COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Shields v. GetSet Communications Inc.,

2011 BCCA 34

Date: 20110125

Docket: CA038366

Between:

Mike Shields and
Cost Plus Computer Solutions Ltd.

Appellants

(Plaintiffs)

And

GetSet Communications
Inc., Sattler, Gail Sattler, Randy Christie

Respondents

(Defendants)

Before:

The Honourable Mr. Justice Low

The Honourable Mr. Justice Chiasson

The Honourable Madam Justice Bennett

On appeal from: Supreme
Court of British Columbia, July 15, 2010
(
Shields v. GetSet Communications Inc.
, Vancouver Docket No. S082140)

Oral Reasons for Judgment

Appellant appearing In Person:

M. Shields

Counsel for the Respondent:

R. Cuddeford

Place and Date of Hearing:

Vancouver, British
  Columbia

January 20, 2010

Place and Date of Judgment:

Vancouver, British
  Columbia

January 25, 2010

[1]

LOW J.A.
: The appellants were plaintiffs in an unsuccessful
action in contract against the four defendants. The appellants brought an
application for summary trial judgment under the former Rule 18A which resulted
in an order made by Mr. Justice Rice dismissing the action.

[2]

The respondent, GetSet Communications Inc. (GetSet), is a company that
designed and hosted websites. The individual defendants owned or worked for
GetSet.

[3]

In 2004, the appellant Mike Shields, on behalf of the appellant company,
approached GetSet to work on developing a website named OnlineOffice. This
resulted in a Memorandum of Understanding dated 19 October 2004. That document
provided that GetSet would be paid half its fees in cash and the other half,
after completion of the website, in the form of shares in the appellant company.

[4]

It appears from the affidavit evidence that some work was done on the
website for which the appellants paid GetSet the sum of $7,181.04. However, the
project was never completed because the business relationship between the
parties broke down around the middle of 2005. Before that occurred, however,
Mr. Shields did work for GetSet on a commission basis. Part of the claim of the
appellants arises out of that second business relationship.

[5]

The statement of claim filed by Mr. Shields is a rambling document with
a predominantly evidentiary flavour. It does not plead facts in the ordinary
manner and does not clearly plead the legal basis on which damages are sought. However,
one can deduce from reading it that the claim is in contract, and on the
evidence presented, the amounts claimed arise out of the breakdown of the
contractual relationship that existed between the parties in the two areas I
have identified.

[6]

There is also a pleading that in February 2005 there was an agreement
among the appellant Mike Shields and the respondents Tim Sattler and Randy
Christie that they would each become one-third shareholders in GetSet. This has
been referred to as a partnership agreement but it might be more accurate to
describe it as a share-purchase agreement.

[7]

In the statement of claim, the appellants claimed the following:

1.

refund of
the $7,081.04 paid to GetSet for work on the website that was not completed;

2.

reimbursement
of $21,795.90 for certain advances made by the appellants to staff members or
contractors employed or retained by GetSet;$750 for purchase of a computer;

3.

$750 for
purchase of a computer;

4.

refund of
$500 for establishing an alternate office location;

5.

payment of
one-third commission of sales made by Mr. Shields on behalf of GetSet from
February to August 2005 in the net amount of $11,322.67;

6.

payment of
a one-third commission for web hosting contract revenue during the same period
and later  calculated at $7,200;

7.

the sum of $20,833 as would be reasonable for Mr. Shields success in
preserving GetSet and/or Victory Communication corporate viability.

[8]

Item 7 apparently was a claim for damages for breach of the
share-purchase agreement.

[9]

In addition, the statement of claim sought punitive damages for
non-performance of the website development contract and for non-performance
of the February 8, 2005 agreement and/or of subsequent agreements, the latter
also referring to the share-purchase agreement.

[10]

The summary trial judge dismissed all claims on the basis that none was
supported by the evidence.

[11]

Notwithstanding the fact that they brought the R. 18A application, the
appellants contended in their factum that, because of credibility issues, this
case was not suitable for disposition under Rule 18A on a summary basis and the
order dismissing the action should be set aside accordingly. Nevertheless, they
also sought judgment in their favour expressed in Part 4 of their factum as
follows:

A judgment in
favor of the Plaintiff be rendered pursuant to Rule 18A with regard to one or
more of his breach of [website development] contract claim for $7,181.04 and/or
his breach of partnership claim in the amount of $1 and/or his breach of
commissions earned claim. With regard to the latter, plaintiff seeks access to
defendant financial records for the period March-August 2005 to calculate gross
sales -- however if all court ordered amounts are paid without delay will
alternatively accept the agreed upon commission rate of 33% times the sales
specifically documented by the email evidence [$18,750 + $2232 +$650 = $21,632
x 33%] less $3677.33 paid = $3461.23.

[12]

At the hearing of the appeal, the appellants did
not pursue the argument that the action was not suitable for summary
disposition. They do not seek a new trial.

[13]

In their statement of defence, the respondents pleaded that the
Memorandum of Understanding did not amount to a contract; that there was no
further agreement reached between the parties with respect to the website the
appellants wanted; that Mr. Shields was provided with work space by GetSet in
order to work on the website; that there was an agreement for Mr. Shields to
work in a commission sales position with his remuneration therefrom to retire
the outstanding debt owed by the corporate appellant to GetSet; that Mr.
Shields had no authority to incur expenses on behalf of GetSet; and that
certain named persons were hired by Mr. Shields for the benefit of the
corporate plaintiff and were neither employees of nor contractors with GetSet. It
is at least implicit in this pleading that GetSet received from the appellants
only what it had earned for its work on the website project and that Mr.
Shields was paid all commissions he earned.

[14]

There was no counterclaim.

[15]

At trial, Mr. Shields presented his own affidavits that recite the
dealings between the parties over the period of time in question. Exhibited to
the affidavits are a number of documents, mostly emails that passed between the
parties. Although detailed, the affidavits are not as clear with respect to the
facts asserted as they might have been but some facts are implicit as to what
did and did not occur.

[16]

The respondents filed affidavits sworn by Tim Sattler and Randy Christie.
No documents are attached. The thrust of Mr. Sattlers affidavit is that GetSet
was entitled to retain the monies it was paid for its work on the website and
that there was no more than discussion on the part of Mr. Shields with respect
to the future ownership of GetSet. He acknowledged that Mr. Shields worked for
GetSet on a commission basis but did not recall how much business he brought in.
He provided answers to some of the particular assertions of fact in Mr.
Shields evidence but had no recollection with respect to some matters. He
provided no accounting from GetSets financial records of business generated by
Mr. Shields, commissions earned by him or payments made to him. Gail Sattler,
his wife, was the bookkeeper for GetSet but she did not give evidence.

[17]

Randy Christie swore an affidavit in which he provided answers to some
of the specific assertions of fact made by Mr. Shields, none of which is of any
importance to the issue remaining on appeal. His evidence does not directly
address the matter of him being involved in purchasing the equity of GetSet,
but the thrust of his evidence is that he did not pay much attention to things
said by Mr. Shields and did not want a business relationship with him. Mr.
Christie was not an employee of GetSet but an independent contractor.

[18]

If my addition is correct, the amounts sought in the
statement of claim and at trial total $69,482.61, not including punitive
damages. On appeal, the appellants limit the claim to the following:

(a)      return of
the sum of $7,181.04 paid to GetSet for development work on the website;

(b)      nominal
damages of $1 for breach of the alleged share purchase agreement; and

(c)      $3,461.23 for commissions owing.

Memorandum of Understanding

[19]

Mr. Shields contends that the trial judge erred in not finding that
GetSet had to reimburse the sum of $7,181.04 it received for the partial
development of the OnlineOffice website. This issue involves interpretation of
the Memorandum of Understanding of 19 October 2004.

[20]

With respect to this issue, the trial judge said this:

[14]
Now
Mr. Shields wants what he says is a refund for monies paid to the defendant for
work supposedly performed prior to December 31, 2004. There is no contention
that that money was not paid. On the other hand, there is no contention that
work approximating that value subject to completion of the website, was ever
paid. If it was paid, then the issue is whether there was the failure to
perform for the work needed to complete the website. That is not in evidence
anywhere, and without that evidence I am unable to conclude that any payment
was made in excess of what was owed.

[21]

It seems to me the judge did not directly address the issue because he
did not provide an interpretation of the Memorandum of Understanding. However,
my interpretation of that agreement is that GetSet was entitled to be paid for
the work it performed. There is no evidence that the corporate appellant did
not receive value for that work.

[22]

The memorandum is between the corporate appellant and the corporate
respondent. The document states as its purpose the development of the
OnlineOffice.com website as set out in certain identified specifications. Hourly
billing rates are specified to be in accordance with an attached schedule. Payment
is to be half in cash and half in shares in OnlineOffice.com Inc., the shares
to be priced at 25 cents per share and to be deemed earned and payable
only
upon the launch of a functioning OnlineOffice.com website. It is of importance
that the contract provides for weekly billing by GetSet to be due and payable
within five days to a maximum of $1,500 per week. Any excess shall be deferred
to the end of the development period and thereafter billed on a weekly basis on
the same terms until extinguished.

[23]

There is no explicit provision in the contract that development costs
paid to GetSet must be refunded if the project is not completed. Nor is such a
contractual term implicit. Therefore there is no legal requirement arising from
the contract itself that GetSet must refund that which it earned simply because
the development of the website was not completed.

[24]

The evidence does not address why the project did not complete. The
relationship between the parties changed with the discussion of the future of
GetSet and Mr. Shields becoming a commission salesman for GetSet. There is
evidence that Mr. Shields did not have the money to finance the development of
the website on an ongoing basis. He does not plead or otherwise suggest that
GetSet breached the contract by failing to complete the website. As I have
said, there is no evidence that the appellant company did not get value for the
development work done by GetSet. Mr. Shields acknowledged that he received the
work product.

[25]

In these circumstances, there is no basis in law for ordering return of
the monies paid to GetSet under the contract.

Share purchase agreement

[26]

Mr. Sattler was the only shareholder in GetSet. Mr. Shields claims that
at a meeting on 7 February 2005, he, Mr. Sattler and Mr. Christie agreed that
GetSet would be restructured so that each of them would own one-third of the
shares in GetSet. His notes of this meeting are exhibited to one of his
affidavits. He says that GetSet is no longer an operating company and a money
judgment for damages for breach of contract would be pointless so he asks for
nominal damages.

[27]

On this issue, the trial judge said:

[12]      ...
upon
reviewing the evidence and listening to the submissions of Mr. Shields, that I
am unable on his evidence to find any even probability that there was a
partnership agreement as such. No document has been produced that outlines a
partnership agreement. There are no terms in detail that are recalled and
presented before me. There is no evidence of payment according to a partnership
understanding. There is no certainty as to who were the parties. There is no
reason on a commonsense analysis that this would have been the way that these
parties continued in business after having at that point, that is the first
couple of months of 2005, opted for this arrangement, having had a very
difficult time with each other. It was at a time when Mr. Christie, one of the
defendants was in the process of leaving GetSet, where he had worked before as
a programmer.

[28]

There is nothing in writing between the parties that would serve to
prove the agreement alleged. Mr. Shields notes are not sufficient and on his
evidence put in its best light the most that can be said is that there was some
discussion about a restructuring of the ownership of GetSet that never got
beyond discussion. There is nothing in the evidence to support any conclusions
as to the essential terms of the agreement alleged, particularly the cost of
acquisition of the shares in GetSet. On this basis, the agreement alleged would
fail for being vague and uncertain.

[29]

In addition, emails between the parties subsequent to the meeting date
make it clear that nothing had been agreed to with respect to the future equity
ownership of GetSet. It is not necessary to look beyond an email from Mr.
Shields to Gail Sattler dated 26 April 2005 in which Mr. Shields wrote: In conclusion
my suggestion is for you and Tim [Sattler] to decide once and for all whether
you want Randy [Christie] and I as partners or as subcontractors or employees
and then to make an offer we can all agree to in writing.

[30]

This is not the language of a party who asserts that prior to the date
of the email there was an enforceable agreement. The trial judge did not err in
finding the agreement alleged to be unproven.

Commissions

[31]

As to the commissions claim, the trial judge said this:

[21]
I have spoken about the one-third
commission. In his statement of claim he talks about an estimated $45,000 of
which $15,000 should be commission less $3,677 that he acknowledges he has
received.

[22]      I

have
to say again, as I said before for lack of evidence as to an agreement between
the parties on the payment of that amount of a commission, I am unable to make
a finding that there is any such commission that has not been paid and is
outstanding.

[32]

The trial judge failed to note, as I have stated above, that the
respondents pleaded that there was a commission sales arrangement with Mr.
Shields, with the remuneration he earned to be offset against the debt owed by
the corporate appellant to GetSet. The first part of this admission supports
the assertion of Mr. Shields that there was a commission agreement. Counsel has
not directed us to any evidence that there was to be an offset.

[33]

The evidence with respect to the commissions claim is a bit sketchy but
I am convinced that it was sufficient to support part of the claim. The trial
judge did not refer to any specifics in the evidence. I expect that we have
been given more assistance by Mr. Shields than he gave to the trial judge in
isolating the evidence that supports the conclusion that Mr. Shields worked for
GetSet on a commission basis and managed client accounts so as to be entitled
to payment for his work.

[34]

At least one email written by Gail Sattler acknowledges that Mr.
Shields, as he claimed in his evidence, was to be paid 33% for his work for
GetSet. Mr. Sattler did not deny this in his affidavit. Rather, he swore: The
sales job that GetSet hired Shields to perform was a commission sales job. He
went on to express some disappointment in the work Mr. Shields generated for
GetSet but did not deny the commission rate or the particulars in the evidence
given by Mr. Shields. He also swore that he did not recall exactly how much
business Shields brought in. Gail Sattler who, as bookkeeper for the company,
would be in a position to know about these matters did not give evidence. It is
common ground that Mr. Shields did some work for GetSet and that he received
remuneration for this work in the amount of $3,677.33.

[35]

I conclude, therefore, that the trial judge erred in failing to find
that there was a commission agreement at 33%. At the hearing of the appeal,
counsel for GetSet did not attempt to persuade us that the judge was correct in
his conclusion.

[36]

GetSet has not provided an accounting of the sales attributable to
Mr. Shields, the commissions earned thereon, and the payments made to him.
At trial, Mr. Shields claimed sales of $45,000 and $15,000 in commissions, less
the payment received. On appeal, he limits his claim to commissions on gross
sales of $21,632, less the amount received, leaving a net balance owing of
$3,461.23.

[37]

There are documents in evidence supporting gross sales in at least the
amount now asserted. Counsel for GetSet contends that Mr. Shields did not swear
in his affidavit that he was not paid the balance of the commissions earned. I
think this fact can be inferred. A spread sheet prepared by Mr. Shields and
emailed to Gail Sattler shows the commissions claimed and the amount paid by
GetSet. She has provided no evidence that GetSet paid Mr. Shields any more than
the sum of $3,677.33 as stated in the spread sheet. There is also an email from
Mr. Shields to her complaining that a cheque he received was only about half of
what he expected. To avoid the inference that this was all that Mr. Shields
received for his services, GetSet could have produced evidence of a later
payment or payments.

[38]

I would allow the appeal to the extent of giving Mr. Shields judgment
against GetSet in the amount of $3,461.23.

Costs

[39]

The trial judge ordered that the appellants pay costs to the respondents.
That part of the order has to be reconsidered in light of partial success on
the appeal.

[40]

The respondents argue that in the result this action comes within the
jurisdiction of the Provincial Court under the
Small Claims Act
so that
the appellants should be deprived of costs in both this court and the trial
court. They cite R. 57(10) under the old rules that would apply to this case.

[41]

This action arose from a fairly complex business relationship between
the parties, the amount initially claimed was in excess of the jurisdiction of
the court under the
Small Claims Act
and, in my opinion, there was
sufficient reason to bring the action in the Supreme Court as contemplated by
the rule.

[42]

Mr. Shields should have had some success at trial and should have
recovered some of his costs in the trial court. I would vary the trial costs
order to provide that the respondents recover 75% of their trial costs and that
the appellants recover 25% of their trial costs.

[43]

Success in this court being divided, I would order that the parties bear
their own costs of the appeal.

Disposition

[44]

I would made the following order:

(a)      that the appeal be
dismissed as against Tim Sattler, Gail Sattler and Randie Christie;

(b)      that the order
dismissing the action as against GetSet be set aside and that the appellants
recover judgment against GetSet in the amount of $3,461.23;

(c)      that the provision
for costs in the trial court order be set aside and be replaced with an order
that the appellants pay the respondents 75% of their costs of trial and that
GetSet pay the appellants 25% of their costs of trial;

(d)      that
the parties bear their own costs of the appeal.

[45]

CHIASSON J.A.
:I agree.

[46]

BENNETT J.A.
: I agree.

[47]

LOW J.A.
: There will be an order accordingly.

The Honourable Mr. Justice Low


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

R. v. Moore,

2011 BCCA 36

Date: 20110127

Docket: CA037682

Between:

Regina

Respondent

(Plaintiff)

And

Roger Brian Moore

Appellant

(Defendant)

Before:

The Honourable Mr. Justice K. Smith

The Honourable Madam Justice Bennett

The Honourable Madam Justice Garson

On appeal from:
Supreme Court of British Columbia, 26 June 2009
(
R. v. Moore
, New Westminster Registry X071549)

Oral Reasons for Judgment

Appellant appearing In Person:

Counsel for the Respondent:

W.P. Riley

Place and Date of Hearing:

Vancouver, British
  Columbia

January 27, 2011

Place and Date of Judgment:

Vancouver, British
  Columbia

January 27, 2011

[1]

K. SMITH J.A.
:  Roger Brian Moore appears in person this morning
seeking leave to appeal and, if leave be granted, appeals from his global
sentence of four years imprisonment imposed on June 26, 2009 by the Honourable
Mr. Justice Brown of the Supreme Court of British Columbia after convicting him
following a five-day trial on four counts of trafficking in controlled
substances, contrary to section 5(1) of the
Controlled Drugs and Substances
Act
, 1996, c. 19.

[2]

Mr. Moore, this morning, has eloquently expressed his regret and his
remorse for what he has done and he asks us to treat him leniently by reducing
his sentence to three years. He is now on parole and his warrant of committal
will expire in June 2013.

[3]

I have explained to Mr. Moore the limitations on what this Court can do
on a sentence appeal. The standard of review that we must apply has been
summarized by the Supreme Court of Canada in
R. v. L.M.
, [2008] 2 S.C.R.
163 at para. 14:

14.       In its past decisions, this Court has established
that appellate courts must show great deference in reviewing decisions of trial
judges where appeals against sentence are concerned. An appellate court may not
vary a sentence simply because it would have ordered a different one. The court
must be "convinced it is not fit", that is, "that ... the
sentence [is] clearly unreasonable" (
R. v. Shropshire
, [1995] 4
S.C.R. 227, at para. 46, quoted in
R. v. McDonnell
, [1997] 1 S.C.R. 948,
at para. 15). This Court also made the following comment in
R. v. M. (C.A.)
,
[1996] 1 S.C.R. 500, at para. 90:

... absent an error in principle, failure to consider a
relevant factor, or an overemphasis of the appropriate factors, a court of
appeal should only intervene to vary a sentence imposed at trial if the
sentence is demonstrably unfit.

[4]

At the sentencing hearing the Crown sought a sentence of five years and
Mr. Moore sought a sentence of three years. The sentencing judge gave
comprehensive reasons for sentencing in which he reviewed the circumstances
fully along with the submissions of counsel and Mr. Moores circumstances.

[5]

After considering all the circumstances, the judge said this:

[79]      I cannot agree with the Crowns position that five
years is the right sentence in this case. This fails to give sufficient weight
to rehabilitation. While the facts of this case cry out for denunciation and
deterrence, all the more reason to ensure that these do not then overwhelm fair
consideration of rehabilitation, bearing in mind the heavy burden that Mr.
Moores conviction and sentence will continue to impose on him upon his release.
Although he is not a youthful offender, he was a relatively young man at the
time of the offence without a criminal record, factors that I am required to
give due and fair consideration to. The sentence should strongly denounce and
deter, but not crush the spirit of the convicted person or be so unduly long
that it may impede his rehabilitation.

[80]      The controlled substances involved in this case are
less pernicious than those found in some of the cases cited, however, this
consideration must be somewhat weighed against what I would refer to as the in
for a penny, in for a pound corrupting effect of a Corrections Officer in such
circumstances, as he exposes himself or herself to escalating demands from
inmates, with little recourse on the officers part except to comply or face
exposure by the inmate.

[81]      At the same time, I find a three-year sentence
inadequate. Mr. Moores actions required considerable thought and
discussion with both foresight and planning involving the inmates before
executing the plan. This is clearly not a case of impetuous actions carried out
with little deliberation. Execution of the plan also required contact with
criminal elements outside the prison itself in order to obtain the trafficked
substances.

[82]      Mr. Moore had numerous
opportunities to reflect and numerous opportunities to make different choices
at each step along the way. There is no element of duress as in
Domke
, [
R.
v. Domke,
2006 ABPC 252, 68 Alta. L.R. (4th) 372]. Upon his return to his
unit, Mr. Moore exacerbated the consequences of what he had done by releasing
inmates from their cells, instead of assisting his fellow officers, potentially
jeopardizing the investigation and involving them and the inmates in a
difficult situation.

[6]

He went on to impose sentences amounting to the global sentence that I
mentioned. In my view, the reasons given by the sentencing judge demonstrate
that he applied the proper approach and that he fairly considered all the
relevant circumstances. I am satisfied the sentence he imposed was a fit one in
the circumstances.

[7]

For those reasons I would grant leave to appeal, but I would dismiss the
appeal.

[8]

BENNETT J.A.
:  I agree.

[9]

GARSON J.A.
:  I agree.

[10]

K. SMITH J.A.
: The appeal is dismissed.

The Honourable
Mr. Justice K. Smith


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Sandhu v. The Khalsa Diwan Society,

2011 BCCA 24

Date: 20110127

Docket: CA038464

Between:

Amarjit S. Sandhu,
Sukhbir S. Gill, Lakhbir S. Khangura,
Karnail Singh Brar, and Gurmeet Singh Gill

Respondents

(Petitioners)

And

The Khalsa Diwan
Society and
Kashmir Singh Dhaliwal

Appellants

(Respondents)

Before:

The Honourable Mr. Justice K. Smith

The Honourable Madam Justice Neilson

The Honourable Madam Justice Bennett

On appeal from:  Supreme
Court of British Columbia, August 30, 2010,
(
Sandhu v. Dhaliwal
, 2010 BCSC 1328,
Vancouver Docket No. S102766)

Counsel for the Appellant:

S.A. Turner

Counsel for the Respondent:

H.A. Mickelson, Q.C.

J. D. Tweedale

Place and Date of Hearing:

Vancouver, British Columbia

December 15, 2010

Place and Date of Judgment:

Vancouver, British
  Columbia

January 27, 2011

Written Reasons by:

The Honourable Mr. Justice K. Smith

Concurred in by:

The Honourable Madam Justice Neilson

The Honourable Madam Justice Bennett

Reasons for Judgment of the Honourable
Mr. Justice K. Smith:

[1]

The Khalsa Diwan Society [the Society] and Kashmir Singh Dhaliwal
appeal from an order of the Supreme Court of British Columbia, pronounced by
the Honourable Mr. Justice Walker on 30 August 2010, granting the
respondents relief on a petition brought pursuant to s. 85 of the
Society
Act
, R.S.B.C. 1996, c. 433, the relevant part of which provides,

85 (1)   Despite anything in this Act, if an omission,
defect, error or irregularity occurs in the conduct of the affairs of a society
by which

...

(b)   there is default in compliance with the ... bylaws of
the society,

...

the court may

(d)   either of its own motion or on the application of an
interested person, make an order

(i)   to rectify or cause to be rectified or to negate or
modify or cause to be modified the consequences in law of the omission, defect,
error or irregularity, or

(ii)  to validate an act, matter or thing rendered or
alleged to have been rendered invalid by or as a result of the omission,
defect, error or irregularity, and

(e)   give the ancillary or consequential directions it
considers necessary.

(2)   The court must, before making an order, consider the
effect of it on the society and its directors, officers, members and creditors.

[2]

Although the appellants raise three grounds of appeal, I find it
necessary to deal with only one, which is whether they were denied a fair
hearing.  In my view, they were, and I would allow the appeal, set aside the
order, and remit the petition to the Supreme Court for a new hearing.

BACKGROUND

[3]

The Khalsa Diwan Society is a non-profit, religious society established
to promote the teachings and philosophy of the Sikh religion.  The appellant
Kashmir Singh Dhaliwal is the current president of the Societys elected
Executive committee.  The individual respondents are members of the Society.
They describe themselves as organizers and supporters of the opposition slate
of candidates in the next election of the Societys Executive.

[4]

The Societys constitution provides that all memberships expire every
three years.  Consequently, there is a busy enrolment process each time the
expiry date approaches as old members and prospective new members submit their
membership applications.  The constitution also provides for elections of the
Executive at the commencement of every three-year cycle.  The last election was
held in November 2007.

[5]

The Society has a history of litigation respecting membership and
election disputes dating back to 1999.  One of these disputes (indexed as 2004
BCSC 1399) resulted in a detailed consent order, referred to in subsequent
cases as the transparent process, which provided for participation in the
enrolment process of those proposing to contest the re-election of outgoing
Executive members.   It was designed to alleviate concerns that the outgoing
Executive members might influence the enrolment process in such a way as to
promote their re-election.

[6]

The present dispute concerns the validity of membership application
forms accepted by the Societys current Executive in relation to the membership
drive conducted in anticipation of the Executive election that was scheduled to
be held in November 2010, but which has necessarily been postponed pending the
outcome of this proceeding.

[7]

In January 2010, the respondents asked to meet with the Executive to
discuss what they suggested were procedures being followed for the acceptance
of membership applications that did not comply with the Societys bylaws.
After some back-and-forth communications in which they felt the Executive was
not addressing their concerns and was not abiding by the transparent process,
they filed their petition in April 2010, naming the members of the Executive
and the Society as respondents.  They sought an order that they be allowed to
inspect all new membership applications and related records, an order that new
membership forms accepted to date by the Executive be declared invalid, and a
number of ancillary orders calculated to bring fairness and order as they saw
it to the membership drive and the forthcoming election.

[8]

The respondents position was that members of the Executive had been for
some time processing invalid membership applications and thereby deliberately
distorting the membership list.  They filed affidavits in support of their
position, including an affidavit summarizing their conclusions from a review of
4,156 membership applications delivered to them by the Executive before they
filed their petition.  The Executive members filed responding affidavits in
which they denied the allegations of irregularities and the allegations that
they were complicit in processing irregular applications.  On the morning of
the first day of the hearing, another 2,523 applications were delivered to the
respondents by counsel for the Executive, bringing the total to 6,679.  The
respondents reviewed these applications overnight and filed an affidavit
summarizing the results of their review on the morning of the second day of the
hearing.  However, as will become apparent, the hearing concluded before the
appellants could file evidence responding to suggestions of irregularities
contained in this affidavit.

[9]

The hearing of the petition commenced on Thursday, August 26, 2010, and
took up one full day and two partial chambers days.

[10]

The respondents submissions occupied the first two days.  During his
submissions, Mr. Mickelson, counsel for the respondents, referred to evidence
of various membership forms accepted by members of the Executive that he
contended clearly did not comply with the Societys bylaws because, he
submitted, they were

a)

Forms signed by the same person, with the same address, on different
dates, and with a different signature;

b)

Forms purported to be signed by a different person, at a different
address, on different dates, bearing the same signature;

c)

Forms containing no signature at all; and

d)

Forms apparently verified by family members of applicants who ostensibly
attended with a member of the executive and provided written verification as to
the accuracy of the form on behalf of applicants who could not attend, which
were accepted in questionable circumstances.

[11]

Near the beginning of his submission, Mr. Mickelson submitted, in what
he referred to as his limited pitch, that there should be an order that these
allegedly non-compliant forms be independently inspected and validated in some
way and that his clients would be content to accept the other membership
applications as valid, but qualified his position by adding that you may come
to the conclusion that ... its widespread and everything needs to be thrown
out and we need to start from scratch.  And Im not saying that that isnt the
right answer, but Im going to stay on my limited pitch.   Near the end of the
first day of Mr. Mickelsons submissions, the following exchange with the
chambers judge occurred:

THE COURT:  ...
If I accept everything you say, how
can I be sure that ordering relief where both parties have representatives at
the same table will work if there truly was nefarious conduct on the part of --
the president of the society signed this document or took it in
.

MR. MICKELSON:  Yes.

THE COURT:  If I follow where you're going, or the thrust
of your submissions,
shouldn't I be appointing somebody independent so that
there can be true -- perception of true fairness in the process
?

MR. MICKELSON:
Well, My Lord, this is why I started
by saying I have the main relief, which is what Your Lordship is speaking of,
and then I talked about the limited relief.  If it's systemic, the relief is
the first prayer for relief which is everything is thrown out and we start
fresh with the transparent process.  We don't need an independent -- the
transparent process will work, it's what my clients want
.  If you sit at a
table, this won't happen because --

THE COURT:  No, but on a moving forward basis for the transparent
process.
If there has been fraud
.

MR. MICKELSON:  Yes.  Then it's a band-aid and it's a problem.

THE COURT:
Then shouldn't there be an independent person
in charge of the membership application drive
?

MR. MICKELSON:  Well, if Your Lordship becomes concerned
that it's systemic -- and we can't know -- other courts have said we can't
know, and it's in the best interests of the society to take the relief further,
then it's actually a simpler process.  They're gone.  And all I'm saying -- maybe
I'm at cross purposes with Your Lordship -- you don't need anybody independent
because we're now starting from scratch if the election gets postponed a couple
of months.

THE COURT:  Right.  But we're
ad idem
there in
terms of the thought process?

MR. MICKELSON:  Yes.

THE COURT:  Now we've started from scratch.  Moving forward,
what's the process.  Who runs it?

MR. MICKELSON:  Yes.  So here's how this works and
here's
how the transparent process works.  One representative of the executive and the
other person are sitting at a table.  Now this gentleman shows up and says, I'm
submitting my form
.

THE COURT:  All right.  That's what I thought.  But then
my question to you was -- and I didn't clearly explain myself well.
How can
that work in

an environment where there's been fraud alleged, or fraud
suggested, given -- and particularly given the background of two prior
proceedings?  How can the members of this society be confident that these
parties sitting at the same table will act in the best interests of the
society?  And shouldn't I, as a matter of what's in the best

interests
of the society, and for all of the members, simply -- if I was convinced that
this was systemic, or suspected it to be so, simply

annul all of the
membership applications to start a new process where there's an independent
person in charge
?

[Emphasis added.]

[12]

Shortly thereafter, there was the following exchange:

MR. MICKELSON:  ... I think this is systemic.  I didn't
reach for that --

THE COURT:  No --

MR. MICKELSON:  -- because in my submission I didn't need
to.  But I want to be clear; I believe this is systemic and it gets worse as we
move through this.

THE COURT:  I had a sense that's where you were taking me
to.

MR. MICKELSON:  Yes.

THE COURT:  And so
I thought I would telegraph that
to you and your friends right off the bat
, that if I find there's a lack of
compliance that invokes the court's jurisdiction, and now dealing with the relief
provision, and
I need to know whether or not there is a systemic aspect to
this, and it does help me to know your results of the other forms
.

[Emphasis added.]

[13]

On the morning of the second day, the chambers judge said, during a lengthy
colloquy with Mr. Mickelson,

THE COURT:
Well, you've taken it to the point that's really troubling me, which is,
assuming that I accede to your submission that this Court's jurisdiction is
engaged and that this is something beyond just mere trifling or technical incompliance
but shows something much more, in terms of a relief that's granted and the
history of litigation, what relief can be fashioned so that there can be an end
of this so that the parties moving forward can have confidence in the membership
drive, the election process, so they're not constantly coming back before the
Court seeking relief.

[14]

Thus, at this point in the hearing, the judge had been shown a number of
forms that Mr. Mickelson contended were, on their face, not compliant with the
bylaws and he had signalled his view that the respondents results of the
other forms (in respect of which the appellants had not yet filed any
evidence) had help[ed] him on the question whether there was a systemic
aspect to this, and that, if he should find irregularities that were beyond
just mere trifling or technical incompliance but represented something much
more, he would be considering a remedy that would put an end once and for all
to such disputes.

[15]

After the luncheon adjournment, the hearing adjourned in order to allow
the parties to attempt to negotiate a resolution over the weekend.  The
negotiations did not succeed, however, and the appellants discharged their
counsel.

[16]

On Monday morning, the third day of the hearing, counsel for the
appellants appeared and told the chambers judge they had been discharged.  They
withdrew and new counsel, Mr. de Groot, advised the judge that he was a junior
associate in the office of Mr. Turner, counsel for the appellants on this
appeal, who had been retained by the appellants on the weekend to continue with
the hearing.  Mr. de Groot said Mr. Turner was out of the country and
he sought an adjournment of several days to permit Mr. Turner to appear.  In
explaining the appellants reasons for changing counsel, he said his clients
were concerned with how the case was proceeding and they wanted to have new
counsel.  Then, following Mr. Mickelsons submissions opposing the
adjournment, the following occurred:

THE COURT:  All right.  Thank you.  Mr. de Groot, you
were retained last evening?

MR. de GROOT:  I was only informed this morning.

THE COURT:  When was your firm retained?

MR. de GROOT:  I believe there was a conversation at the
end of Friday, but no actual retainer at that time.  I spoke to Mr. Turner on
the telephone this morning outside the courtroom.

THE COURT:  All right.  What do you have to say in
response to Mr. Mickelson's submissions?

MR. de GROOT:  I have a few points in reply here.  Mr.
Mickelson states with some certainty that the respondents were unhappy about
the affidavit and that the change of counsel is merely a tactical move.  I'm
not sure it's in my friend's knowledge to be certain about that.  And, in fact,
the respondents were also under some misapprehension as to the process and were
under misapprehension that Your Lordship was prepared to give judgment today.
And they were confused about the process.

THE COURT:  Your clients have been engaged in this
process at least three times before and according to the cases, it's more perhaps,
that I've just been shown, four or five times in the past.

MR. de GROOT:  Yes, My
Lord.  But they were under that concern, and that concern was associated with
previous counsel.

[17]

Mr. de Groot continued with a brief submission to the effect that there
would be a delay in the sign-up process whether or not the hearing was
adjourned and that Mr. Turners experience acting in these membership disputes,
including his previous dealings with Mr. Mickelson, might facilitate an early
resolution rather than the lengthy delay predicted by Mr. Mickelson in having
the hearing reconvened.

[18]

Immediately after the conclusion of Mr. de Groots submissions, the
chambers judge delivered reasons dismissing the application to adjourn:  see
2010 BCSC 1327.  In his reasons, he said,

[2]        ... I am told that the basis for the respondents'
decision to discharge their counsel and seek an adjournment is that they are
unhappy with the manner in which the case is unfolding during the hearing.  I
find that submission remarkable because counsel for the petitioners is still
making oral submissions on the merits of the case (
and the respondents'
counsel have yet to make their submissions on the merits
).

[3]        I am satisfied that the respondents' decision is a
reaction to the evidence that has been adduced in the affidavits and shown to
me by counsel for the petitioners. In essence,
the evidence shows that a
number of the membership application forms (membership forms) are, on their
face, clearly non-compliant with the bylaws of the Society
.

[4]
I find, from all of the evidence contained in
the affidavits in the chambers record, that the Societys executive, who are
respondents in this litigation, have been engaged in obtaining membership forms
that are not compliant with the Society's bylaws. I find that their conduct
goes beyond mere technical non-compliance and that they have been actively
engaged in obtaining membership forms that are clearly non-compliant since
2008, and onward, through the height of the dispute between the respondents and
the petitioners.  This conduct continued to occur as recently as last week,
just prior to the commencement of the hearing of the petition
.

[Emphasis added.]

[19]

He added that the appellants had many months to prepare for the hearing
and that, since Mr. Turner had acted for them before in other matters, they
could have retained him earlier for this litigation (at para. 5).  In this
regard, he said,

[6]        Mr. Turner is out of the country and, I am told,
not available until at least September 9.
I am satisfied that the decision
made by the respondents to discharge their counsel is a tactical decision to
gain advantage from delay.

It is a decision that, in the wake of the
evidence I have so far seen, should not be condoned by this Court
.

[Emphasis added.]

[20]

He concluded,

[8]        It would be unfair and prejudicial to the Society
and its members to allow the executive members to discharge their counsel and
adjourn this application
considering evidence showing the executives prior
history and recent participation in obtaining non-compliant membership forms
,
all in the wake of a hotly contested membership drive and a looming election.
To allow an adjournment would, in my view, bring the entire membership drive
and election process into disrepute.

[Emphasis added.]

[21]

After delivering his reasons, the chambers judge said,

THE COURT:  Now, Mr. Mickelson, I'm not sure what you wish
to do here.
On Friday you were of two minds about the nature of the relief
you wish to seek, and I wonder if this has an impact upon it.  It certainly
does in my thinking
, I do want to hear from you.  And I'm sure your friend
will want to make submissions.

[Emphasis added.]

[22]

Mr. Mickelson then submitted that all of the forms be thrown out and
that there be a new process put in place.  When he had finished his
submissions, the following occurred:

THE COURT:  Yes, I was going to offer Mr. de Groot the
opportunity, in view of what Mr. Mickelson said and the exchange between Mr.
Mickelson and myself, to see if you wish to take instructions from his client,
either as to process or simply what you're going to say in reply.

MR. de GROOT:  It would be helpful for --

THE COURT:  All right.

MR. de GROOT:  -- me to have some time.

THE COURT:  And I'll give you 20 minutes to do that, and
if you need longer, let Madam Registrar know.  But I'd like to get back by
11:30 if you can, given that the matter was put over -- or stood down more than
it was heard on Friday.

MR. de GROOT:  Yes.  Thank
you, My Lord.

[23]

Chambers thereupon adjourned and, when chambers reconvened 35 minutes
later, the chambers judge called on Mr. de Groot, who made submissions on
behalf of the appellants as to the appropriate remedy.

[24]

At the conclusion of Mr. de Groots submissions, the chambers judge said
he did not need to hear Mr. Mickelson in reply.  Then, he gave oral judgment in
favour of the respondents (see 2010 BCSC 1328) in which he expanded on the
findings he made in his earlier reasons.

[25]

After reviewing the evidence, the judge noted (at para. 30) that the
documents he had been shown raise questions as to the integrity and validity
of the verification process and the role of certain members of the executive
who accepted those documents in very questionable circumstances.  He concluded
(at para. 31) that the evidence of non-compliant membership forms was not
limited to a few documents such that it could be said that non-compliance [was]
limited, inadvertent, or the result of the conduct of a naive and innocent
member of the executive.  He noted that non-compliant membership forms had
been taken over a considerable period of time, since at least August 2008, and
that in many instances they were taken while the dispute between the parties in
this proceeding was fully engaged.  He concluded no effort had been made by the
Executive to check for duplicate or other questionable forms or to ensure that
no errors had been made in accepting the forms (at para. 32) and observed (at
para. 33) that no explanation had been provided to explain or justify the accepting
of non-compliant forms.  In the result, he concluded that the non-compliance was
such as to engage the courts jurisdiction under s. 85 (at para. 34).

[26]

After describing what he considered to be the obvious and egregious
nature of the non-compliance, the chambers judge said,

[38]      Recent revelations of additional and substantial
numbers of membership forms show that the Societys executive continues to be
actively involved in taking membership forms that are clearly non-compliant.
In my opinion, non-compliance is so pervasive that the integrity of the entire
membership application process is called into question.

[39]      This is the third time since 2000 that members of
the Society have been before the Court to deal with election and membership
form issues. In light of that history, given the executive's outright rejection
of the petitioners' request for a transparent process, and due to the very
recent and blatant activity of certain members of the executive in accepting
clearly non-compliant membership forms, I believe that no right-thinking member
of the Society would have any confidence in the validity of the membership
documents. I can say that I do not.

[40]      I am also of the view
that ordering a transparent process remedy, which would involve each side
having a representative participate in the taking of forms, is likely to lead
to further conflict and further court proceedings. The time has come for the
Society to conduct a membership process and an election in such a way that its
members can have confidence that those processes are fair and conducted in an
impartial manner.

[27]

Accordingly, he made the following orders:

a)

All membership forms taken since the last election are
invalidated;

b)

A neutral, independent person ("Electoral
Officer"), will be appointed to run the membership drive and to conduct
the Society's next election;

c)

The parties are to agree upon the identity of the
Electoral Officer within seven days, failing which the judge would do so;

d)

The election presently scheduled to take place in
November 2010 is postponed to a date to be agreed upon by the parties in
accordance with the recommendation of the Electoral Officer, and failing
agreement, by order of the Court;

e)

The Electoral Officer shall provide recommendations to
the parties and the Society concerning the process to be used in conducting the
membership drive, including the taking of membership forms, and the process to
be used to conduct the election; and

f)

Those recommendations shall be contained in written
form and provided to the Court for its approval.

[28]

As a further term of the order, the judge retained supervisory
jurisdiction over the process until the election should be completed and
allowed for the parties and the Electoral Officer to apply for further
directions and corollary relief as necessary.  He also limited the Executives
authority to current operations and to running the affairs of the Society in
the ordinary course of business until the election results should be in hand and
the new Executive should be elected.

DISCUSSION

[29]

Thus, the judges conclusion
that there was not only non-compliance with the bylaws in some membership
applications but also that the members of the Executive had been acting
deliberately in such a way as to call into question their own integrity and the
integrity of the entire membership application process played a significant
role in his decision to grant relief that intruded substantially into the right
of the Society to govern its own affairs, something the courts are generally
reluctant to do:
Garcha v. Khalsa Diwan Society - New Westminster
, 2006
BCCA 140 at para. 9, 223 B.C.A.C. 295.

[30]

As I have set out above, in giving his reasons for dismissing the
adjournment application, the chambers judge concluded that a number of the
membership applications were on their face, clearly non-compliant with the
bylaws of the Society (at para. 3).  This finding was a precondition to his
jurisdiction under s. 85(1)(b) of the
Act
.  At the hearing of the
appeal, Mr. Turner outlined submissions that these applications were not
necessarily non-compliant with the bylaws, yet the chambers judge decided this
issue against the appellants without hearing these submissions.  The judge
found, as well, that the Societys executive have been engaged in obtaining
membership forms that are not compliant with the Societys bylaws; that their
conduct goes beyond mere technical non-compliance; that they have been
actively engaged in obtaining membership forms that are clearly non-compliant
since 2008, and onward; and that [t]his conduct continued to occur as
recently as last week, just prior to the commencement of the hearing of the
petition (at para. 4).  Again, Mr. Turner refers to evidence and submissions,
which the chambers judge failed to hear or consider, that might refute these
findings.

[31]

The respondents submit that the appellants are the authors of their own
misfortune  ̶  that they should not have discharged their counsel in the
middle of the hearing.  Discharging their counsel at that time may or may not
have been wise.  It is clear the appellants were not pleased with the way the
respondents case had been developed over the first two days of the hearing or
with the progress of the weekend negotiations and that they wished to have Mr.
Turner, who had represented them in similar matters on previous occasions, take
over their case.  The chambers judge characterized the dismissal of counsel as
a tactical decision taken to gain advantage from delay, but he did not
indicate what that advantage might be, nor did counsel in their submissions
before him or on appeal.  Moreover, in light of the judges comments during Mr.
Mickelsons submissions (some of which I have set out above), it might have reasonably
seemed to the appellants on the weekend that they were in imminent danger of
having judgment given against them.  It may be that, in their minds, their
situation was so precarious that they felt the need to retain Mr. Turner
and to run the risk an adjournment might be refused.

[32]

The decision to dismiss the adjournment application was a discretionary
one.  The appellants contend the discretion was not exercised judicially.
However, it is not necessary to decide that question since, having refused an
adjournment, the chambers judge ought to have at least offered Mr. de Groot an
opportunity to address him on the question whether the respondents had met the
threshold necessary to engage his jurisdiction under s. 85.  He did not do so.
He decided that question in favour of the respondents in his reasons for
refusing the adjournment and limited submissions thereafter to the question of
the appropriate remedy.

[33]

In my view, the chambers judge erred in so doing.  In deciding as
he did without hearing the appellants, he violated the
audi alteram partem
rule of natural justice.  I would adopt as apt the following remarks of Prowse
J.A., for this Court, i
n
R. v. Gustavson
,
2005 BCCA 32 at para. 64,
249 D.L.R. (4th) 598:

[64]      While the
audi alteram partem
principle is most often discussed in the administrative law context, it is not
limited to that context. Rather, it has been described as a basic tenet of our
legal system. In
A. (L.L.) v. B. (A.),
[1995] 4 S.C.R. 536, for example,
Madam Justice L'Heureux-Dubé, speaking for the court on this point, stated at
para. 27:

The
audi alteram partem principle
,
which is a rule of natural justice and one of the tenets of our legal system,
requires that courts provide an opportunity to be heard to those who will be
affected by the decisions
. The rules of natural
justice or of procedural fairness are most often discussed in the context of
judicial review of the decisions of administrative bodies, but they were
originally developed in the criminal law context. In
Blackstone's Criminal
Practice
(Murphy rev. 1993), the authors remark at p. 1529:

Traditionally, the rules of natural justice
have been defined with a little more precision, and are said to involve two
main principles - no man may be a judge in his own cause, and
the tribunal
must hear both sides of the case
. [Emphasis added by L'Heureux-Dubé J.]

[Emphasis in
original.]

CONCLUSION

[34]

For those reasons, I would allow the appeal, set aside the order made by
the chambers judge, and remit the petition for a new hearing.

The Honourable Mr. Justice K. Smith

I agree:

The
Honourable Madam Justice Neilson

I agree:

The Honourable Madam Justice
Bennett


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Wah Fai Plumbing & Heating Inc. v. Ma,

2011 BCCA 26

Date: 20110127

Docket: CA037596

Between:

Wah Fai Plumbing
& Heating Inc.

Appellant/Cross-Respondent

(Plaintiff)

And

Harton Kwok Hing
Ma, Yolanda Heung Ying Yuen and

True Art
Construction and Renovation and

Nghia Moc Vuong

Respondents/Cross-Appellants

(Defendants)

Before:

The Honourable Madam Justice Newbury

The Honourable Madam Justice Levine

The Honourable Mr. Justice Chiasson

On
appeal from the Supreme Court of British Columbia, September 28, 2009

(
Wah Fai Plumbing
& Heating Inc. v. Ma, Harton,
2009 BCSC 1914,

Vancouver
Registry, Docket 024839)

Counsel for the Appellant/Cross-Respondent:

J.R. White

V. Reakes

Counsel for the Respondents/Cross-Appellants:

E.G. Wong

Place and Date of Hearing:

Vancouver, British
  Columbia

October 28, 2010

Place and Date of Judgment:

Vancouver, British
  Columbia

January 27, 2011

Written Reasons by:

The Honourable Madam Justice Levine

Concurred in by:

The Honourable Madam Justice Newbury

Concurring Reasons by:

The Honourable Mr. Justice Chiasson (Page 17, para. 66)

Reasons for
Judgment of the Honourable Madam Justice Levine:

Introduction

[1]

The primary issue raised on this appeal is the claim by a subcontractor
to a lien against the holdback under the
Builders Lien Act
, S.B.C. 1997,
c. 45, as described in
Shimco Metal Erectors Ltd. v. Design Steel
Constructors Ltd.
, 2002 BCSC 238, 99 B.C.L.R. (3d) 59, affd
Shimco
Metal Erectors Ltd. v. North Vancouver (District)
, 2003 BCCA 193, 11
B.C.L.R. (4th) 199.  On this appeal, the subcontractor seeks to extend the
application of
Shimco
to circumstances where no holdback was retained by
owners as required by the
Act
.  As will be seen, it is my opinion that
the reasoning and result in
Shimco
do not apply, and should not be
extended to this case.

[2]

The appellant, Wah Fai Plumbing & Heating Inc., provided plumbing
services as a subcontractor for renovations of the home of the respondents,
Harton Kwok Hing Ma and Yolanda Heung Ying Yuen (the Owners).  The appellant claims
it is owed the amount of $47,882.98 for the work, which was completed in
November 2001.  On September 28, 2009, it sought judgment in a summary trial in
Supreme Court on the grounds that it was entitled to a declaration that it has
a lien against the amount that the Owners were required to holdback pursuant to
s. 4(1) of the
Act
, and to a constructive trust over the Owners land on
the basis of unjust enrichment.

[3]

The trial judge dismissed the appellants action.  He found that the
claim for the holdback lien was out of time, and the appellant had not proved
that the Owners were enriched.  The appellant appeals on both grounds.

[4]

In my opinion, the appellant is not entitled to a declaration of a
holdback lien in accordance with the
Act
or its interpretation in
Shimco
,
and has not shown that the chambers judge made any error in dismissing its claim
for unjust enrichment.  It follows that I would dismiss the appeal.

Background Facts

[5]

On May 18, 2000, the Owners contracted with the respondent, Nghia Moc
Vuong doing business as True Art Construction and Renovation (the Contractor),
to undertake major renovations at their Vancouver home.  The Owners had paid
the Contractor the total amount of $389,630 under the contract by the time the
Contractor abandoned the contract on January 2, 2002.  The Owners did not
retain any holdback funds as required by s. 4 of the
Act
.

[6]

On September 20, 2000, the appellant contracted with the Contractor to
perform plumbing and heating work for the renovations for the total amount of
$82,882.98.  The Contractor paid the appellant $35,000.  The appellant
completed the work on November 1, 2001, and invoiced the Contractor for the
balance owing of $47,882.98.  Two weeks later, on November 14, 2001, the appellant
filed a lien against the Owners land for the same amount.

[7]

The Contractor did not pay the appellant in full allegedly because the Owners
did not pay the Contractor the full amount claimed by it.  The Contractor went
into bankruptcy in 2006, and did not participate in these proceedings.  The Owners
claim deficiencies against the Contractor, and deny that any money is owing to
the Contractor.  The trial judge was unable to determine on the evidence
whether the Owners owe any amount to the Contractor, and appellants counsel
conceded that amount cannot be determined from the record.

[8]

On August 29, 2002, the appellant commenced an action against the Owners
and the Contractor, claiming breach of contract.  The pleadings did not refer
to any claim of lien.  On November 14, 2002, the lien the appellant had filed
against the Owners land was extinguished because it had not been perfected within
one year after it was filed by commencing an action to enforce the claim of
lien and filing a certificate of pending litigation (ss. 22, 33(1) and (5) of
the
Act
).  On May 15, 2006, the appellants claim of lien against the
land was cancelled and removed from the title to the land when a mortgage was
registered on the property.

[9]

On August 17, 2006, the appellant filed an amended statement of claim in
which it claimed a lien against the land, a lien against the holdback and
unjust enrichment against the Owners.  The appellant also filed a certificate
of pending litigation.

[10]

The trial judge ordered that the certificate of pending litigation be
removed.  The claims for a lien against the land and a certificate of pending
litigation are not in issue in this appeal.

[11]

The trial judge rejected the appellants claims for a holdback lien and
a constructive trust as a remedy for unjust enrichment, and dismissed the
appellants action.

[12]

He found that the appellant had waited too long to bring its claim for a
lien against the holdback (at para. 11):

In these
circumstances, it seems to me that the plaintiff is trying to get around the
scheme set out by the
Builders Lien Act
which requires particular steps
to be taken at certain times in order to enforce certain rights.  That
Act
sets
out a scheme designed to enable contractors, subcontractors, and owners to
secure and determine their rights within an appropriate timeframe.  The time
within which an owner would normally be able to pay out the holdback funds had
long passed by the time this claim for a lien on those funds was first raised,
even though, of course, the owners never did pay out any funds because they had
never set any aside.

[13]

The trial judge also dismissed the claim for unjust enrichment on the
grounds that the appellant had not proved the Owners were enriched, and the contract
between the Owners and the Contractor gave a juristic reason for the appellants
deprivation.  The trial judge denied the Owners costs ... in view of their own
failure to abide by the provisions of the
Act
in terms of a holdback
account (at para. 14).

[14]

The appellant appeals the dismissal of its action, and the Owners
cross-appeal the order denying them costs of the trial.

Lien Against the Holdback

[15]

The appellants claim for a lien against the holdback is based on the
decision in
Shimco
, which established that the
Act
provides for a
lien against the holdback that is distinct from and independent of the lien
against the land.

Statutory Provisions

[16]

The relevant provisions of the
Act
are ss. 2(1), 4(1), 4(9), and
8(4):

2
(1)     Subject to this Act, a
contractor, subcontractor or worker who, in relation to an improvement,

(a)        performs or provides work,

(b)        supplies material, or

(c)        does
any combination of those things referred to in paragraphs (a) and (b)

has a lien for the price of the work and material, to the
extent that the price remains unpaid, on all of the following:

(d)        the interest of the owner in the
improvement;

(e)        the improvement itself;

(f)         the land in, on or under which the
improvement is located;

(g)        the material delivered to or placed on
the land.

4
(1)      The person primarily liable
on each contract, and the person primarily liable on each subcontract, under
which a lien may arise under this Act must retain a holdback equal to 10% of
the greater of

(a)        the
value of the work or material as they are actually provided under the contract
or subcontract, and

(b)        the
amount of any payment made on account of the contract or subcontract price.

4
(9)      Subject
to section 34, a holdback required to be retained under this section is subject
to a lien under this Act, and each holdback is charged with payment of all
persons engaged, in connection with the improvement, by or under the person
from whom the holdback is retained.

8
(4)      Payment
of a holdback required to be retained under section 4 may be made after expiry
of the holdback period, and all liens of the person to whom the holdback is
paid, and of any person engaged by or under the person to whom the holdback is
paid, are then discharged unless in the meantime a claim of lien is filed by
one of those persons or proceedings are commenced to enforce a lien against the
holdback.

[17]

Section 2(1) creates a lien against the land in, on, or under which the
improvement on which the contractor or subcontractor performs work is located.
In this case, the appellant filed a claim of lien against the land, which was extinguished
in law on November 14, 2002, and discharged in May 2006.

[18]

The lien against the land is not in issue in this appeal.

[19]

Sections 4(1), 4(9) and 8(4) are relevant to the holdback lien.

How a Holdback Lien Operates

[20]

Section 4(1) of the
Act
requires a person who is primarily liable
on a contract to holdback 10% of the greater of the value of the work or
materials under the contract, and the amount of any payment made on account of
the contract. Section 4(9) provides that the holdback required to be retained is
subject to a lien.

[21]

Shimco
established, interpreting s. 4(9), that a lien against a
holdback is independent of the lien on the land established under s. 2(1) (BCSC
at paras. 17-18), and, under s. 8(4), the holdback lien is not extinguished
when a lien against the land is extinguished (BCSC at para. 20).

[22]

The holdback period expires 55 days after the completion, abandonment or
termination of the project (s. 8(2)). Once that period has expired, the
holdback may be paid out. If the money is paid out to compensate a person with
a lien on the land, that persons lien and the liens of any person engaged by
or under that person are discharged.  If in the meantime (before payment of
the holdback) a claim of lien is filed against the land, or proceedings are
commenced to enforce a lien against the holdback, the holdback may not be paid
out (s. 8(4),
Shimco
, BCSC at paras. 20, 22(j)).

Shimco

[23]

Shimco
involved a
contract between the District of North Vancouver (as owner) and Design Steel
Constructors Ltd. (as general contractor) for the construction of a tennis
court.  Design Steel hired several subcontractors to assist it with the project
but failed to pay them completely.  Seven subcontractors filed builders lien
claims against the Districts lands.  Only three claimants perfected their
liens by commencing an action and filing a certificate of pending litigation
within the stipulated time.  Shimco Metal Erectors Ltd., one of the claimants
who had failed to perfect its lien against the land, conceded that its claim
against the land was extinguished, but argued that it was still entitled to
pursue a claim of lien against the holdback moneys retained by the District as
required by s. 4 of the
Act
(BCSC at paras. 2, 3, 5).

[24]

In Supreme Court, Tysoe J. (as he then was) determined, based on prior
Supreme Court authorities and a close reading of the
Act
, that despite
the fact that the lien against the land had been extinguished, the lien against
the holdback continued to exist because the action was commenced prior to the
holdback being paid out.  Thus, the holdback continued to exist and a lien
could be filed against it  (BCSC at para. 20):

In my opinion, the wording of s.
8(4) reinforces the existence of a separate lien. It provides that a holdback
may be released upon expiry of the holdback period unless (i) a claim of lien
is filed or (ii) proceedings are commenced to enforce a lien against the
holdback. The first of these events corresponds to the s. 2 lien and the second
corresponds to the s. 4(9) lien. Even if a claimant has not filed a lien in the
land title office by the time of the expiry of the holdback period, the
holdback may not be released if proceedings have been commenced to enforce a
lien against the holdback. The lien against the land will have been
extinguished by operation of s. 22 but the holdback may not be released and
there may be continuing proceedings to enforce the lien against the holdback.
This acknowledges that there is a separate lien against the holdback which has
not been affected by the extinguishment of the lien against the land.

[25]

A unanimous division of this Court affirmed Tysoe J.s judgment.

[26]

The dual lien theory endorsed in
Shimco
was not warmly received
by the profession, and was the subject of critical commentary:  see David A.
Garner, Builders Lien Law Update  2003:  The Aftermath of
Shimco Metal
Erectors Ltd.
, prepared for the Continuing Legal Education Society of
B.C.s Construction Law  2003 Update (November 2003) at
§
1.1.3;
David Coulson,
Guide to Builders Liens in British Columbia
, loose-leaf
(Scarborough:  Carswell, 1992-) at
§
5.33; Jason S.
Twa, The Shimco Lien  A Refresher, prepared for the Continuing Legal
Education Society of B.C.s Construction Law  2009 Update (April 2009) at
11.3.3; Norm Streu & Christopher Hirst, Shimco Lien Lives On
Journal
of Commerce Online
(7 April 2003); Brindle, Jenkins & MacEwing, eds,
British
Columbia Builders Liens Practice Manual
, loose-leaf (Vancouver:  The
Continuing Legal Education Society, 1999) at
§
3.42.
[BC Practice Manual];  British Columbia Law Institute, Consultation Paper on
Builders Liens After the
Shimco
Case (Vancouver, September 2003);
British Columbia Law Institute, Report on Builders Liens After the
Shimco
Case (Vancouver, February 2004) [BCLI Report].

[27]

In the BCLI Report, the BC Law Institute summarized the concerns of
practitioners, owners, and others involved in the construction industry.  In
general, it was suggested that the existence of a holdback lien created
uncertainty, which conflicted with one of the broad policy goals of the
Act

to create certainty around the maintenance and release of holdbacks  and would
create more complex contractual negotiations, and more disputes and litigation
in the construction industry.  The primary concern was that the provisions of
the
Act
that establish procedures for claiming, enforcing and
extinguishing a lien against land do not apply to a holdback lien, creating
uncertainty concerning the scope and implementation of a holdback lien in
comparison with a land lien.  Other concerns were expressed about the owners
role in maintaining and paying out a holdback required under the
Act
.  It
was suggested by one commentator, for example, that the holdback lien as interpreted
in
Shimco
may create a personal (as opposed to an
in rem
claim)
against an owner who has failed to maintain a holdback account (or to retain a
holdback):  see B.C. Practice Manual at 3.42:

There is a
significant difference between a right
in rem
against a holdback and a
right
in personam
against an owner for the holdback obligation.  The
distinction will be important where no holdback account has been established,
and where non-contracting owners are sued.  If there is no holdback account,
then perhaps this lien is a charge against the contractors right to be paid
the holdback.  This would be the equivalent to a money judgment against the
contracting owner who failed to maintain a holdback account.

[28]

After consultation with interested parties, the BC Law Institute
recommended legislative amendments to abolish the holdback lien.  No such
amendments have been made.

The Appeal

[29]

The discussion of the implications of the holdback lien and the
recommendations of the BC Law Institute suggest a cautious approach to any
extension to other cases of the application of the reasoning and result in
Shimco
.
An analysis of
Shimco
, to determine what it decides, and of the
Act
,
to determine how it applies to the facts of this case, is necessary.

[30]

The facts in
Shimco
were that the owner retained a holdback, and the
plaintiff commenced proceedings to claim a holdback lien before its land lien
was extinguished and before the holdback had been paid out.

[31]

On those facts, Tysoe J. determined that the plaintiff was entitled to a
lien against the existing holdback, separate from its extinguished land lien,
and the plaintiffs holdback lien was not extinguished on the extinguishment of
its land lien.

[32]

In this case, the Owners did not retain a holdback from its payments to
the Contractor (or alternatively, they effectively paid the holdback to the
Contractor by wrongfully failing to holdback 10% from those payments), and the
appellant did not commence proceedings to enforce a lien against the holdback
before its land lien was extinguished (on November 14, 2002, under ss. 22 and
33(5) of the
Act
, for failure to comply with the filing requirements of
the
Act
).

[33]

On these facts, there was no holdback in existence that remained to be
paid, and the appellant had not commenced proceedings to enforce a lien against
the holdback when its land lien was extinguished.

[34]

Shimco
does not deal with these facts.  It is the
Act
which determines whether the appellant has a valid claim to a holdback lien in
these circumstances.

[35]

The relevant provision of the
Act
is s. 8(4), which I reproduce
here for convenience:

8
(4)      Payment
of a holdback required to be retained under section 4 may be made after expiry
of the holdback period, and all liens of the person to whom the holdback is
paid, and of any person engaged by or under the person to whom the holdback is
paid, are then discharged unless in the meantime a claim of lien is filed by
one of those persons or proceedings are commenced to enforce a lien against the
holdback.

[36]

If the Owners had retained a holdback as required by s. 4(1) of the
Act
,
under s. 8(2) the holdback period would have expired 55 days after January 2,
2002, the date the Contractor abandoned the contract.  Section 8(4) provides
that the holdback could then be paid out unless a claim of lien was filed
against the land or proceedings were commenced to enforce a lien against the
holdback.

[37]

At the expiry of the holdback period (February 22, 2002), the
appellants lien had been filed against the land.  The holdback could not have
been paid out until the resolution of the claim.

[38]

The appellants land lien was extinguished one year after it was filed,
on November 14, 2002.

[39]

As of November 14, 2002, the appellant had not commenced proceedings to enforce
a lien against the holdback.  Under s. 8(4), the Owners could then have
lawfully paid out the holdback, extinguishing the appellants lien against the holdback.

[40]

Shimco
does not deal with these circumstances.  Nor can the
Act
be interpreted to provide that where there is no holdback, or a holdback has
been wrongfully paid out, a person whose land lien has been extinguished may later
commence proceedings to enforce a lien against a nonexistent holdback.

[41]

The appellant argues there is no limitation in the
Act
for
enforcing a lien against the holdback.  It claims that proceedings to enforce a
lien against a holdback may be commenced any time before the holdback is paid
out, subject only to the six-year limitation period provided in s. 3(5) of the
Limitation
Act
, R.S.B.C. 1996, c. 266.  It argues further, citing s. 4(4) of the
Limitation
Act
, that the amendment to the statement of claim in August 2006 to claim
the holdback lien did not have the effect of commencing a new action, and its
claim against the holdback should be considered to have arisen when it
originally filed the writ and statement of claim in August 2002.

[42]

The appellant cites no authority for its suggestion that s. 4(4) of the
Limitation
Act
should be given retroactive effect, and I see no basis in principle to
so find in this case.  In any event, it would not change the result:  the
appellant is not entitled to claim a lien against a nonexistent holdback.

[43]

The fact there was no holdback is the principal difference between this
case and
Shimco
.  Even if the appellant commenced proceedings to claim a
holdback lien before its land lien expired, there was nothing against which the
lien could be claimed.  The
Act
does not provide for enforcement of a
holdback lien where there has been no holdback, nor is there any reason to
extend
Shimco
to that factual circumstance.

[44]

It is true that the Owners failure to comply with s. 4 of the
Act
is the primary cause of the loss of the appellants holdback lien.  That is the
result of the wording of the legislation, which the Legislature has the power
to remedy.  It is also true that the appellant did not take steps to claim a
lien against the holdback until long after the time that the Owners could have
paid out the holdback, had they retained it.

[45]

It follows that I would not accede to this ground of appeal.

Unjust Enrichment

[46]

The appellants claim for unjust enrichment is brought in the alternative
to its claim for a lien against the holdback.

[47]

At trial, the appellant claimed that the Owners were unjustly enriched
because of the work that it completed on their home. The Owners were enriched
by the improvements, while the appellant was deprived because he was not paid
for that work.  The appellant asserts that because the Owners have not paid all
that is owed on the contract between them and the Contractor, there is no
juristic reason for their enrichment.

[48]

The trial judge found that the appellant had been deprived.  He did not
find that the Owners were correspondently enriched because the appellant did
not prove that the Owners did not pay the full amount owed under the contract
to the Contractor. If the full amount was paid for the renovation, it could not
be said that the Owners were enriched.  The onus was on the appellant to prove
that the Owners did not pay the full cost of the renovations.  The trial judge found
that the appellant failed to discharge that burden.

[49]

The trial judge decided that, in any event, the contract between the Owners
and the Contractor was a juristic reason for the benefits [the Owners}
obtained from the appellants work (at para. 6).  He found further that the
... deprived [appellant], who was not a party to that contract, does not have
a sufficient relationship to the owners to demonstrate the absence of a
juristic reason (at para. 6).

[50]

The parties focused much of their argument on whether a contract is a
juristic reason for the appellants deprivation.  They say that the law in
Canada is not settled on this point. The respondent argues that the existence
of a contract, in itself, precludes a claim for unjust enrichment, citing
Garland
v. Consumers Gas Co.
, 2004 SCC 25 at paras. 40, 44-46; [2004] 1 S.C.R.
629;
Pacific National Investments v. Victoria (City)
, 2004 SCC 75 at
paras. 23-25, [2004] 3 S.C.R. 575.  The appellant argues that the state of
accounts between the parties to the contract (in this case, the Owners and the
Contractor) is relevant to whether an owner retaining a benefit is supported by
a juristic reason, citing, among other cases,
Ken Lawter Holdings Ltd. v.
Steen Panduro Holdings Ltd.
(1991), 55 B.C.L.R. (2d) 317 (C.A.).  It
suggests that the statement in
Garland
, referred to in
Pacific
National Investments
, that the existence of a contract is an established
category of juristic reason resulting in the denial of a claim for unjust
enrichment, was not applied in those cases.

[51]

Where the parties differ is on the question of whether proof of the
state of accounts between the Owners and the Contractor is necessary to the
claim for unjust enrichment.  The appellant says that is determinative:  if the
Contractor was not paid in full, the Owners were unjustly enriched.  The Owners
argue that the existence of the contract, whether or not they paid the
Contractor in full, is a juristic reason for any enrichment they may have
received.

[52]

It is trite law that the three elements of a claim for unjust enrichment
are an enrichment of the defendant; a corresponding deprivation of the
plaintiff; and an absence of juristic reason for the enrichment:  see
Garland
at para. 30.

[53]

Thus, for the appellant to succeed on its claim for unjust enrichment,
it must prove enrichment of the Owners.

[54]

The appellant concedes that that the state of accounts between the Owner
and the Contractor must be resolved before it can be determined whether the
Owners were enriched, and there is insufficient evidence on the record to
determine that question.  Without proving that the Owners were enriched by
failing to pay the Contractor in full, an unjust enrichment claim cannot
succeed.

[55]

On appeal, the appellant argues that on the summary trial, the trial
judge could have concluded that he could not decide the issue and referred it
to trial instead of dismissing the action.

[56]

In my opinion, the appellant failed to prove its case on this issue.
The appellant did not provide any information to this Court to explain why it
could not produce the evidence necessary to prove its claim for unjust
enrichment at the summary trial, and why it would have been unjust for the
trial judge to dismiss the claim for unjust enrichment.

[57]

Since the appellant has not proved that the Owners were enriched, the
issue of whether there is a juristic reason for any enrichment does not arise.

[58]

I would not accede to this ground of appeal.

Costs

[59]

The Owners cross-appeal the order denying them the costs of the trial.

[60]

The Owners cross-appealed from the order for costs without applying for
leave under s. 7(2)(b) of the
Court of Appeal Act
, R.S.B.C. 1996, c. 77,
which provides that leave is required to bring an appeal from an order
respecting costs only.  This matter was raised by the division at the hearing,
and the parties provided written submissions on whether leave to cross-appeal
was required.

[61]

Previous cases of this Court have made it clear that where an order for
costs is integral to a judgment from which an appeal is brought, leave is not
required to appeal or cross-appeal the order for costs:  see
Rieta v. North
American Air Travel Insurance Agents Ltd.
(1998), 52 B.C.L.R. (3d) 114
(C.A.);
Heppner v. Schmand
(1997), 29 B.C.L.R. (3d) 128 (Esson J.A. in
chambers);
Cao (Guardian ad litem of) v. Natt
, 2004 BCCA 446 (Esson
J.A. in chambers).

[62]

The trial judge refused costs to the successful Owners because their
failure to comply with the holdback provisions of the
Act
affected the
manner in which the action proceeded.  In doing so, the trial judge erred in
principle in exercising his discretion as to costs by relying on pre-litigation
conduct of the Owners:  see
Rossmo v. Vancouver Police Board et al.,
2003 BCCA 677 at paras. 59 and 62, 21 B.C.L.R. (4
th
) 68, followed in
Brito (Guardian ad litem of) v. Woolley
, 2007 BCCA 1 at paras. 27 and
28, 63 B.C.L.R. (4
th
) 139.  This Court said in
Rossmo
at
para. 62:

I conclude that the trial judge
erred in principle by basing her decision on pre-litigation conduct.  The very
purpose of the litigation was to determine whether the impugned conduct
supported a cause of action leading to a judgment in damages.  The trial judge
found no liability against DCC Unger.  Costs should follow that determination.
The order denying him costs amounts to a finding of quasi-liability and cannot
be sustained.

[63]

Similarly, in this case, the very purpose of the litigation was to
determine whether the failure of the Owners to retain a holdback supported a
cause of action by the appellant to enforce a claim against the holdback.  The
trial judge found that it did not.  The order denying the Owners costs amounts
to a finding of quasi-liability.  While the nonexistence of the holdback is the
primary reason for denying the appellants claim, it is the application of the
law that gives rise to that result.

[64]

I would allow the Owners cross-appeal, set aside the order of the trial
judge denying them the costs of the summary trial, and order that they are
entitled to those costs.

Conclusion

[65]

I would dismiss the appeal, allow the cross-appeal, and order that the
Owners are entitled to the costs of the summary trial and the appeal.

The Honourable
Madam Justice Levine

I Agree:

The Honourable
Madam Justice Newbury

Reasons for Judgment of the Honourable Mr. Justice Chiasson:

[66]

I have had the privilege of reading a draft of the reasons for judgment
of Madam Justice Levine.  I agree with her conclusion, but wish to add a few
comments.

[67]

A lien is a right
in rem
.  It must attach to property.  Newbury
J.A. made this very clear in
Columbia (Workers' Compensation Board) v.
Canadian Imperial Bank of Commerce
(1998), 157 D.L.R. (4th) 193.  Section 4
requires a person liable on a contract, in this case the owners, to retain
money payable to contractors.  Retain means continue to have; keep
possession of:
Concise Oxford English Dictionary
,
11
th
ed.
The money retained is the property to which the lien attaches.

[68]

In
Voth Bros. Const. (1974) Ltd. v. National Bank of Canada
(1988), 54 D.L.R. (4th) 534 (B.C.C.A)
,
this Court observed that the
holdback did not have to be in a specific fund. Section 5 was a new feature of
the
Builders Lien Act
, S.B.C. 1997, c. 45 (which came into force on
February 1, 1998).  It provides for the creation of a specific fund: the
holdback account.

[69]

In its factum, the appellant stated, without reference to authority,
that the legislation provides for three liens: land, holdback and holdback
account.  In my view, that is not correct.  There are two liens only: the land
lien and the holdback lien.  The holdback account is merely the holdback held
in a designated fund, from which liens are paid.  It is the same money that is
required to be retained by s. 4.

[70]

This is clear from a consideration of ss. 4 and 5.  Section 4(1)
requires the retention of money.  Section 5(1)(b) requires that money to be put
into a depository, unless the money is retained by a lending institution (ss.
5(4), 4(4) and (5)).  The failure of an owner to put the money into a
depository or to have it retained by a lender does not relieve the owner of the
responsibility to retain the money pursuant to s. 4.

[71]

In
Shimco
there was a holdback; there was property to which the
holdback lien could attach.  In this case, as Madam Justice Levine observes,
there was no holdback.  The owners did not retain the money required to be
retained by s. 4.  There was no property to which the lien could attach.  That
is why the appellant cannot obtain a declaration of lien. If an owner has not
retained money, whether in or not in a specific fund, no lien can arise.

[72]

The appellants difficulty derives from the legislation.  Section 4
provides for a lien.  The legislation is silent on any remedy that may be
available to a claimant arising out of an owners failure to meet the statutory
obligation to retain funds to which that lien could attach.  There may be such
a remedy, about which I give no opinion, but a declaration of lien is not one of
them.

[73]

I also would dismiss this appeal.

The Honourable
Mr. Justice Chiasson


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Domirti v. Domirti,

2011 BCCA 30

Date: 20110128

Docket: CA037259

Between:

Janice Marian
Domirti (Skinner)

Respondent

(Plaintiff)

And

Doriano Domirti

Appellant

(Defendant)

Before:

The Honourable Madam Justice Saunders

The Honourable Madam Justice Levine

The Honourable Madam Justice D. Smith

Supplementary Reasons
to: Court of Appeal for British Columbia,
October 27, 2010 (
Domirti v. Domirti,
2010 BCCA 472,
Vancouver Docket No. CA037259)

Counsel for the Appellant:

G. Walker

Counsel for the Respondent:

B. Ingram

Place and Date of Hearing:

Vancouver, British
  Columbia

September 13, 2010

Place and Date of Judgment:

Vancouver, British
  Columbia

October 27, 2010

Written Submissions Received:

December 23, 2010,

January 6 and 21,
  2011

Date of Supplementary Judgment:

January 28, 2011

Supplementary Reasons of the Court

Reasons for Judgment of the Court:

[1]

The appellant, Doriano Domirti, seeks an order for costs attendant upon
the order of this Court in which we allowed his appeal and terminated his
obligation to pay the respondent, Janice Skinner, spousal support after 16
years. The order provided that the date of termination was the date upon which
the appellant retired from his long-time employment.

[2]

In the court below, the respondent had opposed the appellants
application to terminate her spousal support. The appellant had made the
application at a review hearing, which was ordered as a condition of an earlier
order that awarded the respondent continued spousal support subject to a full
review after 12 months.

[3]

The review hearing was held on April 30 and May 1, 2009. On June 5,
2009, the court below dismissed the appellants application to terminate the
respondents spousal support (the Review Order) and maintained her spousal
support for an indefinite period. On February 1, 2010, the appellant retired
and began to receive his pension. That pension was divided with the respondent
pursuant to the terms of the parties order for divorce.

[4]

This Court allowed the appellants appeal, set aside the Review Order,
and granted the appellants application to terminate spousal support as of the
date of the appellants retirement on February 1, 2010. It further ordered that
any spousal support that has been paid by the appellant under the Review Order
since February 1, 2010, be applied to any outstanding arrears of support:
Domirti v. Domirti,
2010 BCCA 472 at para. 51.

[5]

Following the release of our reasons, the appellant applied to the
Registrar of the Court for clarification on the form and content of our order
and for the opportunity to make further submissions on the issue of costs.

[6]

In regard to the first issue, we reiterate that the orders made by the
Court are contained in full in para. 51 of our reasons for judgment. Any
further issue in regard to an accounting of payments that may have been made by
the appellant after February 1, 2010, against the respondents share of his
pension, are a matter that in our view must be addressed by way of application
in the court below.

[7]

In regard to the issue of costs, it is our view that pursuant to R. 23
of the
Court of Appeal Rules,
costs of the appeal follow the event and
therefore the appellant as the successful party in this Court is entitled to
his costs of the appeal. It is also our view that as a result of our order on
appeal, the parties success in the court below was divided. While the
appellant succeeded in terminating his obligation to pay spousal support, the
respondent succeeded in continuing that obligation until February 1, 2010, when
the appellant retired. Accordingly, we would order that each party bear their
own costs of the appellants application in the court below.

The Honourable
Madam Justice
  Saunders

The Honourable
Madam Justice
  Levine

The Honourable
Madam Justice D.
  Smith