COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

R. v. Wiens,

2016 BCCA 34

Date: 20160126

Docket:  CA41140

Between:

Regina

Respondent

And

Keith Gregory
Wiens

Appellant

Corrected
Judgment:  The text of the judgment was corrected at paragraph 51 on March 3,
2016.

Before:

The Honourable Mr. Justice Frankel

The Honourable Madam Justice D. Smith

The Honourable Mr. Justice Savage

On appeal from:  An
order of the Supreme Court of British Columbia, dated
July 23, 2013 (
R. v. Wiens,
Penticton Docket 40090-K).

Counsel for the Appellant:

R.S. Fowler, Q.C.

E. Purtzki

Counsel for the Respondent:

M.T. Ainslie, Q.C.

T.A. Livingston

Place and Date of Hearing:

Kelowna, British
  Columbia

October 6, 2015

Place and Date of Judgment:

Vancouver, British
  Columbia

January 26, 2016

Written Reasons by:

The Honourable Mr. Justice Frankel

Concurred in by:

The Honourable Madam Justice D. Smith
The Honourable Mr. Justice Savage

Summary:

Appeal by W., a retired
member of the RCMP, from his conviction for second degree murder.  At trial, W.
testified that he shot and killed his common law spouse in self-defence.  On
appeal, W. argued evidence of his spouses peaceful disposition was improperly
admitted at trial and, in the alternative, that the jury was improperly instructed
with respect to the use of that evidence.  W. also argued that the trial judge
applied the wrong test in ruling inadmissible expert evidence on police firearms
training tendered by the defence.  Held: Appeal dismissed.  The peaceful
disposition evidence was properly admitted.  The test is whether the
disposition evidence is relevant and whether its probative value outweighs its
prejudicial effect; it is not necessary for the disposition evidence to have
exceptional probative value.  It was unnecessary for the trial judge to
instruct the jury on peaceful-disposition evidence with the degree of detail W.
suggested.  The expert evidence on firearms training was properly ruled
inadmissible; the prejudicial effect of that evidence outweighed its limited
probative value.

Reasons for Judgment of the Honourable
Mr. Justice Frankel:

Introduction

[1]

Keith Gregory Wiens appeals his conviction on a charge of second degree
murder following a trial in the Supreme Court of British Columbia before Mr. Justice
Barrow sitting with a jury.  The victim was Lynn Kalmring, Mr. Wienss common
law spouse.  She died as a result of a single shot from a pistol fired by Mr. Wiens,
which struck her in the face.  The shooting occurred in the couples bedroom.
In convicting, the jury rejected Mr. Wienss evidence that he acted in
self-defence.

[2]

Mr. Wiens contends that the trial judge erred in three respects,
namely:

(a)      admitting
evidence of Ms. Kalmrings peaceful disposition;

(b)      inadequately
instructing the jury with respect to that evidence; and

(c)      refusing
to allow him to call opinion evidence to the effect that when he shot Ms. Kalmring
he was acting in a manner consistent with his training as a police officer.  (Mr. Wiens
is a retired member of the Royal Canadian Mounted Police.)

[3]

For the reasons that follow, I would dismiss this appeal.

Background

[4]

In August of 2011, Mr. Wiens and Ms. Kalmring were living in a
home he had purchased in a gated retirement community in Penticton, British
Columbia.  They had been in a relationship for about eight years.  Mr. Wiens
was 57 years old, five feet ten inches tall, and weighed 200 pounds.  Ms. Kalmring
was 55 years old, five feet six inches tall, and weighed about 150 pounds.  He
was employed as a school bus driver; she was not then working.

[5]

The couple owned a home in Arizona that Mr. Wiens had purchased.
He placed the title to that home in both of their names.

[6]

At approximately 11:45 p.m. on August 15, 2011, Ms. Kalmring spoke
to her sister, Shelley Pertelson on the telephone.  Ms. Kalmring was
sobbing and told Ms. Pertelson she and Mr. Wiens had been arguing and
that she had thrown $2,000 (U.S.) at him, along with a ring he had given her.
She said Mr. Wiens told her to get a job and had gone to bed.  Ms. Kalmring
said she tried to find a motel room, but nothing was available.  Ms. Pertelson
suggested Ms. Kalmring sleep in the spare bedroom.  Ms. Kalmring said
she loved Mr. Wiens and did not want to leave.

[7]

Shortly after midnight on August 16, 2011, Mr. Wiens called 9-1-1
to report he had shot his wife two minutes before.  He told the 9-1-1 operator
he was an ex-policeman and that what happened is just a huge mistake and that
something got out of hand here tonight.

[8]

At around 12:30 a.m. the police arrived at the residence.  They found Ms. Kalmrings
body on the floor in the master bedroom.  She was lying on her back having been
shot once in the face at close range, i.e., less than 30 inches. That shot came
from a nine millimetre semi-automatic pistol belonging to Mr. Wiens.  The
police located the pistol in a holster on the bed.

[9]

Ms. Kalmrings left arm was extended at almost a 90 degree angle
from her body.  There was a large knife in her left hand, pointing downwards.
At trial, the Crowns position was that the knife had been planted, i.e.,
placed in Ms. Kalmrings hand after she was shot.  The Crown called expert
medical evidence to support that position.  Mr. Wiens called expert
medical evidence to support his position that the knife had not been planted.

[10]

An examination of the residence by the police revealed:

·

The sheets on the bed in the master bedroom had been turned down
on one side.

·

A bathrobe lying on the bed in the master bedroom had a large
blood stain.  There was a beige hand towel on the bed.

·

There were sex toys and a bottle of lubricant on a bedside table
in the master bedroom.

·

The sheets on the bed in the guest bedroom had been turned down.

·

Ms. Kalmrings ring and about $2,000 (U.S.) were on an
island in the kitchen together with handwritten documents which appeared to
record payments Ms. Kalmring made to Mr. Wiens towards household
expenses in January, February, March, April, and May of 2011.

·

A brown wooden box, in which Ms. Kalmring kept personal possessions,
was near the door of the master bedroom.

·

A letter written by Mr. Wiens to Ms. Kalmring shortly
after midnight on January 1, 2011, in which he states:  (a) he does not
take kindly to being told fuck you; (b) is no longer prepared to pay all
the expenses for a home they own in Arizona; (c) suggests they sell that
home thereby giving her a very nice profit for doing fuck all.  (financially
speaking!); (d) starting January, 2011 it
will
be a two way
street regarding financial matters; and (e) if she wants them to stay
together and get married we each start paying our way  as of today.
[Emphasis in original.]

[11]

Ms. Kalmrings daughter, Brandy Cummings, testified that at a
family picnic about ten days before her mother was killed, Mr. Wiens
complained to her that Ms. Kalmring was not working.  Using derogatory language,
he stated that while he has a pension Ms. Kalmring has no money and needed
to get back to work.  Ms. Cummings testified Mr. Wiens also told her he
had lost money when the stock market crashed.

[12]

Over Mr. Wienss objection, the Crown called three former husbands
of Ms. Kalmring to give evidence with respect to her peaceful
disposition.  That evidence and the trial judges ruling permitting it to be
called are discussed below.

[13]

Mr. Wiens gave evidence.  He began by relating the details of his
service in the RCMP.  He was a member of that force for approximately 26 years,
from June 1975 until January 2001, retiring as a corporal.

[14]

Mr. Wiens said he received basic training in the use of a revolver
and a rifle during his initial six-month training period at the RCMP depot in
Regina, Saskatchewan.  He graduated from the depot in January 1976.  In
cross-examination, he said the following about the basic training he received:

[S]o the way I was taught is, if
youre in a physical confrontation not including a weapon being used against
you, you use self-defence techniques.  If somebodys coming at you with a
weapon, you shoot to kill, is how I was instructed, and this is 1975.

[15]

In the mid-1980s, Mr. Wiens became a member of the emergency
response team (ERT).  He received specialized training in Ottawa and, on
several occasions, at an RCMP training facility in Carleton Place, Ontario.  In
Ottawa, Mr. Wiens received expert marksmanship rifle (i.e., sniper)
training.  The training at Carleton Place dealt with hostage-taking situations.
Those training exercises took place in what he referred to as the killing
house.  Trainees would enter a three-bedroom house and be confronted with
situations requiring them to make instantaneous decisions with respect to
whether to fire their weapons in close quarters.

[16]

Mr. Wiens said most of his ERT training involved firing a pistol
similar to the one with which Ms. Kalmring was killed.  He purchased the pistol
he used to shoot Ms. Kalmring in the mid-1980s, when he was stationed in
Yellowknife, Northwest Territories.  One of the reasons he bought it was so his
late wife, who passed away in 1997, could use it for protection.  He said that
since acquiring that pistol he had always kept it at home loaded.  The last
time he fired it was in the Northwest Territories on December 31, 1989, when he
used it to kill some rabid coyotes.  He said that during the course of his
duties as a police officer he never drew his service firearm other than to shoot
an injured animal.

[17]

When asked by his counsel to explain the type of shooting he did at
Carleton Place, Mr. Wiens stated:

It was all whats referred to as
instinctive shooting which is very close range shooting, you dont aim, you
point and shoot in very rapid succession and the shooting that they taught us
to do was two shots to the head.

[18]

In his examination-in-chief, Mr. Wiens related how he and Ms. Kalmring
met and started dating in February 2006.  They began living together in June
2009.  In September 2010, he purchased a home in Penticton.  He also purchased
a home in Arizona for their impending retirements, which he put in both their
names.  He said he and Ms. Kalmring were generally happy and that there
were new employment opportunities for both of them.

[19]

Mr. Wiens denied using the pejorative language attributed to him by
Ms. Cummings, but agreed he had said something about Ms. Kalmring
having to go back to work.

[20]

Mr. Wiens said that on the evening of August 15, 2011, he and Ms. Kalmring
had been drinking at home.  They played a video game and had a bet of a sexual
nature.  Ms. Kalmring won the bet and put some sex toys on his pillow in
the master bedroom.  However, he did not want to have sex with her because he
had a golf game the next morning; he put the sex toys on a bedside table.  She
was very upset with him; they argued and she left the bedroom.  When she came
back into the bedroom she was still upset and agitated.  He told her he wanted
to go to sleep and asked her to sleep in the guest room.  She went to the guest
room, but returned a few minutes later.

[21]

When Ms. Kalmring came back to the bedroom she was madder than
before.  He told her to leave, which she did.  He then heard what he took to be
her looking through a telephone book; he presumed she was looking for a motel.
He fell asleep.

[22]

He testified that he was awakened by Ms. Kalmring hitting him.  She
was very mad and was screaming.  They argued and she left the bedroom.  He had
never seen her act in this manner before.  As the bedroom door did not have a lock
he took a wooden box in which Ms. Kalmring kept some items and placed it
behind the closed door; he wanted to be alerted if she came back into the room.

[23]

Mr. Wiens said that within a minute Ms. Kalmring came back
into the bedroom.  She was extremely upset and screamed at him.  He described
her as having snapped.  Her eyes were bugging out, she was purple, and
she spit on him.  She yelled, Ill f die, Im not f leaving and Im not f
living with my f kids.  Im f not doing that.  Ill f die.  He said she
repeated Ill f die about six times.  In cross-examination, he said they
stood nose-to-nose yelling at each other for one-and-one-half to two minutes.
He described it as the worst confrontation of his life.

[24]

Mr. Wiens said Ms. Kalmring left the bedroom and he heard her move
down the hall towards the kitchen.  He felt fearful.  He closed the door and
then took his pistol from a dresser drawer.  He removed the pistol from its
holster, threw the holster on the bed, and racked the pistols magazine to load
a bullet into the pistols chamber.  He did this,

Because I feared Lynn.  She was
not Lynn, she was crazy, and she had just assaulted me while I was sound asleep,
and I was worried about what was coming next.

[25]

He said Ms. Kalmring came flying through the door, which he was unable
to hold shut.  She was screaming and had a knife in her left hand.  She
advanced towards him.  He backed away, hitting a bedpost.  She was two to three
feet away from him and he believed she was going to strike him in the throat or
heart.  Even as a police officer, he had never been in such a situation.  With
his elbow towards his chest and the pistol at the height of his head, he fired
a single shot at Ms. Kalmring.  Her knees buckled and she fell into a
seated position and then backwards on to the floor.

[26]

In cross-examination, when asked whether he intended to kill Ms. Kalmring,
Mr. Wiens stated:

I cant answer that.  I mean, I
-- I know enough about weapons to say that when you point a weapon at somebody
and pull a trigger that bad things are going to happen.  I mean, I did
basically what I did, what I was trained to do, and it took one and a half
seconds, and I did what I did because if I didnt do it I would have died.  I
mean, I felt my life was in danger when I saw a 15 inch butcher knife coming at
my throat.  So did I intend to kill her?  I  I intended to protect my life.

[27]

The trial judge would not permit Mr. Wiens to call opinion evidence
on how a police officer would be expected to react in the sort of confrontation
Mr. Wiens described.  That proposed evidence and the judges ruling are
discussed below.

[28]

Whether Mr. Wiens shot Ms. Kalmring in self-defence was the critical
issue that the jury had to decide.  Mr. Wienss counsel submitted to the
jury that on the whole of the evidence there could be no other conclusion.
Crown counsel asked the jury to reject Mr. Wienss evidence of the
altercation and to find that he intentionally shot Ms. Kalmring following
an argument over money, and then planted a knife in her hand to make it look
like self-defence.

Analysis

Admissibility of the
Peaceful-Disposition Evidence

[29]

A
voir dire
was held to determine whether the Crown would be
permitted to call Ms. Kalmrings former husbands to give evidence that she
had a peaceful, non-violent, disposition; that evidence reached back to 1974.  It
was not necessary for the former husbands to testify on the
voir dire
,
as counsel agreed the admissibility question could be decided on the basis of statements
the husbands had given to the police.  During submissions, Mr. Wienss
counsel stated that the defence did not intend to attack Ms. Kalmrings
character by leading evidence she had acted aggressively on other occasions.

[30]

The statements of the former husbands contained the following:

Robin Kuraoka:  He and Ms. Kalmring were married from
1973 until 1984.  When they married she was 17 and he was 23.  She was never
violent towards him.  He never saw Ms. Kalmring being violent towards anyone,
even when she had been drinking.  She would get affectionate when she had been
drinking.

Elmer Leroy Marchant:  He and Ms. Kalmring were married
from 1985 until 1993.  She was not violent, even when she had been drinking.
He never saw her hit anyone.  Ms. Kalmring was bad with finances and money;
she spent a lot of money.

Blaine Richard Kalmring:  He and Ms. Kalmring
were married for about six years.  When they argued it was basically over
finances.  She never showed any physical aggression towards him.  He never saw
her be violent towards anyone.  She did not have a drinking problem.

[31]

In ruling the evidence admissible, the trial judge said this:

[32]      I am satisfied the evidence is
relevant in this case on the basis that, as the authors of the [
Report of
the Federal Provincial Task Force on Uniform Rules of Evidence
, (Toronto:
Carswell, 1982)] noted, self-defence has been raised and by necessary
implication the issue of whether the deceased was the aggressor arises.  Evidence
of the disposition of the victim, whether towards violence or otherwise, is
relevant to the resolution of that issue.

[33]      Next, I find that the evidence in
this case has significant probative value.  I recognize that it spans a period
that begins some 40 years before the events in question and ends some 10 years
before the events.  Its probative force lies in part in the duration of the
aspect of the deceaseds character to which it relates.  Evidence of a
disposition or inclination based on an isolated event years ago will likely be
of little value.  Evidence of a disposition over the course of a few years many
years ago is also likely of little value.  Evidence of a persistent trait over
the course of most of the adult life of the deceased may, however, have
significant probative value.  Evidence of that trait in the context of intimate
relationships, all of which ended in divorce, is the more probative, given the
circumstances in the matter at bar.

[41]      The greater the tendency of the
evidence to evoke sympathy, the less likely it is that any prophylactic
instruction given to constrain that risk will be effective.  The tendency of
the evidence to give rise to this kind of prejudice in this case is, in my
view, reasonably low.  Although the three former spouses may have some
lingering attachment to the deceased, it is nothing like the attachment and
hence the emotional quality that accompanies a parent giving evidence about his
or her deceased child.

[42]      Related to this concept is the
risk that the jury might conclude that the respondent was a repugnant
individual deserving of punishment and a conviction would, as a matter of rough
equivalence, give him his just deserts: from [
R. v. Handy
,
2002 SCC 56, [2002] 2 S.C.R. 908]
at paragraph
25.  Although this comment was made in the context of evidence about an accused
person as opposed to a complainant or victim, the risk identified may operate
not because the jury is improperly prejudiced against the accused, but rather
because they are moved to sympathy towards the victim.  It seems to me unlikely
that a properly-instructed jury would fall into such an error in this case.
The evidence itself does not give rise to anything approaching a rough
equivalency or the equivalent of a rough equivalency in this context, and thus
the tendency to that end is relatively low.

[43]      On balance, I am satisfied that the probative
value of this evidence significantly outweighs any potential it has to work
prejudice, and in the result I am satisfied it is admissible.

[32]

The testimony of the former husbands before the jury was consistent with
their statements, save for the following:

(a)      Mr. Kuraoka described Ms. Kalmring
as a loving, kind, gentle person; they would argue about day-to-day things
like grocery money, or relationship issues.  They married in 1974 not 1973.

(b)      Mr. Marchant said he and Ms. Kalmring
would argue about money once in a while.

(c)      Mr. Kalmring stated he and Ms. Kalmring
were married from 1993 until 2001.

Their testimony with respect to Ms. Kalmring having a
peaceful disposition was not challenged in cross-examination.

[33]

Mr. Wiens accepts that when self-defence is raised in a murder
case, the Crown can tender evidence of the victims peaceful disposition.
However, he says where an accused is not suggesting the victim had a violent
disposition or character, evidence of peaceful disposition can be admitted only
if it has significant or exceptional probative value.  He says that in the
present case the trial judge erred in admitting the evidence because its
probative value was tenuous at best and outweighed by its prejudicial effect,
as it could garner sympathy from the jury.  In advancing his position, Mr. Wiens
submits greater care and caution must be exercised before admitting peaceful-disposition
evidence in what he describes as a simple self-defence case, i.e., one in
which the accused is not alleging that the victim had a violent disposition.  I
do not agree.

[34]

It is settled that it is open to the Crown to lead evidence of a
deceased victims peaceful disposition when that evidence is relevant to the
issue of whether the accused acted in self-defence, e.g., whether the deceased
was the aggressor.  The Crowns ability to lead such evidence is not contingent
upon the accused attacking the deceaseds character.  However, the probative
value of such evidence must outweigh its prejudicial effect:
R. v. Dejong
(1998), 125 C.C.C. (3d) 302 at paras. 49, 77, 79 (B.C.C.A);
R. v. Diu
(2000), 144 C.C.C. (3d) 481 at paras. 49-51 (Ont. C.A.);
R. v. Krasniqi
,
2012 ONCA 561 at paras. 61-63, 291 C.C.C. (3d) 236.

[35]

I reject Mr. Wienss contention that evidence of peaceful
disposition must have significant or exceptional probative value to be
admissible; a proposition for which he cites no direct authority.  The decision
whether to admit evidence of peaceful disposition requires a trial judge to
determine the relevancy of such evidence to the issues raised and, if the
evidence is relevant, to assess whether its probative value outweighs its
prejudicial effect.  It is not a precondition to the making of that assessment that
evidence which is relevant also be significantly or exceptionally
probative.  Rather, the cogency of the evidence is a factor to be weighed in
making that assessment.

[36]

The concept of relevance was discussed in
R. v. Chahley
(1992),
72 C.C.C. (3d) 193 (B.C.C.A.).  In that case, Mr. Justice Wood said (at
204):

Evidence is relevant if it is probative of either a fact in
issue or a fact which itself is probative of a fact in issue.  In
Morris v.
The Queen
, [1983] 2 S.C.R. 190, the Supreme Court of Canada rejected
Wigmores concept of legal relevancy, which requires something more than
merely probative value as a condition of admissibility.  In his dissenting
judgment, with which other members of the court concurred on this point, Lamer,
J. (as he then was) confirmed Thayers analysis which applies principles of
logic and common sense to determine relevance, and which, subject to the
exclusionary rules, admits all evidence logically probative of some matter
required to be proved, reserving for the court only a narrowly defined discretion
to exclude.

Evidence which tends to make the
existence of a fact in issue either more or less probable is logically
probative of that fact:
Regina v. P.(R.)
(1990), 58 C.C.C. (3d) 334
(Ont. H.C.),
Cross on Evidence
(7th ed.), p. 51.

In
R. v. Watson
(1996),
108 C.C.C. (3d) 310 at 323 (Ont. C.A.), Mr. Justice Doherty stated:

Relevance as explained in these
authorities requires a determination of whether as a matter of human experience
and logic the existence of Fact A makes the existence or non-existence of
Fact B more probable than it would be without the existence of Fact A.  If
it does then Fact A is relevant to Fact B.  As long as Fact B is itself a
material fact in issue or is relevant to a material fact in issue in the
litigation then Fact A is relevant and
prima facie
admissible.

[37]

In the case at bar, evidence that in three previous relationships Ms. Kalmring
never displayed violent tendencies towards either her partners or third parties
was relevant to one of the principal issues the jury had to decide, namely,
whether Ms. Kalmring attacked Mr. Wiens with a knife.  Put otherwise,
evidence of Ms. Kalmrings lack of propensity for violence over a 27-year
period was probative of whether on the night in question she had been the
aggressor.  That the last of those relationships ended about ten years before
the events in issue was, in the context of this case, a matter going to the
weight to be given to the evidence, not its admissibility.  Although the Crown
was not aware of precisely what defence evidence would be called, it was
apparent from the outset of the trial that Mr. Wiens would be asserting Ms. Kalmring
came at him with a knife and that he shot her in self-defence.

[38]

Mr. Wiens further submits that while the peaceful disposition
evidence was of minimal probative value, its prejudicial effect was significant
as it was likely to garner sympathy from the jury.  Once again, I disagree.
For the reasons just stated, I am of the view that the evidence was more than
minimally probative.

[39]

With respect to prejudice arising from sympathy, as the trial judge
noted in para. 41 of his ruling, this was far less a concern than it would
have been had the witnesses been the parents of the victim or, I would add, a
person with a recent and close personal relationship with the victim.  It
should be noted that Mr. Kuraokas statement during his examination-in-chief
that Ms. Kalmring was a loving, kind, gentle person was not in his
statement and appears to have been an unprompted and unanticipated comment.  It
should also be noted that immediately after Ms. Kalmrings daughter
testified and shortly before Mr. Kuraoka and the other former husbands
testified, the judge instructed the jurors, as he had prior to any evidence
being called, that they should not be influenced by sympathy for or prejudice
against anyone involved in the case.

[40]

The task of determining whether the probative value of evidence
outweighs its prejudicial effects is an exercise of judicial discretion entitled
to appellate deference:
R. v. Oseguera
, 2014 BCCA 352 at para. 19,
315 C.C.C. (3d) 542;
R. v. McCotter
, 2012 BCCA 54 at para. 50, 287
C.C.C. (3d) 423.  In this case, Mr. Wiens has not been shown that in
exercising that discretion the trial judge made any error in principle or that
his decision to admit the evidence was plainly unreasonable.

[41]

I would not accede to this ground of appeal.

Jury Charge with respect
to the Peaceful-Disposition Evidence

[42]

In his closing submissions to the jury, Mr. Wienss counsel
accepted Ms. Kalmring had been a person who normally had a peaceful
disposition.  He asked the jury to find that on the night in question a
confluence of circumstanceswhat he described as a perfect storm caused her
to act completely out of character.  In advancing that position, counsel
stated, in part:

Through Lynns life she had experienced many difficulties
with a number of failed relationships.  In fact weve heard from a number of
these relationships.  This is not to disrespect her in any way, but as is true
for all of us, our current makeup is a function of our past experience.
We
heard evidence of her peaceful disposition.  We dont dispute this, nor did
Keith when you heard him on the witness stand.
But the factors that led to
the perfect storm
that I will talk about, started long before August
16th, 2011, ladies and gentlemen.  It started with her failed relationships.
Past relationships can scar you forever.  I can certainly identify with this,
and Im sure many of you can.

In the weeks leading up to August 19th [
sic
], 2011,
you heard the evidence about a number of things that were on the mind of the
deceased.  Any single one of us -- any single one of which would cause us all
hardship.  There were multiple things on her mind.  Her son had been charged
with a serious sexual assault in Grande Prairie.  Any mother would be mortified
by that.  She talked about her daughter Brandy and the abortion of her twins.
She talked about her growing older and the fact she didnt like being 55 years
of age.  There was her inability to go back to work because of the enrolment at
the place that she was instructing at, and the fact that Keith was going to
leave her -- perhaps leave her side to journey to Grande Prairie.  Was Keith
going to leave her like everyone else had in her life?  Well never know.
Ladies
and gentlemen, all of these factors, her past relationships, everything that
was on her mind at the time leading up to August 16th, 2011, led to the perfect
storm.

Keith described his wife during these confrontations.  He
described the intensity of these -- of these confrontations, and he was quite
fair when he said, It wasn't just her, I was getting angry too.  She kept
coming into the room, she kept making these allegations.  She kept -- and as
he said, she started to get crazy.  Now, ladies and gentlemen, the only
evidence youve heard about what happened that night is from Keith.  There is
nothing else in the evidence before you that can refute that.  Nothing.

[Emphasis added.]

[43]

Crown counsel, in asking the jury to reject Mr. Wienss version of
what happened relied on the peaceful-disposition evidence.  In part, counsel
stated:

The point is, I suggest, how likely is it that a woman never
known to be violent, and openly expressive of a dislike of weapons, would arm
herself with a knife for an offensive purpose following a fight?  And why would
she advance with that knife towards someone who has a gun in their hand?  It
simply does not make sense.

These men established that for the whole of Lynn Kalmrings
adult life in relationships of some duration she was never violent.  She got
over fights quickly, she didnt stew over things.  She was a person of
peaceable disposition whether sober or even after she had been drinking
alcohol.

Now, it might be suggested that
people change, and to some extent thats true, but I suggest to you, ladies and
gentlemen, that people's character, their essential disposition, the core of
who they are doesnt change over time.  So the person described to you by Keith
Wiens on the fatal evening bears no relationship to the Lynn Kalmring that was
described by others.  The description of her spitting, eyes bulging out,
turning purple is just not true.

[44]

Mr. Wienss objection to the jury charge relates to para. 117 of
the written version of the charge provided to the jury.  That paragraph appears
in the following section of the charge:

a)
Has
the Crown proved beyond a reasonable doubt that Ms. Kalmring did not
assault Mr. Wiens?

[114]    The question is whether Ms. Kalmring
assaulted Mr. Wiens and, if she did, whether Mr. Wiens killed Ms. Kalmring
in repelling that assault.

[115]    Assault includes the application of
force or the threat to apply force.  To put this another way, it is not
necessary that a person apply force to another to constitute an assault; a
threat to apply force made by a person who has the present ability to carry out
the threat is sufficient.  You should consider all the evidence when
determining whether Ms. Kalmring applied force to Mr. Wiens or
threatened to apply force to Mr. Wiens in circumstances in which she had
the present ability to carry out that threat.

[116]    The evidence in relation to this
issue comes from a number of sources.  There is the evidence from Ms. Kalmrings
former spouses.  You will recall that each of them testified that in their
experience with her and whether in the course of their experience with her they
saw her resort to violence.  They all said that from time to time they argued
with Ms. Kalmring during the course of their relationship with her and
they all said that finances was a subject that they argued about, they all said
that she was never violent towards them or anyone else either when the [
sic
]
argued or otherwise.  They said that alcohol did not seem to have a negative
effect on her; both Mr. Kuraoka and Mr. Kalmring said that when she
drank she tended to become happy.  Their collective experience with Ms. Kalmring
was from about 1974 when she married Mr. Kuraoka to 2001 when she
separated from Mr. Kalmring.  Thus their most recent experience with Ms. Kalmring
was 10 years before August 2011.

[117]    The evidence of Ms. Kalmrings
disposition may be used by you in deciding whether the Crown has proved beyond
a reasonable doubt that she did not assault Mr. Wiens.  This evidence and
other evidence in this case, may evoke feelings of sympathy for Ms. Kalmring.
 As I have instructed you already, your decision is not to be based on sympathy
for or prejudice against anyone involved in this case.

[Emphasis added.]

[45]

The trial judge went on to summarize the other evidence in the case, at
the conclusion of which he stated:

[143]    You should consider Mr. Wienss evidence on
this issue in the context of all of the evidence.  If, in the context of all
the evidence, you believe Mr. Wienss evidence on this issue then you will
conclude that the Crown has not disproven this element of the defence of
self-defence beyond a reasonable doubt.  Even if you do not believe Mr. Wiens's
evidence that Ms. Kalmring assaulted him, if his evidence leaves you in a
state of reasonable doubt about whether she did, then you will conclude that
the Crown has not disproven this aspect of the defence of self-defence beyond a
reasonable doubt.  Finally, even if you do not believe Mr. Wienss
evidence on this point and even if his evidence does not leave you in a state
of reasonable doubt about this aspect of the defence of self-defence, you must
still ask yourself whether, on all the other evidence, you are satisfied beyond
a reasonable doubt that Ms. Kalmring did not assault Mr. Wiens.

[144]    If the Crown has proved
beyond a reasonable doubt that Ms. Kalmring did not assault Mr. Wiens
then the defence of self-defence fails.

[46]

In the course of summarizing the Crowns position, the trial judge said:

[200]    Finally, the Crown
argues that from this evidence you should conclude that Ms. Kalmring was
not a violent person, either when drinking or not.  Support for that
proposition comes from the evidence of her former spouses.  In addition the
Crown says that Ms. Kalmring was not angry on the night she was killed.
She was upset to be sure but, at least according to her sister, she was upset
in the sense that her heart was hurting.  Further, the Crown says that from all
of this evidence you can and should conclude that Ms. Kalmring disliked
weapons of all kinds but guns in particular.

[47]

In the course of summarizing Mr. Wienss position, the judge said:

[209]    As I understand the submissions of Mr. McKay on
behalf of Mr. Wiens they are these.  First, he argues there is simply no
reason why Mr. Wiens would shoot Ms. Kalmring other than to defend himself
in precisely the manner he told you.  The evidence supports the conclusion that
theirs was a happy relationship.  Mr. McKay asks rhetorically if money
issues were a concern why it is that Ms. Pertelson seemed unaware of that?
Even if money was a concern it does not begin to explain why Mr. Wiens
would deliberately shoot his spouse.  On the other hand, there are reasons for
why Ms. Kalmring behaved in the manner Mr. Wiens described.  The
reasons can be found in her background, a background that came to the fore with
the prospect of Mr. Wiens travelling to Grand Prairie to work.  Mr. McKay
argues that Ms. Kalmring was fearful of losing her relationship with Mr. Wiens.
The prospect of returning to live with one of her children, an alternative
which she saw as the only realistic short term outcome, was completely
unpalatable to her.  She did not want to start over in another relationship at
her age.

[210]    These concerns were
percolating in her life.   They had a significance informed by her life
experiences.  She had been in past relationships some of which ended sadly from
her point of view.  On top of that she had other issues.  One related to her
work and the fact that the course she hoped to teach was not going to be
offered and another related to her sons legal situation.  This all came to the
fore on August 15 when, after the video game, Mr. Wiens wanted to go to
bed rather than pay the bet, a payment which involved sexual relations with Ms. Kalmring.
This is what caused Ms. Kalmring to react in the manner that Mr. Wiens
said she did.

[48]

Before charging the jury the trial judge provided counsel with a draft
of his proposed instructions for discussion.  As those discussions proceeded,
the draft went through a number of revisions.  The initial draft did not
contain the paragraph which is now impugned.  That paragraph appeared for the
first time in the final draft given to counsel.  The trial judges decision to
include it was not based on any submissions made to him.  Counsel for Mr. Wiens
(who are not counsel on this appeal) had an opportunity to review the final
draft before the jury was instructed and did not object to this paragraph.  Further,
in the post-charge discussions, Mr. Wienss counsel did not object to it.

[49]

Mr. Wiens now contends the charge was deficient.  He says the trial
judge should have instructed the jury to exercise caution in relying on the
peaceful-disposition evidence because people do not always act in a manner
consistent with their past behaviour; in other words, people sometimes act out
of character.  In addition, Mr. Wiens says the jury should have been told
to consider the temporal proximity of the evidence of peaceful disposition to
the events in issue and any differences between the nature of Ms. Kalmrings
past circumstances and her present situation when assessing the weight to be
given the peaceful-disposition evidence.  He submits that in the absence of
such an instruction there is a significant risk that the jury reached its
verdict without scrutinizing the peaceful-disposition evidence.

[50]

In discussing the jury instructions and the peaceful-disposition
evidence, Mr. Wiens cites
R. v. Handy
, 2002 SCC 56 at paras. 31,
35, 39, [2002] 2 S.C.R. 908, and
R. v. Last
, 2009 SCC 45 at para. 40,
[2009] 3 S.C.R. 146, cases which discuss the dangers associated with propensity
reasoning in the context of evidence with respect to the character of the
accused.  He says since it is dangerous to base a finding of guilt on the
character of an accused it is equally dangerous to base a finding of guilt on
the disposition of a victim.

[51]

In considering Mr. Wienss objection to the jury charge it
is important to keep in mind, as discussed in
R. v. Jacquard
, [1997] 1
S.C.R. 314 at para. 32, that an appellate court must take a functional
approach in reviewing a jury charge.  Further, as stated in
Jacquard
at
para. 38,

defence counsels failure to object to the charge says
something about both the overall accuracy of the jury instructions and the seriousness
of the alleged misdirection.  See also:
R. v. Rodgerson
, 2015 SCC 38
at para. 50, [2015] 2 S.C.R. 760;
R. v. Daley
, 2007 SCC 53 at para. 58,
[2007] 3 S.C.R. 523.

[52]

More
recently in
R. v. Alexander
, 2015 BCCA 484, Madam Justice
Stromberg-Stein, succinctly described the approach to be taken in reviewing a
jury charge:

[110]    An appellate court, when reviewing a jury charge,
must consider the alleged error in the context of the charge and the trial as a
whole.  A trial judge is allowed flexibility in instructing the jury.  The
precise words used in the jury charge are a matter of discretion for the trial
judge and will depend on the circumstances of the case. It is the overall
effect of the instructions that matters:
R. v. Araya
, 2015 SCC 11 at para. 39.

[111]    An accused is entitled to a properly instructed
jury, not a perfectly instructed one.  If perfection were the standard, no jury
charge would pass appellate review:
R. v. Jacquard
, [1997] 1 S.C.R. 314
at paras. 1-2.

[112]    It is the trial judges
obligation to properly instruct the jury; however, it is expected that counsel
will assist the trial judge and identify aspects that may be problematic in the
charge.  A failure to object to a jury charge is not determinative; however,
trial counsels position at trial is an important factor to consider when
evaluating complaints raised on appeal:
Jacquard
at paras. 35-38;
R.
v. Purchase
, 2015 BCCA 211 at paras. 3-4.

Also apposite is the judgment of
Mr. Justice Doherty in
R. v. MacKinnon

(1999), 132
C.C.C. (3d) 545 (Ont. C.A.):

[27]      In
Jacquard
, Lamer C.J.C. stressed that a functional approach must be taken
when assessing the adequacy of jury instructions.  I take this to mean that
instructions must be tested against their ability to fulfil the purposes for
which they are given and not by reference to whether any particular approach or
formula has been used.  By the end of the instructions, whatever approach is
used, the jury must understand:

        the factual issues which had to be
resolved;

        the law to be applied to those
issues and the evidence;

        the positions of the parties; and

        the evidence relevant to the
positions taken by the parties on the various issues.

[53]

In my view, having regard to the submissions of counsel and the charge
as a whole, there was no need for the jury to be instructed to exercise special
caution in considering the peaceful-disposition evidence.  Mr. Wiens did
not take issue with the fact that ordinarily Ms. Kalmring was a
non-violent person.  His defence was founded on her having acted completely out
of character on the night in question.  Based on his counsels closing submissions
and the summary of those submissions provided by the trial judge, the jurors
would have been aware of Mr. Wienss position.  More particularly, they
would have been aware that to reject self-defence they had to be satisfied
beyond a reasonable doubt, on all the evidence, that Ms. Kalmring had not
acted in the manner Mr. Wiens described.  The unchallenged evidence of her
peaceful disposition was just one of the pieces of evidence the jurors had to
consider in making that determination.  I am, accordingly, unable to find that Mr. Wiens
was prejudiced by the trial judges failure to instruct the jury to exercise
special caution in considering the peaceful-disposition evidence.

[54]

I would not accede to this ground.

Admissibility of Expert
Evidence

[55]

Mr. Wiens sought to call Murray Charlton to give opinion evidence.
Mr. Charlton had been a member of the RCMP from 1964 to 1977.  In the
1970s he served as a firearms instructor at the RCMP depot in Regina,
Saskatchewan.  Since leaving the RCMP he has been involved in training peace
officers in the use of firearms.  Part of the training he administers involves
placing trainees in stressful situations.  Mr. Charlton had not trained RCMP
ERT members in the handling of firearms, nor had he visited or participated in
training at the RCMP facility in Carleton Place, Ontario.  He did not interview,
test, or otherwise assess Mr. Wiens.

[56]

Mr. Wiens sought to place before the jury Mr. Charltons
opinion in response to the following questions:

1.       Was Mr. Wienss response to
the alleged knife attack reasonable and expected considering his background?

2.       How would Mr. Wienss past
training have affected his reaction?

3.       What is muscle memory in this
context?

4.       What is significant about the
fact of one shot being fired?

5.       In
terms of self-defence, was Mr. Wienss response proportionate?

[57]

A
voir dire
was held to determine the admissibility of Mr. Charltons
evidence.  Mr. Charlton testified on the
voir dire
and a written
report prepared by him was filed as a
voir dire
exhibit.  The opinions
expressed in that report are based on a summary of the facts that is consistent
with Mr. Wienss description of the events on the night in question.  The
report is silent with respect to Mr. Charltons knowledge of the firearms
training Mr. Wiens received.

[58]

The trial judge would not permit Mr. Charlton to express an opinion
on any of the five questions.  On appeal, Mr. Wiens contends the judge
erred in refusing to permit Mr. Charlton to opine on question 4 and, to
the extent it is related, question 2.  He does not challenge the judges refusal
with respect to questions 1, 3, and 5.

[59]

As set out in Mr. Charltons written report, if permitted to
testify before the jury, he would have answered Questions 2 and 4 as follows:

Question 2:

With his past training, it would
be more than reasonable for him to pull the firearm close to his body before
discharging it.  This would have been part of his training for what is call [
sic
]
Close Quarter Drills.  Extending ones [
sic
] firearm out at arms
length when the threat is within 30 inches is not practical with the
possibility of your duty sidearm being pushed aside or grabbed is too real.

Question 4:

With respect to one shot being
fired this is not unusual in that with training, officers at [
sic
]
taught to use deadly force to prevent grievous bodily harm and once any threat
is removed or neutralized, there is no more need to continue firing.

[60]

In his ruling, which is indexed as 2013 BCSC 1579, the trial judge
considered the four criteria set out in
R. v. Mohan
, [1994] 2 S.C.R. 9
for determining the admissibility of opinion evidence, namely:
(a) relevance; (b) necessity in assisting the trier of fact; (c) the
absence of any exclusionary rule; and (d) a properly qualified expert.

[61]

The trial judge held the answers to questions 2 and 4 were inadmissible
for four reasons.  The first was that those answers were only marginally
relevant.  In reaching this conclusion, the judge began by noting that the
events in issue occurred years after Mr. Wiens retired from the RCMP.  He
also noted that although Mr. Charlton was a highly qualified firearms
instructor, he had no knowledge of the ERT firearms training Mr. Wiens
received.  The judge then stated:

[
23]      Mr. Wiens
did not testify about whether he was trained to fire a single shot or fire
multiple shots when faced with a deadly threat.  He merely testified that he
was taught to shoot to kill.  Mr. Charlton testified on the
voir dire
about what
constitutes an acceptable course of fire.  He said that has changed or
evolved over time.  Course of fire involves a number of shots that peace
officers are trained to discharge and where they are trained to hit their
targets.  Initially, they were trained to empty their weapons into the torso of
the threat.  Next, they were taught to fire once at the torso, once at the
head, and once again at the torso.  Mr. Wiens did not testify which of
these approaches he was taught.  Thus, in a general sense, Mr. Charltons
opinion about the significance of Mr. Wiens decision to fire a single
shot at his spouse is of some relevance, but not great relevance.

[24]
In [
R. v. Mohan
, [1994] 2 S.C.R. 9]
, Sopinka [J.] pointed out that
subsumed within the notion of relevance as a criterion for the admission of
expert opinion evidence is the notion of the cost of the admission of such
evidence to the trial process.  In that respect, the criteria of relevance
involves an assessment of the probative value of the evidence and its
potentially prejudicial effect.  While I accept that Mr. Charltons
evidence has some relevance, its probative value is not high for the reasons
indicated.  His evidence has the potential to operate prejudicially.  That is
so, in part, because of his impressive credentials.  Those credentials do not
necessarily translate to the circumstances of this case.  This is the second
overarching objection that the Crown raises.  As Mr. Charlton pointed out,
the training he administered and with which he is familiar is training used by
police officers in the course of their duties as police officers.  He pointed
out that the training is administered to and expected to be utilized by peace
officers who are on duty and sober.  Mr. Wiens was neither.  He was 12
years post-retirement and was not sober at the time of the events in question.
He testified that he did not think he could operate a vehicle legally given the
amount of alcohol he had consumed.  These features, that is, the consumption of
alcohol, the fact that Mr. Wiens was not employed as a police officer at
the time in question, the fact that he was some 11 or 12 years into his
retirement, and the fact that there is no evidence as to the training he
received in terms of course of fire all serve to diminish the probative value
of the evidence.  The prejudicial effect lies in a combination of the
impressive credentials of the witness and the substance of his opinion which
must necessarily be advanced from the perspective of an individual employed as
a peace officer and sober.  These two things in combination serve to tip the
balance in favour of exclusion.

[25]      A further consideration in relation to question 4
involves an assessment of what the opinion is relevant to.  It is not clear to
me whether the opinion is offered to account for the fact that only one shot
was fired, and yet one might expect that faced with a homicidal attack, someone
acting in self-defence would fire repeatedly.  If that is the basis upon which
the evidence is proffered, it has limited value and would not assist the trier
of fact.  I say that because, on the evidence, the wound that Ms. Kalmring
sustained rendered her instantly unconscious and killed her almost instantly.  She
would have dropped to the floor more or less immediately.  That would have been
apparent to anyone, including Mr. Wiens given his proximity to her and
where he knew the bullet had struck her.  Whether his training caused him to
fire only a single shot is something he did not allude to in his evidence. It
seems to me that Mr. Charltons opinion on this point would be of limited
assistance at best.

[28]      The proffered evidence
from Mr. Charlton is evidence which, in my view, should attract a strict
application of the relevance and necessity criterion.  As to the former, I find
the evidence is not particularly probative. I note that relevance in this
context means something more than merely helpful.  As to the latter, it seems
to me that whether a particular response is proportionate in the context of the
fact situation presented by this case is a matter within the knowledge of the
average juror.  In fact, it is a matter which jurors are well suited to assess
based on their life experiences and the application of their common sense.
Finally, there is some risk that given Mr. Charlton's impressive
qualifications, his opinion would be afforded more weight than it warrants in
these circumstances.

[62]

In deciding whether to admit opinion evidence, trial judges exercise a
gatekeeper function.  As those judges are in the best position to make such
determinations, their decisions are entitled to appellate deference.  Apt in that
regard is the following from the judgment of Mr. Justice Mainella in
R.
v. Pearce
, 2014 MBCA 70, 318 C.C.C. (3d) 372, recently cited with approval
by this Court
in R. v. Orr
, 2015 BCCA 88 at para. 65, 18 C.R. (7th)
158:

[74]      Appellate deference
will be afforded to determinations as to the admissibility of expert opinion
evidence.  The balancing of its potential probative value, reliability,
significance to the trial, necessity and its potential prejudicial effect to
the trial process, if admitted, in the context of the particular case does not
involve the application of bright line rules, but instead requires an exercise
of judicial discretion [(
R. v. Abbey
, 2009 ONCA 624, 246 C.C.C. (3d)
301] at para. 79).  Therefore, absent an error in law, a misapprehension
of evidence, a failure to consider relevant evidence or abdication by the trial
judge of his or her gatekeeper function, an appellate court should decline to
interfere with a trial judge's admissibility decision ([
R. v. K.(A.)
(1999), 45 O.R. (3d) 641 (C.A.)] at para. 93; [
R. v. D.D.
, 2000 SCC
43, [2000] 2 S.C.R. 275] at paras. 12-13, 70; [
R. v. J.-L.J.
, 2000
SCC 51, [2000] 2 S.C.R. 600] at para. 61; and
R. v. Woodard (J.)
, 2009
MBCA 42 at para. 14, 240 Man. R. (2d) 24).

[63]

In the present case, Mr. Wiens submits that the trial judge erred
in law because he applied the wrong test in considering whether the probative
value of Mr. Charltons evidence was outweighed by its prejudicial
effects.  He says that because Mr. Charlton was called as a defence
witness, the judge was required to consider whether the prejudicial effect of
his evidence
substantially outweighed
its probative value.  In support
of this argument, Mr. Wiens cites
R. v. Seaboyer
, [1991] 2 S.C.R.
577 at 621;
R. v. Grant,
2015 SCC 9 at para. 44, [2015] 1 S.C.R.
475;
R. v. Bell
(1997), 115 C.C.C. (3d) 107 at para. 28
(N.W.T.C.A.);
R. v. Doodnaught
, 2013 ONSC 4534 at paras. 30-33; and
R. v. Al-Rassi
, 2013 NSSC 211 at para. 24, 331 N.S.R. (2d) 328.
See also:
R. v. M.(B.)
(1998), 130 C.C.C. (3d) 353 at paras. 88-89
(Ont. C.A.).

[64]

In light of the record in this case, it is unnecessary to decide whether
the test for the admission of opinion evidence at the behest of an accused is
different from the test that applies when such evidence is sought to be
tendered by the Crown.

[65]

The first difficulty with Mr. Wienss argument is that the test he
says the trial judge should have applied is not the test he advanced at trial.
At trial he relied on
Mohan
, in which Mr. Justice Sopinka, in
discussing the relevance criterion, stated (at 21) that, Evidence that is
otherwise logically relevant may be excluded on [the cost benefit analysis]
basis, if its probative value is overborne by its prejudicial effect.  At no
point did Mr. Wiens suggest to the trial judge that a different standard
applied when the defence seeks to tender opinion evidence.  Of note, is that
Mohan
is a case in which the Supreme Court of Canada affirmed a trial judges
decision to exclude the evidence of a defence expert.

[66]

The second difficulty with Mr. Wienss argument is that it is
apparent from the trial judges ruling that had he applied the test now being
propounded, he would have reached the same conclusion.  The judge found Mr. Charltons
opinion had some relevance but that it was of limited probative value.  However,
the judge found numerous factors caused the prejudicial effect of Mr. Charltons
opinion evidence to outweigh its probative value including: (a) Mr. Wiens
not having testified he fired a single shot because he had been trained to do
so; (b) Mr. Charltons limited knowledge of the training Mr. Wiens
received; and (c) the events in issue did not involve a sober police
officer acting in the course of his or her duties.  In addition, the trial
judge found Mr. Charltons opinion with respect to only one shot being fired
would not be of assistance to the jury because it would have been apparent to Mr. Wiens
as soon as he fired that single shot, that Ms. Kalmring had been killed.

[67]

In this case, the trial judge exercised his gatekeeper function having
regard to the facts of the case before him.  He was in the best position to
determine whether the jury would be able to reach a proper verdict in the
absence of Mr. Charltons opinion.  While another judge might have
exercised his or her discretion differently, I am unable to say that in making
what amounted to a judgment call, the trial judge committed a reversible error.

[68]

I would not accede to this ground.

Disposition

[69]

I would dismiss this appeal.

The Honourable Mr. Justice Frankel

I AGREE:

The
Honourable Madam Justice D. Smith

I AGREE:

The Honourable Mr. Justice
Savage


COURT
OF APPEAL FOR BRITISH COLUMBIA

Citation:

Jacobs
  v. Yehia

2016 BCCA
  38

Date: 20160127

Docket: CA41892

Between:

Paul Jacobs, 657947 B.C. Ltd. and
Columbia Cottage Ltd.

Respondents

(Plaintiffs)

And

Sam Yehia, The Cambie Malones
Corporation, Cambie Holdings
(Vancouver) Corp., 494989 B.C. Ltd., Cambie Holdings (Nanaimo) Corp.,
0828508 B.C. Ltd., Esquimalt Holdings Corp., and 0790012 B.C. Ltd.

Appellants

(Defendants)

Before:

The
  Honourable Mr. Justice Chiasson

The
  Honourable Mr. Justice Frankel

The
  Honourable Mr. Justice Fitch

On appeal from:  Orders of the Supreme Court of British
Columbia,
dated May 12, 2014 (
Jacobs v. Yehia
, 2014 BCSC 845);
dated February 24, 2015 (
Jacobs v. Yehia
, 2015 BCSC 267); and
dated February 25, 2015 (
Jacobs v. Yehia
, 2015 BCSC 282)
(Vancouver Registry 106849).

Counsel for
  the Appellants:

T.D. Goepel and M.B. Stainsby

Counsel for
  the Respondents:

J.D. Vilvang, Q.C.

Place and
  Date of Hearing:

Vancouver, British Columbia

October 29, 2015

Place and
  Date of Judgment:

Vancouver, British Columbia

January 27, 2016

Written Reasons by:

The Honourable Mr. Justice Chiasson

Concurred in by:

The Honourable Mr. Justice Frankel

The Honourable Mr. Justice Fitch

Summary:

Through a private company, in November 2002 Mr. Jacobs
loaned money to Mr. Yehia.  The parties anticipated that the loan would be
converted into equity in companies owned by Mr. Yehia, but they were
unable to agree on the basis for valuing the equity contribution and other
terms of the conversion.  The loans bore interest at 12% which Mr. Yehia
paid until September 2003. He paid no interest subsequently.  In February 2005,
the parties entered into two agreements.  One addressed Mr. Jacobs
participation in Mr. Yehias companies; the other dealt with the loan and
stated that Mr. Yehia was not liable for it.  In October 2009, the parties
entered two additional agreements.  The 2002 loan agreement was renewed.
Mr. Yehia terminated the relationship between the parties and repaid the
loan in July 2010.  The trial judge held that the February 2005 agreements
failed insofar as they dealt with Mr. Jacobs acquiring an interest in the
companies, but that they extinguished the loan obligation.  She concluded that
the October 2009 agreements renewed Mr. Yehias liability for the loan and
interest.  She held that no interest was payable between September 2002 and
February 2005 by reason of the February 2005 agreements, but that interest was
payable thereafter by reason of the October 2009 agreements.  She found that
Mr. Yehia was unjustly enriched by having use of the loan proceeds with no
juristic reason for doing so.  Held: appeal allowed.  The February 2005
agreements were unenforceable.  Mr. Yehias obligation to pay interest was
not extinguished.  There was no unjust enrichment because Mr. Yehia was
entitled contractually to use the loan proceeds with a concomitant contractual
obligation to pay interest.  Other subsidiary issues also are addressed.

Reasons for Judgment of the Honourable
Mr. Justice Chiasson:

Introduction

[1]

This appeal
considers the implications of a course of dealings between parties on their
contractual rights and an award of damages for unjust enrichment arising out of
the course of dealings.

Background

[2]

The corporate appellants are owned and controlled by the personal
appellant, Mr. Yehia.  They are known as the Cambie Malone Group,
through which he operated a number of restaurants and bar facilities.  The
corporate respondents are owned and controlled by the personal respondent, Mr. Jacobs.

[3]

The appellant and
the respondent met in October 2002.  The judge described their circumstances at
that time:

[26]      Throughout October and early November 2002, Mr. Jacobs
toured the Cambie Malone Group properties at Mr. Yehias invitation.
Amongst others, he met senior staff members and the businesses bank managers.
Mr. Yehia told Mr. Jacobs about the businesses and described the
existing financing arrangements.  He also told him about four appraisals
commissioned in September, 2002 for purposes of obtaining bank financing for
planned remodelling, development and expansion of the properties and businesses
(the Appraisals).

[27]      Messrs. Jacobs
and Yehia discussed many ideas of possible mutual benefit.  From the outset
words like partnership and equity stake were bandied about.  For example,
in an October 19, 2002 email Mr. Jacobs proposed that he loan up to
$1 million to Mr. Yehia and his companies with an option to convert
the loans to an equity stake, subject to negotiation and due diligence.  He stated
the equity participation would be subject to a shareholder agreement, a
buy-sell mechanism and annual dividends, and described his prospective role as
an investor partner, with a broad base of general day to day duties.  He
further proposed that these duties be discharged through Columbia Cottages Ltd.
and compensated at a rate of $60,000 per annum, plus GST and expenses.

[28]      Mr. Yehia
responded to Mr. Jacobs email with a counter-proposal.  In an October 23,
2002 email he stated his wife was  encouraging us to try working together
before committing to a partnership.  He then proposed that in the spirit of
getting this potential partnership underway Mr. Jacobs advance a
$200,000 promissory note to the Cambie Group by November 7, 2002, which
loan would earn 12 per cent interest annually, be paid at a rate of $2,000
monthly, mature in five years and be personally secured by Mr. Yehia.

[29]      Mr. Yehia
went on to propose that Mr. Jacobs would have the option to convert the
loan and invest an additional $800,000 into the Cambie Group in equity or debt
by May 7, 2003, subject to negotiating a mutually acceptable shareholder
agreement and on mutually acceptable terms.  He also stated the Cambie Group
would retain Mr. Jacobs to assist and participate in expansion of the
existing properties for a retainer fee of $3,000 per month.

[30]      Shortly
after this exchange, Mr. Jacobs and Mr. Yehia agreed that Mr. Jacobs
would advance funds to Mr. Yehia for investment in the Cambie Malone
Group.  They also agreed to a six-month honeymoon period in which the
possibility of a long-term relationship would be explored and interest would be
paid on the loans (the November 2002 Loan Agreement).

[31]      On
November 8, 2002 Mr. Jacobs advanced $200,000 to Mr. Yehia through
Columbia Cottage Ltd.  The loan was secured by a promissory note dated November 4,
2002 and signed by both parties.

[4]

The judge
described further developments:

[33]      At
approximately the same time he made the $200,000 advance Mr. Jacobs began
to work as a marketing and business strategy consultant for the Cambie Malone
Group.  A written agreement in this regard was not signed, nor even proposed.
At Mr. Yehias suggestion Mr. Jacobs incorporated 657947 BC Limited
(657).  He invoiced Mr. Yehias management company for his services and
expenses through 657 (the Oral Management Consultancy Agreement).

[35]      On
January 27, 2003 Mr. Jacobs advanced a second loan of $500,000 to Mr. Yehia
through Columbia Cottage Ltd.  Like the first loan, the second was secured by a
promissory note.

[5]

Both promissory
notes obliged Mr. Yehia to pay the money advanced plus 12% interest to the
respondent Columbia Cottage Ltd.

[6]

Mr. Yehia deposited the funds into his personal account and
advanced them to the Cambie Malone Group as shareholders loans.  The Cambie
Malone Group did not record a loan from Mr. Jacobs or Columbia Cottage
Ltd.

[7]

Mr. Jacobs
incorporated the respondent, 657947 B.C. Ltd., which invoiced the Cambie Malone
Group for consulting services provided to it by Mr. Jacobs.  The judge
found that it was agreed that the consulting services were to be provided for
$3,000 per month, plus expenses.  In fact, the Cambie Malone Group was invoiced
for and paid more than $3,000 per month.

[8]

The judge
described ongoing discussions between Messrs. Jacobs and Yehia:

[48]      As
their discussions progressed Messrs. Jacobs and Yehia agreed that Mr. Jacobs
loans would be converted to equity and they would operate the Cambie Malone
Group businesses as partners.  The conversion would be achieved by Mr. Jacobs
receiving shares in the companies and both parties signing a shareholder
agreement.  The terms of the shareholder agreement would address matters such
as dividend rights, corporate governance and dispute resolution.  The
percentage of Mr. Jacobs equity interest would be based on the as is
values of the Cambie Malone Group properties in the Appraisals.

[49]      Unfortunately,
although Messrs. Jacobs and Yehia agreed on the general concept of
converting the loans to equity they had quite different ideas about a key
element of the arrangement.  In particular, they did not share a common
understanding of the as is values in the Appraisals and thus the percentage
of equity to which Mr. Jacobs would be entitled.  Indeed, as the trial
progressed it became apparent that Mr. Jacobs did not fully understand the
nature of the as is values in the Appraisals, either in his discussions with Mr. Yehia
or when he was testifying.  On the contrary, I find that Mr. Jacobs
misunderstood the meaning and implications of the Appraisals on this centrally
important point.

[9]

After Mr. Jacobs
testified at trial, his counsel made an admission on his behalf that resiled from
Mr. Jacobs valuation position.  The judge observed:

[60]      It
was sensible for Mr. Jacobs and his counsel to make this admission.  The
admission differed considerably, however, from Mr. Jacobs testimony about
his understanding of the as is values in the Appraisals.  It also differed
from his written and oral communications to Mr. Yehia on this issue.  In
those communications he rejected the notion that the Residual Values in the
Cambie, Malones and Nanaimo Appraisals corresponded to their as is values
for purposes of establishing his equity share.

[65]      Regardless
of the explanation, however, Mr. Jacobs pro‑rating approach to
determining as is values was misconceived and unjustified.  It was not based
on the values in the Appraisals, which included assumptions as to proposed
remodelling.  In contrast Mr. Yehias approach was realistic and based on
the Appraisals.  This was the method the parties identified for establishing Mr. Jacobs
equity entitlement.

[10]

The judge noted
that the practical effect of the different approaches was significant (at para. 67).
On Mr. Yehias calculation, Mr. Jacobs equity interest would have
been 10‑12%.  Mr. Jacobs approach yielded an interest of 34‑35%.

[11]

The parties agreed that Mr. Yehia paid $70,633 in interest on the
loans until he stopped paying sometime between July and September of 2003 (at
para. 72).  The judge concluded that Mr. Yehia stopped paying
interest  specifically because he and Mr. Jacobs agreed the loans would
be converted to equity and they would operate as partners (at para. 76).

[12]

On January 27,
2004, Mr. Jacobs loaned an additional $267,000 to Mr. Yehia.  No
promissory note was executed and there were no express terms as to interest or
repayment.  It is not clear whether the loan was made by Mr. Jacobs or by
Columbia Cottage Ltd.  No interest was paid on this loan.

[13]

Throughout 2004,
Messrs. Jacobs and Yehia exchanged correspondence dealing with Mr. Jacobs
investing in the Cambie Malone Group.  They were not in agreement on a number
of points.  Mr. Jacobs did not agree on the valuation approach to his
potential equity investment being taken by Mr. Yehia or the approach being
taken to value his consultancy services.  He also addressed a number of other
outstanding issues.

[14]

The parties met in
January 2005 and on February 1, 2005 they signed two letters Shareholders
Agreement in the Cambie Group of Companies and Investing in the Cambie Group
of Companies.  These are described as the February 2005 Agreement.

[15]

The Shareholders
Agreement letter confirmed Mr. Jacobs participation as a partner in the
Cambie Malone Group and added:

To
provide clarity and avoid any confusion in the future, we have agreed that a
shareholders agreement outlining the interests and rights for both Paul Jacobs
and Sam Yehianeeds to be drawn and executed.

It also was
suggested that a professional(s) be retained to assist us in the
reconciliation of all of the points which would be included in the shareholders
agreement.

[16]

The Investing
letter recited the history of the loans and promissory notes and stated that in
July 2003, Mr. Jacobs had agreed to convert all of the promissory notes
into an equity position in the Cambie Malone Group.  It continued:

By
executing below you acknowledge that all of the promissory notes which were
advanced to me, which notes suggested a personal obligation owed by me to you,
are null and void and that I am not personally liable for the repayment to you
of any amounts on account of such notes.

[17]

Professionals were
not retained to assist in resolving outstanding issues and they were not
resolved.

[18]

The judge
addressed the February 2005 Agreement stating:

[263]    As
the February 2005 Agreement indicates, the parties agreed to agree on
conversion of the loans as part of the intended partnership.  The proposed
conversion was, however, on unspecified terms, at an unspecified time, in an
unspecified way.  It is trite law that an agreement to agree does not amount to
an enforceable contract, whether in original form or by way of later amendment.

[266]    I am
satisfied, however, that the November 2002 Loan Agreement was terminated by the
February 2005 Agreement.  When it was executed, the parties agreed Mr. Yehia
was no longer responsible to repay the $967,000 advanced by Mr. Jacobs in
2002, 2003 and 2004.  In these circumstances, an essential element of a loan
contract was removed: liability on the borrowers part for return of the
principal with accrued interest (see
Lee
, paras. 9‑10).  In
consequence, by mutual agreement, the November 2002 Loan Agreement came to an
end when the February 2005 Agreement was executed.

[268]    As
events unfolded, Mr. Jacobs expectation of partnership did not come to
fruition.  In these circumstances, Mr. Yehia remained obliged to pay
interest under the November 2002 Loan Agreement unless and until it was
terminated.  That did not occur until February, 2005.

[19]

On October 23,
2009, the parties executed two further agreements: the Loan Agreement and the
Management Services Agreement.  The Loan Agreement was between Messrs. Yehia
and Jacobs.  It provided in part:

WHEREAS
, IN SEPTEMBER OF 2002 AN AGREEMENT
WAS ENTERED INTO BY THE PARTIES WHEREIN THE SECOND PARTY DID LEND OR MAKE
AVAILABLE THE USE OF NINE HUNDRED SIXTY SEVEN THOUSAND DOLLARS ($967,000) TO OR
BY THE FIRST PARTY (HEREINAFTER THE INVESTMENT);

AND WHEREAS
SUCH AGREEMENT, HAVING BEEN RELIED UPON BY THE PARTIES OVER THE COURSE OF THE
SUBSEQUENT SEVEN (7) YEARS, REQUIRES A RENEWAL OF THE AGREEMENT IN ORDER TO
FACILITATE THE PARTIES GOING FORWARD;

THE PARTIES
HERETO DO ENTER INTO AN AGREEMENT, INTENDING BY SO DOING, TO SUPPLANT ANY AND
ALL PREVIOUS AGREEMENTS BETWEEN THE PARTIES WITH RESPECT TO THE ABOVE MENTIONED
LOAN AMOUNT;

THE PARTIES AGREE THAT:

1.
Paul Jacobs, the Lender has lent to
Sam Yehia, the Borrower nine hundred sixty-seven thousand dollars ($967,000) in
good Canadian currency;

2.
The Borrower will provide the Lender
with a personal guarantee for the entire amount owing under this agreement;

6.
The term of this agreement shall renew automatically in
one (1) year increments at the end of the year or the date on which the loan is
paid in full;

This
agreement supplants and is paramount to any precedent agreement. Where any
correspondence, contract or other agreement of any kind whatsoever conflicts
with this agreement it is agreed by the parties that this agreement has
paramountcy.

By signing below each of the parties
attests to the fact that they have been informed of their right to independent
legal advice and independent accounting advice and that this agreement is
executed in full knowledge of the importance of seeking such independent
counsel and under no duress or misconception about the partys rights at law
whatsoever.

There was no
provision for interest.  Mr. Jacobs did not obtain legal advice.

[20]

The Management
Services Agreement, which was between the respondent 657947 B.C. Ltd. and the
Cambie Malones Corporation dealt with aspects of the consultancy arrangement
and included the following:

9.   Upon the termination
of this agreement, the Company will:

a)   pay
out the personal loan, and any associated interest, made by Mr. Paul
Jacobs, Principal of the Service Provider, to Mr. Sam Yehia, Principal of
the Company.  The original amount of the principal outstanding of such loan was
of September 2002 was CDN $967,000.

[21]

On July 1,
2010, Mr. Jacobs was advised by Mr. Yehia that he had decided to pay
out Mr. Jacobs.  Shortly thereafter, notice to terminate the October 2009
Agreements was given.  The judge found that on July 30, 2010, Mr. Yehia
paid $967,000 to Mr. Jacobs.

[22]

The respondents
sued.  They asserted that the October 2009 Loan Agreement was unconscionable
and sought rescission.  They sought a declaration that they held an equitable
interest in the form of a trust in the Cambie Malone Group and a certificate of
pending litigation (CPL) against land owned by the Group.  Damages for breach
of contract also were claimed.  Alternatively, a declaration of partnership was
sought.  The respondents asserted that the appellants were unjustly enriched.

[23]

The appellants
contested all of the assertions of the respondents and counterclaimed for a
$45,000 overpayment of the $967,000 loan.

Trial
Judgment

[24]

The trial was
bifurcated.  The present appeal concerns only liability.  The judge observed:

[3]
The question at the heart of the case is whether Mr. Jacobs was right
about the nature of the business relationship and, if not, whether Mr. Yehia
was unjustly enriched by what Mr. Jacobs did for him.

She then set out the issues for
determination.

1.         Were Messrs. Jacobs
and Yehia partners?

2.         How is the November 2002
Loan Agreement to be construed and did the defendants breach it by failing to
pay interest?

3.         If the November 2002 Loan
Agreement was breached, is any part of the claim for damages statute barred?

4.         How is the Oral Management
Consultancy Agreement to be construed?

5.         How are the October 2009
Agreements to be construed and were they unconscionable?

6.         Did Mr. Yehia
repudiate the October 2009 Agreements?

7.         If Messrs. Jacobs and
Yehia were not partners, was Mr. Yehia unjustly enriched and, if so, how?

8.         Is any of the relief sought
by the plaintiffs precluded by an equitable doctrine?

9.         If the plaintiffs are
entitled to a remedy, what remedy is appropriate?

10.       Are
the defendants entitled to a remedy and, if so, what remedy is appropriate?

[25]

Not all of the
issues are relevant to this appeal.  I summarize the judges conclusions with
respect to those that are relevant.

[26]

The judge
concluded that Messrs. Jacobs and Yehia were not partners.  She held that Mr. Yehia
was in breach of the 2002 Loan Agreement by failing to pay interest from
September 2003 to February 2005.  The October 2009 Agreements were not
unconscionable and were not repudiated by Mr. Yehia.  Mr. Yehia was
unjustly enriched.  She held that the respondents are entitled to judgment for
unpaid interest and a declaration the appellants have been enriched unjustly
from February 2005 to October 2009.  Compensation will be calculated based on
11.73% of the increase in the net equity of the Cambie Malone Group from
February 2005 to October 2009.

[27]

The judge also
awarded 657947 B.C. Ltd. $50,064 for unpaid GST and held that the appellants
were entitled to a $45,000 set‑off.  In a separate order the judge
refused to order the cancellation of the certificate of pending litigation.

[28]

I review these
conclusions in a little more detail.

[29]

The judges
conclusion, that there was no partnership, was based on her analysis of the
course of dealings between them.  She stated that Messrs. Jacobs and
Yehia did not proceed beyond the intended partners stage in their business
relationship (at para. 243) and added:

[245]     at
a minimum, until the parties ownership interests were determined or
determinable and basic governance agreed upon the joint enterprise could not
and did not commence.

[246]
I am not persuaded there was a meeting of minds on the shared ownership issue,
nor on an effective mechanism for its determination.  On the contrary,
Messrs. Jacobs and Yehia held distinctly different views on this key
element of the intended partnership.  In particular, they disagreed on the as
is values in the Appraisals and thus on the formula for calculating their
respective equity entitlement.

[30]

The judge held
that the entire advance of $967,000 was covered by the 2002 Loan Agreement and
that it carried interest at 12%.  She rejected the appellants contention that
interest was waived and held that it was payable until the February 2005
Agreement, which terminated the 2002 Loan Agreement.

[31]

The judge also
held that the 2005 Agreement acknowledged the debt and the respondents claim
was not statute barred.

[32]

The judge rejected
the respondents contention that the October 2009 Agreements failed for lack of
certainty and consideration or were unconscionable.  After examining a number
of troublesome provisions, she found that I am able objectively to discern the
meaning of its essential terms.  The judge rejected the appellants submission
that:

[312]
the October 2009 Agreements clarified, confirmed or otherwise impacted the
parties
past
relationship or obligations.  In particular, I reject the
submission that the October 2009 Agreements confirmed Mr. Jacobs
had
been solely
a lender and a consultant in so far as it suggests, ex post
facto, that he was a lender continuously from 2002 to 2009.  He was not, and
the parties did not agree that he was.

[33]

She continued:

[313]    I
find the October 2009 Agreements, considered as a whole and in context,
expressed a meeting of the minds on the way forward given what had transpired
in the past, regardless of how the past was characterised.  The opening recital
of the Management Services Agreement referenced the past relationship and a wish
to express how the relationship had been operative, but failed to do so.  On
the contrary, the terms agreed upon thereafter concern only the future
relationship and are unrelated on their face to the past relationship or its
characterisation.  The same is true of the Loan Agreement, which referenced the
original loan because it was being renewed.

[314]    The
Loan Agreement did not clarify or alter the past effect of the November 2002
Loan Agreement, nor did it purport to do so.  Rather, it recorded the fact that
Mr. Jacobs had previously loaned $967,000 to Mr. Yehia and a renewal
was required for the business relationship to go forward.  In so doing, it
expressed a shared intention to supplant any and all previous agreements with
the Loan Agreement.  It did not, however, cancel any prior unmet obligations
(such as liability for unpaid interest) or purport retroactively to extend the
life of the November 2002 Loan Agreement over the pre‑renewal period.

[317]    Taking
into account the plain and ordinary meaning of the words in the October 2009
Agreements in the context of the contract as a whole and the surrounding
circumstances, I find the October 2009 Agreements renewed the November 2002
Loan Agreement and replaced the existing Oral Management Consultancy
Agreement.  When read as a whole, they contain all the essential elements of a
loan agreement.  They also contain all the essential elements of a management
services agreement.

[318]    As
the plaintiffs note, the October 2009 Agreements do not define the loan amount
outstanding as of the date of their execution.  The Loan Agreement does,
however, renew the November 2002 Loan Agreement (recitals, para. 1) and
thus resume liability for the amount owed thereunder after an interruption.  Accordingly,
I find the October 2009 Agreements established an effective mechanism for
determination of the amount of the renewed loan.

[319]    Application
of the established mechanism is straightforward. The November 2002 Loan
Agreement encompassed a total principal sum of $967,000 advanced in three
tranches, plus annual interest at a rate of 12 per cent (see also Management
Services Agreement, para. 9 (a)).  The outstanding principal was
reduced by $45,000 in May 2004 and interest was paid monthly until
approximately September 2003.  Thereafter, interest accrued until February
2005, when the November 2002 Loan Agreement was terminated.

[34]

The judge
concluded that the parties intended to renew liability for both the principal
of the loan and interest at 12%.

[35]

After reviewing
the relative positions of the parties, the judge concluded that the October
2009 Agreements were not unconscionable.  She also assessed the conduct of Mr. Yehia
and concluded that he did not evidence an intention not to be bound by the agreements,
that is, he did not repudiate them.

[36]

The judge addressed
unjust enrichment as follows:

[355]    I
find the defendants were enriched by Mr. Jacobs $967,000 investment.  The
investment funds were used to operate, renovate and develop the Cambie Malone Group
properties and businesses.  I also find Mr. Jacobs was correspondingly
deprived.

[356]    There
is a causal link between the contribution and the enrichment.  The causal link
was the defendants access to and use of the investment funds.

[357]    As
previously noted, Mr. Yehia needed substantial cash for planned
remodelling, development and expansion of the Cambie Malone Group properties
and businesses.  Bank financing was not, however, readily available for these
purposes.  In November 2002, Mr. Yehia found an alternate source of
financing: Mr. Jacobs.  From that point forward, he had access to the
needed funds.

[358]    Mr. Jacobs
funds allowed Mr. Yehia to convert his plans into reality. Combined with
the properties and businesses in their as is state, they jointly contributed
to the increased value of the Cambie Malone Group over time.

[37]

She rejected
unjust enrichment as it pertained to Mr. Jacobs consultancy services
because there were consultancy contracts in place.  The judge continued:

[362]    Between
November 2002 and February 2005 the defendants also accessed and used the
$967,000 pursuant to a valid and enforceable contract: the November 2002 Loan
Agreement.  The same is true of the period after the October 2009 Agreements.  Between
February 2005 and October 2009, however, there was no such contract in place
because Mr. Yehia persuaded Mr. Jacobs they were partners completely.
 Although naïve, this belief was held in good faith and was based on the
cumulative effect of Mr. Yehias conduct and representations.

[38]

The judge
addressed the basis for calculating compensation:

[364]    Based
on their history and Mr. Yehias representations, between February 2005
and October 2009 Mr. Jacobs reasonably expected to share in the profits of
the Cambie Malone Group if he left the $967,000 investment, Second Mortgage and
SBIL loan guarantee with Mr. Yehia.  He did so.  The profits he expected
to share in were the increase in net equity of the Cambie Malone Group, including
any increase in land values.  They were to be calculated taking into account
any difference between the fair market value of his services and those of Mr. Yehia.

[365]    Mr. Jacobs
also reasonably expected that his share entitlement would be a relative
percentage of the Cambie Malone Groups as is value, as outlined in the
Appraisals.  For purposes of this unjust enrichment analysis, I accept as
accurate Mr. Yehias repeated assertions that it was reasonable for Mr. Jacobs
to expect to receive 11.73 per cent of the net equity in the Cambie Malone
Group.

[366]    The
defendants have failed to show a reason it would be just for them to retain the
benefits from February 2005 to October 2009.  Mr. Yehia had no such
reasonable expectation.

[367]    In
reaching the foregoing conclusion I have considered the parties entire course
of dealings.  I find that Mr. Yehia consciously and deliberately strung Mr. Jacobs
along regarding his intentions and the nature of their relationship.  In
particular, he persuaded Mr. Jacobs they were partners in order to retain
access to and use of his $967,000 for the benefit of the Cambie Malone Group.  In
so doing, he failed to deal with Mr. Jacobs with commercial good
conscience by rebuffing his attempts to resolve the partnership impasse while
simultaneously paying no interest on the $967,000, renouncing liability for its
repayment and purporting to erode Mr. Jacobs equity entitlement.

[368]    All
things considered, I conclude it would not be just to permit the defendants to
retain the benefits so conferred.

Discussion

Effect of the February
2005 Agreements

[39]

The judge and the parties proceeded on the basis that the February 2005
Agreement was comprised of both the Shareholders Agreement letter and the
Investing letter.  Indeed they both address Mr. Jacobs position as an
investor and the conversion of his loans into equity in the Cambie Malone
Group.

[40]

The judge held, at para. 263, that the February 2005 Agreement
indicates, the parties agreed to agree on conversion of the loans as part of
the intended partnership.  She noted that the terms for doing so were not
specified and that an agreement to agree does not amount to an enforceable
contract.  At para. 266, she held that the November 2002 Loan Agreement
was terminated by the February 2005 Agreement.  In my view, that cannot be so.

[41]

The judge stated
that in February 2005 the parties agreed that Mr. Yehia was no longer
responsible to repay the $967,000 advanced by Mr. Jacobs, but that
agreement was premised on conversion of this money into equity in the Cambie
Malone Group.  It was not a stand-alone agreement.  The basis for the
conversion was not agreed.  Essentially, there was a failure of consideration.  In
my view, the February 2005 Agreement was not an enforceable agreement.

[42]

It follows that Mr. Yehia
is liable for payment of interest to Columbia Cottage Ltd. at 12% per annum
from the date of advancement of funds to the date of repayment, subject only to
consideration of the provisions of the October 2009 Agreements to which I now
turn.

The October 2009 Agreements

[43]

I agree with many
of the judges conclusions regarding the October 2009 Agreements and with her
concerns about its shortcomings.  The critical issue is the effect of the
October 2009 Agreements on the November 2002 Loan Agreement.  The appellants
assert it was supplanted to the extent that no obligations derived from it
survived.  In my view, this does not take adequate account of the factual
matrix or the language of the October 2009 Agreements.

[44]

I agree with the
judges conclusion that:

[313]    I
find the October 2009 Agreements, considered as a whole and in context,
expressed a meeting of the minds on the way forward given what had transpired
in the past, regardless of how the past was characterised.  The opening recital
of the Management Services Agreement referenced the past relationship and a wish
to express how the relationship had been operative, but failed to do so.  On
the contrary, the terms agreed upon thereafter concern only the future
relationship and are unrelated on their face to the past relationship or its
characterisation.  The same is true of the Loan Agreement, which referenced the
original loan because it was being renewed.

[45]

These agreements
were entered into to resolve many years of disagreement and uncertainty.  This
history included the February 2005 Agreements by which the parties purported to
relieve Mr. Yehia from any obligation to repay the $967,000 loan on the
basis that the money was invested in the Cambie Group of Companies for equity
participation.

[46]

The October 2009 Loan
Agreement begins by referring to the 2002 Loan Agreement.  It states, perhaps
curiously, that the parties had relied on that agreement for seven years and
that the agreement requires a renewal.  The renewal was to supplant all
previous agreements; that is, to supersede and replace them (
Concise
Oxford English Dictionary
, 11th ed. (Oxford: Oxford University Press,
2004)).

[47]

The October 2009
Management Services Agreement set out the basis on which the loan was to be
paid out.  On termination of that agreement The Cambie Malones Corporation
would repay the loan and any associated interest.  Reference was made to the
amount of the indebtedness as of 2002.

[48]

It is apparent
immediately that the October 2009 Agreements took off the table any
relationship between the loan and an equity investment by Mr. Jacobs.  It
also is apparent that the loan addressed in the Agreements was linked to the
November 2002 Loan Agreement and to interest payable on that loan.

[49]

Although it is
somewhat troublesome, the legal interest of Columbia Cottage Ltd., which
advanced at least the first two tranches of the loan and which was the
beneficiary of two promissory notes, appears to have been ignored at the time
of the October 2009 Agreements.  I conclude that the parties intended that the
loan would be treated as directly between Messrs. Yehia and Jacobs.

[50]

I see no basis in
the factual matrix or the language of the October 2009 Agreements to suggest
that Mr. Jacobs was forgiving interest that had accrued or forgoing
interest for the future.  There is no suggestion that an equity position would
derive from the loan.  The monthly fee payable for Mr. Jacobs services is
not linked to interest on the loan.  There had been considerable disagreement
over the years on the value of those services.

[51]

As of October 2009,
the November 2002 Loan Agreement was extant.  It provided for interest at 12%
payable annually.  There also were terms of repayment.  On the evidence, the
loan was advanced in the context of the expectation that the parties would
agree to terms on which the loan would be converted into equity.

[52]

The October 2009
Loan Agreement superseded and replaced the November 2002 Loan Agreement.  It no
longer governed the relationship between the parties.  The issue becomes the
proper construction of the October 2009 Agreements.

[53]

The October 2009
Agreements dealt with the loan strictly as a loan and provided for its
repayment.  Interest was included although a rate was not specified.

[54]

In my view, the
effect of the October 2009 Agreements was to continue the November 2002 loan
bearing interest at 12% payable on the termination of the Management Services Agreement.
 To interpret the October 2009 Agreements as absolving Mr. Yehia of the
obligation to pay interest on a $967,000 loan makes no business sense in the
circumstances of this case.  The 2009 Loan Agreement provides that the loan is
to Mr. Yehia and that he will guarantee its repayment.  In addition, the Management
Services Agreement provides that The Cambie Malones Corporation will pay out the
personal loan, and any associated interest.

[55]

The loan was repaid on July 30, 2010.  Mr. Yehia is liable for
interest at 12% from the date money was advanced to July 30, 2010 as
adjusted by interest and principal previously paid.  The Cambie Malones
Corporation also is liable for this amount.

Unjust Enrichment

[56]

The judge rejected
unjust enrichment for the periods November 2002 to February 2005 and after
October 2009 because there was a contractual basis on which Mr. Yehia
retained the $967,000.  She held there was no such basis between February 2005
and October 2009 because the February 2005 Agreement terminated the 2002 Loan
Agreement; there then was no juristic reason for Mr. Yehias retention of
the benefit he derived from the loan funds.

[57]

I have concluded that the February 2005 Agreement did not terminate the
2002 Loan Agreement.  It remained extant.  It continued as a juristic reason
for Mr. Yehias retention of the benefits he derived from the loan funds.

[58]

Until there was
agreement on the basis on which the loans would be converted to equity, they
remained loans to Mr. Yehia.  He was enriched to the extent he did not pay
interest and Mr. Jacobs was deprived of that interest, but Mr. Jacobs
had an enforceable contractual right to recover his loss.  Mr. Yehias use
of the funds in the business did not give Mr. Jacobs an interest in
whatever benefits may have accrued to the Cambie Malone Group.  He did not have
an interest in the business because the parties did not agree on the terms for
him to do so.

$45,000 Overpayment

[59]

It is common
ground that Mr. Yehia overpaid $45,000 on the loan.  He and The Cambie
Malones Corporation are entitled to a set‑off in that amount.

GST

[60]

The October 2009 Management
Services Agreement provided for the payment by The Cambie Malones Corporation
of GST in addition to the monthly fee.  Previous agreements apparently did
not.  The Cambie Malone Group was invoiced for fees only and paid the invoices.

[61]

I agree with the appellants that 657947 B.C. Ltd. is not entitled to
payment of GST for the time prior to the 2009 Management Services Agreement.

Certificate of Pending Litigation

[62]

The judge declined
to order the cancellation of the CPL on the basis that there was no hardship on
the appellant and because the CPL related to the award of damages for unjust
enrichment.  In my view, that award is not sustainable.  The respondent Mr. Jacobs
is entitled to an award of interest on the loan.  No interest in land is
involved.  The CPL should be cancelled.

Conclusion

[63]

The appellants
seek an order setting aside paras. 1‑6 of the judges order and
varying paras. 7 and 8 of her order to provide for judgment rather
than set‑off.  I address these provisions.

[64]

I would vary para. 1
to provide that Mr. Yehia breached the October 2009 Agreements by failing
to pay interest that was due and owing from the date of advancement of funds to
July 30, 2010.

[65]

I would vary para. 2
to provide that Mr. Jacobs is entitled to an accounting for unpaid
interest from the date funds were advanced to July 30, 2010 plus court
ordered interest as against Mr. Yehia and The Cambie Malones Corporation
to be determined at the second stage of the trial.

[66]

I would set aside para. 3
as unnecessary.

[67]

I would set aside paras. 4, 5
and 6.

[68]

I would not
disturb para. 7.

[69]

I would modify
para. 8 to read: The Defendant, The Cambie Malones Corporation, is
entitled to set‑off against the compensation awarded to the Plaintiffs
the value of any ineligible expenses paid to the plaintiff, 657947 B.C. Ltd.,
over the course of the Oral Management Consultancy Agreement or the October
2009 Agreements. The value of any such ineligible expenses shall be determined
at the second stage of the trial.

[70]

In my view, the
results of this appeal are mixed.  The finding of unjust enrichment is set
aside, but Mr. Yehia is liable for interest.  I would direct that each
side bear its own costs in this Court and in the Supreme Court.

The
Honourable Mr. Justice Chiasson

I agree:

The Honourable Mr. Justice Frankel

I agree:

The
Honourable Mr. Justice Fitch