Giles v. Westminster Savings Credit Union and Gary Thomas et al. , 2008 BCCA 62
Costs – Costs on Appeal – Costs Payable to Multiple Defendants
Ross McGowan for the Defendant Gary Thomas

This was a decision regarding the costs payable on the Plaintiffs' unsuccessful appeal of a trial judgment dismissing their claims in breach of fiduciary duty and breach of trust (though the Court of Appeal disagreed with some of the trial judge's findings, it upheld the dismissal of the claims). The Plaintiffs had argued that costs should not be determined at this point, since certain matters at the trial level had not yet been finalized. They further argued that only one set of costs should be paid to the Defendants Westminster Savings Credit Union and Mr. Thomas, a former Credit Union employee, on the basis that their positions on the appeal were substantially similar.

The court rejected both submissions. It found there was no good reason to defer the decision on costs, and it awarded the Credit Union and Mr. Thomas separate costs since their interests were not identical and the parties rightfully asserted their differing positions via separate counsel. The court denied Mr. Thomas's application for special costs based on allegations of fraud made against him at trial and through the appeal proceedings.

Weyerhaeuser Company Limited v. Hayes Forest Services Limited , 2008 BCCA 69
Contractual Interpretation – Assignment – Novation – Petition, Suitability of
Pat Foy and Rob Deane for the Respondent Weyerhaeuser Company Limited

This case involved determining the effect of an assignment of a timber supply contract (by Weyerhaeuser) to a third party (another respondent – Cascadia) on the rights of the original other party to the contract (Hayes). The court below had held that the assignment relieved Weyerhaeuser of all of its obligations to Hayes as of the date of the assignment and that Cascadia was not acting as Weyerhaeuser's agent in operating under the agreement. That order was obtained in a petition proceeding commenced by Weyerhaeuser seeking declaratory relief in that form when Hayes refused to consent to the assignment. Hayes appealed on the grounds that the judge erred in dismissing its arguments based on novation and in improperly interpreting the assignment provision in the contract. Hayes also argued that it was inappropriate to have allowed the matter to proceed by way of petition; rather, it should have proceeded as a trial. Finally, it challenged subsequent orders refusing Hayes' application to reopen the matter to adduce further evidence by seeking to adduce further evidence on the appeal.

The Court of Appeal found that it was appropriate to have proceeded by way of petition because the matter involved solely the interpretation of a contractual provision. The court also agreed with the Chambers judge's view that this was not a case where the legal test for novation could be applied dogmatically. It recognized a distinction between cases where it is a question of fact whether acceptance of a new party to a contract has created a novation situation and cases involving the interpretation of a contract itself to determine whether its terms allow for substitution of a contracting party. It held that novation did not arise on these facts, since there was no tripartite agreement among the parties. Rather, the contract, properly interpreted, allowed for the substitution of Cascadia for Weyerhaeuser. The court rejected the Appellant's argument that only a novation can substitute a third party as a contracting party; rather, the parties can agree to provide for that possibility in their agreement, which these parties had. In the result, the court held that the proper interpretation of the contract established a privity of contract between Cascadia and Hayes such that Hayes could no longer enforce the contract as against Weyerhaeuser. The court also dismissed the Appellant's motion to adduce fresh evidence.

J.S.M. Corporation (Ontario) Ltd. v. The Brick Furniture Warehouse et al. , 2008 ONCA 183
Landlord and Tenant – Commercial Lease – Liability of Parent Company – Oppression Remedy, scope of
Chris Bredt and Aaron Blumenfeld for J.S.M. Corporation (Ontario) Ltd.

This was an appeal from the trial decision on a very difficult commercial lease dispute. The landlord, J.S.M., was trying to enforce contractual rights with shell companies in the Brick "enterprise". The Brick had tried to arrange its affairs such that the actual tenants of certain Brick locations were judgment proof and the companies with assets were insulated from lease obligations. The Brick had breached its lease with J.S.M. 18 months prior to its expiry. It was not in dispute that the named tenants were liable for unpaid rents, but those entities had no assets. The trial judge denied the breach of contract claim on the leases, but granted relief pursuant to the oppression remedy in favour of J.S.M. against the Brick Warehouse Corporation, which was the parent company with assets ("Brick Corp.").

The appeal was dismissed but on different grounds than those stated by the trial judge. The court agreed with the court below that there was a contractual relationship between JSM and Brick Corp. and held that J.S.M. could recover damages equivalent to unpaid rent. This disposed of the appeal. However, and arguably by way of obiter, the court commented on the trial judge's oppression findings. In short, it rejected the extension of the oppression remedy to J.S.M. on the facts of the case, and affirmed a rather conservative interpretation of the scope of the remedy.

Maystar General Contractors Inc. v. International Union of Painters and Allied Trades, Local 1819 , 2008 ONCA 265
Labour Relations – Union Certification – Judicial Review – Mootness of Appeal – Discretion to Decide Moot Appeal
Martin Sclisizzi and Morton Mitchnick for the Respondent, Maystar General Contractors Inc.

This was an appeal of an order made on the judicial review of a decision of the Ontario Labour Relations Board regarding certification of a trade union. The union had brought a certification application before the Board and though the employer had prepared a response as required by the legislation, through inadvertence it failed to file this response within the two-day time limit for doing so set by the Ontario Labour Relations Act . On an application by the employer for reconsideration and to extend the time for filing its response, the Board, relying on a previous decision, decided it did not have the jurisdiction to relieve against the employer's inadvertence and certified the union. The Divisional Court applied a correctness standard and remitted the matter back to the Board on the basis that it had erred in finding it did not have the jurisdiction to relieve against the missed deadline. The union applied for leave to appeal but no stay of the Divisional Court Order was sought; therefore, in the interim the Board reconsidered the application and rescinded the certification before the appeal was heard.

The Court of Appeal dismissed the appeal on the basis that it was moot. It noted that the court may decline to decide a case that is merely academic or hypothetical since its main function is to resolve real disputes between parties. In this case, the appeal was moot both because the relief sought by the union was no longer available and because the Board's reconsideration of the certification application had reshaped the dispute between the parties such that the matter the court was asked to decide would not be determinative of that dispute. While the court recognized a discretion to decide a case regardless of whether or not it is moot, it declined to do so in this case primarily because the appeal did not raise issues of broad social or constitutional importance, thus raising a concern about preserving judicial economy. The court did note that its decision should not be considered to be an affirmation of the Divisional Court's decision that the Board's decision was reviewable on a correctness standard and made reference to the significant deference that has been afforded to Board decisions in the past.

Propjet Management Ontario Inc. v. Pascan Aviation Inc., Ontario Court of Appeal, December 3, 2007
Summary Judgment, Appeal – Error of Counsel – Full and Fair Record – New Evidence Motion
Paul D'Angelo and Andre Ducasse for the Defendant

The Plaintiff, Propjet, obtained an order granting summary judgment against the Defendant, Pascan, in the summer of 2007. BLG did not represent Pascan on that motion and was of the opinion that the original motion for summary judgment would have been more effectively defended had key documentation been filed by Pascan's former counsel. Pascan's formal counsel had also failed to file an Affidavit from the principal of Pascan, and instead filed an Affidavit from an unrelated non-party. Finally, it was discovered that counsel for the Plaintiff had 'omitted' from the moving motion record a key excerpt of an examination transcript (which excerpt addressed one of the direct questions on the merits of the claim and was supportive of the defence). BLG argued the appeal and also filed a motion to introduce new evidence.

The Court of Appeal held that had the full documentary evidence been presented at the original motion, the Superior Court judge could not have reasonably granted summary judgment to the Plaintiff. It held further that as a result of Pascan's former counsel's error, and the fact that the full transcript reference was not filed by the Plaintiff's counsel, serious prejudice was caused to Pascan's defence on the summary judgment motion. It allowed the motion to admit new evidence and set aside the summary judgment.

J.J. Barnicke Limited v. City of Ottawa, Ontario Court of Appeal, March 11, 2008
Real Estate – Commissions – Oral Agreement – Real Estate and Business Brokers Act (Ontario)
Paul D'Angelo for the Plaintiff

J.J. Barnicke Limited obtained an order at trial in September 2006 that the City of Ottawa must pay to Barnicke $124,588.13 in real estate commissions plus $40,000.00 in costs. The trial judge had found as fact that: the parties both knew that a commission would be payable; the City knew that Barnicke expected a commission and the city took no steps to disabuse Barnicke of its expectation; and, at the conclusion of the transaction the City thanked Barnicke for its cooperation and for bringing in the particular offer. The trial judge concluded on these facts that the parties had agreed that Barnicke should be paid a commission if it assisted in the sale of the property, but that the parties never had an agreement on the quantum of the commission. In these circumstances the trial judge applied s. 34(2) of the Ontario Real Estate and Business Brokers Act , which provides that 'where no agreement as to the amount of the commission has been entered into, the rate of commission…shall be that generally prevailing in a community where the real estate is situate'. The City of Ottawa appealed this decision on the principal ground that the City never agreed to pay the commission with respect to the property in question, and hence s. 34(2) of REBBA had no application.

The Court of Appeal disagreed with the City, holding that there was ample evidence to support the fact that the City had offered to pay a commission, and that it was prepared to do so, even if a formal commission agreement was not entered into. The Court of Appeal held that the trial judge's conclusion that there was an oral agreement to pay a commission was sound. Accordingly, where there was an agreement to pay a commission, but disagreement about the rate of a commission, the Court of Appeal found no error in the trial judge's conclusion that s. 34(2) of REBBA resolved this disagreement. Finally, the evidence at trial supported a generally prevailing commission rate in the community of 3.75% for this size of sale ($3,105,000.00). In the end Barnicke recovered its full commission and over 80% of its costs incurred for the trial and appeal.

Nextstep Resources Ltd. v. Talisman Energy Inc. et al. , 2007 ABQB 788
Oil and Gas – Summary Judgment – Estoppel By Convention – Rectification – Mandatory Injunction
Randall Block and Michael Marion for the Defendants

This proceeding involved cross-applications by the parties in an action to determine ownership of a petroleum well. Nextstep applied for an injunction seeking to prevent Talisman from continuing to produce petroleum products from the vertical well. Talisman brought a cross-motion for summary judgment seeking dismissal of the action. By agreement made in March 2004, Nextstep had purchased certain assets from Talisman, including the right to explore for, drill and extract certain petroleum substances. One of the assets acquired was a lease of a particular parcel of land and a horizontal well located thereon. There was also a vertical well located on at least part of that parcel, which was not included in the list of assets acquired under the agreement. Nextstep agreed it had not paid for the infrastructure of that well or its production costs as part of the agreement. However, because a part of the well was located on the lands, it argued that it had the right to the production from that well.

In support of its motion for summary judgment, Talisman argued that the purchase price under the agreement, the other provisions of the contract, and the intention of the parties all made clear that the vertical well was not conveyed to Nextstep. It further argued that the doctrine of estoppel by convention applied, which would render it unfair for Nextstep to now challenge an assumption the parties had shared for at least three years, i.e. , that Talisman was entitled to production from the vertical well. Finally, Talisman argued that to the extent that the agreement did not support its position, it should be rectified. Nextstep argued that Talisman's position was contrary to the plain language of the agreement, that there was no shared assumption such that estoppel by convention could apply, and that rectification was inappropriate in the circumstances. In any event, it argued that summary judgment was not available since there existed real conflicting issues between the parties. The court agreed with Nextstep that there was a genuine issue for trial regarding the transfer of the vertical well and dismissed the summary judgment application since it was not beyond doubt that the action could not succeed. However, it also dismissed Nextstep's application for an injunction to prohibit production. It found there was a serious issue to be tried but that because Nextstep was seeking a mandatory injunction requiring Talisman to shut down production it had to show a 'strong prima facie case', which it had failed to do. It went on to opine that there was no irreparable harm that could not be remedied by an award of damages and that the balance of convenience rested with Talisman. The decision on the summary judgment motion is under appeal.

CareVest Capital Inc. v. Chychrun et al. , 2008 BCSC 201
Application to Strike Pleadings – Duty of Care – Damages Reasonably Foreseeable – Proximity – Policy Considerations
Brad Dixon and Alan Cofman for the Plaintiff

This was an application to strike allegations of negligence made in a counterclaim in a foreclosure proceeding. CareVest, the owner's lender on a failed townhouse development, argued that there was not sufficient proximity between it and the Plaintiffs by Counterclaim to establish a duty of care and, in the alternative, any such duty that could be imposed was negated by policy considerations. The Plaintiffs by Counterclaim were all parties to pre-build purchase contracts for units in the development. They argued that they held equitable interests that should supercede CareVest's mortgage security claim. Their claims in negligence against CareVest were based on the allegation that CareVest had a duty to ensure that the price at which the developer agreed to sell the units on closing would raise sufficient funds to complete construction and allow the units to be conveyed with clear title.

The court struck out the offending paragraphs of the counterclaim. It disagreed that CareVest owed the Plaintiffs by Counterclaim a duty of care as prior equitable charge holders whom CareVest had an obligation to consider by dealing with charged property reasonably. Following the test set out by the Supreme Court of Canada in Cooper v. Hobart , it held that the harm suffered by the Plaintiffs by Counterclaim was not reasonably foreseeable and that there was insufficient proximity between the parties to establish a duty of care. Finally, there were policy reasons to deny a duty of care as between the mortgagee and the unit purchasers, since to require the mortgagee to look out for those types of interests contrary to its own would adversely affect the orderly operation of credit and lending markets. The court also held there was no duty on the part of CareVest to warn the Plaintiffs by Counterclaim of any risks associated with the project.

Canadian Star Development Corp. et al. v. 0712276 B.C. Ltd. et al. , 2008 BCSC 81
Security for Costs – Corporate Plaintiff
Ryan Parsons for the Defendants

The Defendants applied for an order requiring the corporate Plaintiff to post $20,000 in security for costs in an action for breach of a share purchase agreement and intentional interference with economic relations. The court granted the motion on the basis that it was unlikely the corporate Plaintiff could pay costs if unsuccessful in the action, given that its only significant asset was the funds paid pursuant to the share purchase agreement itself, but there was no evidence that the corporate Plaintiff could not finance the action. Further, the court was satisfied that the Defendants had an arguable defence, despite the fact that they had filed a pro forma Statement of Defence (the Plaintiffs had since provided particulars and the Defendants had advised of their intention to amend the Statement of Defence accordingly). The action was stayed until such time as security was posted.

Owners v. Lark Odyssey Project Ltd. , 2008 BCSC 316
Leaky Condo Claim – Summary Trial – Summary Judgment – Application to Strike Claims – Representative Action – Constructive Trust – Certificate of Pending Litigation
David Miachika, Rob Dawkins and Evan Cooke for the Plaintiffs

The Developer of a proposed multi-phase strata development applied to strike out portions of the Strata Corporation's leaky condo claim. Phase I of the concrete residential strata development was completed in 1995. The Disclosure Statement issued by the Developer for the project confirmed that Phase I was part of a two-phase residential development, with Phase II being a high-rise condo to be completed by mid-1996. Once completed, the Phase II Owners were to share common expenses and facilities with the Phase I Owners. Phase I subsequently suffered a systemic failure of the building envelope, resulting in the Owners of Phase I incurring over $6 million to remediate the building from 2005 to 2007. Meanwhile, from 1998 to 2006, the Developer extended the time by which it had to elect to proceed with construction of Phase II by court order 11 times and ultimately opted not to proceed at all. During this time, the Developer was aware of the serious envelope failure at Phase I but it did not fully disclose to the Owners of Phase I matters related to the numerous extensions sought. The Developer now seeks to develop or sell the Phase II lands as a separate property.

The Owners of Phase I commenced representative lawsuits in 2003 and 2005 in the name of the Strata Corporation seeking damages for the building repairs against all parties responsible for the original development, design and construction of the building envelope, including the Developer, and making claims in misrepresentation related to the Disclosure Statements. The Owners further asserted a constructive trust over the Phase II lands and claimed a consequent Certificate of Pending Litigation. At an early stage of the proceedings, the Developer and Director sought to strike out all portions of the Strata's claim relating to the alleged misrepresentations in the Disclosure Statements, the constructive trust and the assertion of the CPL. The applications were brought pursuant to Rules 18A (summary trial), 18 (summary judgment) and 19(24) (striking pleadings on the basis of no reasonable cause of action pleaded). The Developer submitted that these claims should be struck on the basis that: (a) they were claims personal to the Owners that could not be brought on a representative basis by the Strata Corporation; (b) the Owners have no claim in constructive trust or sufficient interest in the Phase II lands to support the CPL; and (c) the claim for a CPL created hardship for the Developer in attempting to develop or sell the Phase II lands.

The court dismissed the Developer's motion. It held that based on the existing case law (which was limited), it was arguable that the Strata Corporation had standing to bring the claims on behalf of the Owners or, alternatively, the pleadings could be amended by adding the individual Owners as co-Plaintiffs. With respect to the Owners' constructive trust and CPL claims, the court recognized that there was a legal basis to make the claims despite their novelty, and that the claims were sufficiently pleaded. Finally, the court noted that there was no statutory or common law basis to strike a CPL claim on the basis of hardship where the CPL has yet to be filed on title. Furthermore, the Developer had not established any real hardship due to the CPL claim alleged in the pleadings. This decision is of particular significance because there is no case law on such equitable claims against land held for use as a phased strata development and there is very little jurisprudence on the remedies available when a Developer elects not to proceed with a subsequent phase of a multi-phased development. Following the decision, the Owners filed a CPL on the Phase II lands. The Developer is seeking leave to appeal the decision.

Pavlis v. HSBC Bank Canada and HSBC Securities (Canada) Inc. , Supreme Court of British Columbia, December 6, 2007
In Person Litigants – Representation by Non-Lawyer Agent
Gord Johnson for the Defendants

This hearing involved, among other things, an application by the self-represented Plaintiff to have a specific individual who was not a lawyer represent her in the proceedings set for a two-week trial in January 2008. The individual was initially one of the Plaintiffs in the proceeding but he had discontinued his action in 2006. The application was resisted on the basis that the individual in question had shown himself to be an inappropriate advocate. He had formerly been a member of the Saskatchewan bar but had left practice in 1997 for health reasons.

The court confirmed that it has the discretion to permit a non-lawyer to appear in court, and that the exercise of that discretion should be focused on the interests of justice and fairness so as to take both the particular circumstances of the case and the greater public good into account. The ability of a layperson to appear in court as an advocate is a privilege not a right. In this case, the court held that the individual selected lacked the requisite objectivity, temperament and judgment to represent the Plaintiff for several reasons. In particular, he was a former party to the litigation and a possible witness, and was at least at one time the Plaintiff's common law spouse, giving him a potential interest in the outcome. There was also evidence to the effect that earlier in the proceedings the individual had purported to act on the Plaintiff's behalf without her knowledge or consent and had presented positions at that time inconsistent with the Plaintiff's actual views. The Defendants were awarded their costs of the application.

BCE Inc. (In Re: Proposed Plan of Arrangement) , Quebec Superior Court, March 7, 2008
Plan of Arrangement – Standing to Oppose – Fair and Reasonable
Jacques Darche, Tommy Tremblay and Andréanne Latreille for the lenders

BCE Inc. applied under s. 192 of the Canada Business Corporations Act (CBCA) for final approval of a plan of arrangement as part of the transaction whereby BCE was to be acquired by the Ontario Teachers Pension Plan (the Pension Plan) and others. The application was supported by the purchaser (a CBCA numbered company incorporated by the Pension Plan and others to acquire all of the outstanding shares in BCE for cash) and contested by certain debenture holders and trustees related to the debentures. The court had made prior interim orders setting out the procedure required to implement the plan of arrangement, all of which had been complied with. A majority of 97.93% of BCE's shareholders had also approved the plan. On the application, BCE challenged the status of the debenture holders to resist the plan on the basis that their rights were not being 'arranged' in any way, and in any event, it argued that the plan was fair and reasonable and should be approved. Some of the debenture holders claimed that the terms of their debentures required approval by the trustees before any such plan could be implemented, and all debenture holders argued that the plan was unfair and prejudicial to their interests overall. The trustees adopted the positions of their respective associated debenture holders.

The court held that the contesting parties had standing on the application but that the plan should nevertheless be approved. It held that the statutory requirements for approval under the CBCA had been met, including that it was impracticable to complete the transaction in any other way on a broad and inclusive interpretation of that criterion, and that the plan had been advanced by BCE in good faith. The court was particularly impressed with the strength of shareholder support. In assessing whether the plan was fair and reasonable, the court had regard to the interests of BCE, its shareholders and other stakeholders whose interests were being affected. However, it found that the plan would not alter the rights of the contesting debenture holders in any way, and noted that these parties had other means by which to seek redress, which they had attempted to do by way of oppression remedy claims and applications for related declaratory relief brought and heard at the same time as the motion for approval of the plan (other decisions rendered at the same time as the decision on approval of the plan dismissed all such claims). The allegations made in these other proceedings and in opposition to approval of the plan were essentially the same. The court further denied the debenture holders a right to vote on the plan. The decision concludes with a commendation of all counsel involved for their 'highest standards of advocacy, professionalism and courtesy' and 'the unprecedented level of excellence with which these proceedings have been prepared and presented'.

Franklin et al. v. Toronto Police Services Board et al. , Ontario Superior Court of Justice, March 13, 2008
Jury Notice – Application to Strike – Late filing of Jury Notice – Informer Privilege – Waiver of Privilege
Edward Ayers and Katherine Kirkpatrick for the Defendants Toronto Police Services Board, Mike Hamel and Stephen Pipe

This was an application by the police Defendants, represented by BLG, and certain Defendants related to the Crown to strike out a jury notice served by the Plaintiffs in a malicious prosecution action. The Defendants sought to strike the notice on the basis that it was not served in accordance with the Rules of Civil Procedure (while there was a reference in the Statement of Claim to a desire for a jury trial, a jury notice was filed much later than it should have been since Plaintiffs' counsel mistakenly believed it was unnecessary to do so) and that the evidence of a confidential informant was central to the case. It was acknowledged that the vast majority of evidence to be relied on by most or all parties related to the activities of the informant and that that evidence could identify him or her in many different ways. It was not expected that the informant would be called as a witness. Trial was set for September 2008.

The court recognized a general right to a jury trial and a discretion to give effect to a late-filed jury notice where the failure was inadvertent, the delay was not unconscionable, and there would be no real prejudice to the opposing parties. It held that in this case, the first two criteria were met but that there would be real prejudice to the Defendants if the trial proceeded with a jury. There was some conflicting case law regarding whether delivery of a jury notice after examinations for discovery had been held was by definition prejudicial, which the court resolved by stating where discoveries have occurred there is a rebuttable presumption of prejudice. Discoveries had been held in this case, and the court found that the presumption of prejudice had not been rebutted. The court went on to discuss the fundamental importance of protecting informer privilege to the proper administration of justice and held that the fact that the informant in this case would be identified to any jury meant that the case could not proceed as a jury trial. It rejected the argument that disclosure to the jury should be viewed as disclosure to judicial officers rather than members of the public, as well as arguments alleging waiver of informer privilege by the informant and the Crown.

Giroux v. Regroupement des étudiantes et des étudiants de maÎtrise, de diplome et du doctorat de l'université de Sherbrooke (REMDUS) , Quebec Superior Court, March 3, 2008
Injunction – Safeguard Order – Referendum Results – Sealing of Ballots Pending Challenge to Electoral Process
Jacques Darche and François Longpré for Philippe-Olivier Giroux

A referendum was underway at the University of Sherbrooke to determine whether the approximately 5,000 members of REMDUS would continue to be members of the Fédérat