COURT OF APPEAL FOR BRITISH COLUMBIA
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Citation: |
Blattgerste v. Heringa, |
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2008 BCCA 186 |
Date: 20080501
Docket: CA034056; CA034709
Docket: CA034056
Between:
Juergen Blattgerste, Anne-Marie Blattgerste
and Mount Benson Enterprises Ltd.
Respondents
(Petitioners)
And
Hans Peter Heringa, Arline Beatrice Warwick, Executrix of the Estate of
Gerald Thomas Warwick, Deceased, Sunshine Ridge Properties Ltd.,
Lakewood Investments Ltd., Lost Lake Properties Ltd.,
Richard William Warwick, L.T. Leasing Ltd.
Appellants
(Respondents)
– and –
Docket: CA034709
Between:
Juergen Blattgerste, Anne-Marie Blattgerste
and Mount Benson Enterprises Ltd.
Appellants
(Petitioners)
And
Hans Peter Heringa, Arline Beatrice Warwick, Executrix of the Estate of
Gerald Thomas Warwick, Deceased, Sunshine Ridge Properties Ltd.,
Lakewood Investments Ltd., Lost Lake Properties Ltd.,
Richard William Warwick, L.T. Leasing Ltd.
Respondents
(Respondents)
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Before: |
The Honourable Madam Justice Huddart |
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The Honourable Mr. Justice Lowry |
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The Honourable Mr. Justice Frankel |
| C.P. Dennis and M.D. Shirreff |
Counsel for Hans Peter Heringa and
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| G.K. Macintosh, Q.C. and T. Dickson |
Counsel for Juergen Blattgerste, Anne-Marie Blattgerste
and
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Place and Date of Hearing: |
Vancouver, British Columbia |
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April 1, 2008 |
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Place and Date of Judgment: |
Vancouver, British Columbia |
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May 1, 2008 |
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Concurring in the Result by: |
| The Honourable Mr. Justice Lowry |
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Written Reasons by: |
| The Honourable Mr. Justice Frankel (Page 10, Paragraph 19) |
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Concurred in by: |
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The Honourable Madam Justice Huddart |
Reasons for Judgment of the Honourable Mr. Justice Lowry:
[1] These two appeals are taken from an order winding up two companies. The second appeal, CA034709, which was in the nature of a cross-appeal, was abandoned in argument. The questions raised on the first appeal, CA034056, are whether the petition upon which the two companies were ordered wound up ought to have been converted to an action to be tried, and whether the judgment was properly rendered, as the judge who heard the petition died before signing the reasons for judgment he prepared, 2006 BCSC 565. They were ultimately released by the Chief Justice, 2006 BCSC 1963.
[2] The personal parties were for some years engaged in real estate development in the Nanaimo area. They hold interests in Sunshine Ridge Properties Ltd. and Lakewood Investments Ltd. Juergen Blattgerste and his wife, Anne-Marie Blattgerste, hold their interest through Mount Benson Enterprises Ltd. Hans Peter Heringa and Gerald Thomas Warwick (and subsequently his estate) hold their interests through Lost Lake Properties Ltd. Juergen Blattgerste, his wife, and Mount Benson petitioned in December 2004 to have Sunshine Ridge and Lakewood wound up.
[3] The material facts upon which they stated their petition is based are as follow:
24. That on or about August 15, 2002, it was agreed between Juergen Blattgerste and Mount Benson on the one hand, and Hans Peter Heringa, Gerald Thomas Warwick and Lost Lake, on the other hand, that the said parties would sever all business relationships with respect to the Corporations as soon as possible;
25. That on or about December 20, 2002 and March 27, 2003, Juergen Blattgerste and Mount Benson Enterprises on the one hand and Hans Peter Heringa, Gerald Thomas Warwick and Lost Lake Properties Ltd., on the other hand, agreed on the terms of the separation of their business interests (the “Settlement Agreement”);
26. That on or about December 20, 2002, and in [sic] pursuant to the terms of the Settlement Agreement, the said parties transferred the title to the Parksville/McKinn/French Creek Property to Lost Lake and transferred the tax loss of Brickyard to Sunshine Ridge and agreed to wind-up Brickyard;
27. On or about March 27, 2003, pursuant to the Settlement Agreement, the said parties agreed to proceed with the splitting up of the eight Building Lots, two Duplexes and cash in Sunshine Ridge, so that Lost Lake would receive title to four Lots and one Duplex and that it would transfer all of its Shares in Sunshine Ridge back to Sunshine Ridge, so that Sunshine Ridge would be owned solely by Mount Benson with Sunshine Ridge then owning four Lots and one Duplex;
28. On or about April 21, 2003, the Respondents, Hans Peter Heringa and Lost Lake, breached the terms of the Settlement Agreement and refused to enter into the second part of the Settlement Agreement to wind-up the investment activities of the parties in the Sunshine Ridge subdivision;
29. The Respondent, Hans Peter Heringa and Lost Lake have further breached the terms of the Settlement Agreement in that they have sought to obtain and extract further concessions from Juergen Blattgerste and Mount Benson, parties to the Settlement Agreement, which concessions are extraneous to the wind-up of the Companies;
[4] Thus, somewhat remarkably, it is alleged that on two dates, December 20, 2002, and March 27, 2003, the parties entered into what is said to have been the “Settlement Agreement”, partially performed on the first of those dates. The allegation is the parties agreed to split the eight building lots, two duplexes and cash held by Sunshine Ridge by transferring five of the properties to Lost Lake in exchange for its shares in Sunshine Ridge being surrendered to Sunshine Ridge such that Mount Benson would then own Sunshine Ridge outright. No allegation is made with respect to any agreement on how the cash Sunshine Ridge holds was to be divided. It is then alleged that Mr. Heringa and Lost Lake breached the Settlement Agreement and refused to enter into what is said to be the “second part” of the Settlement Agreement to wind up the investment activities of the parties. Finally, it is further alleged Mr. Heringa and Lost Lake breached the terms of the Settlement Agreement in that they sought to extract extraneous concessions from Mr. Blattgerste and Mount Benson.
[5] At the hearing of the petition, Mr. Heringa, who was an unrepresented litigant, maintained there was no agreement and that the matter, being as he put it in his Outline “more in the nature of a damage action ... rather than a request for statutory relief”, ought in any event to be tried.
[6] The reasons for judgment contain an extensive analysis rejecting Mr. Heringa’s position on an assessment of the affidavit evidence, on which there was no cross-examination, and concluding there was in fact an agreement. The terms of the agreement are not, however, stated to be the terms alleged in the facts on which the petition was based, but rather are said to be the terms recorded in what was referred to as an “Agreement Letter” written by an accountant to solicitors, with copies to the parties, the day following the accountant’s meeting with Mr. Blattgerste, Mr. Heringa, and Mr. Warwick on March 27, 2003. The letter contained what is described at paragraph 32 of the reasons to be “instructions as to the nature of the [written] agreement to be prepared”. Five terms were stated.
[7] As particularized in the petition, the Settlement Agreement references only the first term, the transfer of the five properties to Lost Lake. The fifth term is that Lost Lake’s shares in Sunshine Ridge be transferred to Mount Benson as opposed to being surrendered to Sunshine. More significantly, three of the five terms in the Letter Agreement have to do with cash dividends being paid out of Sunshine Ridge and one term pertains to Lost Lake assuming a mortgage on one of the properties. The reasons state that, in October 2003, the solicitors instructed to draw the documentation to be executed advised a final draft settlement agreement had been drawn together with draft collateral agreements, but reported the documentation for the collateral agreements had not been completed because the parties’ discussions had broken down.
[8] Sunshine Ridge was ordered to be wound up with effect being given to the terms of the Letter Agreement. Lakewood was ordered to be liquidated and dissolved with a pro rata distribution of its assets among the owning interests.
[9] The following statement is all there is to be found in the reasons for judgment with respect to the petition being converted to an action for trial:
[84] Finally, Mr. Heringa argued that the petition should be referred to the trial list. Given my conclusions that (1) he agreed to the terms of the agreement of March 27, 2003, as enunciated in the Agreement Letter of March 28, 2003; and (2) he agreed to the companies being wound up subject to his ability to pursue unrelated litigation, I see no basis for referring this matter to the trial list.
[10] In my view, the statement reflects an error of principle. The judge decided on evidentiary grounds there was an agreement, and then declined to have the matter tried on the basis that the subject of the trial – whether there was an agreement and, if so, what it was – had been determined. The question to be addressed in response to Mr. Heringa was whether the relief actually sought could be obtained by petition and, if so, whether a trial was required to resolve the issue of what, if any, agreement the parties had made.
[11] Further, Mr. Heringa may well have agreed to the companies being wound up, but that is not to say he agreed to have them wound up on the terms of either the Settlement Agreement alleged or the Letter Agreement. It may be appropriate that the companies be wound up, but it does not necessarily follow the terms could only be as the Blattgerstes and Mount Benson contend were agreed.
[12] The relief that can be obtained by petition is circumscribed by Rule 10 of the Rules of Court. It of course includes an application authorized by statute, such as liquidation and dissolution of a company under s. 324(1) of the Business Corporations Act, S.B.C. 2002, c. 57. But the relief sought here is for all practical purposes the enforcement of an alleged oral agreement whereby the company to be wound up would be wholly-owned by the party seeking the relief. A court-ordered winding up is incidental and completely unnecessary.
[13] I do not consider the enforcement of the Settlement Agreement to be the proper subject of a petition. The Blattgerstes and Mount Benson maintain having proceeded by way of petition is of no consequence; it is no more than an irregularity. I accept orders can in some instances be sustained despite the wrong originating procedure having been employed, but where, as here, the wrong process was employed and there is an evidentiary conflict bearing on the resolution of the primary issue, the party seeking a trial must be entitled to have the case against him or her adjudicated in that way. Whether a matter should be disposed of by way of petition, even where the nature of the relief sought falls within the rule, is invariably a matter of whether any dispute there may be can properly be resolved without a trial. That must become a heightened concern when this Court is asked to sustain an order made on the hearing of a petition that should not have been sought in that way.
[14] The Blattgerstes and Mount Benson also contend that Mr. Heringa must do more than establish the wrong process was employed in resolving the primary issue of whether the Settlement Agreement was in fact made. They say he must show that finding of fact to be wrong before this Court can interfere and that cannot be done on the record upon which the appeal has been heard. They cite no authority in support and I am unable to accept their contention. If the wrong process has been employed, it is wrong because where there is a factual dispute the process may not facilitate a proper finding of the true facts. It is not reliable. A review of the complete record of the proceedings which led to the finding of fact the judge made may well appear to support the finding, but that is of no consequence once it is accepted that what the record may show is not satisfactory because of the process by which it was developed. If the fact-finding process was flawed or inappropriate, the facts found must be suspect.
[15] Where matters have been found to be unsuitable for summary disposition under Rule 18A, this Court has set the decisions aside without considering the correctness of the findings of fact made in consequence of the summary process employed. See, for example: Prevost (Committee of) v. Vetter, 2002 BCCA 202, 100 B.C.L.R. (3d) 44 at paras. 25-28; Parsons v. Finch, 2003 BCCA 409, 16 B.C.L.R. (4th) 86 at paras. 48-49; Castellan v. Muncey Estate, 2004 BCCA 128, 46 C.P.C. (5th) 8 at paras. 10-11. I see no reason why decisions made summarily on the hearing of a petition cannot be similarly set aside where the process is shown to have been inappropriate.
[16] It is then said this issue was not sufficiently raised by Mr. Heringa at the hearing of the petition and that it is not to be entertained now. I disagree. The judge recognized Mr. Heringa disputed the existence of an agreement and wanted the matter referred to the trial list. Mr. Heringa did not raise the issue in the original factum he filed but did raise it in his amended factum. I see no sound reason why it cannot be considered now.
[17] I consider the petition should have been converted to an action to be tried. That being the case, it becomes unnecessary for me to consider whether the judgment was properly rendered.
[18] I would allow the appeal, set aside the order, and remit the petition to the trial court.
“The Honourable Mr. Justice Lowry”
Reasons for Judgment of the Honourable Mr. Justice Frankel:
OVERVIEW
[19] The principal issue in this case is the legal status of unsigned reasons for judgment left behind when a judge dies. Can they, as happened here, be signed and released by another judge in the name of the deceased judge, or are they, as contended by the losing parties in this litigation, of no force and effect? There is a dearth of Canadian authority on this question.
[20] Mr. Dennis, of behalf of the losing parties, advanced a number of arguments with respect to why unsigned reasons for judgment cannot be released. In opposing the appeal, Mr. Macintosh, Q.C., counsel for the successful parties, agreed that his clients cannot prevail unless this Court accepts that the unsigned reasons in this case are final and complete.
[21] For the reasons that follow, I have concluded that unsigned reasons cannot be regarded as final and complete. They are of no force and effect, and any formal order entered to give effect to them cannot stand. As the reasons in this case should not have been released, I express no view as to their correctness.
FACTUAL BACKGROUND
[22] On December 2, 2004, Juergen Blattgerste, Anne-Marie Blattgerste and Mount Benson Enterprises Ltd. filed a petition in the Supreme Court of British Columbia seeking an order to wind up Sunshine Ridge Properties Ltd. and Lakewood Investments Ltd. Hans Peter Heringa and Lost Lake Properties Ltd. were two of the respondents to the petition. Mr. Heringa owns 75% of the shares in Lost Lake Properties.
[23] Mr. Justice Taylor heard the petition over six days. He reserved judgment on June 2, 2005. Mr. Justice Taylor passed away suddenly on January 8, 2006.
[24] On April 7, 2006, without notice to the parties, written reasons for judgment granting the petition were released in Mr. Justice Taylor’s name. These reasons were signed “Donald I. Brenner C.J.S.C. for the Honourable Mr. Justice Taylor”: 2006 BCSC 565.
[25] On December 11, 2006, the parties appeared before Chief Justice Brenner to settle the terms of the formal order resulting from the reasons that had been released. At the same time, Mr. Blattgerste, Ms. Blattgerste, and Mount Benson Enterprises Ltd. sought to have the Chief Justice make an order under Rule 64(10) of the Rules of Court, B.C. Reg. 221/90, as amended, nunc pro tunc, nominating himself to succeed Mr. Justice Taylor in the matter.
[26] Rule 64(10) provides:
(10) Where an application ought to be made to, or any jurisdiction exercised by, the judge by whom a proceeding has been tried or partly tried, or heard or partly heard, then if that judge dies or ceases to be a judge of the court during or after the trial or hearing, or if for any other reason it is impossible or inconvenient for that judge to act in the proceeding, the Chief Justice or next senior judge of the court may either by a special or by a general order nominate some other judge to whom the application may be made or by whom the jurisdiction may be exercised.
Under Rules 64(11) and 64(12), the judge nominated to assume carriage of a matter has a broad discretion with respect to how to proceed. Any orders made by that judge will be entered in his or her name.
[27] Chief Justice Brenner settled the terms of the formal order, which was later entered as having been made by Mr. Justice Taylor on April 7, 2006. However, the Chief Justice declined to make a nomination under Rule 64(10), stating (2006 BCSC 1963):
[1] The decision for today is that I am reluctant to grant the order nunc pro tunc under 64(10) by reason of the circumstances of the case.
[2] Mr. Justice Taylor died suddenly January the 8th. He had heard this case. It was a petition with supporting affidavit material. His reasons for judgment were drafted and in my view were virtually completed.
[3] I conducted an independent review of his reasons and the material and conclude that it was in the best interests of the administration of justice to issue those reasons in his name in April of this year, which I proceeded to do.
[4] Counsel advise that they would like a memorandum from the court outlining what occurred, and I am happy to provide that.
[28] On December 13, 2006, Chief Justice Brenner issued the following memorandum:
[1] In order to assist counsel I am providing the following memorandum on the circumstances surrounding the issuance of the Judgment in this case.
[2] This proceeding was brought by Petition and concerned the winding up, liquidation and dissolution of two companies, Sunshine Ridge Properties Ltd. and Lakewood Investments Ltd. The Petition was heard by the late Mr. Justice Taylor of our court on March 23 and 24, June 2, 2005 in Nanaimo, British Columbia and April 13 to 15, 2005 in Courtenay, British Columbia. He died on January 8, 2006. I released the court’s Reasons for Judgment on April 7, 2006.
[3] After Mr. Justice Taylor’s death a number of matters were reviewed that he had heard. In the case at bar, Mr. Justice Taylor had finalized his Reasons for Judgment, but had not signed them prior to his death. Since his reasons had been completed, I chose not to assign this case to another judge, but rather reviewed the file material and after satisfying myself that the Reasons for Judgment were supported by the material that was before Mr. Justice Taylor, I signed the Reasons for Judgment on his behalf.
[4] A significant factor I gave consideration to was that this was a proceeding by way of Petition and that all of the evidence was before Mr. Justice Taylor in the form of Affidavit material. There was no viva voce evidence nor any cross examination on Affidavits. On any appeal, the appellate court would have the identical material before it as Mr. Justice Taylor had when he drafted his Reasons for Judgment.
[5] For that reason, I considered it to be in the best interests of the administration of justice to finalize and sign his judgment rather than issue an order under Rule 64(10) of the Rules of Court.
ANALYSIS
[29] The ability of a judge of the Supreme Court of British Columbia to reserve judgment is specifically dealt with in s. 16 of the Supreme Court Act, R.S.B.C. 1996, c. 433, which states:
A judge, master or registrar may reserve his or her decision.
However, unlike the Court of Appeal, there is no statutory requirement that Supreme Court reserved judgments be delivered (i.e., pronounced) in open court: Court of Appeal Act, R.S.B.C. 1996, c. 77, s. 21(1) - (3).
[30] The practice in the Supreme Court with respect to reserved judgments is that once a judge has finalized his or her reasons for judgment, they are signed, and then processed for release. This process involves giving the reasons a neutral citation (if one was not placed on the front page before it was signed), and delivery of the original to the registry by the judge’s administrative assistant. The reasons are date-stamped by the registry the day they are released, and judgment is taken as being pronounced on that day.
[31] How the litigants and others are notified of a decision is governed by the following practice direction (issued June 7, 2002):
PRACTICE DIRECTION
Re: Release of Written Reserved Judgments
The purpose of this Practice Direction is to ensure that counsel and litigants have sufficient time to obtain and consider written reserved judgments before they are generally released to the public and the media. Currently, written reserved judgments are released with no advance notice and in many cases, counsel may not be immediately available to obtain and review the judgment. This has led in some cases to litigants learning of the outcome of their litigation through the media or others before communicating with counsel.
Effective June 17, 2002, counsel and self-represented parties will receive advance notice of the release of written reserve judgments. Counsel and self-represented parties will now be contacted the day before a judgment is to be released. Judgments will be released to the public and the media 24 hours after judgments have been made available to the parties. As there are cases where it is appropriate for the judgment to be released to the public and the media at the same time it is released to the parties, this direction is subject to the discretion of the judge or master issuing the judgmet.
Unless otherwise directed by the judge or master issuing the judgment, the following procedure will apply to the release of written reserved judgments:
1. Counsel and/or self-represented parties will be contacted the day before the judgment is to be released. The judgment will be available for release from the issuing registry at 10:30 a.m. the following business day. The judgment may be picked up by courier, faxed for a fee or sent by email (in those registry locations offering email release).
2. 24 hours after the judgment is available for release to the parties, the judgment will be released to the media and posted on the Court’s website. Saturdays, Sundays and statutory holidays will not be counted in this 24 hour period.
[32] In my view, reasons for judgment cannot be said to be final and complete unless they are signed by the judge who wrote them. The act of signing evinces that the judge is fully satisfied with what he or she has written with respect to the facts, the law, and the result. Until reasons are signed they are a work in progress, subject to being revised, or even abandoned. Regardless of how complete draft reasons appear to be, the reason they are unsigned may be because the judge wishes to give them further thought. In affixing a signature to reasons for judgment, the judge is, in effect, certifying that he or she considers them to be a final opinion. This is not diminished by the fact that, as discussed in Harrison v. Harrison, 2007 BCCA 120, 64 B.C.L.R. (4th) 318 (at paras. 28, 29), a judge has a discretion to re-open a matter after reasons for judgment have been released (or delivered orally), but before the formal order has been entered.
[33] Although Singh v. Canada (Minister of Citizenship and Immigration), [1998] 3 F.C. 127 (C.A.) is concerned with a decision of the Immigration and Refugee Board, the following passage from Mr. Justice Stone’s judgment is nonetheless apposite (at para. 22):
I respectfully agree with Reed J.’s observation at page 317 of her reasons, that as a practical reality of decision-making “decisions often change with the writing of reasons.” Requiring that each member of the panel indicate his or her agreement or disagreement with the final decision by signing ensures that the decision accurately reflects the opinions of each person who participated in it.
[34] The importance of a signature is also dealt with in Westfield Freezing Company Limited v. Steel Construction Company Limited, [1968] N.Z.L.R. 680 (S.C.). The issue in that case was whether reasons for judgment signed by a judge who later died, but not delivered to the registrar of the court, could be entered. In holding that the reasons could be entered and enforced, Mr. Justice Hardie Boys, as he then was, discussed the significance of the placement, by a judge, of his or her signature at the end of reasons (at 684):
... unless and until a Judge is satisfied that he has arrived at a final determination and is content with the form of words in which he has expressed his decision, he does not sign the reasons for judgment. When he has so signed the reasons for judgment (but always subject to his right to change his mind), he has completed his judicial functions in deciding and “giving judgment” upon the matter in hand. There is nothing more required of him. It is not he who hands the judgment to the Registrar – still less does he see that it is “entered” under R. 306. He is finished with it – it is a considered a final judgment, certified and authenticated by his signature.
… it may well be that the death of the Judge has put an end to any opportunity for change of mind: but that does not make the signed judgment the less final – it may make it the more so.
[Italics in original, underlining added]
[35] It should be noted that Mr. Dennis, in responding to questions from the bench, took the position, with reference to the provisions of the Supreme Court Act and Rules of Court, that even signed reasons for judgment cannot be released after a judge has died. However, as he correctly noted, this issue does not arise in this case. Accordingly, I express no opinion on it.
[36] The last authority I wish to mention is Johnston v. Stewart (1994), 116 D.L.R. (4th) 180 (Ont.Ct.)(G.D.)). At issue in that case was the status of unsigned, handwritten reasons for judgment in a personal injury matter, prepared by a judge before his death. After the judge died, the parties were advised of the existence of the reasons, but not the contents. With one exception, the parties were prepared to accept the handwritten reasons as a binding “decision”. This led to an application by the plaintiff for a declaration that the judge’s writings constituted such a “decision”.
[37] Mr. Justice Desmarais refused to make the declaration sought because the writings in question failed to address several issues. However, in what may well be obiter dicta, he opined that, had all issues been dealt with, then the writings could have been released as the reasons for judgment of the judge who had died. Given the importance I attach to the presence of a judge’s signature, I would not follow this reasoning.
[38] There is another aspect of Johnston v. Stewart deserving of comment. In that case, there was evidence from members of the deceased judge’s family that he told them he had completed writing his decision and that he would be taking it to the courthouse for typing. However, as noted above, the reasons were not complete as the judge had not addressed a number of issues.
[39] It is not appropriate, in my view, for evidence to be adduced in an effort to prove or disprove whether a deceased judge considered unsigned reasons to be final. What the judge may have said to family members, court staff, law clerks, or judicial colleagues is irrelevant. A judge may well indicate to someone that he or she has finished writing a decision only to decide to make some changes shortly thereafter. This is why it is imperative for a judge to have “signed off” before a reserved judgment is released.
[40] There can be no doubt that Chief Justice Brenner acted out of concern for the interests of the parties and the administration of justice in releasing the reasons for judgment left behind by Mr. Justice Taylor. However, as Mr. Justice Taylor had not signed those reasons, it cannot be said that he had completed his judicial consideration of the matter.
CONCLUSION
[41] I would allow this appeal, set aside the entered order, and remit the matter to the Supreme Court of British Columbia for a new hearing.
“The Honourable Mr. Justice Frankel”
I AGREE:
“The Honourable Madam Justice Huddart”