COURT
    OF APPEAL FOR BRITISH COLUMBIA

Citation:

Catalyst
          Paper Corporation v. Companhia de Navegação Norsul,

2009
          BCCA 16

Date: 20090120

Dockets: CA035088; CA035494

Between:

Catalyst
    Paper Corporation

Respondent

(
Plaintiff
)

And

Companhia
    de Navegação Norsul

Appellant

(
Defendant
)

Supplementary Reasons
    on Costs

Before:

The
          Honourable Mr. Justice Hall

The
          Honourable Mr. Justice Smith

The
          Honourable Mr. Justice Chiasson

M.L.
          Smith

Counsel for the Appellant

G.C.
          Weatherill

Counsel for the Respondent

Place
          and Dates  of Hearing:

Vancouver, British Columbia

22 and 23 May 2008

Place
          and Date of Judgment:

Vancouver, British Columbia

2 September 2008

Written
          Submissions on Costs Received:

9, 27 and 30 October 2008

Date
          of Supplementary Judgment:

20 January 2009

Supplementary
    Reasons for Judgment of the Honourable Mr. Justice Hall:

[1]

In my reasons for judgment dated 2 September 2008, I requested submissions
    from the parties concerning entitlement to costs in this Court and in the
    Supreme Court of British Columbia.  The plaintiff succeeded in its claim for
    breach of contract at trial but that verdict was reversed in this Court.
    Costs should normally follow the event (R. 57(9) of the
Rules of Court
)
    and be payable to the successful appellant unless there is some principled
    basis for departure from that normal rule.  Section 9(1)(a) of the
Court
    of Appeal Act
,
R.S.B.C. 1996, c. 77, permits this Court to
    make any order that could have been made by the trial court.

[2]

In
Grassi v. WIC Radio Ltd
.
, 2001 BCCA 376, 89
    B.C.L.R. (3d) 198, 5 C.P.C. (5th) 94, Southin J.A., for the court, gave a
    concise history of the courts discretion in making an order for costs:

[18]
    British Columbia, from 1st July, 1970, to 1st July, 1990, but neither before
    the former nor since the latter date, had an express provision as to the court's
    discretion as to costs, which was understood to give the same wide discretion
    as that conferred by s. 5 of the
Judicature Act, 1890
, although
    the judges here did not express the ambit of the discretion by reference to
    s. 5.  See, for instance,
Peters v. Davidson
(1982), 41 B.C.L.R.
    330 (C.A.), and
Landry v. Bridgestone Tire Co. Ltd.
(1975), 66 D.L.R.
    (3d) 408 (B.C.S.C., Craig J., as he then was).  The provisions to which I
    refer were these:

S.B.C.
    1969, c. 38, s. 14
, proclaimed in
    force 1st July, 1970, added to the
Supreme Court Act
, R.S.B.C. 1960,
    c. 374, this:

80.
    ...

(2)
    Subject to subsection (1), a Judge may, in his discretion, award or refuse
    to award costs to any litigant in any civil proceeding in the Court.

S.B.C.
    1976, c. 33, s. 146
, amending s.
    80(2) to read:

80.
    ...

(2)
    Subject to subsection (1), the Court may, in its discretion, award or refuse
    to award costs to any party in any civil proceeding in the Court.

R.S.B.C.
    1979, c. 397
, amended s. 80(2) and
    renumbered it s. 63(2):

63.
    ...

(2)
    ... the court may, in its discretion, award or refuse to award costs to a
    party in civil proceedings in the court.

[19]
    I suspect that the change said to have been made in 1979 was made by the revisers
    of the Statutes and did not have any express legislative warrant.

[20]
    On 1st July, 1990, the present Rules came into force and s. 63(2) was
    dropped from the
Supreme Court Act
.

[21]
    Cases on costs decided in this Court when s. 63(2) or one of its predecessors
    was applicable must be scrutinized in order to determine whether the statutory
    provision was material to the reasoning.

[22]
    One discretion which now exists is that of Rule 57(9), unless the court otherwise
    orders.

[Emphasis in original]

[3]

Shortly after the adoption of the new R. 57(9) of the
Rules of
    Court
, Lambert J.A., in
Claessins v. Wice
(1991), 56
    B.C.L.R. (2d) 110 (C.A.), without referring to R. 57, said at para. 9:

The
    cases in British Columbia indicate that the trial judge has a wide discretion
    in deciding whether to decline to award costs in favour of the successful
    party.  I refer particularly to
Landry v. Bridgestone Tire Co.
(1975),
    [1976] 3 W.W.R. 160, 66 D.L.R. (3d) 408 (B.C.S.C.);
Peters v. Davidson
(1981), 22 C.P.C. 246, 125 D.L.R. (3d) 753, affirmed (1982), 41 B.C.L.R.
    330, 32 C.P.C. 210, 141 D.L.R. (3d) 763 (C.A.); and
Steinhauser v. Robinson
(1983), 49 B.C.L.R. 333 (S.C.).

[4]

In
Moore v. Dhillon
(1993), 85 B.C.L.R. (2d) 69 (C.A.),
    Taylor J.A., for the court, opined that R. 57(9) did not alter the discretion
    of the trial judge that existed under s. 80(2).  He said at paras. 7-8:

Before
    us it is asserted for the defendants on their cross-appeal that the reasoning
    followed in
Peters v. Davidson
ought no longer to be followed.  Counsel
    points out that the words of s. 80(2) introduced into the
Supreme Court
    Act
in 1969 were removed when the statute was recast in 1989 in the present
    much abbreviated form (S.B.C. 1989, c. 40).  There is now no reference
    in the statute to discretion to grant or refuse costs.

By
    the time that this statutory change came into effect, however, the
Supreme
    Court Rules
had also been recast.  The matter of costs was dealt with
    by Rule 57(4) (now 57(9)) which says:

Subject
    to subrule (12), costs of and incidental to a proceeding shall follow the
    event unless the court otherwise orders.

Since
    subr. (12) relates only to motions, R. 57(9) seems to grant unqualified discretion
    to depart from the prima facie rule which it provides in the matter awarding
    costs at trial.  The
Supreme Court

Rules
, including R. 57, were
    confirmed and validated by the
Court Rules Act
, S.B.C. 1989, c. 22.
     It seems to me that omission of the phrase for good cause which had previously
    been included in M.R. 976 shows an intention that the new rule as to costs
    be consistent with s. 80(2) of the
Supreme Court Act
, as it stood at
    the time the Rules were recast.  The elimination thereafter of what was previously
    s. 80(2) from the Act could have no effect, therefore, so far as the discretion
    of the Court is concerned in the matter of awarding or denying costs at trial.

[5]

In
Grassi
, Southin J.A. commented on the decision in
Moore
with respect to possible alteration of the law arising
    from the replacement of s. 63(2) of the
Supreme Court Act
, R.S.B.C.
    1979, c. 397, with R. 57(9) of the
Rules of Court
when she said:

[24]
    I would not myself go so far as did Taylor J.A. because, in my opinion, the
    change from s. 63(2) to Rule 57(9) has made a subtle change in emphasis.  I
    would say that the subtle change of emphasis is that the person who seeks
    to displace the usual rule has the burden of persuading the judge that the
    rule should be displaced, but even if the discretion is the same under both
    the statutory provision and the present rule, it is nonetheless a discretion
    to be exercised on a principled basis.

[6]

This Court has had occasion to consider the exercise of discretion
    of the Supreme Court in awarding costs to or imposing costs on a successful
    litigant in the cases of
Rossmo v. Vancouver Police Board
, 2003
    BCCA 677, 21 B.C.L.R. (4th) 68, and
Brito (Guardian ad litem of) v.
    Woolley
, 2007 BCCA 1, 63 B.C.L.R. (4th) 139, 36 C.P.C. (6th) 41.

[7]

In
Rossmo
, the background circumstances were thus narrated
    by Donald J.A., writing for the court:

[1]
    The plaintiff, Dr. Kim Rossmo, sued the Vancouver Police Board (the Board)
    for wrongful dismissal and Deputy Chief Constable John Unger for interference
    with contractual relations and inducing breach of contract in a matter arising
    from the Board's decision in October 2000 not to renew the plaintiff's five-year
    contract as head of the Geographic Profiling Unit (GPU).

[2]
    In reasons for judgment delivered on 19 December 2001, Madam Justice Allan
    dismissed the action.  She denied costs to the defendant Unger because of
    what she found to be inappropriate behaviour in his dealings with the plaintiff's
    employment: 2001 BCSC 1775.

[8]

The plaintiff Rossmo appealed to this Court from the dismissal of his
    action and the individual defendant cross appealed the decision of the trial
    judge denying him his costs.  This Court dismissed the appeal of the appellant
    and allowed the cross appeal of the individual defendant on the costs issue.
    Although Donald J.A. found there to be some basis in the evidence for the
    trial judges criticism of the conduct of the individual defendant vis-à-vis
    the plaintiff including his apparent alacrity in getting rid of the plaintiff
    when he had the chance (para. 53), he found the judge had erred in refusing
    to award costs to this defendant.  He noted that while costs are discretionary,
    the discretion must be exercised on a principled basis having regard for the
    general rule that costs follow the event as provided for in R. 57(9).  He
    found that the judge erred when she denied the successful party costs based
    on conduct that was prior to and outside the litigation process.  He concluded
    on this matter by saying:

[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.

[9]

More recently, in
Brito
, this Court reversed the decision
    of a trial judge in a medical malpractice case awarding costs of the action
    to the unsuccessful plaintiffs.  The trial judge observed that the onus was
    on the unsuccessful plaintiffs to demonstrate that a departure from the ordinary
    costs rule was justified, citing
Grassi
, but elected to depart
    from the ordinary rule because, on her view of the evidence, all of the defendants
    were reckless with respect to the manner in which they prepared the medical
    records that it was their duty to prepare, and because all but one of the
    defendants were negligent with respect to the care they provided to the plaintiffs
    (although the defendants were not liable in negligence for the plaintiffs
    failure to prove causation).

[10]

Saunders J.A., following the earlier decision of
Rossmo
,
    found that the trial judge had erred in her disposition of costs.  She said:

[27]
    For the reasons that follow, I have concluded that the order of the trial
    judge as to costs must be set aside, and the usual order issued.  In my view,
    the trial judge did not follow, in the words of this Court in
Stiles v.
    B.C. (W.C.B)

(1989), 38 B.C.L.R. (2d) 307 (C.A.) at 310, the principles
    [that] have developed which guide the exercise of the discretion of a judge
    with respect to costs.  In particular, the trial judge based her order upon
    two features of the case which, in my view, do not support the sanction imposed.
    First, she referred to the state of the records created at the time of the
    events in issue, or shortly after, which was a time long before the litigation
    commenced, and did so in circumstances in which no liability attaches in the
    action for the delict of poor record keeping, and in circumstances in which
    there was not even a whiff of bad faith.  Second, she referred to the tortious
    conduct of the defendants, when in fact no liability attached to them because
    the entire tort of negligence was not proved.  I do not consider that the
Rules of Court
permit the sanction imposed, in these circumstances.

***

[32]
    In this case the deficiencies in the record keeping were well known to the
    plaintiffs prior to trial.  There was, as I understand the reasons for judgment
    of the trial judge, no serious backtracking from the evidence the defendants
    gave at their examinations for discovery, and inconsistencies in the evidence
    was in the nature of those often discovered as a product of the trial process,
    but were not created through dishonesty of the defendants.

[33]
    Likewise, it was error, in my view, to base the costs order upon a finding
    that most of the defendants were found to have failed to comply with their
    duties to the plaintiffs (I observe that this does not include Nurse Omstead).
    More than this failure is required to establish an entitlement to costs.
    The case was defended not just on the issue of compliance with the standard,
    but also on the issue of causation.  The plaintiffs were required to succeed
    on the causation issue in order to obtain an order in their favour.  They
    did not.

[11]

She found there existed no sound basis in that case to deny the successful
    defendants their costs and she ordered costs in their favour.

[12]

Both
Rossmo
and
Brito
involved tort claims.
    It seems to me that this Court was concerned that the disposition of costs
    made at trial in both of those proceedings could be perceived as what Donald
    J.A. referred to in
Rossmo
as a finding of quasi-liability
    (para. 62) when, in fact, no liability had been found against the successful
    defendants.  The successful appellant here submits that there should be no
    distinction drawn between a plaintiff failing to make out a claim in tort
    as opposed to a claim in contract.  It submits that to sanction a party for
    conduct that is not actionable is to create some species of quasi-liability
    which would not be an appropriate or a principled application of the costs
    rules.

[13]

A number of cases in this Court have made the point that the costs
    rules should be seen as having a purpose beyond indemnification of the successful
    party in the litigation.  In
Houweling Nurseries Ltd. v. Fisons Western
    Corp
. (1988), 37 B.C.L.R. (2d) 2 at 25, 29 C.P.C. (2d) 168 (C.A.),
    leave to appeal refd [1988] S.C.C.A. No. 200, McLachlin J.A. (as she then
    was) noted that the costs rules, beyond indemnity, serve the purpose of deterring
    frivolous actions or defences.  She said, Parties, in calculating the risks
    of proceeding with a particular action or defence, should be able to forecast
    with some degree of precision what penalty they face should they be unsuccessful.

[14]

In
Skidmore v. Blackmore
(1995), 2 B.C.L.R. (3d) 201
    at para. 28, 35 C.P.C. (3d) 28 (C.A.), Cumming J.A. observed that while costs
    are awarded to indemnify a successful litigant for fees and disbursements
    incurred in the litigation process, costs are also awarded to encourage or
    deter conduct on the part of litigants.

[15]

In the recent case of
Bedwell v. McGill
, 2008 BCCA 526,
    a case dealing with a particular aspect of costs not relevant to this appeal,
    Newbury J.A., for the court, at para. 33, noted the purpose of former R. 37(24)
    as being aimed at encouraging litigants to settle wherever possible, thus
    freeing up judicial resources for other cases.

[16]

It seems to me that the trend of recent authorities is to the effect
    that the costs rules should be utilized to have a winnowing function in the
    litigation process.  The costs rules require litigants to make careful assessments
    of the strength or lack thereof of their cases at commencement and throughout
    the course of litigation.  The rules should discourage the continuance of
    doubtful cases or defences.  This of course imposes burdens on counsel to
    carefully consider the strengths and weaknesses of particular fact situations.
    Such considerations should, among other things, encourage reasonable settlements.

[17]

I must say that in this particular case, I have been moved to a degree
    of sympathy for the position of the ultimately unsuccessful plaintiff.  That
    is so because of the statement of Mr. Baroncini in December 2003 that in effect,
    the parties were agreed on a new contract.  However, on reflection, I consider
    it was becoming clearer as the process of reducing matters to writing went
    forward in early 2004 that there had been no consensus reached between the
    parties on the vital issue of responsibility for freight damage.

[18]

The discovery process should have also placed this into sharper relief.
    I have considered whether in light of the pronouncement of Mr. Baroncini in
    December 2003, some apportionment of trial costs ought to be ordered.  I have
    concluded that such an order would tend to create uncertainty in the law relating
    to costs and therefore I would not be disposed to so order.  As to any suggestion
    that perhaps some distinction might be made between this case (a contract
    case) and the cases of
Rossmo
and
Brito
(tort
    cases), I am not of the view that differing causes of action mandate a different
    approach to the usual costs rules.

[19]

Ultimately, I am not persuaded that this Court should countenance any
    departure from the usual rule that costs should follow the event in this Court
    and in the trial court.  This result seems to me consistent with the reasoning
    in the cases of
Rossmo
and
Brito
.  Accordingly,
    I would order costs in favour of the defendant appellant in this Court and
    in the Supreme Court of British Columbia.

The Honourable Mr. Justice Hall

I
    agree:

The
    Honourable Mr. Justice Smith

I
    agree:

The
    Honourable Mr. Justice Chiasson


COURT
OF APPEAL FOR BRITISH COLUMBIA

Citation:

Payne v. Montague,

2009 BCCA 351

Date: 20090120

Docket: CA036564

Between:

David Payne

Appellant

(
Plaintiff
)

And

Atoya Montague and
Orellana Gustavo Ernesto Amador
also known as Gustavo Amador Orellana

Respondents

(
Defendants
)

Before:

The Honourable Mr. Justice Donald

(In Chambers)

On appeal from: Supreme Court of British Columbia, October 10, 2008

(
Payne v. Montague
, New Westminster RegistryM100928)

Oral Reasons for Judgment

Counsel for the Appellant:

O.L.
  Wilson

Counsel for the Respondent:

M.
  von Antal

Place and Date of Hearing:

Vancouver,
  British Columbia

January 20, 2009

Place and Date of Judgment:

Vancouver
, British Columbia

January
  20, 2009

[1]

DONALD J.A.:
This
is an application for leave to appeal a costs order in a personal injury action.
The action was settled shortly before trial. As the trial date drew near, the
respondent obtained an independent medical examination order on short leave
from a master. The master granted the respondent costs in any event of the
cause.

[2]

The applicant applied to set aside the order. That
application was refused by Mr. Justice Slade who awarded costs of that
proceeding. It is from Mr. Justice Slades order that the proposed appeal is
taken. There are two grounds: first, there was no urgency supporting short
leave; and second, the process was defective because the short leave order was
not served within the time limited. The order required service by the afternoon
of the day of the application for short leave, but in fact, it was not served
until about 7:00 on the morning of the hearing of the application itself.

[3]

Mr. Justice Slade found no error in the masters
discretionary decision. There was a basis for urgency and the late delivery was
inconsequential as he held that applicants counsel had adequate notice and did
not appear.

[4]

Leave to appeal will rarely be granted for
discretionary orders:
Silver Standard Resources Inc. v. Joint Stock Co.
Geolog
, [1998] B.C.J. No. 2298 (QL) (C.A.), per Madam Justice Rowles in
chambers:

[12]      The usual rule followed by
appellate courts in relation to discretionary orders was succinctly stated by
Madam Justice McLachlin in
British Columbia Teachers' Federation v. British
Columbia (Attorney General)
(1986), 4 B.C.L.R. (2d) 8 (C.A.) at 11:

Generally speaking, barring error in the
decision below, a justice will be reluctant to grant leave where the decision
constitutes the exercise of a discretion conferred on the chambers judge. The
party seeking leave to appeal bears the onus of establishing that the
conditions for leave have been met.

[5]

Leave to appeal a discretionary order will only
be granted where the order is clearly wrong or serious injustice will occur or
where a discretion was not exercised judiciously or was exercised on the wrong
principle:
Strata Plan LMS 2019 v. Green
(2001), 152 B.C.A.C. 174, 2001
BCCA 286, per Madam Justice Proudfoot in chambers:

[6]        Before
I assess the merits of these arguments, I point out that an order under R.
52(11)(d) [for which leave to appeal is sought] is a discretionary order. This
court is slow to grant leave from a discretionary order unless the order is
clearly wrong or a serious injustice will occur:
Watson v. Imperial
Financial Services Ltd.
, (1992), 65 B.C.L.R. (2d) 281 (C.A.).

[6]

In my view, the applicant is unable to establish
any of the prerequisites for leave. The order is discretionary. The points
taken on appeal are not of significance to the practice and since the action is
settled, they are not of significance to the action itself. I can see no merit
in the proposed appeal. The applicant cannot show an error in principle or a
manifestly unjust result.

[7]

For these reasons I dismiss the application and
refuse leave to appeal.

(discussion
with counsel)

[8]

DONALD, J.A.
: The
costs are yours as a matter of course.

The
Honourable Mr. Justice Donald


COURT OF APPEAL FOR
BRITISH COLUMBIA

Citation:

R. v. Li, R. v. Zheng

2009 BCCA 21

Date: 20090120

Docket: CA035613; CA035679

Docket: CA035613

Between:

Regina

Respondent

And

Jing Yan Li

Appellant

- and -

Docket: CA035679

Between:

Regina

Respondent

And

George Zheng

Appellant

Before:

The Honourable Mr. Justice
  K. Smith

The Honourable Mr. Justice
  Lowry

The Honourable Madam
  Justice Neilson

Oral Reasons for Judgment

D.N.
  Fai

Counsel for the Appellant, J. Li

J.I.S.
  Sutherland

Counsel for the Appellant, G. Zheng

P.
  Eccles

Counsel for the (Crown) Respondent

Place and Date:

Vancouver, British Columbia

20 January 2009

[1]

SMITH, J.A.
: The appellants appeal their convictions by the
Honourable Judge de Walle of the Provincial Court sitting at Vernon, British
Columbia on charges of production of marihuana and possession of marihuana for
the purposes of trafficking contrary to s. 7(1) and s. 5(2) respectively of the
Controlled Drugs and Substances Act
.  They were charged on a
single information and were tried together.  Neither appellant testified or
called evidence in defence of the charges. The trial judges reasons for
judgment are reported at [2007] B.C.J. No. 2802 (QL) and are indexed as 2007 BCPC
406.  He imposed a one-year conditional sentence on each of them.

[2]

The charges arose when around 9:30
a.m., on December 15, 2005, the RCMP executed a search warrant at 6919 Service
Road, a rural residential property at the end of a dead-end street in Westwold,
British Columbia, a small community roughly midway between Kamloops and Vernon.
 They arrested the appellants, who were found alone inside the house.

[3]

The undisputed facts are as
follows.

[4]

The police found 2,298 marihuana
plants in various stages of growth and a 54½ pound bag of dried marihuana in a
large shop or barn located on the property about 30 metres from the house.  There
was a well-worn path in the snow from the back door of the house to the locked
door of the shop.  There was a faint odour of marihuana outside between the
house and the shop and the odour of marihuana inside the shop was overpowering.
 The shop building contained several rooms. Marihuana was growing in three of
them.  The bag of dried marihuana was found in a drying room.  Another room
contained materials and supplies related to the growing of marihuana, including
plant pots, soil, fertilizers, and piled up used equipment.  In this room the
police found three used shrouds lying on the floor which were very similar if
not identical to other shrouds that were in use hanging over plants in the
growing rooms.  In one of the growing rooms they found a CO
2
control unit hanging in the middle of the room above
growing marihuana plants.  The marihuana grow operation was large and
sophisticated and required human attention at least every other day, if not
daily.

[5]

The trial judge accepted the
evidence of Corporal Coates, a fingerprint expert, that he found three
individual fingerprints of the appellant Zheng on one of the shrouds and that
he found a fingerprint of the appellant Li on the CO
2
control box.

[6]

The police found a vacuum sealer
unit for saving food and a number of new sealable Ziploc plastic bags in the
kitchen of the house.  In a closed dishwasher they found three pH soil testers.
 On the kitchen counter they observed some cooking oils, dishwashing soap,
dishes, and a rice maker.

[7]

They also found a hydro bill and a
gas bill in a kitchen drawer, both addressed 6919 Service Road to a customer by
the name of Min Zheng. According to their drivers licences, the appellants
resided in Coquitlam, in the Lower Mainland, more than 200 miles from the
scene.  A set of keys found in the kitchen contained a key that unlocked the
doorway to the shop.  The room immediately inside this doorway was completely
empty and access to the grow operation was through this room.

[8]

There were no beds in the house,
just mattresses on the floor.  The furniture in the house was to use the trial
judges words makeshift.  There were no pictures on the walls and clothes
were strewn about the floor.  The trial judge concluded the house gave the
appearance of, and again using the trial judges words, being used in a
transient way.

[9]

The trial judge accepted the
evidence of Constable Evans, an expert in marihuana grow operations.  In this
respect, he said that Constable Evans

[11]
 had an opportunity to view the various exhibits in this case, the photograph
and the flow chart of the exhibits.  He described some of the
paraphernalia that was involved in the grow operation here, various electrical
controls, timer lights, carbon dioxide devices and the charcoal filters to keep
the smell away from the building.  He testified that the vacuum sealer and
bags located in the kitchen of the residence were items that are used in
marihuana grow operations.  The marihuana is placed into the bags; the air
is removed by the vacuum sealer, for the purpose of prolonging the life of the
marihuana bud.  He described that the pH testers found in the dishwasher
in the kitchen of the residence are commonly used to check soil conditions in
marihuana grow op operations, to determine the best production of the
plants.  He also referred to a surveillance camera that was found in the
residence, and he said surveillance cameras are commonly used in marihuana grow
ops to watch for uninvited or unwanted visitors, including the
authorities.  He testified that the CO
2
detector, which was
located in one of the marihuana growing rooms, suspended from the ceiling, was
an item used to check CO
2
levels and that could adjust those levels
automatically to ensure the best growing conditions for the plants, and that it
would be placed in the centre of the plants as it was in this case to best
determine and check levels of CO
2
for the entire growing area.
He testified that, and as I have referred to already, that this size of grow op
would require frequent attention, not necessarily daily, but more than likely
at least every other day.

[10]

All elements of the offences were
established save for the appellants knowledge and control of the marihuana in
question, which the trial judge noted was the sole issue to be decided.  He
noted that all of the evidence was circumstantial and he cited
R. v
Cooper
(1977), 34 C.C.C. (2d) 18 (SCC), for the proposition that
before basing a verdict of guilty on circumstantial evidence the trier of fact
must be satisfied beyond a reasonable doubt that the guilt of the accused is
the only reasonable inference to be drawn from the proven facts.  He expressed
his ultimate finding of guilt in the following passage in paragraph 13 of his
reasons:

[13]      Defence
counsel in a very thorough manner identified a number of items where it is
suggested that there is evidence that does not indicate knowledge or control,
evidence that is absent in cases that would support an inference that there was
proof of knowledge and control.  I am not going to refer to the list of
absent pieces of evidence in this case, except to say that I have considered
that entire list very carefully and I have concluded based on the evidence
before me, the whole of the evidence, that it has been established beyond a
reasonable doubt that the accused Zheng and the accused Li had the necessary
knowledge and control of the marihuana grow op in this case to be convicted of
both offences.  I am, as I said at the outset, mindful of the test to be
applied in a case of circumstantial evidence, but I am satisfied beyond any
reasonable doubt that the guilt of the accused is the only reasonable inference
to be drawn from the proven facts.  I refer in particular to the location
of this grow operation, the presence of the accused at the scene, the items
that were seized from the inside of the residence, including the key that
gained access to the outbuilding where the marihuana grow op was located, as
well as the fingerprints of Mr. Zheng on a shroud and the fingerprint of Mr. Li
on the CO
2
control unit.  That evidence, in my view, leads to
the inescapable conclusion that these accused were aware of the marihuana grow
op, had control of it.  Whether or not others were involved is a question
that I am not going to speculate on, and it is not necessary for me to
determine.  In the end result, I find each accused guilty on both counts.

[11]

During the hearing of the appeal,
the grounds of appeal were narrowed to two.  Both appellants submit that the
verdict was unreasonable or was not supported by the evidence.  The appellant
Li contends, in addition, that the trial judge should not have accepted the
evidence that the fingerprint found on the CO
2
control box was his fingerprint.

[12]

I will deal first with the latter submission.

[13]

Corporal Coates was called by the
Crown as its fingerprint expert.  He explained in detail the process he went
through to reach his conclusion that the print was that of the appellant Li.  He
testified that he submitted his file and his conclusion to another officer for
peer review.  He said the other officer responded that he was unable to explain
some discrepancies without further information.  Corporal Coates said he
supplied more information but before the second officer could review it, he was
transferred to another jurisdiction.  He testified his opinion was then
reviewed and confirmed by a third officer.  No other fingerprint evidence was
before the trial judge.

[14]

Counsel for the appellant Li
contends that the opinion of Corporal Coates was unreliable because of the
comments of the first reviewing police officer that there were discrepancies he
could not explain.  As well, he points to the evidence of the information
supplied by Corporal Coates in response to the request for further information
and submits that the second officer had the same information, if not better
information, than the third officer who ultimately confirmed the opinion.
Accordingly, he contends, it was not reasonable for the trial judge to accept
Corporal Coates opinion as proof beyond a reasonable doubt that the finger
print was that of the appellant Li.  He did not attempt to identify any clear
and overriding error in the trial judges reasoning and he did not suggest that
the trial judge misunderstood or misapprehended the evidence.

[15]

In my view, counsel for Mr. Li is
simply asking us to substitute our view of the weight of Corporal Coates
opinion for the view taken by the trial judge.  We may not do that.  Questions
of credibility and weight are for the trial judge and we may not interfere in
the absence of some demonstrated error.  No error being demonstrated, I would
therefore not accede to this submission.

[16]

I turn to the submission that the
verdict was unreasonable or unsupported by the evidence.

[17]

The standard of review applicable
in this case is set out in
R. v. Yebes
, [1987] 2 S.C.R. 168 at
185; affirmed in
R. v. Biniaris
, [2000] 1 S.C.R. 381 at para. 36
 the question is whether the verdict is one that a properly instructed jury
acting judicially could reasonably have rendered.  In answering this question
we must, within the limits of the appellate disadvantage, weigh the evidence to
some extent and view it through the lens of judicial experience.

[18]

The attack on the reasons on this
ground is based on the premise that the trial judge was required to explain in
paragraph 13 of his reasons, which I have already set out, his reasoning for
the inferences he drew from each of the facts he found proven and that he
failed to do so  he expressed only conclusions.  As an example, counsel noted
that there was no evidence of exactly where the keys were first found or who
found them.  He characterized the evidence of the officer who said he found
them on the kitchen table about two hours or so after he arrived as ambiguous
and said the trial judge was required to acknowledge this ambiguity and explain
how he resolved it.  I cannot agree.

[19]

This approach has been rejected in
R. v. R.E.M.
, 2008 SCC 51 and in
R. V. H.S.B.
, 2008
SCC 52, albeit in another context.  In
R. V. R.E.M.
, Chief
Justice McLachlin said for the Court at para. 24:

The
Court of Appeal in this case took the phrase the path taken by the trial judge
through confused or conflicting evidence to mean that the trial judge must
detail the precise path that led from disparate pieces of evidence to his
conclusions on credibility and guilt.  In other words, it insisted on the very
verbalization of the entire process engaged in by the trial judge in reaching
a verdict rejected in Morrissey (p. 525). Sheppard does not require this.  The
path taken by the judge must be clear from the reasons read in the context of
the trial.  But it is not necessary that the judge describe every landmark
along the way.

[20]

Chief Justice McLachlin added,
again speaking for the Court, in
R. v. H.S.B.
at para. 2:

The
purposes of giving reasons are fulfilled where the reasons for judgment, read
in context, establish a logical connection between the verdict and the basis
for it - in other words, the reasons must explain why the judge made his or her
decision.  A detailed description of the judges process in arriving at the
verdict is unnecessary.

[21]

In my view, the reasons given by
the trial judge here read as a whole and in the context of the evidence given
at the trial explain clearly why he reached his verdict.  He drew the
inferences of guilt from a consideration of the evidence as a whole and from
the cumulative effect of the facts he found as he recounted them in his reasons
for judgment.

[22]

Counsel for the appellant Zheng
conceded that an inference of guilt drawn from the facts mentioned in para. 13
of the reasons for judgment was a reasonable inference.  However, he submitted,
that it was not the only reasonable inference open on the evidence.  Other
inferences he suggested were that the appellants were invited guests at the
residence and that the fingerprints of his client were placed on the shroud at
some earlier time and place.

[23]

He relies in this part of the
argument primarily on the absence of evidence that is often led in such cases.  For
example, he says there was no smell of marihuana in the house; no evidence of
fans or other sounds related to marihuana production; no evidence of
scoresheets, cash or other paraphernalia typically found in grow operations; no
evidence that marihuana was found in the house; no evidence from which it could
be concluded that it was the appellants who were using the residence in a
transient way; no evidence of where the keys were found or to whom they
belonged; and no evidence of whether there was anything else in the dishwasher
besides the pH testing kit.  He points as well to the evidence that the
appellants had no marihuana residue or smell of marihuana on their persons and
noted the Crowns evidence that persons tending marihuana plants often have
both.  He notes also evidence that the fingerprints could have been on the
shroud and the control box for a very long period of time.

[24]

Inferences must be based on proven
facts.  If there are no facts from which an inference can be made, we are left
with mere speculation.  In my view, there was no evidence before the trial
judge that would have supported an inference that the appellants were merely
casual visitors to the premises or that Mr. Zhengs fingerprints were placed on
the shroud at some earlier time and place.  These things are mere speculation.

[25]

Here, the appellants were found in
a remote area far from their homes early one morning in a residence used only
in a transient way in close proximity to a large and sophisticated commercial
marihuana grow operation.  A well worn path led from the back door of the
residence in which they were found to the locked door of the building in which
the marihuana was found.  A key that unlocked the door was found in the
residence.  Their fingerprints were found on equipment in use or which had been
used in the enterprise.  The appellants concede the trial judges inference of
guilt from these facts was a reasonable inference.  I have not been persuaded
that any other reasonable inference was open to the trial judge on the
evidence. Accordingly, I have not been persuaded that the verdicts were
unreasonable or unsupported by the evidence.

[26]

Moreover, I would take into
account against the appellants their failure to testify in the face of
otherwise convincing evidence and to provide an innocent explanation of the
circumstances: see
R. v. Noble
, [1997] 1 S.C.R. 874;
R. v.
E.R.
(2002), 171 B.C.A.C. 223.  If there was an innocent explanation
for these facts, they could have taken the stand and given it.

[27]

In the result, I would dismiss the
appeals.

[28]

LOWRY, J.A.
: I agree.

[29]

NEILSON, J.A.
: I agree.

[30]

SMITH, J.A.
: The appeals are dismissed.

The Honourable Mr. Justice
Smith

CORRECTION 20 January 2009

On the cover page the style
of cause of Docket CA035679, the Appellant Regina should be Respondent and the
Respondent George Zheng should be Appellant.


COURT
    OF APPEAL FOR BRITISH COLUMBIA

Citation:

Saalfeld
          v. Absolute Software Corporation,

2009
          BCCA 18

Date: 20090121

Docket: CA036271

Between:

Jennifer
    Saalfeld

Respondent

(
Plaintiff
)

And:

Absolute
    Software Corporation

Appellant

(
Defendant
)

Before:

The
          Honourable Madam Justice Huddart

The
          Honourable Madam Justice Saunders

The
          Honourable Madam Justice Neilson

N.T.
          Mitha
D. Rideout

Counsel for the Appellant

C.
          Forguson

Counsel for the Respondent

Place
          and Date of Hearing:

Vancouver, British Columbia

30 October 2008

Place
          and Date of Judgment:

Vancouver, British Columbia
21 January 2009

Written
          Reasons by
:

The
          Honourable Madam Justice Huddart

Concurred
          in by:

The
          Honourable Madam Justice Saunders (P. 18, para. 34)
The Honourable Madam Justice Neilson (P. 21, para. 44)

Reasons
    for Judgment of the Honourable Madam Justice Huddart:

[1]

This appeal from an award of damages for wrongful dismissal challenges
    the trial judge's determination of the appropriate notice period and her inclusion
    in the award of compensation for loss of the right to participate in the appellants
    stock option plan.  The trial judges reasons for judgment are indexed at
    2008 BCSC 760.

Facts

[2]

In October 2006, the appellant company, Absolute Software, offered
    employment to the respondent, Ms. Saalfeld, as a Federal Territory Manager
    at a base annual salary of $60,000 as part of its initiative to seek sales
    of its anti-theft software products to the U.S. federal government.  Despite
    its title, Ms. Saalfelds job did not include any managerial or supervisory
    duties.

[3]

Absolute Software contacted Ms. Saalfeld after her posting on the website
    Monster.ca had caught the interest of a recruiting agency working with it:
    the respondent had ten years experience in software sales and some expertise
    selling to the United States federal government.

[4]

From June 2005 until accepting the job offer from Absolute Software
    in October 2006, Ms. Saalfeld was employed as a salesperson by ACL Systems,
    a successful software company headquartered in Vancouver.  The job at Absolute
    Software offered her a slightly higher base salary, significant potential
    for earnings based on sales in the U.S. federal government territory, stock
    options, as well as reduced travel.  In consequence, she accepted the appellants
    written offer of employment made on 16 October 2006.

[5]

On 25 October 2006, Absolute Software granted her 5,000 stock options,
    as it did all new employees, to be earned at the rate of 1,250 per year.
    Under the terms of the Share Option Plan, the first 1,250 were to vest on
    25 October 2007, priced at $6.00 per unit.  The Share Option Plan included
    these relevant provisions:

1.1    In this Share Option Plan:

(z)         The words
the last
    day on which the Officer or Employee worked for the Company or a Subsidiary
    of the Company
means, with respect to an Officer or Employee whose employment
    has been terminated by the Company or a Subsidiary of the Company

i.
    other than for cause, either

(A)
    the day specified by the Company  in writing to the Officer or Employee as
    being the last day on                                       which the Officer
    of Employee is to work for the Company ; or

(B)
    if such Officer or Employee is given pay in lieu of advance notice of a pending
    effective date of termination, the day on which such notice of termination
    is given in writing by the Company or such Subsidiary to the  Officer or Employee;
    and

ii.
    for cause, the day on which the notice of termination was given.

3.6    No option may be exercised after:

(a)
    ; or

(b)         in the case of an Officer
    or Employee, 5:00 p.m. Pacific Standard Time on the last day on which the
    Officer or Employee worked for the Company or Subsidiary of the Company

[6]

Ms. Saalfeld began to work for Absolute Software on 13 November 2006,
    sharing her territorys quarterly sales target of $650,000 with a U.S. based
    account executive.  On 24 July 2007, Absolute Software terminated her employment
    without cause.  The company paid her one week's salary in lieu of notice,
    salary and benefits accrued to that date, including commissions, and refunded
    her contributions to the Employee Share Ownership Plan.

[7]

Ms. Saalfeld found alternative employment shortly before the summary
    trial held on 26 May 2008 after what the trial judge called a reasonably
    diligent job search.  The evidence relating to Ms. Saalfelds job search
    consists of these statements from her examination of discovery on 23 April
    2008:

Q:
Ill
    ask you some questions, Ms. Saalfeld, regarding your search for other work.
    And youve produced a number of documents from tabs 36 through 42 of your
    list of documents.  Its in your list of documents the companies that are
    here are Oracle?

[Ms. Saalfeld]:
Mmm-hmm.

Q
Theres
    also Microsoft?

[Ms. Saalfeld]:
Yes.

Q
And
    a company called RHI?

[Ms. Saalfeld]:
Correct.

Q
Theres
    also Business Objects?

[Ms. Saalfeld]:
Yes, it is.

Q
And
    also a company called Lock Search?

[Ms. Saalfeld]:
Yes.

Q:
These
    documents that youve produced appear to run from the period from August 13
th
,
    through to November 19
th
, so I just want to focus on that period.

[Ms. Saalfeld]:
Okay.

Q:
From
    August 13
th
to November 19
th
, are these five companies
    the only five companies that you contacted for work?

[Ms.
    Saalfeld]:
I believe so.

Q
Did
    you keep a diary or a log of any companies that you contacted in your efforts?

[Ms.
    Saalfeld]:
No.

[8]

Absolute Software pled failure to mitigate, but did not pursue this
    allegation at trial.

The Trial Judges Decision

[9]

The trial judge concluded the respondent was entitled to five months
    notice. After taking guidance from
Bardal v. Globe and Mail Ltd.
(1960),
    24 D.L.R. 140 (Ont. H.C.J.), and

Ansari v. British Columbia Hydro and
    Power Authority
, [1986] 4 W.W.R. 123, 2 B.C.L.R. (2d) 33 (S.C.), she
    explained why at para. 30 of her reasons for judgment:

[30]
In
this case, the plaintiff had been employed for over
    ten years in software sales and had developed some special expertise in working
    with the U.S. federal government and its agencies.  She was recruited by the
    defendant but I do not find that she was induced to leave her previous employment
    to the extent that inducement should be given significant weight in determining
    the reasonable notice period.  Her position with the defendant was a responsible
    and relatively senior one although it did not carry management responsibilities.
     It took the plaintiff some nine months to find another job, despite conducting
    a reasonably diligent search.  The defendant did not allege failure to mitigate.
     The length of the plaintiff's subsequent job search does not determine the
    reasonable notice period, but it provides some evidence putting into question
    the transferability of sales skills generalization and supporting that the
    brevity of employment may affect a subsequent job search.

[10]

In assessing the damages flowing from the appellants failure to give
    the appropriate five months notice, the trial judge concluded the respondent
    was entitled to be compensated for her loss of the stock options as she would
    have exercised them on their vesting date.  On the trial judges construction
    of the employment contract, the respondent would have been entitled to those
    options if proper notice had been given because for the purpose of assessing
    damages, the employment continues throughout the reasonable notice period
    (at para. 51).

Discussion

The Notice Period

[11]

The appellant submits the award warrants this Courts intervention
    because it is outside the range of reasonableness, entirely disproportionate
    to judicial precedent, and like the award in
Cronk v. Canadian General
    Insurance Company
(1995), 128 D.L.R. (4
th
) 147, 25 O.R.
    (3d) 505 (C.A.) at 158-59, one that has the potential of disrupting the practices
    of the commercial and industrial world, wherein employers have to predict
    with reasonable certainty the cost of downsizing or increasing their operations,
    particularly in difficult economic times.  This erroneous result may have
    been influenced, the appellant suggests, by the trial judges findings, unsupported
    by the evidence, that the respondents sales position was a responsible and
    relatively senior one although it did not carry management responsibilities
    (at para. 30) and that there was a slight degree of inducement (at para.
    23).  In the appellants view, the range of reasonable notice on the facts
    of this case would be three weeks to two months.

[12]

I do not accept that the inducement could have played much, if any,
    role in the trial judges determination of the appropriate notice period.
    She was clear that she did not give that factor significant weight (at para.
    30) probably because the evidence does not support a finding of inducement
    as that concept is understood in the jurisprudence:
Timm v. Juran Institute
    (Canada) Ltd
., [2004] O.T.C. 615 (Ont. S.C.J.);
Wright

v. Feliz Enterprises Ltd.,
2003 BCSC 267;
Ansari
,
supra
.  As in
Shinn v. TBC Teletheatre B.C.
, 2001 BCCA
    83, 85 B.C.L.R. (3d) 75, McEachern C.J.B.C., dissenting in part, at para.
    10, it seems obvious the respondent lost nothing that could relate to the
    determination of his notice period by accepting this employment.  The respondent
    had been in her previous employment for 16 months.  She presented no evidence
    to suggest that either she or the appellant anticipated a difficult job market
    when she was hired or if she were terminated.  She was looking for an opportunity
    to advance her software sales career; the appellant offered her that opportunity
    and nothing more.  As with any sales job, continuance of employment would
    depend on demonstrable results.

[13]

I have similar difficulty with finding that the trial judge ascribed
    much significance to the senior nature of the respondents employment.
    On the evidence, the trial judge could only have meant that the respondents
    function was important to the appellant.  Ms. Saalfeld was an inside salesperson
    who, together with another salesperson, was responsible for developing a new
    market for Absolute Software under the supervision of the Territory Sales
    Manager (responsible for 19 territories).  While the trial judge discussed
    at some length the diminishing importance given by courts to the character
    of the employment in determining appropriate notice, she recognized (at para.
    29) the important factors were those set down in
Bardal
and
Ansari
:  the respondents age (35), her length of service (nine
    months), her position (a shared quarterly sales target of $650,000 in a market
    new to the employer), and availability of similar employment.  As I read the
    reasons of the trial judge, she gave primary importance to the last factor.

[14]

The appellants main submission is supported by the decision in
Foster
    v. Kockums Cancer Division Hawker Siddeley Canada Inc
., [1993] 8 W.W.R.
    477, 83 B.C.L.R. (2d) 207 (C.A.), where this Court affirmed the importance
    of determining a range of reasonableness from recent British Columbia precedents.
    The exercise of looking to comparables and adjusting for differences permits
    a reasoned objective analysis, not only by a court, but by all who must determine
    reasonable notice in particular circumstances.  (See also
Cassell &
    Co. Ltd. v. Broome,
[1972] 1 All E.R. 801, [1972] A.C. 1027 (H.L.);
Bavaro v. North American Tea, Coffee & Herbs Trading Co.
,
    2001 BCCA 149, 86 B.C.L.R. (3d) 249; and
Shinn,

supra
,
    at para. 28, Prowse J.A., concurring in part).

[15]

The trial judge's reasons do not reveal that analysis.  However, the
    respondent submits that the recent jurisprudence

supports a
    notice period of five to six months in short service cases.  While B.C. precedents
    are consistent that proportionately longer notice periods are appropriate
    for employees dismissed in the first three years of their employment, I see
    little support for the proposition that five to six months is the norm in
    short service cases for employees in their thirties or early forties whose
    function is significant for their employer, but not one of senior management.
    I further see no support for a floor of six months as the trial judge appears
    to have understood the respondents counsel to have suggested to her.  That
    proposition was not put to us.  Absent inducement, evidence of a specialized
    or otherwise difficult employment market, bad faith conduct or some other
    reason for extending the notice period, the B.C. precedents suggest a range
    of two to three months for a nine-month employee in the shoes of the respondent
    when adjusted for age, length of service and job responsibility:
Zeidel
    v. Metro-Goldwyn Mayer Studio Inc
., 2004 BCSC 1415;
Duprey v.
    Seanix Technology (Canada) Inc
., 2002 BCSC 1335; 20 C.C.E.L. (3d)
    136;
Woolard v. Unum Life Insurance Co. of Canada
, 2002 BCSC
    1178, 4 B.C.L.R. (4
th
) 333;
Mitchell v. Paxton Forest Products
    Inc
., 2001 BCSC 1802, affd 2002 BCCA 532, 174 B.C.A.C. 205;
Kussman
    v. AT & T Capital Canada, Inc.
, 2000 BCSC 268, 49 C.C.E.L. (2d)
    124.

[16]

Nevertheless, I am not persuaded the trial judges award in this case
    is unreasonable.  The factor that appears to have loomed largest in her analysis
    was the nine months it took the respondent to find employment.  While the
    evidence of the respondents job search between the date she received notice
    of the termination of her employment and the date she obtained new employment
    is paltry, it is legitimate to take that evidence into account in assessing
    the availability of alternative employment.  Neither party led evidence as
    to the market in which the respondent was competing for employment as a senior
    software salesperson.  It seems both her counsel and the trial judge considered
    the appellants failure to pursue its pleaded allegation of failure to mitigate
    rendered such evidence unnecessary in light of the authorities:
Bavaro
,
    supra
;

Beglaw v. Archmetal Industries Corp
., 2004 BCSC 1369,
    36 C.C.E.L. (3d) 265;
Longshaw v. Monarch Beauty Supply Co.
,

[1996] 3 W.W.R. 365, 14 B.C.L.R. (3d) 88 (S.C.);
Athey v. Steve
    Marshall Motors Ltd.
(1996), 23 C.C.E.L. (2d) 114 (S.C.);
Frederick
    v. International Fund Raising Consultants Ltd.
, [1991] B.C.J. No 3420
    (S.C.); and
Paradis v. Skyreach Equipment Ltd
., 2002 BCSC 32.

[17]

Of these cases,
Bavaro
is the closest comparable.  On
    appeal, this Court accepted it was reasonable to fix a notice period for a
    35-year-old purchasing manager discharged after 14 months employment at six
    months.  Mr. Bavaro found subsequent employment, some ten and a half months
    later, with a job that required him to move to New York.  Ms. Saalfelds position
    involved less responsibility than that of Mr. Bavaro, who, as one of six department
    managers, supervised four employees, managed a purchasing budget of $50 million
    annually and reported to the managing director.  Ms. Saalfeld was employed
    for significantly less time, and her job search lasted for about the same
    length of time as Mr. Bavaros, although she found employment that allowed
    her to remain in Vancouver.

[18]

In the absence of an error in principle, the test on appeal is not
    whether I would have made the same award had I been the trial judge, it is
    whether the trial judges award was beyond the range of reasonableness in
    all the circumstances.  In light of
Bavaro
, while the award
    on the evidence before the trial judge was on the very high end of an acceptable
    range, I cannot accept the appellants submission that it warrants appellate
    intervention.  Thus, I would not give effect to the first ground of appeal.

Share Option Plan

[19]

Absolute Software alleges the trial judge erred by failing to properly
    apply the agreement between the parties to determine the damages that flowed
    from the failure to give reasonable notice, and by implying the term lawful
    into clause 1.1(z) of the Share Option Plan.

[20]

It is not disputed that the measure of damages for breach of an employment
    contract is what the employee would have received if the contract had been
    performed according to its terms:
Nygard International Ltd. v. Robinson
(1990), 46 B.C.L.R. (2d) 103 (C.A.); and
Iacobucci v. WIC Radio Ltd
.,
    1999 BCCA 753, 72 B.C.L.R. (3d) 234.  Nor is it disputed that the Share Option
    Plan was integral to the employment contract.  Thus, the loss of its value
    to the respondent is properly to be compensated.

[21]

Absolute Softwares point is that the respondent would not have been
    entitled to exercise a stock option after 24 July 2007, the date on which
    she received notice of her dismissal, whether [she] received 1 month or 5
    months notice or pay in lieu.  In other words, the breach of the reasonable
    notice duty did not cause Ms. Saalfelds loss of the entitlement to exercise
    her stock options; her dismissal did.  In the appellants view, the wording
    of the Share Option Plan provides that an employees entitlement to options
    ceases on the date notice is given.  Thus, it is inconsequential whether
    the right to receive stock options would have vested within the notice period,
    had she received proper notice.  Once dismissed, she could not have exercised
    them.  This, Absolute Software maintains, is the effect of the employment
    agreement, properly construed.

[22]

The trial judge disagreed with this interpretation, as she explained
    at paras. 51 and 52 of her reasons:

[51]
    I am persuaded by the plaintiff's submissions on this issue.  There is no
    doubt that the parties can agree to a contract that would deprive a dismissed
    employee of options during a period of notice even if the dismissal was wrongful;
    that is a matter of construction of the contract as a whole.  I find that
    the parties did not make such an agreement in this case, upon proper construction
    of the contract.  The option plan here referred to notice.  The principle
    that dismissal without cause must be upon reasonable notice and that employment
    continues to the end of the reasonable notice period has been recognized on
    numerous occasions by our Court of Appeal.  Though
Martell
[
v. Ewos
    Canada Ltd. and Statkorn Holdings ASA
, 2005 BCCA 554] was somewhat different
    from this case, in that the employer had alleged cause, nevertheless the principle
    it states is applicable:  that, for the purpose of assessing damages, the
    employment continues throughout the reasonable notice period.

[52]
    I find that the plaintiff's entitlement to damages for the loss of her option
    rights is not precluded by the terms of the contract, properly construed.

[23]

The trial judge accepted Ms. Saalfelds submissions regarding the stock
    options, outlined at para. 43:

[43]    Counsel
    for the plaintiff argued, on the other hand, that the words whose employment
    has been terminated by the company defined in paragraph (z) and used in paragraph
    3.6 should be taken to refer to
lawful
termination of employment.  The
    plaintiffs position is that there was no lawful termination until the plaintiff
    had received reasonable notice:  thus, if reasonable notice was five months,
    her employment
was not
lawfully
terminated until December 24, 2007.

[Emphasis in original]

[24]

In effect, Absolute Software submits, the trial judge impermissibly
    read the word lawful into paragraph (z) of the Share Option Plan where the
    agreement was effective without it:
Life Innova Capital Inc. v. Perceptronix
    Medical Inc
., 2008 BCSC 1132. The appellant seeks to distinguish
Veer
    v. Dover Group Corp. (Canada) Ltd/Société Dover Canada Ltée
(1999),
    45 C.C.E.L. (2d) 183, 2 B.L.R. (3d) 234 (Ont. C.A.), where the court construed
    the meaning of termination as lawful rather than unlawful dismissal,
    and other cases where the stock option agreement is ambiguous as to the determinative
    termination date:
Gryba v. Moneta Porcupine Mines Ltd.
(2000),
    5 C.C.E.L. (3d) 43 at para. 51, 139 O.A.C. 40, and
Iacobucci
,
supra
.  In those cases where the employment contract contains ambiguity,
    the contract, including the stock option agreement, is given the construction
    most favourable to the employee on the principle of
contra proferentem
.

[25]

I agree, as did the trial judge, with the proposition that the Share
    Option Plan governs the rights and responsibilities of both parties.  Where
    an agreement is clear as to when the right to exercise an option terminates,
    it governs.  This was the case in
Brock v. Matthews Group Ltd.
(1991), 34 C.C.E.L. 50, 43 O.A.C. 369.  At paras. 21-22, the Ontario Court
    of Appeal explained:

[The trial judge] held that Brock could have exercised his option up to November
    8, 1985, the expiration of the period of reasonable notice, and he made his
    calculations of the numbers on that basis.

With
    respect, we are of the view that he was in error.  Brock was discharged from
    his employment on November 8, 1984.  He had, in law, a right to reasonable
    notice or compensation in lieu of such notice.  But the proper focus of the
    question relating to the interpretation of the share option agreements is
    not the determination of the period of reasonable notice or the quantification
    of compensation in lieu thereof.  The proper focus of that question is the
    meaning, within the contemplation of the option agreements, of the words notice
    of dismissal, dismissal and ceasing to be an employee.  In our view,
    that meaning is the same for all of the events described

[26]

The Ontario Court of Appeal came to the same decision on a differently
    worded stock option agreement in
Kieran v. Ingram Micro Inc.
(2004), 33 C.C.E.L. (3d) 157, 189 O.A.C. 58, noting at para. 56 that, under
    Ontario law, the employee would be entitled to damages for the loss of the
    stock option benefit as it formed part of his compensation, absent contractual
    terms to the contrary, in the presence of which those terms govern.

[27]

In this case, the words governing the termination of the right to exercise
    an option (assuming one has vested) are the last day on which the Officer
    or Employee worked for the Company   I do not agree with the appellant that
    the Share Option Plan clearly defines those words to mean the date of notice.

[28]

Paragraph 1.1(z) of the agreement provides two alternate definitions.
     The first applies where an employee is given written notice of the last
    day on which [(s)he] is to work for the Company.  In that event, the specified
    day is the date on which the right to exercise a vested option terminates.
     The specified day might be the date of notice or it might be a date months
    after the date of notice if, for example, working notice is given (whether
    reasonable or unreasonable in length).  However, Absolute Software does not
    rely on that definition within the provision, and rests its argument on the
    second definition.  Having given Ms. Saalfeld one weeks pay in lieu of advance
    notice of a pending effective date of termination, it argues, her right to
    exercise the stock option terminated on the date of receipt of that notice.

[29]

Ms. Saalfeld submits that the preamble of the provision makes the definition
    inapplicable to a person whose employment has not been lawfully terminated.
     According to Ms. Saalfeld, although she was given one weeks notice of the
    termination of her employment and paid for that week, her employment was not
    terminated at common law because she did not receive reasonable notice:
Dunlop
    v. British Columbia Hydro & Power Authority
, [1989] 2 W.W.R. 518,
    32 B.C.L.R. (2d) 334 (C.A.). Her counsel suggests the second definition in
    paragraph 1.1(z) of the Share Option Plan applies only where the underlying
    employment agreement contains a termination provision. Ms. Saalfelds agreement
    contained no such clause.  Thus, her counsel submits, she is entitled not
    only to reasonable notice, but to be treated as an employee until the notice
    period fixed by the court comes to an end.  Included among the benefits lost
    when Absolute Software dismissed her without reasonable notice was the value
    of the stock option rights.  The trial judge found as a fact that she would
    have exercised her option to acquire 1,250 shares at the time they would have
    vested, and then immediately sold them.

[30]

This submission by the respondent is consistent with this comment of
    Gouge J.A. for the Ontario Court of Appeal in
Veer
,
    supra
at para. 14:

In my view voluntary termination refers to a termination that is consensual
    or initiated by the employee, whereas involuntary termination is that initiated
    by the employer.  In either case, the termination contemplated must, I think,
    mean termination according to law.  Absent express language providing for
    it, I cannot conclude that the parties intended that an unlawful termination
    would trigger the end of the employee's option rights.  The agreement should
    not be presumed to have provided for unlawful triggering events.  Rather,
    the parties must be taken to have intended that the triggering actions would
    comply with the law in the absence of clear language to the contrary.

[31]

It is also consistent with the approach of this Court as explained
    by Thackray J.A. in
Martell

v. Ewos Canada Ltd. and Statkorn
    Holdings ASA
, 2005 BCCA 554
,
218 B.C.A.C. 241 at para. 26,
    quoting from the reasons of the trial judge:

The termination was not of his volition, but rather was that of the employer.
    It has been found to have been unlawful.  In the circumstances, the employer
    cannot thus benefit from having wrongfully dismissed the plaintiff.  The correct
    course is that the plaintiff will be entitled to benefits which he would have
    had a right to claim, had he been employed.

[32]

On the other hand, Absolute Software submits that this Courts decision
    in
Dunlop
has been overtaken by more recent decisions of the
    Supreme Court of Canada, where that court has recognized that an employer
    can discharge its implied obligations under an employment contract either
    by giving reasonable notice or by providing pay in lieu of notice:
Wallace
    v. United Grain Growers Ltd
., [1997] 3 S.C.R. 701 at paras. 65 and
    75, 152 D.L.R. (4
th
) 1. I read that decision as requiring employers
    to give reasonable notice that the contract is about to be terminated, and
    the payment of damages for failure to do so.  It does not support the proposition
    that providing pay in lieu of notice is an alternative means of lawfully terminating
    employment, effective on the date of the payment.  The payment is a remedy
    for the failure to give the appropriate notice.  I see nothing in
Ansari,
supra,
or
Tull v. Norske Skog Canada Limited
, 2004 BCSC
    1098, 34 C.C.E.L. (3d) 225, that suggests payment in lieu of notice terminates
    the employment contract unless that payment compensates for reasonable notice.

[33]

As a result, I am not persuaded that the Share Option Plan is clear
    that the right to exercise stock options terminates on the day of notice.
    As in
Veer,
without express language to the contrary, it cannot
    be presumed that the preamble in paragraph 1.1(z), an Officer or Employee
    whose employment has been terminated by the Company, contemplates those officers
    or employees unlawfully terminated.  The essential question is whether participation
    in the Share Option Plan was a benefit of employment lost by reason of the
    employers breach of the employment contract.  In my view, it was.  Since
    Ms. Saalfeld is entitled to damages for any benefits she would have accrued
    if the employment contract had been performed according to its terms until
    the end of the reasonable notice period, she is entitled to damages for the
    loss of her option rights.  There being no reason to interfere with the trial
    judges valuation of the benefit she lost, I would dismiss the appeal.

The Honourable Madam Justice Huddart

Reasons
    for Judgment of the Honourable Madam Justice Saunders:

[34]

I have had the privilege of reading in draft form the reasons for judgment
    of Madam Justice Huddart.  I agree with her, for the reasons she has given,
    we should not interfere with the award of damages for the appropriate notice
    period.  I agree as well the appeal of the damage award relating to the share
    options should be dismissed, but for somewhat different reasons.

[35]

The question is the loss to Ms. Saalfeld from the appellants failure
    to give reasonable notice, found by the trial judge to extend past the date
    on which Ms. Saalfelds right to receive share options would have vested.

[36]

It is clear, on authority of this Court, the implied term in the employment
    contract is that each party must give reasonable notice of termination to
    the other.  The implied term is not a term to the effect that the employer
    may give pay in lieu of notice:
Dunlop v. BC Hydro & Power Authority
(1988), 32 B.C.L.R. (2d) 334 at 338, [1989] 2 W.W.R. 518 (C.A.), Lambert J.A.
    The corollary of this proposition is, as said by Southin J.A. in
Nygard
    Int. Ltd. v. Robinson
(1990), 46 B.C.L.R. (2d) 103 at 107 (C.A.):

That compensation, that is to say, damages for the breach are what
    the innocent party would have received or earned depending on the nature of
    the contract had it been performed according to its terms.

See
    also
Iacobucci v. WIC Radio Ltd.
, 1999 BCCA 753, 72 B.C.C.R.
    (3d) 234, and
Gillies v. Goldman Sachs.
, 2001 BCCA 683, 95 B.C.L.R.
    (3d) 260.

[37]

This means, in my view, the remedy for Ms. Saalfeld is the value of
    the emoluments she would have earned during the notice period had she continued
    to work until its end.

[38]

It is, of course, open to the parties to agree to, as part of the contract
    of employment, the length of notice to which the employee is entitled and
    the monetary and benefit package that will be provided to the employee in
    the event employment is terminated without cause.

[39]

My learned colleague has referred to
Veer v. Dover Corp. (Canada)
    Ltd. / Société Dover Canada Ltée
(1999), 45 C.C.E.L. (2d) 183, 2 B.L.R.
    (3d) 234 (Ont. C.A.),
Gryba v. Moneta Porcupine Mines Ltd.
(2000),
    5 C.C.E.L. (3d) 43, 139 O.A.C. 40, leave to appeal refd [2001] S.C.C.A. No.
    92,
Brock v. Matthews Group Ltd.
(1991), 34 C.C.E.L. 50, 43
    O.A.C. 369, and
Kieran v. Ingram Micro Inc.
(2004), 33 C.C.E.L.
    (3d) 157, 189 O.A.C. 58., leave to appeal refd [2004] S.C.C.A. No. 423.

[40]

As she has observed, those cases turn on the particular language of
    the plan before the court.  In this case the language of clause 1.1(z) provides:

1.1    In this Share Option Plan:

(z)         the words
the last
    day on which the Officer or Employee worked for the Company or a Subsidiary
    of the Company
means, with respect to an Officer or Employee whose employment
    has been terminated by the Company or a Subsidiary of the Company

(i.)
    other than for cause, either

(A)
    the day specified by the Company  in writing to the Officer or Employee as
    being the last day on which the Officer of Employee is to work for the Company
    ; or

(B)
    if such Officer or Employee is given pay in lieu of advance notice of a pending
    effective date of termination, the day on which such notice of termination
    is given in writing by the Company  to the Officer or Employee; and

(ii.)
    for cause, the day on which the notice of termination was given.

[41]

Absolute Software Corporation contends that clause of the share option
    plan limits Ms. Saalfelds right to compensation for loss of the opportunity
    to participate in it.  Respectfully, I do not consider the terms of the share
    option plan accomplish this result.

[42]

It appears to me the share option plan addresses entitlement to shares.
    Had Ms. Saalfeld received the notice to which she was entitled, colloquially
    referred to as working notice, clause (A) of clause 1.1(z)(i.) would apply
    and Ms. Saalfeld would have had the opportunity to acquire shares.  I do not
    consider clause (B) of 1.1(z) detracts from that proposition; had she received
    the working notice to which she was entitled, clause (B) would have been inapplicable.

[43]

It follows I, too, would dismiss the appeal.

The Honourable
    Madam Justice Saunders

Reasons
    for Judgment of the Honourable Madam Justice Neilson:

[44]

I have had the opportunity to read the draft reasons for judgment of
    both Madam Justice Huddart and Madam Justice Saunders.  I agree with the reasons
    for judgment of both, and I would accordingly dismiss this appeal.

The Honourable
    Madam Justice Neilson


COURT
    OF APPEAL FOR BRITISH COLUMBIA

Citation:

Vancouver
          Fraser Port Authority v. Canadian Forest Products Ltd.,

2009
          BCCA 17

Date: 20090121

Docket: CA036616

Between:

Vancouver
    Fraser Port Authority

Respondent

(
Plaintiff
)

And

Canadian
    Forest Products Ltd.

Appellant

(
Defendant
)

And

Greater
    Vancouver Sewerage and Drainage District

Respondent

(
Defendant
)

And

The
    Attorney General of British Columbia and

The
    Attorney General of Canada

Respondents

Before:

The
          Honourable Madam Justice Prowse

(In
          Chambers)

H.
          Poulus, Q.C.

A.
          Sabur

Counsel for the Appellant

R.W.
          Grant

Counsel for the Respondent

Vancouver Fraser Port Authority

R.G.
          Hildebrand

Counsel for the Respondent

Greater Vancouver Sewerage

and Drainage District

No
          one appearing on behalf of

The
          Attorney General of British Columbia or The Attorney General of Canada

Counsel for the Respondents

The Attorney General of

British Columbia
and

The Attorney General of Canada

Place
          and Date of Hearing:

Vancouver, British Columbia

January 15, 2009

Place
          and Date of Judgment:

Vancouver, British Columbia

January 21, 2009

Reasons
    for Judgment of the Honourable Madam Justice Prowse:

[1]

Canadian Forest Products Ltd. (Canfor) is applying for leave to appeal
    from the decision of a chambers judge, made October 24, 2008, granting Vancouver
    Port Authority (the Port Authority) an injunction enjoining the Greater
    Vancouver Sewerage and Drainage District (the GVSDD) from filing a vesting
    notice in the land title office in respect of certain lands in the City of
    New Westminster owned by Canfor until the final disposition of this action,
    further Order of this Court, or until March 1, 2009, whichever occurs first.
    The order provides for liberty to apply, and also provides that the Port Authority
    provide the usual undertaking as to damages.  I was advised that there was
    some initial dispute as to the content of the order, which was settled on
    January 6, 2009.

[2]

The trial of the action between the parties has been expedited and
    is set to be heard for three days commencing February 18, 2009.

[3]

By way of brief background, the Port Authority and Canfor entered into
    a contract on April 11, 2008 whereby Canfor agreed to sell waterfront property
    it owns along the Fraser River which is zoned for industrial use (the property)
    to the Port Authority for a total purchase price of $47.5 million.  That offer
    was subject to certain conditions which had been removed by the time of the
    hearing on October 28, 2008.

[4]

It is common ground that the Port Authority had been looking for land
    of this description to accommodate the increasing demand for interregional
    distribution facilities in the Lower Mainland for goods coming and going by
    ship, and that there are few remaining waterfront properties in the Lower
    Mainland suitable for its purposes.  The chambers judge observed that the
    Port Authoritys operations are an important foundation to the economy of
    the Lower Mainland, British Columbia and Western Canada.

[5]

At approximately the same time as the Port Authority was evidencing
    an interest in Canfors property, the GVSDD was also attempting to acquire
    the property for the possible future construction of a solid waste management
    infrastructure, including a new transfer station, a waste energy facility,
    an organic management facility, a re-use centre, and an education centre.
    In March 2008, the GVSDD offered to purchase the Canfor property for $34.5
    million.  When Canfor did not accept that offer, and knowing of the Port Authoritys
    interest in the property, the GVSDD attempted to negotiate a Section 3
Expropriation
    Act
agreement with Canfor.  When this failed, the GVSDD then proceeded
    with an expropriation of the property.

[6]

On June 25, 2008, the Port Authority commenced an action naming the
    GVSDD as a defendant, claiming that it has a binding enforceable contract
    with Canfor pursuant to which it has a unconditional right to acquire the
    legal and beneficial interest in the property and seeking, amongst other relief,
    an interlocutory and permanent injunction restraining the GVSDD from filing
    a vesting notice in relation to the property.

[7]

The GVSDD is defending the action, denies that the Port Authority has
    a legal or equitable interest in the property, and ultimately seeks to have
    the action dismissed and to proceed with its expropriation of the property
    pursuant to the
Expropriation Act
, R.S.B.C. 1996, c. 125 (the
Act
).

[8]

Canfor was added as a party to the action, and opposed the granting
    of the injunction primarily on the basis that, in the present economic circumstances
    where the real estate market is falling, the injunction could result in it
    receiving a lower price for the property, or being deprived of any sale should
    the GVSDD decide at some point not to proceed with the expropriation.

[9]

It was in these circumstances that the chambers judge granted a four-month
    injunction precluding the GVSDD from finalizing its expropriation of the property
    and vesting title in its own name, pending the determination of the action
    which is now set to be heard in mid-February.

[10]

At the outset of the hearing, I raised with counsel the timing of this
    application for leave to appeal.  I observed that two and a half months had
    elapsed since the injunction was granted and that the matter did not appear
    to have been treated with any degree of urgency.  Further, it was only one
    month until the hearing of the action and less than two months before the
    injunction expired according to its terms.  Counsel for Canfor agreed that,
    even if I were to grant leave to appeal, there was little prospect of the
    appeal being heard before the date set for the hearing of the action.  In
    his view, however, there was a likelihood that the injunction would be continued,
    or a new injunction granted, after the date of the hearing and, possibly,
    after the present termination date, given what he viewed as the likelihood
    of the matter ultimately proceeding to appeal from whatever decision is ultimately
    rendered.

[11]

Counsel for the Port Authority took the position that any appeal of
    the order would likely be moot by the time any appeal was heard and that there
    was little utility in granting leave to appeal in the circumstances.  He also
    submitted that the application did not meet the standard criteria for the
    granting of leave.

[12]

I note that the other parties to the action took no position on this
    application.

[13]

Having now had a further opportunity to consider this matter, I have
    concluded that this is not a proper case in which to grant leave to appeal.
    Assuming, without deciding, that the usual criteria for granting leave have
    been met, this is not the usual case.  I am satisfied that the appeal would
    be moot by the time it was heard (within the meaning of the decision in
Borowski
    v. Canada (Attorney General)
, [1989] 1 S.C.R. 342) and that it is unlikely
    that this Court would be moved to decide the appeal, since the factual landscape
    would have changed.  The action would have been heard, and a decision likely
    rendered.  The injunction may have expired or been modified.  Canfor may or
    may not have continued to suffer prejudice as a result of being unable to
    complete a sale of the property or to receive monies pursuant to the expropriation
    process.  In that regard, I note that the expropriation process is still ongoing,
    and that the injunction only precludes the GVSDD from vesting title in its
    own name; it does not impede the rights or duties of the GVSDD to proceed
    with the expropriation in accordance with the
Act
.

[14]

I am not persuaded that it would be appropriate to grant Canfor leave
    to appeal based on the possibility that the injunction may be extended in
    the future.  If a new injunction is issued, or if the present injunction extended
    by further order of the court, it will be open to Canfor to seek leave to
    appeal at that time, based on the facts as they then stand.

[15]

In the result, and for these reasons, I would dismiss the application
    for leave to appeal.

The
    Honourable
Madam Justice Prowse