COURT
OF APPEAL FOR BRITISH COLUMBIA

Citation:

Westnav Container Services Ltd. v. Freeport Properties
  Ltd.,

2010 BCCA 33

Date: 20100125

Docket: CA036928

Between:

Westnav Container Services Ltd.

Appellant

(
Petitioner
)

And

Freeport Properties Ltd.

Respondent

(
Respondent
)

Before:

The Honourable Madam Justice Saunders

The Honourable Madam Justice D. Smith

The Honourable Madam Justice Garson

On appeal from: Supreme
Court of British Columbia, February 17, 2009
(
Westnav Container Services Ltd. v. Freeport Properties Ltd.,
2009 BCSC
184, Docket No. S087300)

Counsel for the Appellant:

M. Andrews, Q.C.
S. Coval

Counsel for the Respondent:

J. Fraser

Place and Date of Hearing:

Vancouver, British
  Columbia

October
  26, 2009

Place and Date of Judgment:

Vancouver, British
  Columbia

January 25, 2010

Written Reasons by
:

The Honourable Madam Justice Saunders

Concurred in by:

The Honourable Madam Justice D. Smith

The Honourable Madam Justice Garson

Reasons for Judgment of the
Honourable Madam Justice Saunders:

[1]

At issue is the jurisdiction of an arbitrator to issue a corrected
award. The corrected award confirmed the original decision while deleting portions
of the award that discussed an erroneous fact and supplementing the discussion
of the basis of the award. The Supreme Court of British Columbia dismissed a
petition to quash the award, and that dismissal is appealed to this Court.

[2]

The arbitration was conducted under the
Commercial Arbitration Act
,
R.S.B.C. 1996, c. 55, to settle the fair market rent for a property leased by
the appellant Westnav Container Services Ltd. The property, near the Fraser
Surrey Docks, was leased by the owner to the respondent Freeport Properties
Ltd., and subleased to Westnav. Westnav exercised a right to renew the sublease
in December 2004, extending the lease through January 2019.

[3]

Disputes arose between Westnav and Freeport and were settled by an
agreement remitting the determination of rent, on the basis of fair market value,
to arbitration.

[4]

The arbitration was held in April 2008 before Mr. Leon Getz, Q.C. Each
party presented expert evidence tendered by an appraiser. The appraiser called
by Westnav, Mr. Dybvig, described the premises as generally poor; the appraiser
called by Freeport, Mr.Johnston, described the premises as fair to average. The
arbitrator stated he was inclined to the assessment of the Westnav tendered
appraiser.

[5]

The appraisers utilized different methods in determining the fair market
rental value of the property. The appraiser called by Westnav employed a method
described as rate-times-value method, and estimated the fair market rent at $282,500
per year. The appraiser called by Freeport used a direct comparison approach
and estimated the fair market rent at about $740,000 per year.

[6]

The arbitrator accepted the direct comparison method used by the
appraiser called by Freeport, but not his conclusion as to the fair market
rental value. The arbitrator found the fair market rent to be $660,000 per
year.

[7]

The direct comparison approach required the arbitrator to review the
comparability of other properties. In his analysis the arbitrator mistakenly
said the rent for a property known as the Ewen property was $4.38 per square
foot for the building. In fact that rent represented the rent for both the
building and the land.

[8]

In light of this error, Westnav applied to the arbitrator for correction
of what appears to be an accidental or arithmetical error in paras. 90 to 94
of the Award, or alternatively for clarification pursuant to s. 27 of the
Act
.
Freeport contended the award should remain as it was, arguing the error could
make no difference to the original award.

[9]

On September 17, 2008 the arbitrator released the corrected award. The
covering letter acknowledged the error, but stated that the decision as to rent
was the same. The corrected award deleted the mention of the Ewen property from
the analysis and included fresh passages explaining the original conclusion.
Westnav characterizes the additional explanation as an alternate explanation.
Freeport characterizes it as an expanded explanation.

[10]

Westnav objected to the arbitrators actions. It sought, by petition, a
declaration that the arbitrator had exceeded his powers by amending the award
to correct an error, a declaration the arbitrator had committed an arbitral
error by failing to observe the rules of natural justice when amending the
award, and an order in the nature of
certiorari
setting aside the award
and ordering a new arbitration before a new arbitrator.

[11]

Mr. Justice Silverman dismissed the petition. He concluded the
arbitrator had not engaged in new analysis, but rather had clarified his
original reasoning as permitted by s. 27 of the
Act
, and thus had
not exceeded his jurisdiction. He held, further, the arbitrator had not
violated principles of natural justice. He concluded there was therefore no
basis on which to set the award aside.

[12]

Westnav appeals from the order dismissing its petition. It contends Mr.
Justice Silverman erred in law in finding the arbitrator had not exceeded his
powers under the
Commercial Arbitration Act
to correct errors, and in finding
the process comported with the principles of natural justice.

The
Commercial
Arbitration Act

[13]

The arbitrator relied upon s. 27 of the
Act
. That section
provides:

27  (1) On the
application of a party or on the arbitrator's own initiative, an arbitrator may
amend an award to correct

(a) a clerical or typographical
error,

(b) an accidental error, slip,
omission or other similar mistake, or

(c) an arithmetical error made in a
computation.

(2) An application by a party under
subsection (1) must be made within 15 days after the party is notified of the
award.

(3) An amendment under subsection
(1) must not, without the consent of all parties, be made more than 30 days
after all parties have been notified of the award.

(4) Within 15 days after being
notified of the award, a party may apply to the arbitrator for clarification of
the award.

(5) On an application under
subsection (4), the arbitrator may amend the award if the arbitrator considers
that the amendment will clarify it.

(6) Within 30 days after receiving the award, a party may
apply to the arbitrator to make an additional award with respect to claims
presented in the proceedings but omitted from the award, unless otherwise
agreed by the parties.

[14]

By definition in s. 1 the award is both the result and the reasons:

"award" means the decision of an arbitrator on the
dispute that was submitted to the arbitrator and includes

(a) an interim award,

(b) the reasons for the decision,
and

(c) any amendments made to the award under this Act;

[15]

A party may apply to the Supreme Court of British Columbia to set aside an
award under s. 30:

30  (1) If an
award has been improperly procured or an arbitrator has committed an arbitral
error, the court may

(a) set aside the award, or

(b) remit the award to the
arbitrator for reconsideration.

(2) The court may refuse to set
aside an award on the grounds of arbitral error if

(a) the error consists of a defect
in form or a technical irregularity, and

(b) the refusal would not
constitute a substantial wrong or miscarriage of justice.

(3) Except as provided in section 31, the court must not set
aside or remit an award on the grounds of an error of fact or law on the face
of the award.

[16]

Arbitral error, referred to in s. 30, is defined in s. 1:

"arbitral error" means an error that is made by an
arbitrator in the course of an arbitration and that consists of one or more of
the following:

(a) corrupt or fraudulent conduct;

(b) bias;

(c) exceeding the arbitrator's
powers;

(d) failure to observe the rules of
natural justice;

Discussion

1.
Jurisdiction

[17]

Westnav complains that the corrected award removes all reference to the
Ewen property in Part Nine of the original award and inserts a new section
discussing properties not referred to in the arbitrators original analysis in
place of reference to that property. It contends the arbitrator was permitted
to correct the ruling to deal with his misstatement of the rent of the Ewen
property but was not permitted by the
Act
to remove his reliance on the
Ewen property rent as a comparable, having relied upon it in the original
award. It submits that in deleting the fact of his reliance upon it, the
arbitrator deleted something that is not in error (his reliance), and so acted beyond
his jurisdiction. Nor was he empowered by the
Act
, says Westnav, to
alter the balance of his analysis.

[18]

Freeport agrees the arbitrator made an accidental error regarding the
Ewen property rent, but says it was open to him to both correct the error (by
deleting it) and to clarify the basis of his award by explaining that the erroneously
described comparable, the Ewen property, was not the foundation for the award.
It characterizes the corrected award as saying the arbitrator did not rely upon
the Ewen property in the original award, and says the arbitrator, having said he
had omitted to explain how he reached his decision on value in the first
instance, was entitled to explain how he arrived at the valuation. Freeport
says this discussion is within the powers of an arbitrator set out in
s. 27. It submits the challenge is more akin to an allegation that the
arbitrator has backfilled his reasons to support a knowingly incorrect result
and so would seem to be more a complaint of arbitral error under (a) of the s.
1 definition (corrupt or fraudulent conduct), than of exceeding the
arbitrators powers or failing to observe the rules of natural justice referred
to in (c) and (d) of that definition. Freeport urges us to put trust in the
arbitrator, and to conclude his corrections are in the nature of correcting
an accidental slip (s. 27(1)) and clarification (s. 27(5)).

[19]

The question is both one of characterizing the nature of the changes to
the award made by the arbitrator, and of interpreting the statute to determine
the scope of an arbitrators authority after an arbitration award is published.
It is not, with respect, a matter of trusting the arbitrator. Nor is it a
matter of his integrity, which is unquestionably high. Rather, it is,
objectively
,
a question of where the permissible boundary of change is, so as to preserve
the integrity of commercial arbitration and to keep the arbitrator within his role
as contemplated by the Legislature.

[20]

Prior to passage of the
Act
in 1996 the ability of an arbitrator
to alter the face of the decision was limited to the traditional slip rule,
which allows correction of accidental slips, omissions and clerical errors. Interpretation
of the
Arbitration Act
, which had remained much the same from its
initial passage in 1893, prohibited an arbitrator from clarifying an award once
it was published, on the basis the arbitrator was
functus officio
. Any
re-working of an award could be done only after application to a court and an
order remitting the matter to the arbitrator. See, for example,
Gulf Islands
Intermediate and Personal Care Society v. Hospital Employees Union Local No.
180
, [1984] B.C.J. No. 184 (B.C.S.C.).

[21]

In 1986, in a comprehensive rewriting of the regulatory framework for
commercial arbitration as part of a bid to make commercial arbitration a more
attractive dispute resolution process, provision was made for clarification of
an award by an arbitrator.

[22]

In other jurisdictions, though the model is not identical, the trend in
legislation and jurisprudence also has been to give more scope for post-award
alterations by an arbitrator. Thus, for example, in
Mutual Shipping Corp. of
New York v. Bayshore Shipping Co. of Monrovia (The Montan)
, [1985] 1 All.
E.R. 520 (C.A.);
Gannet Shipping Limited v. Eastrade Commodities Inc.
,
[2002] 1 Lloyds Rep. 713 (Q.B.  Comm. Ct); and
AHT v. Tradigrain
,
[2002] 2 Lloyds Rep. 512 (Q.B.), the courts discuss the scope of an
arbitrators jurisdiction to remedy an error in an award as part of the slip
rule.

[23]

In
Mutual Shipping Corp.
, Sir John Donaldson M.R. addressed the
distinction in the slip rule between a clerical error and an error arising from
an accidental slip or omission, and an intended decision which the arbitrator
later accepts as erroneous, saying at p. 526:

The High Court slip rule (RSC Ord 20, r 11), which is
similarly worded, was considered only recently by this court in
R. v.
Cripps, ex p Muldoon
[1984] 2 All ER 705, [1984] QB 686. We there pointed out
the width of the power, but also drew attention to the fact that it does not
enable the court to have second thoughts (see [1984] 2 All ER 705 at 711-712,
[1984] QB 686 at 697).

It is the distinction between having second thoughts or
intentions and correcting an award of judgment to give true effect to first
thoughts or intentions, which creates the problem
. Neither an arbitrator nor
a judge can make any claim to infallibility. If he assesses the evidence
wrongly or misconstrues or misappreciates the law, the resulting award or
judgment will be erroneous, but it cannot be corrected either under s 17 or
under Ord 20, r 11. It cannot normally even be corrected under s. 22. The
remedy is to appeal, if a right of appeal exists. The skilled arbitrator or
judge may be tempted to describe this as an accidental slip, but this is a
natural form of self-exculpation. It is not an accidental slip. It is an
intended decision which the arbitrator or judge later accepts as having been
erroneous.

[Emphasis
added.]

[24]

In
Gannet Shipping Ltd.
the court permitted the arbitrator not
only to correct an agreed error, but also to correct the order of costs which
followed upon the original incorrect conclusion. Langley J. said at para. 24:

...
The authorities draw distinctions between errors
affecting the expression of the tribunals thought (which can be corrected) and
errors in the tribunals thought process (which cannot)
and to not
permitting corrections to reflect second thoughts. I do not think such
distinctions are material in the present context. Granted an error in the
amount of the award was properly corrected, I do not think these principles
preclude the tribunal from addressing the question whether the corrected figure
may reveal other errors. If an error properly falls to be corrected, how it is
to be corrected and its consequences is always likely to involve some new
consideration.

[Emphasis
added.]

[25]

In
AHT v. Tradigrain
the court considered s. 57 of the
Arbitration
Act

1996
(U.K.), 1996, c. 23, a provision in substance much like our
s. 27. The section permits an arbitrator to correct an award so as to remove
any clerical mistake or error arising from an accidental slip or omission or
clarify or remove any ambiguity in the award. The court concluded that inadequate
rationale or incomplete reasons would require clarification, and that such
clarification is permitted under the arbitration scheme. The court held that issuing
further reasons, where reasons are incomplete, and providing reasons, where
none are given, can be within the jurisdiction of an arbitrator. However
AHT
does not deal with the question of an arbitrator resiling from reasoning earlier
set out.

[26]

Westnav contends that under our
Act
an arbitrator should be
subject to the same limitation on correction of his thought process. Further it
submits that the provision allowing the Arbitrator to clarify the award does
not permit the arbitrator to substantially re-write his rationale for the
decision which, it says, he did in this case. The appellant urges us to
conclude the changes made in the corrected award are corrections in the
tribunals thought processes  second thoughts, as it were.

[27]

Freeport contends the arbitrator was within his jurisdiction in
clarifying the award by setting out more fully his reasoning process, and did
not cross the line described in these cases.

[28]

Section 27, in permitting correction of accidental errors and slips, and
in permitting clarification, contemplates amendment of an original award
through change to the reasons for the decision, whether or not the change affects
the result. Yet there is a line between permitted correction and clarification,
and alteration that strays into the thought processes. The distinction drawn in
Mutual Shipping Corp.
and
Gannet Shipping Ltd.
between expression
of the tribunals first thoughts, and corrections that reflect second thoughts,
is equally applicable here. While the expanded language in s. 27 from the
provisions of the former legislation is intended to assist with finality of the
arbitration process and limit applications that bounce the final determination
between the arbitrator and the courts, it does not contemplate any shift of the
well understood prohibition, founded in the concept of
functus officio
, against
subsequent alterations in either the thought processes or the basis of the
award. Such amendments step beyond correction of an accidental slip or error,
and beyond clarification. Indeed the word clarification implies adherence to
the same thought processes, but with more precise expression of the thought.

[29]

By appealing, Westnav assumes the task of persuading us the judge erred
in law in his analysis, or reached a conclusion not supported by the record
before him.

[30]

In stating the applicable principles on the issue of jurisdiction and
distinguishing between correcting expression and having second thoughts, the
judge correctly referred to the distinction discussed in
Gannet Shipping
Ltd.
and
Mutual Shipping Corp.
, and adopted the statement of the
principle in J. Kenneth McEwan, Q.C. & Ludmila B. Herbst,
Commercial
Arbitration in Canada: A Guide to Domestic and International Arbitrations
(Aurora, Ont.: Canada Law Book, 2008) at 9-50  9-51:

Authorities draw a distinction between errors affecting the
expression of the tribunals thought (which can be corrected) and errors in the
tribunals thought process (which cannot) and do not permit corrections to
reflect second thoughts.

... If the arbitrator assesses
the evidence wrongly or misconstrues or misappreciates the law, the resulting
award or judgment will be erroneous, but it cannot be corrected as an
accidental slip or omission. The remedy is to appeal, if a right of appeal
exists.

[31]

I am, however, respectfully of the view that in spite of reference to
the correct principles, the judge erred by imputing to the arbitrator a view of
the relevance of the Ewen property to his original thinking not expressed by
the arbitrator, and by failing to consider the objective view of the events.

[32]

I consider it to be of assistance to refer directly to the two awards.
The original award was structured in thirteen parts. The first eight described
the issues, the property, the evidence of valuation adduced by both parties and
their responses to each others case, including correct references to the Ewen
property. Analysis of the material before him started in Part Nine, entitled
CONCLUSIONS AS TO MARKET RENT FOR LEASED PREMISES, leading with this line:

[81]      Given the state of the
evidence and in particular the contrasting approaches and opinions of Messrs.
Dybvig and Johnston, it seems virtually inescapable that in essence I must
choose between their respective approaches. ...

[33]

The arbitrator made his choice known later in Part Nine:

[84]      I have come to the
conclusion, on balance and taking account of Westnavs criticisms, that Mr.
Johnston has the better view on this and that the indices that in the end he
relies on [footnote deleted] can fairly and without distortion and for the
reasons that he gave be considered comparables. ...

[34]

The arbitrator then said he did not agree, however, with that
appraisers final opinion as to value, and went on to express his own
conclusions. Under the heading Building value the arbitrator discussed two
properties that had been advanced as comparables, the Topco property (in his
para. 89) and the Ewen property (in his para. 90). As to the Topco property, the
arbitrator found the appraisers seemingly heavy reliance upon it to support
his valuation was not justified. The arbitrator then said as to the Ewen
property, wrongly referring to the rent as for the building only:

[90]
It was common
ground between Mr. Johnston and Mr. Dybvig that, at least in terms of size,
site coverage, building quality and rail access, the Ewen Avenue property is
comparable to the Leased Premises;
and both of them seemed to agree that
the $3.75 per square foot building rental rate in effect there as at July 1,
2006 was low as a guide to the market rent of the building component of the
Leased Premises and required upward adjustment. As indicated, in 2005 the
building rent effective as of October 1, 2006 for that property was fixed at
$4.38. Mr. Johnston, as I have said, [footnote deleted] considered Ewen Avenue
significantly inferior to the Leased Premises. My own view is that he has
exaggerated the relative merits and demerits of Ewen Avenue as compared to
those of the Leased Premises.

[Emphasis
added.]

[35]

The arbitrator then concluded:

[91]      Making the best
judgment that I can of the information in evidence, I have reached the conclusion
that the fair market rent for the building component of the Leased Premises,
was $5.35.

[36]

From there, still in Part Nine of his award, the arbitrator went on to
value canopies and the surrounding land, concluding:

[94]      In summary, then, I conclude that the market rental
value for the Leased Premises as at July 1, 2006 was:

Building

64,057 sq. ft

$5.35

$342,705

Canopies

21,701 sq. ft

$3.00

$65,103

Land

290,133 sq. ft

$0.87

$252,415

TOTAL*

$660,223.00

*           rounded

In the result the fair market rental
value of the Leased Premises for the five year term from July 1, 2006 to June
30, 2011 is $3,300,000.

[37]

In his ruling on the application to correct or clarify the award, the
arbitrator said:

[13]      Since paragraph [90] is the only place in this
section of the Award in which any reference is made to the Ewen Avenue lease,
deleting it might appear to respond comprehensively to Mr. Covals point.
I
think, however, that this is a superficial view of that point  which goes,
rather, to my apprehended reliance on Ewen Avenue as the principal basis for my
conclusion.

[14]
I can understand how a reader might form that
view. It is clear, in retrospect, that this section of the Award simply fails
to explain how and why I reached my conclusion as to building value.

[15]      As a result, the mere removal of paragraph [90] is
not enough. If it is removed, the components of this section are:

(a)        an
observation concerning the condition of the building (paragraph [88]);

(b)        a
reservation about the weight attributed by Mr. Johnstone to the Topco lease
(paragraph [89]); and

(c)        a
statement of my conclusion that the fair market rent for the building component
was $5.35 (paragraph [91]).

[16]      While the conclusion
in paragraph [91] is perhaps not technically a
non sequitur
it is
certainly not explained by paragraphs [88] and [89]. In this sense this section
of the Award is simply defective. It fails to provide what the parties have a
right to expect and an arbitrator must deliver, namely, a reasoned decision
[footnote deleted]. I acknowledge the failure. I cannot think of a creditable
explanation for it.

[Emphasis
added.]

[38]

The arbitrator then deleted para. 90 of the original award, rewrote the
two previous paragraphs and supplemented the award with eight paragraphs
discussing the Topco property and other properties referred to in the summary
of evidence. He made no reference at all to the Ewen property in this
discussion.

[39]

In reviewing this trail of writing the judge said:

[53]      I am satisfied that the Correction Ruling in this case
is the type of clarification contemplated by s. 27. It is a clarification of
the Arbitrators reasoning in the original Award. He did not embark upon a new
analysis or rationale. He acknowledged in the ruling that the building value
component of the Award had been inadequately explained, and he proceeded to
make it more understandable. He indicated that the reasoning in the Correction
Ruling is not a new analysis. I am satisfied that this is so.

[54]      The Arbitrator could have simply deleted the word
building from paragraph 90 and permitted everything else to remain as it was.
I accept that his reason for not doing so was because he felt compelled to
provide the comprehensive analysis of his reasoning, which he acknowledges
should have been present in the original Award.

[55]      The Arbitrator changed nothing from the Award. He
simply augmented it to fill in a gap in his analysis by explaining how he
determined building rent in the first place.

[56]      The Correction Ruling
provides supplemental reasons to the Award. Supplemental reasons are not the
same as changed reasons.

[40]

The trial judge then found that the Ewen property was not the principle
factor in the reasoning of the arbitrators original award, and that the
valuation was based on all the information in the evidence, not just that
particular site.

[41]

With respect, I do not consider it can be said, as the judge did in
para. 55, that the arbitrator changed nothing in his award.

[42]

The arbitrator deleted, in the discussion as to valuation in his
corrected ruling, all reference to one of only two properties he had originally
specifically referred to in his comparative analysis. While it is correct to
say, as the judge did at para. 58, that the arbitrator referred in para. 91 of
the original award to the information in evidence and thus broadly recognized
the body of evidence before him, this ignores the specific reference to the
property. It must be taken by the reference to the Ewen property in para. 90 of
the original award that the evidence of this property was material to the
decision. It was not open to the arbitrator, in my view, to simply delete all
reference to evidence which was sufficiently cogent to him as to comparability
that he made prominent mention of it in the original award.

[43]

Objectively, the appearance is that the arbitrator has changed his mind
as to the comparability of the subject property to the Ewen property. I do not
understand the arbitrator to deny that he originally considered the Ewen
property comparable to the property in issue. If the Ewen property was
reasonably comparable, the fact that the rent was for both land and buildings would
be relevant to valuation. Nevertheless, it was ignored entirely in the analysis
in the corrected award.

[44]

The arbitrator did say he recognized he had failed to give reasons for
reaching his conclusion, and proceeded to provide reasoning in several
paragraphs discussing other properties referred to in the evidence. It may have
been open to him to write these paragraphs in the spirit of completing
incomplete reasons as suggested in
AHT v. Tradigrain
, and I make no
final determination of that issue, but it was not open to him to do so without
any reference to evidence he had earlier put into a position of prominence.

[45]

The arbitrator recognized this difficulty in his corrected award in the
passages at paras. 13 and 14 of his correction ruling, replicated and underlined
above.

[46]

The matter of releasing additional reasons after a decision has been
announced is delicate. Certainly in the realm of arbitration the
Act
contemplates additional and corrective, to a degree, rulings.

[47]

As I earlier stated, the issue is not one of the integrity of the
arbitrator. I recognize in this unfortunate situation the arbitrator has sought
to rescue the arbitration process through his correction ruling. However, and
with respect, I have come to the view that in doing so he has stepped outside
his jurisdiction. The matter is one of the integrity of the arbitration
process. Viewed objectively one may ask whether an objective bystander, reading
these awards, could have confidence in the outcome in light of the arbitrators
silence in the corrected award on the effect of the Ewen property as a
comparable on his analysis, given its prominence in the analysis in the
original award. I conclude the answer is in the negative. I consider an
objective review of the award reveals a correction in reasoning through
exclusion from the reasons of a factor previously considered material, creating
objectively an impression the corrected award was an alternate explanation for
the result rather than clarification of the original reasoning.

[48]

This, in my view, goes beyond s. 27. As it is not permitted by s. 27, it
exceeded the arbitrators powers and is an arbitral error. I conclude the judge
erred in finding it was not.

[49]

The question, then, is remedy. Freeport urges us, if we find error, to
remit the matter to the arbitrator. It says reference to a new arbitration goes
beyond the remedy originally available to Westnav under s. 30 of the
Act
.

[50]

Section 30 permits this Court to do nothing in respect to the award even
if arbitral error is found, to set the award aside, or to refer the matter back
to the arbitrator.

[51]

In my view, given the sequence of events and the basis for my
conclusion, neither doing nothing nor sending it back to the arbitrator are
appropriate responses, even recognizing the delay and expense that is attendant
on my decision. I would allow the appeal and set the award aside.

The
Honourable Madam Justice Saunders

I AGREE:

The Honourable Madam Justice D. Smith

I AGREE:

The Honourable Madam Justice Garson


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Bryans Transfer Ltd. v. British
  Columbia,

2010 BCCA 89

Date: 20100126

Docket:
CA037508

Between:

Bryans
Transfer Ltd.

Respondent

(Plaintiff)

And

Her
Majesty the Queen in Right of the Province of British Columbia

Appellant

(Defendant)

And

City
of Trail and Regional District of Kootenay Boundary

Respondents

(Defendants)

Before:

The Honourable Mr. Justice K. Smith

(In Chambers)

On
appeal from: British Columbia Supreme Court, September 1, 2009
(
Bryans Transfer Ltd. v. Trail (City)
, 2009 BCSC 1198, Kamloops Reg.
39822)

Oral Reasons for Judgment

Counsel for the Appellant:

K.
  Horsman

Counsel for the Applicant Intervenor:
  Surveyor General of British Columbia

A.R.Westmacott

Place and Date of Hearing:

Vancouver,
  British Columbia

January
  26, 2010

Place and Date of Judgment:

Vancouver,
  British Columbia

January
  26, 2010

[1]

K. SMITH J.A.
:
This is an application by the Surveyor General to intervene in an appeal
between Her Majesty the Queen in Right of the Province as appellant and Bryans
Transfer Ltd., the respondent and the plaintiff in the action below. The City
of Trail is not opposing the application, nor is Her Majesty the Queen. The
respondent Bryans Transfer Ltd., however, does oppose the application,
although its counsel has not appeared in response to the motion today.  Rather,
he has filed a letter setting out in point form objections to the intervention
and a short memorandum of argument.

[2]

The question in the action involves the accretion
of what was formerly Crown land covered by the Columbia River.  The land, which
was uncovered on a reasonably permanent basis after a dam was constructed
upstream on the River, is adjacent to land owned by Bryans Transfer Ltd.,
which claims title to the land under the common law principle of accretion. Since
it was uncovered, the land has been used by the City of Trail and by the
Province for their purposes and the action below claims against them for
trespass.

[3]

In the trial court, the Province argued that the
statutory scheme established by the
Land Title Act
, R.S.B.C. 1996, c.
250 and the
Land Title Inquiry Act
, R.S.B.C. 1996, c. 251, have altered
or abrogated the common law, and that ss. 94, 95, and 96 of the
Land Title
Act
are a complete code dealing with the accretion of Crown land formerly
covered by water into an upland owners title.

[4]

Bryans Transfer Ltd. was successful below but
on a ground that was not argued by either party and I gather is not supported
by either party on appeal.

[5]

The Surveyor General takes the position that the
judgment adversely affects his ability to carry out his statutory functions and
that he is directly affected by the judgment and, as well, that he has a useful
perspective to bring to the appeal from the public interest point of view.

[6]

The Surveyor General is appointed under s. 34(1)
of the
Land Title and Survey Authority Act
, S.B.C. 2004, c. 66, to administer
the Surveyor General Division of the Land Title and Survey Authority of British
Columbia, which has separate legal existence from the Provincial Crown. It is
responsible for managing, operating and maintaining the land title and survey
systems of British Columbia. It is a statutory delegate responsible under the
Land
Act
and the
Land Title Act
for adjudicating various applications
brought under those statutes, including applications affecting natural
boundaries submitted under s. 94(1) of the
Land Title Act.

[7]

I am satisfied that the Surveyor General has a
direct interest in the appeal. It raises a fundamental issue with respect to
the scope of his jurisdiction, and the interpretation of the applicable
provisions of the statute adopted by the learned chambers judge has had a
significant impact on the applicants operations. It was restricting his
ability to process accretion and natural boundary adjustment applications that
do not involve the deposit of a subdivision plan. That effect of the order has
been stayed pending disposition of the appeal by an order made earlier in this
proceeding by Madam Justice Neilson. Of course, if the appeal is unsuccessful,
those effects will continue and, as a result, the survey community and land
owners will be deprived of an administrative process for clarifying the
boundaries of waterfront properties and will be left to common law principles.

[8]

Bryans Transfer Ltd. sets out several
objections to the intervention.

[9]

It objects that the Surveyor General took no
position with respect to the matter when it was in Supreme Court and, by
implication, asserts it therefore should not be allowed to take a position on
the appeal. I am advised by counsel for the Surveyor General that the Surveyor
General held a watching brief at trial and did not participate.  As I have
already noted, the ground of appeal that has caused such concern for the
Surveyor General was not argued by either party at the trial and there was
therefore no occasion for the Surveyor General to take a position on that
ground.

[10]

Bryans Transfer Ltd. is also concerned that the
Surveyor General will attempt to adduce fresh evidence on the appeal. I am
assured by counsel for the Surveyor General that he has no such intention.
There is afoot some thought of introducing fresh evidence relevant to this
issue but that is an initiative that Her Majesty the Queen may take, rather
than the Surveyor General.

[11]

Bryans Transfer Ltd. also objects that the
position the Surveyor General wishes to take will be adequately covered by the
Provincial Crown and there is no need for the Surveyor General to intervene.
However, I am advised by counsel that the Surveyor General does not intend to
argue any points made by the Provincial Crown but simply to adopt what the
Provincial Crown has to say, that the Surveyor General wishes to make submissions
as to the effect of the judgment on his statutory duties and responsibilities
as opposed to the merits of the issues as between the parties.

[12]

I repeat that I am satisfied that the Surveyor
General has a direct interest in the appeal and will bring a useful and unique
perspective to an issue of public law.  Accordingly, I grant leave to the
Surveyor General to intervene.  The Surveyor General will have leave to file a
factum that does not exceed 20 pages. The Surveyor General asks for an order
that it be permitted to make oral submissions at the hearing. I will leave that
request to the division hearing the appeal.

(discussion
with counsel)

[13]

K. SMITH J.A.
:
The intervenors factum is to be submitted by March 5, 2010, and the respondent
Bryans Transfer Ltd. will file his factum by March 19, 2010.

The Honourable Mr. Justice K. Smith


COURT
OF APPEAL FOR BRITISH COLUMBIA

Citation:

Dykeman v. Porohowski,

2010 BCCA 36

Date: 20100126

Docket:
CA035701

Between:

Megan Martha Dykeman, Ronald
Wellington Dykeman,

and Monica Diane Dykeman

Appellants

(
Plaintiffs
)

And:

Stephen Porohowski, Ajit Singh Hothi,
and Bertha Rogers

Respondents

(
Defendants
)

Before:

The Honourable Madam Justice Prowse

The Honourable Madam Justice Newbury

The Honourable Mr. Justice Lowry

On appeal from the Supreme Court of British Columbia, pronounced

December 5, 2007, New Westminster Registry, Docket S75643

Counsel for
  the Appellant
Megan M. Dykeman:

W.D.
  Mussio

Counsel for the Respondent

Stephen Porohowski:

L.G.
   Harris

Place and Date of Hearing:

Vancouver,
  British Columbia

November 20, 2009

Place and Date of Judgment:

Vancouver
, British Columbia

January
  26, 2010

Written Reasons by
:

The Honourable Madam Justice Newbury

Concurred in by:

The Honourable Madam Justice Prowse

The Honourable Mr. Justice Lowry

Reasons for
Judgment of the Honourable Madam Justice Newbury:

[1]

The plaintiff/appellant, Ms. Dykeman, was
injured in two motor vehicle accidents, the first on September 5, 2000 (the
accident involving the defendants Porohowski and Hothi), and the second on
August 28, 2001 (involving the defendant Rogers).  The plaintiffs damage claims
were tried by a jury over several days in late 2007 after the question of
liability for the second accident had been settled in her favour.  The jury
awarded Ms. Dykeman total damages of $44,400, consisting of $15,000 for non-pecuniary
damages, $4,400 for past income loss, $5,000 for special damages, $20,000 for
costs of future care and nil for loss of income-earning capacity.  Since the
defendant Porohowski was found to be entirely at fault in respect of the first
accident, he was ordered to pay one-half of the damages plus court order
interest and one-half of the plaintiffs assessable costs and disbursements.

[2]

The plaintiff appeals the jurys award on four
discrete bases  namely that the jurys verdict was inconsistent and should
therefore be set aside; that the trial judge erroneously permitted the jury in
effect to draw an inference adverse to the plaintiff due to her failure to call
certain evidence; that the trial judge erred in refusing to put to the jury the
plaintiffs in-trust claim; and last, that he erred in allowing the defence
to cross-examine her on various Internet postings which the plaintiff says had
not been disclosed to her counsel prior to trial in accordance with R. 26 of
the
Supreme Court Rules
.  For the reasons that follow, I am of the view
that the appeal must be allowed on the third and fourth grounds and that a new
trial must be ordered.

Factual Background

[3]

At the time of the first accident, Ms. Dykeman,
then approximately 23 years old, was a passenger in the front seat of a vehicle
being driven by Mr. Porohowski (whom she married three months later).  He was
attempting to leave a parking lot by making a left turn onto Highway No. 10 to
proceed westbound.  In the course of making the turn, he collided with a
vehicle driven by the defendant Hothi, who was also travelling westbound on
Highway No. 10.  Ms. Dykeman, who had been wearing her seatbelt, struck her
right temple on the passenger window and struck her right knee and ankle.  She
also suffered a vitreous detachment of her right eye and a neck injury.

[4]

At the time of the second accident, Ms. Dykeman
had been driving an extended cab truck heading north on 184th Street in
Surrey.  She had stopped at the four-way stop sign at 32nd Avenue and when it
appeared safe to do so, proceeded through  at which point the vehicle driven
by the defendant Rogers entered the intersection without stopping.  The two
vehicles collided.

[5]

Immediately following the first accident, Ms.
Dykeman felt some initial soreness and disorientation.  She testified that the
following day, she noticed blood on her pillow and went to a walk-in clinic,
where the doctor suggested she go to the emergency room at Surrey Memorial
Hospital.  She was discharged without the necessity of a CT scan, as hospital
personnel felt she did not have a serious enough concussion.  She said she began
to experience shooting pain down her neck, problems with depth perception and
balance, floaters in the vision of her right eye, sensitivity to light, headaches
and difficulty focussing.  Although her knee, ankle and back problems cleared
up, she continued to suffer headaches and pain in her neck and indeed alleged
that most of her other symptoms were continuing even up to the time of trial
seven years later.  The low back and hip injuries she suffered in the second
accident, on the other hand, were quite distinct from those suffered in the
first and had largely cleared up by the time of trial.

[6]

The plaintiff had been working at a restaurant in
September 2000, but her passion was horseback riding and she had ambitions to
become a Grand Prix show jumper.  In late 2000, she and Mr. Porohowski had
formed a partnership to carry on the business of providing agrarian and
equestrian services.  That partnership was dissolved in May 2001, but shortly
thereafter, Ms. Dykeman and her parents formed another partnership under the
name Freedom Fields Farm.  It carried on the business of farming and
equestrian activities (including horse-boarding) and required a great deal of
time and labour.  Ms. Dykeman claimed that due to the accidents, and
particularly their effects on her balance and depth perception, she was limited
in the duties she could perform on the farm and in her ability to ride and jump
horses.  How her injuries had affected her capacity to earn income was the
subject of various reports and testimony from experts, including Dr. Shukett,
a rheumatologist; Dr. OBreasail, a psychiatrist; Dr. Van Rijn, a physiatrist;
Dr. Hohmann, a vocational expert; Dr. Anderson, an ophthalmologist; Dr. Longridge,
an otolaryngolist; Ms. Sharma, a vocational expert; Ms. Dobbin, an occupational
therapist; Mr. Maynard, an expert on equestrian competition in Canada; Dr.
Jones and Dr. Keyes, both neurologists; and Mr. Benning, an economist who
provided calculations of estimated wage losses.

[7]

The plaintiff claimed out-of-pocket expenses in
the amount of $94,788.21 (much of which was attributable to wages paid to
replacement workers in the equestrian operation) and future care costs of
$476,817 as calculated by Mr. Benning.  He also quantified the plaintiffs
past and future wage loss at $325,300 if she had 50% residual capacity and
$451,448 if she had 25% residual capacity as a self-employed horse trainer/farm
operations foreman.  Subsequently, based on Mr. Maynards report concerning
wages in the horse industry, Mr. Benning provided a further calculation that
estimated Ms. Dykemans past and future wage loss as ranging between
$1,205,192 and $3,796,811.

[8]

The plaintiff also asserted an in-trust claim,
which was duly pleaded, in respect of the losses and labour of her parents in
providing assistance in the operation of the Freedom Fields Farm business.  (As
well, her parents were themselves plaintiffs in the action and claimed damages
for having expended additional money and efforts in the business and otherwise
as a result of Ms. Dykemans injuries and inability to work after the
accident.)  There was evidence that her mother, a psychologist, helped in the
Freedom Fields business by giving tours of the farm, doing filing, answering
the phone, and by babysitting once Ms. Dykeman had children.  This entailed her
delaying her planned return to the practise of her profession.  Ms. Dykemans
father was employed full-time during the week but did whatever was needed in
the evenings and on weekends, to the extent of one to two hours per day.  He
estimated that he used up about $40,000 in vacation leave to support the farm
enterprise.

[9]

The plaintiffs treating doctors, whose reports
and diagnoses were based in large part on her subjective reports, were cross-examined
extensively at trial.  The defence position was that the appellant was
suffering from soft tissue injuries that had never totally disabled her and
which had little or no objective basis in terms of medical diagnosis; and that
her claims that but for the accident, she would have achieved considerable
success and earned substantial income in the show jumping business were
contradicted by other evidence and were exaggerated.  Thus Ms. Dykemans
credibility was clearly in issue, and the Internet postings on which she was
cross-examined provided some basis for the defendants position that her
injuries were less severe and less persistent than she had claimed, and that
her earnings prospects prior to the accident had been much less promising than
Mr. Bennings reports had assumed.

[10]

Obviously, the amounts awarded by the jury in
respect of Ms. Dykemans first accident  $15,000 for non-pecuniary damages,
$5,000 for special damages, $4,400 for lost income and $22,000 for future care
costs  were considerably less than what she had  sought.  No award was made
for the in-trust claim, since the trial judge ruled that the evidence did not
meet the applicable threshold for such claims to be put to the jury.  This ruling
is the basis of one of the four grounds of appeal, to which I now turn.

On Appeal

Inconsistent Verdict?

[11]

The plaintiffs first ground of appeal is that the
jurys award was clearly inconsistent in that the $15,000 award for non-pecuniary
damages cannot be reconciled with the future care award of $20,000.  On this
point, counsel relies on
Novak v. Lane,
2000 BCCA 267, in which a
plaintiff was awarded $3,000 for non-pecuniary damages and $4,000 for loss of
future care, and nothing for past income loss or loss of income-earning
capacity.  The plaintiffs credibility had not been seriously attacked at
trial.  Chief Justice McEachern for the Court observed that it was very
difficult to determine the basis on which the jury could have concluded that
she required $4,000 for future care costs and yet was entitled to only $3,000
for pain and suffering, given that the case was similar to others in which
non-pecuniary damages had ranged as high as $20,000 or $25,000.  In the result,
the Court ordered a new trial, although expressing the hope that some
accommodation could be found by the parties in order to save the cost of
another jury trial.

[12]

A rather different view of inconsistency was
taken by this court in 2003 in
Ferguson v. Lush
, 2003 BCCA 579.  As in the
case at bar (and unlike
Novak
), the plaintiffs credibility in
Ferguson
was at issue and her self-reporting was the foundation of much of the expert
testimony and reports. The Court,
per
Thackray J.A., acknowledged that
there was support in a general sense for the notion that inconsistent
verdicts can result in appellate interference (see
White v. Nuraney,
2000
BCCA 536, [2000] 80 B.C.L.R. (3d) 307 at 325, and the cases cited therein).
However, his Lordship also noted
Gunderson v. Hoogerdyk
[1995] B.C.J.
No. 1602 (C.A.), in which a jury had awarded damages of $1,920 for pain and
suffering and $16,000 for loss of income.  The Court in that instance had reasoned
that the plaintiffs argument rested on the proposition that the jurys award
for pecuniary loss should be taken to be incontrovertibly correct  a
proposition for which no authority had been cited.  In the analysis of Rowles
J.A.:

This is a case
in which the jury had to resolve various conflicts in the evidence, including
the opinions provided by the medical doctors. The jury was also required to
consider the credibility of the plaintiff, that is, how reliable her evidence
was in respect to the nature and duration of the injuries she sustained in the
two accidents. There were virtually no facts which were not in dispute. Had the
jury award for pecuniary loss been based on facts not in contention, there
might be some foundation for the appellant's argument but that is not the case
here.  [At para. 7.]

The Court in
Ferguson
applied this
reasoning, emphasizing that the awards were made by the jury on the basis of
the weight that it gave to the evidence.  (See also
Moskaleva v. Laurie
2009 BCCA 260, 94 B.C.L.R. (4th) 58, at paras. 134-7.)

[13]

Similarly here, it seems to me that the jurys
award was based on the facts it found, which we will never know, and that there
is no basis to assume that the award for future care costs was incontrovertibly
correct, as opposed to the lower award for pain and suffering.  As in
Moskelova,
supra
, it cannot be said the jury must necessarily have misapprehended the
principles to be applied in making the awards in question.  Put another way, it
is possible to conceive of a logical and rational basis for the awards for
pain and suffering on the one hand, and future care costs on the other: see
Holmes
v. Hawka
1994 1 B.C.L.R. (3rd) 341 (S.C.) at paras. 12-20.)  In all the circumstances,
I would not accede to this ground of appeal.

Adverse
Inference

[14]

The second ground of appeal advanced on behalf
of the plaintiff relates to the trial judges handling of an argument made to
the jury by counsel for the defence.  Following the calling of one of the
expert doctors, the trial judge inquired of counsel for the plaintiff whether
Dr. Englebrecht, Ms. Dykemans treating doctor, would be giving evidence.  Mr.
Mussio, counsel for Ms. Dykeman, advised the trial judge that ... she hasnt
seen the patient for some time and wasnt going to write me a report.  And
theres also a CL-19 thats available to my learned friends, so if they raise
adverse inference, then ....  The following exchange then took place:

THE COURT:  No, they can call her, if that's
the case.

MR. MUSSIO: I'm sorry?

THE COURT:  They can call her.

MR. MUSSIO: Exactly.

THE COURT:  It's just ...

MR. MUSSIO: They're -- It's available for them to call her.  They
have ... an expert report from her, and -- and similarly I wrote and tried to
get a report, but was unable to, and I can tell the jury that.  So it's not as
if I'm --

THE COURT:  No, but it -- it's going to be important about how I
approach it in directing the jury.

MR. MUSSIO:  Yes.

THE COURT:  Or whether we're going to have any argument about
adverse inference.

MR. MUSSIO:  Okay.  Well, --

THE COURT:  That may be -- That may be a legal issue that we're
going to have to --

MR. HARRIS:  Yes.

THE COURT:  -- get sorted out before I give directions.

MR. GIBB:  Yes.

[15]

Thereafter, the trial judge commented that if the
plaintiff had requested Dr. Englebrechts attendance, and she had declined
to come, ... thats one thing.  Because it means equally if your friends are
on notice of that, then they could have subpoenaed her also.  Counsel for the
defence, Mr. Harris, told the Court he intended to argue before the jury as a
part of the plaintiffs case in general that you havent heard from any of the
doctors who treated her in a primary way, that its open for us to call any
of these people, but it is also the plaintiffs onus to prove her case, and
that Dr. Englebrechts absence would be raised as one of the points about the
proof of the plaintiffs case.  Mr. Harris seemed to accede to the trial
judges assumption that he would not be seeking to draw an adverse inference
from Dr. Englebrechts absence.

[16]

In making his summation to the jury, defence counsel
said this:

Ladies and gentlemen, there's a real
critical area of evidence where things were just missing, and that is in the
very first year.  In that first year the plaintiff has met Mr. Porohowski, she has
-- she is dating him, she eventually marries him, she separates from him, she
gets back together later on.  She --.... The family clears the farm. ...
Freedom Fields Farm Services is formed and then stops operating. What happened
during this period of time?  ... What would have happened to make the
plaintiff's life different had these accidents not occurred?  We don't know.
It wasn't called.  It could have been called as medical evidence, except for
the eye doctor, Dr. Parsons, who ... if you read his report, he said there was
a partial vitreous detachment.  And I should say that we completely accept
that.  There is no evidence about how the plaintiff's injuries affected her
during that first year.
That could have come from the family doctor, Dr.
Engelbrecht, but doesn't need to.

Now, I don't want to make more of that ...
than I ought to.  Mr. Mussio can say, and he would be quite correct in saying,
that I could have subpoenaed Dr. Engelbrecht to come to court if I'd wanted
to.  But that's just another ... brick that wasn't in the wall.  That's just
another ... piece of the puzzle that was missing.

...

I said there's no corroborating medical evidence in the first
year.  Similarly, there's no corroborating lay evidence of what happened in that
critical first year.  The plaintiff's mother and father attempted to
corroborate, but I'm going to suggest to you in a moment that their evidence is
suspect.

In view of these questions it
would have been important to have corroborating evidence from independent
sources, friends, stable mates, people in the business, but no such evidence
was called.  [Emphasis added.]

[17]

In response, Mr. Mussio for the plaintiff told
the jury that the law did not require him to call every piece of evidence in
existence, but only enough to make the plaintiffs case.  He noted that many of
Ms. Dykemans former trainers were not around and that many of the records
relating to her jumping performance prior to 2000 were simply not available.
He continued:

Mr. Harris also
made the comment about the family doctor, and there has been explanation as to
why he's not here.  As Mr. Harris noted, if necessary he can call the same
individual to testify.
And there ought not be an adverse inference drawn
from -- from the failure for -- for a doctor to be called
.  Because surely,
as you see the list of special damages and the number of doctors and therapists
that Ms. Dykeman saw over the course of her injury, it would be dozens and dozens
that would be here if that was the test to be applied in these courts.  And it
isn't.  [Emphasis added.]

[18]

The trial judge then charged the jury,
mentioning the defence submission as follows :

He [Mr. Harris] said
there was a lack of evidence, and he touched on various aspects:  As to a lack
of corroboration of Ms. Dykeman's riding ability in 2000.  There was a lack of
information on the farm operation, on how it started up and how the plaintiff's
activities were affected with the effect of having her children.  He questioned
the credibility.  He actually pointed to [the plaintiff] on an issue of
fainting, and I think properly, if I may say, it was the mother's evidence, not
the daughter's.  He pointed out an issue about ear bleeding, or a bleeding ear,
and whether there was any other evidence of it.  He mentioned the second
accident and the third accident, and I might say on that aspect he was simply
saying that there is not a lot of evidence.  There is a reason, of course, we
have not heard much about the second accident, but the reality of it is you
heard Ms. Dykeman's evidence.  She was T-boned.  There was injury to the hip.
There was a third accident.  That was said to be minor by the plaintiff.  There
is no contrary evidence.

[19]

In the absence of the jury, counsel for Ms.
Dykeman objected that Mr. Harris summation had effectively asked the jury to
draw an adverse inference from the failure to call not only the family doctor
but also various individuals in the horse industry and so forth.  After
further discussion, the trial judge called for the jury to be brought back, but
the following exchange took place before they returned:

MR. HARRIS:  Sorry.  I'm not sure what your
ruling is going to be yet.  It was my respectful submission that I had not made
such a comment as Mr. Mussio suggests that I made.

THE COURT:  Oh, what I was going to do was
say this:

That there was
some comment on the lack of evidence, that not all people were called.  That it's
for the plaintiff to call who they deem necessary to establish their case, that
there is no suggestion that they take an adverse inference, but they are to
decide the case on all of the evidence presented to them.

[20]

Defence counsel argued that to underscore the
matter would give it undue weight, to which the Court said Yes.  Counsel
for the plaintiff nevertheless pressed the issue and repeated his argument that
although defence counsel had not used the words adverse inference, the only
logical conclusion to be drawn from his summation was that such an inference
should be drawn.  The trial judge at this point simply asked if there were any
other issues to be discussed.  After hearing submissions on other topics, he
told counsel that:

The more we
go on, the more I am convinced that I shouldnt mess with the jury in where
they are right now.  I am not going to concede to any of the various concerns.
The points of view were very well put in argument on both sides yesterday, and
I have tried to provide what little guidance I can in this, I think, legally
complex, case ...

He made no further comment on this subject to
the jury prior to their return with a verdict later that day.

[21]

In this court, counsel for the plaintiffs
submits that the jury was left with the clear impression that most aspects of
the appellants case should be dismissed due to a lack of evidence.  He says
that the summation of defence counsel to the jury was highly prejudicial to
her, and that if comments of the kind made by Mr. Harris to the jury were
permitted, plaintiffs would be obliged to call all possible witnesses in order
to avoid the drawing of adverse inferences.

[22]

With respect, I am not persuaded that the
defence argument to the jury effectively amounted to an invitation to draw an
adverse inference.  Certainly the comments were close to the line, but as I
read it, the argument was devoted to showing the weaknesses of what evidence
the plaintiff
had
adduced, rather than speculating as to why other
evidence was
not
adduced.  Mr. Harris did not invite the jury to assume
the missing evidence had not been called because it would have been adverse to
the plaintiff.  In my view, he was entitled to point to holes in the wall and
to ask the jury to reach a verdict that reflected the deficiencies in the plaintiffs
case, if such they were.  Having said this, it certainly would have been
preferable if the trial judge had simply taken the matter in hand and warned
the jury not to draw anything one way or the other from the fact there were
potential, but uncalled, witnesses.

[23]

I would not accede to this ground of appeal.

In-Trust
Award

[24]

As noted earlier, Ms. Dykeman advanced a claim for the losses and
labour of her parents in providing assistance to her in the Freedom Fields
business and in coping with her family responsibilities. This was in addition
to claims brought by her parents, who were also plaintiffs in the action and claimed
compensation for their own  efforts and expenditures necessitated by their
daughters (and partners) injuries.  The transcript indicates that in
correspondence with Mr. Harris prior to trial, however, plaintiffs counsel had
agreed that Ms. Dykemans parents themselves should not have advanced claims
for what were essentially business losses of their partner and that indeed they
were not proper plaintiffs.

[25]

It is not entirely clear whether as part of their correspondence,
counsel had also agreed, or assumed, that the plaintiff herself would not be
asserting a claim for services rendered gratuitously by her parents in respect
of the Freedon Fields business.  Recovery for assistance provided by family
members to a family enterprise has been approved by this court in previous
cases: see
Hall v. Miller
(1989), 41 B.C.L.R. (2d) 46 (C.A.), discussed in
Kroeker v. Jansen
,
infa
, and
Johnson v. Shelest
(1988) 22
B.C.L.R. (2d) 230 (C.A.).  In any event, there remained  the plaintiffs claims
for personal and household services provided by her parents.  The defence
argued there was no evidence of the extraordinary circumstances required
for such a claim to succeed.  In Mr. Harris submission, the decided cases,
especially
Dufault v. Kathed Holdings Ltd
. 2007 BCSC 186, all involved
both
serious
injury and services that went above and beyond what would
naturally be expected under the natural love and affection. [
Sic.
]  For
his part, Mr. Mussio responded that various other cases, including
Boren v. Vancouver
Society for the Physically Disabled
2002 BCSC 1134 (revd in part at 2003
BCCA 388), show that in-trust awards for family services do
not
require
serious injury and that in any event, the question was one for the jury.  The
trial judge expressed the tentative view that he needed something more than
the fact that father perhaps has got a lot more physical exercise than he ever
planned and mothers perhaps not being able to go back to her profession, but
asked for further argument the following week.

[26]

After further argument, the trial judge pronounced his
ruling on December 4, 2007.  He began by reviewing the evidence of Ms.
Dykemans parents, the cases provided by counsel, and other authorities,
including
Bystedt (Guardian ad litem of) v. Hay
2001 BCSC 1735.  In the
latter case, D. Smith J. (as she then was) had referred to the well-known judgment
of Gibbs J.A. for the majority of a five-person division of this court in
Kroeker
v. Jansen
(1995) 4 B.C.L.R. (3d) 178, to which I shall return below.
The trial judge then continued:

... It was noted that the services provided
must replace services necessary for the care of the plaintiff as a result of
the plaintiffs injuries, and that
if the services are rendered by a family
member, they are over and above what might be expected from the family
relationship
, and then a number of factors going to evaluation, if I can
put it that way.

The foundation in each case is the
grievousness of the injuries
, and where an in-trust
award may be made for compensation for services provided in the nature of
personal care
if those services are of a kind that is above and beyond the
type of service undertaken by friends and relatives out of love, friendship or
family duty.

Here there are two aspects in my view:
Firstly, that
the injuries are not of that serious grievous nature as
described in the decisions; and secondly, that they are more to the business
aspect and loss that may have been sustained by the plaintiff.

In sum, I will
not put a question to the jury regarding the claim for an in-trust award.  [At
paras. 10-13; emphasis added.]

[27]

On appeal, counsel for the plaintiff contends
that the trial judge was wrong to suggest that an in-trust award may be made only
where the plaintiffs injuries are particularly grievous.  He relies on this
courts more recent judgment in
Ellis v. Star
, 2008 BCCA 164, in which
the plaintiff was a police officer whose wrist had been injured. At trial, he received
an in-trust award of $3,500 as compensation for household services (which he would
otherwise have performed) carried out by his wife.  Mackenzie J.A. noted the
defendants submission that the cases in which awards for gratuitous personal
services have been made had involved seriously injured plaintiffs
or other
support services beyond those normally expected in a marital relationship for
minimal debilitating injuries
.  (Para. 18; my emphasis.)  The Court found
that yard maintenance services undertaken by Ms. Starr were not sufficiently
extensive or related to the injury to support an in-trust award.  The appeal
was allowed to the extent of deleting the in-trust award.

[28]

Since
Kroeker
, it has been settled law in
this province that housekeeping and other spousal services have economic value
for which a claim by an injured party will lie even where those services are
replaced gratuitously from within the family.  In
Kroeker
, such
recovery was allowed under the heading of loss of future ability to perform
household tasks, but obviously, damages for loss of such ability
prior
to trial may also be properly claimed and recovered: see, e.g.,
McTavish
v. MacGillivray
, 2000 BCCA 164 at paras, 43, 51-7,
per
Huddart
J.A.;
West v. Cotton
(1995) 10 B.C.L.R. (3d) 73 (C.A.) at para. 25; and
Campbell
v. Banman
2009 BCCA 484.  The reasoning in
Kroeker
has been extended
beyond spousal services to services rendered by other members of a family:
see
Boren v. Vancouver

Resource Society, Dufault, McTavish v.
MacGillivray
;
Bystedt v. Hay
, all
supra
.  Such awards
are colloquially referred to as in trust even though it is the plaintiff who
recovers them, and British Columbia courts do not generally impose trust terms in
their orders, regarding the loss as that of the plaintiff: see
Feng v.
Graham
(1988) 25 B.C.L.R. (2d) 116 (C.A.) at 9-10
; McTavish, supra.

[29]

The majority in
Kroeker
was alive to the
possibility that awards for gratuitous services by family members of plaintiffs
could unleash a flood of excessive claims (
supra
, at para. 29) and for
that reason, urged courts to be cautious in making such awards.  In the words
of Gibbs, J.A.:

... as the law
has developed it would not be appropriate to deny to plaintiffs in this
province a common law remedy available to plaintiffs in other provinces and in
other common law jurisdictions.
It will be the duty of trial judges and this
Court to restrain awards for this type of claim to an amount of compensation
commensurate with the loss. With respect to other heads of loss which are
predicated upon the uncertain happening of future events measures have been devised
to prevent the awards from being excessive
. It would be reasonable to
expect that a similar regime of reasonableness will develop in respect of the
kind of claim at issue in this case.  [At para. 19; emphasis added.]

I do not read
Kroeker
or
Ellis
,
however, as establishing a threshold of grievousness in terms of the injuries
which may necessitate such services.  A plaintiff who has a broken arm, for
example  presumably not a grievous injury  and who is obliged to seek
assistance in performing various household tasks should not be foreclosed from
recovery on this basis.  This was recognized in
Ellis
in the quotation
reproduced above.  Thus I disagree with the trial judges reference to grievous
injury as a threshold that the plaintiff was required to surmount if her claim was
to go to the jury.  Instead, claims for gratuitous services must be carefully
scrutinized, both with respect to the nature of the
services
 were they
simply part of the usual give and take between family members, or did they go
above and beyond that level?  and with respect to causation  were the
services necessitated by the plaintiffs injuries or would they have been
provided in any event?  Finally, if these questions  which I would have
thought are appropriate for determination by a jury  are answered
affirmatively, the amount of compensation must be commensurate with the
plaintiffs loss.  The assessment of such loss has been the subject of several considered
judgments in this province, most notably
McTavish
and
Bystedt,
both
supra
.

[30]

The trial judges second reason for not putting
the claim to the jury in this case was that the services which were the subject
of the in-trust claim were not personal or household services but were related
to the business operated by the plaintiffs family.  As mentioned above,
counsel evidently agreed that the plaintiffs parents claim for business
losses had not properly been made.  It is not correct to say, however, that the
plaintiff herself could not claim for assistance provided by family members in
a family enterprise (see
Johnson v. Miller, supra
) or that there was no
evidence of personal or household services having been provided by Ms. Dykemans
parents to her.  The mother testified that she was supposed to spend a third
of her time on the farm  in accordance with the partnership agreement in
evidence  and had planned on going back to practice on a part-time basis.  Instead,
she found herself spending at least 10 to 12 hours per week assisting in the
business and babysitting her grandchildren when her daughter had medical
appointments or migraine headaches.  At the time of trial, she testified, she
was caring for her grandchildren pretty well every day plus assisting in the
equestrian business.  The plaintiffs migraines had become less frequent, but
the medication she took for them essentially knocked her out for 12-14 hours
 during which Ms. Dykemans mother slept in the same room with her
granddaughter.  The thrust of her evidence was that at least until her
grandchildren were in school, she would not be able to return to practice even
on a part-time basis.  Mr. Dykemans services, on the other hand, related
almost entirely to physical work in the Freedom Fields Farm operation.

[31]

In all the circumstances, it seems to me that
there was evidence of household and other assistance provided by Ms. Dykemans
parents that could have been the basis of an award and that the trial judge
erred in effectively granting a no evidence motion in respect thereof.  I
would allow the appeal on this ground.

Disclosure
of Internet Documents

[32]

The plaintiffs fourth and final ground of
appeal relates to the disclosure and use at trial of certain Internet postings
by counsel for the defendant Mr. Porohowski.  Mr. Gibb, counsel for the
defendant Hothi, had purported to list these in Part III of his Form 93 as
follows:

Doc #

Source

Description

Dates of Records

77

ICBC

Diskette containing an index to the Plaintiffs web
  postings

Various

78

Themanestreet.com

Copy of bundle of printouts of articles regarding
  the Plaintiffs horse business

Various

79

Various

Copy of various pictures printed out from the
  internet regarding horse riding

Undated

80

Internet

Copy of bundle of printouts of articles regarding advertising
  of the Freedom Fields Farm

Various

Plaintiffs counsel had, he said, received
this list only a few days before trial and had not sought production pursuant
to Rule 26(8).

[33]

The issue of disclosure arose in the context of
Mr. Harris cross-examination of Ms. Dykeman.  Mr. Harris began by
soliciting her confirmation that she had posted various writings on a website
known as thewomensplace.ca and on another entitled themanestreet.ca and had
corresponded with various other members of those websites concerning her interest
in and activities with horses.  Mr. Harris then informed the trial judge that:

... Id like to
refer in the next part of my cross-examination to some of the website writings
of the plaintiff.  And the reason for doing so will appear.
There are
approximately 8000 such writings
. ...  I now propose to
release
privilege on those blogs for the purpose of the following questions and answers
with the plaintiff
.  [Emphasis added.]

[34]

Mr. Mussio on behalf of Ms. Dykeman objected
that his client was being subjected to trial by ambush in that the documents
in question had not been produced within seven days of the trial and he had
not seen any of them or discussed them with his client.  (Later he clarified
that he had received Mr. Gibbs list a few days before trial, when he had been
out of town.)  The jury was excused to permit counsel and the trial judge to
discuss the matter further.  Mr. Mussio submitted that the real issue
was that because the documents had (he said) been produced (i.e., brought
into existence) by Ms. Dykeman, they
could
not properly be the subject
of solicitors brief privilege. As well, since the postings had not been
properly disclosed, he was taken by surprise by Mr. Harris application to
use them, or some of them, to cross-examine the plaintiff.

[35]

For his part, Mr. Harris referred to
Blake v.
Gill
(1996), 4 C.P.C. (4th) 158 (S.C.) and
Williams v. Vancouver (City)
,
2006 BCCA 556, 60 B.C.L.R. (4th) 89, in support of his position that
plaintiffs counsel had been put on a train of inquiry by the index listed at
item 77 of the Form 93.  In any event, he contended, the plaintiff could hardly
be taken by surprise by writings she herself had written.

[36]

The trial judge issued his ruling after an
adjournment.  He began by recounting the factual background of the application.
 He rejected Mr. Mussios position that the defence had not produced a list
that properly disclosed the Internet items. In the trial judges analysis, ...
discovery is met by the listing
.  As a separate step, there is
production, and if a copy was required, that would have been obtained by
request.  (My emphasis.)  He declined to read R. 26(14) in conjunction
with R. 40(13), presumably on the basis that an Internet posting did not
qualify as a plan, photograph or object.  (It is Rule 40(13) that contains a
reference to a time-period ending seven days prior to trial.)  After reviewing
Blake
v. Gill, supra; Robitaille v. Vancouver Hockey Club Ltd.
(1981) 30
B.C.L.R. 286 (C.A.);
Daruwalla v. Shigeoka
(1992) 72 B.C.L.R. (2d)
344 (S.C.);
Carol v. Gabrielle
(1997) 14 C.P.C. (4th) 376 (S.C.);
Ball
v. GAP (Canada) Inc
. 2001 BCSC 824; and
Jones,

Gable &
Co. v. Price
(1977) 5 B.C.L.R. 103 (S.C.), the Court concluded:

As I noted when I came into the courtroom
and Mr. Harris kindly provided me his blue folder of documents, I have now had
the opportunity of looking through the plaintiffs documents, or at least the
web postings of various documents. I do not know how far counsel will go with them,
but some of them plainly are very personal statements of a young lady that may
or may not be used by counsel. Some are plainly relevant to the issues before
the jury in terms of the nature of the injuries sustained by the plaintiff, how
the injuries said to be sustained by the plaintiff affect her ability to ride
horses or how well she rides a horse, and how much it may have affected her
plans as she hoped them play out.

In
Jones, Gable & Co. v. Price
(1977), 5 B.C.L.R. 103 (SC) Anderson J. met one of the early cases where this
situation arose, and there he directed that there be a brief adjournment. As he
put it:

I believe that
the ends of justice will
be served by permitting counsel for the defendants to consult with Mr. Price in
respect of the documents delivered
...

Anderson J. said this is not to be used as a
precedent, but there is a very delicate balance in this case in terms of the
plaintiff as a witness and the fact that it is a jury trial, and at least on my
brief view of the documents,
the ends of justice are best met by allowing
the plaintiff and her counsel to view the documents
.

It is now two oclock. The plaintiff will
only have until the end of the half hour to go over the documents, but that
should be sufficient, and then we will resume the trial and I will permit Mr.
Harris to use the documents, but plainly to keep focused on the issues at
trial, the evidence she has given and where the documents are on point. There
are plainly, on my very quick look at it, some very personal statements that
have been made by the plaintiff, and there could be real prejudice, and I know
I am in the hands of senior counsel here who I am sure will direct himself
along that path.

So what I will
allow, Mr. Mussio, is that you and Ms. Dykeman will have until 2:35 p.m. to
review the document book so that she is aware of them. If there is an objection
as to the authenticity of any of the documents, I want that to be brought to me
forthwith, But other than that, then
Mr. Harris will be permitted to cross
examine on the documents
.  [At paras. 26-31; emphasis added.]

[37]

Mr. Harris was permitted to introduce a book of
Internet postings which was marked Exhibit D for identification only and which,
we are now told, consisted of 124 pages of the approximately 8000 writings
encompassed by the list.  (Counsel are unable to agree whether the 124 pages
contained 63 or 35 articles plus one photo.)  Mr. Harris cross-examined Ms.
Dykeman on 30 of the postings and made fairly extensive submissions to the jury
on them and her testimony relating thereto.

[38]

In this court, the plaintiff submits that the trial
judge erred in allowing Mr. Harris to cross-examine her on the Internet
postings and to use them in closing summations.  Again it is said that the
postings were not properly listed on any list of documents before trial and
that accordingly, R. 26 was not complied with.

[39]

The salient sub-rules of R. 26 provide as
follows:

(1)  A party to an action may deliver
to any other party a demand in Form 92 for discovery of the documents which are
or have been in the party's possession or control relating to any matter in
question in the action, and the other party shall comply with the demand within
21 days by delivering a list, in Form 93, of the documents that are or have
been in the party's possession or control relating to every matter in question
in the action.

...

(1.3)  Documents to which there is no
objection to production must be enumerated in a convenient order and include a
short description of each.

...

(2)  Where it is claimed that a document is privileged
from production, the claim must be made in the list of documents with a
statement of the grounds of the privilege.

(2.1)  The nature of any document for which privilege
from production is claimed must be described in a manner that, without
revealing information that is privileged, will enable other parties to assess
the validity of the claim of privilege.

...

(8)  At any time a party may deliver a notice to any
other party, in whose pleadings or affidavits reference is made to a document,
requiring the other party to produce that document and, within 2 days, the
other party shall deliver a notice stating a place where the document may be
inspected and copied during normal business hours or stating that he or she
objects to producing the document and the grounds of the objection.

(13)  Where, after a list of documents has been
delivered under this rule,

(a) it comes to the attention of the party delivering
it that the list was inaccurate or incomplete, or

(b) a document relating to a matter in question in the
action comes into the party's possession or control,

the party shall deliver forthwith a supplementary list
specifying the inaccuracy or document.

(14)  Unless the court
otherwise orders, where a party fails to make discovery of or produce for
inspection or copying a document as required by this rule, the party may not
put the document in evidence in the proceeding or use it for the purpose of
examination or cross-examination.

[40]

Rule 26(2) and (2.1) were recently considered at
length by this court in
Stone v.  Ellerman
2009 BCCA 294, 92
B.C.L.R. (4th) 203 in connection with a pain journal of the plaintiff over
which privilege had been asserted.  The journal was not specifically mentioned in
the Form 93 but the plaintiff submitted it came within the phrase notes and
documents, correspondence, minutes of evidence, memoranda being the work
product of plaintiffs legal advisors in respect of which privilege was
claimed in Part III of the form.  The Court found that the description was
inadequate, since nothing in it would enable other parties to assess the
validity of the claim of privilege or to anticipate that anything like a pain
journal existed among the notes and documents, even in the most general
terms.  (Para. 22.)  Chief Justice Finch for the majority elaborated:

The information that must be included in the
description of a document over which privilege is claimed will vary depending
upon the document, but
it must be sufficiently described so that if the
claim is challenged it can be considered by a judge in chambers
:
Babcock
v. Canada (Attorney General)
, 2004 BCSC 1311, 246 D.L.R. (4th) 549, citing
Visa
International Service Assn. v. Block Bros. Realty Ltd.
(1983), 64 B.C.L.R.
(2d) 390 (C.A.).

In
Saric v. Toronto-Dominion Bank
,
1999 BCCA 459, Mr. Justice Hall, in chambers, cited
Shaughnessy
Golf and Country Club v. Uniguard Services Ltd. and Chahal
(1986), 1
B.C.L.R. (2d) 309 (C.A.), for the proposition that
the grounds for privilege
have to be established in respect of each document which is said to be
privileged
.  He added (at para. 12) a litigant, (and presumably the
court), has to have some proper basis upon which to determine issues of
privilege as they relate to documents.

It has been held that since Rule 26(2.1)
came into force in mid-1998 the bundling of documents under a broad
description is no longer sufficient and that each document must be listed
separately.
In Leung v. Hanna
(1999), 68 B.C.L.R. (3d) 360 (S.C.),
solicitor-client privilege was claimed over documents that were described as
documents marked P3 [through P10], the same having been initialled by the
handling solicitor. Mr. Justice Burnyeat found that each document
had been listed separately as the new sub-rule required.  He found that
the descriptions themselves otherwise satisfied the requirements articulated in
Hodgkinson v. Simms
(1988), 33 B.C.L.R. (2d) 129, under the old rule,
which permitted quite generic descriptions in favour of protecting privileged
information. Burnyeat J. held that such descriptions  now of individual
documents  remained sufficient under the new rule.

In
Bajic v. Friesen
, 2006 BCSC 1290,
a master in chambers explained the decision in
Leung
this way:

It is clear from the decision of Mr.
Justice Burnyeat that the sanctity, if you will, of solicitor/client privilege
in his mind trumps any attempt to describe documents in part 3 such that they
provide any conceivable understanding to the other party as to the nature of
the document. It would appear it then forces a party concerned with the
description or lack of same in part 3 to bring an application to the court
which then leaves the judge or master hearing the matter to review the document
and then conclude whether or not it is appropriately within part 3.  [At paras.
23-6; emphasis added.]

[41]

Applying these observations to the case at bar,
can it be said that the descriptions reproduced above were such as to enable
the plaintiff and her counsel, or a judge in chambers, to assess the validity
of the claim of privilege?  In my opinion, none of the items was sufficiently
described for this purpose.  Item 77, an index to the plaintiffs web
postings, could contain any number of writings posted on any number of
websites, relevant or irrelevant to the case.  With respect to item 78, one
does not know who wrote the articles regarding the plaintiffs equestrian
business or the date of such articles; with respect to item 79, there is no
description of the pictures printed out from the Internet regarding horse
riding, where they are from or what connection, if any, the plaintiff had with
them; and with respect to item 80, there is again no description of the
articles, who wrote them or when.  Counsel told the court below that the
postings had all been written by the plaintiff, but even that was not apparent
from the disclosure document.  Thus I disagree with the trial judges ruling
that the postings had been adequately listed for purposes of R. 26.  (For a
discussion of e-discovery generally, see The Sedona Conference Working Group
7,
The Sedona Canada Principle: Addressing Electronic Discovery
(2008).)
If the defence had been more forthcoming, counsel for Ms. Dykeman might well
have challenged the claim of privilege asserted by Mr. Harris
via
the
Form 93 filed by Mr. Gibb.

[42]

Assuming, then, that the defence failed to make
proper discovery of the Internet documents, the next question is whether it can
be said the trial judge nevertheless properly exercised his discretion under
the opening words of R. 26(14) to permit Ms. Dykeman to be cross-examined
on some of those documents.  In
Stone v. Ellerman
, the majority stated
that the factors relevant to the exercise of such discretion include the
question of prejudice to the party being cross-examined, whether there was a
reasonable explanation for the other partys failure to disclose, whether
excluding the document would prevent the determination of the issue on its
merits, and whether in the circumstances of the case, the ends of justice
require that the document be admitted.  In this case, counsel did not provide
any
explanation for the non-descriptiveness of Mr. Gibbs list and argued only
that disclosure
had
been sufficient.  The trial judge therefore had no
explanation to consider, even if he had been of the view that the listing was
deficient.

[43]

It is difficult to square the trial judges ruling
on this second question with his prior ruling that the documents had been
properly disclosed or listed.  If the latter was correct, there was no need to
balance the interests of justice in avoiding trial by ambush against the interests
of justice in assessing Ms. Dykemans credibility by cross-examining her on the
Internet postings.  Given that her lawyer had only half an hour to discuss the
124 pages with her, it cannot be said with any certainty that she was not
prejudiced by what transpired.  At the end of the day, I am not confident that
the apparent exercise of the trial judges discretion was fair to the plaintiff
or rested on a correct understanding of the Rule.  I would therefore allow the
appeal on this basis as well.

[44]

The final question is whether a new trial must
be ordered.  Although retrials are not to be ordered unless the interests of
justice plainly require it (see
Arland v. Taylor
[1955] 3 D.L.R.
358 at 364-5, [1955] O.R. 31 (C.A.), recently discussed in
Knauf v. Chao
2009 BCCA 605), this is not an appeal in which the quantum of an award is all
that is at issue.  Here, there was no award on the in-trust claim because it was
not put to the jury, and any award we would make would depend at least in part
on the view of the plaintiffs credibility and that of her parents taken by the
finder of fact.  Not having seen them, we are not in a position to determine
the validity or quantum of an award.  As well, the plaintiff was taken by
surprise by the Internet postings which were not adequately disclosed, and that
fact may have prejudiced her case.  In all the circumstances, I see no
alternative but to order a new trial of the plaintiffs claims.  Of course, it
is to be hoped that this may be avoided by agreement of the parties.

[45]

I would allow the appeal and order a new trial.

The Honourable Madam Justice Newbury

I agree:

The Honourable Madam Justice Prowse

I agree:

The Honourable Mr. Justice Lowry