BC Take Five April 2013

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BRITISH COLUMBIA EDITION EDITION

INSIDE THIS ISSUE:

Civil Procedure; Leave to Appeal; Striking Jury

Civil Practice and Procedure; Functus Officio; Real Estate Development; Disclosure Statements

Civil Procedure; Reopening Trial; Fresh Evidence - With Counsel Comments

Civil Practice and Procedure; Reopening Appeals; Fresh Evidence

Unfair Trade Practices; Constitutional Law; Paramountcy; Interjurisdictional Immunity

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Recent changes to the Court of Appeal Rules, BC Reg 297/2001 (the “Rules”)

specifically set out which orders require leave to appeal. The amendments have resulted in a spate of decisions on the application of the new Rule 2.1 governing leave to appeal (see Yao v. Li, 2012 BCCA 315; Royal Bank of Canada v. Miller, 2012 BCCA 419 (“Royal Bank”); Bradshaw v. Stenner, 2012 BCCA 481; Bentley v. The Police Complaint Commissioner, 2012 BCCA 514 (“Bentley”); Hollander v. Nelson, 2013 BCCA 83; Tian v. Ren, 2013 BCCA 140). In this case, the Court of Appeal confirmed a literal and restrictive approach to interpreting Rule 2.1. Limited appeal orders are explicitly listed in Rule 2.1, and the Court was not disposed to expand that list through inference or analogy.

In general, orders of Supreme Court judges may be appealed as of right: Court of Appeal Act, RSBC 1996 c. 77, ss. 6-7. Limited appeal orders are an exception, appealable only with leave from the Court of Appeal. In 2012, the new Rule 2.1 brought in a new definition of limited appeal orders, setting out with precision which orders require leave to appeal. In this case, the Appellant had applied at trial for an extension of time and an order

striking a jury. The Respondent opposed the appeal and argued that leave was required to appeal the trial judge’s refusal to strike the jury.

Orders granting an extension of time clearly require leave to appeal under Rule 2.1(e). On first glance, it would appear that an order striking a jury does not require leave to appeal as it does not appear in the exhaustive list under Rule 2.1. Nonetheless, the Plaintiff attempted to expansively interpret Rule 2.1 so as to include this order. Rule 2.1(a)(vi) provides that leave is required to appeal “an order granting or refusing relief for which provision is made under… (vi) Rule 12-2 [governing trial management conferences]”. An order striking a jury may be made under Rule 12-2, if made at a trial management conference. Consequently, the Plaintiff argued that an order to strike was an order “for which provision was made under Rule 12-2”. The Plaintiff’s position was that the alternative was absurd: leave would be required to appeal such an order made at a trial management conference, but not for the same order made in chambers.

In this decision, the Court of Appeal confirmed that the intent of the new Rule

Wallman v. Gill, 2013 BCCA 110Areas of Law: Civil Procedure; Leave to Appeal; Striking Jury

~Restrictive interpretation given to the list of limited appeal orders in the new Court of Appeal Rules.~

BACKGROUNDCLICK HERE TO ACCESS

THE JUDGMENT


http://www.courts.gov.bc.ca/jdb-txt/CA/13/01/2013BCCA0110.htm


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Wallman v. Gill, (cont.)

2.1 was to provide certainty as to which orders required leave to appeal: Bentley at para. 5. Such certainty would be undermined if the Court were to permit the list to be expanded by caselaw through inferences or analogies. Rule 2.1 set out a clear and definitive list of limited appeal orders, and the exclusion of particular orders from the list could not be ignored.

Prior to the new Rule 2.1, interlocutory orders generally required leave to appeal. Some of those orders were left out of Rule 2.1, and no longer require leave. This reduces the Court of Appeal’s discretion to act as a gatekeeper and places the emphasis on clarity and certainty. In this and other recent decisions, the Court has shown it supports this focus on certainty in appeal practice, and will resist attempts by litigants to broaden the range of limited appeal orders beyond those specifically listed in Rule 2.1.

The Court confirmed that prior caselaw on the considerations for leave to appeal continued to apply to the new class of limited appeal orders. The most important question was whether granting leave to appeal is in the interests of justice: Hanlon v. Nanaimo (Regional District), 2007 BCCA 538, at para. 2. Other relevant considerations included:

“(1) whether the point 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.” (Goldman, Sachs & Co. v. Sessions, 2000 BCCA 326, at para. 10.)

Regarding leave to appeal the extension of time, the Court stated that whether an extension should be granted in this case is not a question of general importance to the practice. Furthermore, the chambers judge’s decision was discretionary and based on appropriate considerations. The Court of Appeal adopted the chambers judge’s statement that:

“Once it is established there has been a significant change in the complexity of the case after the expiry of the time for bringing the application, as a rule, delay in brining on the application to strike the jury is but one factor to consider on the application, but it is not fatal.”

(2012 BCSC 1849, at para. 55.)


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Owners, Strata Plan LMS 3851 v. Homer Street Development Limited Partnership, 2013 BCCA 99Areas of Law: Civil Practice and Procedure; Functus Officio; Real Estate Development; Disclosure Statements

~A review of functus officio and the basis for reopening findings of liability.~

BACKGROUNDCLICK HERE TO ACCESS

THE JUDGMENT

What does a court decide when it orders that a party is liable? Complex

and prolonged litigation regarding strata property disclosure statements sets the backdrop for this interplay of the principle of functus officio with the assumptions underlying court orders. The issue at the base of this decision is the rebuttability of a statutory presumption deeming purchasers’ reliance on representations in developers’ disclosure statements (under section 75(2)(a) of the then Real Estate Act (the “Act”)).

The first trial decision had disposed of the question of liability on the basis that the presumption of reliance was irrebuttable

(though without explicitly making that finding). Thereafter, the Court of Appeal, in Sharbern Holdings Inc. v. Vancouver Airport Center Ltd., 2009 BCCA 224 (“Sharbern”), affirmed 2011 SCC 23, held that the presumption in fact was rebuttable. Nevertheless, the first Court of Appeal ruling in this case (issued after Sharbern) upheld the trial judge’s order – though again, it did not explicitly address the issue of rebuttability. The Appellants then applied for declarations from the trial judge that “as a matter of law, deemed reliance is rebuttable”, and ”the issue of deemed reliance had not been determined by this Honourable Court in this action”. The trial


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judge found the issue was the subject of an entered order, confirmed on appeal, and was res judicata. Accordingly, he was unable to vary the order, despite a contrary decision by the Supreme Court of Canada. This was the appeal of that decision.

Mr. Justice Frankel’s dissent provided a clear analysis of the doctrine of functus officio. In his estimation, the Appellants sought to vary an entered order “by a declaration that the order does not mean what it says”. Once its order had been entered, the court was functus officio — its mandate was expired — and its authority to vary the order was extremely limited. In general, a court could only make corrections where there had been a mistake in drawing up the order, a matter was omitted from the order, or where there had been “an error expressing the manifest intention of the

court”: Harrison v. Harrison, 2007 BCCA 120 at para. 29. In this case, the issue of rebuttability was necessarily decided by the orders confirming the Appellants’ liability, and therefore was not open to be reviewed. Despite the fact that the law at the time was different on that point, the Appellants had a duty to present their whole case and would not be permitted to re-litigate the issue “only because they have, from negligence, inadvertence, or even accident, omitted part of their case”: Henderson v. Henderson (1843), 67 E.R. 313 at 319 (H. Ct. Ch.). To grant the Appellants’ application in this case “would be tantamount to re-opening the first appeal and allowing [them] to succeed on grounds that they intentionally chose not to advance at the hearing of that appeal” (at para. 60).

Mr. Justice Harris’ majority reasons appeared in a short coda at the end of

Strata Plan v. Homer Street Ltd, (cont.)

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the decision, and proceeded from a different interpretation of the orders from the first round of this case. The trial order finding liability, and the appeal order confirming it, were formed on the basis of the prevailing law at the time. However, they did not specifically state that the deemed reliance under the Act was irrebuttable. Mr. Justice Harris stated that the first Court of Appeal division turned its mind to the change in law and could not be found to have made an order which implicitly affirmed a position refuted by the Supreme Court of Canada. Their finding of liability, and affirmation of the trial judge’s order, were therefore to be read as having left the issue undecided. The Appellants could therefore attempt to rebut the presumption in the second portion of the trial.

Strata Plan v. Homer Street Ltd, (cont.)

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In contrast to proceedings after the entering of an

order, a trial judge is not functus officio and retains wide discretion to vary a decision before the order is entered. But reopening a trial and admitting fresh evidence can be a perilous undertaking. In this case, “procedural mayhem” was the result a trial judge’s attempts to accommodate both parties, who were unhappy with the original decision. The unfortunate outcome of this family law matter was the occasion for the Court of Appeal to

review the proper handling of applications to reopen completed trials, after a decision has been made but before the order is entered. Rule 12–5(3) of the Supreme Court Rules, BC Reg 168/2009, permits the Court reopen a trial if a party has omitted or failed to prove a material fact.

The Court stated that a trial judge retained the unfettered discretion to reopen the trial up to the point the order was entered, but this should be exercised only with restraint. The

overarching consideration was whether it was in the interests of justice to do so. In that respect, the Court of Appeal noted that it was generally in the interests of justice not to reopen trials, but rather to consider the trial final and complete when judgement has been delivered. To overcome that default position, an applicant must show that the new evidence would probably change the result of the trial, and that failure to admit it would result in a miscarriage of justice. Even so, the amount of

BACKGROUND

Moradkhan v. Mofidi, 2013 BCCA 132Areas of Law: Civil Procedure; Reopening Trial; Fresh Evidence~Review of procedure for reopening trials and admitting fresh evidence.~

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Moradkhan v. Mofidi, (cont.)

new evidence was to be strictly limited, and could not include opinion evidence: the rule was not intended to permit the trial judge to rehear the trial. Nor was it intended to let parties change their tactical decisions if they turned out to have been poor ones, so a party’s decision not to lead evidence at trial was also a consideration.

Given the procedural problems in this case, the Court of Appeal also gave direction as to how reopened trials should proceed:

“fairness would dictate that an application must be made to the judge on notice to the other party with an outline of the evidence to be tendered. The judge will then decide to reopen or not, and may direct a further hearing, or if appropriate,

decide the question concurrently with the application to reopen. Such an application must be governed by the Supreme Court Civil Rules, B.C. Reg. 168/2009, relating to interlocutory procedures and the conduct of trials. (Consistent with these legal principles, further guidance on seeking an appearance before a specific judge may be found in Practice Directions 18 and 27, dated July 1, 2010, and July 12, 2010, respectively.)” (At paragraph 32.)

In this case, the Court of Appeal found that it had no alternative but to exercise its jurisdiction to order a new trial, whether or not either party sought that result.

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“As appellate counsel for Ms. Moradkhan, what was most noteworthy about this case involving the reopening of a family law trial, was that most of the

evidence took the form of emailed written submissions, rather than admissible fresh or new evidence.

A three-day Rule 18A trial, where the husband was unrepresented, culminated in Reasons for Judgment. The major flaw in the trial was that the husband submitted no affidavit or documentary evidence and was never sworn in during the trial. However, on the last day of the trial, the husband submitted an affidavit, prepared by a friend. No argument was presented with respect to the admissibility of this affidavit and the husband was not cross-examined on it. The plaintiff wife had no opportunity to rebut the evidence in the affidavit.

On the basis of this affidavit, the trial judge accepted the 60-year-old husband’s bald-faced statement that he didn’t feel like working anymore and dismissed the wife’s claim for spousal support. The trial judge also divided the parties’ assets between them with a small reapportionment to the wife.

Ms. Moradkhan was unhappy with the division of assets as the court gave each of the parties a home on the North Shore, despite the wife’s argument that she should retain both homes, leaving her husband with the business assets.

What followed was the wife’s reopening application before the trial judge, again with the husband unrepresented. The brief oral hearing did not complete, so the trial judge suggested that the parties deliver written submissions to complete the record. At this point Mr. Mofidi retained counsel and the paper began to fly.

Multiple, lengthy written submissions were emailed by both parties to the trial judge. Eventually, the husband submitted an affidavit attaching appraisals for each of the North Shore homes. One of the appraisals was a “drive-by”. The husband argued that the trial

COUNSEL COMMENTS

Comments provided by Georgialee Lang, Counsel for the Appellant, Ms. Moradkhan

Georgialee Lang

Moradkhan v. Mofidi




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COUNSEL COMMENTSjudge’s reliance on the assessed values of the properties at the Rule 18A trial, although agreed by the parties, would result in a miscarriage of justice, as the appraisals showed a higher value for each home.

The wife had no opportunity to provide rebuttal evidence in respect of the appraisals and the expert was not cross-examined.

This husband’s argument proved compelling to the trial judge, who reversed her Rule 18A decision and ordered that all the assets be sold and divided equally between the parties, with a 20% holdback, because the parties’ adult daughter held a 20% interest in a corporate asset that held real estate assets.

All of the foregoing was accomplished by virtue of the wife’s reopening application. The husband had no application before the court. However, the “replacement” Reasons did not determine if the wife’s application to reopen satisfied the test for a reopening. My view is that there were no grounds to reopen the trial.

In summary, extensive written submissions replaced affidavit evidence, untested expert reports were admitted into evidence on the reopening, and both parties rehashed and reargued their trial positions with slight deviations. Apparently, neither party, nor the judge was aware that expert evidence is not permitted as grounds for a reopening, particularly where notice provisions are ignored, no rebuttal evidence is submitted and the experts are not cross-examined.

On appeal, Ms. Moradkhan sought the reinstatement of the original Rule 18A trial Reasons, followed by an appeal of the trial judge’s spousal support order, having been persuaded that the property division in the original Reasons was sound in law. The Appeal Court determined that the only fair result was a new trial. This case represents one of the worst examples of wasted time and money. Only in family law, you say?”

Georgialee Lang BA JD MCIArb


April 2013


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BACKGROUND

Temple Consulting Group Ltd. v. Abakhan & Associates Inc., 2013 BCCA 119Areas of Law: Civil Practice and Procedure; Reopening Appeals; Fresh Evidence~ Review of procedure for reopening appeals and admitting fresh evidence at the appeal level.~

Appeals, too, may be reopened and fresh

evidence considered. The criteria which inform a Court’s decision whether to do so are similar in some respects to those reviewed in the context of reopening of trials in Moradkhan v. Mofidi, 2013 BCCA 132 (“Moradkhan”), summarised above. Despite the similarities, this decision structures the analysis quite differently from the Court of Appeal’s directions regarding reopening of trials, and uses considerably

different language and authorities. This case considered the Appellant’s application to reopen an appeal in order to admit fresh evidence in respect of the dates of service. In response to a Notice of Disallowance, the Appellant had served its Notice of Appeal on the Respondent on the last possible day, but had not filed the appeal with the Registry until the next day. A hearing was held on the status of the appeal; the

Court of Appeal determined that the Notice of Appeal had to be both filed and served in time and that the appeal was therefore out of time. Subsequently, new counsel for the Appellant noticed that the Notice of Disallowance had been served at 4:07 p.m. on the date previously assumed to have been the date of service. The Supreme Court Civil Rules, BC Reg. 168/2009, specify that material filed after 4:00 p.m. is deemed delivered the next day. This provided the extra


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Temple Group Ltd. v. Abakhan & Associates Inc., (cont.)

day needed to bring the Notice of Appeal within the limitation period, and the Appellant applied for the Court of Appeal to reopen the case and admit the evidence regarding the time of service.

The Court provided a straightforward review of the law regarding reopening appeals. (It is instructive to compare the Court’s statements with those regarding reopening trials in Moradkhan.) The decision to reopen an appeal was characterised as a two step process: “first, should the appeal be re-opened in order to consider a position advanced by a party; second, if so, should the decision be reconsidered, that is, changed” (at para. 17). The Court referred to its decision in Doman Forest Products Ltd. v. GMAC Commercial Credit Corp., 2005 BCCA 111, at para. 6:

“The circumstances in which a reconsideration will be undertaken are limited and do not include simple re-argument of the appeal. Something in the nature of overlooked or misapprehended evidence, or failing that, a clear and compelling case in law on the point and the prospect of a very serious injustice absent reconsideration, is required”

In this case, the fresh evidence was relevant to the main issue of the appeal, and the Court agreed that the appeal should be reopened “to the extent of considering

whether to admit the fresh evidence” (at para. 19).

The criteria for admitting fresh evidence appear in some respects similar to those referred to in Moradkhan, but omit some of those criteria and add new ones. It appears the Court did not distinguish between admission of fresh evidence during the appeal proper, as opposed to in reopening an already decided appeal.

The Court adopted the Supreme Court of Canada’s statement in Palmer v. The Queen, [1980] 1 SCR 759 at 775:

“(1) The evidence should generally not be admitted if, by due diligence, it could have been adduced at trial…

“(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 believe

it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.”

In this case, the Court found that the evidence could have been adduced in the previous hearing, had Appellant’s counsel


April 2013


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Temple Group Ltd. v. Abakhan & Associates Inc., (cont.)

exercised due diligence. Furthermore, Appellant’s counsel’s acknowledgement of service to the Respondent, and its subsequent confirmation of the date of service, estopped the Appellant from arguing that service had in fact been performed one day later. In the result, the Court found that admission of the evidence would not be in the interests of justice.

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BACKGROUND

Unlu v. Air Canada, 2013 BCCA 112Areas of Law: Unfair Trade Practices; Constitutional Law; Paramountcy; Interjurisdictional Immunity

~Federally regulated airlines subject to provincial consumer protection legislation.~

Fuel surcharges are now a common item reflected on transportation ticket

prices. These fees are added to advertised ticket prices, and are retained by carriers, notionally to offset the fluctuating costs of fuel. These practices are raising scrutiny, including complaints under the BC Business Practices and Consumer Protection Act (the “Act”). The Court of Appeal has now confirmed that federally regulated and international airlines are not immune to provincial consumer protection legislation.

Air Canada and Lufthansa included fuel surcharges in the total price paid for tickets, added to the advertised price. (New regulations regarding advertised prices have been brought in since the issuance of the tickets in question.) The fuel surcharge appeared on the tickets issued by the carriers in a field labelled “TAX”, in Air Canada’s case appearing only as a lump sum totalled with other taxes. These surcharges were retained by the carriers and the Plaintiff alleged that the ticket was intended to deceive customers as to the nature of the charges they were paying. This decision was merely a preliminary to the planned class

action on that question.

Air Canada and Lufthansa applied for summary judgment, arguing that the regulation of aviation was an area of sole federal jurisdiction, and that the Act was incompatible with the complete code of regulation administered by the Canada Transportation Agency. In their


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A CompanyAnother way to do business is through a company. A company is a separate legal entity that can undertake to do business and own property in its own name. A company has its own requirements to file tax returns, pay taxes, and meet other obligations. A company pays tax at different rates than does an individual proprietor.

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Unlu v. Air Canada, (cont.)

submission, the constitutional doctrines of paramountcy and interjurisdictional immunity meant that the Act did not apply to air carriers.

The Court found that, to be inapplicable due to federal paramountcy, provincial legislation must frustrate a federal purpose, or be in operational conflict with federal legislation: Québec (Attorney General) v. Canadian Owners and Pilots Association, 2010 SCC 39 at para. 64. Section 5 of the BC Act prohibited any “deceptive act or practice in respect of consumer transaction”. In the Court of Appeal’s words, this meant that for the airlines to benefit from federal paramountcy, “the Agency would have to require the airlines to have a tariff containing a deceptive

statement.” Nor did applying the Act frustrate any federal purpose: the Canada Transport Agency had itself stated that “[i]t is the [airlines’] responsibility to ensure that they comply with all applicable legislation respecting advertising of prices, not just the [federal regulations]”.

Interjurisdictional immunity applied where provincial legislation seriously encroached on the core of a federal power. It was exceptional for it to be applied in situations not already covered by precedent, such as this one: Canadian Western Bank v. Alberta, 2007 SCC 22 at para. 77. The Court of Appeal confirmed that in any event, the alleged encroachment was not serious enough to trigger the immunity.


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Documents

BC Take Five April 2013