COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Li v. Li,

2021 BCCA 39

Date: 20210114

Dockets:
CA44691; CA46070

Docket: CA44691

Between:

Shaoqing Li

Respondent

(Plaintiff)

And

Xingzi Li also
known as Xing Zi Li also known as Withy Li
and Minwoo Kim

Appellants

(Defendants)

- and -

Docket: CA46070

Between:

Shaoqing Li

Respondent

(Plaintiff)

And

Xingzi Li also
known as Xing Zi Li also known as Withy Li
and Minwoo Kim

Appellants

(Defendants)

Before:

The Honourable Madam Justice Dickson

The Honourable Madam Justice DeWitt‑Van Oosten

The Honourable Mr. Justice Voith

On appeal from: Orders
of the Supreme Court of British Columbia, dated
July 27, 2017 (
Li v. Li
, 2017 BCSC 1312, Vancouver Docket S160037)
and
April 9, 2019 (
Li v. Li
, 2019 BCSC 533, Vancouver
Docket S160037).

Oral Reasons for Judgment

Appearing in person on behalf of the Appellants (via videoconference):

X. Li

Counsel for the Respondent (via videoconference):

B. Blake

Place and Date of Hearing:

Vancouver, British
  Columbia

January 6, 2021

Place and Date of Judgment:

Vancouver, British
  Columbia

January 14, 2021

Summary:

Following a 25‑day trial,
the appellant, Withy Li, was found to have wrongfully converted $423,900 belonging
to her father (the respondent). The trial judge also determined that Ms. Li
failed to repay a $10,000 loan. Ms. Lis spouse, Minwoo Kim, was found to
have benefitted from the converted funds; as such, each appellant was unjustly
enriched. Some of the converted funds were used to purchase a townhouse in Ms. Lis
name. In his final judgment, the trial judge granted the respondent a 100%
interest in that townhouse. On appeal, the appellants challenge the judges
liability findings and the proprietary remedy, contending: he made errors of
fact; his conduct gave rise to a reasonable apprehension of bias; and he erred
in his legal analysis of the proprietary remedy. Held: Appeal dismissed. The
appellants have not shown palpable and overriding errors of fact, a reasonable
apprehension of bias, or an error of law. Instead, they effectively ask this
Court to retry the case, conduct its own assessment of credibility and make its
own findings of fact. That is not the role of an appeal court, and, on the
record in this case, there is no principled basis on which to interfere with
the judges conclusions.

DEWITT-VAN OOSTEN J.A.
:

Introduction

[1]

After a lengthy trial, a Supreme Court judge determined that the
appellants, Withy Li and Minwoo Kim, wrongfully converted funds belonging to
Shaoqing Li, the respondent. The judge also found that Ms. Li failed
to repay Mr. Li a loan of $10,000. Withy Li is Shaoqing Lis
daughter. Minwoo Kim is her spouse. The judge found that the wrongful
conversion benefitted both appellants, resulting in their unjust enrichment.

[2]

Before finalizing his resolution of the case, the judge directed that a
registrar conduct a tracing and accounting inquiry on the converted funds,
which totalled $423,900 (
Supreme Court Civil Rules
, Rules 18‑1(1)
and (3)). The registrar reported on various uses made of the funds, including
the purchase of a townhouse in Withy Lis name (the Townhouse). The
judge determined that Mr. Li was entitled to a 100% interest in the
Townhouse. He quantified Mr. Kims liability to the respondent at
$145,061.67.

[3]

The trial judge reached his conclusions on conversion, unjust enrichment
and unpaid debt after a 25‑day trial in which he heard extensive evidence
from each side and assessed the credibility of their witnesses. The appellants did
not dispute that Ms. Li took possession of funds originating with the
respondent. However, the parties offered starkly different narratives of the
reasons why Ms. Li had access to those funds; their intended purpose and
use; and Ms. Lis beneficial entitlement to them. Some of the
circumstances surrounding the dispute were captured in documentary evidence;
however, much of the case depended on testimonial descriptions of familial
events that preceded the alleged conversion; conversations between the parties
over time; and their respective perceptions of the reasons or motivation behind
particular acts vis‑à‑vis one another.

[4]

Given that context, the judges assessment of credibility played a critical
role. The parties acknowledged that credibility would heavily influence the
outcome of the trial. Ultimately, the judge found the respondent and his
witnesses credible and accepted the respondents version of events. He rejected
Ms. Lis assertion that she was lawfully entitled to the $423,900, as well
as Mr. Kims testimonial support for Ms. Lis position.

[5]

On appeal, the appellants challenge the judges findings, contending
that his assessment of credibility and the ensuing determinations of fact reflect
a misapprehension or inadequate consideration of the evidence on several key
points. They also allege a reasonable apprehension of bias. They seek to have
all liability findings set aside. Doing so would mean that neither appellant is
responsible for the $423,900, in whole or in part; the unpaid debt would cancel;
and Ms. Li would be entitled to a 100% interest in the Townhouse.

[6]

If they are not successful in challenging the liability findings, the
appellants say that in quantifying Mr. Lis interest in the Townhouse, the
judge misunderstood the nature of Withy Lis contributions to the Townhouse, as
well as the applicable law. As such, even if this Court affirms the findings of
conversion, unjust enrichment and unpaid debt, Ms. Li is legally entitled
to a share of the Townhouse.

Findings at Trial

[7]

In 2002, Mr. Li purchased an apartment in China (802) and
registered it in his daughters name. The apartment sold in 2015. The proceeds
of sale lie at the centre of the dispute between the parties.

[8]

At trial, Withy Li argued that her father purchased the apartment as a
gift for her, intending that she have immediate beneficial ownership. Mr. Lis
position was that he purchased the apartment with the intention of passing
beneficial entitlement to Ms. Li upon his death. He acknowledged having
registered the property in her name, but for other reasons. He argued that Ms. Li
held the apartment in trust for him and that he reserved the right to deal with
it as he saw fit, including disposing of the apartment during his lifetime and
claiming the proceeds.

[9]

The trial judge accepted Mr. Lis evidence. His key factual
findings are detailed in reasons for judgment indexed as
Li v. Li
, 2017
BCSC 1312 (RFJ‑1):

[194]    When Mr. Li purchased 802, he did not intend it
to be an
inter vivos
gift to his daughter. He purchased 802 for several
reasons: (a) to provide a home for his aging parents to live; (b) to
provide an inheritance for his daughter on his death; (c) to avoid
disputes between his two children on his death; and (d) to protect his
cash.

[195]    Mr. Li did not create a testamentary
disposition in favour of his daughter.

[196]    When Mr. Li purchased 802, he intended to have
complete control over the disposition of 802 during his lifetime, including the
right to use and sell it, and in that event, to disburse the sale proceeds, all
as he saw fit. His intention in that respect never changed.

[197]    Ms. Li was aware since May 2003 of Mr. Lis
reasons for purchasing 802 and of his right to deal with and dispose of it
during his lifetime. She understood that she had no right to take, control, or
sell 802, and also, that she might not inherit 802 on her fathers death.

[198]    Mr. Li registered title to 802 in Ms. Lis
name, but she held it in trust for him until it was sold. At no time did he gift
his beneficial ownership to her. Nor did he ever gift the proceeds of the sale
of 802 to Ms. Li. The sale proceeds belonged to Mr. Li.

[199]    Mr. Lis plans in respect of 802 changed in the
late summer of 2014, when he decided to immigrate to Canada with Ms. Wei
and R.L. [their son]. Ms. Li was fully aware that her fathers plans for
802 changed.

[200]    Mr. Li reached an agreement with Ms. Li to
pay her $150,000 to act as his familys sponsor and to facilitate their
immigration application. She knew that she would not receive the proceeds of
sale of 802.

[201]    Ms. Li invited R.L. to live with her and Mr. Kim
after R.L. graduated from elementary school. In accordance with that
invitation, R.L. moved to live with his stepsister in August 2015.

[202]    Ms. Li and Mr. Li agreed that he would
give her $20,000 per year to cover R.L.s tuition and living expenses, which he
proposed, and they agreed, would be set at $650 per month. Of that amount, Ms. Li
could keep whatever sum she did not spend in a particular month.

[203]    Ms. Li removed money that Mr. Li deposited
in R.L.s RBC Account and Mr. Lis RBC Account, without her fathers
consent. She used those funds for the benefit of herself and Mr. Kim.
Except for her withdrawal of funds from R.L.s RBC Account to purchase the
vehicle and to pay her debt, which she told her father she had done after the
fact, Mr. Li was unaware of his daughters conduct in respect of his other
funds. She repaid the funds she took from R.L.s RBC Account with her fathers
funds.

[204]    Contrary to her agreement with Mr. Li, Ms. Li
refused to act as the familys sponsor. She did not take any steps to carry out
her agreed role. She nonetheless took the $150,000 payment for her own
purposes.

[205]    On December 2, 2015, Ms. Li made a sudden and
abrupt demand that R.L. be removed from her home. She told her father that she
would renounce her custodianship of R.L. when he turned 13 on December 12.

[206]    Ms. Li has not repaid any of her fathers
funds.

[207]    Ms. Li has wrongfully taken $420,000 that
belongs to Mr. Li.

[208]    She has also refused to return the remainder of the
funds she was given for R.L.s living expenses for the months of January to
June 2016.

[209]    Ms. Li used her fathers money to renovate her
house, to pay personal debt, to invest in a TFSA, and to make the down payment
on the Townhouse. It is unclear whether she used all or any portion of those
specific funds that Mr. Li wired into Ms. Lis chequing account to
purchase the Townhouse, or whether she used funds from Mr. Lis RBC Account,
or a combination of both.

[210]    Mr. Kim has also
benefitted from his wifes wrongful conduct.

[10]

The trial judge also found that Ms. Li failed to repay $10,000 loaned
to her to assist with the purchase of her principal residence in June 2013.

[11]

After the judge reached his conclusions on liability, he directed a
registrar to conduct a tracing and accounting inquiry on the converted funds. The
registrar produced two reports. The judge confirmed both of them, as set out in
reasons for judgment indexed as
Li v. Li
, 2019 BCSC 533 (RFJ‑2).

[12]

In the first report, the registrar found that the $423,900 in converted
funds had been used for several purposes. They consisted of: (a) a down
payment on the Townhouse ($133,776.67); (b) repairs and renovations to the
home Ms. Li owns with Mr. Kim ($76,966.27); (c) the purchase of
a pick‑up truck ($51,376.64); (d) personal use, including a vacation
with Mr. Kim ($13,000); and (e) legal fees ($148,780.42).

[13]

The registrar also found that Mr. Kim benefited from one‑half
of the converted funds ($145,061.67), excluding the down payment for the
Townhouse.

[14]

In his notice of civil claim, Mr. Li sought a declaration of constructive
trust over assets held by the appellants, as well as a tracing order and an accounting.
At trial, he obtained leave to amend his pleadings to include a claim for a
certificate of pending litigation (CPL) against the Townhouse. The judge
directed the registrar to determine Mr. Lis beneficial interest in the
Townhouse. As at December 11, 2018, the property carried a fair market value of
$520,000.

[15]

The registrar reported the purchase price of the Townhouse to be
$323,976.67, including property transfer tax, conveyance costs and legal fees. As
noted, the down payment came from the converted funds. Mortgage financing
secured by Ms. Li covered the remainder of the purchase, including conveyance
costs. After the purchase, Ms. Li rented the Townhouse to one or more
tenants. The registrar found that between June 2015 and October 2017, rental
income totalled $42,740.97. The related expenses for that period totalled
$37,376.10. As detailed at para. 15 of RFJ‑2, those expenses were
covered by the rent. This included:

(a)        monthly
mortgage payments between August 2015 and October 2017 totalling $24,292.23;

(b)        strata fees between July 2015 and October 2017
totalling $4,628.04;

(c)        property taxes for 2015 to 2017 totalling
$6,101.45;

(d)        a one‑time
special levy imposed by strata council for repairs and maintenance of $220.38;
and,

(e)        tax paid on the rental
income in May 2018 of $2,134.00.

[16]

The appellants did not dispute the numbers in the registrars first
report. In fact, as explained by the registrar, the parties reached an
agreement, by consent, which they believed resolved all the issues referred to
the registrar.

[17]

The registrars second report addressed the relative interests of Mr. Li
and Ms. Li in the Townhouse. Mr. Li conceded that his daughter did
the legwork in finding and purchasing the Townhouse. Based on that fact, as
well as the fact that she secured the mortgage, Ms. Li argued that her
fathers interest in the Townhouse was limited to a 41.3% share, consistent
with the proportion of the original purchase price covered by the down payment.
In light of her own contributions, Ms. Li said she was entitled to a 58.7%
interest.

[18]

The registrar rejected Ms. Lis position on the ground that it
would result in a windfall to her directly from her wrongful conduct, where
she has made no actual financial contribution to the purchase of the Townhouse.
He recommended that Mr. Li receive a 100% interest in the Townhouse. The
trial judge agreed. He declared that Ms. Li held the property on a
constructive trust for Mr. Lis benefit (RFJ‑2 at paras. 4546).
He then said:

[53]      Turning to whether Ms. Li can claim an
interest in the Townhouse and a consequential pro‑rata share of the
increase in its value, I will begin by saying that I agree with Registrar
Nielsens finding that the mortgage for the Townhouse was secured only because
Mr. Lis converted funds were used as the down payment.

[54]
Next, by her own admission, Ms. Li did not
make any financial contribution to the Townhouse
. No case has been cited to
me where a non‑financial contribution has been sufficient to establish a
pro‑rata interest. I do not conclude, however, that a non‑financial
contribution could never be sufficient to found a pro‑rata interest.
But,
in this case, where Ms. Li chose not to adduce any evidence of the value
of any non‑financial contribution, there is no evidentiary basis in which
to consider her claim
.

[55]      As a result, Ms. Li has not established that
she has made the requisite contribution to the Townhouse to establish an
interest in it.

[56]      Lastly, I wish to
address Ms. Lis submission that a tortfeasors right to share in the increase
in value or profit can only be precluded in cases involving findings of breach
of fiduciary duty or fraud (which she argues were not pleaded by Mr. Li in
his notice of civil claim). No cases dealing with claims in conversion and
unjust enrichment containing any statement of principle to that effect were
cited to me.

[Emphasis added.]

Issues on Appeal

[19]

In challenging the findings of conversion, unjust enrichment and unpaid debt,
the appellants raise two grounds of appeal. They say: (1) the trial judges
credibility determinations and findings of fact are materially flawed and
undermine his conclusions on liability; and (2) he made comments and
interventions during the trial that gave rise to a reasonable apprehension of
bias.

[20]

The appellants challenge the respondents 100% interest in the Townhouse
on two bases. They say: (1) the judge misapprehended the evidence on
financial contributions by Ms. Li to the Townhouse; and (2) in any
event, he erred in his legal analysis of the effect of her non‑financial
contributions.

[21]

There is an ancillary issue. At the hearing of the appeals, Mr. Li
applied to adduce new evidence concerning events since the trial. He filed an
affidavit that, among other things, indicates the Townhouse sold in September
2019, with the net proceeds transferring by consent to Mr. Li. Counsel for
Mr. Li advised that the primary purpose of this evidence was to bring the
Court up to date on what has transpired since the judge made his findings. The
appellants objected to the admissibility of the evidence, saying it is
irrelevant to the issues raised on appeal.

[22]

I do not consider it necessary to address the legal framework that
governs the admission of new evidence, or the particulars of the evidence
adduced by Mr. Li. Upon a review of the affidavit, I agree with the
appellants that the events addressed there are irrelevant to assessing the
merits of the grounds of appeal as framed by the appellants. Nor does the new
evidence render moot any of the issues before us. As such, I would deny the
application.

Discussion

Did the Trial Judge Err in His Assessment of Credibility and the Facts?

[23]

The appellants allege five material errors in the judges acceptance of
the respondents testimony. They say the judge misapprehended the trial evidence,
or ignored relevant evidence, in relation to each of these points. Cumulatively,
it resulted in a skewed credibility assessment in favour of the respondent. As
the judges assessment of credibility heavily influenced his findings of fact,
the appellants contend that the conclusions he reached on liability are irreparably
flawed.

[24]

Specifically, the appellants say the trial judge was wrong to find that:

·

Mr. Li
had been effectively separated from his first wife (Withy Lis mother) since
1993;

·

Mr. Li
and his daughter had a conversation in June 2013 wherein Ms. Li proposed
that her half‑brother, R.L., travel to Canada and live with her once he
graduated from elementary school;

·

Mr. Li
did not know that the Canadian bank accounts opened for him and R.L. in July
2014 were held jointly with Ms. Li;

·

the
proceeds of sale from 802 were sent to Canada for three specific purposes:
(1) $150,000 for Withy Li to assist Mr. Li and his immediate family
with immigration sponsorship; (2) $150,000 for Mr. Li to purchase
property in Canada; and (3) $120,000 for R.L.s education; and

·

Mr. Li did not know that $70,000 removed by Withy Li from
R.L.s Canadian bank account had been repaid by her, at least in part, using funds
taken from Mr. Lis account.

[25]

Credibility findings are subject to a deferential standard of review. Appeal
courts must defer to a trial judges assessment of credibility unless the party
seeking to challenge that assessment establishes palpable and overriding error.
As explained in
R. v. Wright
, 2019 BCCA 327:

[25]

The
assessment of credibility is not a science  it involves a complex process of
watching, listening, and reconciling the various versions of events:
R. v.
Gagnon,
2006 SCC 17 at para. 20. Trial judges are required
to justify their credibility findings and explain how credibility concerns were
resolved;
however, deficiencies in a trial judges credibility analysis will
rarely rise to the level requiring appellate intervention
:
R. v.
Dinardo,
2008 SCC 24 at para. 26;
R. v. Kinney
2013 YKCA 5
at para. 14.

[Emphasis added.]

[26]

The standard of review for factual findings is also highly deferential
and requires palpable and overriding error to justify appellate interference:
Housen
v. Nikolaisen
, 2002 SCC 33 at para. 10. A palpable error is one that
is obvious, plain to see or clear:
Housen
at para. 5.
An overriding error is one that is so tied to the
issues at trial that it can be said to have affected the outcome:
Franklin
v. Cooper
, 2016 BCCA 447 at para. 13.

[27]

The appellants say the trial judges credibility assessment of the
respondent, and his ensuing findings of fact, meet the test for palpable and
overriding error because they reflect misapprehensions of the trial evidence or
a failure to consider relevant evidence.

[28]

It is the respondents position that the judge did not commit palpable
and overriding error. Instead, he properly reviewed the evidence in the entire
context, considering the parties/witnesses relationship, cultural background,
language ability, and places of residence, and weighed trial testimonies with
objective evidence such as contracts of sales, names shown on bank documents,
wire transfer information, photos, text messages, emails, and oral testimony
(respondents factum at para. 120).

[29]

I have considered each of the five errors alleged by the appellants and
the evidence they say either contradicts the findings of the trial judge or was
given insufficient consideration in the assessment of the credibility of Mr. Lis
testimony. I have also carefully considered the various points raised by them in
support of their argument that Mr. Lis evidence was inherently
implausible, demonstrably fabricated, inconsistent with his pleadings, and
inconsistent with the documentary evidence, including text messages exchanged
with his daughter, banking statements for Mr. Li and R.L.s bank accounts,
and records surrounding the opening of those accounts.

[30]

In my view, it was open to the trial judge to make his findings, both in
his assessment of credibility and his determinations of fact. There was a
supportable basis for those findings in the record, allowing him to draw the
inferences that he did and to accept the evidence of Mr. Li and his
witnesses over the evidence of the appellants. The reasons for judgment reflect
a comprehensive and careful review of the evidence,
as a whole
, with
explicit reference to many of the portions of the recordboth testimonial and
documentarythat the appellants say the judge failed to appreciate or ignored
all together. The appellants complain that some of the evidence they consider
supportive of their version of events was not mentioned by the judge in
resolving the issues before him; however, the law does not oblige a judge to
advert to every piece of evidence that was tendered and considered at trial:
R. v. J.M.H.
,
2011 SCC 45 at para. 32.

[31]

The appellants do not allege that in
finding conversion, unjust enrichment and unpaid debt, the trial judge
misunderstood or wrongly applied the relevant legal principles. Instead, it is
the judges interpretation of the evidence that they take issue with. Consistent
with the position put forward at trial, the appellants say the preponderance of
the evidence supported their narrative, not the version advanced by the
respondent. From their perspective, the evidence made it clear that 802 was
intended as an immediate beneficial gift to Ms. Li when purchased in 2002;
that intention never changed; and, as a result, the sale proceeds from the
property belonged to her, not her father. Any conclusion to the contrary is
said to defy common sense.

[32]

I appreciate that the appellants believe
firmly in the rightness of their position. However, it was up to the trial
judge to decide whether such was the case, after considering and weighing the
whole of the evidence, within the context of the pleadings as reviewed and
understood by him. It is not for this Court to re‑try 25 days of
evidence and submissions and substitute our own view of credibility and the facts:
Silverhill Homes Ltd. v. Borowski
, 2019 BCCA 227 at paras. 2931,
40;
Wright
at paras. 23, 25;
Esau v. McCurdy

et al.
,
1999 BCCA 223 at para. 2. Instead, the deferential standard of
review on this first ground of appeal mandates that we respect the trial
judges determinations in the absence of palpable and overriding error. The
appellants have not met that test.

Is There a Reasonable Apprehension of Bias?

[33]

The appellants allege that the judges comments and interventions
during the trial gave rise to a reasonable apprehension of bias. As noted by
Bauman C.J.B.C. in
Dhillon v. Dhillon
, 2019 BCCA 163,
this is a serious allegation and one that should not be made lightly. The
independence of the judiciary, both actual and reasonably perceived, is a
foundation of our legal system (at para. 30).

[34]

The appellants face a high barrier on this ground of appeal because of
the presumption of impartiality:
Dhillon
at para. 31.
As explained by the Supreme Court of
Canada in
Wewaykum Indian Band v. Canada
, 2003 SCC 45:

[59]
[t]he presumption of impartiality carries
considerable weight, and the law should not carelessly evoke the possibility of
bias in a judge, whose authority depends upon that presumption
.

[60
]      In Canadian law, one standard has
now emerged as the criterion for disqualification. The criterion, as expressed
by de Grandpré J. in
Committee for Justice and Liberty v. National
Energy Board
,
supra
, at p. 394, is the reasonable
apprehension of bias:

. . . the apprehension
of bias must be a reasonable one, held by reasonable and right minded persons,
applying themselves to the question and obtaining thereon the required
information. In the words of the Court of Appeal, that test is what would an
informed person, viewing the matter realistically and practically  and having
thought the matter through  conclude. Would he think that it is more likely
than not that [the decision‑maker], whether consciously or unconsciously,
would not decide fairly.

[Emphasis added.]

[35]

The appellants say the trial judge conducted himself in a manner that
left a reasonably held perception he was assisting the respondents case and
that he prejudged Ms. Lis credibility. The impugned conduct is said to
include:

·

repeatedly
attempting to have respondents counsel acknowledge that Mr. Li told his
first wife about his extra‑marital affair (presumably in support of a
finding that they were effectively separated);

·

allowing
a late motion to amend the respondents pleadings to include a request for a
CPL against the Townhouse and blaming Ms. Li for not disclosing that
property;

·

providing
legal counsel with case law during their submissions that assisted the
respondents case; and

·

making negative comments about Withy Li and her testimony before
deciding the case.

[36]

I have reviewed the parts of the record the appellants point to in
support of their position on bias. The judge asked questions about whether Mr. Li
told his former wife of his relationship with R.L.s mother (Ms. Wei) to ensure
that he accurately understood the evidence referred to by respondents counsel
in her submissions. Before allowing the respondent to add a CPL against the
Townhouse to his pleadings (the merits of which is not under appeal), the judge
gave both sides an opportunity to address the issue, including possible prejudice
to the appellants. At the hearing of the appeals, Ms. Li said the judge
wrongly found that she did not disclose the Townhouse until she was cross‑examined.
She says she referred to it in her direct evidence. That may be so, but Ms. Li
does not take issue with the fact that
before the start of trial
, she
did not disclose her purchase of the Townhouse, or that proceeds from the sale
of 802 had been used for the down payment. Quite properly, it was
that
fact
that carried analytical significance on the motion to amend.

[37]

When he raised case law not advanced by counsel, the judge gave them time
to review it and to make submissions on its relevance and legal effect. Finally,
I do not agree that comments made about Ms. Lis testimony, the manner in
which she expressed herself in text messages, and her demeanour while testifying,
indicate that the judge prejudged her credibility. Instead, the impugned
comments arose during closing submissions by appellants legal counsel. The
judge candidly flagged his concerns with Ms. Lis evidence and provided her
counsel an opportunity to address those concerns before the judge reached his
final determination. Credibility was a critical issue at trial. In that
context, it was appropriate for the judge to identify the parts of the evidence
that troubled him and to ask Ms. Lis lawyer to show him, with reference
to the record, why those concerns were unwarranted.

[38]

A bias inquiry is fact‑specific, contextual and informed by the
entirety of the proceedings. In the circumstances of this case, I am not
persuaded that an informed person, viewing the matter realistically and
practically, would think it more likely than not that the trial judge would not
decide the matter fairly:
Yukon Francophone School Board, Education
Area #23 v. Yukon (Attorney General)
, 2015 SCC 25

at para. 20,
citing
Committee for Justice and Liberty v. National Energy Board
,
[1978] 1 S.C.R. 369 at 394.

Did the Judge Err in Finding No Financial Contribution to the Townhouse?

[39]

The appellants say: (1) the judge misapprehended the record in
finding there was no evidence of the amount of tax paid by Ms. Li on
rental income (RFJ‑2 at para. 40); and (2) because of that
misapprehension, he committed palpable and overriding error in concluding that Ms. Li
did not financially contribute towards the Townhouse (RFJ‑2 at para. 54).

[40]

The respondent says there is no error. Ms. Li made
all
payments associated with the Townhouse from its rental income, including related
income tax. There was no evidence of Ms. Li expending her own funds for the
purchase of the Townhouse or the costs of maintaining it as a rental unit.

[41]

I agree with the appellants that, contrary to the judges statement at para. 40
of RFJ‑2, the amount of income tax paid on the rental income had been
quantified. In his first report, the registrar put that amount at $2,134: see para. 15
of RFJ‑2. The judge was mistaken on this point. However, I do not see
that the factual error makes a difference. In other words, it is not overriding.
The parties agreed for the purpose of the registrars first report that the
rents have covered all the expenses,
including
any paid rental income
taxes. Furthermore, consistent with that agreement, Ms. Li did not argue
before the trial judge that the income tax constituted a financial contribution
(RFJ‑2 at para. 40).

[42]

The tracing and accounting inquiry did not reveal any form of direct
financial contribution by Ms. Li. Moreover, for the registrars second
report, the appellants declined to provide evidence quantifying the monetary
value of any of her contributions that did not involve an expenditure of funds,
from which Ms. Li might then have argued in support of an indirect financial
contribution. The ultimate finding, that Ms. Li did not make any
financial contribution to the Townhouse, is borne out by the record (RFJ‑2
at para. 54).

Did the Judge Err in Denying Ms. Li an Interest in the Townhouse?

[43]

This ground of appeal raises a question of law, reviewed on a standard
of correctness:
Housen
at para. 8.

[44]

The appellants say that even if this Court affirms the conversion and
unjust enrichment, Mr. Lis interest in the Townhouse was necessarily limited
to a 41.3% share, proportionate to the amount of the down payment. Consistent
with their position in the court below, the appellants contend that Ms. Li
is entitled to a 58.7% share, proportionate to the amount of the purchase price
covered by the mortgage. She says the trial judge erred in law when he awarded Mr. Li
a 100% interest.

[45]

The record established that Ms. Li did not expend personal funds towards
the purchase or maintenance of the Townhouse. However, she was the party who
found the Townhouse; researched the neighbourhood; facilitated the purchase; arranged
for one or more tenants; and made sure that the property taxes were paid. Critically,
from her perspective, she was the party who secured the mortgage, which made up
the bulk of the purchase, and exclusively bore its risk. Without the mortgage,
the purchase would not have completed. Ms. Li also says that the existence
of the mortgage, and the payments made in reducing its principal, facilitated the
growth of equity in the Townhouse over time. In light of these factors, she
contends the trial judge was duty bound to adopt the approach taken in
ICBC
v. Dragon Driving School
, 2007 BCSC 389, and recognize that Ms. Li
is entitled to a share of the Townhouse.

[46]

The respondent says
Dragon Driving School
is distinguishable on
its facts. Unlike in that case, Ms. Li made no separate, unrelated,
direct or indirect financial contribution towards the Townhouse (respondents
factum at para. 35). Accordingly, the judge rightly held that Ms. Li
is not entitled to an interest in the Townhouse, allowing her to benefit from
her tortious conduct by sharing in its fair market value.

[47]

I agree with the respondent that in the circumstances of this case, the
judge correctly awarded Mr. Li a 100% interest in the Townhouse. The judge
properly held that Mr. Lis remedy for conversion is neither premised nor
restricted to the actual loss he has suffered (RFJ‑2 at para. 47). Indeed,
at trial, Ms. Li acknowledged that her father was entitled to recover a
pro rata share of the increase in the value of the Townhouse (RFJ‑2 at para. 35).

[48]

This Court recognized in
Ruwenzori Enterprises Ltd. v. Walji
,
2006 BCCA 448, that wrongfully obtained funds traced to the purchase
of real property, in whole or in part, entitle the plaintiff to an equitable
claim in proportional ownership (at para. 28). To hold otherwise would
constitute a reproach to justice, allowing the wrongdoer to profit from their
own wrongdoing by receiving any increase in the asset value (at para. 41).
See also
British Columbia Teachers Credit Union v. Betterly
(1975),
61 D.L.R. (3d) 755 (B.C.S.C.) (a conversion case) and the
discussion in
Dhillon v. Dhillon
, 2006 BCCA 524 at paras. 8593.

[49]

In
Dragon Driving School
, Groberman J. (as he then was)
found that the entirety of the equity in real property at the time of its
purchase was traceable to a fraud (at para. 39). However, he was not
prepared to make that same finding in relation to equity that built up subsequent
to the purchase by paying down the mortgage, because some of
that money
may have come from the proceeds of sale of another home, the acquisition of
which predated the fraud (at para. 39; emphasis added). In other words,
the equity in the property at the time of granting the remedy reflected a commingling
of fraudulent and
bona fides
funds (at para. 40).

[50]

That is not the situation here and the trial judge was correct to
distinguish
Dragon Driving School
on that basis

(see RFJ‑2
at paras. 5255). The down payment for the Townhouse and all direct and
indirect expenses associated with its purchase and ongoing maintenance were
traceable to Ms. Lis use of the converted funds. Any reduction of the mortgage
principal, to the extent it may have occurred, was only possible because of income
generated by the property. The appellants provided no evidence showing that Ms. Li
put her own funds towards the Townhouse, or funds drawn from a source
unconnected to the property. Ms. Li relies upon various non‑financial
contributions as a basis for entitlement to the Townhouse. However, assuming
without deciding that non‑financial contributions may be considered, the
appellants did not lead any evidence quantifying those contributions, through
an equivalent monetary value or otherwise, for the purpose of the judges
analysis. As a result, there was no demonstrated commingling of wrongfully converted
and
bona fides
funds.

Disposition

[51]

For the reasons provided, I would dismiss both appeals.

[52]

The respondent seeks increased costs on the appeals because of the
volume of the record, the time required for preparation and the lack of merit. I
see nothing out of the ordinary about these appeals that would warrant such an
order. Accordingly, I would order that the costs of the appeals be assessed at
Scale 1, payable by the appellants.

[53]

DICKSON J.A.
: I agree.

[54]

VOITH J.A.
: I agree.

[55]

DICKSON J.A.
: The appeals are dismissed. Costs of the appeals are
assessed at Scale 1, payable by the appellants.

The
Honourable Madam Justice DeWitt‑Van Oosten


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Provost v. Dueck Downtown Chevrolet Buick GMC Limited,

2021 BCCA 15

Date: 20210114

Dockets:
CA44808; CA44809; CA44810

Docket: CA44808

Between:

Quinn Provost

Respondent

(Plaintiff)

And

Dueck Downtown Chevrolet
Buick GMC Limited

and Kyle
Katerenchuk

Appellants

(Defendants)

And

David James Bolton
and ABC Corporations #13

Respondents

(Defendants)

- and -

Docket: CA44809

Between:

Attorney General
of Canada

Respondent

(Plaintiff)

And

Dueck Downtown Chevrolet
Buick GMC Limited

and Kyle
Katerenchuk

Appellants

(Defendants)

And

David
James Bolton

Respondent

(Defendant)

- and -

Docket: CA44810

Between:

Brandy Brundige

Respondent

(Plaintiff)

And

Dueck Downtown
Chevrolet Buick GMC Limited

and Kyle Katerenchuk

Appellants

(Defendants/Third
Parties)

And

David James
Bolton, Minister of Justice for the

Province of
British Columbia, John Doe #1 and John Doe #2

Respondents

(Defendants/Third
Parties)

Before:

The Honourable Madam Justice MacKenzie

The Honourable Mr. Justice Butler

The Honourable Madam Justice DeWitt-Van Oosten

Supplementary Reasons
to
Provost v. Dueck Downtown Chevrolet Buick GMC Limited
, 2020 BCCA 86.

Counsel for the Appellants/Respondents on Cross Appeal in
  CA44810:

A. Mersey, Q.C.

M. Sobkin

E.J. Segal

Counsel for the Respondent, Brandy Brundige:

A. Leoni

B.J. Colangelo

Counsel for the Respondent/Appellant on Cross Appeal in
  CA44810, Minister of Justice for the Province of British Columbia and
  Respondent, Attorney General of Canada:

D. Kwan

E.L.C. Louie

Counsel for the Respondent, Quinn Provost:

K. Gourlay

P.J. Bosco

Counsel for the Respondent, David James Bolton:

T.S. Hawkins

R.S. Bernard

Place and Date of Hearing:

Vancouver, British
  Columbia

October 24 and 25,
  2019

Place and Date of Judgment:

Vancouver, British
  Columbia

March 12, 2020

Written Submissions Received:

November 10, 18, 24,
  and 30, 2020

Place and Date of Supplemental Reasons:

Vancouver, British
  Columbia

January 14, 2021

Supplementary Reasons of the Court

Summary:

Defendant/appellant, Dueck,
succeeded in overturning finding of liability at trial and seeks costs from the
plaintiffs. In the circumstances, a Sanderson order is warranted whereby Duecks
costs are payable directly by the unsuccessful defendants, Mr. Bolton and
the Minister. Mr. Bolton sought to shift blame to Dueck and the
plaintiffs. Dueck was not blameless in the events leading to the plaintiffs
injuries. It would not be just or fair in the circumstances to erode the
judgment funds of the plaintiffs based on liability disputes between
defendants. The Minister is to pay costs of its unsuccessful cross-appeal.

Supplementary Reasons for
Judgment of the Court:

[1]

These Supplementary Reasons address the issue of costs following the
successful appeal of Dueck Downtown Chevrolet Buick GMC Limited (Dueck)
against a finding of liability at trial in three actions concerning motor
vehicle collisions: 2020 BCCA 86, leave to appeal refd 2020 CanLII 89595
(SCC). In its decision, the Court also dismissed the cross-appeal brought by
the Minister of Justice for the Province of British Columbia (the Minister)
in one of the three actions. The parties were unable to agree on costs and the
Court invited further submissions on costs that have now been received.

Background

[2]

The factual background and procedural circumstances of the dispute are
complicated. In April 2012, David James Bolton stole a truck from Dueck and caused
a series of accidents. In the first accident, Mr. Bolton collided with and
caused damage to an RCMP vehicle. In the second accident, he collided with
another RCMP vehicle driven by Constable Quinn Provost. In the third accident,
Mr. Bolton collided with a vehicle driven by Brandy Brundige.

[3]

The Attorney General of Canada (the AG), Cst. Provost, and
Ms. Brundige (together, the plaintiffs) all commenced actions for
damages. The AG claimed against Mr. Bolton and Dueck for the costs of the
two damaged RCMP vehicles and advanced a subrogated claim to recoup benefits
paid to Cst. Provost (the AG Action). Cst. Provost claimed against
Mr. Bolton and Dueck for injuries, damage, and expense suffered by him
(the Provost Action). Ms. Brundige claimed against Mr. Bolton,
Dueck, and the Minister for vicarious liability for the conduct of members of
the RCMP (the Brundige Action).

[4]

The liability trials were heard together in June 2017. In reasons
indexed as 2017 BCSC 1608, the trial judge found the defendants liable and
apportioned fault:

1.

The AG Action
: Mr. Bolton and Dueck were found jointly and
severally liable to the AG, with liability apportioned 85% to Mr. Bolton
and 15% to Dueck. The AG was awarded costs payable by Mr. Bolton and
Dueck.

2.

The Provost Action
: Mr. Bolton and Dueck were found jointly
and severally liable to Cst. Provost, with liability apportioned 85% to
Mr. Bolton and 15% to Dueck. Cst. Provost was awarded costs payable by
Mr. Bolton and Dueck.

3.

The Brundige Action
: Mr. Bolton, Dueck, and the Minister
were found jointly and severally liable to Ms. Brundige, with liability
apportioned 70% to Mr. Bolton, 15% to Dueck, and 15% to the Minister.
Ms. Brundige was awarded costs payable by Mr. Bolton, Dueck, and the
Minister.

[5]

The quantum trials took place in NovemberDecember 2017. In reasons
indexed as 2018 BCSC 1090, the judge awarded Cst. Provost $461,142.29 and the
AG $23,051.53 for vehicle damage and $43,500.69 in medical/rehabilitative costs
for Cst. Provost. In separate reasons indexed as 2018 BCSC 1843, the judge
awarded Ms. Brundige $784,375.98 in damages, reduced by $102,450.11
pursuant to s. 83 of the
Insurance (Vehicle) Act
, R.S.B.C. 1996,
c. 231.

[6]

Dueck filed notices of appeal in all three actions seeking to set aside
the liability findings of Justice Kelleher. The Minister filed a notice of
cross-appeal in the Brundige Action in respect of the judgment apportioning
liability to the Minister. Duecks liability appeal and the Ministers
cross-appeal were heard together before a division of this Court.

[7]

Dueck and Mr. Bolton also filed notices of appeal in the Provost
Action and the AG Action raising a single ground of appeal: whether the trial
judge erred by concluding that the AG has an equitable right of subrogation for
the wage loss benefits paid by the RCMP to Cst. Provost and by including the
amount of those benefits in his assessment of damages. The hearing of that
appeal is set for February 2021.

Issues

[8]

It is not contentious that Dueck, the successful party on appeal, is
entitled to costs of the appeal and the proceedings below. It seeks an order
that their trial and appeal costs be paid equally by each of the three plaintiffs
(Cst. Provost, Ms. Brundige, and the AG). Mr. Bolton supports this
position.

[9]

The plaintiffs all support a
Sanderson
or
Bullock
order
whereby Duecks costs of defending the three actions in the liability and
quantum trials and in the liability appeal are payable by the unsuccessful
defendant(s). As a result of Duecks successful appeal, Mr. Bolton is now
100% liable in the Provost and AG Actions; Mr. Bolton and the Minister are
liable in the Brundige Action. We will address the parties submissions in
greater detail in our analysis below. First, however, we will address two
preliminary matters.

Subrogation Appeal

[10]

Cst. Provost submits that the issue to be addressed is costs for the
liability trial and appeal, but not for the quantum trial and appeal. We do not
agree. The sole issue in the quantum appeal is whether the trial judge erred in
finding that wages paid by the AG to Cst. Provost were subject to an equitable
right of subrogation. The decision in that appeal will not affect Duecks
liability to any of the plaintiffs. Moreover, Dueck would not have been
involved in the quantum proceedings if the correct result had been achieved at
the liability trial. Any order for costs of the ongoing appeal will not affect
Duecks right to trial costs, which will be considered below.

Costs of the
Ministers Cross-Appeal

[11]

As a second preliminary matter, Dueck seeks an order for costs of
defending the AG cross appeal as 100% payable by the AG. As joint counsel for
the AG and Minister notes, the cross-appeal was brought by the Minister as a
respondent in the Brundige Action, not the AG (the plaintiff in the AG action).
Counsel does not otherwise dispute Duecks position and notes that any order of
costs relating to the cross-appeal should be against the Minister and not the
AG.

[12]

However, we note that only Mr. Bolton and Ms. Brundige opposed
the cross‑appeal. Dueck was not a respondent on the cross-appeal: at
paras. 4, 94. Dueck did not file a respondents factum in the cross-appeal
although it stated in its reply factum that it supported the position of
Ms. Brundige and adopted her submissions in response to the Ministers
cross-appeal. We therefore decline to award Dueck its costs of defending the
cross-appeal. We will return to the matter of cross-appeal costs below.

Discussion and
Analysis

Statutory
Provisions

[13]

Under s. 23 of the
Court of Appeal Act
, R.S.B.C. 1996,
c. 77:

23
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.

[14]

Rule 14-1(9) of the
Supreme Court Civil Rules
specifies that
costs of a proceeding must be awarded to the successful party unless the court
otherwise orders.

[15]

Rule 14-1(18) of the
Supreme Court Civil Rules
states:

(18)
If the costs of one defendant against a plaintiff ought to be paid by
another defendant, the court may order payment to be made by one defendant to
the other directly, or may order the plaintiff to pay the costs of the
successful defendant and allow the plaintiff to include those costs as a
disbursement in the costs payable to the plaintiff by the unsuccessful
defendant.

Sanderson
and
Bullock
Orders

[16]

It is not disputed that Dueck, as the successful party, is entitled to
its trial and appeal costs. The question is whether these costs should be paid
by the plaintiffs (Cst. Provost, the AG, and Ms. Brundige) or by the
unsuccessful defendants (Mr. Bolton and the Minister) under Rule 14-1(18)
of the
Supreme Court Civil Rules
, which provides the basis for what are
commonly referred to as
Sanderson
and
Bullock
orders. As this
Court noted in
Davidson v. Tahtsa Timber Ltd.
, 2010 BCCA 528:

[50]      In Fraser, Horn &
Griffin,
The Conduct of Civil Litigation in British Columbia
, 2nd ed.
looseleaf (Markham: LexisNexis, 2007), the authors explain at para. 38.19:

Rule 14-1(18) provides that the
court may order that a successful plaintiff pay the costs of a successful
defendant and recover such costs as a disbursement against an unsuccessful
defendant. Such order is commonly known as a
Bullock
order. The Rule
also provides that the court may, as an alternative, order that the
unsuccessful defendant pay the costs of the successful defendant directly. Such
order is commonly known as a
Sanderson
order. A court may make such
order where there is more than one defendant in an action and also where
actions have been consolidated for trial or ordered to be tried at the same
time.

. . . . .

Where all parties are solvent,
it does not matter much which form of order is made
. The advantage of a
Sanderson
order in such a case is confined to avoiding circuitousness.

If the unsuccessful defendant is
insolvent, then the
Bullock
form of order imposes a hardship upon the
plaintiff who may recover nothing from the unsuccessful defendant and yet has
to pay the successful defendant. A
Sanderson
form of order, on the other
hand, imposes the hardship upon the successful defendant.
Where the
successful defendant is blameless, the courts have generally refused to make a
Sanderson
order
.

[Emphasis added.]

[17]

The threshold test for a
Sanderson
or
Bullock
order is
whether it is reasonable for the plaintiff to have joined the successful
defendant in the action. If this is satisfied, the question becomes whether it
would be just and fair in the circumstances for the unsuccessful defendant to
pay the successful defendants costs:
Davidson
at paras. 5356. In
Grassi
v. WIC Radio Ltd.
, 2001 BCCA 376 at para. 32, Justice Southin
described the secondary consideration as whether the unsuccessful defendant
ought to pay the costs of the successful defendant. The decision to award a
Sanderson
or
Bullock
order is a matter of discretion, which must be exercised
judicially based on the judges assessment of the circumstances of the case:
Robertson
v. North Island College Technical and Vocational Institute
(1980), 119
D.L.R. (3d) 17 (B.C.C.A.) at para. 14.

[18]

In
Grassi
, Justice Southin noted that [t]here must be something
which the unsuccessful defendant did,
such as asserting the other defendant
was the culprit in the case
, to warrant his being made to reimburse the
plaintiff for the successful defendants costs: at para. 33 (emphasis
added). Justice Southin elaborated:

34
 orders under Rule 57(18) [now Rule 14-1(18)] are not restricted to cases
where the unsuccessful defendant in the course of the litigation has blamed the
successful defendant but may extend to acts of the unsuccessful defendant which
caused the successful defendant to be brought into the litigation.

[19]

In
Davidson
, this Court held that a
Sanderson
or
Bullock
order requires some conduct on the part of the unsuccessful defendant in order
to justify the award: at para. 54. There, even though the Court found
that it was reasonable for the appellant to have joined both defendants in one
action, it was not just and fair in the circumstances to make a
Sanderson
or
Bullock
order because there was no credible evidence to support the
claim against the successful defendant: at para. 56.

Analysis

[20]

In all three actions, the threshold question is easily satisfied. Given
Duecks actions, it was eminently reasonable for the plaintiffs to join Dueck
as a defendant. The trial judge held Dueck liable for breaching the requisite
standard of care, and while Duecks liability was overturned on appeal, it was
on the basis that Dueck did not owe a duty of care to Cst. Provost,
Ms. Brundige, or the AG. Dueck did not dispute the standard of care on
appeal and whether Dueck owed the plaintiffs a duty of care would not have been
certain at the outset.

[21]

At the second stage, there are a number of factors which favour a
Sanderson
or
Bullock
order. We will consider each of the underlying actions and
the parties individual submissions separately below. However, we will first
address two general points which apply to all plaintiffs.

[22]

First, it is clear that the actions of Mr. Bolton caused the
successful defendant, Dueck, to be brought into the litigation:
Grassi
at
para. 34. Mr. Boltons theft of the truck and his actions in evading
the police were central to the liability considerations involving Dueck and the
actions of the police officers.

[23]

Second, we do not accept Mr. Boltons assertion that he did not
actively attempt to attach any blame to Dueck. He submits that at no time
during the Liability Trial or appeal did Bolton assert that Dueck should bear
liability to any of the plaintiffs. He concedes that the negligence of Dueck
was pled but asserts that this position was never actively pursued at trial.
He notes that in his trial briefs, he took the position that he would not be
denying liability at trial.

[24]

In his response to civil claim in the Brundige Action, Mr. Bolton
submitted that the accident occurred solely as a result of Ms. Brundiges
negligence in driving her motor vehicle. In the alternative, he submitted that
the accident occurred solely as a result of the negligence of the defendant
Dueck. In the further alternative, Mr. Bolton submitted that the accident
occurred as a result of the negligence of the defendant police officers and,
separately, the Minister. In other words, the allegations made by
Mr. Bolton in his pleadings attempted to shift blame onto each of
Ms. Brundige, Dueck, and the Minister for the actions of the RCMP.

[25]

At the liability trial, Justice Kelleher described Mr. Boltons
position:

[7]        He concedes
that his negligent driving caused the motor vehicle collisions which are the
subject of this case, and that he is liable to the plaintiffs for their
damages. He submits however, that he is not the only person liable to the
plaintiffs.

[8]        Mr. Bolton
submits, like Ms. Brundige, that the collision with her car would not have
occurred but for the RCMP engaging in a dangerous police pursuit.

[9]        Moreover,
Mr. Bolton alleges that the RCMP created a dangerous situation when officers
attempted to arrest him at gun point. The RCMP, Mr. Bolton alleges,
breached the standard of care owed to people in the immediate vicinity,
including their employee, Constable Provost.

[10]
Dueck denies liability for any of the accidents. It submits that Constable
Provost was contributorily negligent for his injuries for not wearing his
seatbelt at the time of the collision.

By the time of the trial, Mr. Bolton no longer actively
sought to shift blame on Dueck but continued to do so with respect to the
actions of the RCMP officers and Cst. Provost.

[26]

While Mr. Bolton did not make submissions about Duecks liability
at trial or on appeal, it is clear that he did not have to do so to obtain the
benefit of a finding in that regard. Mr. Boltons pleadings alleged that
Dueck was at fault. He even issued a third party notice against Dueck in the
Brundige Action. Duecks liability was always going to be a live issue at
trial, given that the plaintiffs all claimed against Dueck. As such, it did not
matter at that point whether Mr. Bolton, too, explicitly sought to blame
Dueck. Duecks liability would be fully considered at trial, and on appeal
after Dueck was found liable in negligence at first instance.

[27]

With this in mind, we turn to the individual actions below.

Brundige Action

[28]

Ms. Brundige submits that she was forced to trial due to a contest
between defendants in apportioning liability. She notes that Mr. Bolton
initially attempted to blame Dueck; that Dueck blamed Mr. Bolton and the
Minister; and that the Minister blamed Mr. Bolton and Dueck. All
defendants filed Third Party Notices against each other. Despite the fact that
Mr. Bolton and Dueck were both insured and represented by ICBC, and that
there was no divergence of interest between Mr. Bolton and Dueck on
quantum of damages, there were two sets of counsel instructed by ICBC in
attendance at the quantum trial.

[29]

Ms. Brundige says the outcome of the liability contest was of no
import to her other than establishing the liability of Mr. Bolton, which
was a foregone conclusion. Due to the defendants refusal to admit fault (until
Mr. Bolton conceded fault at trial while seeking liability on the part of
the Minister), lengthy trials were required. Ms. Brundige notes that
Sanderson
or
Bullock
orders are frequently granted where defendants seek to shift
blame onto each other. That occurred in this case both at trial and on appeal,
even if Mr. Bolton did not have to actively advance the case against
Dueck.

[30]

In our view, the submissions of Ms. Brundige have considerable
merit. It would not be just or fair in the circumstances to require her to pay
costs stemming from the multiple trials and appeal which occurred because of
the defendants attempts to shift blame. Although Dueck was ultimately found
not to owe a duty of care in the unique circumstances of this case, they were
not blameless in a sense that would mitigate against a
Sanderson
order:
Davidson
at para. 50. From Ms. Brundiges perspective, given
that Mr. Boltons liability was a foregone conclusion, it mattered not
whether Dueck and/or the Minister were also liable. As Ms. Brundige notes,
she should not see her judgment funds potentially eroded as a result of costs
awards flowing from a liability dispute between defendants that was of little
concern to her.

[31]

We would accordingly make a
Sanderson
order in
Ms. Brundiges favour. Duecks trial and appeal costs will be payable
directly by the unsuccessful defendants, Mr. Bolton and the Minister,
according to the proportion of liability allocated to each of them. A
Sanderson
order is preferable to a
Bullock
order because it avoids circuitousness:
Davidson
at para. 50. Having arrived at this conclusion, we need
not consider Ms. Brundiges request for leave to adduce evidence of
without prejudice settlement communications.

[32]

Separately, Mr. Bolton and Ms. Brundige are awarded their
costs of defending the Ministers cross-appeal in the Brundige Action, to the
extent that those costs are distinct from their costs of the main appeal and
may be ascertained as such.

Provost Action

[33]

Cst. Provosts situation is analogous to that of Ms. Brundige. In
his pleadings, Mr. Bolton denied liability and alleged that Dueck and Cst.
Provost were at fault. As in the Brundige Action, the liability contest in the
Provost litigation was between Mr. Bolton and Dueck. While Cst. Provost
argued that both defendants should be found at fault, the question of liability
as between the defendants was not of practical significance to him.

[34]

In these circumstances, it is appropriate to order Mr. Bolton to
pay Duecks costs. Like Ms. Brundige, Cst. Provost should not have the
potential for his judgment funds to be eroded by the liability contest between
Mr. Bolton and Dueck. Dueck was not blameless in the events leading to his
injuries, and the conduct of Mr. Bolton was such that it is just and fair
for him to pay Duecks costs. We would also make a
Sanderson
order in
favour of Cst. Provost.

AG Action

[35]

The AG seeks a
Sanderson
order and cites a number of factors that
support such an order: in the course of litigation, Mr. Bolton continued
to attribute fault to Dueck and issued a third party notice against Dueck; before
and at trial, Mr. Bolton and Dueck attempted to attribute fault to the
police; and Duecks conduct was not absolved in any way in litigation, but
liability was avoided based on the absence of a duty of care. Moreover, as
between Dueck (who carelessly stored its vehicle) and the Crown (whose servants
were not blameworthy in damage caused by Mr. Boltons conduct), the risk
of recovery of costs from Mr. Bolton ought to fall to Dueck and not the
AG.

[36]

We accept that these considerations favour a
Sanderson
order.
There is a distinction between the AGs role in the subrogation claim, and as
owner of the damaged property, from that of the Minister as respondent in the
Brundige Action. With that in mind, it is just and fair in the circumstances for
Mr. Bolton to pay Duecks costs directly. Again, Dueck is not blameless in
the events leading up to the damaged vehicles, and there was no negligence on
the part of Cst. Provost or the other police officers working with him at the
time of that collision. Mr. Bolton should pay Duecks trial and appeal
costs in the AG Action.

Summary and
Disposition

[37]

In summary, we make
Sanderson
orders in favour of all three
plaintiffs. Mr. Bolton is ordered to pay Duecks costs of the liability
and quantum trials and the liability appeal in the AG and Provost Actions. The
Minister and Mr. Bolton shall pay Duecks costs in the Brundige Action,
based on their respective shares of liability. This order is without prejudice
to any costs award made following the appeal on the subrogation issue in
the Provost Action as the decision in that appeal will not affect Duecks
liability or this order for trial costs. We also order the Minister to pay
costs to Mr. Bolton and Ms. Brundige for its unsuccessful cross‑appeal
in the Brundige Action.

The Honourable Madam Justice MacKenzie

The Honourable Mr. Justice Butler

The
Honourable Madam Justice DeWitt-Van Oosten


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

R. v. N.P.,

2021 BCCA 25

Date: 20210114

Docket: CA46612

Between:

Regina

Respondent

And

N.P.

Appellant

Restriction
on publication: A publication ban has been automatically imposed under s. 110(1)
of the
Youth Criminal Justice Act
restricting the publication of
information that would identify a young person referred to in this judgment. A
publication ban has also been automatically imposed under s. 111(1) of the
Youth Criminal Justice Act
restricting the publication of information
that would identify a young person as having been a victim or witness. Both
publication bans apply indefinitely, unless the information is published by the
young persons under ss. 110(3) and 111(2), respectively, or the court has ordered
publication.

A
publication ban has been imposed under s. 486.4 of the
Criminal Code
restricting
the publication, broadcasting or transmission in any way of information that
could identify a victim or witness under 18. This ban applies indefinitely
unless otherwise ordered.

Before:

The Honourable Madam Justice Newbury

The Honourable Mr. Justice Hunter

The Honourable Mr. Justice Grauer

On appeal from:  An
order of the Provincial Court of British Columbia, dated
March 28, 2019 (
R. v. [N.P.]
, Cranbrook Docket 3834-1).

Oral Reasons for Judgment

Counsel for the Appellant

(via videoconference):

J.L. Martin

Counsel for the Respondent

(via videoconference):

N.G. Melling

Place and Date of Hearing:

Vancouver, British
  Columbia

January 14, 2021

Place and Date of Judgment:

Vancouver, British
  Columbia

January 14, 2021

Summary:

The appellant, N.P., was
convicted of sexual assault of his stepsister. N.P. submitted, and the Crown
conceded, that the judge erred by admitting Facebook messages between the complainant
and her father following the alleged assault as consistent statements which
reflected positively on her credibility. Held: Appeal allowed and new trial
ordered. The prior consistent statements of the complainant should not have
been entered into evidence or considered by the trial judge in assessing her
credibility or corroborating her testimony. Prior consistent statements are
presumptively inadmissible and no exception to this rule applied in this case.

[1]

NEWBURY J.A.
: The Crown has conceded that this appeal should be
allowed and a new trial ordered, and I agree with that disposition.

[2]

Mr. P was convicted of the sexual assault of B.M. At the time, he
was 15 years old. B.M. was his stepsister and was then age 16. B.M.
testified that at about 1:00 a.m. on July 24, 2018, the appellant and
B.M. were staying at the home of her paternal grandparents. Apparently they
were expected to sleep on the same couch. The two were at opposite ends of a
sectional; she was positioned on one end of the couch with her feet towards him
at the other end. She testified at trial that he began to rub her legs with his
hand. When she moved her legs away, he tried to touch her and [run] his hand
up her leg. (Reasons at para. 3.) He then crawled on top of her and
grabbed her breasts. She responded by repeatedly saying no and told him to
stop. He said, Then blow me and Ill leave you alone. When she refused, he
again grabbed her breasts and as she tried to move away, grabbed her by the
hips and pulled her back onto the couch. She testified that he pulled her
pyjama pants to her knees and inserted his penis into her vagina.

[3]

The appellant testified in his defence, agreeing with virtually all of
the foregoing, except that he denied touching B.M. sexually or at all.

[4]

The Crown entered into evidence a series of Instagram messages between
the appellant and B.M. In one these exchanges, which took place two months
before
the alleged offence, B.M. told Mr. P it was wack  i.e., absurd  for
him to try to smash her  i.e., have sex with her  given that he was her (half)
brother. His reply was, Of course I am Im 15 and your [sic] sexy. In his
testimony, the appellant explained these messages as being simply stupid and
the result of his being drunk at the time.

[5]

The Crown also sought to adduce into evidence some Facebook messages
between B.M. and her father
later in the morning of July 24, 2018
,
in which she complained of what had happened, in a manner that was, in the
trial judges words, consistent with what she testified to. (At para. 16.)
Details of these messages are set forth at para. 21 of the appellants
factum.

[6]

In an exchange with Crown counsel, the trial judge suggested that B.M.s
prior consistent statements, while not admissible for the truth of their
contents, were
admissible and could be used in assessing her credibility
,
on either the second or third branch of
R. v
.
W.D.
[1991] 1
S.C.R. 742. Defence counsel agreed that the Facebook messages could be
used to assess credibility, to the extent that it rebuts any sort of
suggestion of a ... recent fabrication. He continued, I could concede that,
to the extent that she hasnt made up some story later on. I would submit that
it would be  should be assessed for that limited purpose .... In fact, there
was no evidence that would have supported recent fabrication by B.M. of her
evidence.

[7]

No
voir dire
was held to determine the admissibility of the
consistent statements from Facebook.

Trial Judges Reasons

[8]

At para. 5 of his reasons, the trial judge correctly stated the
three prongs of
R. v. W.D
. On the first branch, he said he did not
believe the appellants denial of sexual contact and characterized Mr. Ps
explanation of the Instagram messages as not compelling. With respect to the
second branch of
W.D.
, the judge found that the appellants evidence did
not raise a doubt, and that:

He acknowledges in his evidence
that in sending an eggplant emoji and referring to licked he was asking B.M.
to perform a blowjob, that is to say, fellatio. It is consistent with B.M.s evidence
that on the couch he asked her to blow him. [At para. 13.]

[9]

Turning next to the third branch of
W.D.
, the judge said this:

... I turn to consider the balance of the evidence. I found
the evidence of B.M. to be credible and compelling. Indeed, with respect to the
surrounding facts, including opportunity, it was confirmed by [Mr. P].

Furthermore, the Instagram exchange between them, and to
which I have already referred, is consistent with what she alleges occurred
later in this assault. Other than [Mr. P]s denial being put to her, she
was not challenged or inconsistent in any way.

Lastly, in Exhibit 1, pages 2 to 7, the Facebook messages
between B.M. and her father later in the morning on July 24, 2018, she
complained to her father of what occurred, which was again consistent with what
she testified to.
While those

Facebook messages from her are
not proof of what occurred, they are consistent with her evidence and reflect
positively on her credibility
.

In conclusion, I accept the
evidence of B.M. that she was assaulted by [Mr. P] just as she described.
[At paras. 147; emphasis added.]

[10]

In the result, the appellant was found guilty as charged.

On Appeal

[11]

Statements consistent with a witnesss evidence are normally regarded as
self‑serving evidence and are presumptively inadmissible because they (i) lack
probative value and (ii) constitute hearsay when adduced for the truth of
their contents: see
R. v. Stirling
2008 SCC 10 at para. 5;
R. v. Dinardo
2008 SCC 24 at para. 36;
R. v. Ellard
2009 SCC 27 at para. 27;
R. v. M (E-H)
2015 BCCA 54 at para. 46;
and more recently,
R. v. Gill
2018 BCCA 275 at para. 65. As
S.N. Lederman, A.W. Bryant and M.K. Fuerst observe in
The Law
of Evidence in Canada
(5
th
ed., 2018) at §7.3, in addition
to the lack of probative value of such evidence, the most common rationale for
the rule is the risk of fabrication: no one should be allowed to create
evidence for him or herself. An exception historically existed in sexual
assault cases for recent complaints made by complainants soon after the
incident complained of, but that exception was abrogated by an amendment to the
Criminal Code
in 1983. (See now s. 275.)

[12]

There are several other exceptions to the rule but, in my view, none of
them is remotely applicable to this case. I have already mentioned that no
imputation of recent fabrication arises. The Crown suggested in its factum that
the exception known as narrative as circumstantial evidence  where out‑of‑court
statements made by a complainant in a sexual assault case may be used for the
limited purpose of helping the trier of fact to understand how the complainants
story was initially disclosed (
Dinardo
at para. 37)  might have
application, but I cannot agree. Cases in which it has applied have generally
involved witnesses who because of age, infirmity or similar circumstances are
unable to testify or have a particular difficulty beyond their control, in
testifying. In
Dinardo
itself, the complainant was young person with a
disability. In
R. v. G.C.
[2006] O.J. No. 2245 (C.A.), the
complainant was 8 years old. The Supreme Court in
Dinardo
approved
the reasoning of the majority in
G.C.
that her prior consistent
statements could be admitted, emphasizing at para. 39 that she had had
difficulty in situating events in time, was easily confused, and lied on occasion.

[13]

At the same time, the Supreme Court in
Dinardo
approved the Court
of Appeals conclusion in
G.C
. that the trial judge had
erred
in
admitting the
content
of the complainants prior consistent statements
to
corroborate
her testimony at trial. Both courts cited with approval the
observation of the Ontario Court of Appeal in
R. v. F.(J.E.)
(1993) 85
C.C.C. (3d) 457 that:

The
fact
that the statements were made
is admissible to assist the jury as to the
sequence of events from the alleged offence to the prosecution so that they can
understand the conduct of the complainant and assess her truthfulness. However,
the jury must be instructed that they are not to look to the
content
of
the statement as proof that a crime has been committed. [At 476; emphasis
added.]

[14]

Very recently, in
R. v. Langan
2020 SCC 33, the Supreme
Court adopted the reasons of Chief Justice Bauman, dissenting, reported at 2019
BCCA 467. The Chief Justice quoted with approval passages from
Gill,
including this:

The prior consistent statement
is
not admitted for the truth of its contents or as a form of self-corroboration
of the trial testimony of the witness
. The trier of fact also must not rely
on the statement to support the prohibited inference that repetition enhances
truthfulness. Rather, the probative value of the statement lies in the
inferences that can be drawn from the timing and circumstances of the
statement,
rather than the simple fact that the [witness] has said the same
thing before
 . . . [At para. 91; emphasis added.]

[15]

The situations in which the narrative exception may be relied upon,
then, are limited, and in any event such statements are not to be used for a
hearsay purpose  i.e., as a form of self-corroboration. (
Gill
at para. 76.)
No difficulty like that encountered in
Dinardo
or
G.C.
arose with
respect to the complainants testimony in the case at bar; nor was it contended
that the
timing or fact
of her complaint was of independent cogency in
assessing that testimony. It follows in my opinion that the prior consistent
statements of B.M. should not have been entered into evidence or considered by
the trial judge in assessing her credibility or corroborating her testimony. The
only relevance these statements could have had was to support the prohibited
inference that repetition enhances truthfulness. (
Gill
at para. 76.)

[16]

I also agree with the Crown that the curative proviso in s. 686(1)(b)(iii)
cannot properly be applied in this case. As Mr. Melling acknowledged, it
cannot safely be said that defence counsel made a tactical decision not to
object; and the trial judge gave sufficient importance to the Facebook evidence
to suggest that it did figure significantly in his reasoning.

[17]

In the result, I am satisfied that we have no choice but to allow the
appeal, and order that the case be remitted for retrial.

[18]

I thank counsel for their helpful submissions.

[19]

HUNTER J.A.
: I agree.

[20]

GRAUER J.A.
: I agree.

The
Honourable Madam Justice Newbury