COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Cottrill v. Utopia Day Spas and Salons Ltd.,

2019 BCCA 26

Date: 20190124

Docket:
CA44471

Between:

Jennifer Cottrill

Respondent

And

Utopia Day Spas
and Salons Ltd.

Appellant

Before:

The Honourable Mr. Justice Goepel

The Honourable Mr. Justice Savage

The Honourable Madam Justice Fisher

Supplementary Reasons
to
Cottrill v. Utopia Day Spas and Salons Ltd.,

2018 BCCA 383.

Counsel for the Appellant:

R. Mahil

Counsel for the Respondent:

R.B. Johnson

Place and Date of Hearing:

Vancouver, British
  Columbia

September 27, 2018

Place and Date of Judgment:

Vancouver, British
  Columbia

October
  17, 2018

Written Submissions Received:

November 30, December
  7

and
  12, 2018

Date of Supplementary Judgment:

January 24, 2019

Supplementary Reasons of the
Court

Summary:

At trial, the respondent succeeded
in obtaining damages for wrongful dismissal, aggravated damages and costs. The
appellant challenged the respondents entitlement to trial costs on the basis
that the respondent ought to have brought her claim in the Provincial Court,
which the Chief Justice dismissed in reasons indexed at 2017 BCSC 1925. The
appellant successfully appealed the aggravated damages award, which this Court set
aside in reasons indexed at 2018 BCCA 383. The appellant now seeks costs of the
appeal, and asks this Court to set aside the order awarding trial costs to the
respondent. Held: application allowed in part. As the appellant was successful
on the appeal, it is entitled to the costs of the appeal. The application to
set aside the costs award in the court below is denied. Having not appealed the
costs order of the Chief Justice in its appeal proper, the appellant cannot now
challenge that order. Further, the respondent was successful in her cause of
action at trial, and it was not unreasonable for her to refuse the appellants offer
to settle.

Supplementary Reasons for
Judgment of the Court:

INTRODUCTION

[1]

The respondent, Jennifer Cottrill, sought damages for wrongful dismissal
against her employer, the appellant, Utopia Day Spas and Salons Ltd. (the Company).
The trial judge, in reasons indexed at 2017 BCSC 704, found that Ms. Cottrill
had been wrongfully dismissed and awarded her eight weeks severance pay and because
of the manner of dismissal, a further $15,000 in aggravated damages. She also
awarded costs to the respondent.

[2]

Following the trial, the appellant challenged the costs award in further
written submissions. As the trial judge had retired, the Chief Justice, in
reasons indexed at 2017 BCSC 1925, upheld the trial judges costs award to the
respondent.

[3]

On the appeal, the Company challenged only the award of aggravated
damages. In reasons indexed at 2018 BCCA 383, we allowed the appeal and set
aside the aggravated damage award.

[4]

The parties have now filed written submissions on the question of costs
of the appeal and the trial.

POSITION OF THE PARTIES

[5]

The Company seeks the following orders respecting costs as a result of
the outcome on appeal:

1.       costs of the appeal;
and

2.       with
respect to the costs of trial, an order setting aside the award of costs to Ms. Cottrill
and ordering that:

(a)      each
of the parties shall bear its own costs up to the date of the Companys offer
to settle, and the Company be awarded its costs after the date of the offer
through to the end of trial; or

(b)      in
the alternative, each party shall bear its own costs throughout.

[6]

Ms. Cottrill does not seriously challenge the Companys entitlement
to the costs of the appeal. She submits, however, that the Company having not
specifically appealed the costs order, cannot at this time ask the court to
revisit the matter of trial costs. Alternatively, she submits that she was the
successful party at trial and the trial costs award should not be disturbed
notwithstanding the Companys offer to settle.

BACKGROUND

[7]

To put the parties costs submissions in context, it is first necessary
to review the proceedings in the trial court. Ms. Cottrill claimed for wrongful
dismissal. At trial she sought common law damages of $28,280, representing 12
months of salary in lieu of notice, aggravated and punitive damages of $20,000
and costs.

[8]

The Companys position at trial was that the plaintiff was terminated
for cause. In the alternative, the Company submitted that the plaintiffs
damages were limited by the terms of her employment contract to eight weeks
severance pay.

[9]

The trial judge described the issues before her as: whether the
defendant had cause to terminate Ms. Cottrill; if not, what was the period
of notice to which she was entitled; and, whether she was entitled to
aggravated or punitive damages.

[10]

The trial judge found that Ms. Cottrill had been wrongfully
dismissed, but that the employment contract was binding and limited her damages
to eight weeks salary in lieu of notice. In addition, she awarded Ms. Cottrill
$15,000 in aggravated damages. The trial judge awarded costs to the plaintiff.
In doing so, she stated:

[146]    Costs are awarded to the
plaintiff unless there are circumstances which bear o[n] this issue of which I
am not aware. In that eventuality, the parties may make arrangements for
submission through Supreme Court Scheduling.

[11]

The parties were unable to agree on the question of costs. The trial
judge having retired, the costs issue was heard and determined by the Chief
Justice. At the costs hearing, the Company, relying on R. 14-1(10) of the
Supreme
Court Civil Rules
argued that Ms. Cottrill was not entitled to costs,
other than disbursements, because she had recovered a sum within the
jurisdiction of the Provincial Court. The Chief Justice rejected this
submission and concluded that in this case there was sufficient reason for
bringing the proceeding in the Supreme Court. He awarded Ms. Cottrill her
reasonable and taxable costs and disbursements of the action.

DISCUSSION

A.       Costs of the Appeal

[12]

The Company was successful on the appeal. It is entitled to the costs of
the appeal. Ms. Cottrill does not suggest otherwise.

B.       Costs of Trial

Sufficient Reason for Bringing Claim in the Supreme Court (R. 14-1(10))

[13]

We agree with Ms. Cottrill that it is too late for the Company to
now challenge the Chief Justices costs award on the basis that
the case is one that should have been
brought in Provincial Court.
The point in time for a
consideration of whether a plaintiff had sufficient reason for bringing a
proceeding in the Supreme Court rather than the Provincial Court is the time of
the initiation of the action
:
Reimann v. Aziz
, 2007 BCCA 448 at paras. 3843.
In this case, the Chief Justice decided there was sufficient reason. Our
decision allowing the appeal on the question of
aggravated damages does
not change the analysis or impact on that decision. If the Company wanted to
challenge the decision that there was sufficient reason to bring the matter in
Supreme Court, it had to do so in the appeal proper. We will not at this late
stage re-open the appeal to allow the Company to raise this issue.

Success at Trial (R. 14-1(9))

[14]

The Company submits that the result of the appeal substantially impacts
the trial judgment and the relevant success of the parties in the underlying
proceeding. Given that the trial result was modified on appeal, this Court has
jurisdiction to set aside and vary the award of trials costs:
Reid v. Reid
,
2017 BCCA 191 at paras. 1315;
The Owners, Strata Plan K855 v. Big
White Mountain Mart Ltd
., 2017 BCCA 438 at para. 84.

[15]

The Company notes that as a result of the appeal having been allowed:

(a)      the
trial judgment was reduced from $19,795.78 to $4,795.78, a reduction of more
than 75%; and

(b)      The
award of $4,795.78 obtained by Ms. Cottrill at trial is less than 10% of
the quantum of $48,280 that she sought at trial.

[16]

It submits that in terms of issues in dispute at trial, Ms. Cottrills
success was limited to a finding that she was wrongfully dismissed. She was
unsuccessful at trial on the issue of whether the termination provision in her
employment contract was unenforceable for lack of consideration such that she
was entitled to common law damages, and, as a result of the appeal, was
ultimately unsuccessful on the issue of whether aggravated and/or punitive
damages should be awarded. The Company submits that on those issues it was the
successful party. In the result, it submits that it can no longer be said that Ms. Cottrill
was substantially successful at trial.

[17]

With respect, we do not agree. The question is not whether Ms. Cottrill
was substantially successful at trial. The substantial success test applies
when the litigation concerns multiple causes of actions:
Strata Plan LMS
3259 v. Sze Hang Holdings Inc
., 2017 BCCA 346 at paras. 9192. This is
not such a case.

[18]

Pursuant to R. 14-1(9), costs in a proceeding must be awarded to the
successful party unless the court otherwise orders. In cases involving a single
cause of action the successful party is the plaintiff who establishes liability
under that cause of action and obtains a remedy, or a defendant who obtains a
dismissal of the plaintiffs case:
Loft v. Nat
, 2014 BCCA 108 at para. 46.
The fact that Ms. Cottrill obtained a judgment in an amount less than
sought, is not, by itself, a proper reason to deprive her of costs:
3464920
Canada Inc. v. Strother
, 2010 BCCA 328 at para. 43.

[19]

In this case Ms. Cottrill sued for damages for breach of her
employment contract. She succeeded in her claim and unless the court otherwise
orders, she is entitled to the costs of the action notwithstanding that she
recovered an amount less than that sought.

The Offer to Settle (R. 9-1)

[20]

One circumstance in which the court may otherwise order is where a party
fails to accept a formal offer to settle made under R. 9-1.
Rule 9-1(5) sets out the
options that are open to a court in circumstances in which an offer to settle
has been made
:

(a) deprive a party of any or
all of the costs, including any or all of the disbursements, to which the party
would otherwise be entitled in respect of all or some of the steps taken in the
proceeding after the date of delivery or service of the offer to settle;

(b) award double costs of all
or some of the steps taken in the proceeding after the date of delivery or
service of the offer to settle;

(c) award to a party, in
respect of all or some of the steps taken in the proceeding after the date of
delivery or service of the offer to settle, costs to which the party would have
been entitled had the offer not been made;

(d) if the offer was made by a defendant and the judgment
awarded to the plaintiff was no greater than the amount of the offer to settle,
award to the defendant the defendants costs in respect of all or some of the
steps taken in the proceeding after the date of delivery or service of the
offer to settle.

[21]

In
C.P. v. RBC
Royal Life Insurance
, 2015 BCCA 30 at paras. 9092, this Court held
that double costs cannot be awarded to a defendant if the plaintiff has
obtained a judgement in its favour. The options therefore available on this application
are to decline to award Ms. Cottrill costs
in
connection with steps taken in the proceeding after service of the offer, award
the Company its costs in respect to steps taken in the proceeding after
delivery of the offer or award Ms. Cottrill her costs as though the offer
had not been made.

[22]

When making an order under R. 9-1(5) the court may consider the factors
set out in R. 9-1(6):

(a) whether the offer to settle was one that
ought reasonably to have been accepted, either on the date that the offer to
settle was delivered or served or on any later date;

(b) the relationship between the terms of
settlement offered and the final judgment of the court;

(c) the relative financial circumstances of the
parties;

(d) any other factor the court
considers appropriate.

[23]

In this case the Company on May 12, 2016, made a formal offer to settle on
the following terms:

1.       the defendant will pay the
plaintiff equivalent eight weeks salary as severance; and

2.       both parties bear their
own costs.

[24]

The offer was transmitted in an email on Thursday, May 12 at 5:52 p.m.
It was open for acceptance until 12:00 p.m. Monday, May 16. On Thursday May 12,
2016 at 8:53 p.m., counsel for Ms. Cottrill rejected the offer.

[25]

At the time the offer was made, the parties had concluded discoveries
and had filed trial briefs setting out the issues for trial and their
respective positions. The trial was less than a month away. It was common
ground that the written employment agreement was signed by Ms. Cottrill on
her first day of work. The respondents trial brief indicated that she was the
only witness scheduled to appear on her own behalf and no documentary evidence
had been produced in the litigation in support of the claim to aggravated
damages. The Company submits that in the circumstances the plaintiff should
have known that proceeding with a five-day trial (which ultimately lasted six
days) was a significant gamble and there was a substantial risk that the claims
beyond entitlement to eight weeks notice would not succeed.

[26]

The Company submits that its offer was not a nuisance offer, but one that
reflected the full amount of notice payable in the event that Ms. Cottrill
was found to have been wrongfully dismissed. The Company submits that in all of
the circumstances, the offer was one which ought to have been accepted and the
Company should be awarded its costs of the proceeding below from the date that
the offer was served.

[27]

In
C.P.
at paras. 9495, this Court summarized the principles
of the offer to settle rule:

[94]      The underlying purpose of
the offer to settle rule was set out in
Hartshorne
:

[25]      An award of double costs
is a punitive measure against a litigant for that partys failure, in all of
the circumstances, to have accepted an offer to settle that should have been
accepted. Litigants are to be reminded that costs rules are in place to
encourage the early settlement of disputes by rewarding the party who makes a
reasonable settlement offer and penalizing the party who declines to accept
such an offer (
A.E. v. D.W.J
., 2009 BCSC 505, 91 B.C.L.R. (4th) 372 at para. 61,
citing
MacKenzie v. Brooks
, 1999 BCCA 623,
Skidmore v. Blackmore
(1995), 2 B.C.L.R. (3d) 201 (C.A.),
Radke v. Parry
, 2008 BCSC 1397). In
this regard, Mr. Justice Frankels comments in
Giles
, are apposite:

[74]      The purposes for which
costs rules exist must be kept in mind in determining whether appellate
intervention is warranted. In addition to indemnifying a successful litigant,
those purposes have been described as follows by this Court:

§

[D]eterring frivolous actions or defences:
Houweling
Nurseries Ltd. v.
Fisons
Western Corp.
(1988), 37 B.C.L.R. (2d) 2 at 25 (C.A.), leave refd, [1988] 1 S.C.R. ix;

§

[T]o
encourage conduct that reduces the duration and expense of litigation and to
discourage conduct that has the opposite effect:
Skidmore v. Blackmore
(1995), 2 B.C.L.R. (3d) 201 at para. 28 (C.A.);

§

[E]ncouraging litigants to
settle whenever possible, thus freeing up judicial resources for other cases:
Bedwell
v. McGill
,
2008 BCCA 526, 86 B.C.L.R.
(4th) 343
at para. 33;

§

[T]o have a winnowing
function in the litigation process by requir[ing] litigants to make a careful
assessment of the strength or lack thereof of their cases at the commencement
and throughout the course of the litigation, and by discourag[ing] the
continuance of doubtful cases or defences:
Catalyst Paper Corporation v.
Companhia de Navegação Norsul
,
2009
BCCA 16, 88 B.C.L.R. (4th) 17
at para. 16.

[95]      A plaintiff who rejects a
reasonable offer to settle should usually face some sanction in costs. To do
otherwise would undermine the importance of certainty and consequences in
applying the Rule:
Wafler v. Trinh
,
2014 BCCA 95
at para. 81.
The importance of those principles was emphasized by this Court in
A.E.
Appeal
at para. 41:

[41]      This conclusion is
consistent with the importance the Legislature has placed on the role of
settlement offers in encouraging the determination of disputes in a
cost-efficient and expeditious manner. It has placed a premium on certainty of
result as a key factor which parties consider in determining whether to make or
accept an offer to settle. If the parties know in advance the consequences of
their decision to make or accept an offer, whether by way of reward or
punishment, they are in a better position to make a reasoned decision. If they
think they may be excused from the otherwise punitive effect of a costs rule in
relation to an offer to settle, they will be more inclined to take their
chances in refusing to accept an offer. If they know they will have to live
with the consequences set forth in the Rule, they are more likely to avoid the
risk.

[28]

As set
out above, when making an order under R. 9-1(5), the court may consider the
factors set out in R. 9-1(6). We will consider those factors in turn.

i.     Should the Offer
Have Been Accepted

[29]

Whether an offer to settle is one that ought reasonably to have been
accepted is assessed not by reference to the award that was ultimately made,
but under the circumstances existing when an offer was open for acceptance. In
Hartshorne
v. Hartshorne,
2011 BCCA 29 at para. 27, this Court explained:

[27]      The first factor - whether the offer to settle was one
that ought reasonably to have been accepted - is not determined by reference to
the award that was ultimately made. Rather, in considering that factor, the
court must determine whether, at the time that the offer was open for
acceptance, it would have been reasonable for it to have been accepted:
Bailey
v. Jang
, 2008 BCSC
1372, 90 B.C.L.R. (4th) 125
at para. 24;
A.E.
v. D.W.J.
at para. 55. As was said in
A.E. v. D.W.J.
, The
reasonableness of the plaintiffs decision not to accept the offer to settle
must be assessed without reference to the courts decision (para. 55).
Instead, the reasonableness is to be assessed by considering such factors as
the timing of the offer, whether it had some relationship to the claim (as
opposed to simply being a nuisance offer), whether it could be easily
evaluated, and whether some rationale for the offer was provided. We do not
intend this to be a comprehensive list, nor do we suggest that each of these
factors will necessarily be relevant in a given case.

[30]

As recently noted by Justice Gomery in
Kobetitch v. Belski
, 2018
BCSC 2247 at paras. 2425, the wording of the subrule is important. The
issue is not whether the offer was reasonable but whether it was unreasonable
to refuse it. He explained the distinction as follows:

[24]      In my opinion, the wording of the subrule stating
this consideration is important. The consideration is not whether it would have
been reasonable for the plaintiff to have accepted the offer. It is whether the
plaintiff
ought
reasonably to have accepted the offer. The difference is
this. An offer might be such that a reasonable plaintiff could choose to accept
it or not. One might term it a reasonable offer. On the other hand, to say
that an offer ought reasonably to have been accepted is to say that a reasonable
person should have accepted it. It was unreasonable to refuse it.

[25]      According to the distinction I am drawing, having
regard to the wording of the subrule, the consideration is not whether the
offer was a reasonable offer. It is whether it was unreasonable for the
plaintiff to refuse it.

[Emphasis in original.]

[31]

We agree with that analysis. It is also important to point out that the
fact that it may be reasonable for a party to refuse an offer does not necessarily
immunize that party from the consequences of a reasonable offer to settle:
Wafler
v. Trinh
, 2014 BCCA 95 at paras. 7982. For example, in the oft cited
cases of
Bailey v. Jang
, 2008 BCSC 1372, and
A.E. v. D.W.J
, 2009 BCSC
505, referenced in the above quotation from
Hartshorne
, the plaintiffs were
sanctioned in costs notwithstanding that the trial judges in each case found
that it was not unreasonable for them to reject the offer to settle.

[32]

In this case the Companys offer to settle accurately forecast the
outcome of the trial. Ms. Cottrill had adequate time to consider the offer
as evidenced by her rejection of the offer while it remained outstanding. A
reasonable person may have chosen to accept the offer. The offer was, however,
for but a small fraction of the amounts that Ms. Cottrill was seeking in
the litigation and gave no recognition to the possibility that Ms. Cottrill
may be awarded more than eight weeks severance, as well as costs. The offer did
not offer a genuine compromise or an incentive to settle. Given the amounts
sought in the litigation, it was not unreasonable for her to refuse it. Ms. Cottrill
did not act
unreasonably by taking a chance and proceeding to trial. We are of the opinion
that the offer was not one that ought reasonably to have been accepted by the
plaintiff.

ii.    Relationship
Between Offer and Final Judgment

[33]

The offer to settle was for the equivalent of eight weeks salary with
each side paying their own costs. The trial judgment was for eight weeks
salary together with costs and disbursements. In those circumstances it cannot
be said that Ms. Cottrill would have been better served by accepting the
offer to settle because if she had done so she would given up her right to
costs.

iii.   Financial
Circumstances of the Parties

[34]

While Ms. Cottrills financial circumstances are undoubtedly less
than that of the Company, there is no evidence that the Company improperly used
its financial advantages in the litigation. In our view the relative financial
circumstances are not in this case a material consideration.

iv.   Other
Considerations

[35]

An offer that precisely
forecasts the outcome of an action is objectively reasonable. A party is
not required to compromise
its claim beyond their own objective assessment of the case in order to obtain
the benefit of an offer to settle:
Domtar
Inc. v. Univar Canada Ltd.
, 2012 BCSC 510 at para. 45;
Tham v.
Bronco Industries Inc
., 2018 BCSC 240 at para. 17.
The Companys offer recognized that Ms. Cottrill
would succeed on her wrongful dismissal claim but that her recovery would be
limited to eight weeks severance. While that was a reasonable positon, it was far
from generous and provided Ms. Cottrill with little incentive to settle.

C.       Conclusion

[36]

The purpose of the offer to settle rule is to encourage the settlement
of disputes by rewarding the party who makes a reasonable settlement offer and
penalizes the party who declines to accept such an offer. The most critical
factor in this case is that the offer to settle was, when costs are taken into
account, for a sum less than Ms. Cottrill was awarded at trial. A party
should not be punished in costs for refusing to accept an offer that is less
than the award received at trial.

[37]

Accordingly, in the circumstances of this case, we would not set aside
the trial costs award. Ms. Cottrill should receive the costs of trial as
though the offer had not been made.

SUMMARY

[38]

The Company is entitled to the costs of the appeal. We will not set
aside or modify the trial costs award. In regards to this application, Ms. Cottrill
has been successful on the contested issues and is entitled to the costs of the
application.

The Honourable Mr. Justice Goepel

The Honourable Mr. Justice Savage

The
Honourable Madam Justice Fisher


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

R. v. Russell,

2019 BCCA 51

Date: 20190124

Docket: CA45261

Between:

Regina

Respondent

And

Dennis Dwight
Russell

Appellant

Before:

The Honourable Madam Justice Newbury

The Honourable Madam Justice Stromberg-Stein

The Honourable Madam Justice Fisher

On appeal from:  An
order of the Provincial Court of British Columbia, dated
March 2, 2018 (
R. v. Russell
, Vancouver Dockets 247967-1 and 248051-1).

Oral Reasons for Judgment

Counsel for the Appellant:

J. Whysall

C.D. Waker

S. Dickson, Articled
  Student

Counsel for the Respondent:

C.E. Tomusiak

Place and Date of Hearing:

Vancouver, British
  Columbia

January 24, 2019

Place and Date of Judgment:

Vancouver, British
  Columbia

January 24, 2019

Summary:

Mr. Russell entered
guilty pleas to breach of a long term supervision order and voyeurism. He was
sentenced to 365 days for the LTSO breach (less 356 days for pre-sentence
custody credit), and 18 months consecutive for voyeurism followed by three
years probation. Mr. Russell appeals his sentence on the basis that the
sentencing judge did not give him the correct pre-sentence custody credit,
imposed a demonstrably unfit sentence, and erroneously imposed a three-year
probation order. Held: appeal allowed to the extent of providing an additional
27 days for pre-sentence custody credit at a rate of 1.5:1, reducing the length
of the probation to 18 months, and varying certain terms of the probation
order. The sentencing judge properly considered the sentencing principles and
the circumstances of the offences and offender; the sentence was not
demonstrably unfit.

Introduction

[1]

STROMBERG-STEIN J.A.
: Dennis Dwight Russell entered guilty
pleas to breach of a long term supervision order (LTSO), contrary to s. 753.3(1)
of the
Criminal Code
, R.S.C. 1985, c. C-46, and voyeurism, contrary
to s. 162(1)(c) of the
Criminal Code
. He was sentenced to 365 days
for the LTSO breach (less 356 days for pre-sentence custody credit) and 18
months consecutive for voyeurism followed by three years probation.

[2]

Mr. Russell appeals his sentences on the basis that the
sentencing judge did not give him the correct pre-sentence custody credit,
imposed a demonstrably unfit sentence, and erroneously imposed a three-year
probation order.

[3]

The position of the Crown is that pre-sentence custody credit at
a rate of approximately 1.25:1 is reasonable and fair, the sentence is not
demonstrably unfit, and there is no error in the length of the probation order.

[4]

For the reasons that follow, I would allow the appeal to the
extent of providing an additional 27 days for pre-sentence custody credit at a
rate of 1.5:1, reducing the length of the probation to 18 months, and varying
certain terms of the probation order.

Standard of Review

[5]

An appellate court is constrained on a sentence review, as this Court
will not interfere with a sentence unless (1) the sentencing judge committed an
error in principle, failed to consider a relevant factor, or erroneously
considered an aggravating or mitigating factor that had an impact on sentence;
or (2) the sentence is demonstrably unfit:
R. v. Lacasse
, 2015 SCC 64.

[6]

A demonstrably unfit sentence is one that is clearly unreasonable or
in substantial and marked departure from the sentences customarily imposed for
similar offenders committing similar crimes:
R. v. Shropshire
, [1995] 4
S.C.R. 227 at 249;
R. v. M.(C.A.),
[1996] 1 S.C.R. 500 at 565, 567.

Circumstances of the Offences

[7]

The same facts gave rise to both
offences.

[8]

On April 25, 2017, a Metrotown
Mall security officer observed that when young girls walked by Mr. Russell
would shuffle his backpack. At one point, Mr. Russell placed his open
backpack under the skirt of a young female standing in line at the food court.
Mall security officers arrested Mr. Russell and called the police. The
police determined that Mr. Russell had a digital camera in his backpack as
well as a number of digital storage cards containing approximately 63 videos of
views up the skirts of approximately 85 young women or girls, some wearing
school uniforms. One digital storage card was labelled Catholic School and
another labelled Lulu. Some of the videos apparently depicted Mr. Russell
following young women or girls from location to location.

[9]

At the time of his arrest for voyeurism,
Mr. Russell was bound by a LTSO. His LTSO was suspended upon arrest and he
has been in custody since his arrest. On June 20, 2017, he was charged with the
voyeurism offence. On August 21, 2017, he was charged with breach of the LTSO
for failing to obey the law and keep the peace.

[10]

On January 15, 2018, Mr. Russell entered guilty pleas to both
charges. Pre-sentence and psychological assessment reports were ordered. He was
sentenced on March 2, 2018. At the sentencing hearing, the Crown sought a further
21 months for both offences, in addition to credit for 356 days for
pre-sentence custody, and three years probation. Mr. Russell sought a
global sentence of time served and three years probation.

[11]

None of the victims were
identified so there were no victim impact statements. Crown counsel advises the
Crown made no efforts to identify the victims due to the potential impact on
the victims had they become aware of the invasion of their privacy.

Circumstances of the Offender

[12]

At the time of the offences, Mr. Russell
was 71 years old and was serving a 10-year LTSO that was imposed following his
2005 convictions for two sexual assaults for which he received three-year
concurrent sentences. In addition, he received one year concurrent for juvenile
prostitution and six-month concurrent sentences for three counts of failure to
comply with probation. The offences involved 15-year-old and 13-year-old girls.

[13]

In addition to the 2005
convictions, Mr. Russell has the following criminal convictions:

1.

1987: sexual assault of a 14-year-old girl:
conditional discharge and two years probation;

2.

1998: possession of child pornography (69 Polaroid
photographs of apparently pre-pubescent girls): five months and three years
probation;

3.

1999: three counts of juvenile prostitution involving
a 15-year-old girl, two sexual assaults involving 12-year-old and 13-year-old
girls, and failure to comply with probation (for breach of a no-contact
condition with persons under 18 years old): six months on each count
consecutive;

4.

2002: s. 811 breach (for bringing 13-year-old
girls to his apartment and offering them money and alcohol): time served (six
days) and two years probation;

5.

2003: failure to comply with probation and s. 811
breach: time served (15 days) and three years probation.

[14]

Mr. Russell had no
convictions between 2005 and 2017 but he had a number of LTSO suspensions for:
obtaining a drivers license, driving without his probation officers approval,
being at an erotic massage parlour, owning and driving a truck without permission,
inappropriate comments to female staff, providing false information on sign-out
sheets, owning a boat, shoplifting, and possessing alcohol. The first time he
was charged with a LTSO breach was for the events that occurred on April 25,
2017.

[15]

The psychological assessment
report indicates Mr. Russell represents a high risk to commit a future
sexual offence, likely relating to voyeurism, but it could also be a contact
offence against underage girls. The pre-sentence report notes that community
supervision, incarceration, and sex offender programs have not been successful
in reducing or deterring Mr. Russells sexual reoffending. Both reports
outline a relatively dim view of Mr. Russells character as well as his lack
of cooperation and compliance. Mr. Russell has a sexual predilection for
young girls and petite women and has been diagnosed with hebephilia. He has also
been diagnosed with narcissistic personality disorder.

[16]

He says he has a support system of
family and friends but claims his support system broke down, which led to his
most recent offending. I note the comments in the psychological report that he
tends to externalize responsibility for his conduct.

Sentencing Reasons

[17]

The judge held that balancing the protection of the public with rehabilitation
must be the focus of sentencing for the LTSO breach. Denunciation, deterrence,
and rehabilitation must be equally balanced for the voyeurism offence.

[18]

The judge noted there is a wide sentencing range for a LTSO breach: from
six months and up depending on the nature of the breach. A technical
(administrative) breach, such as being 15 minutes late past curfew or missing
an appointment, would attract a lesser sentence than what the judge called a
substantive breach, which would attract a higher sentence. The judge concluded
the breach in this case was substantive.

[19]

The judge identified the aggravating factors of the offences, including
the seriousness of the offences; that is, while bound by a LTSO, Mr. Russell
targeted approximately 85 young victims over a prolonged period of time, coupled
with his high risk of reoffending and his particularly egregious criminal
record involving sexually predatory behaviour towards young girls.

[20]

The judge recognised a number of mitigating factors, including Mr. Russells
guilty pleas. The judge accepted Mr. Russells expressed remorse but
commented,
He might not have a
great understanding of the depth of the wrongness or of moral culpability that
he needs to come to terms with: at para. 65.
The judge highlighted
Mr. Russells education, support system, and employment history as
positives. Additionally, he noted that Mr. Russells breach of national
paroles in the pre-sentence report were in fact suspensions of the LTSO: at para. 41.
Despite Mr. Russells suspensions, the judge acknowledged that Mr. Russell
had been in the community for many years without reoffending and recognized
there was a gap in his criminal record. He also considered that Mr. Russell
was assaulted while in custody and the impact incarceration had on his
financial, economic, and physical well-being.

[21]

The judge acknowledged the totality principle and considered Mr. Russells
age. However, he concluded that a sentence of time served (approximately 356
days) was insufficient. Therefore, he sentenced Mr. Russell to 365 days
(with credit for 356 days) for the LTSO breach, and 18 months consecutive followed
by 18 months probation for the voyeurism offence: at paras. 7581. He
then increased the probation order to three years after some discussion with
counsel and Mr. Russell.

[22]

The judge attached a number of conditions to Mr. Russells
probation order (at para. 83), which I will discuss below.

Issues

[23]

The issues on appeal are:

1.

Did the judge err in assessing credit for pre-sentence
custody?

2.

Did the judge impose a demonstrably unfit sentence?

3.

Did the judge err in increasing the probation order by
18 months?

Did the Judge Err in Assessing Credit for Pre-Sentence Custody?

[24]

At the sentencing hearing, both Crown counsel and defence counsel
agreed that Mr. Russell should receive credit of 356 days for pre-sentence
custody. Now
Mr. Russell submits the judge
erred because the total pre-sentence credit should be 383 days. This would
provide Mr. Russell credit for an additional 27 days. The error arises
from the failure of the judge to credit him for pre-sentence custody at a rate
of 1.5:1 from June 20, 2017, to January 15, 2018.

[25]

The Crown submits that the judge
did not err in apportioning the pre-sentence custody credit because Mr. Russell
was effectively granted enhanced credit at a rate of 1.25:1 for the period
prior to his plea (January 15, 2018) and granted enhanced credit at a rate of 1.5:1
thereafter. The Crown submits that while the credit was not at a rate of 1.5:1
during the period in dispute, the credit was nevertheless reasonable and fair.

[26]

Initially, the Crown took the position before the sentencing judge that Mr. Russell
should be credited on a 1:1 basis from his arrest on April 25, 2017, to his guilty
pleas on January 15, 2018. The Crown took the position that he would be
entitled to 1.5:1 credit for the time spent in custody from the date of plea
until sentencing. However, in the course of the defence submissions, Crown
counsel realized Mr. Russell had not been charged with the offences until
June 20, 2017, and August 21, 2017. Crown counsel advised the judge that while Mr. Russell
was not entitled to any pre-sentence credit for the pre-charge period he should
receive the same credit (356 days) as originally submitted and the excess could
reflect the hardships Mr. Russell experienced in custody.

[27]

The Crown on this appeal is not pressing the issue with respect to
pre-sentence credit but submits that at the end of the day Mr. Russell
ultimately received sufficient enhanced credit. However, this does not appear
to be a case where the judge exercised his discretion to grant Mr. Russell
1.25:1 credit. The judge accepted the assessment of counsel with the Crown
suggesting the excess could reflect the hardships Mr. Russell experienced
in custody. In my view, Mr. Russell should be entitled to credit of 1.5:1
for the time he spent in pre-sentence custody. That accords with the Crowns
position at trial that he was entitled to enhanced credit as well as the weight
of the authorities. I would credit Mr. Russell with an additional 27 days
on the basis of
R. v. Summers
, 2014 SCC 26.

Was the Sentence Demonstrably Unfit?

[28]

Mr. Russell submits his
sentences
are demonstrably unfit because the judge offended the totality principle by
imposing what effectively amounted to a global sentence of 905 days and three
years probation
.
Mr. Russell
submits that despite the aggravating factors of a criminal record and a history
of breaching conditions, the global sentence is excessive for the offences of
breach of the LTSO and voyeurism.

[29]

He cites
R. v. Dastagir
,
2018 MBPC 44 for the proposition that custodial sentences are not warranted in
voyeurism cases unless the circumstances involve a serious breach of trust or
other significant aggravating factors. He also takes issue with the judges
reliance on the psychological report which, he says, incorrectly states he
breached his LTSO on many occasions. He says the judge erroneously relied on
this as an aggravating factor in sentencing. Mr. Russell contends that in
light of the departure from the sentencing range for voyeurism and the reliance
on the unproven disputed allegation of repeated LTSO breaches, he should have
been sentenced to time served for the LTSO breach and 9 months on the voyeurism
offence followed by probation for 18 months.

[30]

The Crown submits the sentences were not
demonstrably unfit given the seriousness of the offences and Mr. Russells
related criminal history over the preceding three decades. The Crown maintains
the judge did not improperly rely on previous LTSO breaches, as the impugned
passage from the psychological report provides context to Mr. Russells
overall risk of reoffending, and the judge made clear in his reasons that he
was giving no weight to the LTSO suspensions.

[31]

The judge noted the seriousness of the LTSO breach. He acknowledged the
wide range of sentences available for failing to comply with a LTSO, which starts
at six months imprisonment for a technical breach. I note breaching a LTSO is an
indictable offence and the maximum sentence is up to 10 years. The judge found
that the breach in this case was substantive.

[32]

In my view, he correctly applied the principles set out in
R. v.

Ipeelee
,
2012 SCC 13 in assessing the severity of the breach. He considered the
circumstances and the nature of the breach in the context of Mr. Russells
criminal history and risk-management in the community. He balanced this with
prospects of Mr. Russells rehabilitation. The 12-month sentence that the
judge imposed for breach of the LTSO was not, in itself, demonstrably unfit in
the circumstances of this case.

[33]

With respect to the offence of voyeurism, the Crown proceeded by
indictment. Therefore, the maximum sentence is five years. The judge properly
considered the nature of the offence of voyeurism as a serious invasion of
privacy, reproducing the comments
of
Dhillon P.C.J. in
R. v. Bosomworth
, 2015 BCPC 7:

[12]      Judge Dhillons comments under victim impact
statements at paragraph 21, in considering the legal authorities when
sentencing for this type of offence, writes:

The central sentencing objectives
in this case are to denounce the unlawful conduct of voyeurism, deter the offender
and others from committing voyeuristic offences, and assist in [in that case] Mr. Bosomworths
rehabilitation

[13]      Under the analysis which was found at paragraphs
26, 36, and 38, there are comments about the moral gravity of the offence. It
was determined that Mr. Bosomworth thought his plan out, planned it in
advance. It was quite deliberate. He devised and carried out a means to spy on
and record the activities of other people, thereby invading their privacy.

[14]      At paragraph 38 Judge Dhillon really, I think,
makes the point quite clear when she writes:

It is my view that given the times
in which we live, where privacy in the public sphere has been eroded by the
prevalence of surveillance cameras or the ready deployment of cell phone
cameras in public places, the expectation of personal privacy in highly private
places must be protected.

[15]      She continues and writes:

The law must protect that privacy
by ensuring a deterrent and denunciatory sentence which sends the message that
a criminal record is likely to result if criminal acts involve a serious breach
of personal privacy

[16]      So
this was not a victimless crime, even though we do not have victim impact
statements. The impact on society when peoples privacy is invaded is apparent.

[34]

As the judge noted, the offence of voyeurism is not a victimless crime.
It involves a serious invasion of personal privacy.

[35]

In determining a fit sentence in the context of this particular offender
and his criminal history with young women and girls, the judge distinguished Mr. Russells
case from many of the case authorities that mostly involved first offenders: at
para. 10. The judge considered that Mr. Russells aggravating
circumstances were more significant than the offenders in the case authorities
he considered.

[36]

Voyeurism is a hybrid offence and encompasses a broad spectrum of
offending conduct. Therefore, it is difficult to establish a range of sentences
customarily imposed for similar offenders committing similar crimes:
M.(C.A.)
at 567. Martin P.C.J. in
Dastagir
provides a useful summary of a number
of cases when considering an appropriate sentencing range. While illustrative
of available sentencing ranges, many of the case authorities in
Dastagir
and
referred to by counsel are helpful but not binding.

[37]

R. v. Berry
, 2015 BCCA 210 provides the most authoritative
guidance for sentencing for voyeurism offences in this province. In
Berry
,
a nine-month consecutive sentence was imposed in conjunction with a two-year
sentence for sexual assault. In that case, this Court upheld sentences of two
years imprisonment for sexual assault, nine months consecutive for voyeurism involving
his spouse, and two months concurrent for voyeurism against another victim. Mr. Berry
had an unrelated record and was considered a low to moderate risk to reoffend,
but the offences involved a breach of trust.

[38]

In
R. v. McFarlane
, 2018 MBCA 48, the Manitoba Court of Appeal
commented that the range of sentences for a first offender who pleads guilty to
voyeurism is between a discharge and 12 months imprisonment: at para. 25.
However, there are other cases where a sentence of two years imprisonment has
been imposed:
R. v. T.L.
, 2018 ONCJ 107 (consecutive);
R. v. White
,
2015 MBPC 20 (concurrent); and one case where an 18-month global sentence and
three years probation was imposed
R. v. D.R.W.
, 2016 ONCJ 171.

[39]

As can be seen, the case authorities reveal a broad range of sentences
for voyeurism  from a conditional discharge, to a suspended sentence, to a
conditional sentence order, up to two years imprisonment. Cases at the higher
range generally involve more serious offences and offenders in conjunction with
the offence of voyeurism. A lengthy custodial sentence is reserved for
egregious conduct and often where the offence is committed in conjunction with
other serious offences, in which case the sentence is generally consecutive.

[40]

I acknowledge Mr. Russell was placed at the high end of the
sentencing range, but in my view the judge made no error in doing so given the
many aggravating factors in his case. When Mr. Russell was arrested for
voyeurism, he was bound by a LTSO, which was imposed for serious sexual
offending against young girls. His criminal record involves serious sexual
offending against young girls. The judge considered the circumstances and the
nature of the offences in the context of Mr. Russells criminal history,
including a history of breaching conditions. The judge considered his
risk-management in the community, which he balanced with the prospects of Mr. Russells
rehabilitation described in the psychological assessment and pre-sentence
reports. Custodial and community supervision have not successfully reduced or
deterred Mr. Russells sexual reoffending given his lack of cooperation
and compliance. He has been diagnosed with hebephilia and represents a high
risk to reoffend against young girls.

[41]

The decision of the sentencing judge to impose a consecutive sentence is
a discretionary decision and is entitled to deference. The judge was live to
the sentencing principles of proportionality and totality. I am of the view
that the 18-month sentence for the offence of voyeurism, consecutive to the
one-year sentence for breach of the LTSO (less credit for over one year of
pre-sentence custody), having regard to the circumstances of the offences and
this offender, as well as the relevant principles of sentencing and the case
authorities, is not demonstrably unfit.

Did the Judge Err in Increasing the Term of the Probation Order?

[42]

Mr. Russell submits the judge
erred in revisiting and extending his probationary period from 18 months to
three years after the judge stated that a probationary period over 18 months
would be unfair.

[43]

The Crown says the judge did not
err in the length of the probation order, as it was apparently consented to by Mr. Russell
and, in any event, reflected the length of the order that both counsel had
originally suggested in their sentencing submissions.

[44]

The judge attached the following conditions to Mr. Russells
probation order (at para. 83):

(1)        You must
report immediately in person to -- well, we say report within 72 hours of your
release from custody to a probation officer at 275 East Cordova Street,
Vancouver, B.C., and after that you must report as directed by the probation
officer.

(2)        If at any
time prior to the expiration of this order you are arrested, detained, or have
served a sentence for another offence, you must report to the probation officer
within two business days of your release from custody.

(3)        You must
reside at a residence approved in advance by the probation officer. You must
provide your probation officer with your phone number and you must not change
your residence or your phone number without written permission from your
probation officer.

(4)        You must
have no contact or communication, directly or indirectly, with any person under
the age of 18 years.

(5)        You must not
go to any public park, public swimming area, or community centre where persons
under the age of 18 years are present or can reasonably be expected to be
present, or a library, daycare centre, school ground or playground, except in
the immediate presence of a responsible adult approved of in advance by your
probation officer and only after he or she has been informed by your probation
officer of this order, your history as described in your criminal record, and
these reasons for judgment. A copy of these reasons for judgment must be
transcribed and provided to the probation officer.

(6)        You must not
attend any locations where sex trade workers are known to frequent, as well as
massage facilities not licenced by provincial health authorities.

(7)        You must not
engage in activities, volunteer work or employment that could bring you in
contact with persons under the age of 18 years without written permission of
your probation officer, and when so engaged, you must carry this permission on
your person.

(8)        You shall
immediately report to your probation officer the names and contact information
of all relationships you have or establish, whether casual, intimate or
otherwise, with adults who have family members who are under the age of 18
years, and not continue those relationships until your probation officer has
informed that person of your history and described in your criminal record and
these reasons for judgment and with the permission of your probation officer.

(9)        You must not
associate or have a relationship with anyone named by your probation officer if
your probation officer has reasonably determined the relationship or
association to be a risk to yourself or others, or to be detrimental to your
programming, counselling, reintegration into the community, or a risk to the
protection of society.

(10)      You must not
possess or consume alcohol, drugs or any other intoxicating substance except in
accordance with a medical prescription.

(11)      You must
attend, participate in and successfully complete any intake, assessment,
counselling or program as directed by the probation officer. Without limiting
the general nature of this condition, the intakes, assessments, counselling, or
programs may relate to alcohol or drug abuse, mental health or sexual offence
prevention.

(12)      Having
consented, you must do the following:

(1)        at the direction of your probation
officer report to the forensic psychiatric service or elsewhere for any intake,
assessment, counselling or treatment;

(2)        attend all scheduled appointments
with your doctor, psychiatrist and counsellor;

(3)        take all medications prescribed to
you;

(4)        give your doctor, psychiatrist and
counsellor a copy of this order;

(5)        you must provide your probation
officer/conditional sentence supervisor with the names, addresses and phone
numbers of your doctor, psychiatrist and counsellor;

(6)        tell your doctor, psychiatrist and
counsellor that if you do not follow any terms of this order, he or she is to
inform your probation officer. If you decide not to follow these directions,
you must immediately report to your probation officer or at least at the very
latest report the following business day and tell your probation officer.

(13)      You must sign any waiver of confidentiality or
release of information forms as will enable your probation officer, counsellors
or treatment providers to monitor your attendance, and completion of any
intake, assessment, counselling or treatment programs, and to collaboratively
discuss your treatment needs.

(14)      You shall not own or operate a vehicle, boat or
watercraft or mobile home except for such purpose and such times as approved of
in advance and in writing by your probation officer, except in case of a
medical emergency and at which time you must travel directly to the hospital or
medical treatment centre.

(15)      You must not possess any electronic device
capable of storing digital or audio media.

[45]

Immediately after, the judge indicated he had concluded his reasons for
judgment: at para. 85. However, defence counsel then queried whether the
judge had considered the overlapping nature of the LTSO and the probation
order. The ensuing discussion led to Crown counsel requesting that the judge
extend the 18-month probation to three years, with the first 18 months to
include all the conditions, but the last 18 months to include only the
protective conditions (4, 5, 6, 7, and 8) for the public interest: at para. 104.
The judge first said, I dont think it is unreasonable what you are
suggesting: at para.112. Defence counsel commented that it is very likely
that Mr. Russell will be put on some sort of protective conditions at the
expiry of the order in any event (at para. 113) and noted that having to
report to a probation officer could be confusing. Then defence counsel
questioned the need for the no-alcohol condition (condition 10) in the
probation order as there was no suggestion that alcohol was involved in the
offences: at para. 116. The judge said he was not going to get rid of
that condition because he had no idea what triggered Mr. Russells
behaviour: at para. 117. The judge then said:

[118]    I
am going to decline to impose a further period of probation. In my view, there
has to come a time when he has to prove to the people that he is doing time
for, his community, and his probation officer, that he can abide by conditions,
and he has got -- he has done a year in custody. He is going to do another 18
months. That is a year and a half, and he is going to do another year and a
half, 18 months. That is a total of four years which his behaviour is going to
have been monitored.

[119]    If
the Crown is not satisfied with his behaviour between now and the time all that
is completed, it is up to the Crown to come back and bring another long-term
supervision order. I think it is unfair to almost use the sentencing process as
a backdoor mechanism to control his behaviour for an extended time period.

[120]    The crime that
he committed deserved a significant sentence, and I think keeping his behaviour
monitored for a grand total of four years is fairly significant. So I am going
to decline to impose any further conditions. He will be bound by those
conditions upon the completion of his sentence. Unless defence wants to agree
to it, if there is some sort of --

[46]

Despite the judge affirming the 18-month probation term for a second
time, defence counsel indicated she would agree to the no-alcohol condition
coming off if they agree to the 18 months. The judge and defence counsel
negotiated the matter further and then the judge addressed Mr. Russell:

[129]    Mr. Russell,
how about we give you the benefit of the doubt that you can have a beer when
you are watching a ballgame sitting with your friend, but we are going to keep
conditions for a period of three years that keep you away from young people.

[130]    THE
ACCUSED: Yes.

[131]    THE
COURT: Is that fair?

[132]    THE
ACCUSED: Im a teetotaler. I dont drink.

[133]    THE
COURT: No, but its late in the day. I am just wanting to make sure you are
okay with that.

[134]    THE
ACCUSED: I dont have any problems with the condition on my alcohol consumption
because I dont drink anything.

[135]    THE
COURT: Do you have any conditions on the idea of restricting your liberty for a
period three years not to be around young people.

[136]    THE
ACCUSED: No.

[137]    THE
COURT: Okay. So we are going to do that then. We are going to adjust the
probation order to be for a period of three years. Can we have a three-year
probation order with an 18-month further period of custody?

[138]    MS. SMITH:
I -- yes.

[139]    THE COURT: Okay.

[47]

Following this discussion with Mr. Russell, the judge imposed a
three-year probation order with the first 18 months to include all the
conditions as originally described, except condition 10 was eliminated, and the
last 18 months to include only the protective conditions (conditions 4, 5, 6,
7, and 8).

[48]

In my view, in the circumstances,
it was an error in principle for the judge to extend the probationary term from
18 months to three years. The judge had already sentenced Mr. Russell. The
judge recognized it is unfair to almost use the sentencing process as a
backdoor mechanism to control [Mr. Russells] behaviour for an extended
time period: at para. 119. It has not been argued that the judge was
functus
,
but in my view it was improper for the Crown to request the judge to double the
term of probation, just as it was improper for defence counsel to ask him to
eliminate the no-alcohol condition. This led to bartering one request against
the other. Initially, the judge declined to increase the probationary term because
doing so would mean Mr. Russells behaviour would have been monitored for effectively
four years. The judge said it was up to the Crown to obtain another long term
supervision order if the Crown felt it was necessary. While the judge purported
to get Mr. Russells consent to double the probationary term, it is not at
all clear from the transcript that Mr. Russell consented. Judges should
avoid getting into protracted discussions with counsel that could be seen as
negotiations after judgment has already been pronounced.

[49]

In the circumstances, I would reduce the
probationary term to 18 months. The original terms imposed by the sentencing
judge, including condition 10 (as set out at para. 83), are in effect save
for condition 4. Mr. Russell says condition 4 of the probation order is
impractically
broad. In my view, the appropriate wording for condition 4 (as set out at para. 83)
should match what is in the LTSO and both counsel agree.

Conclusion

[50]

I would allow the appeal to the extent of granting additional
pre-sentence credit of 27 days; decreasing the term of probation to 18 months;
including condition 10 (as described in para. 83 of the sentencing
reasons) in the probation order as follows: (10) You must not possess or
consume alcohol, drugs, or any other intoxicating substance except in
accordance with a medical prescription; and varying condition 4 (as described
in para. 83 of the sentencing reasons) to mirror the condition in the
LTSO: (4) You are not to be in the presence of any female children under the
age of 18, unless you are accompanied by a responsible adult who knows your
criminal history, and has been previously approved in writing by your probation
officer.

[51]

Arrangements will have to be made to have Mr. Russell sign his
probation order and have the terms and conditions explained to him as well as
the consequences for breaching any of the terms and conditions.

[52]

NEWBURY J.A.
: I agree.

[53]

FISHER J.A.
: I agree.

[54]

NEWBURY J.A.
: The appeal is allowed to the extent indicated.

The
Honourable Madam Justice Stromberg-Stein


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

San Bao Investments Inc. v. Sun,

2019 BCCA 30

Date: 20190125

Dockets:
CA45796; CA45797

Docket: CA45796

Between:

San Bao Investment
Inc.

Respondent

(Plaintiff)

And

Huigang Sun

Appellant

(Defendant)

And

Dejun Yao, San Bao
Investment Inc. and

Joseph Kwok, aka
Joseph Kuen Yu Kwok aka

Joseph Kuen-Yu
Kwok aka Kun Yu Kwok aka Kuen Kwok

Respondents

(Defendants
by Way of Counterclaim)

- and -

Docket: CA45797

Between:

San Bao Investment
Inc.

Respondent

(Plaintiff)

And

Besco
International Investment Co. Ltd.

Appellant

(Defendant)

And

Dejun
Yao, San Bao Investment Inc. and

Joseph
Kwok, aka Joseph Kuen Yu Kwok aka

Joseph
Kuen-Yu Kwok aka Kun Yu Kwok aka Kuen Kwok

Respondents

(Defendants by Way of Counterclaim)

Before:

The Honourable Madam Justice Newbury

(In Chambers)

On appeal from:  An
order of the Supreme Court of British Columbia, dated November 22, 2018 (
San
Bao Investments Inc. v. Sun
, Vancouver Dockets S1611338 and S1611176)

Counsel for the Appellant:

D.K. Fitzpatrick

Counsel for the Respondent:

J.D. Shields

Place and Date of Hearing:

Vancouver, British
  Columbia

December 21, 2018

Place and Date of Judgment with Written Reasons to Follow:

Vancouver, British
  Columbia

December 21, 2018

Place and Date of Written Reasons:

Vancouver, British
  Columbia

January 25, 2019

Summary:

Dismissal of application for
stay of an order of incarceration on a finding of contempt.

Reasons for Judgment of the Honourable
Madam Justice Newbury:

[1]

On December 21, 2018, Mr. Suns application for a stay of an
incarceration order following a finding of contempt was before me in chambers.
I dismissed the application with reasons to follow.

[2]

Mr. Sun was found personally liable, and liable as the principal of
Besco International Investment Co. Ltd. Judgments were granted in the Supreme
Court against them in July and September 2018 respectively, in the total
principal amount of $1,476,823.78 plus (special) costs and interest. As of
November 13, 2018, the total amount owing was $1,652,632.36.

[3]

Thereafter, Mr. Sun failed to attend an examination in aid of
execution, avoided service of appointments for examinations in aid, failed to
produce documents he had agreed to produce, and failed to provide satisfactory
answers to questions on examination. A registrar certified on November 8 and 9,
2018 that Mr. Sun had failed to pay the judgments without reasonable
excuse and had failed to provide satisfactory answers to questions about his
ability to do so.

[4]

The matter then came before Madam Justice Matthews on November 22, 2018.
She ordered
inter alia
that Mr. Sun be incarcerated for six days
and then have 30 days to pay. If payment was not made by December 27, he was to
be incarcerated for a further 30 days. The judge stated in her reasons:

There is evidence that Mr. Sun and Besco have
considerable means to satisfy the judgments. Funds well in excess of the
judgment have gone through the Besco bank accounts. Mr. Sun admitted at
his examination in aid of execution that he is capable of borrowing the funds
to satisfy the judgment. He identified funds in corporate bank accounts which
he has access to which could have been paid in partial satisfaction of the
judgment. He agreed to pay those funds in partial satisfaction of the judgment,
but has not done so.

There is evidence that he has wilfully taken steps to avoid
being able to pay the judgment, including that he gave three vehicles, one
Bentley and two Range Rovers, to friends. He owns a home on the west side of
Vancouver worth five million dollars. It is encumbered by eight million dollars
in debt to friends.

The law pertaining to committal of a party for failing to
comply with a court order was summarized by Mr. Justice Macintosh in
Fitzgerald
Living Trust v. Mountainstar Gold Inc.
, 2018 BCSC 1451, based on the
decision of the Supreme Court of Canada in
Carey v. Laiken
, 2015 SCC 17.
The first element that must be proven beyond a reasonable doubt is that the
order alleged to have been breached must state clearly and unequivocally what
should and should not be done. The second element is that the party alleged to
have breached the order must have actual acknowledge of it. Finally, the party
allegedly in breach must have intentionally done the act that the order
prohibits or intentionally failed to do the act that the order prohibits.

I conclude that each of these
tests [has] been met in this case and the evidence before me is satisfactory to
meet those tests beyond a reasonable doubt. [At paras. 7-10.]

Matthews J. was satisfied Mr. Sun had intentionally
avoided paying the judgments or failed to pay them although he had argued at an
examination that he could borrow the money to do so, and the evidence showed he
had access to assets in excess of the judgment amount and has disposed of some
of his assets to avoid paying the judgment. (At para. 13.)

[5]

In his argument on behalf of Mr. Sun in this court on December 21,
2018, Mr. Kirkpatrick said all that could be said in favour of his client.
He painted Mr. Sun as a person who has many assets but whose ability to
pay is impaired at the present time. He asked for 90 days in which his client
should, he suggested, be able to borrow the money to pay the judgments. At
times he seemed to suggest the money could definitely be found; at other times
he said his client was willing to pay but cannot. He described Mr. Sun as
a poor manager whose finances are intertwined with those of his family, which
makes it difficult for him to extricate the required amount.

[6]

Mr. Shields, on behalf of the creditor, referred on the other hand
to evidence that suggested Mr. Sun has been preferring other creditors
over San Bao and that substantial funds over which Mr. Sun has control
have simply disappeared without explanation. As far as the debt owing to San
Bao is concerned, no real attempts have been made to pay anything; documents
including financial statements and income tax returns of Besco have not been produced
despite being promised; and there is no indication Mr. Sun has made any
effort to persuade his family to help pay his debts. Most tellingly, his
answers to questions regarding his various companies were highly unsatisfactory
and difficult to credit, given the large amounts of money he had previously
claimed to control. All of this conduct is remarkably similar to the conduct
described by Mr. Justice Steeves in his reasons for the original judgment
that confirmed the indebtedness of Mr. Sun and his company: see 2018 BCSC
1128.

[7]

The criteria for the granting of a stay are well known  whether the
applicant has raised an arguable case on appeal; the question of irreparable
harm if a stay should not or should be granted; the balance of convenience; and
most importantly, the interests of justice. On a consideration of these
factors, I am simply unconvinced that interests of justice are such that a stay
should be granted. As I have already observed, Mr. Sun has repeatedly
neglected to obey court orders, to appear at examinations in aid, to provide
documents he has been ordered to provide, and has failed utterly in providing
relevant information to the creditor concerning his financial position and that
of Besco.

[8]

For all the foregoing reasons, the application was dismissed.

The
Honourable Madam Justice Newbury