COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Mass v. Canada Trustco Mortgage Company
(TD Canada Trust),

2019 BCCA 42

Date: 20190129

Docket:
CA44354

Between:

Shulamit Mass

Appellant

(Plaintiff)

And

Canada Trustco
Mortgage Company (TD Canada Trust) and
Jharna Chandok and Estate of Surjit Chandok

Respondents

(Defendants)

Before:

The Honourable Mr. Justice Frankel

The Honourable Mr. Justice Willcock

The Honourable Mr. Justice Savage

On appeal from:  An
order of the Supreme Court of British Columbia, dated
March 16, 2017 (
Mass v. Canada Trustco Mortgage Company (TD Canada Trust)
,
Vancouver Registry S165222).

Oral Reasons for Judgment

The Appellant appeared in person:

S. Mass

Counsel for the Respondents Canada Trustco Mortgage
  Company (TD Canada Trust):

T. Louman-Gardiner

The Respondent J. Chandok appeared in person:

J. Chandok

Place and Date of Hearing:

Vancouver, British
  Columbia

January 29, 2019

Place and Date of Judgment:

Vancouver, British
  Columbia

January 29, 2019

Summary:

The respondents obtained
orders in foreclosure proceedings against the appellants property in 1999. Years
later the appellant later commenced proceedings to challenge the validity of
the mortgages. Her action was dismissed as statute-barred and as re‑litigation
of issues previously determined. Her appeal from that order was put on the
inactive list after a year. Her application to have the appeal returned to the
active list was dismissed. She missed the deadline to apply to the Court to
vary the order. Her application to extend the time to do so was then dismissed.
The appellant applied to the Court to vary that order and for an extension of
time. Held: appeal dismissed. The appellant did not establish that the chambers
judge made any error in principle or misconceived facts or that relevant
information was not brought to his attention when he dismissed the application.
He did not err in concluding there was no prospect a division of this Court
would restore the appeal to the active list.

[1]

WILLCOCK J.A.
: This is an application pursuant to section 9(6)
of the
Court of Appeal Act
, R.S.B.C. 1996, c. 77, to vary the order
of Harris J.A., made on October 19, 2018, dismissing the appellants
application to extend the time to vary the order of Newbury J.A. made May 24,
2018.

[2]

The standard of review is highly deferential. A review hearing is not a
rehearing of the original application. The court will interfere only if there
has been an error in principle, if the justice was wrong in a legal sense, the
justice misconceived the facts or the relevant information was not brought to
the justices attention.
De Fehr v. De Fehr
, 2002 BCCA 139 at para. 6
;
Haldorson v. Coquitlam (City)
, 2000 BCCA 672 at paras. 6‑7.

[3]

The appellant was the victim of fraud that extended over 17 years and is
described in detail in the judgment of Ballance J., pronounced on March 21,
2018, indexed at 2018 BCSC 464. That judgment brought an end to proceedings
commenced in 2003 and prosecuted in fits and starts over the years, and at
trial between June 2008 and September 2016. The appellant attempted to add
Canada Trustco Mortgage Corporation and Surjit Chandok as parties to those
proceedings. Her application to do so was dismissed on April 8, 2008.

[4]

Canada Trustcos involvement in the appellants financial affairs is
described at paras. 24‑26 of the reasons for judgment of Ballance J.
In 1991, the appellant was taken by the fraudster, a Ms. Wood, to Canada
Trustco to arrange to place a first mortgage on her home in the Oakridge area
of Vancouver. Proceeds of that mortgage were obtained by the fraudster and,
together with other advances made by the appellant to Wood, were the subject of
the trial heard by Ballance J.

[5]

The Canada Trustco mortgage went into arrears. Foreclosure proceedings
were commenced. An Order
Nisi
of foreclosure was obtained by Canada
Trustco on July 9, 1999. The appellants appeal of the Canada Trustco Order
Nisi
was dismissed by Bowden J. on March 16, 2017.

[6]

Chandoks involvement in the appellants financial affairs is described
at paras. 43‑56 of the reasons for judgment of Ballance J. In
1996, the appellant was taken by Ms. Wood to an individual who privately
arranged to place a second mortgage on the Oakridge home. Chandok eventually
replaced that second mortgagee. The second mortgage fell into arrears.
Foreclosure proceedings were commenced. On August 19, 1999, an Order
Nisi
of foreclosure was made. An application to extend the time within which that
order might be appealed was dismissed on November 25, 1999. On January 7,
2000 an Order Absolute of foreclosure was made.

[7]

On June 8, 2016, these proceedings were commenced by the appellant
in the Supreme Court of British Columbia. The Notice of Civil Claim, amended on
January 27, 2017, challenged the validity of the first and second
mortgages.

[8]

On March 16, 2017, the proceedings in Supreme Court were dismissed
by Bowden J.

[9]

The order of Bowden J. was appealed on April 4, 2017. The
appeal was moved to the inactive list on April 9, 2018.

[10]

The appellants application for an order removing the appeal from the
inactive list was heard by Newbury J.A. on May 22, 2018 and
dismissed. In her reasons dismissing the application Newbury J.A. held:

[11]      Ms. Mass has known about the frauds on the
part of Ms. Wood and all the actions of the lenders since before the
foreclosure took place in 1999. Thus at least 19 years have passed since the
events she now complains of. All limitations, even allowing for postponement,
have long since expired. In my opinion, the claims asserted are also statute
barred and barred
as res judicata
. Cause of action estoppel may also
apply to at least some of her claims.

[12]      In my opinion it would
not be in the interests of justice to spend further public resources on the
unfortunate events that have been explored at such great length in the fraud trial.
I understand that Ms. Mass judgment against Ms. Wood is a dry one,
but unfortunately for Ms. Mass that does not change the facts I have
described and the law that applies to those facts. I am therefore dismissing
the applications.

[11]

Section 9(6) of the
Court of Appeal Act
, R.S.B.C. 1996,
c. 77, provides that the court may discharge or vary any order made by a justice
other than an order granting leave to appeal. Section 34 of the
Court
of Appeal Rules
provides that a party wishing to bring an application under
section 9(6) of the
Act
must prepare a Notice of Application to
vary the order in Form 15, file the Notice, and serve it on each of the
other parties within seven days after the order was made. The appellant did not
do so.

[12]

On October 16, 2018, the appellant appeared before Harris J.A.
and sought an order extending the time within which to do so.

[13]

Harris J.A. held that the criteria that should apply on the application
were well established:

[3]         I have to consider
whether there was a bona fide intention to appeal, whether the respondents were
informed that intention, any prejudice that might arise from extension of time
in the merits of the proposed application. These factors are all encompassed by
whether it is in the overall interests of justice to grant the extension.

[14]

He concluded:

[10]      Having examined the materials before Madam Justice
Newbury, I am not persuaded that she misapprehended, in any material way, the
facts underlying the exercise of her discretion. Ms. Mass has not
persuaded me that there is new evidence, either that Madam Justice Newbury
misapprehended, or that is capable of undermining her conclusion, in substance,
that the appeal of the order Mr. Justice Bowden was bound to fail.

[11]      As a result I do not think there is any prospect
that a division of this court could interfere with Madam Justice Newburys
order on a review application. The proposed review application is so lacking in
merit that the interests of justice do not support extending time.

[12]      As well, I am concerned
about the length of time that has elapsed before this application was brought.
I accept that Ms. Mass did not understand the nature of her appeal
remedies arising from Madam Justice Newburys order. That is not, however,
explain the delay in bringing the application once Ms. Mass learned of the
true position in July of this year. Likely I would not have refused to extend
time if this true if this delay were the sole impediment to doing so. Rather, I
ground my decision not to extend time on the lack of merit in the proposed
application to review. I share Madam Justice Newburys opinion that it is not
in the interests of justice to spend more resources on this matter, which must
come to an end.

[15]

In a lengthy written submission provided to us today, Ms. Mass seeks
not only an order varying the order of Harris J.A. but other relief,
including an order removing her appeal from the inactive list. The only matter
properly before us is the application to vary the order of Harris J.A. by
extending the time within which to seek a review under Rule 9(6).

[16]

In those written submissions, Ms. Mass argues that both Harris and
Newbury JJ.A. were under a misapprehension with respect to the extent to
which newly discovered evidence would enable her to make out a meritorious
claim against the respondents. She claims that the full extent of the fraud
perpetrated upon her by the fraudster was unknown to her until the trial before
Ballance J. concluded in September 2016. However, the material
substantiates rather than undermines Newbury J.A.s conclusion that Ms. Mass
has known about the fraud on the part of Ms. Wood and all the actions of
the lenders since 1999. The appellant herself notes in para. 96 of the
written submissions:

With the commencement of the
foreclosure actions I realized that I was defrauded by the mortgagees
themselves and in hindsight they were perpetrators of the Fraud in
participation with the fraudster.

[17]

It was not necessary for the appellant to fully comprehend the extent to
which Ms. Wood had defrauded her in order to contest the validity of the
mortgages that are the subject of these proceedings.

[18]

In my opinion, the appellant has not established any error in principle
or that Harris J.A. misconceived facts or that relevant information was
not brought to his attention when he dismissed the application to extend the
time to seek a review of Newbury J.A.s order. In particular, he did not
err in concluding there was no prospect that a division of this Court could
interfere with Newbury J.A.s order on a review application. Newbury J.A.,
in turn, was not under a misapprehension when she concluded that all
limitations, even allowing for postponement, have long since expired and the
claims asserted are statute barred and barred as
res judicata.

[19]

The appellant seeks leave to adduce new evidence on this application.
The evidence the appellant seeks to adduce, set out in her affidavit filed on
December 7, 2018, is a recital of evidence that was available to the
appellant at the time the application came on for hearing before Harris J.A.
and before her application came on for hearing before Newbury J.A. I would
not grant leave to adduce new evidence. In any event, the evidence does not
address the fundamental weakness of the appellants case, set out in great
detail in the judgment of Newbury J.A.

[20]

I would dismiss the application.

[21]

FRANKEL J.A.
: I agree.

[22]

SAVAGE J.A.
: I agree.

[23]

FRANKEL J.A.
: The application is dismissed.

The
Honourable Mr. Justice Willcock


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Staetter v. British Columbia (Adult Forensic
  Psychiatric Services),

2019 BCCA 40

Date: 20190129

Docket: CA45596

Between:

Christopher
Michael Staetter

Appellant

And

Director of Adult
Forensic Psychiatric Services and

The Attorney
General of British Columbia

Respondents

Before:

The Honourable Mr. Justice Frankel

The Honourable Mr. Justice Willcock

The Honourable Mr. Justice Savage

On appeal from: An
order of the British Columbia Review Board, dated
August 8, 2018).

Oral Reasons for Judgment

Acting on his own behalf:

C.M. Staetter

Counsel for the Respondent, Director of Adult Forensic
  Psychiatric Services:

D.K. Lovett, Q.C.

Counsel for the Respondent, Attorney General of British
  Columbia:

L.D. Hillaby

Place and Date of Hearing:

Vancouver, British
  Columbia

January 29, 2019

Place and Date of Judgment:

Vancouver, British
  Columbia

January 29, 2019

Summary:

S., who was found not
criminally responsible on account of mental disorder, appeals from a decision
of the British Columbia Review Board ordering his continued detention. Held:
Appeal dismissed. The Boards decision is reasonable. S. continues to have
delusions and, if released, would pose a significant risk to public safety.

[1]

FRANKEL J.A.
: This appeal is brought by Christopher Michael
Staetter, pursuant to s. 672 of the
Criminal Code
, R.S.C. 1995,
c. C-46, from a custodial disposition order made by the British Columbia
Review Board on August 8, 2018.

[2]

On October 19, 2012, Mr. Staetter was found not criminally
responsible on account of mental disorder (NCRMD) on two counts of criminal
harassment, one count of uttering threats, and one count of uttering a threat
to cause death or bodily harm. The trial judge committed Mr. Staetter to
the care of the Adult Forensic Psychiatric Services and, pursuant to s. 672.45(1.1)
of the
Criminal

Code
, referred him to the Board for disposition. On
November 27, 2012, the Board ordered a custodial disposition under s. 672.45(1):
[2012] B.C.R.B.D. No. 72. Thereafter, as required by s. 672.81(1),
the Board has conducted annual reviews of Mr. Staetters status. On each
occasion the Board found Mr. Staetter to be a significant threat to the
safety of the public (s. 672.54) and ordered him detained. Mr. Staetter
suffers from schizoaffective disorder complicated by chronic substance abuse,
primarily marihuana.

[3]

This Court has considered and dismissed previous appeals brought by Mr. Staetter
from custodial dispositions:

·

From the November 27, 2012 decision detaining him: 2013 BCCA 307,
340 B.C.A.C. 94.

·

From the September 16, 2014 decision detaining him for a further
12 months: 2015 BCCA 63, 367 B.C.A.C. 226, leave to appeal refd [2015] 3
S.C.R. xi.

·

From the September 11, 2015 decision detaining him for a further
12 months: 2016 BCCA 167.

·

From the September 8, 2016 decision detaining him for a further
12 months: 2017 BCCA 68, leave to appeal refd [2018] S.C.C.A. No. 219.

·

From the September 6, 2017 decision detaining him for a further
12 months: 2018 BCCA 125.

[4]

The index offences were committed in relation to a young woman, P.H.,
and her father. They were subjected to dozens of voicemail and text messages
sent by Mr. Staetter in March and April 2012. The content of those
messages was threatening and disturbing. Their basic theme related to Mr. Staetters
entrenched and false belief that he fathered a son with P.H. He has intractable
beliefs he can teleport himself, others, and objects. He believes he teleported
himself into P.H.s bedroom in 2005, where he saw his son in a crib. The victim
impact statements established that P.H. and her family experienced significant
psychological harm.

[5]

In its September 6, 2017 decision the Board said this:

[24]      There has been no material change in Mr. Staetters
mental status over the last year. He remains utterly devoid of any insight into
circumstances, including his illness, the need for treatment, the risks of
marijuana use, and the harms that he has caused the victims. The accused was
permitted to represent himself at this hearing. Throughout the proceedings he
tried to prove the truth of his delusions, the injustice of his circumstances,
and the evils of psychiatry. Aside from reinforcing the evidence with respect
to the entrenched nature of his symptoms, the Board was challenged to keep the
conduct of the hearing focused on relevant evidence and issues.

[25]      We fully agree with the
reasons of the last panel on the threshold issue of significant threat as set
out in paragraph five of these reasons. The Boards decision was upheld by the Court
of Appeal. Considering the absence of changes in the material factors that
affect the accuseds risk, we had little hesitation in determining that he
remained a significant threat to public safety.

[6]

Starting on May 14, 2018, Mr. Staetter began communicating with the
Boards registry by email and telephone, making requests for subpoenas to be
issued for two police officers whom he asserts can establish the truth of his
beliefs. The tone and content of those emails changed on June 19th. In the
first email he described in explicit detail the nature of his alleged sexual
relationship with P.H. In a subsequent email the same day he wrote that in
order to get the new trial he wants, he would have to do something silly like
I know  maybe harass them with voicemails and text messages and get criminal
charges. The email contained references to his continuing beliefs, including
his ability to teleport and being a god. He also expressed frustration with the
court and Board not permitting him to introduce evidence he believes is
relevant. A third email again contained explicit details of his belief about
his relationship with P.H.

[7]

On June 20, 2018, Mr. Staetters treatment team was notified of his
communications with the Board. This resulted in his privileges being put on
hold. When asked about those communications, he repeated his beliefs that he
had sexual relations with P.H. and can teleport himself. He stated he wanted to
call witnesses to confirm those beliefs. He said he did not intend to contact
P.H., but that she took six years of his life. He also said it was a mistake
sending the emails and that he does not plan on doing so again.

[8]

Mr. Staetter has a lengthy criminal record dating back to 2006. His
convictions include criminal harassment, uttering threats, assault, and breach
of probation.

[9]

In a report dated July 15, 2018, Dr. Barinder Singh, Mr. Staetters
treating forensic psychiatrist, referred to emails Mr. Staetter had sent
to the Director in which he: (i) spoke in explicit detail of having sexual relations
with P.H.; (ii) claimed P.H. and her father had committed perjury; and (iii)
had witnesses who could confirm his ability to teleport himself.

[10]

Under the heading Clinical Factors, Dr. Singh stated Mr. Staetter:

·

Does not believe he suffers from a mental illness and believes
the medications prescribed for him are poison and he doesnt need to take them.

·

Has not shown any violent ideation or intent recently but his
emails to the Director raise concerns with respect to his reaching out to P.H.

·

Denies having any hallucinations and reports he: (i) has a son
with P.H.; (ii) will not contact her again; and (iii) has witnesses who can
confirm his ability to teleport himself.

·

[B]egrudgingly participates in programs and cooperates with the
treatment team.

[11]

Later, in that report, Dr. Singh states:

[9]     RISK
SENARIOS:

1.     In the worst case scenario, if Mr. Staetter was
not supervised, he could stop taking his medications and start using marijuana,
which in the past has exacerbated his mental illness and led to the index
offence. In this case scenario, he would have end up [
sic
] causing
psychological or physical harm to someone known to him in his vicinity or even
a stranger.

2.     If Mr. Staetter continues to have active symptoms
of his mental illness. He is likely to always believe that he had a
relationship with the victim and about the existence of his son. In the best
case scenario, if he takes his medications, abstains from marijuana and is
supervised, he could be stable in the community. However, the risk to the
victim remains in case Mr. Staetter was to act impulsively and reach out
to her again.

[10]
SECTION
672.54:

i.      The need to
protect the public from dangerous persons, which is of paramount consideration:
Given

Mr. Staetters
history and the index offence, Mr. Staetter remains at risk to harm others
should he have deterioration in his mental health or if he were to use illicit
substances, which have worsened his illness in the past. Mr. Staetter
continues have limited insight into his illness and remains at risk to the
public.

ii.     The need to
consider the mental state of the accused: Mr. Staetter continues to
believe that he has a child with the victim and that he had a relationship with
her. He reports that he can call witness who can prove that he had a
relationship with the victim and that he can teleport himself.

iii.    The
reintegration of the accused into society: It would be important for Mr. Staetter
to continue with his medications and to abstain from using marijuana. He
reports that he plans to start smoking marijuana as soon as he is absolutely
released. He reports that he will get a green card from a doctor in the
community and smoke marijuana for medicinal purposes. The treatment team
continues to proceed cautiously and gradually to reintegrate Mr. Staetter
into the community while monitoring his response and coping abilities.

[11]   RECOMMENDATIONS:

1.     It is the treatment teams
recommendation that the Review Board consider a custody disposition at this
time.

[12]

Mr. Staetter was represented by counsel at the Boards most recent
hearing. At that hearing, the Board heard from Dr. Singh and Mr. Staetter.
Mr. Staetters counsel submitted Mr. Staetter should be granted an
absolute discharge or, in the alternative, a conditional discharge. Counsel for
the Director and counsel for the Attorney General of British Columbia both
submitted a custodial disposition was appropriate.

[13]

In finding that Mr. Staetter continued to pose a significant threat
to the safety of the public, the Board stated:

[24]      The index offences were part of a
longstanding pattern of harassing the victims. That pattern has been
interrupted since Mr. Staetter has been in FPH and under the jurisdiction
of the Review Board. In the past year he has had frequent unsupervised access
to the community on day leaves, and then almost two months in Johnson Manor. He
has not contacted the victims of the index offences, and maintains that he has
no intention of doing so. However, the delusions that led to the commission of
the offences appear to be as strongly held as ever. He continues to blame the
victims for his current situation and is particularly resentful because he
believes that had he been convicted of the offences rather than being found not
criminally responsible, he would have been sentenced to no more than 18 months
in custody. Mr. Staetter believes that he was not fairly treated by the
trial court, when he was not permitted to call witnesses that he believed would
establish the truth of his allegations. He has been frustrated by the continued
refusal of the Review Board to permit him to call these witnesses, and has
unsuccessfully appealed to the BC Court of Appeal on numerous occasions. The
second email of June 19, 2018 said that his only strategy to get a new trial
would be to commit further actions similar to the index offences. He is also
focused on strategies to hold the victims accountable for what he believes was
perjury.

[25]      Although Mr. Staetter is
clearly frustrated by the Review Board process, he conducted himself
respectfully and followed the advice of his lawyer. He can be forthcoming to
his treatment team about his thoughts and beliefs, but Dr. Singh
acknowledged in her evidence that they were not fully aware of the continued
intensity of Mr. Staetters delusions. In his evidence, Mr. Staetter
said that what he had learned from this recent experience was that everything
you say can be used against you, suggesting that he may be even more cautious
in the future about disclosing his thoughts to his treatment team. Because of
this, Mr. Staetter is a difficult patient to assess. The recent emails
illustrated that he had been ruminating about things in a way that his
treatment team had not suspected. The tenacity of his beliefs is very
concerning as Mr. Staetters history is of impulsive behavior on the basis
of his false beliefs. Dr. Singh testified that although strong false
beliefs are unlikely to disappear as a result of medication, it is the hope that
over time they will become less pronounced, and the patient will be less likely
to act on them. That is not yet the case for Mr. Staetter. He has
demonstrated significant self-control by not contacting the victims, but this
has been in the context of significant supervision, largely in custody.

[26]      We are satisfied that Mr. Staetter
continues to present a significant risk to public safety, and there is not plan
in place, or even contemplated at this point, that would be sufficient to
manage the risk he presents in the community. We therefore impose a further
custody order, with the same terms and conditions as the current order.

[14]

Mr. Staetter filed a number of documents in support of his appeal,
none of which are relevant. The majority are copies of letters Mr. Staetter
sent to Dr. Marcel Hediger, his current treating forensic psychiatrist, in
late 2018, i.e., months after the decision under appeal. In those letters,
which are written in a rambling fashion, Mr. Staetter raises numerous
complaints with respect to his continued detention and treatment. Among other
things, he asks for a prescription for marihuana (his main religious belief),
seeks his immediate release, accuses P.H. and her family of committing perjury,
and asserts he was denied a proper trial and an appeal.

[15]

On November 25, 2018, Mr. Staetter emailed the Boards registry
requesting an early date for his next review hearing. He stated he wished to
call two police officers to give evidence and that the NCRMD verdict was based
on perjury. On December 6, 2018, the Board denied his request. Mr. Staetter
responded to that denial in an email containing vulgar language.

[16]

Mr. Staetter also filed an unsworn document headed Affidavit. In
that document he says the first problem with the Boards most recent hearing is
falsified transcripts. He then states his three main arguments are error of
law, unreasonable verdict, miscarriage of justice.  This is followed by a
litany of complaints directed at the trial judge (who he refers to using an
offensive term) and his trial counsel. He also complains about being denied an
appeal from the NCRMD verdict.

[17]

By virtue of s. 672.78(1) of
the
Criminal Code
, this Court has the power to allow an appeal against a
Review Boards decision on three grounds: (a) the decision is unreasonable or
cannot be supported by the evidence; (b) it is based on a wrong decision on a
question of law; or (c) there was a miscarriage of justice. The reasonableness
standard of review applies to whether a decision is unreasonable or unsupported
by the evidence. In that regard, the following from the judgment of Justice
Dickson in
Nelson v. British Columbia (Adult Forensic Psychiatric Services)
,
2017 BCCA 40, is apposite:

[23]

The standard of review on appeal from a decision of the Review Board
is reasonableness. Mr. Justice Harris described the applicable standard in
Calles v. British Columbia (Adult Forensic Psychiatric Services)
, 2016
BCCA 318:

[14]      The
standard of review for this appeal is reasonableness:
R. v. Owen
, 2003
SCC 33, [2003] 1 S.C.R. 779 at para. 33. Courts recognize that the
assessment of whether the mental condition of an NCR accused renders him a
significant threat to public safety calls for significant expertise:
Owen,
at para. 30
.
As stated in
Winko v. British Columbia
(Forensic Psychiatric Institute),
[1999] 2 S.C.R. 625 at para. 61,
[a]ppellate courts reviewing the dispositions made by a court or Review Board
should bear in mind the broad range of these inquiries, the familiarity with
the situation of the specific NCR accused that the lower tribunals possess, and
the difficulty of assessing whether a given individual poses a significant
threat to public safety.

[24]

This Court does not make its own judgment
on the significant threat issue when evaluating whether a Review Board decision
under review was reasonable. Rather, it considers the Board's reasoning and
substantive decision to determine whether an acceptable and defensible outcome
was reached:
Carrick (Re)
, 2015 ONCA 866 at paras. 24-26.

[18]

In his submissions this morning, Mr. Staetter
repeated his complaints with respect to his continued detention and treatment. He
referred to a number of persons who have been given conditional or absolute
discharges. He advanced a free-flowing and wide-ranging argument that he has
been dealt with unjustly, including allegations that members of the judiciary
have engaged in perjury and should be investigated by the police.

[19]

In my view, Mr. Staetter has not
demonstrated the Boards decision is unreasonable.

[20]

In the result, I would dismiss this appeal.

[21]

WILLCOCK J.A.
: I agree.

[22]

SAVAGE J.A.
: I agree.

[23]

FRANKEL J.A.
: The appeal is dismissed.

The Honourable Mr. Justice Frankel


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Coburn and Watsons Metropolitan Home v. Home Depot of
  Canada Inc.,

2019 BCCA 35

Date: 20190130

Dockets:
CA45499; CA45513

Docket: CA45499

Between:

Coburn and
Watsons Metropolitan Home dba Metropolitan Home

Respondent

(Plaintiff)

And

Home Depot of
Canada Inc.

Appellant

(Plaintiff
Class Member)

And

BMO Financial
Group, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, MasterCard
International Incorporated, National Bank of Canada Inc., Royal Bank of Canada,
Toronto-Dominion Bank and Visa Canada Corporation

Respondents

(Defendants)

And

Wal-Mart Canada
Corp.

Respondent

(Plaintiff
Class Member)

- and -

Docket: CA45513

Between:

Coburn and
Watsons Metropolitan Home dba Metropolitan Home

Respondent

(Plaintiff)

And

Wal-Mart Canada
Corp.

Appellant

(Plaintiff
Class Member)

And

BMO Financial
Group, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, MasterCard
International Incorporated, National Bank of Canada Inc., Royal Bank of Canada,
Toronto-Dominion Bank and Visa Canada Corporation

Respondents

(Defendants)

Before:

The Honourable Madam Justice Newbury

(In Chambers)

On appeal from:  An
order of the Supreme Court of British Columbia, dated
July 13, 2018 (
Coburn and Watsons Metropolitan Home v. BMO Financial Group
,
2018 BCSC 1183, Vancouver Docket S-112003).

Counsel for the Appellant Home Depot of Canada Inc.:

J. Orr

K. Taylor

Counsel for the Appellant Wal-Mart Canada Corp.:

E. Babin

Counsel for the Respondent Coburn and Watsons Metropolitan
  Home:

L. Brasil

C. Hermanson

K. Duke

Counsel for the Respondents, BMO Financial Group, Bank of
  Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and
  Toronto-Dominion Bank:

K. Kay

Counsel for the Respondent MasterCard International
  Incorporated:

J. Simpson

J. Musgrove

Counsel for the Respondent National Bank of Canada Inc.:

S. Griffin

Counsel for the Respondent Visa Canada Corporation:

R. Kwinter

Place and Date of Hearing:

Vancouver, British
  Columbia

January 15, 2019

Place and Date of Judgment:

Vancouver, British
  Columbia

January 30, 2019

Written Reasons by:

The Honourable Madam Justice Newbury

Summary:

The plaintiff class members
appeal of settlement approval orders in class proceedings are ordered to
proceed before a division of this court to consider: (1) whether an appeal lies
in respect of a settlement approval order under the Class Proceedings Act; and
if so, (2) whether such an appeal may be properly brought by a member of the
plaintiff class with or without being added as a party to the action.

Reasons for Judgment of the Honourable
Madam Justice Newbury:

[1]

Before the Court are applications made in connection with purported
appeals in a class action brought against certain financial institutions,
notably Visa Canada Corporation (Visa), MasterCard International Incorporated
(MasterCard) and National Bank of Canada Inc., on behalf of various merchants,
including the applicants Home Depot of Canada Inc. (Home Depot) and Wal-Mart
Canada Corp. (Wal-Mart). In its pleading, the representative plaintiff,
Coburn, alleged that the defendants had conspired with other financial
institutions to set so-called interchange fees (fees charged to merchants
when they accept Visa or MasterCard credit cards); and that they had conspired
with issuing banks to set rules that discourage the use of credit cards that
have lower costs to merchants. The action was begun in British Columbia in
2011, and followed similar actions filed in other provinces of Canada. It was
certified in 2014 pursuant to the
Class Proceedings Act
, R.S.B.C. 1996,
c. 50 (
CPA
). Overall, over 650,000 merchants were represented in
the actions across Canada.

[2]

Similar class proceedings had already been brought in the United States
against the American counterparts of Visa and MasterCard and related financial
institutions. In mid-2016, an order approving the settlement of the U.S. actions
was overturned by the U.S. Court of Appeals for the Second Circuit. That court
expressed concern regarding the broad terms of a release that, in the words of
Justice Jacobs, permanently immunize[d] the defendants from any claims that
any plaintiff may have now, or will have in the future, that arise out of,
e.g., the honor-all-cards and default interchange rules. He described the
settlement as so unreasonable that it evidences inadequate representation.
(See
In Re Payment Card Interchange Fee and Merchant Discount Antitrust
Litigation
, 827 F. (3d) 223 (2016).

[3]

By mid-2017, the plaintiffs in the Canadian actions had negotiated
settlements with Visa, MasterCard and National Bank. In December, 2017 the B.C.
action was finally certified in anticipation of the hearing for court approval
of the settlements of the claims against Visa, MasterCard and the National
Bank. Although they were members of the plaintiff class, Wal-Mart and Home
Depot say they did not become aware of the proposed settlements until shortly
before the date set for the approval hearings in July 2018. Counsel for Home
Depot and Wal-Mart both appeared, Home Depot objecting to the Visa and
MasterCard settlements, and Wal-Mart objecting to all three settlements.

[4]

Under the settlement agreements each of the three defendants agreed to
pay a Settlement Amount  $19.5 million payable by each of Visa and
MasterCard and $6 million by the National Bank  to the plaintiff class.  According
to the factum filed by Home Depot, these amounts averaged about $65 per member
before deduction of the fees of class counsel. The settlements also dealt with
surcharges that merchants would be entitled to charge their customers, and
contained a release of claims relating to specified future conduct.

[5]

The chambers judge below approved the settlements on July 13, 2018 for
reasons indexed as 2018 BCSC 1183. As well, he approved legal fees in relation
to the latest round of settlements for class counsel, in the amount of
$11,250,000.

[6]

The applicants Home Depot and Wal-Mart seek to appeal the approval orders
on the ground that the chambers judge erred in approving the settlements as
fair and reasonable and in the best interests of the settlement class. Home
Depot contends that the settlements are unreasonable and unfair to members of
the plaintiff class on a cost-benefit basis; that class members were not given sufficient
notice of or information about them; that the settlements include releases that
are anti-competitive and that will sanction behaviour that may in future be
found to be improper or illegal; and that members of the plaintiff class were
deprived of their statutory rights to opt out of the class in order to avoid
the unprecedented negative effects of the settlements. For its part, Wal-Mart
asserts that the settlements are extremely advantageous to the three
defendants and extremely disadvantageous to the plaintiff class members.
Further, it contends:

12.        the Plaintiff has
agreed to provide a release that may give Visa and MasterCard carte blanche
(and immunity from civil action) to continue, forever, to engage in a very
broad range of improper conduct, provided they can argue that it is currently
occurring. Such a release appears to be unprecedented in class proceedings.
Although Visa and MasterCard claim that without such a release, it would be
impossible to settle this case, this statement is belied by the agreements
reached with the Prior Settling Defendants (which only release claims for acts
or omissions during the pendency of the class proceedings). The breadth of the
release in the present Settlements is exacerbated by the most favoured
nation, no further claims and no assistance provisions.

13.       Also in exchange for this paltry sum, the Plaintiff
has agreed class members will not continue to assert any claim for modification
or abrogation of any of the Visa/MasterCard Rules, or seek any declaratory or
other relief asserting that these restraints are illegal, unlawful or
unenforceable. Although Visa and MasterCard have agreed that they will make
amendments to the No Surcharge rule, Wal-Mart Canada has no present intention
to implement surcharges, and all of the other Visa and MasterCard rules will
remain in place. The modification is also time-limited. After five years, Visa
and MasterCard are entitled to reinstate the No Surcharge rule. If they do,
Releasors may sue, but only in respect of the No Surcharge rule, and nothing
else.

14.       No sum of money would
be sufficient to compensate the Settlement Class Members for the benefits being
obtained by Visa and MasterCard, and by National Bank, under the Settlements.

[7]

In terms of policy, the applicants also argued that there is a need for
judicial (and appellate) scrutiny over settlements under the
CPA
, which
are usually reached without any opposition or direct participation by members
of the plaintiff class. Mr. Babin emphasized that class proceedings are
designed in part to provide access to justice for large groups of consumers or
other persons who would not normally be in an economic position to sue; and that
the goal of behaviour modification by lawbreakers is usually an important part
of such justice: see
Hollick v. Toronto (City)
2001 SCC 68 at para.
15. In the applicants submission, that goal has not been achieved by the
settlement in this case; nor is judicial economy achieved, given that a 120-day
trial remains on foot for later in 2019 involving other defendants.

Procedural Issues

[8]

The actual applications filed in this court by Home Depot and Wal-Mart
were slightly different in terms of procedure: Home Depot sought an order that
the appeal had been properly brought by notice of appeal or alternatively,
sought leave to act as a representative plaintiff to appeal; Wal-Mart applied
for leave to appeal, or alternatively, if leave was not required, to have the
three settlement orders set aside on the ground that they were not fair and
reasonable or in the plaintiffs best interests. (A motion seeking directions, filed
by counsel for Home Depot, was withdrawn.)

[9]

Unfortunately, the procedural issues that arise from these applications
are more complicated than first appears. In general terms, two main issues must
be addressed  whether a right of appeal exists
at all
from a
settlement
order
made under the
CPA
, and whether a
member of the plaintiff
class
(as opposed to a
party
such as the representative plaintiff) may
bring such an appeal in this province (bearing in mind that it is evidently now
too late for the applicants to opt out of the action.) I turn to those
questions below.

Is a Settlement Order Under the CPA Appealable?

[10]

I believe it is common ground that s. 36 of the
CP
A does not
refer to an appeal from a settlement order.  It provides as follows:

36 (1)
Any party
may appeal to the Court of Appeal
from

(a) an order certifying or
refusing to certify a proceeding as a class proceeding,

(b) an order decertifying a
proceeding,

(c) a judgment on common issues,
and

(d) an order under Division 2 of
this Part, other than an order that determines individual claims made by class
or subclass members.

(2) If a representative plaintiff
does not appeal
as permitted by subsection (1)
within the time limit for
bringing an appeal set under section 14 (1) (a) of the
Court of Appeal Act
or if a representative plaintiff abandons an appeal under subsection (1), any
member of the class or subclass for which the representative plaintiff had been
appointed may apply to a justice of the Court of Appeal for leave to act as the
representative plaintiff for the purposes of subsection (1).

(3) An application by a class or
subclass member for leave to act as the representative plaintiff
under
subsection (2)
must be made within 30 days after the expiry of the appeal
period available to the representative plaintiff or by such other date as the
justice may order.

(4) With leave of a justice of the
Court of Appeal, a class or subclass member, a representative plaintiff or a
defendant may appeal to that court any order

(a) determining an individual
claim made by a class or subclass member, or

(b) dismissing an individual claim for monetary relief made
by a class or subclass member.

Section 40 of the
CPA
also
states:

40  The Supreme Court Civil Rules apply
to class proceedings to the extent that those rules are not in conflict with
this Act.

[11]

I am aware of only two decisions of this court dealing with an appeal
from an order in a class proceeding that did not fall within the terms of s. 36.
In
Samos Investments Inc. v. Pattison et al.
2004 BCCA 278, the plaintiff
(a would-be representative plaintiff) sought directions as to whether it
required leave to appeal an order that refused leave to certify a revised
plaintiff class under the
CPA
, and to amend its pleadings accordingly.
At the time the application was heard in 2004, ss. 6 and 7 of the
Court of
Appeal Act
, R.S.B.C. 1996, c. 77, required leave for appeals from,
inter
alia
, interlocutory orders.

[12]

Chief Justice Finch disagreed in
Samos
with the plaintiff's
argument that the order sought to be appealed came within the terms of s. 36
of the
CPA.
Therefore, he said, the plaintiff did not have a statutory
right of appeal under that Act and leave to appeal must otherwise be
obtained. In his analysis:

Dealing first with the question of whether the order comes
within s.36(1) of the
CPA
, counsel for the plaintiff [applicant] says
that refusal of leave under s.2(3)(b) [of the
CPA
] has the same effect
as an order refusing certification. I respectfully disagree. The order refusing
leave was a discretionary judgment as to whether the time for making the
application should be extended beyond the 90 day period specified in s.2. In
reaching a decision on that issue the judge could properly consider the history
of the proceedings, the conduct of the parties, and the likelihood or
otherwise, of a proper class eventually being defined. It is, in my view, an
order of a different character from those specified in s.36. An appeal from
that order
poses the question of whether leave to apply for certification
was wrongly refused, rather than whether certification was wrongly refused. The
plaintiff therefore does not have a statutory right of appeal under the
CPA
.

Turning to the question of
whether the order is final or interlocutory, the test is whether the order finally
disposes of the rights of the parties ... [At paras. 17-8; emphasis added.]

[13]

The Chief Justice went on to find that the plaintiff's rights had not
been finally disposed of, since the plaintiff could still pursue the action as
an ordinary one. Again in the words of Finch C.J.B.C.:

The order in this case dismissing
the plaintiffs application for leave under s.2(3)(b) to certify the proceeding
in respect of the new class does not fall within any of s-s.(a) to (d) of
s.36(1), nor is it a final order.
It follows that leave to appeal must be
obtained.
[At para. 22; emphasis added.]

He directed the plaintiff to seek leave to appeal the order
in question.

[14]

Similar reasoning was adopted in
Harrington v. Dow Corning Corp. et
al.
2001 BCCA 534, where the applicant was the representative plaintiff.

[15]

Samos
and
Harrington
may be taken as suggesting, then,
that even though an order obtained in a class proceeding is not one for which
s. 36 of the
CPA
provides an appeal, an appeal or right to seek leave to
appeal may nevertheless arise under the
Court of Appeal Act.

[16]

In 2012, the
Court of Appeal Act
was amended such that ss. 6 and
7 read as follows:

6 (1) An appeal lies to the court

(a) from an order of the Supreme
Court or an order of a judge of that court, and

(b) in any matter where
jurisdiction is given to it under an enactment of British Columbia or Canada.

(2) If another
enactment of British Columbia or Canada provides that there is no appeal,
or
a limited right of appeal
, from an order referred to in subsection (1),
that enactment prevails.

7 (1) In this
section,
limited
appeal order
means an order prescribed under the rules as a
limited appeal order.

(2) Despite
section 6 (1) of this Act,
an appeal does not lie to the court from a
limited appeal order without leave being granted by a justice.

(3) In an order granting leave to appeal
under this or any other Act, a justice may limit the grounds of appeal.
[Emphasis added.]

S. 2.1 of the
Court of Appeal Rules,
B.C. Reg
.
297/2001,
prescribes the types of orders that are limited appeal orders. Counsel are in
agreement that an appeal of a settlement order under the
CPA
does not
qualify as a limited appeal order.

[17]

The reasoning in
Samos
and
Harrington
concerning s. 36
differs from at least one case decided at the appellate level in Ontario,
although one must keep in mind that the legislation of the two provinces
differs. Mr. Orr referred us to
Dabbs v. Sun Life Assurance Co. of
Canada

Ltd.
(1998) 165 D.L.R. (4th) 482 (Ont. C.A.), which is
relevant to both procedural points at issue in the case at bar. In
Dabbs
,
Mr. Maclean, a member of the plaintiff class, disagreed with the terms of
a settlement that had been approved under s. 29 of the
Ontario Class
Proceedings Act, 1992,
S.O. 1992, c. 6 (
OCPA
). He sought
leave to appeal. At the same time, the representative plaintiff,
Mr. Dabbs, sought to have the appeal quashed, primarily on the basis that
Mr. Maclean was not a party and therefore had no standing to bring an
appeal.  At the time, s. 30 provided in relevant part:

30 (1) A party may appeal to the Divisional Court from an
order refusing to certify a proceeding as a class proceeding and from an order
decertifying a proceeding.

...

(3) A party may appeal to the Court of Appeal from a
judgment on common issues and from an order under section 24, other than an
order that determines individual claims made by class members.

...

(5) If a representative party
does not appeal as permitted by subsection (3), or if a representative party
abandons an appeal under subsection (3), any class member may make a motion to
the Court of Appeal for leave to act as the representative party for the
purposes of subsection (3).

S. 6(1)(b) of the
Courts of Justice Act
, R.S.O.
1990, c. C-43 provided a general right of appeal from a final order of a
judge of the General Division. (It was subsequently amended to provide a right
of appeal to the Court of Appeal from a final order of the Superior Court.)

[18]

The Court of Appeal agreed with the representative plaintiffs position,
noting that one of the purposes of class actions is to handle potentially
complex cases of mass wrongs efficiently. In the words of Mr. Justice
OConnor (as he then was) for the Court of Appeal:

This efficiency is accomplished, in part, by the court
appointment of one or more class members under s. 5 to be representative
plaintiffs or defendants as the case may be. The criteria for appointment
include the ability to fairly and adequately represent the interests of the
class. A representative plaintiff or defendant is a party to the proceeding and
has the specific rights and responsibilities for the carriage of the litigation
on behalf of the class that are set out in the
Act
.

The
Act
makes a clear distinction between the role
of a party and that of a class member
. Section 14 gives the court a broad
discretion to permit class members to participate in a proceeding and to
provide for the manner and terms upon which the participation is permitted. Not
surprisingly, s. 14 does not provide that class members who are permitted to
participate thereby become parties to the proceeding. The section does not
restrict participation to those class members who are able to fairly and
adequately represent the class. Indeed, the court may permit participation by
those who oppose the manner in which the party representing the class is
conducting the proceeding and who assert positions that differ from those of
the majority of the class. While the court may consider it useful to hear from
these class members and to permit them to participate in a limited manner,
it
could frustrate the orderly and efficient management of the proceeding if they
became parties simply because of their participation.

If class members are dissatisfied
with the conduct of a proceeding or do not wish to be bound by the result,
they
may opt out under s. 9 and pursue their claims or defences in a personal
capacity
. [At paras. 6
‒
8;
emphasis added.]

[19]

Mr. Maclean also argued that the settlement order was a final order
of the General Division of the Ontario Court and that accordingly, he had a
right of appeal under s. 30(3) of the
OCPA.
The Court of Appeal disagreed,
citing the rules of statutory construction that a general statute yields to a
more specific one, and that a more recent statute takes precedence over prior
legislation. Both presumptions led to the conclusion that the appeal provisions
in s. 30(3) of the
OCPA
took precedence over s. 6(1)(b) of the
Courts of Justice Act
. (See para. 13.) In summary, the Court
stated:

.I am of the view that s. 30(3) of the
Act
provides the rights
of appeal to this court for class proceedings and that s.
6(1)(b) of the
Courts
of Justice Act
does not supplement those rights
. [At para. 17; emphasis
added.]

[20]

Finally, the Court refused to grant Mr. Macleans motion to be
permitted to act as a representative party in order to bring his appeal.
There was nothing in the record, OConnor J.A. said, to indicate that Mr.
Maclean would adequately represent the interests of the plaintiff class by bringing
an appeal to set aside the settlement agreement. The Court continued:

Courts in three jurisdictions have approved the agreement.
Maclean is the only class member of an estimated 400,000 who now seeks to set
it aside. The wishes of one class member ought not to govern the interests of
the entire class.

Importantly, if Maclean is
dissatisfied with this settlement,
he has the opportunity under the terms of
Sharpe J.s judgment and s. 9 of the [
Class Proceedings Act
,
1992
]
to opt out of the class and pursue his claim against Sun Life in his personal
capacity
. [At paras. 19
‒
20;
emphasis added.]

The Court dismissed both motions.

[21]

In a 2013 case,
Cavanaugh v. Grenville Christian College
2013 ONCA
139, the Court of Appeal distinguished
Dabbs
and found that an appeal to
that court existed under s. 6(1)(b) of the
Courts of Justice Act.
In the
words of Mr. Justice Doherty:

The result in
Dabbs
flows from a reading of the
[O]CPA
as creating a specific right of appeal
applicable to the circumstances
before the court and limited to a party.
The court held that when a statute
creates a specific right of appeal,
another statute providing a more general
right of appeal, like the
CJA

[
Courts of Justice Act
],
cannot be used to create a different right of appeal than that set out in the
specific legislation
.

Dabbs
is consistent with
the language of s. 6(1)(b) of the
CJA
. Because
Dabbs
interpreted
the relevant part of the
[O]CPA
as creating a specific right of appeal
applicable in the circumstances of the case and limited to parties, s. 6(1)(b)
could not be used to expand that right of appeal to entities who were not
parties.
Dabbs
is distinguishable from this case because,
I do not
read the appeal provisions in s. 30 of the
[O]CPA
as speaking to an
appeal from an order dismissing an action.
[At paras. 27
‒
8; emphasis added.]

In summary, the Court said:

the order as it relates to the
Diocese is an order dismissing the action. It is not an order granting or
refusing certification.
Under the terms of s. 6(1)(b) of the
CJA
, the
order dismissing the action against the Diocese is appealable to this court
unless there is an appeal to the Divisional Court
. If there is an appeal to
the Divisional Court, it must be found within the terms of s. 30 of the
CPA
.
None of the provisions in that section directing appeals to the Divisional
Court have any application to an order dismissing the action. Therefore, there
is no appeal from that order to the Divisional Court.
The appeal is to this
court.
[At para. 32; emphasis added.]

[22]

Counsel for Home Depot submits that the reasoning in
Dabbs
has
been supplanted more clearly by more recent authorities, including
Airia
Brands Inc. v. Air Canada
2017 ONCA 792. The class action in that instance
alleged a global conspiracy to impose excessive fuel and security surcharges on
air freight shipping services to and from Canada. There was a dispute over
whether the plaintiff class could properly include absent foreign claimants
(AFCs). The defendants sought a declaration that the Ontario court did not
have jurisdiction over AFCs and that the class should be defined to exclude such
parties. They sought a stay of the action as it related to such persons on
jurisdictional grounds or on the basis of
forum non conveniens
. The
judge below allowed the defendants motion after concluding that the real and
substantial connection test for jurisdiction
simpliciter
should not be
applied, but that the question should be answered by reference to principles
of order and fairness.

[23]

The plaintiffs appeal was allowed. For our purposes, we need only note
paras. 36 and 37 of the Court of Appeals reasons, where Pepall J.A.
stated:

Before engaging in an analysis of these issues, I will first
briefly address this courts jurisdiction to hear the present appeal. Section
30 of the
CPA
addresses the appropriate appeal routes for a number of
types of orders and judgments made in class proceedings. The
CPA
however
makes no reference to the appropriate avenue for appeal of jurisdiction orders.
Where the
CPA
does not specifically address an avenue of appeal, s.
6(1)(b) of the
Courts of Justice Act
, R.S.O. 1990, c. C. 43 governs
whether an appeal in a class proceeding lies to this court: .

The question therefore is whether
the jurisdiction order under appeal is final and appealable to this court
pursuant to s. 6(1)(b) or whether it is interlocutory.
The jurisdiction
order finally disposes of the issue of an Ontario courts jurisdiction over the
AFCs, and therefore the present appeal is properly before this court
. [At
paras. 36
‒
7;
emphasis added.]

The Court made no reference to
Dabbs.

[24]

I was referred to other appellate cases from both this province and
Ontario in which appeals from orders in class actions that did not fall within s. 36
of the
CPA
or other provincial counterparts, were entertained without
substantive discussion of whether a right of appeal existed. In
Main v. The
Hershey Co.
2011 BCCA 21, for example, a settlement approval order was
appealed by the non-settling defendants without any discussion of s. 36 of
the
CPA.
In a case analogous to this,
Coburn and Watsons
Metropolitan Home v. Bank of Montreal
2018 BCCA 432, the representative
plaintiff  obviously a party  sought to appeal an order that the defendants
were entitled to discover class members in addition to the representative
plaintiff. In the course of his reasons, Mr. Justice Tysoe noted that the Court
had expressed concern to counsel about its authority to entertain the appeal:

We have reservations about the
Courts jurisdiction as a result of the fact that s. 36(1) of the [
CPA
] does
not list an order under s. 17 as one of the orders that can be appealed to this
Court. Although s. 36 does not explicitly prohibit the Court from entertaining
appeals of other orders, it could be interpreted as an implicit prohibition.
However, the defendants do not take the position that the Court lacks
jurisdiction to deal with this appeal. [At para. 13.]

Ultimately, he said, the issue of jurisdiction did not
have to be decided because the Court had concluded that the appeal should be
dismissed in any event.

Does a member of the plaintiff class have an appeal?

[25]

The second procedural issue in this case results from the fact that
Wal-Mart and Home Depot are not parties to the class action, but are merely
members of the plaintiff class. It will be recalled that s. 36 of the
CPA
begins with the wording Any
party
may appeal .... Section 6 of the
Court of Appeal Act
contains different wording: it states that ... an
appeal lies to the court  from an order of the Supreme Court, subject to
s. 7, quoted earlier. However, s.1 defines appellant to mean
the
party
 bringing an appeal, and respondent to mean a person, other than
the appellant,
who was a party
. (My emphasis.)

[26]

Counsel did not cite any authority, from British Columbia or elsewhere,
that is directly on point with the facts of this case. Counsel did refer to
Logan
v. Hong
2012 BCCA 399, in which various doctors were seeking leave to
appeal an order that required them to provide the representative plaintiff in a
class action against the defendant, with certain private information of
patients. Madam Justice Ryan in chambers granted leave to the doctors, whom she
described as non-parties subject to the court order. At para. 13 she
observed that the judge below had accepted as a given that he had had
jurisdiction under s. 12 of the
CPA
to make the order in question.
No objection had been taken to this courts jurisdiction to do so.  Ultimately,
she granted leave to appeal. Leave was also granted in
Equustek Solutions
Inc. v. Google Inc.
2014 BCCA 295, to Google Inc., a non-resident non-party,
to appeal an interim injunction granted in an ordinary action (not a class
proceeding) against three defendants. (See para. 21.)

[27]

In other areas of the law, non-parties have been permitted to appeal orders
by which they or their interests are directly affected. Where a frustrated
prospective purchaser wishes to contest the fairness of an order for sale
granted in foreclosure proceedings, for example, the court may permit the
frustrated purchaser to appeal: see
Bank of Nova Scotia v. Yoshikuni Lumber
Ltd.
(1992) 99 D.L.R. (4
th
) 289 (B.C.C.A.), where the fairness
and integrity of a process of sealed bidding were put in issue. Similar
concerns may arise in the case at bar with respect to the fairness and
reasonableness of the process by which the settlement was arrived at by the representative
plaintiff and the three defendants.

[28]

S. 9(3) of the
Court of Appeal Act,
which states that this
court may exercise any original jurisdiction that may be necessary or
incidental to the hearing and determination of an appeal has also been invoked
to permit non-parties to appeal. In
J.P. v. British Columbia (Children and
Family Development)
2015 BCCA 481, Madam Justice Bennett  noted:

A Court of Appeal has the
ability to permit a non-party to appeal a decision.
This issue was
canvassed thoroughly in
Société des Acadiens v. Association of Parents
,
[1986] 1 S.C.R. 549, a decision upholding the New Brunswick Court of Appeal.
The Court of Appeal had permitted the Association of Parents, non-parties to
the lower court action, to file an appeal. The Court invoked its inherent
jurisdiction found in s. 8(2) of the
Judicature Act
R.S.N.B. 1973 c. J-2
as amended. This section is similarly worded to this Courts s. 9(3).
It is
clear that this is an inherent jurisdiction that may be exercised by a division
of the Court, not a justice
(para. 86). See also
Proposed Appellants v.
Griffiths
, 2005 NSCA 85 at para. 1. [At para. 23; emphasis added.]

She continued:

It seems to me that what Mr. Strickland really wants is an
opportunity to make submissions in relation to the findings in relation to
misfeasance in public office. In my view,
he may be permitted to make these
submissions as a party to the appeal. He does not have to be an appellant.

Mr. Strickland can be added by a justice of the court as a
respondent to the appeal under R. 2(2).
This rule was considered by Garson
J.A. in
Adams Lake Indian Band v. British Columbia
, 2011 BCCA 339. Sun
Peaks Resort sought to be added as a party under R. 2(2), although its position
was more or less aligned with the appellant, the Lieutenant Governor in
Council.

Garson J.A. canvassed the different approaches to adding a
party. She discussed the low threshold found in
British Columbia Ferry Corp.
v. T & N plc
(1994), 2 B.C.L.R. (3d) 26 (C.A.) at paras. 10-13 and the
more direct effect on the applicant approach found in
Canada (Attorney
General) v. Aluminum Co. of Canada
(1987), 10 B.C.L.R. (2d) 371 (C.A.) at
379, which stands for the proposition that a party cannot be added unless the
question to be adjudicated between the existing parties cannot be adjudicated
unless the new party is added.

Each approach may apply depending
on the nature of the appeal and the issues that the applicant wishes to raise.
The within case is somewhat similar to
Butty v. Butty
(2009), 98 O.R.
(3d) 713 (C.A.), where under the Ontario equivalent to R. 2(2), LaForme J.A.
permitted former trial counsel to be added as a party to address the findings
of the trial court that he had deliberately misled the court, suppressed
information and otherwise conducted himself unprofessionally. [At paras. 26
‒
9; emphasis added.]

In the result, Bennett J.A. added the applicant as a
respondent pursuant to R. 2(2) of the
Court of Appeal Rules
.

[29]

Finally under the rubric of procedural issues, Mr. Orr referred to
s. 20 of the
Court of Appeal Act
, which deals with the quashing of
an appeal. It provides:

20 A respondent must not be heard

(a) on an application to quash an appeal, or

(b) to raise a preliminary objection to the appeal being
heard

unless the respondent has filed
and served on the appellant a notice, specifying the ground of the application
or objection, at least 7 clear days before the day that has been set for
hearing the appeal.

The respondents have not applied to have the present
appeal (if such it be) in this case quashed, but the applicants suggest that
one consequence of s. 20 is that only a division of this court may quash an appeal
(a proposition that in my view is unassailable), that formal notice is required
and that the motion must be heard on the date set for the hearing of the appeal
itself. The latter proposition was considered by this court in
Carten v.
British Columbia (Family Maintenance Enforcement Program)
2015 BCCA 93, where
the appellant objected to a motion to quash for which no application had been
filed at least seven days before the hearing. The Court ruled that in the
circumstances of the case, the objection should not be sustained, and that the
Court had discretion to consider an application to quash an appeal, regardless
of timing. (At para. 7; see also
British Columbia (Technology,
Innovation and Citizens Services) v. Columbus Real Estate Inc.
2017 BCCA
365 at para. 17.)

The Defendants Response

[30]

This brings me to the arguments in response made by counsel for the
representative plaintiff and the defendants. Ms. Brasil on behalf of Coburn
(with whose argument Visa and MasterCard agreed) expressed surprise at the
notion that she might not be in a position to object at the hearing in chambers
to the purported appeals without having filed a motion to quash under s. 20. In
her submission, it was open to me as a judge in chambers to decide whether Home
Depot and Walmart had rights of appeal, and that should be determined without
further delay.

[31]

Counsel addressed the two specific procedural questions together. Ms.
Brasil contended that ss. 36 (2), (3) and (4) of the
CPA
constitute an
exhaustive statement of rights of appeal in class actions.  She submitted that,
like the applicant Maclean in
Dabbs
, Home Depot and Wal-Mart had had the
opportunity to participate, and did participate through counsel, at the hearing
of the settlement approval motion before the chambers judge below. They had also
had the opportunity to opt out earlier and had not taken it. Mr. Simpson for
the defendants added that the the orderly and efficient management of the
proceeding under the
CPA
would be frustrated if a member of a class
were permitted to become a party simply because of its participation in the
class. (See
Dabbs
at para. 7.)

Counsel also cited
Cambridge
Mortgage Investment Corporation v. Matich
2014 BCCA 377, where Madam
Justice Saunders (in chambers) stated:

An appellant is defined in s. 1
of the
Court of Appeal Act
as the party bringing an appeal.
To
enjoy a right of appeal a person or entity must be a party to the proceeding
that produced the order, and thus be bound by an order in that proceeding
:
Kitimat
(District) v. Alcan Inc
., 2006 BCCA 562,
Fraser Valley Refrigeration
Ltd. v. British Columbia (Attorney General)
, 2009 BCCA 576. In this case
the foreclosure proceedings in the Supreme Court of British Columbia do not
name Mr. Robbins as a party. [At para. 24; emphasis added.]

Analysis

[32]

Leaving aside the procedural questions for the moment, I will say that I
would grant leave to appeal in this case if leave were necessary. No one
contends, however, that an appeal from an order approving the settlement of a
class action is a limited appeal order within the meaning of the Rules; thus
no leave is necessary, assuming that a right to appeal a settlement order
exists and that such an appeal may be brought by a member of a plaintiff class.

[33]

I am inclined also to the view that in British Columbia, the fact that
an appeal from a settlement order is not listed in s. 36 of the
CPA
may
not be fatal to such an appeal.
Samos
and
Harrington
, the only
authorities directly on point (although they were decided prior to the
amendment of s. 7 of the
Court of Appeal Act)
suggest that contrary to
the ruling of the Ontario Court of Appeal in
Dabbs,
s. 36 may be
supplemented by a more general right of appeal provided by s. 6(1)(a) of the
Court
of Appeal Act
.

[34]

Both this issue and the non-party issue are important to the law and
to this action. I consider that they should be decided by a division of the
Court, even if no motion to quash was formally brought by the respondents. (Nor
was there a formal motion that the applicants be made representative plaintiffs.)
The appeal may therefore proceed to a division, subject to the inclusion by the
applicants of the following issues in the issues for determination on appeal,
namely

(1) whether an appeal lies in respect of a settlement order made
under the
CPA;
and (2) if so, whether such an appeal may be properly
brought by a member of the plaintiff class, with or without being added as a
party to the action. I would assume that if the Court answers either question
in the negative, it would quash the appeal, but that of course will be for the
division to decide.

[35]

I am indebted to counsel for their able submissions.

The
Honourable Madam Justice Newbury


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Li v. Rao,

2019 BCCA 56

Date: 20190130

Dockets:
CA45061; CA45103

Docket: CA45061

Between:

Peipei Li

Respondent

(Claimant)

And

Luhua Rao

Appellant

(Respondent)

- and -

Docket: CA45103

Between:

Peipei Li

Respondent

(Claimant)

And

Lu Hua Rao

Appellant

(Respondent)

Before:

The Honourable Madam Justice Fenlon

(In Chambers)

On appeal from:  An
order of the Supreme Court of British Columbia, dated
January 30, 2018 (
Li v. Rao
, 2018 BCSC 142, Vancouver Docket E170206).

Oral Reasons for Judgment

Counsel for the Appellant:

P.R. Albi, Q.C.

M.A. Clemens, Q.C

J. Parker

Counsel for the Respondent:

B.B. Olthuis

A.C. Bjornson

Place and Date of Hearing:

Vancouver, British
  Columbia

January 23, 2019

Place and Date of Judgment:

Vancouver, British
  Columbia

January 30, 2019

Summary:

Application to stay two
appeals pending the resolution of a related action in the court (Settlement Action).
Held: application dismissed. The parties have brought a multiplicity of
proceedings in multiple jurisdictions, and it is not clear that resolution of
the Settlement Action would end the litigation. Since the appeals are not
brought from orders in the Settlement Action, the concern of avoiding
litigating in slices does not weigh as heavily in favour of staying the appeals
pending its resolution. Further, the respondents appeals can be heard
expeditiously. As a result, the prejudice to the respondent from the delay in
hearing the appeals if the stay is granted outweighs the prejudice to the
applicant from having to respond to the appeals while the Settlement Action
continues.

[1]

FENLON J.A.
: The respondent Peipei Li applies to have two appeals
stayed pending resolution of an action in the Supreme Court to enforce a
settlement. Ms. Li asserts that the parties entered into a comprehensive
settlement in March 2018 resolving all matters between them.

[2]

The appellant Lu Hua Rao is a businessman residing in China, and Ms. Li
is a businesswoman residing in Vancouver. The two are currently parties to at
least six different legal proceedings, all arising out of essentially the same
factual background and seeking overlapping relief.

Background

[3]

In or about August 2015 the parties commenced a romantic relationship
and eventually underwent a marriage ceremony in Las Vegas, even though Mr. Rao
was already married. He says he told Ms. Li he was married and would not
leave his wife and two sons, but went through with the marriage ceremony
because Ms. Li told him a Las Vegas marriage hardly had any effect and
would help them to get mortgage financing for their real estate venture and
assist with immigration. For her part, Ms. Li says it was a
bona fide
marriage and she was later shocked and distressed to discover Mr. Rao was
already married in China.

[4]

On the business side of their relationship, the parties incorporated LPP
Properties Inc. (LPP), and each received 50% of the shares. They agreed that Mr. Rao
would contribute $20 million to the company for his shares and Ms. Li
would contribute $1,000. Mr. Rao actually invested $17.65 million. Those
funds were distributed to an account controlled jointly by the parties and to
an account held by Ms. Li personally. The transfers occurred by way of
promissory notes and directions to pay executed by Mr. Rao.

[5]

The parties relationship collapsed in acrimony in late 2016. They
immediately became embroiled in a series of proceedings all of which arose out
of their relationship and business dealings. Central to their disputes is
whether Ms. Li used the $17.65 million invested by Mr. Rao in
accordance with the parties agreement.

[6]

The proceedings are as follows:

·

In
December 2016 Mr. Rao commenced a civil proceeding (the Civil Claim) in
Supreme Court claiming that Ms. Li had transferred and used LPP funds
without his knowledge and contrary to their agreement.

·

In
January 2017 Ms. Li commenced a family proceeding in Supreme Court seeking
a divorce, support and division of family property (the Family Claim). Mr. Rao
filed a counterclaim in that proceeding.

·

Early in 2017 Ms. Li also commenced proceedings
in China alleging Mr. Rao had committed bigamy. That led to criminal
proceedings against Mr. Rao by the Chinese government.

·

In
March 2017 Mr. Rao started a family action in China seeking a declaration
that the Las Vegas marriage was a nullity.

·

In
June 2017 Mr. Rao commenced an arbitration in China under the terms of the
parties agreement which provided for resolution of disputes in that forum (the
CIETAC arbitration). In that proceeding he seeks return of the funds advanced
to the company and does not mention the romantic component of his relationship with
Ms. Li.

·

Finally, Mr. Rao commenced an action in the Supreme Court advancing
the same civil claim and seeking the same relief as the CIETAC arbitration,
under s. 9 of the
International Commercial Arbitration Act
,
R.S.B.C. 1996, c. 233 as an interim measure of protection to toll the
limitation period given Ms. Lis jurisdictional challenge to the CIETAC arbitration.

[7]

In March 2018 the parties met in person in Hong Kong. Ms. Li
asserts they came to a settlement, but Mr. Rao backed out of that
agreement in late April 2018 when he realized the significant tax consequences
flowing from the terms agreed to.

[8]

In August 2018 Ms. Li commenced civil proceedings in the Supreme
Court to enforce the settlement (the Settlement Claim). The terms of the
settlement asserted by Ms. Li are as follows:

(1)      Mr. Rao would receive the balance of the
company funds remaining, amounting to approximately $8 million;

(2)      Ms. Li would receive the Vancouver
residential property that was purchased with some of the funds, free and clear
of any claim by Mr. Rao;

(3)      Mr. Rao would remove any liens or other
encumbrances he had caused to be placed on the Vancouver residential property;

(4)      Ms. Li would receive Mr. Raos
shares in the company and all of the companys remaining assets; and

(5)      The parties would
withdraw any and all claims made against the other including the Family Claim,
the Civil Claim, and the CIETAC arbitration.

[9]

I turn now to the two appeals Ms. Li seeks to stay. The first,
Appeal CA45103, is from an order of Madam Justice Forth made in the Family Claim
on January 30, 2018. Justice Forth declared the marriage to be void
ab
initio
, but dismissed Mr. Raos November 2017 application to strike Ms. Lis
claim for division of family property and spousal support.

[10]

The second, Appeal CA45061, is from the order of Mr. Justice Funt,
also in the Family Claim, made January 12, 2018 enjoining Mr. Rao from
taking any further steps in the CIETAC arbitration and enjoining him from
requiring Ms. Li to take any steps in that proceeding without leave of the
Supreme Court. This order effectively prevented Mr. Rao from withdrawing
the Civil Claim and proceeding only with the arbitration.

[11]

As I have noted, Ms. Li applies for stay of the appeals pending
determination of the Settlement Action which she says would resolve all
proceedings between the parties, including the Family Claim underlying the
orders under appeal, thereby rendering the appeals moot.

[12]

A single justice may grant a stay of an appeal
proceeding pending the occurrence of a certain event, such as the decision of
another body, pursuant to subparagraphs 10(2)(a) and (b) of the
Court of
Appeal Act
, R.S.B.C. 1996, c. 77
:
Hollander
v. Nelson
, 2013 BCCA 83 at paras. 14, 21 (D. Smith J.A. in Chambers),
citing
Taga Ku Development Corp. v. Yukon Territory
(1995), 55 B.C.A.C.
266 (Legg J.A. in Chambers).

[13]

There are two principles animating a decision
whether to stay an appeal pending a decision from another body, such as a trial
court:
Habitat for Humanity Canada v. Hearts and Hands for Homes Society
,
2015 BCCA 443 at para. 24. The first concerns the public interest in the
efficient use of judicial resources and avoiding litigating in slices:
Habitat
for Humanity
at para. 24;
Hollander
at paras. 2527. The
second is balancing the prejudice between the parties. The Court must ask
whether the prejudice from a delay in completing the proceedings in the court
below to the party applying for the stay outweighs the prejudice to the other
party of a delay in hearing the appeal:
Habitat for Humanity
at para. 25;
Taga Ku
at para. 14.

[14]

This test may respond more flexibly to the considerations relevant to
deciding whether to stay an appeal itself as opposed to an order appealed from
than the traditional three-part inquiry from
RJR-MacDonald Inc. v. Canada
(Attorney General)
, [1994] 1 S.C.R. 311:
Korea Data Systems (USA), Inc.
v. Aamazing Technologies Inc.
, 2012 ONCA 756 at para. 19.

[15]

Ms. Li submits that, by any measure, six proceedings dealing with
the same set of circumstances and seeking overlapping relief does not amount to
an efficient use of judicial resources. She argues that, irrespective of the
outcome, the two appeals will not serve to conclude the dispute between the
parties  one, if successful, will lead to the CIETAC arbitration intensifying,
and the other, while striking the property and spousal support claims from the Family
Claim, would leave to be resolved the constructive trust claims advanced both
by Ms. Li and by Mr. Raos counterclaim in that action.

[16]

Ms. Li asserts that if the Settlement Action is permitted to
proceed while everything else is held in abeyance, it could resolve all of the
disputes in the proceedings between the parties. In relation to balancing
prejudice, she submits that if the Settlement Action is unsuccessful, Mr. Rao
can simply resume his appeals, whereas if she is required to go through the
appeals, the cases will continue and she will be left to battle through various
proceedings as well as the Settlement Action, incurring significant costs.
Given the history of the litigation between the parties, she stresses that
further appeals may follow.

[17]

The application for stays of appeal in this case differs from the stays
sought in
Habitat
,
Hollander
, and
Taga Ku
, all of which
involved the staying of an appeal until matters in the single underlying cause
of action could be completed. The arguments in those cases therefore focused on
the disadvantage of litigating in slices, described by Southin J.A. in
Digital.Doc
Services (Canada) Inc. v. Future Chop Ltd.
(1998), 49 B.C.L.R. (3d) 78
(C.A.):

[5]        It is obvious to us that what is happening here is
what I have called before litigating in slices and that form of litigating
may result in several matters coming before this Court at different times
relating to this obviously highly contested litigation.
It is not in the
public interest that several panels of this Court should have to deal with
several little bits of a lawsuit now and then and here and about.
Therefore,
we are going to stay of the proceedings now pending in this Court. When Madam
Justice Baker has handed down her judgment, the parties will have to consider
how to put all of these matters together in an appropriate way so that the time
of this Court which belongs to the public and not to us, will not be wasted
this way.

[Emphasis added.]

[18]

In contrast, the parties before me are engaged in multiple proceedings
in various forums and countries. They appear to have adopted a strategy of
litigation warfare on both sides and on all fronts. In this context, a
ceasefire to enable the Settlement Action to run its course and potentially end
the war by resolving all of the extant proceedings is attractive. The saving in
court time and costs to the parties tends to staying the appeals to permit the
Settlement Action to be determined. However, there are a number of other
considerations that tend to the contrary view.

[19]

First, I begin by noting that it is not plain on the record before me
that Ms. Li is likely to succeed in proving the settlement she asserts. Her
own lawyer, in forwarding a draft form of agreement to Mr. Raos lawyer,
referred to the parties having agreed to a framework for settlement. Although
it is possible that Ms. Li will be successful, again, I restrict my
remarks to the record I have before me  that of course cannot be assumed, and
even if successful at trial, an appeal could well follow. If Ms. Li is
not
successful, Mr. Rao will have been delayed considerably in his pursuit of
the $17.5 million he invested in LPP.

[20]

Second, and more significantly, the Settlement Action is only at the
pleadings stage. Ms. Li has filed a notice of civil claim and Mr. Rao
is in the process of preparing his response. Although Ms. Li submits the
entire case could be dealt with within a year, that seems improbable. As I see
it, there is no prospect of the Settlement Action being resolved expeditiously
given the inherent complexity in such an action  many documents will have to
be translated from Mandarin, Mr. Rao lives in China and can only proceed
through an interpreter, and there is a prospect of a third party proceeding. In
addition, there is little reason to anticipate the parties will depart from
their aggressive approach to litigation.

[21]

In contrast, the appeal in the Family Claim from Justice Forths order
is ready to proceed. All factums and books have been filed and it could be
heard within a few months. If that appeal succeeds, it will dispose of a significant
portion of the Family Claim and remove a layer of complexity raised by the
romantic component of the parties relationship.

[22]

I also take into account the timing of Ms. Lis application for a
stay of Mr. Raos two appeals. As I have noted, the appeal in the Family
Claim is ready to be heard. The appeal from the order of Justice Funt freezing
the CIETAC proceedings is at an early stage but leave was applied for in
January 2018 and obtained in May 2018 without Ms. Li raising the
settlement she now asserts occurred in April. Mr. Rao incurred the expense
of that leave to appeal application and filed his appeal record on July 23,
2018, all before Ms. Li commenced the Settlement Action in August 2018 and
applied for a stay.

[23]

Mr. Rao intends to apply to have the two appeals heard at the same
time and based on much of the same record. If Mr. Rao succeeds on appeal,
he will be able to continue with the CIETAC arbitration. If the arbitrator
assumes jurisdiction of the contractual disputes, many of the issues between
the parties will be resolved outside of this jurisdiction.

[24]

Taking all of these factors into account, and in particular:

·

the length of time the appeals will have to be stayed until the
Settlement Action can be concluded;

·

Ms. Lis
failure to proceed expeditiously to seek a stay of the appeals after Mr. Rao
denied a settlement had occurred; and

·

the steps taken by Mr. Rao in the appeals which are close to
ready to proceed;

I am of the view that the
prejudice to Mr. Rao in delaying the completion of the appeals in this
Court outweighs the prejudice to Ms. Li of requiring her to respond to
them. I therefore dismiss the applications to stay both appeals.

The
Honourable Madam Justice Fenlon