
broadly. Thus whether they appear in the
BIA
(
Interclaim Holdings v.
Down
2001 BCCA 65 at paras. 29-32), the
Companies Creditors Arrangement
Act
(
Re Canadian Airlines Corp.
(2001) 92 Alta. L.R. (3d) 140 at
paras. 20-27), the
Treaties of Peace Act
, S.C. 1919 (2nd sess.), c. 30, (
The
Custodian v. Passavant
[1928] S.C.R. 242 at 249-54), or the
Court Order
Enforcement Act
, (
Taxsave Consultants Ltd. v. Pacific Lamp Corp.
(1990)
52 B.C.L.R. (2d) 128 at 132-33) to name but a few, they will be given meaning
consistent with their context: see
Barrette v. Crabtree Estate
[1993] 1
S.C.R. 1027 at 1048-9.
[55]
As Weiler J.A. noted in
Central Capital Corp., supra, Blacks Law
Dictionary
(6th ed., 1990) offers three different definitions as follows:
A sum of money due by certain and express agreement.
A
specified sum of money owing to one person from another
, including not only
the obligation of debtor to pay but right of creditor to receive and enforce
payment ...
A
fixed and certain obligation
to pay money or some other valuable thing or things, either in the present or
in the future. In a still more general sense, that which is due from one person
to another
, whether money, goods or services. In a broad sense, any duty to
respond to another in money, labor, or service; it may even mean a moral or
honourary obligation, unenforceable by legal action. Also, sometimes an
aggregate of separate debts, or the total sum of existing claims against person
or company. Thus we speak of the national debt, the bonded debt of a
corporation, etc. [Emphasis added.]
[56]
The obligation of Coast Capital to pay to its Class C shareholders the
par value of the shares on the Maturity Date in 2009 was clearly an obligation
to pay a sum of money due, and was enforceable by the shareholders on or after
that date. Until then, the obligation was in the future. Counsel for the
Minister seemed to suggest in passing in his letter of December 14, 2010 that the
Class C shares did not represent indebtedness of the credit union prior to the
Maturity Date, although they may have done so from and after June 27, 2009. This
submission depends on a narrow construction that restricts debt to an
obligation that is due and owing unconditionally.
[57]
It seems to me that if we were to so interpret indebtedness, we would
be restricting the scope of non-equity shares almost out of existence. It is
difficult to imagine how even the most debt-like share could be said to
evidence indebtedness given that it is almost impossible to conjure up a share
that would not require that a condition of some kind be met before the
obligation to redeem becomes enforceable. Further, it seems to me that interpreting
indebted in the ordinary and grammatical sense of the word, most reasonable
people would agree, for example, that a mortgagor whose mortgage becomes due
ten years from now is nevertheless indebted to the mortgagee and would be
required to disclose the mortgage if he or she were asked to list his debts. On
balance, then, I am not persuaded that on a proper application of the modern
approach to statutory interpretation, we should confine indebtedness to
indebtedness that is due and owing unconditionally. Rather, I would be content
to adopt the definition of debt that appears in numerous Canadian and English
cases, namely:
A debt is defined to be a sum of
money which is certainly, and at all events, payable without regard to the fact
whether it be payable now or at a future time.
(See also
Mail Printing Co. v. Clarkson
(1898) 25
O.A.R. 1 at 9 (C.A.);
Enterprise Capital Management Inc. v. Semi-Tech Corp.
(1999) 10 C.B.R. (4th) 133 (Ont. S.C.J.);
Dyadic Industries International
Ltd. v. Award Cleaners Ltd.
(1996) 114 Man.R. (2d) 193 (Q.B.) at para. 15;
see also
Mortimore v. Inland Revenue Commissioners
(1864) 33 L.J. Ex.
263;
Tapp v. Jones
(1875) L.R. 10 Q.B. 591;
P. Lyall & Sons
Construction Co. Ltd. (In Liquidation) v. Baker, et al.
[1933] 21 O.R. 286
(C.A.);
Webb v. Stenton
(1883) 11 Q.B.D. 518 at 527;
Barsi v. Farcas
[1924]
1 D.L.R. 1154 (Sask. C.A.);
Souris Credit Union Ltd. v. MacDonald
(1986)
61 Nfld. & P.E.I.R. 1 (P.E.I.S.C., Gen. Div.).
[58]
Accordingly, even in the absence of the Ministers concession, I would conclude
that the Class C shares issued by Coast Capital did evidence indebtedness to
their holders and that the first branch of the statutory definition was also
met.
[59]
I would dismiss the appeal.
The
Honourable Madam Justice Newbury
I agree:
The
Honourable Madam Justice Ryan
I agree:
The Honourable Mr. Justice
Hinkson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Shields v. GetSet Communications Inc.,
2011 BCCA 34
Date: 20110125
Docket: CA038366
Between:
Mike Shields and
Cost Plus Computer Solutions Ltd.
Appellants
(Plaintiffs)
And
GetSet Communications
Inc., Sattler, Gail Sattler, Randy Christie
Respondents
(Defendants)
Before:
The Honourable Mr. Justice Low
The Honourable Mr. Justice Chiasson
The Honourable Madam Justice Bennett
On appeal from: Supreme
Court of British Columbia, July 15, 2010
(
Shields v. GetSet Communications Inc.
, Vancouver Docket No. S082140)
Oral Reasons for Judgment
Appellant appearing In Person:
M. Shields
Counsel for the Respondent:
R. Cuddeford
Place and Date of Hearing:
Vancouver, British
Columbia
January 20, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 25, 2010
[1]
LOW J.A.
: The appellants were plaintiffs in an unsuccessful
action in contract against the four defendants. The appellants brought an
application for summary trial judgment under the former Rule 18A which resulted
in an order made by Mr. Justice Rice dismissing the action.
[2]
The respondent, GetSet Communications Inc. (GetSet), is a company that
designed and hosted websites. The individual defendants owned or worked for
GetSet.
[3]
In 2004, the appellant Mike Shields, on behalf of the appellant company,
approached GetSet to work on developing a website named OnlineOffice. This
resulted in a Memorandum of Understanding dated 19 October 2004. That document
provided that GetSet would be paid half its fees in cash and the other half,
after completion of the website, in the form of shares in the appellant company.
[4]
It appears from the affidavit evidence that some work was done on the
website for which the appellants paid GetSet the sum of $7,181.04. However, the
project was never completed because the business relationship between the
parties broke down around the middle of 2005. Before that occurred, however,
Mr. Shields did work for GetSet on a commission basis. Part of the claim of the
appellants arises out of that second business relationship.
[5]
The statement of claim filed by Mr. Shields is a rambling document with
a predominantly evidentiary flavour. It does not plead facts in the ordinary
manner and does not clearly plead the legal basis on which damages are sought. However,
one can deduce from reading it that the claim is in contract, and on the
evidence presented, the amounts claimed arise out of the breakdown of the
contractual relationship that existed between the parties in the two areas I
have identified.
[6]
There is also a pleading that in February 2005 there was an agreement
among the appellant Mike Shields and the respondents Tim Sattler and Randy
Christie that they would each become one-third shareholders in GetSet. This has
been referred to as a partnership agreement but it might be more accurate to
describe it as a share-purchase agreement.
[7]
In the statement of claim, the appellants claimed the following:
1.
refund of
the $7,081.04 paid to GetSet for work on the website that was not completed;
2.
reimbursement
of $21,795.90 for certain advances made by the appellants to staff members or
contractors employed or retained by GetSet;$750 for purchase of a computer;
3.
$750 for
purchase of a computer;
4.
refund of
$500 for establishing an alternate office location;
5.
payment of
one-third commission of sales made by Mr. Shields on behalf of GetSet from
February to August 2005 in the net amount of $11,322.67;
6.
payment of
a one-third commission for web hosting contract revenue during the same period
and later calculated at $7,200;
7.
the sum of $20,833 as would be reasonable for Mr. Shields success in
preserving GetSet and/or Victory Communication corporate viability.
[8]
Item 7 apparently was a claim for damages for breach of the
share-purchase agreement.
[9]
In addition, the statement of claim sought punitive damages for
non-performance of the website development contract and for non-performance
of the February 8, 2005 agreement and/or of subsequent agreements, the latter
also referring to the share-purchase agreement.
[10]
The summary trial judge dismissed all claims on the basis that none was
supported by the evidence.
[11]
Notwithstanding the fact that they brought the R. 18A application, the
appellants contended in their factum that, because of credibility issues, this
case was not suitable for disposition under Rule 18A on a summary basis and the
order dismissing the action should be set aside accordingly. Nevertheless, they
also sought judgment in their favour expressed in Part 4 of their factum as
follows:
A judgment in
favor of the Plaintiff be rendered pursuant to Rule 18A with regard to one or
more of his breach of [website development] contract claim for $7,181.04 and/or
his breach of partnership claim in the amount of $1 and/or his breach of
commissions earned claim. With regard to the latter, plaintiff seeks access to
defendant financial records for the period March-August 2005 to calculate gross
sales -- however if all court ordered amounts are paid without delay will
alternatively accept the agreed upon commission rate of 33% times the sales
specifically documented by the email evidence [$18,750 + $2232 +$650 = $21,632
x 33%] less $3677.33 paid = $3461.23.
[12]
At the hearing of the appeal, the appellants did
not pursue the argument that the action was not suitable for summary
disposition. They do not seek a new trial.
[13]
In their statement of defence, the respondents pleaded that the
Memorandum of Understanding did not amount to a contract; that there was no
further agreement reached between the parties with respect to the website the
appellants wanted; that Mr. Shields was provided with work space by GetSet in
order to work on the website; that there was an agreement for Mr. Shields to
work in a commission sales position with his remuneration therefrom to retire
the outstanding debt owed by the corporate appellant to GetSet; that Mr.
Shields had no authority to incur expenses on behalf of GetSet; and that
certain named persons were hired by Mr. Shields for the benefit of the
corporate plaintiff and were neither employees of nor contractors with GetSet. It
is at least implicit in this pleading that GetSet received from the appellants
only what it had earned for its work on the website project and that Mr.
Shields was paid all commissions he earned.
[14]
There was no counterclaim.
[15]
At trial, Mr. Shields presented his own affidavits that recite the
dealings between the parties over the period of time in question. Exhibited to
the affidavits are a number of documents, mostly emails that passed between the
parties. Although detailed, the affidavits are not as clear with respect to the
facts asserted as they might have been but some facts are implicit as to what
did and did not occur.
[16]
The respondents filed affidavits sworn by Tim Sattler and Randy Christie.
No documents are attached. The thrust of Mr. Sattlers affidavit is that GetSet
was entitled to retain the monies it was paid for its work on the website and
that there was no more than discussion on the part of Mr. Shields with respect
to the future ownership of GetSet. He acknowledged that Mr. Shields worked for
GetSet on a commission basis but did not recall how much business he brought in.
He provided answers to some of the particular assertions of fact in Mr.
Shields evidence but had no recollection with respect to some matters. He
provided no accounting from GetSets financial records of business generated by
Mr. Shields, commissions earned by him or payments made to him. Gail Sattler,
his wife, was the bookkeeper for GetSet but she did not give evidence.
[17]
Randy Christie swore an affidavit in which he provided answers to some
of the specific assertions of fact made by Mr. Shields, none of which is of any
importance to the issue remaining on appeal. His evidence does not directly
address the matter of him being involved in purchasing the equity of GetSet,
but the thrust of his evidence is that he did not pay much attention to things
said by Mr. Shields and did not want a business relationship with him. Mr.
Christie was not an employee of GetSet but an independent contractor.
[18]
If my addition is correct, the amounts sought in the
statement of claim and at trial total $69,482.61, not including punitive
damages. On appeal, the appellants limit the claim to the following:
(a) return of
the sum of $7,181.04 paid to GetSet for development work on the website;
(b) nominal
damages of $1 for breach of the alleged share purchase agreement; and
(c) $3,461.23 for commissions owing.
Memorandum of Understanding
[19]
Mr. Shields contends that the trial judge erred in not finding that
GetSet had to reimburse the sum of $7,181.04 it received for the partial
development of the OnlineOffice website. This issue involves interpretation of
the Memorandum of Understanding of 19 October 2004.
[20]
With respect to this issue, the trial judge said this:
[14]
Now
Mr. Shields wants what he says is a refund for monies paid to the defendant for
work supposedly performed prior to December 31, 2004. There is no contention
that that money was not paid. On the other hand, there is no contention that
work approximating that value subject to completion of the website, was ever
paid. If it was paid, then the issue is whether there was the failure to
perform for the work needed to complete the website. That is not in evidence
anywhere, and without that evidence I am unable to conclude that any payment
was made in excess of what was owed.
[21]
It seems to me the judge did not directly address the issue because he
did not provide an interpretation of the Memorandum of Understanding. However,
my interpretation of that agreement is that GetSet was entitled to be paid for
the work it performed. There is no evidence that the corporate appellant did
not receive value for that work.
[22]
The memorandum is between the corporate appellant and the corporate
respondent. The document states as its purpose the development of the
OnlineOffice.com website as set out in certain identified specifications. Hourly
billing rates are specified to be in accordance with an attached schedule. Payment
is to be half in cash and half in shares in OnlineOffice.com Inc., the shares
to be priced at 25 cents per share and to be deemed earned and payable
only
upon the launch of a functioning OnlineOffice.com website. It is of importance
that the contract provides for weekly billing by GetSet to be due and payable
within five days to a maximum of $1,500 per week. Any excess shall be deferred
to the end of the development period and thereafter billed on a weekly basis on
the same terms until extinguished.
[23]
There is no explicit provision in the contract that development costs
paid to GetSet must be refunded if the project is not completed. Nor is such a
contractual term implicit. Therefore there is no legal requirement arising from
the contract itself that GetSet must refund that which it earned simply because
the development of the website was not completed.
[24]
The evidence does not address why the project did not complete. The
relationship between the parties changed with the discussion of the future of
GetSet and Mr. Shields becoming a commission salesman for GetSet. There is
evidence that Mr. Shields did not have the money to finance the development of
the website on an ongoing basis. He does not plead or otherwise suggest that
GetSet breached the contract by failing to complete the website. As I have
said, there is no evidence that the appellant company did not get value for the
development work done by GetSet. Mr. Shields acknowledged that he received the
work product.
[25]
In these circumstances, there is no basis in law for ordering return of
the monies paid to GetSet under the contract.
Share purchase agreement
[26]
Mr. Sattler was the only shareholder in GetSet. Mr. Shields claims that
at a meeting on 7 February 2005, he, Mr. Sattler and Mr. Christie agreed that
GetSet would be restructured so that each of them would own one-third of the
shares in GetSet. His notes of this meeting are exhibited to one of his
affidavits. He says that GetSet is no longer an operating company and a money
judgment for damages for breach of contract would be pointless so he asks for
nominal damages.
[27]
On this issue, the trial judge said:
[12] ...
upon
reviewing the evidence and listening to the submissions of Mr. Shields, that I
am unable on his evidence to find any even probability that there was a
partnership agreement as such. No document has been produced that outlines a
partnership agreement. There are no terms in detail that are recalled and
presented before me. There is no evidence of payment according to a partnership
understanding. There is no certainty as to who were the parties. There is no
reason on a commonsense analysis that this would have been the way that these
parties continued in business after having at that point, that is the first
couple of months of 2005, opted for this arrangement, having had a very
difficult time with each other. It was at a time when Mr. Christie, one of the
defendants was in the process of leaving GetSet, where he had worked before as
a programmer.
[28]
There is nothing in writing between the parties that would serve to
prove the agreement alleged. Mr. Shields notes are not sufficient and on his
evidence put in its best light the most that can be said is that there was some
discussion about a restructuring of the ownership of GetSet that never got
beyond discussion. There is nothing in the evidence to support any conclusions
as to the essential terms of the agreement alleged, particularly the cost of
acquisition of the shares in GetSet. On this basis, the agreement alleged would
fail for being vague and uncertain.
[29]
In addition, emails between the parties subsequent to the meeting date
make it clear that nothing had been agreed to with respect to the future equity
ownership of GetSet. It is not necessary to look beyond an email from Mr.
Shields to Gail Sattler dated 26 April 2005 in which Mr. Shields wrote: In conclusion
my suggestion is for you and Tim [Sattler] to decide once and for all whether
you want Randy [Christie] and I as partners or as subcontractors or employees
and then to make an offer we can all agree to in writing.
[30]
This is not the language of a party who asserts that prior to the date
of the email there was an enforceable agreement. The trial judge did not err in
finding the agreement alleged to be unproven.
Commissions
[31]
As to the commissions claim, the trial judge said this:
[21]
I have spoken about the one-third
commission. In his statement of claim he talks about an estimated $45,000 of
which $15,000 should be commission less $3,677 that he acknowledges he has
received.
[22] I
have
to say again, as I said before for lack of evidence as to an agreement between
the parties on the payment of that amount of a commission, I am unable to make
a finding that there is any such commission that has not been paid and is
outstanding.
[32]
The trial judge failed to note, as I have stated above, that the
respondents pleaded that there was a commission sales arrangement with Mr.
Shields, with the remuneration he earned to be offset against the debt owed by
the corporate appellant to GetSet. The first part of this admission supports
the assertion of Mr. Shields that there was a commission agreement. Counsel has
not directed us to any evidence that there was to be an offset.
[33]
The evidence with respect to the commissions claim is a bit sketchy but
I am convinced that it was sufficient to support part of the claim. The trial
judge did not refer to any specifics in the evidence. I expect that we have
been given more assistance by Mr. Shields than he gave to the trial judge in
isolating the evidence that supports the conclusion that Mr. Shields worked for
GetSet on a commission basis and managed client accounts so as to be entitled
to payment for his work.
[34]
At least one email written by Gail Sattler acknowledges that Mr.
Shields, as he claimed in his evidence, was to be paid 33% for his work for
GetSet. Mr. Sattler did not deny this in his affidavit. Rather, he swore: The
sales job that GetSet hired Shields to perform was a commission sales job. He
went on to express some disappointment in the work Mr. Shields generated for
GetSet but did not deny the commission rate or the particulars in the evidence
given by Mr. Shields. He also swore that he did not recall exactly how much
business Shields brought in. Gail Sattler who, as bookkeeper for the company,
would be in a position to know about these matters did not give evidence. It is
common ground that Mr. Shields did some work for GetSet and that he received
remuneration for this work in the amount of $3,677.33.
[35]
I conclude, therefore, that the trial judge erred in failing to find
that there was a commission agreement at 33%. At the hearing of the appeal,
counsel for GetSet did not attempt to persuade us that the judge was correct in
his conclusion.
[36]
GetSet has not provided an accounting of the sales attributable to
Mr. Shields, the commissions earned thereon, and the payments made to him.
At trial, Mr. Shields claimed sales of $45,000 and $15,000 in commissions, less
the payment received. On appeal, he limits his claim to commissions on gross
sales of $21,632, less the amount received, leaving a net balance owing of
$3,461.23.
[37]
There are documents in evidence supporting gross sales in at least the
amount now asserted. Counsel for GetSet contends that Mr. Shields did not swear
in his affidavit that he was not paid the balance of the commissions earned. I
think this fact can be inferred. A spread sheet prepared by Mr. Shields and
emailed to Gail Sattler shows the commissions claimed and the amount paid by
GetSet. She has provided no evidence that GetSet paid Mr. Shields any more than
the sum of $3,677.33 as stated in the spread sheet. There is also an email from
Mr. Shields to her complaining that a cheque he received was only about half of
what he expected. To avoid the inference that this was all that Mr. Shields
received for his services, GetSet could have produced evidence of a later
payment or payments.
[38]
I would allow the appeal to the extent of giving Mr. Shields judgment
against GetSet in the amount of $3,461.23.
Costs
[39]
The trial judge ordered that the appellants pay costs to the respondents.
That part of the order has to be reconsidered in light of partial success on
the appeal.
[40]
The respondents argue that in the result this action comes within the
jurisdiction of the Provincial Court under the
Small Claims Act
so that
the appellants should be deprived of costs in both this court and the trial
court. They cite R. 57(10) under the old rules that would apply to this case.
[41]
This action arose from a fairly complex business relationship between
the parties, the amount initially claimed was in excess of the jurisdiction of
the court under the
Small Claims Act
and, in my opinion, there was
sufficient reason to bring the action in the Supreme Court as contemplated by
the rule.
[42]
Mr. Shields should have had some success at trial and should have
recovered some of his costs in the trial court. I would vary the trial costs
order to provide that the respondents recover 75% of their trial costs and that
the appellants recover 25% of their trial costs.
[43]
Success in this court being divided, I would order that the parties bear
their own costs of the appeal.
Disposition
[44]
I would made the following order:
(a) that the appeal be
dismissed as against Tim Sattler, Gail Sattler and Randie Christie;
(b) that the order
dismissing the action as against GetSet be set aside and that the appellants
recover judgment against GetSet in the amount of $3,461.23;
(c) that the provision
for costs in the trial court order be set aside and be replaced with an order
that the appellants pay the respondents 75% of their costs of trial and that
GetSet pay the appellants 25% of their costs of trial;
(d) that
the parties bear their own costs of the appeal.
[45]
CHIASSON J.A.
:I agree.
[46]
BENNETT J.A.
: I agree.
[47]
LOW J.A.
: There will be an order accordingly.
The Honourable Mr. Justice Low
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Moore,
2011 BCCA 36
Date: 20110127
Docket: CA037682
Between:
Regina
Respondent
(Plaintiff)
And
Roger Brian Moore
Appellant
(Defendant)
Before:
The Honourable Mr. Justice K. Smith
The Honourable Madam Justice Bennett
The Honourable Madam Justice Garson
On appeal from:
Supreme Court of British Columbia, 26 June 2009
(
R. v. Moore
, New Westminster Registry X071549)
Oral Reasons for Judgment
Appellant appearing In Person:
Counsel for the Respondent:
W.P. Riley
Place and Date of Hearing:
Vancouver, British
Columbia
January 27, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 27, 2011
[1]
K. SMITH J.A.
: Roger Brian Moore appears in person this morning
seeking leave to appeal and, if leave be granted, appeals from his global
sentence of four years imprisonment imposed on June 26, 2009 by the Honourable
Mr. Justice Brown of the Supreme Court of British Columbia after convicting him
following a five-day trial on four counts of trafficking in controlled
substances, contrary to section 5(1) of the
Controlled Drugs and Substances
Act
, 1996, c. 19.
[2]
Mr. Moore, this morning, has eloquently expressed his regret and his
remorse for what he has done and he asks us to treat him leniently by reducing
his sentence to three years. He is now on parole and his warrant of committal
will expire in June 2013.
[3]
I have explained to Mr. Moore the limitations on what this Court can do
on a sentence appeal. The standard of review that we must apply has been
summarized by the Supreme Court of Canada in
R. v. L.M.
, [2008] 2 S.C.R.
163 at para. 14:
14. In its past decisions, this Court has established
that appellate courts must show great deference in reviewing decisions of trial
judges where appeals against sentence are concerned. An appellate court may not
vary a sentence simply because it would have ordered a different one. The court
must be "convinced it is not fit", that is, "that ... the
sentence [is] clearly unreasonable" (
R. v. Shropshire
, [1995] 4
S.C.R. 227, at para. 46, quoted in
R. v. McDonnell
, [1997] 1 S.C.R. 948,
at para. 15). This Court also made the following comment in
R. v. M. (C.A.)
,
[1996] 1 S.C.R. 500, at para. 90:
... absent an error in principle, failure to consider a
relevant factor, or an overemphasis of the appropriate factors, a court of
appeal should only intervene to vary a sentence imposed at trial if the
sentence is demonstrably unfit.
[4]
At the sentencing hearing the Crown sought a sentence of five years and
Mr. Moore sought a sentence of three years. The sentencing judge gave
comprehensive reasons for sentencing in which he reviewed the circumstances
fully along with the submissions of counsel and Mr. Moores circumstances.
[5]
After considering all the circumstances, the judge said this:
[79] I cannot agree with the Crowns position that five
years is the right sentence in this case. This fails to give sufficient weight
to rehabilitation. While the facts of this case cry out for denunciation and
deterrence, all the more reason to ensure that these do not then overwhelm fair
consideration of rehabilitation, bearing in mind the heavy burden that Mr.
Moores conviction and sentence will continue to impose on him upon his release.
Although he is not a youthful offender, he was a relatively young man at the
time of the offence without a criminal record, factors that I am required to
give due and fair consideration to. The sentence should strongly denounce and
deter, but not crush the spirit of the convicted person or be so unduly long
that it may impede his rehabilitation.
[80] The controlled substances involved in this case are
less pernicious than those found in some of the cases cited, however, this
consideration must be somewhat weighed against what I would refer to as the in
for a penny, in for a pound corrupting effect of a Corrections Officer in such
circumstances, as he exposes himself or herself to escalating demands from
inmates, with little recourse on the officers part except to comply or face
exposure by the inmate.
[81] At the same time, I find a three-year sentence
inadequate. Mr. Moores actions required considerable thought and
discussion with both foresight and planning involving the inmates before
executing the plan. This is clearly not a case of impetuous actions carried out
with little deliberation. Execution of the plan also required contact with
criminal elements outside the prison itself in order to obtain the trafficked
substances.
[82] Mr. Moore had numerous
opportunities to reflect and numerous opportunities to make different choices
at each step along the way. There is no element of duress as in
Domke
, [
R.
v. Domke,
2006 ABPC 252, 68 Alta. L.R. (4th) 372]. Upon his return to his
unit, Mr. Moore exacerbated the consequences of what he had done by releasing
inmates from their cells, instead of assisting his fellow officers, potentially
jeopardizing the investigation and involving them and the inmates in a
difficult situation.
[6]
He went on to impose sentences amounting to the global sentence that I
mentioned. In my view, the reasons given by the sentencing judge demonstrate
that he applied the proper approach and that he fairly considered all the
relevant circumstances. I am satisfied the sentence he imposed was a fit one in
the circumstances.
[7]
For those reasons I would grant leave to appeal, but I would dismiss the
appeal.
[8]
BENNETT J.A.
: I agree.
[9]
GARSON J.A.
: I agree.
[10]
K. SMITH J.A.
: The appeal is dismissed.
The Honourable
Mr. Justice K. Smith
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Sandhu v. The Khalsa Diwan Society,
2011 BCCA 24
Date: 20110127
Docket: CA038464
Between:
Amarjit S. Sandhu,
Sukhbir S. Gill, Lakhbir S. Khangura,
Karnail Singh Brar, and Gurmeet Singh Gill
Respondents
(Petitioners)
And
The Khalsa Diwan
Society and
Kashmir Singh Dhaliwal
Appellants
(Respondents)
Before:
The Honourable Mr. Justice K. Smith
The Honourable Madam Justice Neilson
The Honourable Madam Justice Bennett
On appeal from: Supreme
Court of British Columbia, August 30, 2010,
(
Sandhu v. Dhaliwal
, 2010 BCSC 1328,
Vancouver Docket No. S102766)
Counsel for the Appellant:
S.A. Turner
Counsel for the Respondent:
H.A. Mickelson, Q.C.
J. D. Tweedale
Place and Date of Hearing:
Vancouver, British Columbia
December 15, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 27, 2011
Written Reasons by:
The Honourable Mr. Justice K. Smith
Concurred in by:
The Honourable Madam Justice Neilson
The Honourable Madam Justice Bennett
Reasons for Judgment of the Honourable
Mr. Justice K. Smith:
[1]
The Khalsa Diwan Society [the Society] and Kashmir Singh Dhaliwal
appeal from an order of the Supreme Court of British Columbia, pronounced by
the Honourable Mr. Justice Walker on 30 August 2010, granting the
respondents relief on a petition brought pursuant to s. 85 of the
Society
Act
, R.S.B.C. 1996, c. 433, the relevant part of which provides,
85 (1) Despite anything in this Act, if an omission,
defect, error or irregularity occurs in the conduct of the affairs of a society
by which
...
(b) there is default in compliance with the ... bylaws of
the society,
...
the court may
(d) either of its own motion or on the application of an
interested person, make an order
(i) to rectify or cause to be rectified or to negate or
modify or cause to be modified the consequences in law of the omission, defect,
error or irregularity, or
(ii) to validate an act, matter or thing rendered or
alleged to have been rendered invalid by or as a result of the omission,
defect, error or irregularity, and
(e) give the ancillary or consequential directions it
considers necessary.
(2) The court must, before making an order, consider the
effect of it on the society and its directors, officers, members and creditors.
[2]
Although the appellants raise three grounds of appeal, I find it
necessary to deal with only one, which is whether they were denied a fair
hearing. In my view, they were, and I would allow the appeal, set aside the
order, and remit the petition to the Supreme Court for a new hearing.
BACKGROUND
[3]
The Khalsa Diwan Society is a non-profit, religious society established
to promote the teachings and philosophy of the Sikh religion. The appellant
Kashmir Singh Dhaliwal is the current president of the Societys elected
Executive committee. The individual respondents are members of the Society.
They describe themselves as organizers and supporters of the opposition slate
of candidates in the next election of the Societys Executive.
[4]
The Societys constitution provides that all memberships expire every
three years. Consequently, there is a busy enrolment process each time the
expiry date approaches as old members and prospective new members submit their
membership applications. The constitution also provides for elections of the
Executive at the commencement of every three-year cycle. The last election was
held in November 2007.
[5]
The Society has a history of litigation respecting membership and
election disputes dating back to 1999. One of these disputes (indexed as 2004
BCSC 1399) resulted in a detailed consent order, referred to in subsequent
cases as the transparent process, which provided for participation in the
enrolment process of those proposing to contest the re-election of outgoing
Executive members. It was designed to alleviate concerns that the outgoing
Executive members might influence the enrolment process in such a way as to
promote their re-election.
[6]
The present dispute concerns the validity of membership application
forms accepted by the Societys current Executive in relation to the membership
drive conducted in anticipation of the Executive election that was scheduled to
be held in November 2010, but which has necessarily been postponed pending the
outcome of this proceeding.
[7]
In January 2010, the respondents asked to meet with the Executive to
discuss what they suggested were procedures being followed for the acceptance
of membership applications that did not comply with the Societys bylaws.
After some back-and-forth communications in which they felt the Executive was
not addressing their concerns and was not abiding by the transparent process,
they filed their petition in April 2010, naming the members of the Executive
and the Society as respondents. They sought an order that they be allowed to
inspect all new membership applications and related records, an order that new
membership forms accepted to date by the Executive be declared invalid, and a
number of ancillary orders calculated to bring fairness and order as they saw
it to the membership drive and the forthcoming election.
[8]
The respondents position was that members of the Executive had been for
some time processing invalid membership applications and thereby deliberately
distorting the membership list. They filed affidavits in support of their
position, including an affidavit summarizing their conclusions from a review of
4,156 membership applications delivered to them by the Executive before they
filed their petition. The Executive members filed responding affidavits in
which they denied the allegations of irregularities and the allegations that
they were complicit in processing irregular applications. On the morning of
the first day of the hearing, another 2,523 applications were delivered to the
respondents by counsel for the Executive, bringing the total to 6,679. The
respondents reviewed these applications overnight and filed an affidavit
summarizing the results of their review on the morning of the second day of the
hearing. However, as will become apparent, the hearing concluded before the
appellants could file evidence responding to suggestions of irregularities
contained in this affidavit.
[9]
The hearing of the petition commenced on Thursday, August 26, 2010, and
took up one full day and two partial chambers days.
[10]
The respondents submissions occupied the first two days. During his
submissions, Mr. Mickelson, counsel for the respondents, referred to evidence
of various membership forms accepted by members of the Executive that he
contended clearly did not comply with the Societys bylaws because, he
submitted, they were
a)
Forms signed by the same person, with the same address, on different
dates, and with a different signature;
b)
Forms purported to be signed by a different person, at a different
address, on different dates, bearing the same signature;
c)
Forms containing no signature at all; and
d)
Forms apparently verified by family members of applicants who ostensibly
attended with a member of the executive and provided written verification as to
the accuracy of the form on behalf of applicants who could not attend, which
were accepted in questionable circumstances.
[11]
Near the beginning of his submission, Mr. Mickelson submitted, in what
he referred to as his limited pitch, that there should be an order that these
allegedly non-compliant forms be independently inspected and validated in some
way and that his clients would be content to accept the other membership
applications as valid, but qualified his position by adding that you may come
to the conclusion that ... its widespread and everything needs to be thrown
out and we need to start from scratch. And Im not saying that that isnt the
right answer, but Im going to stay on my limited pitch. Near the end of the
first day of Mr. Mickelsons submissions, the following exchange with the
chambers judge occurred:
THE COURT: ...
If I accept everything you say, how
can I be sure that ordering relief where both parties have representatives at
the same table will work if there truly was nefarious conduct on the part of --
the president of the society signed this document or took it in
.
MR. MICKELSON: Yes.
THE COURT: If I follow where you're going, or the thrust
of your submissions,
shouldn't I be appointing somebody independent so that
there can be true -- perception of true fairness in the process
?
MR. MICKELSON:
Well, My Lord, this is why I started
by saying I have the main relief, which is what Your Lordship is speaking of,
and then I talked about the limited relief. If it's systemic, the relief is
the first prayer for relief which is everything is thrown out and we start
fresh with the transparent process. We don't need an independent -- the
transparent process will work, it's what my clients want
. If you sit at a
table, this won't happen because --
THE COURT: No, but on a moving forward basis for the transparent
process.
If there has been fraud
.
MR. MICKELSON: Yes. Then it's a band-aid and it's a problem.
THE COURT:
Then shouldn't there be an independent person
in charge of the membership application drive
?
MR. MICKELSON: Well, if Your Lordship becomes concerned
that it's systemic -- and we can't know -- other courts have said we can't
know, and it's in the best interests of the society to take the relief further,
then it's actually a simpler process. They're gone. And all I'm saying -- maybe
I'm at cross purposes with Your Lordship -- you don't need anybody independent
because we're now starting from scratch if the election gets postponed a couple
of months.
THE COURT: Right. But we're
ad idem
there in
terms of the thought process?
MR. MICKELSON: Yes.
THE COURT: Now we've started from scratch. Moving forward,
what's the process. Who runs it?
MR. MICKELSON: Yes. So here's how this works and
here's
how the transparent process works. One representative of the executive and the
other person are sitting at a table. Now this gentleman shows up and says, I'm
submitting my form
.
THE COURT: All right. That's what I thought. But then
my question to you was -- and I didn't clearly explain myself well.
How can
that work in
an environment where there's been fraud alleged, or fraud
suggested, given -- and particularly given the background of two prior
proceedings? How can the members of this society be confident that these
parties sitting at the same table will act in the best interests of the
society? And shouldn't I, as a matter of what's in the best
interests
of the society, and for all of the members, simply -- if I was convinced that
this was systemic, or suspected it to be so, simply
annul all of the
membership applications to start a new process where there's an independent
person in charge
?
[Emphasis added.]
[12]
Shortly thereafter, there was the following exchange:
MR. MICKELSON: ... I think this is systemic. I didn't
reach for that --
THE COURT: No --
MR. MICKELSON: -- because in my submission I didn't need
to. But I want to be clear; I believe this is systemic and it gets worse as we
move through this.
THE COURT: I had a sense that's where you were taking me
to.
MR. MICKELSON: Yes.
THE COURT: And so
I thought I would telegraph that
to you and your friends right off the bat
, that if I find there's a lack of
compliance that invokes the court's jurisdiction, and now dealing with the relief
provision, and
I need to know whether or not there is a systemic aspect to
this, and it does help me to know your results of the other forms
.
[Emphasis added.]
[13]
On the morning of the second day, the chambers judge said, during a lengthy
colloquy with Mr. Mickelson,
THE COURT:
Well, you've taken it to the point that's really troubling me, which is,
assuming that I accede to your submission that this Court's jurisdiction is
engaged and that this is something beyond just mere trifling or technical incompliance
but shows something much more, in terms of a relief that's granted and the
history of litigation, what relief can be fashioned so that there can be an end
of this so that the parties moving forward can have confidence in the membership
drive, the election process, so they're not constantly coming back before the
Court seeking relief.
[14]
Thus, at this point in the hearing, the judge had been shown a number of
forms that Mr. Mickelson contended were, on their face, not compliant with the
bylaws and he had signalled his view that the respondents results of the
other forms (in respect of which the appellants had not yet filed any
evidence) had help[ed] him on the question whether there was a systemic
aspect to this, and that, if he should find irregularities that were beyond
just mere trifling or technical incompliance but represented something much
more, he would be considering a remedy that would put an end once and for all
to such disputes.
[15]
After the luncheon adjournment, the hearing adjourned in order to allow
the parties to attempt to negotiate a resolution over the weekend. The
negotiations did not succeed, however, and the appellants discharged their
counsel.
[16]
On Monday morning, the third day of the hearing, counsel for the
appellants appeared and told the chambers judge they had been discharged. They
withdrew and new counsel, Mr. de Groot, advised the judge that he was a junior
associate in the office of Mr. Turner, counsel for the appellants on this
appeal, who had been retained by the appellants on the weekend to continue with
the hearing. Mr. de Groot said Mr. Turner was out of the country and
he sought an adjournment of several days to permit Mr. Turner to appear. In
explaining the appellants reasons for changing counsel, he said his clients
were concerned with how the case was proceeding and they wanted to have new
counsel. Then, following Mr. Mickelsons submissions opposing the
adjournment, the following occurred:
THE COURT: All right. Thank you. Mr. de Groot, you
were retained last evening?
MR. de GROOT: I was only informed this morning.
THE COURT: When was your firm retained?
MR. de GROOT: I believe there was a conversation at the
end of Friday, but no actual retainer at that time. I spoke to Mr. Turner on
the telephone this morning outside the courtroom.
THE COURT: All right. What do you have to say in
response to Mr. Mickelson's submissions?
MR. de GROOT: I have a few points in reply here. Mr.
Mickelson states with some certainty that the respondents were unhappy about
the affidavit and that the change of counsel is merely a tactical move. I'm
not sure it's in my friend's knowledge to be certain about that. And, in fact,
the respondents were also under some misapprehension as to the process and were
under misapprehension that Your Lordship was prepared to give judgment today.
And they were confused about the process.
THE COURT: Your clients have been engaged in this
process at least three times before and according to the cases, it's more perhaps,
that I've just been shown, four or five times in the past.
MR. de GROOT: Yes, My
Lord. But they were under that concern, and that concern was associated with
previous counsel.
[17]
Mr. de Groot continued with a brief submission to the effect that there
would be a delay in the sign-up process whether or not the hearing was
adjourned and that Mr. Turners experience acting in these membership disputes,
including his previous dealings with Mr. Mickelson, might facilitate an early
resolution rather than the lengthy delay predicted by Mr. Mickelson in having
the hearing reconvened.
[18]
Immediately after the conclusion of Mr. de Groots submissions, the
chambers judge delivered reasons dismissing the application to adjourn: see
2010 BCSC 1327. In his reasons, he said,
[2] ... I am told that the basis for the respondents'
decision to discharge their counsel and seek an adjournment is that they are
unhappy with the manner in which the case is unfolding during the hearing. I
find that submission remarkable because counsel for the petitioners is still
making oral submissions on the merits of the case (
and the respondents'
counsel have yet to make their submissions on the merits
).
[3] I am satisfied that the respondents' decision is a
reaction to the evidence that has been adduced in the affidavits and shown to
me by counsel for the petitioners. In essence,
the evidence shows that a
number of the membership application forms (membership forms) are, on their
face, clearly non-compliant with the bylaws of the Society
.
[4]
I find, from all of the evidence contained in
the affidavits in the chambers record, that the Societys executive, who are
respondents in this litigation, have been engaged in obtaining membership forms
that are not compliant with the Society's bylaws. I find that their conduct
goes beyond mere technical non-compliance and that they have been actively
engaged in obtaining membership forms that are clearly non-compliant since
2008, and onward, through the height of the dispute between the respondents and
the petitioners. This conduct continued to occur as recently as last week,
just prior to the commencement of the hearing of the petition
.
[Emphasis added.]
[19]
He added that the appellants had many months to prepare for the hearing
and that, since Mr. Turner had acted for them before in other matters, they
could have retained him earlier for this litigation (at para. 5). In this
regard, he said,
[6] Mr. Turner is out of the country and, I am told,
not available until at least September 9.
I am satisfied that the decision
made by the respondents to discharge their counsel is a tactical decision to
gain advantage from delay.
It is a decision that, in the wake of the
evidence I have so far seen, should not be condoned by this Court
.
[Emphasis added.]
[20]
He concluded,
[8] It would be unfair and prejudicial to the Society
and its members to allow the executive members to discharge their counsel and
adjourn this application
considering evidence showing the executives prior
history and recent participation in obtaining non-compliant membership forms
,
all in the wake of a hotly contested membership drive and a looming election.
To allow an adjournment would, in my view, bring the entire membership drive
and election process into disrepute.
[Emphasis added.]
[21]
After delivering his reasons, the chambers judge said,
THE COURT: Now, Mr. Mickelson, I'm not sure what you wish
to do here.
On Friday you were of two minds about the nature of the relief
you wish to seek, and I wonder if this has an impact upon it. It certainly
does in my thinking
, I do want to hear from you. And I'm sure your friend
will want to make submissions.
[Emphasis added.]
[22]
Mr. Mickelson then submitted that all of the forms be thrown out and
that there be a new process put in place. When he had finished his
submissions, the following occurred:
THE COURT: Yes, I was going to offer Mr. de Groot the
opportunity, in view of what Mr. Mickelson said and the exchange between Mr.
Mickelson and myself, to see if you wish to take instructions from his client,
either as to process or simply what you're going to say in reply.
MR. de GROOT: It would be helpful for --
THE COURT: All right.
MR. de GROOT: -- me to have some time.
THE COURT: And I'll give you 20 minutes to do that, and
if you need longer, let Madam Registrar know. But I'd like to get back by
11:30 if you can, given that the matter was put over -- or stood down more than
it was heard on Friday.
MR. de GROOT: Yes. Thank
you, My Lord.
[23]
Chambers thereupon adjourned and, when chambers reconvened 35 minutes
later, the chambers judge called on Mr. de Groot, who made submissions on
behalf of the appellants as to the appropriate remedy.
[24]
At the conclusion of Mr. de Groots submissions, the chambers judge said
he did not need to hear Mr. Mickelson in reply. Then, he gave oral judgment in
favour of the respondents (see 2010 BCSC 1328) in which he expanded on the
findings he made in his earlier reasons.
[25]
After reviewing the evidence, the judge noted (at para. 30) that the
documents he had been shown raise questions as to the integrity and validity
of the verification process and the role of certain members of the executive
who accepted those documents in very questionable circumstances. He concluded
(at para. 31) that the evidence of non-compliant membership forms was not
limited to a few documents such that it could be said that non-compliance [was]
limited, inadvertent, or the result of the conduct of a naive and innocent
member of the executive. He noted that non-compliant membership forms had
been taken over a considerable period of time, since at least August 2008, and
that in many instances they were taken while the dispute between the parties in
this proceeding was fully engaged. He concluded no effort had been made by the
Executive to check for duplicate or other questionable forms or to ensure that
no errors had been made in accepting the forms (at para. 32) and observed (at
para. 33) that no explanation had been provided to explain or justify the accepting
of non-compliant forms. In the result, he concluded that the non-compliance was
such as to engage the courts jurisdiction under s. 85 (at para. 34).
[26]
After describing what he considered to be the obvious and egregious
nature of the non-compliance, the chambers judge said,
[38] Recent revelations of additional and substantial
numbers of membership forms show that the Societys executive continues to be
actively involved in taking membership forms that are clearly non-compliant.
In my opinion, non-compliance is so pervasive that the integrity of the entire
membership application process is called into question.
[39] This is the third time since 2000 that members of
the Society have been before the Court to deal with election and membership
form issues. In light of that history, given the executive's outright rejection
of the petitioners' request for a transparent process, and due to the very
recent and blatant activity of certain members of the executive in accepting
clearly non-compliant membership forms, I believe that no right-thinking member
of the Society would have any confidence in the validity of the membership
documents. I can say that I do not.
[40] I am also of the view
that ordering a transparent process remedy, which would involve each side
having a representative participate in the taking of forms, is likely to lead
to further conflict and further court proceedings. The time has come for the
Society to conduct a membership process and an election in such a way that its
members can have confidence that those processes are fair and conducted in an
impartial manner.
[27]
Accordingly, he made the following orders:
a)
All membership forms taken since the last election are
invalidated;
b)
A neutral, independent person ("Electoral
Officer"), will be appointed to run the membership drive and to conduct
the Society's next election;
c)
The parties are to agree upon the identity of the
Electoral Officer within seven days, failing which the judge would do so;
d)
The election presently scheduled to take place in
November 2010 is postponed to a date to be agreed upon by the parties in
accordance with the recommendation of the Electoral Officer, and failing
agreement, by order of the Court;
e)
The Electoral Officer shall provide recommendations to
the parties and the Society concerning the process to be used in conducting the
membership drive, including the taking of membership forms, and the process to
be used to conduct the election; and
f)
Those recommendations shall be contained in written
form and provided to the Court for its approval.
[28]
As a further term of the order, the judge retained supervisory
jurisdiction over the process until the election should be completed and
allowed for the parties and the Electoral Officer to apply for further
directions and corollary relief as necessary. He also limited the Executives
authority to current operations and to running the affairs of the Society in
the ordinary course of business until the election results should be in hand and
the new Executive should be elected.
DISCUSSION
[29]
Thus, the judges conclusion
that there was not only non-compliance with the bylaws in some membership
applications but also that the members of the Executive had been acting
deliberately in such a way as to call into question their own integrity and the
integrity of the entire membership application process played a significant
role in his decision to grant relief that intruded substantially into the right
of the Society to govern its own affairs, something the courts are generally
reluctant to do:
Garcha v. Khalsa Diwan Society - New Westminster
, 2006
BCCA 140 at para. 9, 223 B.C.A.C. 295.
[30]
As I have set out above, in giving his reasons for dismissing the
adjournment application, the chambers judge concluded that a number of the
membership applications were on their face, clearly non-compliant with the
bylaws of the Society (at para. 3). This finding was a precondition to his
jurisdiction under s. 85(1)(b) of the
Act
. At the hearing of the
appeal, Mr. Turner outlined submissions that these applications were not
necessarily non-compliant with the bylaws, yet the chambers judge decided this
issue against the appellants without hearing these submissions. The judge
found, as well, that the Societys executive have been engaged in obtaining
membership forms that are not compliant with the Societys bylaws; that their
conduct goes beyond mere technical non-compliance; that they have been
actively engaged in obtaining membership forms that are clearly non-compliant
since 2008, and onward; and that [t]his conduct continued to occur as
recently as last week, just prior to the commencement of the hearing of the
petition (at para. 4). Again, Mr. Turner refers to evidence and submissions,
which the chambers judge failed to hear or consider, that might refute these
findings.
[31]
The respondents submit that the appellants are the authors of their own
misfortune ̶ that they should not have discharged their counsel in the
middle of the hearing. Discharging their counsel at that time may or may not
have been wise. It is clear the appellants were not pleased with the way the
respondents case had been developed over the first two days of the hearing or
with the progress of the weekend negotiations and that they wished to have Mr.
Turner, who had represented them in similar matters on previous occasions, take
over their case. The chambers judge characterized the dismissal of counsel as
a tactical decision taken to gain advantage from delay, but he did not
indicate what that advantage might be, nor did counsel in their submissions
before him or on appeal. Moreover, in light of the judges comments during Mr.
Mickelsons submissions (some of which I have set out above), it might have reasonably
seemed to the appellants on the weekend that they were in imminent danger of
having judgment given against them. It may be that, in their minds, their
situation was so precarious that they felt the need to retain Mr. Turner
and to run the risk an adjournment might be refused.
[32]
The decision to dismiss the adjournment application was a discretionary
one. The appellants contend the discretion was not exercised judicially.
However, it is not necessary to decide that question since, having refused an
adjournment, the chambers judge ought to have at least offered Mr. de Groot an
opportunity to address him on the question whether the respondents had met the
threshold necessary to engage his jurisdiction under s. 85. He did not do so.
He decided that question in favour of the respondents in his reasons for
refusing the adjournment and limited submissions thereafter to the question of
the appropriate remedy.
[33]
In my view, the chambers judge erred in so doing. In deciding as
he did without hearing the appellants, he violated the
audi alteram partem
rule of natural justice. I would adopt as apt the following remarks of Prowse
J.A., for this Court, i
n
R. v. Gustavson
,
2005 BCCA 32 at para. 64,
249 D.L.R. (4th) 598:
[64] While the
audi alteram partem
principle is most often discussed in the administrative law context, it is not
limited to that context. Rather, it has been described as a basic tenet of our
legal system. In
A. (L.L.) v. B. (A.),
[1995] 4 S.C.R. 536, for example,
Madam Justice L'Heureux-Dubé, speaking for the court on this point, stated at
para. 27:
The
audi alteram partem principle
,
which is a rule of natural justice and one of the tenets of our legal system,
requires that courts provide an opportunity to be heard to those who will be
affected by the decisions
. The rules of natural
justice or of procedural fairness are most often discussed in the context of
judicial review of the decisions of administrative bodies, but they were
originally developed in the criminal law context. In
Blackstone's Criminal
Practice
(Murphy rev. 1993), the authors remark at p. 1529:
Traditionally, the rules of natural justice
have been defined with a little more precision, and are said to involve two
main principles - no man may be a judge in his own cause, and
the tribunal
must hear both sides of the case
. [Emphasis added by L'Heureux-Dubé J.]
[Emphasis in
original.]
CONCLUSION
[34]
For those reasons, I would allow the appeal, set aside the order made by
the chambers judge, and remit the petition for a new hearing.
The Honourable Mr. Justice K. Smith
I agree:
The
Honourable Madam Justice Neilson
I agree:
The Honourable Madam Justice
Bennett
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Wah Fai Plumbing & Heating Inc. v. Ma,
2011 BCCA 26
Date: 20110127
Docket: CA037596
Between:
Wah Fai Plumbing
& Heating Inc.
Appellant/Cross-Respondent
(Plaintiff)
And
Harton Kwok Hing
Ma, Yolanda Heung Ying Yuen and
True Art
Construction and Renovation and
Nghia Moc Vuong
Respondents/Cross-Appellants
(Defendants)
Before:
The Honourable Madam Justice Newbury
The Honourable Madam Justice Levine
The Honourable Mr. Justice Chiasson
On
appeal from the Supreme Court of British Columbia, September 28, 2009
(
Wah Fai Plumbing
& Heating Inc. v. Ma, Harton,
2009 BCSC 1914,
Vancouver
Registry, Docket 024839)
Counsel for the Appellant/Cross-Respondent:
J.R. White
V. Reakes
Counsel for the Respondents/Cross-Appellants:
E.G. Wong
Place and Date of Hearing:
Vancouver, British
Columbia
October 28, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
January 27, 2011
Written Reasons by:
The Honourable Madam Justice Levine
Concurred in by:
The Honourable Madam Justice Newbury
Concurring Reasons by:
The Honourable Mr. Justice Chiasson (Page 17, para. 66)
Reasons for
Judgment of the Honourable Madam Justice Levine:
Introduction
[1]
The primary issue raised on this appeal is the claim by a subcontractor
to a lien against the holdback under the
Builders Lien Act
, S.B.C. 1997,
c. 45, as described in
Shimco Metal Erectors Ltd. v. Design Steel
Constructors Ltd.
, 2002 BCSC 238, 99 B.C.L.R. (3d) 59, affd
Shimco
Metal Erectors Ltd. v. North Vancouver (District)
, 2003 BCCA 193, 11
B.C.L.R. (4th) 199. On this appeal, the subcontractor seeks to extend the
application of
Shimco
to circumstances where no holdback was retained by
owners as required by the
Act
. As will be seen, it is my opinion that
the reasoning and result in
Shimco
do not apply, and should not be
extended to this case.
[2]
The appellant, Wah Fai Plumbing & Heating Inc., provided plumbing
services as a subcontractor for renovations of the home of the respondents,
Harton Kwok Hing Ma and Yolanda Heung Ying Yuen (the Owners). The appellant claims
it is owed the amount of $47,882.98 for the work, which was completed in
November 2001. On September 28, 2009, it sought judgment in a summary trial in
Supreme Court on the grounds that it was entitled to a declaration that it has
a lien against the amount that the Owners were required to holdback pursuant to
s. 4(1) of the
Act
, and to a constructive trust over the Owners land on
the basis of unjust enrichment.
[3]
The trial judge dismissed the appellants action. He found that the
claim for the holdback lien was out of time, and the appellant had not proved
that the Owners were enriched. The appellant appeals on both grounds.
[4]
In my opinion, the appellant is not entitled to a declaration of a
holdback lien in accordance with the
Act
or its interpretation in
Shimco
,
and has not shown that the chambers judge made any error in dismissing its claim
for unjust enrichment. It follows that I would dismiss the appeal.
Background Facts
[5]
On May 18, 2000, the Owners contracted with the respondent, Nghia Moc
Vuong doing business as True Art Construction and Renovation (the Contractor),
to undertake major renovations at their Vancouver home. The Owners had paid
the Contractor the total amount of $389,630 under the contract by the time the
Contractor abandoned the contract on January 2, 2002. The Owners did not
retain any holdback funds as required by s. 4 of the
Act
.
[6]
On September 20, 2000, the appellant contracted with the Contractor to
perform plumbing and heating work for the renovations for the total amount of
$82,882.98. The Contractor paid the appellant $35,000. The appellant
completed the work on November 1, 2001, and invoiced the Contractor for the
balance owing of $47,882.98. Two weeks later, on November 14, 2001, the appellant
filed a lien against the Owners land for the same amount.
[7]
The Contractor did not pay the appellant in full allegedly because the Owners
did not pay the Contractor the full amount claimed by it. The Contractor went
into bankruptcy in 2006, and did not participate in these proceedings. The Owners
claim deficiencies against the Contractor, and deny that any money is owing to
the Contractor. The trial judge was unable to determine on the evidence
whether the Owners owe any amount to the Contractor, and appellants counsel
conceded that amount cannot be determined from the record.
[8]
On August 29, 2002, the appellant commenced an action against the Owners
and the Contractor, claiming breach of contract. The pleadings did not refer
to any claim of lien. On November 14, 2002, the lien the appellant had filed
against the Owners land was extinguished because it had not been perfected within
one year after it was filed by commencing an action to enforce the claim of
lien and filing a certificate of pending litigation (ss. 22, 33(1) and (5) of
the
Act
). On May 15, 2006, the appellants claim of lien against the
land was cancelled and removed from the title to the land when a mortgage was
registered on the property.
[9]
On August 17, 2006, the appellant filed an amended statement of claim in
which it claimed a lien against the land, a lien against the holdback and
unjust enrichment against the Owners. The appellant also filed a certificate
of pending litigation.
[10]
The trial judge ordered that the certificate of pending litigation be
removed. The claims for a lien against the land and a certificate of pending
litigation are not in issue in this appeal.
[11]
The trial judge rejected the appellants claims for a holdback lien and
a constructive trust as a remedy for unjust enrichment, and dismissed the
appellants action.
[12]
He found that the appellant had waited too long to bring its claim for a
lien against the holdback (at para. 11):
In these
circumstances, it seems to me that the plaintiff is trying to get around the
scheme set out by the
Builders Lien Act
which requires particular steps
to be taken at certain times in order to enforce certain rights. That
Act
sets
out a scheme designed to enable contractors, subcontractors, and owners to
secure and determine their rights within an appropriate timeframe. The time
within which an owner would normally be able to pay out the holdback funds had
long passed by the time this claim for a lien on those funds was first raised,
even though, of course, the owners never did pay out any funds because they had
never set any aside.
[13]
The trial judge also dismissed the claim for unjust enrichment on the
grounds that the appellant had not proved the Owners were enriched, and the contract
between the Owners and the Contractor gave a juristic reason for the appellants
deprivation. The trial judge denied the Owners costs ... in view of their own
failure to abide by the provisions of the
Act
in terms of a holdback
account (at para. 14).
[14]
The appellant appeals the dismissal of its action, and the Owners
cross-appeal the order denying them costs of the trial.
Lien Against the Holdback
[15]
The appellants claim for a lien against the holdback is based on the
decision in
Shimco
, which established that the
Act
provides for a
lien against the holdback that is distinct from and independent of the lien
against the land.
Statutory Provisions
[16]
The relevant provisions of the
Act
are ss. 2(1), 4(1), 4(9), and
8(4):
2
(1) Subject to this Act, a
contractor, subcontractor or worker who, in relation to an improvement,
(a) performs or provides work,
(b) supplies material, or
(c) does
any combination of those things referred to in paragraphs (a) and (b)
has a lien for the price of the work and material, to the
extent that the price remains unpaid, on all of the following:
(d) the interest of the owner in the
improvement;
(e) the improvement itself;
(f) the land in, on or under which the
improvement is located;
(g) the material delivered to or placed on
the land.
4
(1) The person primarily liable
on each contract, and the person primarily liable on each subcontract, under
which a lien may arise under this Act must retain a holdback equal to 10% of
the greater of
(a) the
value of the work or material as they are actually provided under the contract
or subcontract, and
(b) the
amount of any payment made on account of the contract or subcontract price.
4
(9) Subject
to section 34, a holdback required to be retained under this section is subject
to a lien under this Act, and each holdback is charged with payment of all
persons engaged, in connection with the improvement, by or under the person
from whom the holdback is retained.
8
(4) Payment
of a holdback required to be retained under section 4 may be made after expiry
of the holdback period, and all liens of the person to whom the holdback is
paid, and of any person engaged by or under the person to whom the holdback is
paid, are then discharged unless in the meantime a claim of lien is filed by
one of those persons or proceedings are commenced to enforce a lien against the
holdback.
[17]
Section 2(1) creates a lien against the land in, on, or under which the
improvement on which the contractor or subcontractor performs work is located.
In this case, the appellant filed a claim of lien against the land, which was extinguished
in law on November 14, 2002, and discharged in May 2006.
[18]
The lien against the land is not in issue in this appeal.
[19]
Sections 4(1), 4(9) and 8(4) are relevant to the holdback lien.
How a Holdback Lien Operates
[20]
Section 4(1) of the
Act
requires a person who is primarily liable
on a contract to holdback 10% of the greater of the value of the work or
materials under the contract, and the amount of any payment made on account of
the contract. Section 4(9) provides that the holdback required to be retained is
subject to a lien.
[21]
Shimco
established, interpreting s. 4(9), that a lien against a
holdback is independent of the lien on the land established under s. 2(1) (BCSC
at paras. 17-18), and, under s. 8(4), the holdback lien is not extinguished
when a lien against the land is extinguished (BCSC at para. 20).
[22]
The holdback period expires 55 days after the completion, abandonment or
termination of the project (s. 8(2)). Once that period has expired, the
holdback may be paid out. If the money is paid out to compensate a person with
a lien on the land, that persons lien and the liens of any person engaged by
or under that person are discharged. If in the meantime (before payment of
the holdback) a claim of lien is filed against the land, or proceedings are
commenced to enforce a lien against the holdback, the holdback may not be paid
out (s. 8(4),
Shimco
, BCSC at paras. 20, 22(j)).
Shimco
[23]
Shimco
involved a
contract between the District of North Vancouver (as owner) and Design Steel
Constructors Ltd. (as general contractor) for the construction of a tennis
court. Design Steel hired several subcontractors to assist it with the project
but failed to pay them completely. Seven subcontractors filed builders lien
claims against the Districts lands. Only three claimants perfected their
liens by commencing an action and filing a certificate of pending litigation
within the stipulated time. Shimco Metal Erectors Ltd., one of the claimants
who had failed to perfect its lien against the land, conceded that its claim
against the land was extinguished, but argued that it was still entitled to
pursue a claim of lien against the holdback moneys retained by the District as
required by s. 4 of the
Act
(BCSC at paras. 2, 3, 5).
[24]
In Supreme Court, Tysoe J. (as he then was) determined, based on prior
Supreme Court authorities and a close reading of the
Act
, that despite
the fact that the lien against the land had been extinguished, the lien against
the holdback continued to exist because the action was commenced prior to the
holdback being paid out. Thus, the holdback continued to exist and a lien
could be filed against it (BCSC at para. 20):
In my opinion, the wording of s.
8(4) reinforces the existence of a separate lien. It provides that a holdback
may be released upon expiry of the holdback period unless (i) a claim of lien
is filed or (ii) proceedings are commenced to enforce a lien against the
holdback. The first of these events corresponds to the s. 2 lien and the second
corresponds to the s. 4(9) lien. Even if a claimant has not filed a lien in the
land title office by the time of the expiry of the holdback period, the
holdback may not be released if proceedings have been commenced to enforce a
lien against the holdback. The lien against the land will have been
extinguished by operation of s. 22 but the holdback may not be released and
there may be continuing proceedings to enforce the lien against the holdback.
This acknowledges that there is a separate lien against the holdback which has
not been affected by the extinguishment of the lien against the land.
[25]
A unanimous division of this Court affirmed Tysoe J.s judgment.
[26]
The dual lien theory endorsed in
Shimco
was not warmly received
by the profession, and was the subject of critical commentary: see David A.
Garner, Builders Lien Law Update 2003: The Aftermath of
Shimco Metal
Erectors Ltd.
, prepared for the Continuing Legal Education Society of
B.C.s Construction Law 2003 Update (November 2003) at
§
1.1.3;
David Coulson,
Guide to Builders Liens in British Columbia
, loose-leaf
(Scarborough: Carswell, 1992-) at
§
5.33; Jason S.
Twa, The Shimco Lien A Refresher, prepared for the Continuing Legal
Education Society of B.C.s Construction Law 2009 Update (April 2009) at
11.3.3; Norm Streu & Christopher Hirst, Shimco Lien Lives On
Journal
of Commerce Online
(7 April 2003); Brindle, Jenkins & MacEwing, eds,
British
Columbia Builders Liens Practice Manual
, loose-leaf (Vancouver: The
Continuing Legal Education Society, 1999) at
§
3.42.
[BC Practice Manual]; British Columbia Law Institute, Consultation Paper on
Builders Liens After the
Shimco
Case (Vancouver, September 2003);
British Columbia Law Institute, Report on Builders Liens After the
Shimco
Case (Vancouver, February 2004) [BCLI Report].
[27]
In the BCLI Report, the BC Law Institute summarized the concerns of
practitioners, owners, and others involved in the construction industry. In
general, it was suggested that the existence of a holdback lien created
uncertainty, which conflicted with one of the broad policy goals of the
Act
to create certainty around the maintenance and release of holdbacks and would
create more complex contractual negotiations, and more disputes and litigation
in the construction industry. The primary concern was that the provisions of
the
Act
that establish procedures for claiming, enforcing and
extinguishing a lien against land do not apply to a holdback lien, creating
uncertainty concerning the scope and implementation of a holdback lien in
comparison with a land lien. Other concerns were expressed about the owners
role in maintaining and paying out a holdback required under the
Act
. It
was suggested by one commentator, for example, that the holdback lien as interpreted
in
Shimco
may create a personal (as opposed to an
in rem
claim)
against an owner who has failed to maintain a holdback account (or to retain a
holdback): see B.C. Practice Manual at 3.42:
There is a
significant difference between a right
in rem
against a holdback and a
right
in personam
against an owner for the holdback obligation. The
distinction will be important where no holdback account has been established,
and where non-contracting owners are sued. If there is no holdback account,
then perhaps this lien is a charge against the contractors right to be paid
the holdback. This would be the equivalent to a money judgment against the
contracting owner who failed to maintain a holdback account.
[28]
After consultation with interested parties, the BC Law Institute
recommended legislative amendments to abolish the holdback lien. No such
amendments have been made.
The Appeal
[29]
The discussion of the implications of the holdback lien and the
recommendations of the BC Law Institute suggest a cautious approach to any
extension to other cases of the application of the reasoning and result in
Shimco
.
An analysis of
Shimco
, to determine what it decides, and of the
Act
,
to determine how it applies to the facts of this case, is necessary.
[30]
The facts in
Shimco
were that the owner retained a holdback, and the
plaintiff commenced proceedings to claim a holdback lien before its land lien
was extinguished and before the holdback had been paid out.
[31]
On those facts, Tysoe J. determined that the plaintiff was entitled to a
lien against the existing holdback, separate from its extinguished land lien,
and the plaintiffs holdback lien was not extinguished on the extinguishment of
its land lien.
[32]
In this case, the Owners did not retain a holdback from its payments to
the Contractor (or alternatively, they effectively paid the holdback to the
Contractor by wrongfully failing to holdback 10% from those payments), and the
appellant did not commence proceedings to enforce a lien against the holdback
before its land lien was extinguished (on November 14, 2002, under ss. 22 and
33(5) of the
Act
, for failure to comply with the filing requirements of
the
Act
).
[33]
On these facts, there was no holdback in existence that remained to be
paid, and the appellant had not commenced proceedings to enforce a lien against
the holdback when its land lien was extinguished.
[34]
Shimco
does not deal with these facts. It is the
Act
which determines whether the appellant has a valid claim to a holdback lien in
these circumstances.
[35]
The relevant provision of the
Act
is s. 8(4), which I reproduce
here for convenience:
8
(4) Payment
of a holdback required to be retained under section 4 may be made after expiry
of the holdback period, and all liens of the person to whom the holdback is
paid, and of any person engaged by or under the person to whom the holdback is
paid, are then discharged unless in the meantime a claim of lien is filed by
one of those persons or proceedings are commenced to enforce a lien against the
holdback.
[36]
If the Owners had retained a holdback as required by s. 4(1) of the
Act
,
under s. 8(2) the holdback period would have expired 55 days after January 2,
2002, the date the Contractor abandoned the contract. Section 8(4) provides
that the holdback could then be paid out unless a claim of lien was filed
against the land or proceedings were commenced to enforce a lien against the
holdback.
[37]
At the expiry of the holdback period (February 22, 2002), the
appellants lien had been filed against the land. The holdback could not have
been paid out until the resolution of the claim.
[38]
The appellants land lien was extinguished one year after it was filed,
on November 14, 2002.
[39]
As of November 14, 2002, the appellant had not commenced proceedings to enforce
a lien against the holdback. Under s. 8(4), the Owners could then have
lawfully paid out the holdback, extinguishing the appellants lien against the holdback.
[40]
Shimco
does not deal with these circumstances. Nor can the
Act
be interpreted to provide that where there is no holdback, or a holdback has
been wrongfully paid out, a person whose land lien has been extinguished may later
commence proceedings to enforce a lien against a nonexistent holdback.
[41]
The appellant argues there is no limitation in the
Act
for
enforcing a lien against the holdback. It claims that proceedings to enforce a
lien against a holdback may be commenced any time before the holdback is paid
out, subject only to the six-year limitation period provided in s. 3(5) of the
Limitation
Act
, R.S.B.C. 1996, c. 266. It argues further, citing s. 4(4) of the
Limitation
Act
, that the amendment to the statement of claim in August 2006 to claim
the holdback lien did not have the effect of commencing a new action, and its
claim against the holdback should be considered to have arisen when it
originally filed the writ and statement of claim in August 2002.
[42]
The appellant cites no authority for its suggestion that s. 4(4) of the
Limitation
Act
should be given retroactive effect, and I see no basis in principle to
so find in this case. In any event, it would not change the result: the
appellant is not entitled to claim a lien against a nonexistent holdback.
[43]
The fact there was no holdback is the principal difference between this
case and
Shimco
. Even if the appellant commenced proceedings to claim a
holdback lien before its land lien expired, there was nothing against which the
lien could be claimed. The
Act
does not provide for enforcement of a
holdback lien where there has been no holdback, nor is there any reason to
extend
Shimco
to that factual circumstance.
[44]
It is true that the Owners failure to comply with s. 4 of the
Act
is the primary cause of the loss of the appellants holdback lien. That is the
result of the wording of the legislation, which the Legislature has the power
to remedy. It is also true that the appellant did not take steps to claim a
lien against the holdback until long after the time that the Owners could have
paid out the holdback, had they retained it.
[45]
It follows that I would not accede to this ground of appeal.
Unjust Enrichment
[46]
The appellants claim for unjust enrichment is brought in the alternative
to its claim for a lien against the holdback.
[47]
At trial, the appellant claimed that the Owners were unjustly enriched
because of the work that it completed on their home. The Owners were enriched
by the improvements, while the appellant was deprived because he was not paid
for that work. The appellant asserts that because the Owners have not paid all
that is owed on the contract between them and the Contractor, there is no
juristic reason for their enrichment.
[48]
The trial judge found that the appellant had been deprived. He did not
find that the Owners were correspondently enriched because the appellant did
not prove that the Owners did not pay the full amount owed under the contract
to the Contractor. If the full amount was paid for the renovation, it could not
be said that the Owners were enriched. The onus was on the appellant to prove
that the Owners did not pay the full cost of the renovations. The trial judge found
that the appellant failed to discharge that burden.
[49]
The trial judge decided that, in any event, the contract between the Owners
and the Contractor was a juristic reason for the benefits [the Owners}
obtained from the appellants work (at para. 6). He found further that the
... deprived [appellant], who was not a party to that contract, does not have
a sufficient relationship to the owners to demonstrate the absence of a
juristic reason (at para. 6).
[50]
The parties focused much of their argument on whether a contract is a
juristic reason for the appellants deprivation. They say that the law in
Canada is not settled on this point. The respondent argues that the existence
of a contract, in itself, precludes a claim for unjust enrichment, citing
Garland
v. Consumers Gas Co.
, 2004 SCC 25 at paras. 40, 44-46; [2004] 1 S.C.R.
629;
Pacific National Investments v. Victoria (City)
, 2004 SCC 75 at
paras. 23-25, [2004] 3 S.C.R. 575. The appellant argues that the state of
accounts between the parties to the contract (in this case, the Owners and the
Contractor) is relevant to whether an owner retaining a benefit is supported by
a juristic reason, citing, among other cases,
Ken Lawter Holdings Ltd. v.
Steen Panduro Holdings Ltd.
(1991), 55 B.C.L.R. (2d) 317 (C.A.). It
suggests that the statement in
Garland
, referred to in
Pacific
National Investments
, that the existence of a contract is an established
category of juristic reason resulting in the denial of a claim for unjust
enrichment, was not applied in those cases.
[51]
Where the parties differ is on the question of whether proof of the
state of accounts between the Owners and the Contractor is necessary to the
claim for unjust enrichment. The appellant says that is determinative: if the
Contractor was not paid in full, the Owners were unjustly enriched. The Owners
argue that the existence of the contract, whether or not they paid the
Contractor in full, is a juristic reason for any enrichment they may have
received.
[52]
It is trite law that the three elements of a claim for unjust enrichment
are an enrichment of the defendant; a corresponding deprivation of the
plaintiff; and an absence of juristic reason for the enrichment: see
Garland
at para. 30.
[53]
Thus, for the appellant to succeed on its claim for unjust enrichment,
it must prove enrichment of the Owners.
[54]
The appellant concedes that that the state of accounts between the Owner
and the Contractor must be resolved before it can be determined whether the
Owners were enriched, and there is insufficient evidence on the record to
determine that question. Without proving that the Owners were enriched by
failing to pay the Contractor in full, an unjust enrichment claim cannot
succeed.
[55]
On appeal, the appellant argues that on the summary trial, the trial
judge could have concluded that he could not decide the issue and referred it
to trial instead of dismissing the action.
[56]
In my opinion, the appellant failed to prove its case on this issue.
The appellant did not provide any information to this Court to explain why it
could not produce the evidence necessary to prove its claim for unjust
enrichment at the summary trial, and why it would have been unjust for the
trial judge to dismiss the claim for unjust enrichment.
[57]
Since the appellant has not proved that the Owners were enriched, the
issue of whether there is a juristic reason for any enrichment does not arise.
[58]
I would not accede to this ground of appeal.
Costs
[59]
The Owners cross-appeal the order denying them the costs of the trial.
[60]
The Owners cross-appealed from the order for costs without applying for
leave under s. 7(2)(b) of the
Court of Appeal Act
, R.S.B.C. 1996, c. 77,
which provides that leave is required to bring an appeal from an order
respecting costs only. This matter was raised by the division at the hearing,
and the parties provided written submissions on whether leave to cross-appeal
was required.
[61]
Previous cases of this Court have made it clear that where an order for
costs is integral to a judgment from which an appeal is brought, leave is not
required to appeal or cross-appeal the order for costs: see
Rieta v. North
American Air Travel Insurance Agents Ltd.
(1998), 52 B.C.L.R. (3d) 114
(C.A.);
Heppner v. Schmand
(1997), 29 B.C.L.R. (3d) 128 (Esson J.A. in
chambers);
Cao (Guardian ad litem of) v. Natt
, 2004 BCCA 446 (Esson
J.A. in chambers).
[62]
The trial judge refused costs to the successful Owners because their
failure to comply with the holdback provisions of the
Act
affected the
manner in which the action proceeded. In doing so, the trial judge erred in
principle in exercising his discretion as to costs by relying on pre-litigation
conduct of the Owners: see
Rossmo v. Vancouver Police Board et al.,
2003 BCCA 677 at paras. 59 and 62, 21 B.C.L.R. (4
th
) 68, followed in
Brito (Guardian ad litem of) v. Woolley
, 2007 BCCA 1 at paras. 27 and
28, 63 B.C.L.R. (4
th
) 139. This Court said in
Rossmo
at
para. 62:
I conclude that the trial judge
erred in principle by basing her decision on pre-litigation conduct. The very
purpose of the litigation was to determine whether the impugned conduct
supported a cause of action leading to a judgment in damages. The trial judge
found no liability against DCC Unger. Costs should follow that determination.
The order denying him costs amounts to a finding of quasi-liability and cannot
be sustained.
[63]
Similarly, in this case, the very purpose of the litigation was to
determine whether the failure of the Owners to retain a holdback supported a
cause of action by the appellant to enforce a claim against the holdback. The
trial judge found that it did not. The order denying the Owners costs amounts
to a finding of quasi-liability. While the nonexistence of the holdback is the
primary reason for denying the appellants claim, it is the application of the
law that gives rise to that result.
[64]
I would allow the Owners cross-appeal, set aside the order of the trial
judge denying them the costs of the summary trial, and order that they are
entitled to those costs.
Conclusion
[65]
I would dismiss the appeal, allow the cross-appeal, and order that the
Owners are entitled to the costs of the summary trial and the appeal.
The Honourable
Madam Justice Levine
I Agree:
The Honourable
Madam Justice Newbury
Reasons for Judgment of the Honourable Mr. Justice Chiasson:
[66]
I have had the privilege of reading a draft of the reasons for judgment
of Madam Justice Levine. I agree with her conclusion, but wish to add a few
comments.
[67]
A lien is a right
in rem
. It must attach to property. Newbury
J.A. made this very clear in
Columbia (Workers' Compensation Board) v.
Canadian Imperial Bank of Commerce
(1998), 157 D.L.R. (4th) 193. Section 4
requires a person liable on a contract, in this case the owners, to retain
money payable to contractors. Retain means continue to have; keep
possession of:
Concise Oxford English Dictionary
,
11
th
ed.
The money retained is the property to which the lien attaches.
[68]
In
Voth Bros. Const. (1974) Ltd. v. National Bank of Canada
(1988), 54 D.L.R. (4th) 534 (B.C.C.A)
,
this Court observed that the
holdback did not have to be in a specific fund. Section 5 was a new feature of
the
Builders Lien Act
, S.B.C. 1997, c. 45 (which came into force on
February 1, 1998). It provides for the creation of a specific fund: the
holdback account.
[69]
In its factum, the appellant stated, without reference to authority,
that the legislation provides for three liens: land, holdback and holdback
account. In my view, that is not correct. There are two liens only: the land
lien and the holdback lien. The holdback account is merely the holdback held
in a designated fund, from which liens are paid. It is the same money that is
required to be retained by s. 4.
[70]
This is clear from a consideration of ss. 4 and 5. Section 4(1)
requires the retention of money. Section 5(1)(b) requires that money to be put
into a depository, unless the money is retained by a lending institution (ss.
5(4), 4(4) and (5)). The failure of an owner to put the money into a
depository or to have it retained by a lender does not relieve the owner of the
responsibility to retain the money pursuant to s. 4.
[71]
In
Shimco
there was a holdback; there was property to which the
holdback lien could attach. In this case, as Madam Justice Levine observes,
there was no holdback. The owners did not retain the money required to be
retained by s. 4. There was no property to which the lien could attach. That
is why the appellant cannot obtain a declaration of lien. If an owner has not
retained money, whether in or not in a specific fund, no lien can arise.
[72]
The appellants difficulty derives from the legislation. Section 4
provides for a lien. The legislation is silent on any remedy that may be
available to a claimant arising out of an owners failure to meet the statutory
obligation to retain funds to which that lien could attach. There may be such
a remedy, about which I give no opinion, but a declaration of lien is not one of
them.
[73]
I also would dismiss this appeal.
The Honourable
Mr. Justice Chiasson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Domirti v. Domirti,
2011 BCCA 30
Date: 20110128
Docket: CA037259
Between:
Janice Marian
Domirti (Skinner)
Respondent
(Plaintiff)
And
Doriano Domirti
Appellant
(Defendant)
Before:
The Honourable Madam Justice Saunders
The Honourable Madam Justice Levine
The Honourable Madam Justice D. Smith
Supplementary Reasons
to: Court of Appeal for British Columbia,
October 27, 2010 (
Domirti v. Domirti,
2010 BCCA 472,
Vancouver Docket No. CA037259)
Counsel for the Appellant:
G. Walker
Counsel for the Respondent:
B. Ingram
Place and Date of Hearing:
Vancouver, British
Columbia
September 13, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
October 27, 2010
Written Submissions Received:
December 23, 2010,
January 6 and 21,
2011
Date of Supplementary Judgment:
January 28, 2011
Supplementary Reasons of the Court
Reasons for Judgment of the Court:
[1]
The appellant, Doriano Domirti, seeks an order for costs attendant upon
the order of this Court in which we allowed his appeal and terminated his
obligation to pay the respondent, Janice Skinner, spousal support after 16
years. The order provided that the date of termination was the date upon which
the appellant retired from his long-time employment.
[2]
In the court below, the respondent had opposed the appellants
application to terminate her spousal support. The appellant had made the
application at a review hearing, which was ordered as a condition of an earlier
order that awarded the respondent continued spousal support subject to a full
review after 12 months.
[3]
The review hearing was held on April 30 and May 1, 2009. On June 5,
2009, the court below dismissed the appellants application to terminate the
respondents spousal support (the Review Order) and maintained her spousal
support for an indefinite period. On February 1, 2010, the appellant retired
and began to receive his pension. That pension was divided with the respondent
pursuant to the terms of the parties order for divorce.
[4]
This Court allowed the appellants appeal, set aside the Review Order,
and granted the appellants application to terminate spousal support as of the
date of the appellants retirement on February 1, 2010. It further ordered that
any spousal support that has been paid by the appellant under the Review Order
since February 1, 2010, be applied to any outstanding arrears of support:
Domirti v. Domirti,
2010 BCCA 472 at para. 51.
[5]
Following the release of our reasons, the appellant applied to the
Registrar of the Court for clarification on the form and content of our order
and for the opportunity to make further submissions on the issue of costs.
[6]
In regard to the first issue, we reiterate that the orders made by the
Court are contained in full in para. 51 of our reasons for judgment. Any
further issue in regard to an accounting of payments that may have been made by
the appellant after February 1, 2010, against the respondents share of his
pension, are a matter that in our view must be addressed by way of application
in the court below.
[7]
In regard to the issue of costs, it is our view that pursuant to R. 23
of the
Court of Appeal Rules,
costs of the appeal follow the event and
therefore the appellant as the successful party in this Court is entitled to
his costs of the appeal. It is also our view that as a result of our order on
appeal, the parties success in the court below was divided. While the
appellant succeeded in terminating his obligation to pay spousal support, the
respondent succeeded in continuing that obligation until February 1, 2010, when
the appellant retired. Accordingly, we would order that each party bear their
own costs of the appellants application in the court below.
The Honourable
Madam Justice
Saunders
The Honourable
Madam Justice
Levine
The Honourable
Madam Justice D.
Smith
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Lebrun,
2011 BCCA 42
Date: 20110128
Docket: CA038286
Between:
Regina
Respondent
(Plaintiff)
And
Anthony Roland
Lebrun
Appellant
(Defendant)
Before:
The Honourable Mr. Justice K. Smith
The Honourable Madam Justice Bennett
The Honourable Madam Justice Garson
On appeal of sentence from:
Provincial Court of British Columbia, June 18, 2010
(
R. v. Lebrun
, Port Coquitlam Registry No. 80542-2C)
Oral Reasons for Judgment
Counsel for the Appellant:
H.M. Patey
Counsel for the Respondent:
E.A. Campbell
Place and Date of Hearing:
Vancouver, British
Columbia
January 27, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 28, 2011
[1]
GARSON J.A.
: Anthony
Roland Lebrun applies for leave to appeal and, if leave be granted, he appeals
a global sentence of six years i
mposed by a
Provincial Court judge
on June 18, 2010, following his guilty plea to
charges of forcible confinement, and illegal use of a
firearm while committing
forcible confinement.
[2]
T
he actual sentence for the two offences
was as follows: four and one-half years for the unlawful confinement and
one and one-half years consecutive for the use of a firearm while committing an
offence. This sentence was reduced by three and one-half years to reflect
credit for 21 months served in pre-trial custody. Therefore the custodial sentence
imposed on him was one year for the charge of unlawful confinement and one and
one-half years for the firearm offence, for a total sentence of two and
one-half years.
[3]
Mr. Lebrun raises two
grounds of appeal. First he says the sentence is unfit because it is outside
the range of sentences usually imposed for similar offences and similar
offenders. Second he says that the judge's comments from the bench during the
sentencing, combined with her rejection of both Crown and defence submissions,
demonstrated a reasonable apprehension of bias.
[4]
On appeal, Mr. Lebrun asks
that this Court substitute a global sentence of four years.
[5]
The Crown argues that the
appeal should be dismissed.
[6]
At the
sentencing hearing the Crown had sought a 48 month global sentence. The
defence argued for time served which amounted to
42 months after granting credit for the time Mr. Lebrun had spent on remand. The
judge indicated in the course of submissions that she was considering a longer
sentence than the one recommended by either counsel.
Background facts
[7]
These offences arose from an incident that began
on September 13, 2008. Mr.
McCann, one
of the co-accused, was convinced that the two complainants, Mr. Morgan and
Ms. Cochran had stolen
a bottle of Oxycontin pills from him. During the
course of the day, the dispute escalated. At some point Mr. Lebrun told Mr.
Morgan that Mr. McCann had handed the dispute over to him, saying "its
out of Mike's hands." In other words, Mr. Lebrun took over an enforcer
type role. In doing so he and the co-accused, Mr. Pastulovic, used duct-tape to
confine Mr. Morgan and Ms. Cochran in a small bathroom in the house. Mr. Morgan
was put on the floor of the bathroom where
Mr. Lebrun and Mr. Pastulovic, wearing boots,
stomped on his neck, tore
his earrings out of his ear, struck him with the butt end of a
pump action shotgun, and threatened him in such a
way that Mr. Morgan firmly believed
he would
be killed. Ms. Cochran was similarly restrained and threatened. She eventually
managed to escape through the bathroom window. She called the police from a
neighbour's home and Mr. Morgan was thereafter rescued. Mr. Morgan was still
restrained in the bathroom when the police arrived. The police found one of the
two firearms with three shells in the magazine, one was loaded in the chamber
and the safety was in the off position. The three accused were arrested at the
home.
[8]
This terrifying ordeal had lasting impacts, both
physically and psychologically on both complainants. Mr. Morgan required
stitches for injuries administered to him while he was restrained. At the time
of the sentencing, some 21 months after the offence, he continued to complain
of pain in his neck from the blows, and as the sentencing judge said,
"...he still has a very substantial emotional and psychological response
to these
actions, [that was] evident when
he testified in the course of the preliminary inquiry, both
in terms of
how the nightmares never end and the ongoing shock and disbelief that this
could happen to him." Ms. Cochran was similarly traumatized by these
events. She too was certain that she was going to be killed. The evidence is
not clear on the length of time the complainants were restrained, but counsel
advised that it was estimated to be some three to six hours.
Mr. Lebrun's background
[9]
Mr. Lebrun has a
dated criminal record for offences far less serious than this one.
The sentencing judge said she was giving no weight to the record for
purposes of sentencing. Mr. Lebrun was 43 years of age when sentenced. The
judge noted that: he
had been hard-working
throughout his life; he had his own concrete business; he maintained a
positive
relationship with his two children, (aged at sentencing 17 and 21); he had
coached his children in their sporting activities; he had been a model prisoner
during the 21 months he had spent in
custody;
he had positive and strong support from his family and friends; and he had
employment, as well as a home to
return to where he had a supportive,
common-law wife. Some 15 letters of support were filed by family members,
friends, associates, and employers. The theme running through these letters is
a description of Mr. Lebrun as a hard-working, loyal, reliable individual. The
judge expressed some concern that the authors of these letters may not have
been aware of the particulars of the offences.
Grounds of Appeal
Bias
[10]
Mr. Lebrun argues that this court should find
the judge demonstrated a reasonable apprehension of bias. In so arguing he
relies in part on the judge's advice to counsel that,
THE COURT: Thank you Mr.
Lebrun. Im going to take a break to think about what Im going to do. Counsel,
Ill tell you that walking into the courtroom this morning I was thinking of a
number of considerably higher than four years. I was in the range of double
that because of the nature of this incident, and I need to think about that a
bit longer.
Some of my remarks will have probably flagged that those are more
of the direction of my concerns here, but this has all brought - - this has all
been forced with - - the firearm is the part that concerns me the most in terms
of moving it beyond the range thats been spoken to. So I am going to go away
and think about it for the break and if either of you want to address that,
youre welcome to do that after the break as well, because I am at the moment
of two minds, but I think in fairness I need to tell you that. Well stand down
for 15 minutes.
[11]
In concluding her sentence she said, I am
persuaded that I can be moved from my original impression or thought as to what
the sentence would be.
[12]
Mr. Lebrun argues that these
comments made by the judge give rise to a reasonable apprehension of bias. He
says that the comments indicate the judge had a firmly held view as to the
appropriate sentence before the sentencing proceedings began. He
contends that rather than having an open mind as
to a fit sentence, the judge viewed counsel's role as needing to persuade her
to depart from her pre-determined decision
as to the length of a fit
sentence.
[13]
The Crown contends that
these comments, and others, taken in context do not reflect a closed mind but
rather one that was open and inviting of submissions. The Crown notes that the
judge appropriately alerted counsel to the fact that she was considering a
higher sentence than the one recommended by both counsel. It was, the Crown
says, appropriate for the judge to alert counsel to her concerns and allow them
the opportunity to address those concerns. The Crown says that it is important
to note the context of the judge's submissions. She had presided at the
preliminary inquiry so she was familiar with the particulars of the offence
before the sentencing hearing began.
[14]
On appeal, the issue is
whether the judge's comments may reasonably be construed as indicative of the alleged
apprehension of bias.
[15]
The
test for appellate review where bias is alleged was articulated by Cory J. in
R.
v.
R.D.S.,
[1997] 3 S.C.R. 484, at paras. 104 and 105:
104 In
Valente v. The Queen
, [1985] 2 S.C.R. 673,
at p. 685, Le Dain J. held that the concept of impartiality describes "a
state of mind or attitude of the tribunal in relation to the issues and the
parties in a particular case". He added that "[t]he word 'impartial'
. . . connotes absence of bias, actual or perceived". See also
R. v.
Généreux
, [1992] 1 S.C.R. 259, at p. 283. In a more positive sense,
impartiality can be described -- perhaps somewhat inexactly -- as a state of
mind in which the adjudicator is disinterested in the outcome, and is open to
persuasion by the evidence and submissions.
105 In contrast, bias denotes a state of mind that is in
some way predisposed to a particular result, or that is closed with regard to
particular issues. A helpful explanation of this concept was provided by Scalia
J. in
Liteky v. U.S.
, 114 S.Ct. 1147 (1994), at p. 1155:
The words [bias or prejudice]
connote a favorable or unfavorable disposition or opinion that is somehow
wrongful
or
inappropriate
, either because it is undeserved, or because it rests
upon knowledge that the subject ought not to possess (for example, a criminal
juror who has been biased or prejudiced by receipt of inadmissible evidence
concerning the defendant's prior criminal activities), or because it is
excessive in degree (for example, a criminal juror who is so inflamed by
properly admitted evidence of a defendant's prior criminal activities that he
will vote guilty regardless of the facts). [Emphasis in original.]
Scalia J. was careful to stress
that not every favourable or unfavourable disposition attracts the label of
bias or prejudice. For example, it cannot be said that those who condemn Hitler
are biased or prejudiced. This unfavourable disposition is objectively
justifiable - - in other words, it is not wrongful or inappropriate:
Liteky
,
supra
, at p. 1155.
[16]
And at paragraph 107, he
concluded his discussion of the concept of bias by noting that
to establish bias, "It must be demonstrated
that those beliefs, opinions or biases prevent
[the decision-maker] from
setting aside any preconceptions and coming to a decision on the basis of the
evidence." (citation omitted.)
[17]
In
R. v. Bertram
, 1989 CarswellOnt 1511
[1987] O.J. No. 2123, Watt J. had this to say about a judge expressing his
views during the course of submissions on sentence:
[68] It is no doubt accurate
to observe that the learned Provincial Court judge, on occasion, indicated the
appropriateness of the terms of imprisonment which were to have been the
subject of the joint submission, but he equally made it plain that sentence would
be determined on the basis of evidence and submissions. It would scarcely seem
unusual that, when a range of sentence or a specific sentence is suggested by
counsel, a judge daily involved in criminal cases may have some views on its
appropriateness and express them to counsel. That he or she does so could
scarcely be a ground of disqualification on account of a reasonable
apprehension of bias else the work of the criminal courts would never be done.
Judges are required to approach the task of sentencing, as other tasks in the
trial and disposition of criminal cases, with a mind that is and appears to be
open to reason and persuasion, not with one that is empty of it and unschooled
by experience. Neither is a judge required to remain mute during proceedings.
Views may be expressed and exchanged with counsel. To do so is not, per se, to
create, in every case, a reasonable apprehension of bias. In the entire
circumstances of this somewhat unusual case, I am not persuaded that what here
occurred demonstrates a case of reasonable apprehension of bias or other
jurisdictional error.
[18]
I agree with the comments made by Watt J. And I
believe his comments are equally applicable to this case.
[19]
The sentencing judges comments,
said to be indicative of bias, include her comment that she thought the authors
of the reference letters did not "have the foggiest clue" about the
nature of the offence. The judge said that she would have expected the letters
to have
acknowledged in the context of
their description of Mr. Lebrun's positive character
some sense of
shock at what he had done.
[20]
In this case, the judge's
comments, taken in the context of the whole proceeding, show that she was
particularly troubled by Mr. Lebrun's gratuitous violence, by the significant
impact on the complainants, and by Mr. Lebrun's seemingly inexplicable
involvement over someone else's trifling affair. She described his conduct as
having been motivated by a misplaced sense of loyalty. That she communicated
clearly to counsel she was considering the offence in a more serious light than
Crown or defence is not evidence of bias. It was necessary for her to
communicate to counsel that she was considering a much longer sentence than
either of them expected and to invite further submissions. Her comments before
she retired to consider her decision clearly indicate she was giving anxious
consideration to all that had been said and was weighing the mitigating factors
against her view as to the seriousness of the offence. I disagree with the appellants
submission that the judge had a fixed starting point from which she began her
consideration of the appropriate sentence. Rather, after she retired she heard
further submissions from defence counsel. I see nothing either untoward or
indicative of bias in these comments. I would not accede to this ground of
appeal.
Fitness of Sentence
[21]
I turn next to the
second ground of appeal. That is the argument that the sentence
is not fit. Mr. Lebrun's counsel says the judge over-emphasized the
use of a gun as an aggravating factor, and under-estimated the mitigating
personal circumstances.
[22]
Appellate courts must show great deference to sentencing decisions of a
trial judge. Only if the sentence is not fit or if the judge erred in principle
should the Court interfere on appeal.
R. v. L.M.
, 2008 SCC 31, [2008] 2
S.C.R. 163 at para. 14.
[23]
Mr. Lebrun contends that the judge placed undue
emphasis on his use of a firearm (it was already accounted for in the minimum
mandatory consecutive sentence under s. 85(3)(a) and 85(4) of the
Criminal Code
),
and that she failed to give sufficient weight to Mr. Lebrun's
otherwise non-violent conduct and substantial community
support.
[24]
Section 85(3)(a) provides
that a judge must sentence an offender to a mandatory minimum sentence of one
year for offences that include the use of a firearm while committing an indictable
offence. Subsection (4) mandates that that sentence be served consecutively to
any punishment imposed on the person for an offence arising out of the same
event.
[25]
Mr. Lebrun's argument seems
to rest on the notion that where an offender is sentenced under s. 85(1) no
account should be taken of the use of a firearm as an
aggravating factor in the overall consideration of the main offence, in
this case unlawful
confinement (s. 279(2)). The judge considered the use
of the firearm as a significantly aggravating factor. Its use cannot be
entirely separated from her consideration of the unlawful confinement. The
aggravating factors she mentioned are the following:
·
More than one firearm was used in the commission of the offence.
·
The firearms were brought into the house specifically to be used
during this incident.
·
One of the firearms was loaded, had a shell in the chamber, and
had the safety in the off
position when the police arrived.
·
The appellant used the firearm to scare or threaten the
complainants.
·
As a consequence of the use of the firearms both complainants
believed they were going to be
killed. Mr. Morgan specifically became fearful of being killed when the firearm
was used to threaten him.
[26]
In my view s. 85(1) is intended to be an
additional consecutive sentence for precisely the type of incident that
occurred in this case. If, as Mr. Lebrun contends, a judge is to discount the
use of the gun in the main offence, then there would be no additional penalty under
s. 85(1) which seems contrary to the intention of the section. I would not
accede to this argument on appeal.
[27]
Counsel for Mr. Lebrun also
argues that the sentence was not fit given the circumstances of this offender
and this offence. He argues that even for home-invasion type offences involving
firearms, lesser sentences than in the case at bar have been imposed. Both
counsel referred to a series of home invasion type cases as guidance in this
sentencing.
[28]
Both parties rely on
R.
v. N.P.D.
,
2002 BCCA 304, in which a 19 year old accused with a
serious
related record was sentenced to an
effective sentence of five and one-half years.
N.P.D.
plead guilty (in connection with a
home invasion type offence) to unlawful confinement, assault with a weapon,
breaking and entering a dwelling and having his face masked with intent to
commit an indictable offence. He tied up the occupants of the house with zap
straps and one of the intruders stood guard over the occupants with a gun. The
incident lasted about 15 minutes. Madam Justice Levine, speaking for the court,
said at para. 20 that the appropriate range for a home invasion type of offence
had been established by the Court to be five to eight years.
[29]
In
R. v. Bernier
,
2003 BCCA 134, a five judge division of this Court considered the wide ranging
and possibly conflicting authorities on sentences imposed in home invasion type
offences. In that case, the Court reduced Mr. Berniers sentence of 14 years to
six years. Mr. Bernier had broken into a home, struck one of the occupants with
a gun, briefly confined the occupant and stolen money.
[30]
In
R. v A.J.C
., 2004 BCCA 268, this Court noted that the range
for serious home invasions was nine to 10 years and higher than that for more
egregious home invasions (para. 45). The charges to which
A.J.C
. had
pleaded guilty, included kidnapping, breaking and entering, unlawful
confinement and having his face masked while committing those offences. On
appeal the sentences were
reduced from 14 years to 11 years
. In this
case, the home invasion was planned in order to terrorize the victims in an
effort to force payment of $50,000. The intruders were armed with sawed-off
shotguns, pepper-spray and at least one knife. The intruders were in the home
for three hours. These facts led the Court to conclude that that case was a
more serious home invasion meriting 11 years. In a helpful review of the recent
home invasion sentencing cases, at paragraph 33, Chief Justice Finch, speaking
for the court, discussed the
Bernier
case and several subsequent cases:
33 After sentences were pronounced in the present
cases, a division of five judges heard the sentence appeal in
R. v. Bernier
(2003), 177 C.C.C. (3d) 137, 179 B.C.A.C. 218, 2003 BCCA 134. A five judge
panel was appointed specifically because of the perceived uncertainty as to the
appropriate range of sentence for "home invasion" type cases in light
of
N.P.D.
,
supra
and
D.A.W.
,
supra
.
34 In
Bernier
,
supra
, the court
unanimously agreed to reduce the appellant's sentence from 14 years to six
years for convictions of breaking and entering a residence to commit robbery,
robbery, assault, and possession of stolen property. It is significant that the
Crown proved that Bernier planned the home invasion but not that he was present
during its execution. He was therefore convicted as a party rather than a
principal to the offences.
35 Although the court in
Bernier
gave three
concurring judgments, several important points emerge. First, this court's
references to sentence "ranges" serve merely as guidelines for
sentencing judges. They are not conclusive of the appropriate sentence in any
given case. As Southin J.A. (Hollinrake J.A. concurring) explained at [paragraph]
40-42:
[40] As to the term
"range", in sentencing cases its proper use, in my opinion, is only
as a short way of describing what the court has done in previous appeals in
which the offence and the offender were similar to those in the case at bar.
The reason is this: no division of this Court has the power to bind other
divisions on future sentence appeals.
[41] While the past is a prelude
to the present, the past cannot always govern the present, nor can what we say
now determine the future.
[42] A "range" does not
preclude on grounds of deterrence or denunciation or the gravity of a
particular offence a sentence different from that "range". Nor does a
"range" preclude a lesser sentence if some special circumstances
warrant such a course. When considering any particular case similar to
R. v.
D.A.W.
or to
R. v. N.P.D.
or to this case, trial judges and this
court will have in mind those sentences as part of the "range". The
"range" is not conclusive.
See also [paragraphs] 73-75 per Prowse J.A. (Levine J.A. concurring);
and [paragraphs] 96, 105-106 per Newbury J.A.
36 Second, the task of arriving at appropriate
"ranges" of sentence for "home invasion" type crimes is
particularly difficult given the different combinations of offences that may
actually be committed. Prowse J.A. stated at [paragraphs] 81-82:
[81] As noted by my colleagues,
the difficulty with a discussion of range of sentences with respect to home
invasions is that there is no single crime known as "home invasion".
Rather, that term is loosely used as a shorthand expression for a combination
of offences involving a breaking and entering with intent to commit theft or
robbery, with knowledge or recklessness as to whether the dwelling is occupied
at the time, and frequently involving an assault on one or more occupants.
[82] Because the combination of
crimes charged in these cases will vary to some extent, it is difficult to
determine a relevant range of sentence. For this reason, the Court should
exercise more caution than usual in attempting to suggest general ranges of
sentence for home invasions.
See also [paragraphs] 36-37 per Southin J.A.; [paragraph] 97
per Newbury J.A.
37 Third, and finally, a sentence of 14 years, such as
that which the sentencing judge imposed on
Bernier
, should be reserved
for the most egregious and severe types of "home invasion" cases.
Southin J.A. stated that 14 years seemed higher than any sentence she had seen
for breaking and entering to commit theft ([paragraph] 49) and that it
"... appears to me to be giving up any hope or prospect that the applicant
might be rehabilitated and become a useful member of the community"
([paragraph] 52). Prowse J.A. generally agreed with these observations
([paragraph] 84, 87); see also Newbury J.A. at [paragraph] 107.
38 This court has decided two cases since Bernier that
are relevant.
39 In
R. v. Leggo
(2003), 184 B.C.A.C. 150,
2003 BCCA 392 [
Leggo
], the appellant and a co-accused were armed with a
wooden bat and imitation revolver. They kicked in the front door of a residence
and struck the occupant on the back of the neck with the revolver. The
intruders tied the victim up with duct tape and shoe lace, kicked him
repeatedly, and dragged him down a hallway where he was left lying face-down on
the floor. They stole some marijuana, $7800 in cash and other personal items
and then left the residence. The appellant was 32 years old and had a lengthy
criminal record. The trial judge found that there were no mitigating factors.
The accused was sentenced to eight and a half years overall, in addition to
eight months pre-trial custody, for break and enter to commit robbery, unlawful
confinement, possession offences and using a firearm during a robbery. This
court affirmed the effective global sentence of 9 years and 10 months.
40 In
Barton
,
supra
, this court upheld a
sentence of effectively 14 years for an especially brutal "home
invasion" which resulted in convictions for manslaughter and robbery. In
that case, the appellant and a co-accused were armed with a gun and knife and
forced their way into a house to complete a planned robbery. A confrontation
with one of the occupants of the home ensued, in which he was killed. Barton
appeared to have played a lesser role in the death, but this court accepted the
trial judge's finding that he was as morally culpable as the co-accused because
this was a planned joint venture. The appellant was 22 years of age and
aboriginal. He had a lengthy record and led no evidence of any efforts at
rehabilitation. This court upheld the sentence of 11 years for manslaughter and
seven years concurrent for robbery, after giving credit for 20 months of
pre-sentencing custody. I therefore take the case to support a sentence of
approximately 14 years.
41 In my view, the 15 year
sentence imposed in
Jones
,
supra
, and the 14 year sentence
effectively imposed in
Barton
,
supra
indicate the length of
sentence which may well be appropriate in the most aggravated circumstances
where a "home invasion" involves not only a break and enter to commit
robbery, the terrorizing and confinement of victims, and the use of weapons to
achieve these objectives, but also the infliction of serious injuries, sexual
assault or death.
[31]
The case before the court is not a home invasion insofar as the
complainants were tenants of Mr. McCann. However the events do resemble home
invasion scenarios, and I agree that it was appropriate for the parties to
treat this case as a home invasion in order to obtain some guidance from the
case authorities. That being the case, in my view, the violence in this case places
it towards the more serious end of the spectrum. The length of time that the
complainants were confined, the violence that was perpetrated upon them, as
well as the threats to their lives are all factors that point to a longer
sentence. The judge took into account all these factors as well as the
mitigating factors. Mr. Lebruns personal circumstances and strong involvement
in family and community life were clearly factored into her sentence, including
the fact that the offence seemed out of character given Mr. Lebruns background.
Balanced against these mitigating factors was the extreme degree of violence
administered to the complainants for no really explicable reason. The
sentencing principles of denunciation and general deterrence are important factors
in this case and ones that would tend to support the fitness of the sentence
imposed by the trial judge. I would not find that her sentence was unfit or in
any way inconsistent with the range of sentences given in the cases mentioned. Indeed,
as the Crown says, a considerably higher custodial sentence would not have been
inconsistent with the authorities.
[32]
I would grant leave and dismiss the appeal.
[33]
K. SMITH J.A.
: I agree.
[34]
BENNETT J.A.
: I agree.
[35]
K. SMITH J.A.
: Leave to appeal is granted and the appeal is
dismissed.
"The Honourable Madam Justice Garson"
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Wallster v. Erschbamer,
2011 BCCA 27
Date: 20110128
Docket: CA037767
Between:
Suzanne Marie
Wallster
Appellant
(Petitioner)
And
Miriam Erschbamer
and Robert Walker Bowe
Respondents
(Respondents)
Before:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Mackenzie
The Honourable Mr. Justice Hinkson
On appeal from: Supreme
Court of British Columbia, November 26, 2009
(
Wallster v. Erschbamer,
2009 BCSC 1619, Vancouver Registry No. S096482)
Counsel for the Appellant:
W. Kosteckyj
Counsel for the Respondents:
J.L. Straith
Place and Date of Hearing:
Vancouver, British
Columbia
January 10, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 28, 2011
Written Reasons by:
The Honourable Madam Justice Newbury
Concurred in by:
The Honourable Mr. Justice Mackenzie
The Honourable Mr. Justice Hinkson
Reasons for Judgment of the Honourable
Madam Justice Newbury:
[1]
Ms. Wallster appeals an order of the Supreme Court of British Columbia
below which dismissed her petition for an order rescinding, varying or
cancelling a restrictive covenant and easement registered against her property in
favour of the respondents and their successors in title. The order was made on
November 26, 2009 by Mr. Justice Masuhara for reasons indexed as 2009
BCSC 1619.
[2]
Ms. Wallster lives to the immediate east of the respondents in
North Vancouver. She and her husband wished to build a new house that would
incorporate various energy-efficient features. Beginning in 2008, they
prepared their plans and obtained building approval from the District of North
Vancouver, but they and their designer/contractor, Mr. Henderson, did not
review the terms of the restrictive covenant and easement until February 2009.
These charges had been registered against title to the appellants property
since 1972 and ran with the land.
[3]
The terms of the restrictive covenant limit the height measured from
the height of the sill of a west-facing window of the respondents house that
overlooks the appellants property of any dwelling or structure that may be
erected on that property. Before the owner may commence construction of any such
dwelling or structure, the covenant requires that the written approval of the Grantee
therein, i.e., the respondents, be obtained.
[4]
The house Ms. Wallster planned to build would originally have set the
height of her roof approximately four feet higher than permitted by the
covenant. After various discussions between the neighbours, the appellant
revised her plans at least twice, such that by the time of the hearing below, the
height being proposed by the appellant would exceed the height restriction by
only 16 inches. An alternative plan prepared by Mr. Henderson
did
comply with the restrictive covenant, but it was problematic from the
appellants point of view: it would allow little natural light into the rear
side of her house and it would be necessary for ventilation of the first floor
to be carried out by mechanical means something Ms. Wallster finds intolerable.
This design would also entail additional costs of approximately $100,000 for
the appellant.
[5]
The respondents refused to agree to the 16-inch modification Ms.
Wallster had proposed. The chambers judge found that the respondents had
purchased their property because of the expansive views afforded from their
house. In his words:
The evidence of Mr.
Bowe and Ms. Erschbamer establishes that the view from the Reference window
provides a wonderful view from their living room that covers a view of downtown
Vancouver between BC Place and Canada Place through to the southern part of
Vancouver Island and north to approximately Nanaimo. They entertain both
friends and business associates in this room. Further, their evidence is
supported by that of Mr. Krahn, a residential designer consulted by the
respondents, who supported the aesthetic value of a long distance view. He also
reinforced the conventional wisdom that a vista of an extensive nature has
financial value and that diminishing the view with a portion of a roof would
serve to impair that value. He says that the height of the house in the revised
design would diminish the view from the Reference window. [At para. 19.]
[6]
The easement granted a corridor almost seven feet wide along the east
side of the appellants property, running its length between the two subject
lots, approximately 109 feet long. It provided to the Grantee (again, the
respondents in this case) a free and uninterrupted right and easement, for
persons, animals and vehicles, through, along and over the appellants
property and the right to pass and re-pass over the said right and easement
for the purposes of ingress and egress to and from the said right and
easement. The Grantor (now the appellant) covenanted to build and fence
and/or a wall to the satisfaction and discretion of the Grantee on the
easement, to clear the easement of any trees, growth or obstructions that might
interfere with the passing or repassing ... for the purpose of ingress and
egress to and from the said easement, and to use the easement for gardening
or planting of shrubs [or] trees that the Grantee might wish to have planted
on the easement.
[7]
A wall has been in place on the easement since before the respondents acquired
their property. It runs north/south and extends about 13 feet back from the
southern property line, and encroaches about ten inches over the boundary of
the easement onto the appellants lot. The respondents constructed a wall
adjoining and running perpendicular to the first wall. The second wall blocks
access to the easement from Tamarack Road, thus (the appellant says)
restricting use of the easement to the respondents. As the appellant states in
her petition, The Easement which is granted in favour of the Respondents is
entirely lodged and walled in such a manner that the Petitioner has no ability
to use such Lands.
[8]
Ms. Wallster brought her petition seeking cancellation or modification of
both encumbrances, pursuant to s. 35(2)(b) of the
Property Law Act
,
R.S.B.C. 1996, c. 377. Section 35 provides:
35 (1) A person
interested in land may apply to the Supreme Court for an order to modify or
cancel any of the following charges or interests against the land, whether
registered before or after this section comes into force:
(a) an easement;
(b) a land use contract;
(c) a statutory right of way;
(d) a statutory building or
statutory letting scheme;
(e) a restrictive or other
covenant burdening the land or the owner;
(f) a right to take the produce
of or part of the soil;
(g) an
instrument by which minerals or timber or minerals and timber, being part of
the land, are granted, transferred, reserved or excepted.
(2) The court
may make an order under subsection (1) on being satisfied that the application
is not premature in the circumstances, and that
(a) because of
changes in the character of the land, the neighbourhood or other circumstances
the court considers material, the registered charge or interest is obsolete,
(b)
the reasonable
use of the land will be impeded, without practical benefit to others, if the
registered charge or interest is not modified or cancelled
,
(c) the
persons who are or have been entitled to the benefit of the registered charge
or interest have expressly or impliedly agreed to it being modified or
cancelled,
(d) modification
or cancellation will not injure the person entitled to the benefit of the
registered charge or interest, or
(e) the registered instrument is
invalid, unenforceable or has expired, and its registration should be
cancelled. [Emphasis added.]
[9]
The appellant submitted that her reasonable use of her property the
construction of an energy-efficient home will be impeded without practical
benefit to others if the modification or cancellation is not permitted. The
chambers judge elaborated:
The essence of the petitioners
argument is that since the roof at the sought after height will obscure the
view only a minimal amount more than it would if the roof were built to the
height specified in the [restrictive covenant], there is no practical benefit
to the respondents to maintain the height restriction. In support of this
position, the petitioner relies upon the affidavits of Mr. Henderson and view
images prepared by Mr. Humney, a designer. Mr. Henderson also deposes that
alternatives to the design to bring the house within compliance of the [restrictive
covenant], have been considered, but that they would be at great expense, or in
the case of blasting bedrock to build up from a lower level, would also not be
permissible. He further deposes that the excess height is required as the
passive ventilation design requires ceiling fans on the upper floor for air
flow. In the absence of a modification of the height restriction, mechanical
ventilation equipment on the exterior of the building would be required which
would create ambient noise. Ms. Wallster says that she cannot tolerate the
effects of air conditioning. The other flaw that Mr. Henderson identifies in
the design without the height restriction being relaxed is that there would be
little light permitted into the rear of the house where the master and second
bedrooms are located. Mr. Henderson notes that this area of the house is
currently dark as there is little space between the respondents and
petitioners houses, only 14 feet. [At para. 10.]
[10]
Masuhara J. noted, correctly, that the appellant had the burden of
establishing that there was no practical benefit to others in keeping the
height restriction in place, and that both subjective and objective factors
could be taken into account in considering the question of practical benefit to
others. (See
Gubbels v. Anderson
(C.A. Vic. Reg., #V02171, June
16, 1995) at paras. 23-5.) After noting the aesthetic and financial value of
the respondents view (see para. 19 quoted above), he rejected the appellants contention
that the roof height she sought would impede the view only slightly and that
there were better views from other places in the respondents home. In his
analysis, the focus of the restrictive covenant was on the window specified
therein and the practical benefits derived
at that location
. The chambers
judge found no merit in the argument that the sought after roof height would
only impede slightly the view from a roof built to the height permitted [by the
restrictive covenant], given that a practical benefit exists. (Para. 20.)
[11]
The chambers judge went on to observe that the additional height sought
by Ms. Wallster was not necessary to meet building code
requirements,
although there was evidence from Mr. Henderson that it was most desirable.
The judge continued:
... The driver of the roof height
is the petitioners desire for passive ventilation in the house, and that
ceiling fans to permit this are required and apparently necessitate the greater
height. It would also provide for additional natural light from glass panels
which would be installed at the top of the walls. However, Mr. Henderson has
acknowledged that mechanical ventilation could be used to achieve the
ventilation requirements without increasing the roof height. It is only the
petitioners preference for passive ventilation that necessitates the higher
roof level. While Mr. Henderson deposes that the alternative of digging out the
foundation and having the structure built up from a lower level is not feasible
because this would require blasting, which in his view would not be permitted
because of the proximity to the respondents foundation and that, in any event,
such a task would require the total demolition of the existing structure and
re-servicing of the lot at great expense,
this is not a factor that is
relevant to the issue of a practical benefit
. [Para. 21; emphasis added.]
In all the circumstances, he concluded that the
appellant had failed to demonstrate [the] absence of a practical benefit to
others arising from the restrictive covenant. He also found that none of the
other paras. of s. 35(2) was applicable.
[12]
The chambers judge noted that the parties dispute concerning the
easement was secondary to the dispute over the height restriction. However,
he found that the easement also provided a practical benefit to the respondents
with respect to light, air and access; that the construction of the wall along
the easement had been expressly contemplated by its terms; that the easement
facilitated the need for light and air in terms of space; and that if any
change were to be considered in terms of the removal of either wall or part
thereof, municipal or other public approvals would be required under
s. 35(4)(a) of the Act. Such approvals had not been sought.
[13]
In the result, although the Court acknowledged that it was unfortunate
that the appellant and her husband found themselves in a difficult position
regarding their home redesign, the petition was dismissed.
On
Appeal
[14]
In this court, Ms. Wallster asserts that the chambers judge erred
in failing to find that the reasonable use of her property would be impeded
without practical benefit to others if the restrictive covenant and easement
were not modified. In essence, it is said that in referring to what was
necessary to meet building code requirements and for ventilation purposes, the
chambers judge required the appellant to demonstrate necessity or unreasonable
hardship proving that her proposal constituted a reasonable use of her
property. In insisting on a reasonable alternative that would not require
the modification of the restrictive covenant, it is said the Court raised the
hurdle well above what was required by the statute and case law.
[15]
In the appellants submission, the chambers judge should instead have
asked only whether the sought-after modification constituted a reasonable use
of land a question that could only be answered in the affirmative. Then, it
is said, he should have asked himself whether, if the modification were not
permitted, the appellants use of her land would have been impeded without
practical benefit to others. On this view, the appellant submits, the
question was not whether the restrictive covenant provided a practical benefit
to Ms. Erschbamer and Mr. Bowe, but rather
whether a denial of the
16-inch modification
provided a practical benefit to them. (My emphasis.)
Since the respondents view was going to be impeded, at least on the horizontal
plane, in any event by the construction of the appellants house, she contends
that a roof design that would exceed the restriction by only 16 inches would
affect the respondents only minimally, and that there was no practical
benefit in
denying a 16 inch modification
given that the current view
would be lost in any event.
[16]
I must say that I do not read the Courts comments regarding the
necessity, or lack of necessity, for natural ventilation or for building codes
to be complied with, as material to the question of reasonable use, the first
branch of s. 35(2)(b). I read these observations and others regarding the
possibility of excavating further, as a recounting of the evidence given by Mr.
Henderson. In the end, the chambers judge said, this was not relevant to the
issue of practical benefit the second branch of s. 35(2)(b). (See para. 21,
quoted above.) I see no suggestion in the reasons that the appellants
proposed use of her land to build a residence would not have been a reasonable
use.
[17]
Nor do I agree that the chambers judge asked the wrong question on the
issue of reasonable use. While s. 35(2)(b) is not worded felicitously, the
question for the court seems clear enough: if the encumbrance is not modified,
will the reasonable use of the appellants property be impeded without
practical benefit to, in this case, the respondents? Put another way, does the
encumbrance as it now exists provide a practical benefit to the respondents?
This is not the same as asking whether the denial of a specific modification
will provide a practical benefit, although the difference is very subtle.
[18]
The appellant further argues that the application of s. 35(2)(b) of
the
Property Law Act
entails the balancing of the impediments that
will be suffered by the petitioner if the restrictive covenant is not cancelled
or modified, against the benefits enjoyed by the respondents and others if the
status
quo
is maintained. Counsel drew our attention to
Winmark Capital Inc.
v. Galiano Island and Local Trust Committee,
2004 BCSC 1754, where the Court
said this about s. 35(2)(b):
This subsection requires some balancing of the impediments
suffered by the petitioner against the benefits gained by the respondents and
others. In saying this, I recognize that this is not a mere balance of
convenience test. The petitioner must show a very substantial balance in
its favour before a covenant will be cancelled.
In the present case, I am unable
to say that there is a significant impediment to the petitioners current use
of the land as a result of the covenant ... [At paras. 42-3.]
[19]
I am not persuaded that s. 35(2)(b) should be approached as a
balancing exercise. As I read the provision, the petitioner (Ms. Wallster
in this case) must show that the reasonable use of the land (here, the erection
of her new house, which in my view is obviously a reasonable use) will be
impeded without practical benefit unless the petition is granted in other
words, that the continuation of the covenant or other charge provides
no
practical benefit. If this burden is not met, the petition should not be granted.
It is clear that practical benefit can include subjective factors such as
neighbourhood aesthetics (see
417489 B.C. Ltd. v. Scana Holdings Ltd.
(1997)
B.C.J. No. 2408, at paras. 72-4), and to that degree s. 35(2) may involve
the exercise or some discretion by the court. It may also be the case that a
truly minimal benefit for example, the preservation of one inch of the
height restriction in this case could also be disregarded on the principle of
de minimis non curat lex.
But that principle was not engaged in this
case, where there was evidence not only from the respondents but also from real
estate professionals as to the value, in both subjective and objective terms,
of preserving the respondents view as is. Various photographs and projections
of the comparative views from the respondents house with and without the 16-inch
modification supported the chambers judges conclusion that they enjoy a
practical benefit from the height restriction.
[20]
Turning to the easement, the appellant submits that although the
original purpose thereof was to provide access to the respondents dwelling (via
a side door near the middle of the side of the house) from Tamarack Road, that
purpose had been completely frustrated by the construction of the wall perpendicular
to the easement corridor. They suggest that the easement be reduced to a width
of about three feet and that it extend only as far as the side door, i.e., the
minimum necessary to accomplish what they say is the primary purpose of the
easement providing ingress and egress to the respondents house.
[21]
Even if the appellant is correct as to the primary purpose of the
easement, it seems to me that any narrowing of its width or length is almost
automatically a diminution of the practical benefit it affords to the
respondents and will afford to future owners of their property. The chambers
judge found that the easement facilitated the need for light and air as well as
access, and that the market value of the property would surely reflect the
existence of the easement and the restrictive covenant. I see no basis on
which we could interfere with this conclusion.
[22]
I would therefore dismiss the appeal.
The
Honourable Madam Justice Newbury
I agree:
The
Honourable Mr. Justice Mackenzie
I agree:
The Honourable Mr. Justice
Hinkson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Falati v. Smith,
2011 BCCA 45
Date: 20110202
Docket: CA038069
Between:
Hourash Falati
Respondent
(Plaintiff)
And
Marion May Smith
Appellant
(Defendant)
Before:
The Honourable Mr. Justice K. Smith
The Honourable Madam Justice Bennett
The Honourable Madam Justice Garson
On appeal from: Supreme
Court of British Columbia, April 7, 2010
(
Falati v. Smith
, 2010 BCSC 465, Vancouver Registry M074325)
Oral Reasons for Judgment
Counsel for the Appellant:
A.B. Hudson
P.M. Arvisais
Counsel for the Respondent:
D.M. Mah
Place and Date of Hearing:
Vancouver, British
Columbia
January 27, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
February 2, 2011
[1]
BENNETT J.A.
: Mr. Falati, the respondent, was struck by a motor
vehicle driven by Ms. Smith, the appellant, on February 13, 2007. He suffered a
crush-type fracture to his left tibia and a fracture of the fibula. He was
hospitalized, underwent surgery, and after discharge from hospital, underwent a
course of physiotherapy. The trial judge found that there was a possibility
that he would suffer a permanent disability associated with the injury.
[2]
The trial judge made the following awards:
·
Non-pecuniary damages
$ 85,000.00
·
Gross Past Loss of Earning Capacity:
$180,000.00
·
Future Loss of Earning Capacity:
$ 75,000.00
·
Special Damages:
$ 1,102.44
[3]
The appellant appeals the award for gross past loss of earning capacity
and the future loss of earning capacity.
Facts
[4]
Mr. Falati had three potential sources of income. At the time of the
accident he had a photography business, from which he had earned $40,000 during
2006. His father was in negotiations to purchase a café. The closing date was
set for April 2007, and Mr. Falati planned to be the manager of the café,
earning $5,000 per month. Mr. Falati was also involved in developing a
restaurant in Yaletown with another gentleman, who was the financier. Mr.
Falati was to manage this restaurant earning $6,000 per month.
[5]
The trial judge concluded that Mr. Falati would not be able to perform
both restaurant jobs, and eventually another manager would have to be hired for
one of the restaurants had both proceeded.
[6]
The café purchase did not complete. The trial judge concluded that the
failure of this business was causally connected to the accident, a finding
which on appeal is not disputed by Ms. Smith. The financier eventually pulled
out of the Yaletown restaurant. The trial judge concluded that he would have
pulled out regardless of the accident, and found that any delay in the opening
of the restaurant was not causally connected to the accident.
[7]
As noted, Mr. Falatis father was going to invest in the café. When that
deal collapsed, and the financier for the Yaletown restaurant withdrew, his
father invested his money into the Yaletown restaurant. The trial judge found
that the father would not have had the money to invest in the Yaletown
restaurant if he had purchased the café. Mr. Falati invested $300,000 of his
own money in the Yaletown restaurant, derived from the sale of his condominium.
Mr. Falati began receiving $6,000 per month around June 2008, initially for his
work setting up the restaurant and then for his work at the restaurant. The
restaurant opened for business in December 2008. Mr. Falati also holds a 40%
ownership in the restaurant with his father. Mr. Falati was unable to perform
all of the functions of manager. Mr. Canuel had to be hired to manage the
restaurant. The trial judge found that there was a causal connection between
the accident and the necessity to hire a manager. He also considered the fact
that the manager, who was also a sommelier, added some benefit to the business.
[8]
The trial judge found that Mr. Falatis injuries have continued to place
some limitations on his capacity to earn income from his photography. Mr.
Falati has not earned any income from photography since the accident. The trial
judge accepted Mr. Falatis evidence that if he was working at both of these
other jobs, he would earn around $10,000 per year from his photography. The
trial judge concluded that Mr. Falati would not be able to work at both
restaurants but would be able to augment his income through photography.
[9]
The trial judge found that there was a possibility that Mr. Falati would
suffer from a permanent disability in relation to his ankle. The evidence from
Mr. Canuel was that Mr. Falati had difficulty performing physical tasks at the
restaurant, which would be considered routine for a manager.
Standard of Review
[10]
The standard of review is well-established. An appellate court cannot
interfere with a trial judges findings of fact unless there is a palpable and
overriding error. The trial judge must have committed a manifest error, ignored
conclusive or relevant evidence, has misunderstood the evidence, or drawn
erroneous conclusions from the evidence before an appeal court can intervene. See:
Toneguzzo-Norvell
(Guardian ad litem of) v Burnaby Hospital,
[1994] 1 S.C.R. 114 at para. 16.
Past Loss of Earning Capacity
[11]
The appellant submits that the trial judge must have double counted the
income from the two restaurant positions when he assessed $180,000 for past
wage loss. Her submission is that $180,000 divided by 38 months (from the time
of the accident until the time of the judgment) approximates what Mr. Falati
would have earned from managing the café. The appellant submits that the trial
judge must not have taken into account and deducted the money earned by Mr.
Falati at the Yaletown restaurant.
[12]
The trial judge found that Mr. Falati would have worked at the café
earning $5,000 per month, but for the accident. The café deal was to be
finalized in early April 2007. Mr. Falati began to earn income from the
Yaletown restaurant in mid-2008. Therefore there was a 14 month period during
which Mr. Falati earned no income as a result of the accident. During this 14
month period his earnings from the café would have been in the range of $70,000.
Once Mr. Falati began earning income of $6,000 per month, he had to hire a
manager because he was physically unable to perform the job. Mr. Canuel has
been paid $5,000 per month since December 2008. As noted, Mr. Falati has a 40%
interest in the business. Thus, there is evidence that the business would have
been more profitable had it not had to retain Mr. Canuel. In addition, a
contingency taken into account by the trial judge is that Mr. Canuel is also an
experienced sommelier, and would add some benefit to the business. Finally, the
trial judge had the evidence of what Mr. Falati earned from his photography
business. Mr. Falati estimated that if he was working at both restaurants, he
could earn an additional $10,000 from his photography business. The trial judge
concluded that it was unreasonable for Mr. Falati to successfully work at two restaurant
managerial positions. However, he found that Mr. Falati would be able to
supplement his income through his photography business. The trial judge could
reasonably conclude that if Mr. Falati was only working at one job, he could
earn additional income from his photography, taking into account that he earned
$40,000 annually from this business before the accident.
[13]
Therefore, there was evidence before the trial judge from which he could
reasonably conclude that the past wage loss of Mr. Falati was in the range of
$180,000. The assessment for loss of earning capacity is not a mathematical
calculation. It is what it is called: an assessment. The trial judge considered
a number of hypothetical situations which could reasonably arise from the
evidence including those he considered contingencies, which might affect the
assessment. In my respectful view, there were available routes in the evidence
to his conclusion without double counting income as submitted by the appellant.
[14]
In my view, the trial judge did not commit an overriding or palpable
error when he made his assessment of past wage loss.
Future Loss of Earning Capacity
[15]
The appellant submitted that there was no evidence to support the award
of future wage loss. However, when asked whether the possibility of a permanent
ankle injury would attract such an award, counsel fairly conceded that it
would, given that Mr. Falatis current employment requires physical activity
which he is not able to perform fully.
[16]
In addition, there is evidence of a reasonable possibility that Mr.
Falati will be limited in his ability to earn income from his photography
business.
[17]
The trial judges assessment of $75,000 represents a salary of less than
a year from his work as a restaurant manager and his work as a photographer. In
my respectful view, this is a more than reasonable assessment taking into
account, as the trial judge did, the evidence and the potential contingencies.
[18]
I would dismiss the appeal.
[19]
K. SMITH J.A.
: I agree.
[20]
GARSON J.A.
: I agree.
[21]
K. SMITH J.A.
: The appeal is dismissed.
The Honourable Madam Justice Bennett
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Jim Pattison Enterprises Ltd. v. British Columbia
(Workers Compensation Board),
2011 BCCA 35
Date: 20110202
Docket: CA036883;
CA036885
Docket: CA036883
Between:
Jim Pattison
Enterprises Ltd., K. Smith Fishing Ltd.
and 289787 B.C. Ltd.
Appellants
(Petitioners)
And
Workers
Compensation Board of British Columbia
Respondent
(Respondent)
- and -
Docket: CA036885
Between:
Osprey Marine Ltd.
Appellant
(Plaintiff)
And
Workers
Compensation Board
Attorney General for the Province of British Columbia
Respondents
(Defendants)
Before:
The Honourable Madam Justice D. Smith
The Honourable Madam Justice Bennett
The Honourable Madam Justice Garson
On appeal from: Supreme
Court of British Columbia, February 2, 2009
(
Jim Pattison Enterprises v. Workers Compensation Board
, 2009 BCSC 88,
Vancouver Docket Nos. S073643 and S074852)
Counsel for the Appellant,
Jim Pattison Enterprises Ltd.:
H. Swanson
Counsel for the Appellant,
Osprey Marine Ltd.:
J. Perrett
Counsel for the Respondent,
Workers Compensation Board:
S. Nielsen
L. Courtenay
Counsel for the Respondent,
Attorney General:
V. Jackson
Place and Date of Hearing:
Vancouver, British Columbia
May 13 and 14, 2010
Supplemental Written Submissions:
November 26, 2010
Place and Date of Judgment:
Vancouver, British Columbia
February 2, 2011
Written Reasons by:
The Honourable Madam Justice D. Smith
Concurred in by:
The Honourable Madam Justice Bennett
Concurring Reasons by:
(P. 53, para. 144.)
The Honourable Madam Justice Garson
Reasons for Judgment of the Honourable
Madam Justice D. Smith:
[1]
These appeals raise constitutional issues that involve federal and
provincial regulatory regimes for worker safety on vessels in the commercial
fishing industry. Both the federal government and the provincial government of
British Columbia have entered into memoranda of understanding to ensure that
their mutual regulations co-exist harmoniously for the benefit of the worker. This
arrangement reflects the evolution of Canadian federalism from the classical
watertight compartments approach to the more flexible cooperative
federalism of modern Canada in dealing with the division of powers under the
Constitution
Act, 1867
[
Constitution Act
]. It is the latter approach that informs
the legal framework in which the constitutional issues raised in this appeal must
be examined.
A.
Overview
[2]
The appellant petitioners, Jim Pattison Enterprises Ltd., K. Smith
Fishing Ltd. and 289787 B.C. Ltd., are the owners of small fishing vessels. The
appellant plaintiff, Osprey Marine Ltd., is the owner of a large fishing
vessel. Collectively they appeal an order dismissing their proceedings
commenced by way of petition and action respectively, in which they challenged
the constitutional validity of certain provisions of the
Occupational Health
and Safety Regulations
, B.C. Regulation 296/97 [
OHSR
] enacted
pursuant to Part 3 of the
Workers Compensation Act,
R.S.B.C. 1996, c.
492 [
WCA
]. Alternatively, they seek a declaration that the impugned
provisions are inapplicable or inoperative to their commercial fishing
operations by application of the constitutional doctrines of interjurisdictional
immunity and/or paramountcy.
[3]
Madam Justice L. Smith heard the appellants respective applications for
judicial review and summary trial concurrently, as they were ordered to be
heard together. The Federal Government did not participate in the hearing. On
February 2, 2009, in written reasons for judgment, she dismissed both
applications, finding that the appellants operations were a provincial undertaking,
the impugned provisions were constitutionally valid, and the constitutional
doctrines of interjurisdictional immunity and paramountcy were not engaged. In
the result, the orders made by the Workers Compensation Board (the WCB)
requiring the appellants to comply with the impugned provisions were valid and
enforceable:
Jim Pattison Enterprises v. Workers Compensation Board,
2009
BCSC 88.
[4]
The appellants raise a number of grounds of appeal. They contend the
trial judge erred in finding that the impugned provisions are
intra vires
the
provincial legislature. They submit that in pith and substance they are
regulations about vessel stability and safety and therefore fall within the
federal Parliaments jurisdiction over navigation and shipping under s. 91(10)
and sea coast and inland fisheries under s. 91(12) of the
Constitution
Act
.
[5]
They further contend that if the impugned provisions are found to be
intra
vires
the provincial legislature under s. 92(13) of the
Constitution Act
over property and civil rights, the trial judge erred in finding that the
nature of their operations and activities constituted a provincial undertaking.
They submit that since their fishing operations extend beyond the territorial
waters of the province of British Columbia, they are a federal undertaking and
therefore fall within s. 91(29) and the exclusionary provisions of
s. 92(10)(a) of the
Constitution Act.
Section 91(29) provides that
those classes of subjects expressly excluded from provincial jurisdiction under
s. 92 fall within the legislative authority of the federal Parliament.
Section 92(10)(a) grants exclusive legislative authority to the provinces for
local works and undertakings, but excludes works and undertakings connecting
the Province with any other or others of the provinces, or extending beyond the
Limits of the Province.
[6]
In the alternative, the appellants submit that if the impugned
provisions are constitutionally valid, they are inapplicable to their
activities by application of the doctrine of interjurisdictional immunity as
they impair the basic, minimum and unassailable core of the federal heads of
power over navigation and shipping and/or inland seas and fisheries and the
management of a federal undertaking. They further submit that the impugned
provisions are rendered inoperative to their activities by application of the
doctrine of paramountcy because they are incompatible or in conflict with the
federal regulatory regime on vessel stability and safety.
[7]
The respondents, the WCB and the Attorney General for the Province of
British Columbia (the AGBC), contend that the impugned provisions are
constitutionally valid since, in pith and substance, they relate to the
occupational health and safety of workers on fishing vessels and therefore are
a matter of labour relations and workplace conditions which presumptively fall
within the exclusive legislative authority of the provinces over property and
civil rights under s. 92(13) of the
Constitution Act.
[8]
They further submit that the appellants fishing operations are a local
or provincial undertaking within the exclusive legislative authority of the
province under s. 92(10) of the
Constitution Act
and do not fall within
the exclusionary provision of s. 92(10)(a) because they do not cross or
come into contact with any other provincial or international borders.
[9]
The respondents also contend that the doctrine of interjurisdictional
immunity is not triggered because the appellants operations are a provincial
undertaking and therefore the impugned provisions do not impair the basic,
minimum and unassailable core of a federal head of power, and that the doctrine
of paramountcy is not triggered because the impugned provisions are not
incompatible or in conflict with the federal legislative regime on vessel
stability and safety. In support of this latter submission the respondents rely
on the memoranda of understanding entered into between the federal and
provincial governments, which identify as their objective the promotion of the
occupational health and safety of workers in the fishing industry and address
areas of potential conflict or inconsistencies and gaps between the two regulatory
regimes.
[10]
A copy of the relevant sections of the impugned provisions of the
OHSR
in both appellants proceedings are attached in the appendix to these
reasons.
B.
Litigation
Background
[11]
The appellants, Jim Pattison Enterprises Ltd., K. Smith Fishing Ltd. and
289787 B.C. Ltd., commenced proceedings by way of petition and applied for
judicial review of orders made by the WCB to enforce the impugned provisions of
the
OHSR
. The appellant, Osprey Marine Ltd., commenced an action and
applied for a summary trial on the issue of the validity and enforceability of
the orders made by the WCB. Before the trial judge, the appellants collectively
raised the constitutional issues being advanced in the grounds of appeal before
this Court. The WCB agreed to stay enforcement proceedings until the trial judgment
was rendered.
1.
The
Northisle and the Western Investor Small Fishing Vessels
[12]
The appellants Jim Pattison Enterprises Ltd. and 289787 B.C. Ltd., both provincially
incorporated companies, are the owners of the federally registered Northisle
fishing vessel. Northisle is categorized as a small fishing vessel under the
Small
Fishing Vessel Inspection Regulations,
C.R.C., Vol. XVII c. 1486
[
SFVIR
]
issued under the
Canada Shipping Act
[
CSA
]. The
CSA
was
repealed and replaced by the
Canada Shipping Act, 2001 (CSA, 2001)
on
July 1, 2007, but the
SFVIR
remains in force. Small fishing vessels
typically weigh between 15 and 150 gross tons and are less than 124 metres in
length; the Northisle weighs 95.75 gross tons and is 19.6 metres long. The
Northisle is licensed by the Department of Fisheries and Oceans (the DFO) to
fish roe herring and salmon using seine fishing gear, and to fish groundfish
using trawl gear.
[13]
The Northisle began its operations as a seiner but in 1989 was converted
to a trawler. Since 2006, it has fished roe herring in the Gulf of Georgia,
salmon off the south coast, and groundfish off the west coast of Vancouver
Island and in the Queen Charlotte Sound. Over the last five years approximately
90% of the Northisles fishing operations have involved trawling rather than
seining, and approximately 75% of its trawling activity has occurred more than
12 nautical miles off the west coast of Vancouver Island. When trawling for
certain species of groundfish, the Northisle may travel as far as 30 nautical
miles beyond the west coast of Vancouver Island.
[14]
The appellants Jim Pattison Enterprises Ltd. and K. Smith Fishing Ltd.
are the owners of the federally registered Western Investor fishing vessel.
K. Smith Fishing Ltd. is also a provincially incorporated company and the Western
Investor is also a small fishing vessel under the
SFVIR.
The vessel
weighs 119.26 gross tons and is 22.68 metres long. It is licensed by the DFO to
fish roe herring and salmon using seine fishing gear, and to fish groundfish
using trawl gear.
[15]
The Western Investor began its operations as a seiner in 1980 but over
the last five years has spent at least 70% of its time trawling rather than
seining. Since 2006, it has been trawling roe herring in the Gulf of Georgia
and Prince Rupert area, salmon off the B.C. coast, and groundfish off the west
coast of the Queen Charlotte Islands and in the Hecate Strait. At least 40% of
its trawling operations occur more than 12 nautical miles off the west coast of
the Queen Charlotte Islands and in Hecate Straits. When trawling for certain
species of groundfish, the vessel may travel as far as 30 nautical miles beyond
the western boundary of the Queen Charlotte Islands.
[16]
Canada claims 12 nautical miles beyond the shore as territorial sea; the
Northisle and the Western Investor travel well beyond this boundary. Thus, both
vessels spend over 50% of their fishing time beyond the geographic limits of
the province and beyond the territorial sea of Canada.
[17]
Both the Northisle and the Western Investor have stability books on board
as mandated by Transport Canada under the
SFVIR.
The Northisles
stability book was published on August 14, 1989; the Western Investors
stability book was published on April 1, 1980. The masters of both vessels
also have comprehensive safety manuals which include information and
instructions about on board emergency procedures, drills and vessel stability. Neither
vessels stability books have been modified since their conversions to trawlers.
[18]
On April 3, 2006, and April 5, 2006, the Northisle and the
Western Investor, respectively, were inspected by a WCB Inspection Officer. Following
the inspections, the WCB issued several orders under the
OHSR
(the
Review Orders). The Review Orders found that: (i) the owners had failed
to provide on board stability documentation; (ii) the master had failed to
establish emergency procedures for crewmembers overboard; (iii) the master
had failed to establish emergency fire and flooding procedures; and (iv) the
master had failed to establish emergency procedures in regard to abandoning
ship or calling for help. The owners were required to notify the WCB of their
compliance with the Review Orders within 30 days.
[19]
On July 3, 2006, the owners filed compliance plans. They also requested
a review hearing under the
WCA
based on their claims that the province
lacked the constitutional authority to regulate stability and other safety
matters on board their fishing vessels. In that regard, they served notice of
their constitutional challenge under the
Constitutional Question Act,
R.S.B.C.
1996, c. 68, on the AGBC and the Attorney General of Canada (the AGC).
Neither the AGBC nor the AGC participated in the review hearing.
[20]
On March 30, 2007, the WCBs Review Division (the Review
Division) determined that it lacked the jurisdiction to decide the constitutional
questions raised by the owners.
[21]
The appellants then filed a petition for judicial review under the
Judicial
Review Procedure Act
, R.S.B.C. 1996, c. 24, and again served notice of
the constitutional questions on the AGBC and the AGC. On this occasion the AGBC
participated in the proceeding.
[22]
In the judicial review proceeding, the appellant owners of the small
fishing vessels challenged the constitutional validity of ss.
24.72 and 24.74 of the
OHSR.
In the alternative, they applied for an order that the impugned provisions were
inapplicable or inoperable to their commercial fishing operations based on the
constitutional doctrines of interjurisdictional immunity and/or paramountcy,
respectively.
2.
The Osprey No. 1 Large
Fishing Vessel
[23]
The appellant Osprey Marine Ltd. is the owner of several large fishing
vessels including the Osprey No. 1. The Osprey No. 1 is categorized as a
large fishing vessel under the
Large Fishing Vessel Inspection Regulations
[
LFVIR
]
issued under the
CSA.
The
LFVIR
remain in
force under the
CSA, 2001.
The Osprey No. 1 weighs 2,003 gross tons and
is 57.4 metres long, is licensed as a commercial fishing vessel under the
Fisheries
Act
, R.S.C. 1985, c. F-14 and is operated in accordance with the
CSA,
2001,
and the
LFVIR.
The master of the Osprey No. 1 is instructed by
the owner to operate the vessel in accordance with the
Canada Labour Code
,
R.S.C. 1985, c. L-2 [
CLC
] and its corresponding regulations,
including, when the action was commenced, the
Marine Occupational Safety and
Health Regulations
, SOR/87-183 [
MOSH
] (which has since been repealed
and replaced by the
Maritime Occupational Health and Safety Regulations,
SOR/2010-120
[
MOHSR
]. However, there is no evidence that the owner was advised by any
federal government employee to operate the ship pursuant to federal labour laws.
Nor is there evidence of any federal enforcement procedures under the
CLC
having ever been taken against the Osprey No. 1.
[24]
The Osprey No. 1 was purchased by the appellant in 2005 and imported
into Canada. At that time, it was inspected by Transport Canada and was
approved for offshore fishing. Most of its fishing activities extend beyond the
territorial limits of the province.
[25]
The Osprey No. 1 is outfitted with a full complement of electronics for
navigation and fish finding, and has a complex fuel and water system. Its crew
of 24 includes a master, mate, chief engineer and second engineer, all of whom
are certified by Transport Canada. Only qualified crew members are authorized
to operate the vessels fuel and water system and only those individuals are provided
with copies of the relevant portions of the Standards for Training,
Certification and Watchkeeping for Seafarers Code (the International
Seafarers Code). The International Seafarers Code is an international code
established by convention to which Canada is a signatory. Transport Canada
annually inspects the Osprey No. 1 and reviews the qualifications of its crew.
[26]
On February 27, 2007, a fatal accident occurred on board the Osprey
No. 1. A crew member was struck and killed by a trawl door. Transport
Canada did not investigate the fatality; the WCB did investigate the incident and
inspected the vessel following which it issued an order requiring vessel
stability information to be developed and made available to the crew (the
Review Order). In particular, the owner of the vessel was required to provide
a health and safety program for its crew that included written procedures on crew
training and supervision, the vessels operational stability, bridge and engine
room protocol, the use of personal flotation devices, and emergency drill procedures.
The owner was also required to give written notice of compliance with 30 days
of the issuance of the Review Order.
[27]
The owner of the Osprey No. 1 applied to the Review Division for a
stay of the Review Order, claiming that ss. 24.69 through to 24.103 of the
OHSR
were constitutionally invalid, or in the alternative, were
inapplicable or inoperative based on the doctrines of interjurisdictional
immunity and/or paramountcy.
[28]
The Review Division dismissed the appellants stay application
concluding that it lacked the jurisdiction to determine the constitutional
validity of the impugned provisions. In its written reasons, however, it offered
the view that the employer has taken an extreme interpretation of the order in
order to support its constitutional argument noting that:
... The order does not explicitly state that the employer
must hire new crew members who have expert knowledge of stability and be
personally capable of taking all steps that may be needed to deal with
stability issues on the vessel. It refers rather to the development and
presentation of instructions to crew members. ... [I]t only requires that crew
members without specialized knowledge be provided with the information they
need for their particular roles. ...
... [The order] did not require the employer to do anything
initially other than provide a compliance plan. ... The Board would then have
the opportunity to state whether it agrees with the plan or to require
modifications.
... I can see no grounds for
finding a conflict [between the federal and provincial laws] in this case.
[29]
The Review Order required the owner to provide its non-specialized crew
members with documentation and information that would give them a basic
understanding of their general role in maintaining the stability of the vessel.
The crew members did not have to know about stability concepts beyond what was
reasonable in the circumstances, but were required to have information and
documentation available to them to assist them in understanding any role they
might have in maintaining the stability of the vessel.
[30]
After receiving the Review Order, the appellant commenced an action and
filed a summary trial application in which it sought a declaration that the impugned
provisions of the
OHSR
were constitutionally invalid, or alternatively
not applicable or inoperative to their operations based on the doctrines of
interjurisdictional immunity and/or paramountcy, respectively. In support of
its application, the appellant provided affidavit evidence from a marine surveyor
who offered the opinion that, while the federal regulations did not require the
crew of a large fishing vessel to have specific knowledge of ship stability
(except for crews of four or less), they should have some basic knowledge of
how to maintain ship stability by: (i) keeping all water tight openings
closed when at sea; (ii) keeping scuppers free so that water cannot
accumulate on decks; (iii) ensuring that any loose item is well secured
against movement; and (iv) ensuring that pallets or blocks of cargo are
properly stowed in the holding tanks.
C.
Acts
and Regulations Relating to Marine Safety
1.
The
Federal Regulatory Regime
[31]
The federal regulatory regime for all small and large fishing vessels is
found largely in the
SFVIR
and
LFVIR
enacted under the
CSA
(now
the
CSA, 2001
). Other regulations issued pursuant to the
CSA, 2001
include
the
Marine Personnel Regulations
, SOR/2007-115; and the
Safe Working
Practices Regulations,
C.R.C., c. 1487.
[32]
The
CSA, 2001
includes the following objectives as set out
in s. 6:
(
a
) protect the health and well-being of individuals,
including the crews of vessels, who participate in marine transportation and
commerce;
(
b
) promote safety in marine transportation and
recreational boating;
(
c
) protect the marine environment from damage due to
navigation and shipping activities;
(
d
) develop a regulatory scheme that encourages
viable, effective and economical marine transportation and commerce;
(
e
) promote an efficient marine transportation system;
(
f
) develop a regulatory scheme that encourages the
viable, effective and economical use of Canadian waters by recreational
boaters;
(
g
) ensure that Canada can meet its international
obligations under bilateral and multilateral agreements with respect to navigation
and shipping;
(
h
) encourage the harmonization of marine practices;
and
(
i
) establish an effective
inspection and enforcement program.
The legislation also gives Parliament the authority to
implement regulations to achieve these objectives. The regulations that have
been implemented are broad in scope, but also include detailed technical
requirements for ship stability and safety in the construction and equipment of
the vessels, provisions for crew safety training and certification, the
implementation of safe working practices on board the vessel, and documentation
on ship stability for a master.
[33]
The appellant owners of the small fishing vessels submit that all the
requirements for vessel stability and safety are contained in the federal
regulatory framework, which historically has been regulated by the federal
Parliament under its legislative jurisdiction over navigation and shipping. The
appellant Osprey Marine Ltd. submits that it would be redundant to insist on giving
documentation and instructions about vessel stability to non-certified or
untrained crew. It submits that such requirements could create confusion and might
even jeopardize the safety of the vessel and crew.
2.
The Federal Canada
Labour Code Scheme
[34]
The
CLC
applies to all employees who work under federal
jurisdiction, including those employed with federal undertakings which are not
subject to the provincial
WCA
scheme. It addresses the rights and
obligations of workers, union members and employers including certification of
unions and labour-management relations, workplace health and safety, and
employment standards.
[35]
The purpose of Part II of the
CLC
, entitled Occupational Health
and Safety, is stated as follows: to prevent accidents and injury to health
arising out of, linked with or occurring in the course of employment to which
this Part applies. Section 123(1) provides that Part II of the
CLC
applies
to the following employment:
(a)
on or in connection with the operation of any federal work, undertaking or
business other than a work, undertaking or business of a local or private
nature in Yukon, the Northwest Territories or Nunavut;
(b)
by a corporation established to perform any function or duty on behalf of the
Government of Canada; ...
[36]
As previously noted,
MOSH, (
now
MOHSR
) was enacted under
the
CLC.
These regulations focus on the requirements for the master of a
vessel. They require the master to ensure that his crew members are qualified
to undertake their duties, complete marine emergency courses, are subject to
regular emergency drills, and are provided with written safety procedures that
are posted on the fishing vessel.
3.
The Provincial
Workers Compensation Act Scheme
[37]
Those employers and employees not subject to the
CLC
are governed
by provincial labour laws and workplace safety standards. The relevant portion
of the
WCA
scheme, being Part 3 and its related regulations, is
effectively British Columbias equivalent to Part II of the
CLC
.
[38]
The 1966 Tysoe Royal Commission Report described the purpose of the
WCA
as: To keep work-connected injuries to a minimum is the first object.
Restoration of injured workmen physically and economically is the second
(p. 18). Part 3 of the
WCA
contains general provisions in relation
to occupational health and safety, with s. 107 defining its purpose as the
promotion of occupational health and safety and the protection of workers and
other persons present at workplaces from work related risks to their health and
safety. Section 111 describes the WCBs mandate under Part 3 as:
[C]oncerned with occupation
health and safety generally, and with the maintenance of reasonable standards
for the protection of the health and safety of workers in British Columbia and
the occupational environment in which they work.
[39]
Occupational health and safety regulations in the fishing industry were
first enacted in 1975. In 1990, the Supreme Court of Canada refused leave to
appeal
504578 Ontario Limited v. Great Lakes Fishermen and Allied Workers
Union
, [1990] O.L.R.B. Rep. 117 in which provincial control over the
business of fishing first was recognized. As a result of this decision, the
WCB believed they had authority to regulate occupational health and safety in
the fishing industry and formed a fishing safety committee which led to new
regulations in 1995. A representative from a subsidiary of the appellant Jim
Pattison Enterprises Ltd. was a member of that committee.
[40]
In 1995, the WCB signed memoranda of understanding with the Canadian
Coast Guard and the DFO regarding the occupational health and safety regulation
of British Columbias commercial fishing workers. The memoranda acknowledge that
the WCB has jurisdiction to govern all aspects of occupational health and
safety for persons working on commercial fishing vessels in British Columbia.
[41]
Part 24 of the
OHSR
came into effect in 1998. It includes
specific provisions for the occupational health and safety of workers in
diving, fishing and other marine operations. The provisions focus on the
documentation and communication of vessel stability characteristics to the
crew; they do not include detailed requirements for vessel stability. In
particular, s. 24.72 of the
OHSR
requires the owner of a small
fishing vessel to have documentation on vessel stability readily accessible to
its crew on board the vessel. Section 24.74 requires the master of the vessel
to establish procedures and assign responsibilities regarding vessel safety to
each crew member in the case of an emergency.
[42]
In 2001, the WCB signed a further memorandum of understanding with
Transport Canada (Marine Safety) for the purpose of coordinating the oversight
of the WCB and Transport Canada over matters in the fishing industry. WCB was
assigned responsibility for the business of fishing, including the safety of
crews and fishing vessels while operating in B.C. waters. In the memorandum of
understanding the jurisdiction of the WCB is stated to include programs and
activities related to occupational health and safety, which is defined in s. 2
as occupational health and safety on commercial fishing vessels operating in
interior and adjacent waters of British Columbia. The memorandum also provides
that [w]here dual jurisdiction occurs, the WCB and [Transport Canada] may
operate jointly and co-operatively or independently to ensure their respective
program mandates are fulfilled (Annex B, B.5.). Transport Canada was assigned responsibility
for shipping and navigation, including crew certification and the application
of vessel construction standards.
[43]
As will be seen from the discussion below concerning the alleged
conflicts between the two regimes, I have concluded that the WCB policy and
guidelines for occupational health and safety of workers on fishing vessels, as
set out in the
OHSR,
are consistent with the federal regulations and
guidelines on vessel stability.
[44]
The
WCA
also includes a compensation and benefits scheme for
injured workers or their families in the event of death or disability. This is
the historic trade-off between workers and employers that creates a statutory
bar from personal injury or fatal accident lawsuits by employees for the alleged
negligence of their employer. The compensatory aspect of the
WCA
is not generally
considered a part of the workers contract of employment as its provisions do
not intervene to compensate workers until after their health or safety has been
affected (
Bell Canada
v. Quebec,
[1988] 1 S.C.R. 749 at 851-852
[
Bell Canada 1988
]). However, the following from
Bell Canada
1988
at 851 is apposite:
... [O]ne can and must
distinguish between the constitutional law classification of compensatory
schemes and that of preventive schemes for purposes of their application to
federal undertakings. The British Columbia Court of Appeal accordingly erred [in
Alltrans Express Ltd. v. The Workers Compensation Board of British
Columbia,
[1983] 6 W.W.R. 372 at 377 (B.C.C.A.)] in holding that the
compensatory scheme cannot be severed from the preventive scheme.
[45]
Further, in
Alltrans Express Ltd. v. British Columbia (Workers
Compensation Board),
[1988] 1 S.C.R. 897, the Court held at 912 that:
... This differing
characterization allows us to sever the compensation regime from the preventive
regime, even when they are in the same statute, in order to properly focus on
the rules which do and do not apply to federal undertakings.
[46]
Thus, it is the purpose and effect of the preventative regime as
outlined in Part 3 of the
WCA
and the
OHSR
which is material to
the pith and substance analysis of the relevant legislation in this case.
D.
The
Trial Judges Reasons for Judgment
[47]
The trial judge began her analysis by reviewing the history of the
relevant legislation. She noted the evidence demonstrated that fishing is a
dangerous industry. In British Columbia, between 1975 and 2005, 157 fishing
vessels capsized with 66 lives lost, and between 2001 and 2005, one fisherman died
for every 29 WCB claims. She also noted that Jim Pattison Enterprises Ltd. had three
fatalities in 55 WCB claims and that Osprey Marine Ltd. had one fatality in 22 WCB
claims.
[48]
The trial judge identified the standard of review for constitutional
issues as that of correctness. She then referred to the presumption of
constitutionality; an enacting body is presumed to confine the scope of its
legislation within its legislative authority under the
Constitution Act
.
Therefore, where two plausible characterizations exist for an enactment, the
characterization that supports the constitutional validity of the legislation
is generally adopted:
Nova Scotia (Board of Censors) v. McNeil,
[1978] 2
S.C.R. 662 at 687-688;
Siemens v. Manitoba (Attorney General),
2003 SCC 3,
[2003] 1 S.C.R. at para. 33.
[49]
Next, the trial judge turned to the relevant jurisprudence on the
constitutional doctrines of pith and substance, interjurisdictional immunity
and paramountcy, beginning with
Canadian Western Bank v. Alberta,
2007
SCC 22, [2007] 2 S.C.R. 3 [
CWB
] and
British Columbia (Attorney
General) v. Lafarge Canada Inc.,
2007 SCC 23, [2007] 2 S.C.R. 86. She also
reviewed
Ordon Estate v. Grail,
[1998] 3 S.C.R. 437, on the application
of the doctrine of interjurisdictional immunity. In
Ordon,
the Court
held that the doctrine of interjurisdictional immunity rendered provincial tort
legislation inapplicable to claims arising out of two fatal boat accidents
because the provincial legislation had the effect of regulating indirectly
federal maritime negligence law ... in such a manner that the provincial law
effectively alters rules within the exclusive competence of Parliament to
amend, or otherwise (para. 140) under navigation and shipping in s. 91(10)
of the
Constitution Act.
[50]
The trial judge also found the reasoning in
R. v. Mersey Seafoods,
2008
NSCA 67, 295 D.L.R. (4th) 244 persuasive.
Mersey Seafoods
involved
charges under the provinces occupational health and safety legislation against
the owners of a large fishing vessel. The owners had argued successfully at
trial that the charges against them should be dismissed on the grounds that the
provincial legislation was inapplicable, or in the alternative was inoperative,
based on the doctrines of interjurisdictional immunity and paramountcy,
respectively. The Nova Scotia Court of Appeal, in a unanimous decision, allowed
the appeal and reinstated the charges.
[51]
While the constitutional validity of the provincial legislation was not
challenged, the appellate court confirmed that the pith and substance of the
legislation involved matters of working conditions, labour relations and the
management of a provincial undertaking, and only incidentally affected the
federal legislative jurisdiction over navigation and shipping. The Court found
that while the appellants fishing operations extended beyond the provinces
territorial limits (to international waters just 12 miles off the coast of
Greenland and to docking in Newfoundland), the management of its operations was
undertaken solely within the provinces boundaries and therefore its fishing
operations were a provincial or local undertaking under s. 92(10) of the
Constitution
Act.
Relying on the jurisprudence in
Ward v. Canada (Attorney General),
2002
SCC 17,
[2002] 1 S.C.R. 569;
Bell Canada 1988
; and
Northern
Telecom Ltd. v. Communications Workers of Canada
, [1980] 1 S.C.R. 115, the
Court reiterated that labour relations in regard to a provincial undertaking,
which include the occupational health and safety of the undertakings employees,
presumptively falls within the provincial legislative authority over property
and civil rights under s. 92(13) of the
Constitution Act
.
[52]
The Court in
Mersey Seafoods
then turned to the constitutional
doctrines of interjurisdictional immunity and paramountcy. It found that the
doctrine of interjurisdictional immunity did not render the provincial
legislation inapplicable as the pith and substance of the legislation involves
the matter of labour relations and only incidentally affected, without impairing,
the core competence of the federal head of power over navigation and shipping.
The Court distinguished
Ordon
on the grounds that the issue in that case
was whether a provincial statute was applicable to a tort claim under maritime
negligence law, while the issue in
Mersey Seafoods
was whether the
provincial labour relations legislation was applicable to the owners of the
fishing vessels. The Court also found that the provincial legislation was not
rendered inoperative by the doctrine of paramountcy as there was insufficient
incompatibility between the two regulatory regimes to establish an actual
conflict.
[53]
Next, the trial judge turned to the impugned provisions of the
OHSR.
Following the direction in
Kitkatla Band v. British Columbia Minister of
Small Business, Tourism & Culture,
2002 SCC 31, [2002] 2 S.C.R. 146,
she examined those provisions without reference to the
WCA
s general
compensation provisions. She found that in pith and substance the purpose of
the impugned provisions was the prevention of risks to the health or safety of
British Columbia workers on fishing boats, and the promotion of sound
occupational health and safety practices in that sector (para. 152) and
that they only incidentally affected the federal head of power under navigation
and shipping.
[54]
The trial judge expressed the view that although there was considerable
overlap and potential for confusion between the federal and provincial regulatory
regimes, and that compliance with both might be difficult and expensive, it
was not impossible to comply simultaneously with both laws (para. 162).
She also found that the
CSA
(now the
CSA, 2001
),
and the
federal regulations issued pursuant to that enactment, were not intended to
create a comprehensive scheme or complete code for the safety of fishing
vessels and their crew, and therefore the impugned provisions did not undermine
or frustrate the purpose of the federal legislation. She observed that if the
OHSR
were intended to impose stability requirements (rather than stability
documentation), there would be an operational conflict, the purpose of the
federal regime would be frustrated and the doctrine of paramountcy would render
the effect of its provisions inoperable. However, she found that the memoranda
of agreement between the federal and provincial governments, under which the
province of British Columbia assumed responsibility for regulating and
monitoring workplace safety on commercial fishing vessels and Canada assumed
responsibility over navigation and shipping of vessels, demonstrated a classic
example of how cooperative federalism could be employed to avoid operational
conflict between the two regulatory regimes.
[55]
Turning to the nature of the appellants fishing operations, the trial
judge held that they were a local or provincial undertaking because: (i) their
operations do not connect British Columbia with any other country or province;
(ii) they do not provide shipping services to offshore destinations; (iii) they
do not enter ports other than British Columbian ports; (iv) their
operations have no connection with any province other than British Columbia;
(v) the owner companies are provincially registered; (vi) the
vessels home ports are in British Columbia; and (vii) the crew members
are hired from and reside in British Columbia. She found that the federal
legislation is directed at ship safety, whereas the provincial legislation is
directed at crew health and safety. She also found no compelling reason to
distinguish
Mersey Seafoods
and held that the impugned provisions of the
OHSR
did not impair the core federal competence over navigation and
shipping or fisheries. Therefore, she held, the doctrine of interjurisdictional
immunity was not engaged.
[56]
In the result, the trial judge dismissed the appellants respective
proceedings, stating that the courts should not be astute to find ways to
frustrate rather than facilitate federal-provincial cooperation if this can be
done within the rules laid down by the Constitution (para. 208).
E.
Analysis
1.
Principles
of Federalism
[57]
The modern approach to Canadian federalism is illustrated by what has
been commonly referred to as cooperative federalism. This form of federalism
involves cooperation between two levels of government in achieving mutual
policy objectives as illustrated in this case by the memoranda of agreement
that seek to maximize each jurisdictions policy objectives in the field of
worker safety. In such circumstances, significant deference must be given to the
cooperative arrangements of governments exercising their mandates in
legislative areas of overlapping jurisdiction. This standard for judicial
oversight of cooperative arrangements between governments was underscored in
Ontario
Public Service Employees Union v. Ontario (Attorney General),
[1987] 2
S.C.R. 2 at 19-20, as quoted in
Kitkatla
:
[72] ... The distribution of powers provisions contained
in the
Constitution Act, 1867
do not have as their exclusive addresses the
federal and provincial governments. They set boundaries that are of interest
to, and can be relied upon by, all Canadians. Accordingly, the fact of
federal-provincial agreement on a particular boundary between their
jurisdictions is not conclusive of the demarcation of that boundary.
Nevertheless,
in my opinion the Court should be particularly cautious about invalidating a
provincial law when the federal government does not contest its validity or, as
in this case, actually intervenes to support it and has enacted legislation
based on the same constitutional approach adopted by [the province]
.
[Emphasis added.]
[58]
Similarly, Justices Binnie and Lebel, jointly writing for the majority
in
CWB,
stated:
[22] ...The fundamental objectives of federalism were,
and still are, to reconcile unity with diversity, promote democratic
participation by reserving meaningful powers to the local or regional level and
to foster co-operation among governments and legislatures for the common good.
[23] ... [T]his living tree as it is described in the
famous image from
Edwards v. Canada (Attorney General)
, [1930] A.C. 124
(P.C.), at p. 136 ─ the interpretation of these powers [ss. 91 and 92 of
the
Constitution Act
] and of how they interrelate must evolve and must
be tailored to the changing political and cultural realities of Canadian
society. It is also important to note that the fundamental principles of our
constitutional order, which include federalism, continue to guide the
definition and application of the powers as well as their interplay. Thus, the
very functioning of Canadas federal system must continually be reassessed in
light of the fundamental values it was designed to serve.
[24] As the final arbiters
of the division of powers, the courts have developed certain constitutional
doctrines, which, like the interpretations of the powers to which they apply,
are based on the guiding principles of our constitutional order. The
constitutional doctrines permit an appropriate balance to be struck in the
recognition and management of the inevitable overlaps in rules made at the two
levels of legislative power, while recognizing the need to preserve sufficient
predictability in the operation of the division of powers. The doctrines must
also be designed to reconcile the legitimate diversity of regional
experimentation with the need for national unity. Finally, they must include a
recognition that the task of maintaining the balance of powers in practice
falls primarily to governments, and constitutional doctrine must facilitate,
not undermine what this Court has called co-operative federalism [Citations
omitted].
[59]
It is under the umbrella of these principles of Canadian federalism that
I turn now to the issues raised in this appeal.
2.
The
Constitutional Validity of the Impugned Provisions
[60]
The constitutional validity of the impugned provisions is a threshold
issue. If the impugned provisions are
ultra vires
the
competence
of the provincial legislature, then the issues of whether the appellants
operations are a federal or provincial undertaking, and whether the doctrines
of interjurisdictional immunity and/or paramountcy are engaged, become moot.
[61]
The determination of the
vires
of a legislative provision begins
with the presumption of its constitutional validity. However, if the
constitutional validity of legislation is expressly challenged, the court must
first characterize the pith and substance, or matter of the impugned law,
without reference to its classification under the federal and provincial
legislative heads of power (
Kitkatla
at paras. 55-56). Only
thereafter is the matter classified in relation to a federal or provincial
head of power under ss. 91 and 92 of the
Constitution Act
:
Chatterjee
v. Ontario (Attorney General),
2009 SCC 19, [2009] 1 S.C.R. 624
at
para. 24.
(a)
The pith and substance doctrine:
identifying the matter
[62]
The pith and substance doctrine refers to the dominant purpose and legal
effect of legislation:
Reference Re Firearms Act (Can.),
[2000] 1 S.C.R.
783, 2000 SCC 31. It is the dominant purpose of the law that is decisive in
determining whether its matter falls within the constitutional mandate of the
enacting body. The purpose of the law may be ascertained through intrinsic
evidence from its preamble or object clause(s), or from extrinsic evidence
including Hansard or minutes of parliamentary debates:
CWB
at
para. 27. The legal effect of the law is how the law changes the rights
and liabilities of those who are subject to it and may assist in revealing its
true (rather than apparent) purpose: P. Hogg,
Constitutional Law of Canada
,
5th ed. Vol. 1, (Scarborough: Thomson Carswell)
at 15-16.
[63]
The purpose clause in legislation may be considered in determining the
pith and substance of the impugned law. Part 3 of the
WCA
, which includes
general provisions for the occupational health and safety of workers, lists as
its purpose: to benefit all citizens of British Columbia by promoting
occupational health and safety of workers and other persons present at
workplaces from work related risks to their health and safety. The
OHSR
provides a more detailed regulatory regime for workers at different workplaces.
The effect of the impugned provisions is to create safe workplaces for crew
members on ships. The relevant portion of the
WCA
scheme creates the
mechanisms by which a provincial government agency can enforce the safety
standards under the
WCA
and make workplaces subject to the standards of
provincial labour laws. Thus, the pith and substance of the impugned provisions
is the occupational health, safety and well-being of workers employed on
fishing vessels, which is a matter of labour relations.
(b)
Classifying the pith
and substance under heads of power
[64]
Once the pith and substance of a law has been determined, the law must
be classified under a federal or provincial head of power.
[65]
The appellants submit that the impugned provisions are
ultra vires
the
provincial legislature because in pith and substance they deal with matters
that fall within the federal legislative jurisdiction over navigation and
shipping under s. 91(10) and/or over sea coast and inland fisheries
under s. 91(12) of the
Constitution Act
. The respondent submits
that the pith and substance of the impugned provisions fall within the
provincial head of power over property and civil rights under s. 92(13)
of the
Constitution Act.
(i)
Section
91(10) and the federal power over navigation and shipping
[66]
The appellants argue that in the circumstances of this case, the
occupational health and safety of the crew on fishing vessels is so closely
integrated with the core of the federal head of power over navigation and
shipping that it falls exclusively within the federal regulatory jurisdiction.
In support of that position they rely on the broad construction that has been
given by the courts to the navigation and shipping head of power as reviewed
in
Lafarge
at para. 64, and as applied in
R. v. Investissements
Navimex Inc
. (1998), 127 C.C.C. (3d) 328 (Que. C.A.).
[67]
Navimex
involved a constitutional challenge to ss. 163 and
165 of the
CSA
by an accused shipping company engaged in the business of
organizing whale-watching excursions within the province of Quebec. The accused
was charged with failing to enter into an agreement with its crew members,
contrary to s. 165 of the
CSA.
The trial judge dismissed the
charges on the grounds that s. 163 of the
CSA
did not apply to the
accuseds operations, which he found were a matter of labour relations and
therefore fell within the provinces mandate over property and civil rights.
In allowing the appeal, the Court held that the pith and substance of the
impugned provisions were not to govern on the matter of civil rights, but to
create a distinct framework for the hiring of seamen for shipping operations,
regardless of the territory in which those operations were carried out. The
contract of employment was found to relate to the discipline and safety of the
crew, which the Court held formed an integral connection to the core federal
competence over maritime matters under navigation and shipping.
[68]
However, Mr. Justice Pidgeon, for the Court, went on to write at
pp. 343-344:
I would nevertheless add that this conclusion does not have
the effect, as mentions Rand J. in the case
Reference re: Industrial
Relations and Disputes Investigation Act,
[[1955] S.C.R. 529] of removing
jurisdiction from the provinces. In fact, depending on the nature of the
activity of the business, such as matters as the legal status of a shipping
concern, tariff issues, schedules, the existence and terms and conditions of
shipping services offered to the public, as well as the collective bargaining
relationship arising out of laws of general application such as the
Quebec
Labour Code
or the
Act respecting labour standards,
may remain
within provincial jurisdiction.
...
... However, I would add that even if I had come to the
conclusion that there was encroachment, I would have come to the conclusion
that section 163 of the
Canada Shipping Act
only touches a very limited
aspect of the relationship between seamen and captain, being the signature of a
contract of engagement.
Sections 163 and 165 contain no substantive clause
relating to work conditions and does not frame in any manner the bargaining of
work conditions for seamen.
In this regard, the encroachment is, to say the
least, modest and touches no fundamental aspect of the power of the provinces
in relation to property and civil rights (92(13)
Constitution Act, 1867
).
[Emphasis included in quote.
Footnotes omitted].
[69]
In my view,
Navimex
does not advance the appellants position,
especially in view of the Courts comments on the validity of both federal and
provincial legislation in this area of overlapping jurisdictions. It is
accepted that some matters relating generally to navigation and shipping may in
fact fall within the jurisdiction of the provincial legislatures. This was
noted in
dicta
in each of the three separate reasons for judgment in
Singbeil
v. Hansen,
[1985] 5 W.W.R. 237
.
In that regard, Mr. Justice Seaton
stated at 249:
I
expect that the ferries are within Navigation and Shipping with respect to
crew qualifications, safety equipment, communication procedures, rules of the
road, and that sort of thing. But there are other matters that fall within
provincial jurisdiction. I think that garnishment of seamans wages is one of
them.
Mr. Justice Craig observed: Obviously, many aspects of a
seamans employment fall within the class of navigation and shipping, but not
all aspects. I do not think that garnishment of seamens wages relates to
navigation and shipping (at 249). Mr. Justice Lambert stated: (at 256):
I think the fact that there is
limited scope to head 91(13) and head 92(10), para. (a) and (b), limiting those
heads to ferries, ships or undertakings extending outside a province, makes it
clear that ferries that are confined to one province are to be regarded as
provincial undertakings.
[70]
Therefore, provincial legislation that may touch (or incidentally affect)
the federal head of power under navigation and shipping does not mean that its
pith and substance necessarily falls under s. 91(10) of the
Constitution Act
.
(ii)
Section 91(12) and the federal power over sea coast and inland
fisheries
[71]
To a lesser extent, the appellants also submit that the safety of fishing
vessels falls within the exclusive legislative authority of the federal
Parliament over Sea Coast and Inland Fisheries under s. 91(12). However,
the federal fisheries power does not confer proprietary rights upon those who
are in the business of fishing. Rather, it is concerned with the management,
preservation and regulation of the resource as a whole for the benefit of all
Canadians:
Ward v. Canada (Attorney General)
, [2002] 1 S.C.R. 569 at
paras. 23, 34 and 38. On the scope of the federal fisheries power, Chief
Justice McLachlin, writing for the Court in
Ward,
stated:
[44] ... Measures whose essence went to the regulation
of fish processing and labour relations in the fishery have been held to fall
outside the federal power. On the other hand, measures primarily related to the
regulation of the fisheries resource but incidentally touching the sale of fish
have been upheld as valid federal legislation.
...
[46] Similarly, labour relations in the fisheries were
held to be matters essentially falling within the provincial power to regulate
business and outside the federal fisheries power: see
British Columbia
Packers
and
Mark Fishing, supra;
see also
Barrys Ltd. v.
Fishermen, Food & Allied Workers Union
(1993), 104 Nfld. &
P.E.I.R. 277 (Nfld. C.A.).
[47] These cases suggest that measures essentially
directed to regulating fish processing and labour relations fall under the
provincial power over property and civil rights, and outside the federal
fisheries power.
If the activity is in pith and substance a matter of trade
and industry within the province, it will not fall under the federal fisheries
power merely because some aspect of the activity touch upon the fishery.
Conversely, measures that are in pith and substance directed to the fishery
fall within the federal fisheries power even though they possess aspects
relating to property and civil rights.
[Emphasis added.]
[72]
Similarly, in
British Columbia Packers Ltd. v. Canada (Labour
Relations Board)
(1976), 1 F.C. 375 (C.A.)
,
the Federal Court of
Appeal observed that the fisheries power does not extend to the making of laws
in relation to things reasonably incidental to carrying on a fishing business,
such as labour relations and disposition of the products of the business, when
such things do not
in themselves
fall within the concept of fisheries
[emphasis in original] (at para. 14).
[73]
In my view, the appellants claim that the pith and substance of their
operations falls within the federal head of power over seacoast and inland
fisheries under s. 91(12) of the
Constitution Act
is not supported by
the jurisprudence.
(iii)
Section
92(13) and the provincial power over property and civil rights
[74]
The scope of s. 92(13) was discussed in
Alltrans,
where the
classification of the
Industrial Health and Safety Regulations,
BC Reg.
585/77 was at issue. The regulations were enacted pursuant to the predecessor
of the
WCA
and involved specifications for appropriate footwear to be
worn by workers in industrial occupations. Mr. Justice Beetz found at 912 that [t]he
impugned provisions ... necessarily relate to the working conditions, labour
relations and the management of the undertakings which are subject to the [
WCA
s
predecessor] and therefore fell within the provincial head of power over
property and civil rights.
[75]
Mersey Seafoods
also classified the provincial legislation
relating to the occupational health and safety of workers in the context of
commercial fishing vessels as a matter of labour relations that fell within the
provincial legislative authority. In arriving at that determination the Court
relied extensively on the following passages in
Bell Canada 1988
:
[31] ... Justice Beetz said:
I think it is clear that on its face the
Act
principally treats working conditions, labour relations and the management of
an undertaking. (p. 798)
. . .
Unlike a workmens compensation scheme, such as that in
question in the
Workmens Compensation Board
case, the preventive
provisions dealing with occupational health and safety fall within the scope of
the contract of employment. The essence of legislation the purpose of which is
to safeguard the health of workers is that it articulates the terms of the
contract of employment, in the same way as does a collective agreement which
contains preventive clauses dealing with occupational health and safety.
(p. 799)
. . .
I therefore do not think that the
Act
is intended to
protect the health and safety of people in the province in general. It
governs relations between worker and employer as such, in the workplace or in
the course of employment, subject to a contract of employment which may add to
the minimum requirements of the
Act
, and relates to a key field of
labour relations, that of the worker's health and safety. (p. 809)
. . .
In my opinion, the first fifty-seven sections of the
Act
manifestly deal with working conditions and labour relations. The same is
largely true either directly or incidentally of a number of subsequent
provisions, such as those contained in Chapter X, entitled "Inspection",
and Chapter XII, entitled Regulations. (p. 810)
Justice Beetz concluded the pith and substance analysis (p.
816):
The
Act
deals with the following matters:
working conditions, labour relations and the management of undertakings.
Under proposition two, these subjects in principle fall into the class of
subject mentioned in s. 92(13) of the
Constitution Act
,
1867
:
Property and Civil Rights in the Province. The
Act
is therefore
intra
vires
, valid and applicable to undertakings which it may constitutionally
cover.
[76]
In this case, I am satisfied the impugned provisions are in pith and
substance a matter involving the occupational health and safety of workers on
fishing vessels. Such matters relate to labour relations and working
conditions which presumptively fall within the exclusive provincial
jurisdiction over property and civil rights under s. 92(13).
(iv)
The incidental effects
doctrine
[77]
Legislation enacted by one jurisdiction may have incidental or secondary
effects upon a head of power allocated to the other jurisdiction. However,
incidental effects that are corollary or secondary to the dominant purpose of the
law will not render the law constitutionally invalid. Incidental intrusions
into another jurisdictions mandate are to be expected as it is in practice
impossible for a legislature to exercise its jurisdiction over a matter
effectively without incidentally affecting matters within the jurisdiction of
another level of government (
CWB
at paras. 25-29). The majority in
CWB
described the incidental effects of legislation as follows:
[28] The fundamental
corollary to this approach to constitutional analysis is that legislation whose
pith and substance falls within the jurisdiction of the legislature that
enacted it may, at least to a certain extent, affect matters beyond the
legislatures jurisdiction without necessarily being unconstitutional. At this
stage of the analysis of constitutionality, the dominant purpose of the
legislation is still decisive. Its secondary objectives and effects have no
impact on its constitutionality: merely incidental effects will not disturb
the constitutionality of an otherwise
intra vires
law (
Global
Securities Corp. v. British Columbia (Securities Commission),
[2002] 1
S.C.R. 494, 2000 SCC 21, at para. 23). By incidental is meant effects that
may be of significant practical importance but are corollary and secondary to the
mandate of the enacting legislature: see
British Columbia v. Imperial
Tobacco Canada Ltd.,
[2005] 2 S.C.R. 473, 2005 SCC 49, at para. 28. Such
incidental intrusions into matters subject to the other level of governments
authority are proper and to be expected:
General Motors of Canada Ltd. v.
City national Leasing,
[1989] 1 S.C.R. 641, at p. 670.
[78]
The incidental effects of legislation on another jurisdictions
legislative authority may in some instances be resolved by a firm application
of the pith and substance doctrine. This should result in the classification of
a law into a single head of legislative power under ss. 91 or 92 of the
Constitution
Act
:
CWB
at para. 31. If the true nature of the law, in purpose and
effect, is found to fall within the enacting bodys legislative mandate, the
law will be constitutionally valid; if its purpose and effect are found to fall
outside the enacting bodys mandate, the law will be viewed as colourable and
constitutionally invalid.
(v)
The double aspect doctrine
[79]
Some areas of legislative authority include a matter that falls under
both federal and provincial legislative authority. In other words, the matter
of the legislation may have both a federal and provincial aspect: one aspect of
the legislative field comes within federal jurisdiction while another aspect of
the legislative field falls within provincial jurisdiction. In such
circumstances, each jurisdiction has the authority to legislate on the matter
within the scope of its mandate, albeit the purposes of the legislation in each
jurisdiction will be different:
Firearms Reference
at para. 52.
This is known as the double aspect doctrine (see
Law Society of British
Columbia v. Mangat,
2001 SCC 67, [2001] 3 S.C.R. 113 at para. 48)
and
reflects the principle of concurrency that constitutionally valid legislation
from each jurisdiction may co-exist provided the dominant purpose and effect of
each law is limited in scope to the matter within the enacting bodys
mandate. In other words, the laws from each jurisdiction are constitutionally
valid provided they fall within the scope of the enacting bodys mandate.
[80]
As stated in
CWB
, the double aspect doctrine:
[30] ... recognizes that
both Parliament and the provincial legislatures can adopt valid legislation on a
single subject depending on the perspective from which the legislation is
considered; that is, depending on the various aspects of the matter in
question.
[81]
The rationale for the double aspect doctrine is to ensure that the
policies of the elected legislators of both levels of government are respected
(
CWB
at para. 30). In
CWB
, the Court underscored how a flexible
approach to the application of the pith and substance doctrine is better
adapted to the modern cooperative federalism rather than the classical
watertight compartments approach:
[37] The dominant tide finds its principled
underpinning in the concern that a court should favour, where possible, the
ordinary operation of statutes enacted by
both
levels of government. In
the absence of conflicting enactments of the other level of government, the
Court should avoid blocking the application of measures which are taken to be
enacted in furtherance of the public interest. ...
...
[42] ... Canadian federalism
is not simply a matter of legalisms. The Constitution, though a legal document,
serves as a framework for life and for political action within a federal state,
in which the courts have rightly observed the importance of co-operation among
government actors to ensure that federalism operates flexibly.
[82]
An example of the application of the double aspect doctrine can be found
in
Chatterjee.
That case involved a constitutional challenge to
Ontarios civil forfeiture legislation for drug related activities. The
appellants argued that the legislation amounted to an impermissible intrusion
into the federal legislative authority over criminal law. In considering the
federal aspect of the civil forfeiture legislation, Mr. Justice Binnie,
writing for the Court, observed that the occupied field test has been
rendered obsolete by subsequent case law which makes it clear that a federal
law touching on a matter does not in general create a negative inference
ousting the operation of a provincial law otherwise valid in relation to
provincial objects, so long as there is no operational conflict (at
para. 35). In the result the Court held that the legislation was
constitutionally valid as it did not introduce an interference with the
administration of [the
Criminal Code
] provisions within the scope of
the mischief identified by Rand J. in [
Johnson
v.
Attorney General of
Alberta,
[1954] S.C.R. 127]
(para. 53).
[83]
The appellants submit that the double aspect doctrine does not apply in
the circumstances of this case as the two regulatory regimes reflect the same
aspect or purpose: namely to prevent risks to the health and safety of workers
on fishing vessels in an area of exclusive federal jurisdiction over navigation
and shipping. Uniformity of regulation in the area of ship stability and
safety, they say, is necessary so that Canada can meet its international
obligations under the International Seafarers Code.
[84]
However, as stated above (see paras. 31-43) there are substantial
differences between the federal regulatory scheme relating to shipping and
navigation, and the provincial
WCA
preventative scheme. Unlike Part 3 of
the
WCA
and the
OHSR,
the dominant purpose of the federal regime
under the
CSA, 2001
focuses on a broad spectrum of objectives relating
to shipping and navigation. In contrast, the focus of Part 3 is on the
prevention of workplace accidents, and the occupational health and safety of
workers in British Columbia, through provisions for documentation and
disseminating of information to crew members to the extent that their duties
may include a role in maintaining the stability of the vessel.
[85]
With respect, the appellants submissions speak more to the incidental
effects doctrine
of the impugned provisions on the federal jurisdiction
over navigation and shipping rather than to a single joint purpose of each
level of government to regulate on worker health and safety on fishing vessels.
As stated, the dominant purpose of the federal regulations is on vessel
stability and safety; worker safety is an incidental effect of the regulations.
In comparison, the dominant purpose of the
OHSR
is on worker safety on
fishing vessels; vessel stability and safety are incidentally affected. Any
potential for conflict or inconsistency has been resolved by the two
jurisdictions through memoranda of understanding.
[86]
There is often a degree of overlap between federal and provincial
legislative measures where both jurisdictions have the authority to legislate
on a similar matter. This overlap between jurisdictions is now recognized as
the inevitable indicia of cooperative federalism. In
Chatterjee,
Binnie
J. described it in this fashion:
[32] ...Co-operative federalism recognizes that overlaps
between provincial and federal laws are inevitable:
Matters, however, which in one aspect and for one purpose
fall within the jurisdiction of a province over the subjects designated by one
or more of the heads of s. 92, may in another aspect and for another purpose,
be proper subjects of legislation under s. 91, and in particular under head 27.
(
Reference re Validity of the Combines Investigation Act
and of s. 498 of the Criminal Code,
[1929] S.C.R. 409. at p. 413)
[87]
Professor Hogg posits that duplication is not a test of inconsistency,
writing at 16.5 on Overlap and Distribution:
There is no reason why duplication should be a case of
inconsistency once the negative implication or covering the field test is
rejected. On the contrary, duplication is the ultimate in harmony. The
argument that it is untidy, wasteful and confusing to have two laws when only
one is needed reflects a value which in a federal system often has to be
subordinated to that of provincial autonomy. Nor does the latter value
disappear when provincial law merely duplicates federal law, because the
suspension of a provincial law may create a gap in a provincial scheme of
regulation which would have to be filled by federal law ─ a situation as
productive of untidiness, waste and confusion as duplication.
In any event, arguments against
duplication of federal and provincial laws can have little weight once
overlapping is admitted. After all, overlapping legislation is duplicative to
the extent of the overlap, and yet it is clear that provincial law is not
inoperative to the extent of its overlap with federal law.
(vi)
The need for provincial
regulation of workers on fishing vessels
[88]
The appellants also submit that there is no need for a provincial
regulatory scheme to protect workers on fishing vessels as there is no
legislative gap in the federal legislation. I cannot agree. This case provides
a good illustration of the gap in the regulatory schemes. The Western Investor
was built and certified in 1980 as a seiner. Its original stability tests were
done as a seiner. It now operates as a trawler. The original stability books
referred to water in the holding tanks. The holding tanks now contain fuel
which changes the stability of the vessel. Yet, there are gaps in the
SFVIR
on
the requirements for the upgrading of stability books as a result of the
vessels conversion to a trawler. Under the
SFVIR
there are only four
instances when a small fishing vessel must be inspected: upon completion of its
construction; upon registration as a Canadian ship; upon conversion to a herring
or capelin fishing vessel; or upon modification where its keel was laid or
where its stability characteristics were adversely affected. Conversion from a
seiner to a trawler does not necessarily fall into any of these categories.
[89]
Similarly, the
LFVIR
do not require crew members to be briefed on
or have access to the stability characteristics of the vessel; the stability
book is only required to be on board for the information of the master since
only the master and crew with the specialized skills for large fishing vessels
have the authority to take such actions as may be required. Nor does it appear
that the Osprey No. 1 was inspected by Labour Canada after the fatality on board
the vessel.
[90]
Such gaps in health and safety regulations within the
SFVIR
and
LFVIR
are filled by
MOHSR
and the
OHSR.
Indeed, both the federal
government and the provincial government have legislated additional health and
safety requirements for marine vessels beyond that which is contained within
the
CSA, 2001
and its regulations. Undertakings that are subject to
federal jurisdiction are subject to
MOHSR
(federal regulations enacted
under the
CLC
)
rather than the
OHSR
(provincial
regulations enacted under the
WCA
)
.
Thus, both federal and
provincial undertakings are subject to safety regulations beyond those found
within the general marine regulatory regime (the
CSA, 2001
). It appears,
therefore, that both the federal and provincial governments recognize that a
gap exists and have attempted to fill the void in the manner described.
[91]
Furthermore, the effect of the cooperative arrangements between the two
levels of government can only add to the safety of the crew and thereby promote
the mutual objectives of each jurisdiction to decrease the incidents of
injuries and deaths on fishing vessels. I agree with the observations of the
Review Division of the WCB that the concerns expressed by the appellants appear
to be an overreaction to some basic requirements to provide documentation and
information on vessel stability and safety to the crew.
(c)
Summary
[92]
In sum, I agree with the trial judge that the impugned provisions are
constitutionally valid legislation in regard to the labour relations and
working conditions for workers on commercial fishing vessels. Conditions of
employment, including legislation relating to the occupational health and
safety of workers, presumptively fall within provincial legislative
jurisdiction over property and civil rights under s. 92(13) of the
Constitution
Act
unless the appellants can establish that the nature of their operations
amount to a federal undertaking.
3.
The
Appellants Operations: A Federal or Provincial Undertaking?
[93]
The presumption that matters involving labour relations and conditions
of employment fall within provincial jurisdiction over property and civil
rights under s. 92(13) can be rebutted where it can be demonstrated that
the normal or habitual activities of an undertaking fall within
s. 92(10)(a) or are found to be an integral or essential part of a federal
work, undertaking or business based on the functional test adopted in
Construction
Montcalm Inc. v. Minimum Wage Commission,
[1979] 1 S.C.R. 754,
Northern
Telecom Ltd. v. Communications Workers of Canada,
[1980] 1 S.C.R. 1031,
and
NIL/TU,O Child and Family Services Society v. B.C. Government and
Service Employees Union,
2010 SCC 45 at para. 11 [
NIL/TU,O
].
[94]
In
NIL/TU,O
at para. 13, Madam Justice Abella, for the majority, referred
to the principles governing federal-provincial jurisdiction over labour
relations as summarized in
Northern Telecom,
which adopted the reasoning
of the majority judgment,
per
Beetz J. in
Construction Montcalm.
The
first four principles in
Northern Telecom,
set out in
NIL/TU,O,
are
as follows
:
(1) Parliament
has no authority over labour relations as such nor over the terms of a contract
of employment; exclusive provincial competence is the rule.
(2) By way
of exception, however, Parliament may assert exclusive jurisdiction over these
matters if it is shown that such jurisdiction is an integral part of its
primary competence over some other single federal subject.
(3) Primary
federal competence over a given subject can prevent the application of
provincial law relating to labour relations and the conditions of employment
but only if it is demonstrated that federal authority over these matters is an
integral element of such federal competence.
(4) Thus, the regulation of wages
to be paid by an undertaking, service or business, and the regulation of its
labour relations, being related to an integral part of the operation of the
undertaking, service or business, are removed from provincial jurisdiction and
immune from the effect of provincial law if the undertaking, service or
business is a federal one. [P. 132.]
[95]
Abella J. then turned to the remaining two principles from
Northern
Telecom
at para. 14
,
in which the Court set out the functional
test to be applied when determining whether an undertaking is federal or
provincial:
(5) The
question whether an undertaking, service or business is a federal one depends
on the nature of its operation.
(6) In
order to determine the nature of the operation, one must look at the
normal
or habitual activities of the business as those of a going concern, without
regard for exceptional or casual factors
; otherwise, the Constitution could
not be applied with any degree of continuity and regularity.
[Emphasis added.]
[96]
The functional test was also applied in
Four B Manufacturing Ltd. v.
United Garment Workers of America,
[1980] 1 S.C.R. 1031, and more recently
in
Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters
,
2009 SCC 53,
[2009] 3 S.C.R. 407, in determining whether operations
of a business were a federal or provincial undertaking. I shall return to
Consolidated
Fastfrate
below.
[97]
The functional test calls for a distinct inquiry regardless of the
specific federal head of power that may be engaged in a particular case (
NIL/TU,O
at para. 3). The bifurcated approach to the inquiry, adopted by the
majority, was described by Abella J. as follows:
[3] ...
It calls for an inquiry into
the nature, habitual activities and daily
operations of the entity in question
to determine whether it constitutes a
federal undertaking. This inquiry is known as the functional test. Only if
this test is inconclusive as to whether a particular undertaking is federal,
does the court go on to consider whether provincial regulation of that entitys
labour relations would impair the core of the federal head of power.
...
[22] ...To the extent that the functional test is
inconclusive as to jurisdiction over labour relations of an entity, the
presumption of provincial jurisdiction will apply in such a case
unless
the
core of the federal head of power would be impaired by provincial regulation of
the entitys labour relations. It is only in this circumstance of an
inconclusive finding about the application of the functional test that this
narrow analysis of the core of the federal power will be engaged.
[Emphasis added.]
[98]
Thus, under the functional test the court must examine the nature,
habitual activities and daily operations of the appellants operations to
determine if they are a vital, essential or integral aspect of a federal head
of power. In those circumstances, the appellants operations would be properly
characterized as a federal undertaking:
Northern Telecom
at 132. If the
inquiry into the nature of their activities is inconclusive, the court must
then go on to consider if the impugned provisions
impair
the core of one
of the federal heads of power. If their activities are found to impair the core
of the federal head of power over navigation and shipping, then the impugned provisions
will be inapplicable to the appellants operations.
(a)
Section
92(10)(a) and the extension of the appellants operations beyond
the
provinces territorial waters
[99]
The appellants submit that their operations are excluded from provincial
legislative control by operation of s. 92(10)(a) of the
Constitution
Act.
Section 92(10)
provides that the provinces have exclusive
legislative authority over local works and undertakings with the exception of:
(a) Lines of steam or other Ships, Railways, Canals,
Telegraphs, and other Works and Undertakings connecting the Province with any
other or others of the Provinces, or extending beyond the Limits of the
Province;
(b) Lines of Steam Ships between the Province and any
British or Foreign Country;
(c) Such Works as,
although wholly situate within the Province, are before or after their
Execution declared by the Parliament of Canada to be for the general Advantage
of Canada or for the Advantage of Two or more of the Provinces.
[100]
The
appellants say that because their fishing operations extend beyond the
territorial boundaries of the province, they necessarily fall within the
exclusionary provisions of s. 92(10)(a). They submit that ss. 92(10)(a)
and (b) are based on the concept of geography and territory, and that in order
to give meaning to the phrase connecting [two or more provinces] or extending
beyond the Limits of a Province the words must be read disjunctively and not
equated with the same meaning. In support of their position, they rely on
Agence
Maritime Inc. v. Canada Labour Relations Board,
[1969] S.C.R. 851,
Northern
Telecom,
and
Singbeil v. Hansen.
[101]
The issue
in
Agence
was whether certification of a proposed bargaining agent for
employees of three coastal vessels that operated largely within the province of
Quebec (except for some isolated and exceptional occasions) was subject to the
provincial or federal labour relations legislation. The Court held that the
appellants operations were a local or provincial undertaking and did not fall
under the subject matter of maritime law since the appellants operations were
essentially limited to the territorial boundaries of Quebec, and the wording of
s. 92(1)(a) and (b) intended to exclude from federal jurisdiction
intraprovincial shipping undertakings. In
dicta,
however, the Court
observed that continuous and regular activities outside the provincial
territorial limits would likely be characterized as a federal undertaking and
therefore fall within the exclusionary provisions of s. 92(10)(a) of the
Constitution
Act.
[102]
Northern
Telecom
involved a similar issue regarding the certification of a proposed
bargaining agent for the employees of its telecommunications operations.
Although the Court did not address the constitutional issue of whether the
telecommunications operation was a provincial or federal undertaking, in the
course of its reasons it provided the oft-cited summary of the principles
governing federal-provincial jurisdiction over labour relations quoted above in
NIL/TU,O
(para. 90)
.
[103]
In
Singbeil
the issue was whether the wages of an employee of the British Columbia ferry
system could be garnished under provincial legislation, or whether the ferry
system was a federal undertaking and therefore subject to the
CSA,
which
contained provisions that exempted the garnishment of wages
.
This Court
held that the ferry system was a provincial undertaking as its service operated
almost entirely within the boundaries of British Columbia except for incidental
excursions through waters outside the inland waters of the province and
therefore the federal
CSA
was not applicable.
[104]
The
appellants contend that implicit in the comments and reasoning of these
decisions, is the view that where the normal or habitual activities of a
fishing vessel extend beyond the limits of the province, their operations will
be characterized as a federal undertaking by operation of the exclusionary
provisions of s. 92(10)(a). The appellants also seek to distinguish
Mersey
Seafoods
on the basis that it did not address the interpretation of
s. 92(10)(a).
[105]
In my
view, the recent decision of
Consolidated Fastfrate
provides
considerable guidance on the interpretation of s. 92(10)(a). In
Consolidated
Fastfrate
the Court had to determine whether labour relations issues at the
Calgary branch of a national trucking company with branches across Canada were
subject to provincial regulation under s. 92(13) or were subject to
federal regulation under the exclusionary provisions of s. 92(10)(a). The
Court concluded that the operations at the Calgary branch were a provincial
undertaking and subject to provincial jurisdiction since the employees role in
the operation of the company was entirely intraprovincial.
[106]
In the
course of his analysis, Mr. Justice Rothstein, for the majority, reviewed
the historical context in which s. 92(10)(a) arose and observed that only
those works and undertakings that furthered the general interest of the
country were historically made subject to federal regulation (at
para. 33). He also considered the underlying purpose of s. 92(10)(a),
which he found was to secur[e] the economic and political viability of Canada
as a federal union (at para. 36 citing C.H. McNairn, Transportation,
Communication and the Constitution: The Scope of Federal Jurisdiction (1969)
47 Can. Bar. Rev. 355 at p. 355). He examined the text of the exclusionary
provisions and concluded that they should be read
ejusdem generis
(in
reference to the specific examples that precede them), indicating that only
those operations of a similar nature as the ones listed, which focus on a
physical connectivity to another jurisdiction, will be subject to federal
regulation (at paras. 42-43).
[107]
Rothstein J. then examined the nature and scope of the appellants
operations. He observed that in determining the operational reality of an
activity the court should not descend to a level of detail or be subject to
technical, legal niceties of the corporate structure or the employment
relationship (para. 77 quoting from
Northern Telecom
at p. 133).
The preferred approach, he said, was to look for commonalities within
industries in order to give regulators a degree of predictability (see
paras. 43-46). He concluded that the focus of the constitutional analysis
should not be on the
means
by which an undertakings activities are
carried out but on the
actual nature of its operation
(at
para. 60). He then stated:
[61] ... Section 92(10(a) is
concerned with the nature of undertakings, not how they are subjectively
understood by consumers. As this court emphasized in
Northern Telecom,
at
p. 132, [t]he question whether an undertaking, service or business is a
federal one depends on the nature of its operations.
[108]
In this
regard, Rothstein J. held that merely facilitating interprovincial [or
international] transport will not, without more, attract federal jurisdiction
(at para. 78); a mere physical connection or extension of a work or
undertaking to beyond provincial boundaries will not displace the general rule
that local works and undertakings fall within provincial regulatory
jurisdiction. Rather it is the business
performing
[the operations]
(at para. 80) that is decisive: if the business of the undertaking
crosses interprovincial boundaries, or involves an international jurisdiction,
the undertaking will be subject to federal jurisdiction; if it does not, it
will be subject to provincial jurisdiction. In other words, there must be an
actual connection with another jurisdiction to fall with the exclusionary
provisions of s. 92(10)(a), not merely a geographical or physical
connection with another jurisdiction.
[109]
This interpretation of s. 92(10)(a) is supported by Professor
Hoggs analysis at 22.4 Connection with another Province:
According to s. 92(10) (a), an
undertaking in a province is within federal jurisdiction if it is an
undertaking connecting the province with any other or others of the provinces,
or extending beyond the limits of the province. The courts have held that the
connection (or extension) that is contemplated by s. 92(10)(a) is an
operational connection, and not a merely physical connection. For example, a
local railway [see
Montreal v. Montreal St. Ry.
[1912] A.C. 333;
B.C.
Elec. Ry. v. CNR,
[1932] S.C.R. 161;
UTU v. Central Western Ry.,
[1990]
3 S.C.R. 1112] or pipeline [see
Re National Energy Bd. Act
[1988] 2 F.C.
196 (C.A.)]
does not come within federal jurisdiction just because it is
physically connected to an interprovincial railway or pipeline. The local
undertaking will remain within provincial jurisdiction despite the physical
connection and despite regular cooperation between the two undertakings to
facilitate through traffic. An undertaking will come within s. 92(10)(a) only
if (1) the undertakings own business operations extend beyond the provincial
border or (2) the undertaking has a close operational relationship with an
interprovincial undertaking.
[110]
Also related is Professor Hoggs comments in his chapter entitled Transportation
by Water at 22.10:
Jurisdiction over transportation
by water depends upon some of the same principles as those applicable to
transportation by land. Section 92(10)(a) expressly refers to lines of steam
or other ships and to canals. In addition, however, s. 91(10) confers on the
federal Parliament jurisdiction over navigation and shipping. The unqualified
language of s. 91(10) does not authorize Parliament to regulate labour
relations in undertakings engaged in intraprovincial shipping. In
Agence
Maritime v. Canada Labour Relations Board
(1969)
,
it was held that
labour relations on ships plying the waters of the St. Lawrence River within
the province of Quebec were within provincial, not federal, jurisdiction. Of
course ships with a continuous and regular trade to the ports of more than one
province (or more than one country) would be within federal jurisdiction.
Labour relations on the ships supplying and servicing the oil drilling rigs off
the coast of Newfoundland have been held to be within federal jurisdiction:
although each voyage began and ended in a single province (Newfoundland), the
major part of the voyage was in international waters [
Crosbie
]. However,
ferries passing briefly through American waters on journeys between ports in
British Columbia have been held to be within provincial jurisdiction [
Singbeil
].
[111]
Finally,
Rothstein J. discussed the policy rationale for this interpretation of
s. 92(10)(a). He noted that the need for predictability in order to
preserve the federal-provincial regulatory balance is to be achieved by
looking at industries on a broad, rather than excessively detailed basis (such
as by calculating the number of days a vessel fishes outside the provinces
territorial waters) rather than to splice and dice discrete differences among
companies within an industry (para. 46). Fluidity within industries, he
suggested, is to be encouraged.
(b)
The application of Mersey Seafoods
[112]
I agree with the trial judge that while
Mersey Seafoods
is not
binding on this Court and did not expressly address the interpretation of
s. 92(10)(a), its reasoning is persuasive and provides guidance on the
issue of whether the appellants operations are a federal or provincial
undertaking.
[113]
One of the issues before the Nova Scotia Court of Appeal was whether the
Mersey Seafoods operations were a federal undertaking that came within federal
regulatory control under its jurisdiction over navigation and shipping, and
therefore were protected by interjurisdictional immunity from the provincial
labour relations legislation. On that issue Mr. Justice Fichaud, for the
Court, undertook a thorough review of the relevant jurisprudence and concluded:
[59]
In my view, Mersey Seafoods is a provincial undertaking.
Section 91(12) (Seacoast and Island Fisheries) and s. 91(29) with s. 92(10)
(federal shipping undertakings) were not the basis of the [Summary Conviction
Appeal Court] reasons and were not featured in the grounds of appeal. So I will
not expand on those heads of federal power. But, from the authorities cited
above,
Mersey Seafoods provincially based fishing operation does not become
a federal undertaking just because its vessel fishes outside the boundary of
Nova Scotia.
That its vessel navigates does not convert Mersey Seafoods to
a federal undertaking by s. 91(10). Nova Scotias
OHS Act
[
Occupational
and Safety Act,
S.N.S. 1996, c.7] applies to Mersey Seafoods under s.
92(13), as an aspect of labour relations or management of an undertaking, and
does not offend the exclusive federal legislative jurisdiction over navigation
and shipping under s. 91(10).
Any impact of the
OHS Act
on navigation
and shipping is incidental. That Mersey Seafoods also is subject to federal
legislation governing navigation and shipping is the double aspect doctrine at
work under our system of cooperative federalism (
Canadian Western Bank,
¶
24, 30;
Ward
¶ 30).
[
Emphasis added.]
(c)
Application of the functional
test
[114]
Based on
the functional test, characterization of the appellants fishing operations
as a federal or provincial undertaking does not depend on where the vessels
cast their nets, or the waters in which they navigate. Rather, it requires a
consideration of the nature of their operations, their habitual activities as a
going concern, and whether those activities engage national or foreign
interests. If their habitual activities include an
operational
connection or extension to another jurisdiction (interprovincial or
international) then the undertaking will have a sufficient national interest or
purpose to require federal regulation. However, a mere physical extension of
the undertakings activities beyond the physical boundaries of the province
will not, absent something more, be sufficient to establish the need for
federal control. That something more will exist where the
business
of
the operation extends beyond the territorial limits of the province. This
interpretation of s. 92(10)(a) does not, as suggested by the appellants,
render the words extending beyond the Limits of the Province superfluous but
rather is consistent with the historical context in which s. 92(10)(a) was
created.
[115]
The
business
of the appellants fishing operations is exclusively intraprovincial. There is
nothing in their habitual activities that can be identified as having a
national or foreign interest or purpose. There is no connectivity to another
jurisdiction. The vessels are owned by provincially incorporated companies; their
home port is in the province; they leave and return only from and to B.C.
ports; they unload and sell their harvest solely within the province; and, their
crew are residents of B.C. and hired solely out of this province. While a
significant percentage of the appellants activities involve excursions into
waters outside the territorial boundaries of the province, there is no
operational connectivity to another jurisdiction. In my view, the appellants focus
on the number of fishing trips its vessels take outside the provinces
territorial waters speaks more of the rejected slice and dice approach to the
jurisdictional issue than the functional approach which focuses on the actual
nature of the appellants daily business activities.
[116]
The
circumstances in this case are, in my view, similar to those in
Mark Fishing
Co. v. United Fishermen & Allied Workers Union
(1972), 24 D.L.R. (3d)
585 (B.C.C.A.). While somewhat lengthy, the following reasons by Chief Justice
Davey, for the majority, at 596-597, in my view capture the essence of the
issue:
I do not overlook the fact that deep sea fishing, with which
we are concerned here, is carried on beyond the territorial limits of the
province.
But the management of the industry is located in the province. The
vessels have their home ports in the province where the crews are engaged and
discharged, and for the most part the catch is delivered to shore plants in the
province.
I do not understand counsel for the Minister of Justice to take
that point, but since some of the duties of the crews are performed outside the
province, it should be considered. The point seems to be answered by the
judgment of the Privy Council in
Workmens Compensation Board v
. C.P.R.
Co. (1919) 48 D.L.R. 218, [1920] A.C. 184, [1919] 3 W.W.R. 167, as explained by
Martland J. in the
Bell Telephone
case,
supra
[1966] S.C.R. 767].
Viscount Haldane at p. 221-2 of the first report stated:
But in their Lordships opinion this is not a case in which
it is sought to enact any law giving a right to arise from a source outside the
Province. The right conferred arises under s. 8, and is the result of a
statutory condition of the contract of employment made with a workman resident
in the province, for his personal benefit and for that of members of his family
dependent on him. Where the services which he is engaged to perform are of such
a nature that they have to be rendered both within and without the Province, he
is given a right which ensures for the benefit of himself and the members of
his family dependent on him, not the less that the latter may happen to be
non-resident aliens. This right arises, not out of tort, but out of the
workmans statutory contract, and their Lordships think that it is a legitimate
provincial object to secure that every workman resident within the Province who
so contracts should possess it as a benefit conferred on himself as a subject
of the Province. ...
The scheme of the Act is not one for interfering with
rights outside the Province. It is in substance a scheme for securing a civil
right within the Province. ... It makes no difference that the accident insured
against might happen in foreign waters. For the question is not whether there
should be damages for a tort, but whether a contract of employment made with
persons within the Province has given a title to a civil right within the
Province to compensation.
In view of the explanation of that authority by Martland J.
in the
Bell Telephone
case, it must not be interpreted as giving a
province as legislative authority over labour relations or any aspect thereof
that belong to Parliament exclusively under a specific head of section 91.
But
where, as here, labour relations have not been assigned to and do not belong to
Parliament, the
Workmens Compensation
case stands as authority that a
provinces authority to legislate upon labour relations under section 92 will
not be defeated by the mere fact that some of the employees duties are to be
performed out of the territorial limits of the province.
For the foregoing reasons I conclude that the
Labour
Relations Act
of the province governs the relations between the owners of
these fishing vessels sailing out of Prince Rupert and their crews, and governs
the appellant union that represents some of the crew members.
[Emphasis added.]
[117]
These
comments continue to be apposite to the issue in this case as the Supreme Court
of Canada, in dismissing the appeal in
Mark Fishing
, declined to address
this Courts decision on the constitutional issue and decided the appeal on the
non-constitutional issue alone.
[118]
I am not
persuaded the trial judge erred in finding that the operational activities of
the appellants are a provincial undertaking within s. 92(10) of the
Constitution
Act
.
(d)
Distinguishing
the maritime negligence cases
[119]
There may
be circumstances where the activities of a provincial undertaking will be
subject to federal control if they are found to be closely integrated with a
federal head of power:
Monk Corp. v. Island Fertilizers Ltd.,
[1991] 1
S.C.R. 779. This occurs in the maritime negligence cases where issues of
tortious liability on navigable waters have historically been held to fall
within the federal legislative head of navigation and shipping:
Whitbread v.
Walley,
[1990] 3 S.C.R. 1273.
[120]
Historically,
maritime law has been viewed as part of the unassailable core of Parliaments
jurisdiction over navigation and shipping because of the intrinsically
multi-jurisdictional nature of maritime matters, particularly claims against
vessels or those responsible for their operation and a concern for
uniformity, which requires that provincial statutes of general application be
precluded from application to a maritime negligence claim:
Ordon
at
para. 93, cited in
CWB
at para. 59.
[121]
The
circumstances of this case do not involve a claim in maritime negligence law.
That factor distinguishes the uniform assignment of federal jurisdiction to
those cases involving the apportionment of tortious liability on accidents that
occur on navigable waters, in favour of the functional approach which focuses
on the nature of the operations activities and whether they involve a matter
of national or foreign interest.
4.
The
Doctrines of Interjurisdictional Immunity and Paramountcy
[122]
While the
appellants contend that their operations are a federal undertaking, they
submit, in the alternative, that if they are found to be a provincial
undertaking then the impugned provisions are inapplicable because they impair
an unassailable core aspect of the federal head of power over navigation and
shipping under s. 91(10). This is the second stage of the functional test
set out in
NIL/TU,O
which is
to be considered only if an analysis
of the first stage of the test is inconclusive.
While not essential to
the analysis in light of my conclusive finding that the appellants fishing
operations constitute a provincial undertaking and therefore are subject to
provincial regulatory control, for the sake of a complete analysis of the
grounds of appeal raised by the appellants I propose to address the
applicability of the doctrine of interjurisdictional immunity to the
circumstances of this case, followed by an analysis of whether the doctrine of
paramountcy is engaged.
[123]
I begin
with a discussion of the doctrine of interjurisdictional immunity since
NIL/TU,O
has reframed the analysis; only if the functional test is inconclusive does
a court move to the second stage and consider whether the provincial regulation
of labour relations in that particular circumstance would impair the core of a
federal power (at para. 22). I note, however, that it remains the case that the
doctrine of paramountcy is much better suited to contemporary Canadian
federalism (
CWB
at para. 69) and as such should generally be considered
first in other situations.
[124]
The
potential for impairment of a federal purpose or operational conflict between
valid but overlapping areas of legislation jurisdiction has given rise to the
constitutional doctrines of interjurisdictional immunity and paramountcy, respectively.
Thus, where the incidental effects of constitutionally valid legislation can be
demonstrated to impair or actually conflict with the constitutional mandate of
the other jurisdiction, these constitutional doctrines will be engaged for the
purpose of containing the intrusive incidental effects by rendering them
inapplicable through the method of reading down the impugned provisions (in the
case of the doctrine of interjurisdictional immunity), or by rendering them inoperative
to the extent of the inconsistency (in the case of the doctrine of paramountcy).
(a)
The doctrine of interjurisdictional
immunity
[125]
The doctrine of interjurisdictional immunity operates by cloaking a
non-enacting jurisdiction from the effects of an enacting jurisdictions
legislation that is found to impair the basic, minimum, and unassailable core
competence of one of the non-enacting jurisdictions subject matters under
ss. 91 or 92 of the
Constitution Act.
The majority in
CWB
described
this doctrine by reference to the leading decision of
Bell Canada 1988
:
[33] Interjurisdictional
immunity is a doctrine of limited application, but its existence is supported
both textually and by the principles of federalism. The leading modern
formulation of the doctrine of interjurisdictional immunity is found in the
judgment of this Court in
Bell Canada (1988)
where Beetz J. wrote that
classes of subject in ss. 91 and 92 must be assured a basic, minimum and
unassailable content immune from the application of legislation enacted by the
other level of government.
[126]
In
Bell
Canada
1988,
the federal telecommunications giant challenged the
applicability of general provincial legislation regulating the health and
safety of employees in the workplace, including the re-assignment of pregnant
workers. The Court held that while the pith and substance of the provincial
legislation related to labour relations and working conditions (matters
typically falling within the exclusive provincial jurisdiction over property
and civil rights under s. 92(13)), the provincial regulations did not
apply to Bell Canada because it was a federal undertaking and labour relations
in regard to a federal undertaking were a vital or essential part of the
undertakings management and operation.
[127]
The Court
stated that provincial regulation of the labour relations of a federal
undertaking would impair the unassailable core of the federal jurisdiction over
the undertakings operation. Therefore, by application of the doctrine of
interjurisdictional immunity, the federal undertaking was granted immunity from
the application of provincial law. This was achieved by reading down the
scope of the provincial legislation to limit the effects of the provincial law
to only those undertakings within its constitutional mandate control. In the
result, the provincial occupational health and safety legislation remained
constitutionally valid but was held to be inapplicable to management of the
Bell Canada operations.
[128]
In the course of his analysis, Beetz J., writing for the Court,
summarized the jurisdictional principles in regard to labour relations and
working conditions at 761-762:
In principle, labour relations and working conditions fall
within the exclusive jurisdiction of the provincial legislatures: these matters
fall into the class of subject mentioned in s. 92(13) of the
Constitution
Act, 1867,
Property and Civil Rights in the Province [citation omitted].
...
... Parliament is vested with
exclusive legislative jurisdiction over labour relations and working conditions
when that jurisdiction is an integral part of its primary and exclusive
jurisdiction over another class of subjects, as is the case with labour
relations and working conditions in the federal undertakings covered by ss.
91(29) and 92(10 a., b. and c. of the
Constitution Act, 1867....
It
follows that this primary and exclusive jurisdiction precludes the application
to those undertakings of provincial statutes relating to labour relations and
working conditions, since such matters are an essential part of the very
management and operation of such undertakings ... This third proposition
reflects, at least in part, a constitutional theory which commentators who have
criticized it have called the theory of interjurisdictional immunity. ...
[129]
This
doctrine, as noted in
CWB,
is rooted in the notion of exclusivity
between the heads of power in ss. 91 and 92 of the
Constitution Act
and
the classical watertight compartments concept of federalism. Application of
the doctrine, however, has also produced what has been described as asymmetrical,
or centrali[zed] results in favour of granting immunity to the federal companies,
works and undertakings from the effects of provincial legislation (
CWB
at
paras. 34 and 45). This historical approach to federalism is said to
undermine the principle of subsidiarity and has been described as not
...particularly compelling (
CWB
at para. 36 referring to Chief
Justice Dickson in
O.P.S.E.U. v. Ontario (Attorney General),
[1987] 2
S.C.R. 2 at 17). As a consequence, the watertight compartments approach to
jurisdictional issues has been given limited application in face of the
dominant tide of recent jurisprudence that would have a court favour, where
possible, the ordinary operation of statutes enacted by
both
levels of
government and [i]n the absence of conflicting enactments of the other level
of government ...avoid blocking the application of measures which are taken to
be enacted in furtherance of the public interest (
CWB
at
para. 37).
[130]
The
appellants rely heavily on
Ordon
, the leading authority on
interjurisdictional immunity, to support their position that the impugned
provisions should be found inapplicable to their operations. However, the issue
in
Ordon
was whether tortious liability arising from a boating accident
was governed by federal maritime law or the provinces fatal accidents
legislation. The Supreme Court of Canada held that based on the doctrine of
interjurisdictional immunity the provincial legislation was inapplicable to the
plaintiffs claims as maritime negligence actions fall within the core of
federal jurisdiction over navigation and shipping.
[131]
The Court
in
CWB,
on the other hand, observed that
in the course of
considering federal jurisdiction over maritime law, the Court [in
Ordon
]
acknowledged that the doctrine could potentially apply to all activities
within Parliaments jurisdiction (para. 41). The majority in
CWB
further
observed that a broad application [of the doctrine] also appears inconsistent
... with the flexible federalism that the constitutional doctrines of pith and
substance, double aspect and federal paramountcy are designed to promote
(para. 42). The challenge of defining the core of every legislative head
of power, rather than adopting a case-by-case incremental approach to that task
and avoiding the interplay between the different heads of power under ss. 91
and 92 of the
Constitution Act,
carries with it the potential to drain
the content of the provincial authority over property and civil rights (
CWB
at para. 43).
[132]
The majority in
CWB
went on to state:
[45] Commentators have noted
that an extensive application of this doctrine to protect federal heads of
power and undertakings is both unnecessary and undesirable in a federation
where so many laws for the protection of workers, consumers and the environment
(for example) are enacted and enforced at the provincial level (Hogg, at p.
15-30; see also Weiler, at p. 312; J. Leclair, The Supreme Court of Canadas
Understanding of Federalism: Efficiency at the Expense of Diversity (2003), 28
Queens L.J.
411)
[133]
In this
case, the impugned provisions are not onerous requirements that could be said
to impair the core competence of the federal jurisdiction over navigation and
shipping. Rather, they appear to complement the federal regulatory regime in a
way that will benefit the health and safety of workers employed in a
potentially hazardous workplace.
[134]
I agree
with the trial judge that the doctrine of interjurisdictional immunity does not
apply in these circumstances. The exclusivity of the heads of power endorsed
by the doctrine is not suited to circumstances that involve double aspects of
complimentary legislative regimes. This limitation to the doctrine of
interjurisdictional immunity was recognized by the majority in
Lafarge,
which
noted that the doctrine [of interjurisdictional immunity] should not be used
where, as here, the legislative subject matter (waterfront development) presents
a double aspect (para. 4). Rather, it is through a firm application of
the pith and substance, double aspect, and paramountcy doctrines that most
cases involving overlapping jurisdiction will be resolved. That is the
situation here, where the memoranda of understanding between the different
levels of government have created a harmonious co-existence between the two
regulatory regimes that can only enhance the safety of workers on fishing
vessels.
(b)
The doctrine of paramountcy
[135]
The
doctrine of paramountcy typically arises with double aspect matters. It is
said to apply where an actual conflict or incompatibility exists between
compliance with the federal and provincial legislation, or where provincial
legislation frustrates the purpose of the federal legislation. In such
circumstances the federal legislation will prevail and render the provincial
legislation inoperative to the extent of the incompatibility (
CWB
at
para. 69
).
[136]
The early
application of the doctrine of paramountcy involved the narrow test of
impossibility of dual compliance set out in
Multiple Access Ltd. v.
McCutcheon,
[1982] 2 S.C.R. 161, where there is actual conflict in
operation as where one enactment says yes and the other says no; the same
citizens are being told to do inconsistent things; compliance with one is
defiance of the other (at 191). Thereafter, it expanded to include the impossibility
of dual effect by decision makers as articulated in
Mangat,
where Mr.
Justice Gonthier, for the Court, wrote that actual conflict in double aspect
matters favoured the application of the doctrine of paramountcy over the
doctrine of interjurisdictional immunity (para. 52). Currently, it also encompasses
the frustration of federal purpose test as was endorsed in
CWB
and
Lafarge.
See R. Elliot,
Safeguarding Provincial Autonomy from the Supreme Courts
New Federal Paramountcy Doctrine: A Constructive Role for the Intention to
Cover the Field Test?
(2007), 38 S.C.L.R. (2d) 629-668.
[137]
The application of the doctrine of paramountcy is consistent with the
principle of cooperative federalism. The trend of co-existing of federal and
provincial legislation on double aspect matters was acknowledged in
Multiple
Access
where Mr. Justice Dickson, for the majority, stated at 190-191:
With Mr. Justice Henry I would say that duplication is, to
borrow Professor Ledermans phrase, the ultimate in harmony. The resulting
untidiness or diseconomy of duplication is the price we pay for a federal
system in which economy often has to be subordinated to [...] provincial
autonomy (Hogg, at p. 110).
Mere duplication without actual conflict or
contradiction is not sufficient to invoke the doctrine of paramountcy and
render otherwise valid provincial legislation inoperative.
The following passage from Professor Ledermans article The
Concurrent Operation of Federal and Provincial Laws in Canada,
supra,
at
p. 199 (fn. 39) is apposite:
As Dr. J.A. Corry has pointed out, our country is
increasingly moving away from the older classical federalism of water-tight
compartments with provincial legislatures and federal parliament carefully
keeping clear of one another. We seem to be moving towards a co-operative
federalism. The co-ordinate governments no longer work in splendid isolation
from one another but are increasingly engaged in cooperative ventures in which
each relies heavily on the other. See J.A. Corry, Constitutional Trends and
Federalism, in the volume of essays
Evolving Canadian Federalism
(Durham,
N.C., U.S.A., 1958), p. 96.
The multiplication of concurrent fields is one
of the facets of this trend.
[Emphasis added.]
[138]
This trend
toward interjurisdictional accommodation of validly enacted federal and
provincial legislation is illustrative of cooperative federalism in action. The
doctrine of paramountcy is now triggered only when the operational effects of
provincial legislation are incompatible with federal legislation (
CWB
at
para. 69). This clarification of the frustration of federal purpose test
suggests that the critical factor in determining if the doctrine is engaged is
the identification of an operational conflict. Operational conflict must be
demonstrated by the party relying on the doctrine of paramountcy, and exists
when federal and provincial laws are in fact incompatible. In order to succeed,
it must be shown either that it is impossible to comply with both laws or that
to apply the provincial law would frustrate the purpose of the federal law (
CWB
at para. 75).
[139]
In this
case, the appellants presented no evidence at trial of any actual
incompatibility between the two regulatory regimes. Instead, they relied on
hypothetical examples in support of their contention that the doctrine should
apply in the circumstances of this case. The absence of evidence of actual
incompatibility is not surprising in this case. It would be difficult if not
impossible to secure such evidence in light of the cooperative arrangements
between the two levels of government that focus on how to avoid any potential
for actual conflict. Moreover, the memoranda of agreement evince no frustration
of federal purpose on the matters of vessel safety and crew safety. If
anything, the impugned provisions appear to enhance the federal purpose. In my
view, the appellants are unable to demonstrate that the impugned provisions
create an operational conflict or inconsistency with the federal regulatory
regime.
F.
Conclusion
[140]
The
appellants fishing operations are tethered to the provinces jurisdiction over
worker health and safety on fishing vessels by a commercial umbilical cord
through which flows the business of the appellants fishing operations. Those
operations are anchored by a provincial home port of call for the maintenance
of the vessels, for all of the loading and unloading of the harvest, and for
the hiring and residency of the crew. The fact that the harvest does not
respect the geographical and territorial boundaries of the province does not
convert the appellants otherwise exclusively intraprovincial fishing operations
into interprovincial or international fishing operations over which the federal
jurisdiction has exclusive legislative control.
[141]
Both
levels of government, through their cooperative efforts, have enacted
complimentary regulatory regimes that provide enhanced protection on issues of
worker safety. This exercise of cooperative federalism should be accorded significant
deference in the absence of any demonstrated operational or actual conflict
between the two regulatory regimes. Courts should be slow to interfere with
federal and provincial agreements in legislative areas of double aspect or
overlapping jurisdictions that achieve their purpose without impairing Canadas
constitutional arrangements as provided for in the
Constitution Act.
[142]
In my
view, the trial judge was correct in finding that the impugned provisions of
the
OHSR
are constitutionally valid as they relate to property and
civil rights under s. 92(13) of the
Constitution Act,
the
appellants operations are a provincial undertaking, and the doctrines of
interjurisdictional immunity and paramountcy are not engaged.
[143]
I would
dismiss the appeals.
The Honourable Madam Justice D. Smith
I AGREE:
The
Honourable Madam Justice Bennett
Reasons for Judgment of the Honourable Madam Justice
Garson:
[144]
I have had
the privilege of reading in draft form the reasons for judgment of Madam
Justice D. Smith in this court. I agree with her that these appeals should be
dismissed, but reach that conclusion on the basis of a somewhat different
analysis.
[145]
I agree
with the conclusion of the trial judge, Madam Justice L. Smith, and with my
colleague that, despite the fact both appellants fish beyond British Columbia
waters, neither appellant is a federal undertaking; and I do not address that
issue further in these concurring reasons for judgment.
[146]
The
appellants argue that there is no room in such a highly technical and complex
area [ship stability] for a province to take on the regulation of some aspects
of ship stability or safety procedures, even if only incidentally or in a
limited capacity. They say a firm application of the doctrine of federal
paramountcy should result in our holding that the challenged aspects of the
OHSR
are
ultra vires
or inapplicable to fishing vessels operating within or beyond
British Columbia waters. The Pattison appellants argue in their factum that the
trial judge erred in, [drawing] a bright line between a regulation requiring
the provision of stability documentation (considered
intra vires
the
province) and the imposition of stability requirements (considered
ultra
vires
the province). They say that such a distinction cannot be legally,
factually, or practically justified.
[147]
The
respondents contend that the two regimes, (the Provincial
OHSR
regime governing
work place health and safety for the fishing industry, and the federal regime,
statutory and regulatory, governed by the
CSA
and other related
enactments, all as described by my colleague) have different purposes and the
incidental intrusion by the
OHSR
into the federal area of competence,
shipping and navigation, is not cause to find that the provincial regime is
applicable to the appellants. The trial judge and my colleague agree with this
proposition.
[148]
The trial
judge did characterize the two legislative regimes as having different
purposes. She said that the provincial regime did not trench on federal
jurisdiction because it dealt only with the question of the
documentation of
vessel stability
. She found that it was only the federal regime that was
concerned with the
imposition of stability requirements
, and compliance
with stability standards (reasons for judgment at para. 173). It is in on this
point that I respectfully disagree with the trial judge and with my colleague
(at para. 41). In my view both levels of government are regulating aspects of
vessel stability. There is considerable overlap and duplication between the two
regimes. The trial judge justifies the provincial intrusion on the navigation
and shipping power by her conclusion that the provincial regime dealt only with
the
documentation
of stability. I agree with the appellants that this
distinction cannot be made, but I disagree with the appellants as to the
consequence that must result. In my view both regimes may co-exist harmoniously
as there is no real operational conflict between the requirements imposed by
the two regimes, despite the fact that there is considerable duplication and
overlap between them.
[149]
Thus like
my colleague I would dismiss the appeals.
Discussion
Review of WCB/Federal
co-operation
[150]
The
historical development of the
OHSR
regime regulating safety on board
fishing vessels indicates how the two levels of government have reached the
apparent consensus mentioned in the reasons for judgment of the trial judge.
[151]
As noted by the WCB review officer in his decision:
The Board has a long history with respect to
regulating the fishing industry, beginning in 1975, when the Legislature
enacted what is now Section 4 of the [
WCA
]
.
The
Fishing
Industry Regulations (FIR)
were enacted in 1975 under section 4 giving
compensation coverage to fishers and requiring fish buyers to pay assessments
on the purchase price of fish. These regulations also provided for the
application of prevention regulations. The Board commenced inspections but
withdrew during 1976 when the Federal Government asserted jurisdiction. The
regulations were then amended to remove most of the provisions relating to
prevention. The position remained largely unchanged until the 1990 decision in
50478 Ontario Ltd v. Great Lake Fisherman and Allied Worker's Union
referred
to above. I understand that this decision was accepted by the Federal
Government as giving the provinces jurisdiction over labour relations and
health and safety on fishing vessels. The Board then followed a consultation
process that resulted in the enactment of prevention regulations known as the
Fishing
Operations Regulations
which were effective January 1, 1995. They applied
to owners, masters and crewmembers of fishing vessels and were later
incorporated into Part 24 of the
OHSR.
The [
WCA
]
was then amended by the legislature to include further references to
fishing vessels. As a result of these amendments taking effect on October 1,
1999, the prevention provisions of the [
WCA
]
were moved to a new
Part 3, sections 106 to 230. The definitions relating to Part 3 are found
in section 106, which defines employer to include the owner and the master
of a fishing vessel for which there is a crew to whom Part 1 applies as if the
crew were workers. The definition of worker includes a person who is deemed
to be a worker under Part 1 or the regulations under that Part, or to whom that
Part applies as if the person were a worker. These definitions are related to
section 4 of the [
WCA
]
and
the
FIR.
The
FIR
state that any provision of Part 1 relating to workers applies to commercial
fishers, which means that, under the definition of worker in section 106, Part
3 also applies to commercial fishers.
[152]
As far
back as 1977, the WCB expressed concern about the lack of effective monitoring
of Canadian Coast Guard (CCG) safety regulations. Their concern arose from an
unacceptable number of injuries and deaths occurring in the fishing industry. In
a 1977 letter addressed to the then federal Minister of Labour, the WCB noted
that the Marine Safety Branch of the CCG had not promulgated or enforced
adequate regulations for vessels under 80 feet. The WCB noted its continued
complaints that the Minister of Transportation was not doing an effective job
and that the majority of vessels in the fishing fleet had been inspectionally
neglected. There was a long simmering dispute between Victoria and Ottawa
concerning the lack of any inspections of smaller fishing vessels.
[153]
In the Fall of 1987, federal, provincial and territorial Ministers
responsible for occupational health and safety in the commercial fishing
industry met. A committee was formed and was instructed to put aside
jurisdictional concerns in order to proceed to their task of considering
appropriate safety issues.
[154]
A report of the committee on occupational safety and health in the
fishing industry was published under the authority of the Minister of Labour
for the Government of Canada in 1988. Jurisdictional issues were discussed in
the executive summary as was the question of inspection of small fishing
vessels (under 15 tons):
The discussion on regulation tended to be
circumscribed by the instruction given the Committee to put aside matters of
jurisdiction. The question of who has jurisdiction regarding occupational
safety and health in the fishing industry is unclear and, although the
Committee is not making a formal recommendation in this regard because of the
nature of its mandate, it respectfully suggests that ministers address this
issue at some time and attempt to reach an understanding in the interests of
avoiding administrative problems or, worse still, running the risk of having
the effective exercise of occupational safety and health in the industry slip
between the cracks.
Considerably
less uncertain is the matter of jurisdiction over operational safety in the
fishing industry. Such responsibility clearly falls within the purview of the
Canadian Coast Guard under the
Canada Shipping Act
. This being the
case, the Committee considers that the regulatory route can be more profitably
and effectively pursued by having the Coast Guard extend the application of
its
safety regulations to vessels under 15 tons, in which category the majority of
the problems being addressed are
concentrated. The Coast Guard has the
authority to inspect vessels under 15 gross tons but for resource reasons does
so on a very limited basis. The Committee believes it would be of inestimable
value in attempting to improve the level of safety if the Coast Guard were to
extend its implementation.
[155]
In 1993, a Government of Canada memorandum regarding the WCB
subcommittee on fishing vessels included the following note:
2. The Sub Committee is most anxious
to develop legislation which quote will dove tail with that of C.C.G. At
some point, there should be a formal agreement or understanding between the
Province of British Columbia Workers Compensation Board and the Canadian Coast
Guard as to how this dove tailing will be given effect. This in order to avoid
confusion and duplication in the industry.
3. At this point given that C.C.G.
does not inspect and certify F.Vs. of less than 15 G.T. I believe one option
would be that of the W.C.B. applying their own Regulations and thus rendering
our Safe Working Practices Regulations redundant for this class of vessel. In
the event that W.C.B. personnel run across deficiencies of a
seaworthy/structural nature, the owners would be advised to have these
deficiencies made good. In cases where our advice was deemed necessary this could
be solicited from us by the W.C.B. Inspector.
4. For
vessels of more than 15 G.T. - to a large extent the same remark applies to our
SWP Regulations and also to the Marine OSH regulations where an employer -
employee relationship exists. As this class of vessel is under our periodic inspection
and certification the need for a formal agreement e.g. a Memorandum of
Understanding is all the more pertinent.
[156]
In 1995, a Memorandum of Understanding (MOU) between the WCB and the
CCG was signed. That memorandum provides in part:
3. The
CCG recognizes the jurisdiction of the WCB to govern all aspects of
occupational health and safety of persons working in commercial fishing vessels
in British Columbia.
4. WCB
and CCG will pursue a cooperative working relationship in keeping with
respective responsibilities.
[157]
In 2001, a further MOU, executed between the WCB and Transport Canada
(TC), included the following provisions:
operational
safety means fishing vessel operational safety requirements intrinsic to
shipping and navigation.
OHS means
Occupational health and safety on commercial fishing vessels operating in
interior and adjacent waters of British Columbia.
...
5.1 TC has
sole responsibility to Parliament for the application and enforcement of the
operational safety provisions of the
Canada Shipping Act
.
...
6.2 The
jurisdiction of TC includes programs and activities related to shipping and
navigation.
[158]
These
areas of jurisdiction are specified in Annex B of the 2001 memorandum. At Annex
B under the heading Jurisdiction, the memorandum provides as follows:
B.3. Case
law from Labour Boards and
Law Courts have defined the 'business of
fishing' as falling primarily within provincial jurisdiction. All other
jurisdictional aspects of fishing vessel shipping and navigation operations,
crew certification and vessel construction standards fall primarily within the
federal jurisdiction.
B.4. The
WCB and TC agree, for the purpose of this MOU and for the purposes of
clarifying jurisdictional boundaries, that:
B.4.1. The
'Business of Fishing', being the activities of the crew and the operation of
the vessel and its gear, while fishing in British Columbia waters, are the
jurisdiction of the WCB.
B.4.2. Shipping
and navigation operations, certification of crewmembers and the application of
vessel construction standards are the jurisdiction of TC.
B.4.3. Activities
on board commercial fishing vessels that are outside of, but incidental to, the
strict definition of the 'business of fishing', such as stowing cargo and
catch, setting and retrieving the vessel's anchor, engine room procedures, and
conducting emergency drills, as defined by Regulation, are the joint focus of
the WCB and TC. Both WCB and TC are actively involved in addressing these
program concerns.
B.5. When dual
jurisdiction occurs, the WCB and TC may operate jointly and co-operatively or
independently to ensure their respective program mandates are fulfilled.
[159]
There is
also a MOU between the WCB and the DFO dated February 16, 2000. It too records
that occupational health and safety of persons working on commercial fishing
vessels in B.C. is the jurisdiction of the WCB.
[160]
I conclude
that the result of federal provincial co-operation in this area was that the
provincial WCB authority, among other things, regulated and inspected fishing
vessels with a view to ensuring crew safety on both small and large fishing
vessels.
[161]
In its
factum, the respondent, the WCB, explains how the co-operative regime
functioned in the case of the Western Investor. The WCB notes that the federal
regulatory regime does not provide for mandatory assessment of stability where
vessels are modified. The fishing vessel, the Western Investor, was modified
and not inspected. In 1980 stability tests were conducted on the Western Investor.
Subsequently modifications were made to the vessel. In particular water ballast
tanks were converted to fuel oil tanks. No further stability checks were
performed until the WCB order of April 5, 2006, despite the fact that the
modifications on the vessel would have implications for its stability. As a
result of the WCB order, stability tests were performed on the Western
Investor, and those tests resulted in further WCB orders being made concerning
the operation of the vessel as modified. The WCB notes in its factum (at para.
24) that, [w]ithout the Boards Orders, those tests would not have been
conducted and Western Investors compromised stability would not have been
detected.
[162]
The trial
judge drew a sharp distinction between the federal regulatory regime, which she
said dictates stability requirements, and the WCB regime, which provides for
the documentation of stability requirements.
[163]
I cited
the example of the WCBs orders and inspections of the Western Investor to
illustrate my view that there is, as the appellants say, no bright line between
the functions of the two regulatory agencies, respecting stability, rather it
illustrates the WCB has under
OHSR
a far broader mandate related to
stability than was suggested by the trial judge. Section 24.70 of the
OHSR
requires all fishing vessels to be maintained in a seaworthy condition. Section
24.71(2) mandates that an owner of a fishing vessel must ensure major
modifications to the vessel do not adversely affect its stability. Section
24.72(b) requires the vessel owner to provide documentation describing vessel
characteristics. Section 179(1)(d) of the
WCA
permits the WCB to inspect
vessels for the purposes of ensuring compliance with its regulations. Section
187 empowers the WCB to make orders following an inspection.
[164]
According
to the WCB respondent, the federal provisions do not require a stability book
for the Pattison appellants vessels because they are under 15 tons. The WCB
focuses on this gap in the regulatory requirements as justifying the
provincial regime. As pointed out by the Pattison appellants, this WCB
submission belies the respondents argument that the provision of documentation
concerning stability does not equate to the imposition of stability
requirements.
[165]
I conclude
from a review of the
OHSR
and the orders made by the WCB affecting these
vessels and referred to by the trial judge at paras. 15 and 28 of her reasons
for judgment, that there is considerable overlap in the responsibilities of the
federal and provincial authorities. In some cases the regulations are
duplicative. In some cases the
OHSR
impose a higher standard than do
their federal counterpart.
[166]
I now turn
to the pith and substance analysis.
[167]
I agree
with my colleagues pith and substance legal analysis, but I would add these
comments. One of the principle purposes of Maritime law is to ensure the safety
of vessels, crews, and passengers as ships navigate water bodies. Every ship
except a pleasure craft is a workplace. Section 6(a) of the
Canada Shipping
Act
lists its first objective to: protect the health and well-being of
individuals, including the crews of vessels, who participate in marine
transportation and commerce. The second objective of the
Canada Shipping
Act
is to promote safety in marine transportation and recreational
boating. The
OHSR
regime focuses on the relations between the employer
and worker in the workplace (
Bell Canada 1988
at 816). Its dominant
purpose is to require provincially regulated employers to provide workers with
a safe workplace. Both regimes are contained within, and are a part of, a much
broader multi-purpose legislative scheme, (the
Canada Shipping Act
and
the
Workers Compensation Act
). In fulfilling their respective
legislative purposes in a cohesive way, both regimes do regulate aspects of
crew safety. I do not consider that in fulfilling its valid legislative purpose
the provincial regime impermissibly encroaches on the federal regime.
[168]
Turning
next to the paramountcy issue, at para. 159 of her reasons for judgment, the
trial judge, set out the arguments of the appellants concerning operational
incompatibility between the federal regime and the impugned provincial
regulations.
For example, the
LFVIR
(applicable to the Osprey) require an owner to
provide the master with a stability booklet for the information of the master
while the Provincial
OHSR
require that the owner provide documentation
readily accessible to the master
and crew members
. She gave several
further examples at paras. 159-160 and then concluded, at paras. 161-163, that
operational incompatibility had not been established. She had this to say:
Counsel for the WCB and for the Attorney General of British
Columbia argued that the provisions of the provincial legislation are
compatible with those of the federal legislation, reflecting the efforts of the
two levels of governments embodied in their Memoranda of Understanding.
Clearly there is considerable overlap and potential for
confusion, as stated in the expert opinion evidence filed by the plaintiff. It
is possible that compliance with both regimes will be difficult and expensive.
However, it has not been shown that it is impossible to comply simultaneously
with the
CSA
and its regulations and with the
WCA
and the
OH&SR
,
properly interpreted, or that there are provisions of one law forbidding what
the other law requires. This case is not like
Lafarge
, where it was
impossible to comply simultaneously with both laws as the Supreme Court
interpreted them.
I find that operational
incompatibility has not been established.
[169]
Importantly, after concluding that the doctrine of federal paramountcy
did not come into play, the trial judge said at para. 173:
I would add that if the
provincial
OH&SR
were designed to impose stability requirements,
rather than simply to require the provision of stability documentation, that
would, in my opinion, create operational conflict and frustrate the purpose of
the federal legislation and regulations. However, the more limited
interpretation urged by the WCB and by the Attorney General is consistent with
the language of the
OH&SR
and is to be preferred.
[170]
As I have
said, the question of documenting stability requirements cannot always be
distinguished from the imposition of vessel stability requirements. On this
question I respectfully disagree with the trial judge and my colleague (at para
41). I would not rest my conclusion that the provincial regime is
constitutional on what I see as a compartmentalization of the scope of the two
regimes, one the imposition and specification of stability requirements
(federal), and the other the documentation and communication of stability
requirements (provincial). However, I do agree in the result reached by the
trial judge and my colleague that the provincial regime is not
unconstitutional.
[171]
In my view, the modern approach to constitutional division of powers
jurisprudence, as discussed by my colleague, does not preclude the duplication
and over-lap that exists in this case. Specifically where both levels of government
legislate pursuant to a valid purpose, as here, such duplication is not
objectionable:
CWB
at para. 30;
Multiple Access
at 190-191; Chatterjee
at paras. 4 and 40; and Hogg at 16.5. (See also my colleagues discussion of
the double aspect doctrine at para. 79 of her reasons.) However, if those
regimes conflict, the doctrine of federal paramountcy dictates that the federal
regime would prevail, and the provincial regime would be rendered inoperative
to the extent of the inconsistency. In this case there are some modest
conflicts, but as already noted they are primarily instances of the province
imposing a higher standard.
[172]
At para. 30 of
CWB
,
Binnie and LeBel JJ., described the
double aspect doctrine, that is applicable where both levels of government legislate
in respect to the same matter, as here, but for their own legitimate purpose
:
Also, some matters are by their
very nature impossible to categorize under a single head of power: they may
have both provincial and federal aspects. Thus the fact that a matter may for
one purpose and in one aspect fall within federal jurisdiction does not mean
that it cannot, for another purpose and in another aspect, fall within
provincial competence:
Hodge v. The Queen
(1883), 9 App. Cas. 117 (P.C.),
at p. 130;
Bell Canada v. Quebec (Commission de la santé et de la sécurité
du travail)
, [1988] 1 S.C.R. 749 (
Bell Canada (1988)
), at p. 765. The
double aspect doctrine, as it is known, which applies in the course of a pith
and substance analysis, ensures that the policies of the elected legislators of
both levels of government are respected. A classic example is that of
dangerous driving: Parliament may make laws in relation to the public order
aspect, and provincial legislatures in relation to its Property and Civil
Rights in the Province aspect (
O'Grady v. Sparling
, [1960] S.C.R. 804).
The double aspect doctrine recognizes that both Parliament and the provincial
legislatures can adopt valid legislation on a single subject depending on the
perspective from which the legislation is considered, that is, depending on the
various aspects of the matter in question.
[173]
In this case each level of government has enacted legislation pursuant
to a valid legislative objective. Absent evidence of actual operational
conflict I would not find that the two regimes are inconsistent such that the
provincial regime should be precluded by an application of the federal
paramountcy doctrine. In
CWB
, at para. 71, Binnie and LeBel JJ.
discussed the test for incompatibility sufficient to trigger the doctrine of
paramountcy, citing
Multiple Access
at 191, where Dickson J. said:
In principle, there would seem
to be no good reasons to speak of paramountcy and preclusion except where there
is actual conflict in operation as where one enactment says yes and the other
says no; the same citizens are being told to do inconsistent things;
compliance with one is defiance of the other. ...
[174]
Of importance to this case, they continued at para. 72 to discuss
duplication:
Thus, according to this test, the
mere existence of a duplication of norms at the federal and provincial levels
does not in itself constitute a degree of incompatibility capable of triggering
the application of the doctrine. Moreover,
a provincial law may in principle
add requirements that supplement the requirements of federal legislation
[citation omitted]. In both cases, the laws can apply concurrently, and
citizens can comply with either of them without violating the other.
[Emphasis added.]
[175]
Justices Binnie and LeBel concluded this discussion in
CWB
at
para. 75:
... To sum up, the onus is on the
party relying on the doctrine of federal paramountcy to demonstrate that the
federal and provincial laws are in fact incompatible by establishing either
that it is impossible to comply with both laws or that to apply the provincial
law would frustrate the purpose of the federal law.
[176]
The
justices noted in
CWB
that an operational conflict might also be found
in cases where the provincial law frustrates the purpose of the federal
regime. As the court found in
CWB
at para. 4, I find here that the
provincial regulatory regime under scrutiny in this case, will complement, not
frustrate, the federal purpose. This is especially evident in light of the
memoranda of understanding between the federal authorities and the WCB. As
noted already, the 2001 memorandum provides for joint and co-operative
regulation where dual jurisdiction occurs.
[177]
I see
nothing objectionable in the provincial regime requiring, in some instances, a higher
standard than the federal regime on the same subject matter. Only where
compliance with both regimes is impossible, or where the provincial law
frustrates the purpose of the federal regime, will the doctrine of federal
paramountcy come into play.
[178]
On the
facts of this case, the trial judge correctly applied the inconsistency test
mentioned above in
CWB
and found no actual conflict. I would not disturb
her finding in that regard (para. 163).
[179]
Like my colleague, I would dismiss the appeals.
The
Honourable Madam Justice Garson
APPENDIX
Workers
Compensation Act
Occupational
Health and Safety Regulation
[includes
amendments up to B.C. Reg. 258/2008, September 1, 2009]
Part
24 Diving, Fishing and Other Marine Operations
Fishing Operations
General Requirements
Application
24.69
Sections 24.70 to 24.143
apply to all owners, masters and crewmembers of licensed commercial fishing
vessels.
Compliance with standards
24.70
All fishing
vessels must
(a) be maintained in seaworthy condition, and
(b) if constructed after January 1, 1995, be built in
accordance with applicable Canadian Coast Guard Regulations, or other standard
acceptable to the Board.
Owner and master responsibilities
24.71
(1) An owner of a
fishing vessel must ensure that all machinery and equipment on board a fishing
vessel is capable of safely performing the functions for which it is used.
(2) The owner must ensure that major modifications to a
fishing vessel do not adversely affect the stability of the vessel.
(3) The master of a fishing vessel must ensure that
(a) machinery and equipment is properly maintained and
functions safely during the voyage, and
(b) any replacement equipment meets the requirements of
this Part.
Documentation
24.72
The owner of every
fishing vessel must provide documentation on board, readily accessible to
crewmembers, which describes
(a) engine room instructions,
(b) vessel characteristics, including stability,
(c) the location and use of firefighting equipment, and
(d) the location and use of emergency equipment,
including radio equipment.
Instruction
24.73
(1) Before the start of
each fishing season, the master must ensure that each crewmember is instructed
in the operational characteristics of the fishing vessel including
(a) the location and use of safety equipment, engine
room components and controls,
(b) deck equipment and rigging,
(c) navigation equipment and electronic aids,
(d) fishing equipment and its use, including safe work
practices for each fishery the vessel will be engaged in,
(e) procedures for anchoring the vessel,
(f) the location and use of emergency equipment,
including firefighting and radio equipment, and
(g) escape routes in the event of fire.
(2) The master must ensure as far as is reasonably
practicable, that the instruction required by subsection (1) results in
each crewmember being able to apply the information as needed to protect the
crewmember's health and safety.
(3) New crewmembers joining the vessel must be
instructed in accordance with the requirements of this section at the time that
they join the vessel.
Emergency procedures
24.74
(1) The master must
establish procedures and assign responsibilities to each crewmember to cover
all emergencies including
(a) crewmember overboard,
(b) fire on board,
(c) flooding of the vessel,
(d) abandoning ship, and
(e) calling for help.
(2) The master must ensure that drills are conducted at
the start of each fishing season, when there is a change of crew, and at
periodic intervals to ensure that crewmembers are familiar with emergency
procedures.
Crewmember responsibility
24.75
Crewmembers must take all
reasonable precautions necessary to ensure the health and safety of themselves
and other persons on board the fishing vessel.
Vessel preparation
24.76
Before leaving on a
voyage the master must ensure that the fishing vessel is capable of safely
making the passage, due consideration being given to
(a) the seaworthiness of the vessel,
(b) the stowage and securing of all cargo, skiffs,
equipment, fuel containers and supplies,
(c) ballasting, and
(d) present and forecast weather conditions.
Reporting injuries
24.77
(1) Crewmembers
must report all injuries to the master, without delay.
(2) The master must report to the owner of the fishing
vessel all injuries that required medical aid and record all injuries in the
vessel log book.
Unsafe conditions
24.78
(1) A crewmember
who observes an unsafe or harmful condition or situation must immediately
report it to the master.
(2) The master must ensure that action is taken,
without delay, to correct an unsafe or harmful condition or situation.
Repealed
24.79
Repealed. [B.C. Reg.
348/2003, s. 10.]
Slipping and tripping hazards
24.80
(1) All work areas
must be kept
(a) clear of unnecessary obstructions, and
(b) free of slipping and tripping hazards.
(2) Decks must have non-skid surfaces except in those
locations where a smooth deck is required for handling fish.
(3) Tools and equipment must be securely stowed when
not in use.
Guarding of equipment
24.81
The owner of a fishing
vessel must ensure that moving parts of power operated equipment are, where
practicable, fitted with effective guards if such parts constitute a danger to
crewmembers.
Inspection of rigging
24.82
The master must ensure
that all rigging is maintained and inspected regularly to ensure that it is
able to safely carry out the work for which it was designed.
Access and egress
24.83
Every portable ladder or
gangway between a fishing vessel and shore, between vessels, or when used on
board a vessel must be designed and rigged to provide safe access and egress.
Protection from falling
24.84
(1) Crewmembers
must be protected from falling overboard by means of grabrails, siderails,
handrails, guardrails or personal fall protection equipment.
(2) Crewmembers working aloft or on deck during adverse
weather conditions must tie off to a lifeline to prevent falling.
Deck openings
24.85
(1) Deck openings
and hatches on a fishing vessel must be
(a) equipped with an effective means of securing them,
and
(b) closed and secured when it is not essential to the
fishing operation that they be open.
(2) When deck openings and hatches are required to be
open for ventilation or other purposes, they must be marked and guarded.
De-energization
24.86
(1) The maintenance
and repair of machinery or equipment on board a fishing vessel must only be
carried out when the power source has been de-energized and effectively secured
to prevent inadvertent startup.
(2) If it is essential that equipment remain
operational during the maintenance process, the master must establish a
procedure to prevent injury from contact with moving or energized parts.
(3) The main engine must be shut off whenever a diver
is conducting work underwater in proximity to the vessel.
Equipment control devices
24.87
(1) Winches, drums,
capstans, and similar equipment on board a fishing vessel must have at least
one master on/off control that is readily accessible on deck.
(2) Drum pedals and other types of hold-to-run controls
must not be bypassed or otherwise rendered ineffective.
Braking devices
24.88
Winches and drums capable
of freewheeling must be fitted with an effective braking device.
Illumination
24.89
All work areas on board a
fishing vessel must be sufficiently illuminated to enable work to be done
safely.
Ventilation
24.90
All crew spaces on
fishing vessels must be provided with an adequate supply of fresh air either by
passive or mechanical means.
Propane installations
24.91
Propane, liquefied
petroleum gas (LPG) and compressed natural gas (CNG) installations used for
appliances on fishing vessels must be in conformity with the
NFPA Standard
302-1989, Fire Protection Standard for Pleasure and Commercial Motor Craft
.
Galley requirements
24.92
(1) Galley stoves
on fishing vessels must be fitted with rails or other means to restrain the
movement of cooking utensils, and to prevent inadvertent contact by
crewmembers.
(2) Stove fuel supply tanks and lines must
(a) be fitted with a shutoff valve at the tank, and
(b) not be located directly above the stove.
(3) Galley stoves must
(a) be secured to prevent movement, and
(b) have sufficient clearance to permit the effective
cleanup of oil and grease.
Requirements for sensors and alarms
24.93
(1) An owner of a
fishing vessel must ensure that a heat sensor, connected to an alarm system, is
installed
(a) above the galley stove or near the stove pipe, and
(b) in proximity to the engine exhaust.
(2) The owner must ensure that a water level sensor,
connected to an alarm system, is installed
(a) in the machinery space bilges, and
(b) in the shaft log or lazarette.
(3) The owner must ensure that main engines are fitted
with low oil pressure and high temperature sensors connected to an alarm
system.
(4) The owner must ensure that a sensor and alarm
system is installed if the Board considers this necessary to detect leaks of
potentially explosive fuel used in engines or appliances.
(5) The owner must ensure that an audible marine grade carbon
monoxide sensor, connected to an alarm system where practicable, is installed
in crew quarters.
[am. B.C. Reg. 243/2006, s. 13.]
Repealed
24.9424.95
Repealed. [B.C.
Reg. 312/2003, App. D, s. 26.]
Protection against cold
24.96
Crewmembers working in
freezers must wear clothing, including headgear, footwear and gloves, that
provides adequate protection against cold.
Crewmember overboard
24.97
(1) Every fishing
vessel must carry, for each crewmember, one immersion suit meeting standards
acceptable to the Board.
(2) The master of a vessel must ensure that there is
suitable equipment on board and that procedures have been developed which will
enable the prompt recovery of a crewmember overboard.
Davits
24.98
The owner of a fishing
vessel must ensure that all moveable davits are fitted with an effective
locking device.
Communication
24.99
The master must ensure
that effective procedures are developed to communicate between the bridge and
all work areas on the vessel.
Ozone generators
24.100
The owner of a fishing vessel
must ensure that ozone generating equipment is installed and operated in
accordance with standards acceptable to the Board.
Loading and offloading
24.101
The master of a fishing
vessel carrying fish or cargo must establish safe procedures for the loading
and offloading of fish and cargo.
Work areas and operations
24.102
All work areas must be
arranged and operations organized to minimize the potential for injury to
crewmembers, including strains and sprains.
Proper lifting
24.103
The master must ensure
that crewmembers are instructed in and use proper lifting techniques.
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Haynes,
2011 BCCA 39
Date: 20110203
Dockets: CA037939;
CA038115
Docket:
CA037939
Between:
Regina
Respondent
And
Ian Michael Haynes
Appellant
- and -
Docket: CA038115
Between:
Regina
Respondent
And
Lee Murray Bonwick
Appellant
Before:
The Honourable Madam Justice Huddart
The Honourable Mr. Justice Hall
The Honourable Mr. Justice Hinkson
On appeal from: the
Provincial Court of British Columbia, December 21, 2009, (
R. v. Haynes and
Bonwick
, Duncan Registry No. 30304-2-C)
Counsel for the Appellant,
Ian Michael Haynes:
K. Bradley
Counsel for the Appellant,
Lee Murray Bonwick:
M. Allen
E. Bates-Smith
Counsel for the Respondent:
K. Madsen
Place and Date of Hearing:
Victoria, British Columbia
October 29, 2010
Place and Date of Judgment:
Vancouver, British
Columbia
February 3, 2011
Written Reasons by:
The Honourable Mr. Justice Hall
Concurred in by:
The Honourable Madam Justice Huddart
The Honourable Mr. Justice Hinkson
Reasons for Judgment of the Honourable
Mr. Justice Hall:
[1]
The appellants, Haynes and Bonwick, were jointly charged with the
aggravated assault of the complainant, Roy, on December 19, 2007 at Shawnigan
Lake. After a trial before Wood P.C.J., they were convicted of this offence on
December 21, 2009 and both were sentenced to three years imprisonment. Haynes
had also been charged with assault of the complainant with a weapon, namely a
board. Bonwick had been charged with the same type of offence involving a
knife. Ultimately, convictions were not registered on these two charges.
[2]
The evidence of the complainant was that as he was working at his
Shawnigan Lake workshop in the early morning hours of December 19, 2007, the
two appellants accosted him and committed a violent assault that resulted in
serious injuries. One injury occasioned the loss of one of his eyes. The
complainant testified that he knew Haynes as a friend and although he was
acquainted with Bonwick, he did not know him as well as Haynes. It appears
that the three men had been involved with illegal drugs and there had in the
past been drug transactions between them.
[3]
The complainant said he had helped Haynes out previously when he was in
jail by looking after goods of Haynes that were contained in a locker. He said
he sold some of these with the consent of Haynes to raise money for him. He testified
that as the two men approached him on the morning of the assault at the
workshop, Haynes stated that he owed him money on account of goods that were
allegedly stolen from the locker.
[4]
Although in his initial statement to police a couple of days after the
event the complainant had asserted that the wielder of the board, which caused
the eye injury, had been Haynes, by the time of trial, he asserted that Bonwick
had done this. The complainant testified that a knife wielded by the appellant
Bonwick caused stab wounds to his legs in the course of the assault upon him by
both men. Given the testimony at trial by the complainant, the trial judge
acquitted Haynes of the offence of assault using the board. Bonwick had not
been charged with this offence. The trial judge did not enter a conviction against
Bonwick on the count alleging assault with a knife on the basis of the rule
against multiple convictions arising out of the same delict. Both appellants
appeal against their conviction for aggravated assault on the basis of errors
of analysis said to have been made by the trial judge as disclosed in his
reasons for judgment.
[5]
It was not clearly apparent from the evidence what the motive for the
attack on Roy was: the judge adverted to this uncertainty in his reasons. The
complainant always denied any conduct on his part that could have resulted in
either accused having any animus against him and neither of the appellants
testified. The only suggestion of a motive arose from the evidence of Roy that
Haynes had expressed a complaint as he approached with Bonwick that Roy had
stolen from him. However, according to the complainant, he had actively
assisted Haynes while the latter was in jail and had committed no wrong towards
him. At the conclusion of the evidence, it was by no means clear what precisely
could have motivated Haynes and Bonwick to attack the complainant at his shop
on the morning of December 19, 2007. Haynes and Bonwick, through counsel,
asserted that they had not in fact attacked the complainant. It was submitted
by counsel for both appellants at trial that the complainant was falsely
asserting that they were the individuals who had caused the injuries to him.
There was never any issue in the case that the complainant had suffered serious
injury on the date in question; the only live issue was whether the appellants
were the perpetrators of the assault. Their identification as such depended
entirely on the testimony of the complainant.
[6]
The complainant described an attack wherein initially Haynes was beating
him about the upper body with an iron bar while Bonwick was stabbing him in the
legs with a knife. The complainant testified that eventually he fell to the
floor inside his shop where he continued to be assaulted by both men. He
testified that during this phase of the assault, Bonwick picked up a piece of
lumber with which he struck the eye of the complainant. The complainant says
that eventually he was able to get to his feet and by a ruse that an alarm was
going off, persuade the two appellants to cease the assault and leave the
premises. Immediately thereafter he was with some difficulty able to drive his
vehicle to his nearby home where his common law partner resided. This partner
testified to him arriving at the premises in an upset and injured condition in
the early morning hours of December 19, 2007.
[7]
One complicating feature of this case was that in his initial statement
to a police officer while he was in hospital soon after being injured, the
complainant attributed the loss of his eye to the actions of the appellant
Haynes. However, just prior to trial in an interview with Crown counsel, he
changed his description of the incident to attribute responsibility for his eye
injury to the appellant Bonwick. His explanation for initially seeking to cast
responsibility for the loss of his eye upon Haynes was that because of what was
said by Haynes as he approached him just prior to the assault, he attributed
greater responsibility for the assault to Haynes. The complainant was
extensively cross-examined by counsel for both appellants but he did not waver
from what he had told Crown counsel, namely that he was the subject of a
violent assault by both men, but only Bonwick had wielded the piece of lumber
that caused the injury to his eye. This was the most serious injury inflicted
on the complainant.
[8]
Immediately after the assault, as I noted, the complainant was able to return
to his residence and was then observed by his partner to be in great distress.
His partner, Ms. Richard, gave this evidence:
Q: And did -- while you were dealing with Mr. Roy
did he indicate whether or not he knew his attackers?
A: Yes.
Q. Did he provide you with names?
A. Yes.
Q: Did you communicate, do you recall whether or
not he communicated names to the police?
A. Yes, I did.
[9]
The following excerpts from the cross-examination of the complainant by
respective counsel for the appellants sets out shortly the suggestions made to
the complainant that he was lying about who had been the perpetrators of the
violent attack upon him:
Q: Sir, I am going to suggest to
you that the reason that your story has changed over time as to who did what on
the night in question was because it was neither Mr. Haynes nor Mr. Bonwick
over there that night.
A: Well, that is your
suggestion and you are allowed to voice your suggestion. ... You are wrong.
Q: ...[A]nd I suggest to you
that you have been threatened or intimidated by the persons who are actually
responsible for this and as a result you have chose two easy scapegoats.
A: ... [Y]our suggestions are
completely off-base.
Q: I am suggesting to you that
you had chosen two easy scapegoats, two persons who owed you
-- money as a
means of --
A: [You] are very wrong
.
Q: On December 17, 2009 [
sic
],
you were attacked by a contact from
Vancouver, correct?
A: No.
Q: You blamed Ian for being --
for being attacked by those contacts?
A: No.
Q: Because Ian was the one that
put you in --
A: Absolutely false.
Q: -- in contact with those
contacts?
A: False.
Q: And you blamed Ian when the
police came to talk to you because it was
safer than blaming the people on Vancouver Island.
A: I
am sorry maam, but that is false.
[10]
The complainant denied the suggestions made by counsel and asserted that
he had been assaulted by the appellants in the fashion he had testified to in
chief. The judge stated that while the lifestyle of the complainant and his
differing versions of events mandated that his evidence be viewed with a
measure of caution, the fact is that, as a whole, I found Mr. Roy to be a
credible witness. This was obviously a case in which the credibility of the
complainant was a central issue in the case.
[11]
The judge went on to find certain aspects of the evidence in the record
to be positive factors in his evaluation of the credibility of the complainant
and supportive of the Crown case. On this appeal, the appellants argue that
the judge fell into error by suggesting that these portions of the evidence could
be so utilized. The judge said this about the evidence quoted
supra
that
had been given by Richard:
[60]
Of particular
significance on the issue of his credibility is the fact that he identified the
two accused as his assailants within minutes of the actual assault. He did so
as he lay on the floor of his residence, having collapsed there immediately
upon his arrival. He was in shock due to the severity of his injuries and
though[t] he was going to die. It seems unlikely in the extreme, given those
circumstances, that he would have had the presence of mind to identify two
innocent individuals for some purpose for which there is no realistic
foundation in the evidence.
[12]
Counsel submit firstly that Richard did not explicitly testify who it
was the complainant identified when he first arrived at his residence in an
injured and distressed state. Secondly, it is submitted that even if the Crown
can surmount this alleged gap in the evidence, the judges use of the statement
for the purpose of confirming Mr. Roys evidence of the identity of his
assailant is out of accord with general evidentiary principles governing the
limited use of previous consistent statements.
[13]
Counsel for the Crown respondent takes issue with these submissions
concerning this evidence. Counsel submits the judge was entitled in all the
circumstances to infer from the evidence of Richard that it was the appellants
who the complainant identified to her as his assailants, in the absence of any
suggestion in the cross-examination of the complainant that it was other individuals.
Counsel for the appellants in response to this argument submit that it does not
lie upon counsel for an accused person to repair any deficiencies in the case
for the Crown.
[14]
In the factual circumstances of this case, I consider the submission of counsel
for the Crown respondent to be a viable argument. In my view, the trial judge
was entitled, on the state of the record before him, to draw the inference that
the persons named by Roy to the witness Richard were the two appellants. Accordingly,
I would not give effect to the objection about there being a gap in the
evidence as argued for by the appellants.
[15]
The second objection taken to this evidence is one that raises perhaps a
more difficult issue. This type of evidence may be adduced and relied upon in
certain limited circumstances as an exception to the rule against hearsay
evidence. Such evidence can be admitted to rebut a suggestion of recent
fabrication of evidence or as a
res gestae
exception to the hearsay
rule. The trial judge did not specifically advert in his reasons to the basis
upon which he found that the statement to Richard could be utilized to impact
positively on the credibility of the complainant Roy. Given that the statement
was made at a time near to the event during which the complainant was in great
distress, it might arguably be admissible as a
res gestae
exception to
the hearsay rule: see
Ratten v. The Queen
, [1972] A.C. 378 (P.C.). The
respondent, however, does not seek to support the admissibility and use of the
evidence under this category. Rather, it is submitted that the judge was
properly entitled to consider this statement as a positive factor in evaluating
the credibility of the complainant to rebut any suggestion of recent
invention. Counsel referred to this language found in
R. v. Stirling
, 2008
SCC 10, [2008] 1 S.C.R. 272:
[11] Courts and scholars in this country have used a
variety of language to describe the way prior consistent statements may impact
on a witnesss credibility where they refute suggestion of an improper
motive. ... This Court has found that the statements can be
admitted
in support of
the witnesss credibility ([
R. v. Evans
,
[1993] 2 S.C.R. 629] at p. 643). What is clear from all of these
sources is that credibility is necessarily impacted in a positive way where
admission of prior consistent statements removes a motive for
fabrication. Although it would clearly be flawed reasoning to conclude
that removal of this motive leads to a conclusion that the witness is telling
the truth, it is permissible for this factor to be taken into account as part
of the larger assessment of credibility.
[12] It is therefore not
entirely accurate to submit, as the appellant contends, that prior consistent
statements cannot be used to bolster or support the credibility of a
witness generally. This argument attempts to insulate the impact of the prior
consistent statements from the remainder of the credibility analysis and
suggests that general credibility can somehow be hived off from the specific
credibility question to which the statements relate. Such a fine parsing
of the notion of credibility is impractical and artificial. Further,
while it would clearly be an error to conclude that because someone has been
saying the same thing repeatedly their evidence is more likely to be correct,
there is no error in finding that because there is no evidence that an
individual has a motive to lie, their evidence is more likely to be honest.
[16]
It was clear from the course of cross-examination and argument advanced
at trial on behalf of the appellants that it was being suggested that the
complainant had fabricated his evidence about the involvement of the appellants
in the violent assault. Thus it became material that at a time very close to
the incident and prior to the complainant giving to the police a narrative of
events, the complainant did identify the appellants as his assailants to Ms. Richard.
What he said on arrival at his residence serves to rebut a suggestion, explicit
or implicit, that he was telling tales to the police. While some of the
language employed in para. 60 of the reasons of the learned trial judge
has about it a flavour of
res gestae
, it is also language consistent
with evidence being allowed to counter a suggestion of invention after
sufficient time for reflection. This is a permitted use of this species of
evidence. Accordingly, I would not give effect to the submissions advanced
under this head of argument by counsel for the appellants.
[17]
The second objection taken to the evidentiary analysis of the trial
judge arises from his treatment of the evidence of a defence witness, Francis.
This witness was called by trial counsel for the appellant, Bonwick. The
witness testified that he knew Roy, Haynes and Bonwick as a result of drug
dealing connected to his addiction. He also said Roy had done some mechanical
work for him.
[18]
The gist of the evidence of this witness was that he had been asked by some
people to try to get the complainant to shift the blame or to drop the
charges or something like that. He fixed the time he was asked to do this as
being near the first trial date which would make it late summer or early fall
of 2008. The exact basis of admissibility of the evidence of this witness might
have been problematic but the evidence was not objected to by the Crown.
Francis said he had numerous communications with Roy over some weeks.
According to Francis, Roy indicated he might be receptive to the blandishments
of Francis if the price were right. According to Francis, Roy wanted payment
of some drug debts of the appellants aggregating $7,000 plus some additional
money. Francis testified that those instructing him cavilled at the sums
requested by Roy and so ultimately no deal could be reached.
[19]
It may be that this evidence could have been viewed as admissible as
possibly showing animus or bias on the part of the complainant. If the
evidence were accepted, it could obviously have a negative impact on the
testimony of Roy, since he would have shown himself willing to interfere with
the course of justice for money. However, the usual rule is that evidence
going purely to the credibility of a witness should not be allowed on the basis
of the collateral issues rule. It is however not necessary to further pursue
this interesting question because the evidence was allowed to be placed on the
record without objection.
[20]
In closing argument at trial, Crown counsel seemed to suggest that the
evidence of Francis about trying to persuade Roy to diminish the involvement of
Haynes in any assault could confirm the guilt of the appellants because he had
approached these negotiations in mind that Haynes and Bonwick were involved.
On the face of it, that seems a mildly dubious assertion, since it was also the
evidence of Francis that neither appellant was privy to or had any knowledge of
the alleged negotiations.
[21]
The trial judge, not surprisingly, appeared sceptical of the evidence of
Francis but he did utilize the calling of the evidence to support verdicts of
guilty against both appellants. He said this at para. 46 of the reasons:
[46] The
significant feature of Mr. Francis evidence is that, depending on how
much
of it I accept, it has the effect of
confirming the participation of both Mr. Haynes and Mr.
Bonwick
in the assault on Mr. Roy. Why else would they, or some independent
third
party on their behalf, be prepared to
offer some consideration for a change in Mr. Roys testimony that,
according to Mr. Francis view of life, would ultimately benefit them
both.
In that regard, the reference by Mr. Francis to Mr. Roy
changing his testimony from
what was in his
statement is particularly interesting. At the time these negotiations
were
allegedly taking place, a month or so before the trial began, both accused
would
have been aware of the contents of Mr. Roys
statement to Constable Lewis. Any
knowledge
that a third party had of the content of that statement could only have come
from the one or both of the accused.
[22]
He noted at para. 47 of his reasons that the approach to Mr. Roy
was most likely made with the complicity of both accused.
[23]
At a later stage in his reasons, after concluding that Roy was a
credible witness, he went on to say this:
[62] And
finally, there is the fact that one accused chose to lead evidence, the
essence of which was that his co-accused or someone on his or their
behalf had tried to
get Mr. Roy to
change his evidence, allegedly by shifting blame for the most serious
injury he suffered from one accused to the other.
Whether that was the actual change suggested, the evidence of Mr. Francis
was quite inconsistent with the innocence of either accused.
[63] There is never an obligation on any
accused to offer evidence in support of their innocence. But when evidence is
called which, instead of innocence, leads to an inference of guilt, the law
neither requires nor permits the trier of fact to look the other way. And when
two accused are charged, and the one gives evidence implicating both in the
crime charged, such evidence becomes probative of the guilt of both.
[24]
Evidence that an accused has sought to influence a witness or to create
a false alibi can lead to an inference of guilt. The former situation was
commented on by Craig J.A. in the case of
R. v. Pappajohn
, [1979] 1
W.W.R. 562 (B.C.C.A.). Craig J.A. concurred with Farris C.J.B.C. in
dismissing an appeal from conviction. In his separate reasons, he addressed
the propriety of permitting counsel for the Crown to cross-examine the accused
on an alleged threat made by the accused to a witness. He gave approval to the
allowance of the cross-examination and also approved the charge of the judge
who had told the jury that the evidence of a threat, if believed, could indicate
a consciousness of guilt and a desire to evade the pressure of facts tending to
establish it. At 567, he made reference to
Wills on Circumstantial
Evidence
as supportive of this use of this species of evidence.
[25]
If it can be established in evidence that an accused has fabricated an
alibi, that may also be utilized by the trier of fact to infer a consciousness
of guilt:
R. v. Tessier
(1997), 113 C.C.C. (3d) 538 (B.C.C.A.).
However, there must be a sufficient evidentiary foundation, aside from mere disbelief
of evidence of an accused, to establish the fabrication. Ryan J.A., in
her concurring judgment in
Tessier
, articulated why mere disbelief in an
alibi testified to by an accused would generally not found an inference of
consciousness of guilt.
[68] It seems to me that the reason we
look for independent evidence that the accused fabricated his story is
two-fold. In the first place as my colleague Rowles J.A. has pointed out
the reasoning is circular if there is no independent proof: The weight of the
Crowns evidence admits of no doubt therefore the accused is not telling the
truth. The accused is not telling the truth therefore the Crowns case admits
of no doubt. In the second place, because the evidence that the accused has fabricated
a story can be used as part of the Crowns case against him, care must be taken
in finding that the alibi was concocted. There must be a solid evidentiary
base of fabrication. It is not unreasonable to demand that this evidence be
found independently of the other evidence of the proof of the crime.
[69] If
evidence of fabrication need be found only in the evidence which proves the
offence then in every case where the accused testifies (alibi or not) there
would be no reason not to permit a jury to use their finding that the accused
has been untruthful as part of the Crowns case against him. That does not
accord with any articulation of the law that I know of.
[26]
In the case at bar, the judge appears to have
utilized the calling of the evidence of Francis as supportive of the Crown case
generally and, although not clearly articulated in his reasons, apparently as
some support for the credibility of Roy. Paragraphs 62 and 63 from his reasons
quoted
supra
immediately follow that portion of his reasons where he
finds Roy to be credible.
[27]
Obviously Francis was a less than stellar
witness. The trial judge was entitled to find that he could not put any
significant weight on his evidence. It is however difficult to see how either
the calling of or the contents of the evidence of Francis could be used as
supportive of the guilt of the appellants or of the credibility of Roy. The
evidence in the record in this case does not support what I would term a
linkage between the calling of the evidence of Francis and the appellants.
Absent such linkage, it does not seem to me that this evidence adduced on
behalf of one of the appellants could be utilized either negatively (an
inference of consciousness of guilt) or positively (supportive of the
credibility of Roy).
[28]
In my respectful opinion, there is force in the
submissions of counsel for the appellants that the learned trial judge erred in
his treatment of the evidence of Francis as supportive of the Crown case and probative
of the charges the appellants faced. The judge was of course perfectly
entitled to reject the evidence of Francis but that should have been the end of
the matter. Such rejected evidence would then not have been capable of having
any adverse effect on the evidence of Roy. But the calling of and the content
of the evidence in the circumstances of this case was not probative of anything
relating to the offences faced by the appellants, including the credibility of
the main witness, Roy. That was so, as I noted, because the record did not
provide any connection between the adducing of this evidence and either accused
person.
[29]
This case substantially depended on the
testimony of Roy. If the trier of fact accepted the evidence of Roy as
credible, the finding of an assault by the appellants was clearly sustainable.
Had the judge concluded, without more elaboration, that he accepted the
evidence of Roy, these convictions were supportable. However, the errors in
analysis that I have adverted to above places the sustainability of the
convictions against these individuals in doubt. I consider that the only
appropriate disposition of this appeal is to allow the appeals from conviction
and order a new trial in the case of both appellants.
The Honourable Mr.
Justice Hall
I agree:
The Honourable Madam Justice
Huddart
I agree:
The Honourable Mr. Justice
Hinkson
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Cheng v. Yu,
2011 BCCA 62
Date: 20110204
Docket: CA038422
Between:
Yuan Chu Cheng
Respondent
(Plaintiff)
And
Jun Ying Yu, Xiao
Ping Yu and Rui Pang
Appellants
(Defendants)
And
Gui
Xiong Pang and his estate
Defendants
Before:
The Honourable Madam Justice Newbury
The Honourable Madam Justice Kirkpatrick
The Honourable Madam Justice Garson
On appeal from: Supreme
Court of British Columbia, August 26, 2010
(
Cheng v. Yu
, Vancouver Registry S103891)
Oral Reasons for Judgment
Counsel for the Appellant:
K.W. Wince
Counsel for the Respondent:
H. Guo
Place and Date of Hearing:
Vancouver, British
Columbia
February 4, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
February 4, 2011
[1]
KIRKPATRICK J.A.
: The appellants, Jun Ying Yu, Xiao Ping Yu, and
Rui Pang are, respectively, the widow, sister-in-law, and daughter of the
deceased, Gui Xiong Pang, who is alleged to have executed a letter of guarantee
in the Peoples Republic of China on 12 March 2007.
[2]
The letter of guarantee, as translated, reads:
I would like to agree to provide a guarantee
for
Guangdong Zhonggu Sugar Industry Group Co., Ltd
to borrow the sum of
Six Hundred Thousand Yuan
Only (
600,000.00
yuan only) from Mr.
Cheng
Yuanchu
. The manner of guarantee:
guarantee of joint liability
. If I
fail to repay it on time, I agree to pay off the said sum based on all property
of my family. All members of my family have no any dispute for the said action
of guarantee. This is to certify that Letter of Guarantee hereby.
Guaranteed by Pang Guixiong (signature)
March 12, 2007
[3]
The appellants appeal with leave from the 26 August 2010 order of the
Supreme Court that dismissed the appellants application to dismiss the
respondents claim on the guarantee, pursuant to the then Rule 18A of the
Rules
of Court
.
[4]
The chambers judge concluded that due to conflicts in the evidence,
inadequate submissions concerning applicable law and jurisdiction, and the fact
that the case was in its infancy in this jurisdiction, it would be unjust to
give judgment in the case, citing the well-known factors in
Canadian
Imperial Bank of Commerce v. Charbonnages de France International S.A.
,
[1994] 10 W.W.R. 232. The chambers judge dismissed the application and directed
the parties to attend a case management conference.
[5]
In their statement of defence, the appellants pleaded that the Supreme
Court should decline jurisdiction on the basis that the guarantee was made in
the Peoples Republic of China and at the material times the plaintiff and the
defendant Gui Xiong Pang were residents of China.
[6]
At the hearing of the appeal, counsel for the respondent advised that a
court in the Peoples Republic of China heard a trial concerning the validity
of the guarantee in question in this case and reserved judgment on 5 January
2011. That advice is apparently confirmed by the summons dated 10 November 2010
issued by the Intermediate Peoples Court of Zhanjiang City Guandong Province
found in the respondents appeal book. Counsel for the respondent advised that
if the judgment is in her clients favour, she will seek to enforce the
judgment in Canada and execute against the appellants property situate in
Canada.
[7]
In these circumstances, it seems to me that because the Chinese court
has evidently assumed jurisdiction and is poised to deliver judgment on the
very subject matter of the action in British Columbia, comity demands that we
decline jurisdiction.
[8]
Furthermore, it is plain from the guarantee itself that it could not be
enforced in Canada under the Canadian law of guarantee. The guarantee, made in
China, is sought to be enforced against persons who did not sign the guarantee
and in the absence of evidence that they agreed to be bound by the guarantee. There
is no reasonable prospect of success in the respondents prosecution of the
guarantee against the appellants in Canada.
[9]
I would allow the appeal and dismiss the respondents action with costs
to the appellants both of the Rule 18A application and of the appeal.
[10]
NEWBURY J.A.
: I agree.
[11]
GARSON J.A.
: I agree.
[12]
NEWBURY J.A.
: The appeal is allowed. The action is dismissed with
costs.
The Honourable Madam Justice Kirkpatrick
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Keremelevski v. V.W.R. Capital Corp.,
2011 BCCA 59
Date: 20110204
Docket:
CA038121; CA038152
Docket: CA038121
Between:
V.W.R. Capital
Corp.
Canadian Western Trust Company
Respondents
(Petitioners)
And
Bozidar Vujicic
and Svetlana Vujicic
Canadian Western Trust Company
Ivanco Keremelevski
Appellants
(Respondents)
Docket:
CA038152
Between:
V.W.R.
Capital Corp.
Canadian Western Trust Company
Appellants
(Respondents)
And
Bozidar Vujicic
and Svetlana Vujicic
Ivanco Keremelevski
Respondents
(Petitioners)
Corrected
judgment: The spelling of the appellant's name, Ivan Keremelevski, was
corrected on the front cover of the judgment on June 3, 2011.
Before:
The Honourable Madam Justice Rowles
The Honourable Mr. Justice Lowry
The Honourable Mr. Justice Hinkson
On appeal from: British
Columbia Court of Appeal, August 5, 2010
(
Keremelevski v. V.W.R. Capital Corporation
, Court of Appeal Nos. CA038121
& CA038152)
Oral Reasons for Judgment
Appellants (CA038121) B. Vujicic and I. Keremelevski
appearing In Person:
Counsel for the Respondent:
K. Liong
Place and Date of Hearing:
Vancouver, British
Columbia
February 4, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
February 4, 2011
[1]
LOWRY J.A.
: Applications are made in two actions to set aside the
order made on 5 August 2010 by Mr. Justice Low, who dismissed applications for
leave to appeal, indigent status and the stay of proceedings in the trial
court.
[2]
The two actions arise out of foreclosure proceedings involving
commercial property, which have been completed. An order for the sale of the
property was approved and the purchaser, who is not a party to the actions, is
in possession. The appellants seek to appeal the order that approved the sale.
[3]
In dismissing the applications, Mr. Justice Low said:
[6] The sale of the
property was completed on 28 May 2010. Title has passed to the purchaser who is
not a party to this appeal and against whom neither appellant makes any
allegations. The purchaser has possession and is lawfully collecting rents.
These facts are fatal to all applications made by the two appellants.
[4]
That led him to conclude:
[11] In any event, there is
no remedy this Court could give either appellant in the context of appeals of
the two orders. The purchaser has title and is in possession. The transaction
the purchaser entered into for value and approved by the court cannot be rolled
back. The sale cannot be undone.
[5]
I am unable to see any error in Mr. Justice Low's disposition of the applications
made before him. He was, in my view, bound to dismiss them as he did.
[6]
I would dismiss the applications to vary the order of Mr. Justice Low.
[7]
ROWLES J.A.
: I agree.
[8]
HINKSON J.A.
: I agree.
The Honourable Mr. Justice Lowry
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Frank
,
2012 BCCA 2
Date: 20120103
Docket: CA038608
Between:
Regina
Respondent
And
Martin Gene Frank
Appellant
Before:
The Honourable Mr. Justice Lowry
The Honourable Mr. Justice Groberman
The Honourable Madam Justice Bennett
On appeal from the
Supreme Court of British Columbia, April 10, 2010,
(
R. v. Frank
, Williams Lake No. 28121-4)
(Oral Ruling on Defence of Self-Defence pronounced April 9, 2010)
Counsel for the Appellant:
Brock Martland
Matthew Scott
Counsel for the Respondent:
Michael J. Brundrett
Place and Date of Hearing:
Vancouver, British
Columbia
November 18, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 3, 2012
Written Reasons of the Court
Reasons for Judgment of the Court:
[1]
Mr. Frank appeals his convictions before a judge and jury on one count
of committing mischief in relation to property (
Criminal Code
, R.S.C.
1985, c. C-46, s. 430(4)), one count of possessing a firearm for a
purpose dangerous to the public peace (
Criminal Code
, s. 88), and
one count of using a firearm while committing an indictable offence (
Criminal
Code
, s. 85). The appellant contends that the trial judge erred in
failing to leave the defence of self-defence with the jury.
Factual Background
[2]
The charges arose out of events which occurred on April 14, 2007.
During the afternoon, the accused was at a party at the residence of a young
man by the name of Dylan Dick, on the Anaham Reserve near Alexis Creek. A
neighbour, Nathan Sam (who we will refer to as Nathan in order to distinguish
him from his father, Theodore Sam, who we will refer to as Mr. Sam) got into
an altercation with Mr. Dick over a beer. It appears that during the course of
the ensuing scuffle, Mr. Dick used a stick to hit Nathan. Nathan fled, having
taken the worst of the battle. As he ran back to his residence, which was
across the street from Mr. Dicks residence and about 100 metres away, someone
not Mr. Frank grabbed a gun and shot at him, but missed.
[3]
A short time later, Nathan returned, accompanied by Mr. Sam and a third
man. The three caused damage to the Dick residence and smashed up vehicles
parked outside. At least one of the three had a firearm, and there was
evidence to the effect that he used it to cause damage.
[4]
The people at the Dick residence contacted the police, who eventually
attended and arrested Nathan and Mr. Sam. Nathan was held by the police, but
Mr. Sam was released on conditions, and was returned to his residence at 9:45
p.m.
[5]
Shortly after Mr. Sams return, Mr. Frank, Mr. Dick and a 13-year-old
girl were standing on the porch of the Dick residence. Mr. Sam armed himself
with a rifle and took a shot at them. They ran back into the house in fear.
Once inside, the girl collapsed on the floor, and the others who were present
realized that she had been shot and seriously injured.
[6]
At that point, the scene inside the Dick residence was one of confusion
and panic. Someone called 9-1-1, but it was quickly decided that waiting for
an ambulance might not be the best plan in view of the girls injury. Mr. Dick
decided to drive her to the first aid post in Alexis Creek. There was some
difficulty finding the keys to the only serviceable truck on the property, but
eventually, Mr. Dick succeeded in getting into the vehicle and taking the girl
to the first aid post. Mr. Frank remained in the Dick residence.
[7]
At some point the evidence as to whether it was immediately or some
hours later is unclear Mr. Frank took possession of a firearm. Mr. Frank did
not testify at trial, but his statement to the police was in evidence.
According to that statement, Mr. Frank obtained a 12-gauge shotgun from Mr.
Dick. Mr. Frank said that he fired two shots into the air while standing near
the fence line of the Dick property. He described the shots as being [j]ust
to let em know that we had a gun, too
just so he doesnt try and come up to
us. He told police that he was apprehensive of another attack, and that the
shots were, in effect, warning shots to deter further aggression by Mr. Sam.
[8]
Mr. Frank agreed with the police that he had told others that he had
gone to Mr. Sams residence and shot at the door. He said, however, that his
statements were untrue (he used a somewhat more vulgar expression), and
intimated that he had merely been bragging.
[9]
As the police continued to question Mr. Frank, he admitted that he had
taken a single shot at the Sam residence, hitting the back corner of it. He
stated that he had left the Dick residence, and gone into an open field between
Mr. Sams house and the neighbouring house. From there (a distance of about 95
metres from the Dick residence) he shot towards the rear corner of the Sam
residence.
[10]
The defence called Mr. Franks brother for the purpose of showing that
Mr. Frank had a poor memory and was easily confused. His mother also testified
to having consumed alcohol during her pregnancy with him. It was the defence
position that the latter part of Mr. Franks statement was unreliable, and Mr.
Franks counsel invited the jury to accept only the part of Mr. Franks
statement in which he said he had fired two warning shots into the air.
[11]
There was extensive damage to the Sam residence from gunshots. The
Crown theory was that Mr. Frank had shot at the north side of the residence
(the area furthest from the Dick residence) several times.
[12]
The defence asked the trial judge to leave the defence of self-defence
to the jury. While it suggested several provisions of the
Criminal Code
that might be left with the jury, it is agreed on this appeal that the relevant
provision is s. 37:
37. (1) Every one is justified in
using force to defend himself or anyone under his protection from assault, if
he uses no more force than is necessary to prevent the assault or the
repetition of it.
[13]
The trial judge ruled that there was no air of reality to such a
defence. In doing so, he referred to the decisions of the Supreme Court of
Canada in
R. v. Cinous
, [2002] 2 S.C.R. 3, and
R. v. Osolin
,
[1993] 4 S.C.R. 595. He cited, in particular, paragraphs 53 and 54 of
Cinous
:
[53] In applying the air of reality test, a trial judge
considers the totality of the evidence, and assumes the evidence relied upon by
the accused to be true. See
Osolin
,
supra
;
Park
[
R. v.
Park
, [1995] 2 S.C.R. 836
]
. The
evidential foundation can be indicated by evidence emanating from the
examination in chief or cross-examination of the accused, of defence witnesses,
or of Crown witnesses. It can also rest upon the factual circumstances of the
case or from any other evidential source on the record. There is no requirement
that the evidence be adduced by the accused. See
Osolin
,
supra
;
Park
,
supra
;
Davis
[
R. v. Davis
, [1999] 3 S.C.R. 759].
[54] The threshold
determination by the trial judge is not aimed at deciding the substantive
merits of the defence. That question is reserved for the jury. See
Finta
[
R.
v. Finta
, [1994] 1 S.C.R. 701];
R. v. Ewanchuk
, [1999] 1 S.C.R. 330.
The trial judge does not make determinations about the credibility of
witnesses, weigh the evidence, make findings of fact, or draw determinate
factual inferences. See
R. v. Bulmer
, [1987] 1 S.C.R. 782;
Park
,
supra
. Nor is the air of reality test intended to assess whether
the defence is likely, unlikely, somewhat likely, or very likely to succeed at
the end of the day. The question for the trial judge is whether the
evidence discloses a real issue to be decided by the jury, and not how the jury
should ultimately decide the issue.
[14]
The judge differentiated between self-defence
and retaliation where a person is not in danger:
[24] Self-defence
is a legal justification explaining and excusing the results of a persons
actions. It is not to be used to cloak a retaliatory strike in circumstances
where the accuseds self-preservation is not in peril. In other words, acts of
retaliation do not amount to self-defence. In making this observation, I refer
to the Supreme Court of Canada decision in
Brisson v. The Queen
, [1982]
2 S.C.R. 227.
[15]
He then analyzed the case as follows:
[29] While there is evidence to support the position
that subjectively Mr. Frank believed he needed to arm himself and fire the
weapon as a means of defending himself and the others in the Dick residence
against another possible attack,
I find the evidence fails to establish that
he held this belief on reasonable grounds
.
[30] In reaching this decision, it must be kept in mind
the defence of self-defence would only arise in the present circumstances as a
defence to the mischief charge if the jury rejected Mr. Franks denial that he
shot at the Sam residence, and found that he actually did shoot at and strike
the house. The evidence on that point would have Mr. Frank leaving the
security of the Dick house after the passage of a period of time since the
single shot was fired at the [Dick] residence, going out into the dark of
night, in an isolated area, not knowing where Mr. Sam was, and proceed 95
metres or so across the street to an open area and shoot at Mr. Sams house
multiple times.
[31] Asking myself whether there is some evidence
reasonably capable of supporting an acquittal on the mischief charge, I find
myself answering in the negative.
On all of the evidence, it would appear
the Crowns submission that Mr. Frank was not objectively as scared as he
claims he was and was not as concerned about his own protection or about the
others in the house whom he abandoned is well-founded.
[32] I agree with the Crowns submission that Mr.
Franks conduct of arming himself with a shotgun, going over to Mr. Sams
property, raising the firearm towards Mr. Sams house, and discharging the
weapon a number of times, all while not knowing where Mr. Sam was or if he or
others were in or around the residence, can be objectively characterized as a
calculated retaliation, well after the need for self-defence existed, and
therefore eliminates his recourse to ... s. 37 of the
Code
. I again
make reference to the
Brisson
decision of the Supreme Court of Canada.
[Emphasis added.]
[16]
There are errors in the judges reasoning. The underlined statements
indicate that the trial judge engaged in weighing the evidence. It was not his
role to do so in determining whether there was an air of reality to the defence
of self-defence. He also erred in referring to the evidence as being that Mr.
Frank shot at Mr. Sams house multiple times and a number of times. The
judge was required, for the purpose of his ruling, to take the evidence at its
most favourable to the accused. There was evidence, in Mr. Franks statement,
that he had taken only a single shot at the house. The judges statement that
the accused shot at the house well after the need for self-defence existed
also represents a finding of fact that trenched on the jurys role.
[17]
We must ask ourselves whether these errors serve to vitiate the judges
determination that there was no air of reality to the defence of self-defence. In
our view they do not.
[18]
The Crown took the position that Mr. Frank could only be convicted of
mischief and use of a firearm in the commission of an indictable offence if the
jury found that Mr. Frank went over to the Sam house and shot at it. The judge
appears to have accepted that Mr. Frank could not be convicted if he had only
taken warning shots into the air from the Dick property.
[19]
The only evidence capable of establishing that Mr. Frank shot at the Sam
residence was evidence that would have required him to take deliberate steps to
leave a place of comparative safety and proceed for some considerable distance
in the darkness towards a place of greater danger. There was no explanation as
to how such steps would have assisted in preventing a further assault; rather,
the only rational explanation available was the one postulated by the judge:
this could only be characterized as calculated retaliation.
[20]
While they could, perhaps, have been more explicit, the judges instructions
to the jury made it clear that Mr. Frank could not be convicted of mischief in
relation to property unless the jury was satisfied beyond a reasonable doubt
that Mr. Frank had shot at and caused damage to the Sam residence:
Now, there are several ways in
which a person may interfere with another persons property, and they are
listed in s. 430 of the
Code
, and I set that out for you earlier in my
reasons [sic]. But the only way that the Crown is alleging because there are
a number of ways you can commit mischief the only way that the Crown is
alleging is that by causing damage, there was damage to the door area on the
north side of the house.
And as I say ..., the Crown says
Mr. Frank caused damage to Mr. Sams house when he shot at it with a firearm
and put holes or marks in the house on the night of April 14th, 2007, and more
particularly, on that north side.
If you are not satisfied beyond
a reasonable doubt that Mr. Frank interfered with Mr. Sams property, that is,
caused damage to Mr. Sams house by discharging a firearm at it, you must find
Mr. Frank not guilty. Your deliberations on Count number 1 on the indictment
would then be over. If, however, you are satisfied beyond a reasonable doubt
that Mr. Frank damaged Mr. Sams property there then you must go on to address
the next question: Was Mr. Franks conduct wilful? ...
Crown counsel may prove that Mr.
Franks conduct was wilful in either of two ways. Mr. Franks conduct was
wilful if he meant to damage Mr. Sams house in the way that I have just
described. Mr. Franks conduct will also be wilful if he meant to do something
that he knew would probably damage the property in the way that I have
described to you but went ahead and did it anyway; being reckless as to whether
the damage to the property happened as a result.
If you are satisfied beyond a
reasonable doubt that Mr. Frank is guilty of mischief in relation to property,
the offence charged in Count 1 of the indictment, you go on to answer the next
question: Did Mr. Frank use a firearm? As I have said to you, a firearm is a
gun, a weapon with a barrel that can discharge a shot, bullet, or other
projectile, and can cause death or serious bodily harm to another person.
In
the present case, the Crown counsel alleges Mr. Frank discharged a firearm
towards Mr. Sams residence, thereby causing damage to that property.
[21]
These instructions made it clear that Mr. Frank could not be convicted of
either mischief or using a firearm while committing an indictable offence unless
the jury was satisfied beyond a reasonable doubt that he had crossed the
street, walked 95 metres toward the Sam house, and shot at and hit it.
[22]
Mr. Frank could not be convicted for taking warning shots into the
air, or, indeed, for taking any shots from the Dick property. He could only be
convicted for taking the shots that hit the north side of the Sam house, which
could not have been hit from the Dick property. There is no air of reality in
the suggestion that such shots could have been taken in self-defence.
[23]
The judges instructions on the count of possession of a weapon for a
purpose dangerous to the public peace (Count 3) were less adequate. The judge
set out the Crowns position as follows:
With respect to count number 2
on the indictment, the Crown position is that Mr. Frank possessed the weapon
for the purpose of shooting at the Sam residence and that such a purpose was
dangerous, not only to anyone in the Sam residence but also to anyone else
around the property. [Emphasis added.]
[24]
The judges instructions, however, were not in accordance with this
position. Instead, he said:
Crown counsel does not have to
prove that Mr. Franks purpose in taking possession of the weapon was to do a
specific act or to use it in a particular way. There is no requirement that
Mr. Frank actually use the weapon, but if he does so, that fact, the fact it
was used, how it was used, and the circumstances in which Mr. Frank used it,
may help you decide Mr. Franks purpose in having the weapon in the first
place.
To
decide what Mr. Franks purpose was, you should consider all of the
circumstances of his possession of the weapon. You should, once again, take
into account what he did or did not do; what he did or did not [do] to or with
it; and what he said or did not say.
[25]
This instruction left it open to the jury to convict Mr. Frank on Count
3 even if it found that he only fired the gun in the air from his own property.
[26]
On Count 3, the judge should either have instructed the jury in
accordance with the position taken by the Crown or left the defence of
self-defence to the jury. If Mr. Franks purpose in possessing the weapon was
only to fire warning shots, it could not be said that the defence of
self-defence lacked an air of reality.
[27]
Given that we find the judges instructions with respect to Count 3
erroneous, we must consider whether s. 686(1)(b)(iii) of the
Criminal
Code
applies in respect of that count:
686. (1) On the hearing of an appeal against a conviction or
against a verdict that the appellant is unfit to stand trial or not criminally
responsible on account of mental disorder, the court of appeal
...
(b) may dismiss the appeal where
...
(iii) notwithstanding that the
court is of the opinion that on any ground mentioned in subparagraph (a)(ii)
the appeal might be decided in favour of the appellant, it is of the opinion
that no substantial wrong or miscarriage of justice has occurred, ...
[28]
The jury was instructed that in order to convict Mr. Frank on Count 1 (mischief),
it had to be satisfied beyond a reasonable doubt that he shot at and damaged
Mr. Sams house. As the jury convicted Mr. Frank of that offence, it is
apparent that it was left in no doubt that Mr. Frank took shots at the Sam
residence. The jury must have found that the purpose for which Mr. Frank possessed
the weapon was to shoot at the Sam residence. Given this finding, we are
satisfied that there was no substantial wrong or miscarriage of justice with
respect to the Count 3, and that the verdict would necessarily have been the
same if proper instructions on that count had been given. We would apply the
curative provision in respect of that count.
[29]
In the circumstances, the appeal is dismissed.
The Honourable Mr. Justice Lowry
The Honourable
Mr. Justice Groberman
The Honourable
Madam Justice Bennett
|
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
R. v. Schiel,
2012 BCCA 1
Date: 20120104
Docket: CA038797
Between:
Regina
Respondent
And
Endeavour
Developments Ltd.,
Golden Horizon Resort Ltd.,
Adolf Schiel and
Sandy Schiel
Applicants
Before:
The Honourable Madam Justice Bennett
(In Chambers)
On appeal from:
Provincial Court of British Columbia,
June 4, 2010 & February 15, 2011,
(
R. v. Schiel et al
, Vancouver Docket No. 131180)
Adolf Schiel and Sandy Schiel:
In Person
Counsel for the Respondent:
Raymond D. Leong
Place and Date of Hearing:
Vancouver, British
Columbia
November 25, 2011
Place and Date of Judgment:
Vancouver, British
Columbia
January 4, 2012
Reasons for Judgment of the
Honourable
Madam Justice Bennett:
[1]
Adolf Schiel and Sandy Schiel were convicted of eight offences contrary
to s. 327(1)(a) and (d) of the
Excise Tax Act
, R.S.C. 1985, c.
E-15. The charges, simply put, involved allegations of false statements in
relation to Goods and Services Tax (GST) refunds. They were convicted along
with two of their companies of obtaining over $1.9 million dollars in refunds
from the government to which they had no entitlement.
[2]
Mr. Schiel is Ms. Schiels father. He was a property developer and she
worked in the family businesses.
[3]
This is the second time this case has come to appeal. The Schiels were
acquitted at their first trial, but that conviction was overturned on appeal.
They were convicted at the second trial on all eight counts on the Information,
three of which the trial judge stayed pursuant to the principle in
R. v.
Kienapple
, [1975] 1 S.C.R. 729. The Schiels have been self-represented
through the entire process.
[4]
The Schiels have brought an application pursuant to s. 684 of the
Criminal
Code
for the appointment of counsel for this appeal. There is no
application on behalf of the companies. They have filed appeal books and
transcripts; thus, the appointment request concerns the preparation of a factum
and oral argument.
[5]
Section 684(1) of the
Code
reads:
684. (1) A court of appeal or a
judge of that court may, at any time, assign counsel to act on behalf of an
accused who is a party to an appeal or to proceedings preliminary or incidental
to an appeal where, in the opinion of the court or judge, it appears desirable
in the interests of justice that the accused should have legal assistance and
where it appears that the accused has not sufficient means to obtain that
assistance.
[6]
The factors which must be considered are:
i) the applicants financial
ability to retain counsel on their own behalf;
ii) whether legal aid would
be granted to the applicants;
iii) the
level of education of the applicants and their competency to advance their
appeals;
iv) the complexity of the
case;
v) whether
the case is one where the assistance of counsel is necessary in order to
marshal the evidence;
vi) whether
the case is one which may result in a term of imprisonment; and
vii) whether
there is an arguable ground of appeal.
(See
R. v. Baig
(1990), 58 C.C.C. (3d) 156 (B.C.C.A.
Chambers) at 158;
R. v. Bernardo
(1997), 105 O.A.C. 244, 121 C.C.C. (3d)
123 at para. 22.)
i) Financial ability to retain counsel
[7]
The Schiels were given two opportunities to file financial information.
They have provided considerable information setting out their personal circumstances
and it appears that they have few assets and little income.
[8]
The difficulty with this application is that the Schiels have filed no
affidavit evidence with supporting documents showing the disbursement of the
substantial amount of money they received in GST tax refunds. When I asked
during submissions where the money went, the response was vague.
[9]
The onus is on the applicants to establish that they do not have
sufficient means to obtain that assistance. In my respective view, neither applicant
has met this onus.
(ii) Legal aid
[10]
Funding from the Legal Services Society has been refused for both applicants
because they did not meet the financial eligibility requirements.
iii) The level of education of the applicants and their competency
to advance their appeals
[11]
I need to address the circumstances of each applicant individually. Mr.
Schiel is 75 years old. He lives in Surrey, B.C. with his wife of 50 years.
Mr. Schiel has serious health issues, including heart disease, Type 2 diabetes,
hypertension and organic brain damage from a heart attack, which has resulted
in a decline in cognitive function.
[12]
Ms. Schiel is 43 years old. She entered the family business after three
years of university education, before she finished her degree.
[13]
Ms. Schiel and her brother, Roy Schiel, have made the submissions during
the case management procedures and this application for both applicants.
[14]
Adolf Schiel and Sandy Schiel do not appear to have conflicting
defences.
[15]
Mr. Schiel, on his own, is not capable of mounting his own defence. Ms.
Schiel has the ability to defend herself, although she has always done so with
the assistance of Roy Schiel.
iv) The complexity of the case
[16]
The Crown contended that the case was not complex. I do not agree.
There are approximately 10,000 pages of exhibits. The trial took 29 days. The
issues at trial involved assessments of credibility as well as a detailed
analysis of the tax documents filed in the proceedings.
v) Assistance of
counsel necessary to marshal the evidence
[17]
There is a large volume of evidence. However, no one is more familiar
with the evidence than the applicants, who generated many of the documents.
They have heard the evidence twice. While the assistance of counsel would be
helpful, it is not necessary to marshal the evidence.
vi) Imprisonment
[18]
Sandy Schiel was sentenced to five years in prison and a fine of
$1,959,910. Adolf Schiel was sentenced to four years in prison and a fine of
$1,959,910.
vii) An arguable case
[19]
The Crown argued strongly that the case has no merit. The Schiels were granted
bail pending appeal on March 25, 2011. One judge of this Court has concluded
that their appeal is not frivolous. Some of the points raised before me have
little or no merit. Other grounds, while not strong, are nonetheless arguable.
There is merit to the Schiels sentence appeal.
[20]
Section 684 has two fundamental requirements for the appointment of
appellate counsel: it must be desirable in the interests of justice that the applicant
have legal assistance
and
the applicant must not have sufficient means
to obtain that assistance.
[21]
I have found that the applicants have not satisfied the second criterion,
and therefore I must dismiss the application.
The
Honourable Madam Justice Bennett
|