Source: http://blog.myleakycondo.com/index.php?op=Default&postCategoryId=1200&blogId=1060
Timestamp: 2019-04-20 23:03:30+00:00

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Catherine Beng Hua and 567 Hornby Apartment Ltd.
The Owners, Strata Plan LMS 3837 and 347518 B.C. Ltd.
 On the application of 347518 B.C. Ltd. and The Owners, Strata Plan LMS 3837, I referred the petition to the trial list, granting leave to the plaintiffs (formerly the petitioners) to file a statement of claim and the defendants (formerly the respondents) to file statements of defence, which has been done. At a case management conference on November 27, 2007, I made some directions concerning the delivery of lists of documents, the defendants’ to be delivered by January 16, 2008.
 I scheduled a further case management conference on December 20, 2007, to address the scheduling of motions.
 These are my directions following that case management conference.
 Mr. Holmes argues that it is appropriate to first set down his summary trial application for hearing under Rule 18A. The plaintiffs wish to bring a summary trial application for, among other things, declarations that the common property lease is void, the unanimous resolution of March 30, 1999 is void, and the room leases were terminated in January 2002.
 Mr. Sewell, counsel for 347518 B.C. Ltd. says that the summary trial application should not be set down for hearing until oral and documentary discovery has been completed and an application for security for costs can be made. He argues that the summary trial application in any event is an inappropriate attempt by the plaintiffs to litigate in slices. Mr. Bennett, counsel for The Owners, Strata Plan LMS 3837, says that discovery is needed before the summary trial application should be heard, and submits that was the basis upon which the matter was referred to the trial list.
3. Vancouver Registry file no. S045961 between Executive Inn Inc. as plaintiff and substantially all of the plaintiffs in this proceeding as defendants.
 Those actions are being case-managed by other judges.
 Mr. Holmes argues that the result in those other proceedings will not be a bar to the application he wants to set down. He says that, at best, the defendants’ position only raises possible defences that can and should be heard at the same time as the plaintiffs’ summary trial application.
 Mr. Sewell says that although he could raise the arguments as defences at a summary trial application, in terms of judicial economy, the better approach, he argues, is to deal with the question of a stay in advance.
 With a view to determining the issues between the parties in the most expeditious and cost-effective manner, I have decided that before the plaintiffs’ summary trial application is set down for hearing, I should hear the defendants’ application that this proceeding be stayed pending determination of the other proceedings that I referred to. I recognize that the plaintiffs argue that a stay is not appropriate, but I am persuaded that it is appropriate to hear the stay application first. That appears to be the logical, just, and efficient way to proceed.
 As the plaintiffs are concerned that this scheduling will cause unnecessary delay, I direct that the defendants bring their application for a stay before me promptly. If the plaintiffs find the delay unreasonable they have liberty to apply to vary this direction.
 At the time of the stay application, if it is unsuccessful, I will fix the schedule for further applications, including directions whether there should be oral discovery and further document production before any summary trial application. Given my decision at the time I remitted this petition to the trial list, I think that it is appropriate, pending the stay application, that the arrangements for oral discovery continue to be made.
 Scheduling of any further applications, as I indicated, will await the outcome of the stay application.
Zul Somani, Sharookh Daroowala, Sunbelt Hotel Management Services Ltd.
Counsel for the Respondent Le Soleil Hotel & Suites Ltd.
 LOW, J.A.: The applicant, Syed Rahmat Nomani, seeks directions as to whether he is required to obtain leave to appeal an order of a case management judge, Madam Justice Dickson, dismissing his motion that he be added as a defendant in two related actions that are proceeding to trial on 7 January 2008. If leave is required, he seeks an order granting it.
 These two actions concern the operation and management of Le Soleil Hotel & Suites, a boutique strata title hotel in Vancouver. The dispute involves two different corporate plaintiffs and dozens of defendants who are the owners of the strata titles and many of whom are not resident in this jurisdiction. The issues are complex. The actions have been ongoing since 2002. The trial is set for 20 days.
 Until 2006, the defendant Kwi Lin Yeo, who lives overseas, was the owner of strata unit 123 in the Le Soleil Hotel. The unit is subject to interim orders governing its use under management contract and will ultimately be the subject of a final order in the actions.
 The two plaintiffs registered certificates of pending litigation (“CPLs”) on the title to the unit in the Land Title Office.
 By a contract dated 25 January 2006, Mr. Nomani agreed to purchase unit 123 from Ms. Yeo and to take an assignment of all legal rights and any obligations arising from the judgment in relation to the proceedings. He registered his title in July 2006. His title is subject to the two CPLs.
 Shortly after acquiring the unit, Mr. Nomani advised the plaintiffs that he wished to be joined as a defendant. The plaintiffs did not consent to his joinder as a party.
 It was not until 28 March 2007 that Mr. Nomani applied pursuant to Rule 15(3), (4) and (5) of the Rules of Court, to be added as a defendant in each of the two actions. The plaintiffs opposed the applications, which were heard on 10 July 2007.
… acquired his interest in the Unit subject to the plaintiffs’ Certificates of Pending Litigation and, in so doing, chose to assume the risk of litigation to which he is not party and over which he has no right of control.
(b) an order made under the Supreme Court Rules on a matter of practice or procedure.
In my view, there can be little doubt that if a matter falls within the definition of an interlocutory order in s. 7 of the Act, it is unnecessary to engage in a Radke analysis. This is so whether or not the order could be classified as final under a Radke analysis. To the extent this may appear anomalous, I note that s. 7(2)(c) of the Act provides that leave is required to appeal from orders under the Supreme Court Rule 50 (“Foreclosure and Cancellation”), including final orders for foreclosure and orders for sale. In other words, the gatekeeping function provided by the requirement for leave applies in some instances to orders which might otherwise be classified as final orders under a Radke analysis.
 Madam Justice Dickson’s order dismissing the application was made under R. 15 of the Supreme Court Rules. It is clear that Mr. Nomani is not a necessary party in either action, and that his right of enjoyment of his property is not compromised in any manner of which he was unaware when he acquired title. He took title subject to the outcome of the litigation and he is not privy to any contract that might be proven at trial by either plaintiff. Neither plaintiff consented either explicitly or implicitly to Mr. Nomani replacing Ms. Yeo as a contracting party. Therefore, it is not suggested, and could not be suggested, that there was a novation. He contracted with Ms. Yeo to be bound by the outcome of the litigation. The plaintiffs remain entitled to look to Ms. Yeo for their remedy whether or not she is on title when, and if, they achieve a remedy. Mr. Nomani’s liability would be through the terms of his contract with Ms. Yeo and not otherwise. Neither action is determinative of his rights or his legal obligations. It is clear to me that in these circumstances his applications to be joined as a party were matters of practice or procedure. Therefore, the order made was interlocutory by operation of s. 7(2) of the Court of Appeal Act.
 It follows that it is not necessary to undertake the common law analysis to determine whether the orders were final or interlocutory. However, I do not wish this decision to be interpreted as holding that all orders adding or refusing to add parties are matters of practice or procedure, and therefore interlocutory. I am simply holding that in the circumstances of this case that I have outlined, and in which Mr. Nomani sought to be added as a party in addition to Ms. Yeo, the order being challenged was a matter of practice or procedure and not directed to the determination of substantive rights.
 Having determined that leave to appeal is necessary, I think it is appropriate to convert Mr. Nomani’s notice of appeal into a notice of application for leave to appeal. However, it has not been established that leave should be granted.
 The criteria for leave to appeal are stated in many decisions of this court, including Power Consolidated (China) Pulp Inc. v. B.C. Resources lnvt Corp. (1988), 19 C.P.C. (3d) 396. They are whether: (1) the points on appeal are of significance to the practice; (2) the points raised are of significance to the action itself; (3) the appeal is prima facie meritorious; and (4) the appeal will not unduly hinder the progress of the action.
 There is no basis for holding that this intended appeal raises any issues of significance to the practice. There is no request for this court to consider the procedural law with respect to the adding of parties to a lawsuit. It is only the application of that law in the present case that Mr. Nomani questions.
 The intended appeal is not significant to either action. It will make no difference to the conduct of the case or its outcome whether Mr. Nomani is or is not a party. There is no suggestion that he has anything to offer to the conduct of the defence by way of evidence or advocacy that would enhance the resistance to the claims being made by the respective plaintiffs.
 There is a concern that due to the short time between now and the trial of this matter, Mr. Nomani’s participation as a defendant might complicate preparation for trial for all the parties, but I do not think that is significant. It could be controlled by skilful case management if it became a problem.
 It is the merit of the intended appeal in particular, on which the application for leave fails. As I understand it, Mr. Nomani contends first, that the judge made a legal error in considering the three parts of R. 15 compendiously rather than individually, and second that the judge wrongly exercised her discretion under the rule.
(3) Where by assignment, conveyance or death, an estate, interest or title devolves or is transferred, a proceeding relating thereto may be continued by or against the person upon whom or to whom that estate, interest or title has devolved or been transferred.
the court may order that the proceeding be carried on between the continuing parties and the new party.
 As I have said, Mr. Nomani contends that in applying the rule the case management judge considered the criteria found in the rule as one instead of individually. With respect, I am unable to find anything in the judge’s reasons that could lead this court to that conclusion.
 The rest of the argument in support of leave is that the judge should have exercised her discretion in favour of ordering Mr. Nomani to be added as a defendant in each action. The threshold to the granting of leave to appeal a discretionary order is a high one. To overturn such an order the appellant must show that the exercise of the discretion was clearly wrong or would lead to a serious injustice.
 The plaintiffs also made a choice: to contract and litigate with Ms. Yeo, not with Mr. Nomani. They are entitled to pursue their claims and resulting remedies against her irrespective of any private agreement she might conclude with Mr. Nomani or anyone else. Mr. Nomani’s participation is not necessary for the proper determination of the matters involved in the actions and his declared desire to be able to direct litigation steps that Ms. Yeo might not choose, given the Unit’s sale, creates the prospect of additional complexity and cost in what is already complex and costly litigation. In these circumstances, I am satisfied that the joinder application should be dismissed. The plaintiffs are entitled to their costs against Mr. Nomani, which costs are to be paid forthwith.
 The arguments proposed to be made on appeal appear to me to be the same as those made in the trial court. They are to no greater effect than that the judge might have exercised her discretion differently, not that she overlooked any factor, that the result was clearly wrong, or that it would lead to an injustice. Mr. Nomani has not identified any error that would prompt this court to reverse the exercise of discretion by the case management judge in dismissing the motions.
 There will be a declaration that leave to appeal the order is required, a conversion of the notice of appeal into a notice of application for leave to appeal, and a dismissal of the motion for leave to appeal.
Le Soleil Hospitality Inc., and Le Soleil Restaurant Inc.
700439 B.C. Ltd., 587019 B.C. Ltd. and 585503 British Columbia Ltd.
 In reasons released December 27, 2006, 2006 BCSC 1920, I ruled that a letter of intent signed by the parties constituted a binding and enforceable agreement. The defendants have breached the agreement. The plaintiffs, who say they have affirmed the agreement from and after the breach, seek a declaration that they may pursue the remedies of specific performance or damages of an amount to be assessed. The defendants say the agreement limits the plaintiffs’ remedy to damages in the amount of $10,000.
8. Bond: Hospitality/Restaurant and Dr. Louie will each pay to their respective solicitors the sum of $10,000 by no later than October 21, 2005. The solicitors will hold these amounts in trust to secure the performance of the terms of this Letter of Intent until such time as formal leave agreements and a formal settlement agreement can be finalized and executed. If either Hospitality, Restaurant or both fail to abide by the terms of this Letter of Intent, the $10,000 will be forfeited to Dr. Louie. If Dr. Louie fails to abide by the terms of this Letter of Intent, the $10,000 will be forfeited to Hospitality/Restaurant.
 The parties signed the agreement in the early morning hours of October 21, 2005, following an all-night negotiating session. The payments contemplated by clause 8 were not made concurrently with execution of the agreement. The plaintiffs paid the sum of $10,000 to their solicitors in trust on October 21, 2005. Dr. Louie delivered a cheque of like amount to his solicitors on the same day, but payment on the cheque was stopped when Dr. Louie informed the plaintiffs that he and the other defendants would not be bound by the agreement because it was allegedly executed under duress. The claim of duress was later abandoned and replaced by a claim that the letter of intent did not constitute a binding agreement. I find as a fact that neither Dr. Louie nor any other defendant has performed the covenant contained in clause 8.
 From and after execution of the agreement on October 21, 2005, the plaintiffs have persisted in their assertion that the agreement continues to bind the defendants and that they have the right to the remedy of specific performance. I find as a fact that the plaintiffs have not elected to cancel or terminate the agreement. They have taken no step preparatory to, or in anticipation of, such an election.
 In my opinion, clause 8 does not constrain the plaintiffs' right to claim specific performance for the following reasons.
 Dr. Louie did not pay the stipulated amount to his solicitor and he is in breach of his covenant to do so. In my opinion, and apart from the question of the proper construction to be afforded clause 8, Dr. Louie cannot assert that he should be afforded protection by a clause in respect of which he is in default. He has omitted or refused to do that which was required of him and cannot claim any benefit that might have accrued to him had he performed.
 Whether or not the plaintiff’s remedies are restricted is a question of construction of the contract: Fraser v. van Nus (1987), 14 B.C.L.R. (2d) 111. The defendants say the meaning and effect of the clause are ambiguous and that I should have regard for extrinsic evidence of the negotiations between the parties in order to construe the meaning they intended to give to the clause. While there is authority for the proposition that post-execution conduct may be considered for the purpose of construing an ambiguous word or phrase in a contract, the general rule is that evidence of negotiations cannot be relied upon to insert words into a contract, or to identify the intention of the parties: see Re Canadian National Railway v. Canadian Pacific Ltd. (1978), 95 D.L.R. (3d) 242 (B.C.C.A.),  1 W.W.R. 358, and compare Ahone v. Holloway (1988), 30 B.C.L.R. (2d) 368 (B.C.C.A.), and Prenn v. Simmonds,  3 All E.R. 237 (H.L.).
 In my opinion, there is no ambiguity in clause 8. The intentions of the parties must be taken as having been expressed in the clause and extrinsic evidence of intention is not admissible.
 The amounts that were to be deposited by the parties with their respective solicitors were to “secure performance of the agreement until such time as formal lease agreements and a formal settlement agreement can be finalized and executed”. The reference to finalization and execution is a reference to the signing of documentation required to implement the terms of the contract. Upon completion of the formal documentation, the requirement to provide security ended. The agreement did not contemplate that either party would provide security for the performance of obligations under the lease agreement or the settlement agreement as formally documented.
 Had I construed the agreement as a letter of intent or agreement to agree, clause 8 might have been construed to require the parties to provide security for ongoing negotiation to the point where a binding agreement had been concluded, failing which the party who walked away from the agreement would forfeit the security it had posted to the other. Construed in that manner, the requirement to provide the security was inoperative because the agreement was a contract rather than a letter of intent.
 The conclusion that clause 8 should be construed to limit the plaintiffs’ remedy is contradicted by the fact that, on its face, the amount of the security deposit or bond cannot reasonably be regarded as a pre-estimate of damage to be sustained in the event that either party refused to close. The dispute between the parties involved an application for an injunction bearing upon the operation of a hotel as a going concern, the purchase and sale of real estate with a value of approximately $5 million, and the modification of commercial restaurant leases essential to the operation of the hotel to which the agreement relates. Given the nature of the dispute and its commercial importance, it cannot reasonably be said that the agreement permitted reversion to the status quo upon payment of $10,000.
 Finally, the clause makes no reference to the fact that the amount is to be forfeited as liquidated damages. Nor does it confer upon the plaintiffs the right to elect to affirm the contract and sue for specific performance or damages over and above the amount of the forfeited security bond. In that sense, clause 8 is materially different from the operative provision or provisions at issue in other cases cited by the defendant in which courts have restricted the recovery of damages to amounts paid as deposits.
 In Fraser v. Van Nus, supra, the Court of Appeal held that the term of a contract stipulating that "the owner may at the owner's option cancel this agreement and in such event the amounts paid by the purchaser shall be absolutely forfeited to the owner by way of liquidated damages" restricted the owner to claiming damages of the deposit amount. Writing for a unanimous court, McLachlin J.A. (as she then was) stated that whether a stipulated sum for damages for breach operates as a limit upon the damages recoverable is in each case a question of construction of the contract.
 With respect, that observation was apt in the context of the Fraser case where the agreement between the parties specifically characterized an amount paid as a deposit as liquidated damages in the event of default. The observation is not applicable in present circumstances where the posted sum is described as security rather than an amount to be forfeited as liquidated damages.
 In J.G. Collins Insurance Agencies Ltd. v. Elsley Estate,  2 S.C.R. 916, 83 D.L.R. (3d) 1, the plaintiff's right to recover damages upon breach of a restrictive covenant was restricted to the sum of $1,000 in the face of a contractual term which specified that such sum would be paid "as and for liquidated damages" in the event of breach.
 In Bains & Sarai Holdings Ltd. v. Sahota (1985), 63 B.C.L.R. 206, 37 R.P.R. 70, the Court of Appeal concluded that the vendor was limited in the recovery of damages to the amount paid by the purchaser under the agreement which provided that the deposit was non-refundable and "in case the deal falls through, the entire deposit will be forfeited to vendors without delay". While that term made no reference to forfeiture as damages, the term appeared in an agreement which included a general clause that the owner could, at its option, cancel the agreement, “and in such event the amount paid by the purchaser would be absolutely forfeited to the owner as liquidated damages”. The Court of Appeal construed the combined effect of the two clauses to be an agreement on the part of the vendor to limit his right of recovery to $10,000 in the event of breach by the purchaser.
 In Goulet & Sons Ltd. v. Lalonde (1983), 149 D.L.R. (3d) 577, 2 Man. R. (2d) 166 (C.A.), the Manitoba Court of Appeal concluded that while the vendor had the option under an agreement with the purchaser to cancel the contract whereupon the deposit would be forfeited to and retained by him, or to take whatever remedies the vendor might have at law, the vendor had denied himself the benefit of the election by electing to terminate the contract for sale. The election to terminate was evidenced by the fact that, immediately after the purchaser's breach, the property was re-listed and sold to another party.
 Finally, in Hargreaves v. Spence (1983), 45 B.C.L.R. 367 (BCSC), the court concluded that the combined effect of the vendor's acceptance of the purchaser's agreement to forfeit a deposit directly to the vendor if a land sale transaction did not complete, combined with the standard reference in the purchase agreement to the fact that a deposit would be forfeited as liquidated damages, should be construed as an agreement to accept the deposit as liquidated damages, and abandonment of any right to a claim for specific performance or damages arising from the breach.
 In my opinion, all of the cases relied upon by counsel for the defendants arise in relation to contracts which are markedly different from that in the present case in which there is no reference to the fact that any amount is to be paid as liquidated damages, and the party seeking to restrict the plaintiffs’ remedies has failed to perform under the term whose benefit he asserts.
 In the result, I conclude that clause 8 of the agreement does not deprive the plaintiffs of the right to pursue the remedy of specific performance. Accordingly, the declaration sought by the plaintiffs is granted.
 The plaintiffs are entitled to the costs of this application.
 This appeal concerns a dispute between two groups of owners of lots in a strata corporation. One group, represented by the appellants, took control of the strata council, and approved expenditures for legal expenses to support litigation in circumstances where the statutorily required approvals for the litigation could not be obtained. The other group, which included the respondents, continuously objected to the strata council's actions on the basis that the strata council was acting in conflict of interest and contrary to the best interests of the strata corporation.
 In their petition brought under s. 33 of the Strata Property Act, S.B.C. 1998, c. 43, the respondents sought an order requiring the appellants to indemnify the strata corporation for the legal expenses. The chambers judge found that the expenditures were "unreasonable and unfair" to the strata corporation; that the appellants failed to disclose their conflicts of interest; and that they did not act honestly and in good faith. He ordered the appellants to pay $190,398.99 to the strata corporation, and special costs.
 The appellants claim that the chambers judge erred in finding that they had a conflict of interest in a "contract or transaction with the strata corporation", and in any event, they acted in good faith, on the advice of legal counsel.
 The underlying dispute in this case has been the subject of multiple legal proceedings. The relevant events occurred from 2002 through 2005, involving numerous court proceedings, three meetings of the strata corporation, many meetings of the strata council, and extensive correspondence among lawyers and the various parties. The chambers judge set out the facts in detail in his reasons for judgment ((2005), 46 B.C.L.R. (4th) 153, 2005 BCSC 1209), and made findings of fact that support his conclusions that the appellants had conflicts of interest they failed to disclose, did not act in good faith, and could not rely on the advice of their legal counsel as a defence to the allegation of lack of good faith.
 The appellants do not dispute the chambers judge's findings of fact; they argue that the facts do not show they had any conflict of interest, and if they did, they were reasonable in relying on the advice of their lawyers. Despite their position that they do not dispute the facts as found by the trial judge, the arguments on appeal focused on the evidence and the facts, rather than the law.
 From my review of the voluminous documentary evidence, and the affidavit and cross-examination of one of the appellants, Khoon Wah Alfred Tan, I conclude there is no basis to interfere with the chambers judge's decision, on either the facts or the law. I agree that the appellants were in a conflict of interest with the strata corporation, did not act in good faith, and cannot rely on their lawyer's advice as a defence to the claim that they were not acting in good faith.

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