2008 BCSC 1596 J. & E. Backhoe Ltd. v. Phillips

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:	*J. & E. Backhoe Ltd. v. Phillips,*
	2008 BCSC 1596

Date: 20081121
Docket: L050213
Registry: Vancouver

Between:

J. &. E. Backhoe Ltd.

Plaintiff

And:

Lynda Jane Phillips and Duncan Phillips

Defendants

Before: The Honourable Mr. Justice Burnyeat

Reasons for Judgment

In Chambers

Counsel for Plaintiff

R.W. Johnson

Counsel for Defendants

D.H. Murray

Date and Place of Hearing:

October 31, 2008

Vancouver, B.C.

[1] THE COURT: This application deals with a notice to admit and a response to that notice to admit. A declaration is sought by the Defendants pursuant to Rule 31(2), that there are no deemed admissions arising from the notice to admit dated July 6, 2007 or, in the alternative, an order pursuant to Rule 31(5), that any deemed admissions of the Defendants be withdrawn.

[2] The background of this matter relates to work undertaken starting April of 2003, a lien filed against the subject property in 2004, an order in 2005 that $50,000 be paid into Court so that the lien could be discharged from the property, and an application pursuant to the provisions of Rule 18A of the Rules of Court in 2006 that the lien be discharged and the monies paid out of Court.

[3] On June 23, 2006, Mr. Justice Curtis was of the view that the matter could not be determined on a summary trial 18A basis and that the matter would go to trial. On July 6, 2007, the Plaintiff delivered a notice to admit. That notice to admit is extensive, setting out some 37 paragraphs as well as 67 paragraphs relating to various documents.

[4] In response, the Defendants took the position in an August 14, 2007 letter that the form of the notice to admit was inappropriate and that some of the questions could not be answered. At the same time, a draft response on a “without prejudice” basis was enclosed. As early as August 16, 2007, the plaintiff advised that it would be relying on the deemed admissions.

[5] The matter was reset for an 18A hearing with a date being reserved but the motion did not then proceed in December of 2007. There was then a March, 2008 application for an 18A summary trial and subsequently this application dealing with whether or not there was appropriate notice to admit and deemed admissions flowing from it.

[6] Counsel for the Defendants advises that some of the affidavits in support of the 18A application contained facts which differed from what was set out in the notice to admit. I do not express an opinion on that submission.

[7] The Rule 18A application is now scheduled to be heard on November 28, 2008. I am satisfied that it is an inevitable result of granting this motion of the Plaintiff that this date cannot be maintained for two reasons. The first being that, if I grant the ability of the Defendants to put in a further response to the notice to admit, the Defendants will have to have a reasonable time to do so. Second, depending on the response, it may well be that it will be necessary for the Plaintiff to adjust the affidavits filed in support of the 18A application in order to set out facts which are no longer admitted.

[8] Rule 31(2) provides that a response to a notice to admit must be received within 14 days. Under subrule (b) of Rule 31(2), the response must "set forth in detail the reasons why the party cannot make the admission" and, under sub (c), the grounds upon which it is alleged that a notice is irrelevant or otherwise improper.

[9] I am satisfied that what was provided by the Defendants does not meet the criteria of Rule 31. There are no reasons in detail or grounds of irrelevancy or suggestion that the notice to admit is otherwise improper. What is provided is a response on a without-prejudice basis and also a two-page response drawing to the attention of the Plaintiff some of the problems that are seen by the Defendants in the notice to admit. A response to a notice to admit cannot be on a without-prejudice basis. A response must be on the basis that admissions are either made or not made. I reject the submission that detailing the responses to the notice to admit is accomplished by a without-prejudice response.

[10] Under Rule 31(5), an admission cannot be withdrawn except by consent or with leave of the Court. Clearly, consent is not present. I find that there are deemed admissions by virtue of the failure of the Defendants to respond within 14 days or, in fact, some 15 months later. I therefore find that there were admissions on the record. The question now is whether it is appropriate to allow those admissions to be withdrawn.

[11] The decision in Drake (Guardian of) v. Clark (Guardian of), [1996] 31 B.C.L.R. (3d) 289 (B.C.C.A.) indicates “... that the governing consideration is the interests of justice” (at para. 12). I am satisfied that the interests of justice require that the Defendants should be at liberty to have those admissions withdrawn. I am satisfied the Defendants should not be held responsible because counsel decided to fashion the answer to the notice to admit in the way he did.

[12] The decision in Hamilton v. Ahmed, [1999] 28 C.P.R. (4th) 139 sets out in some detail the principles to be followed in dealing with this question. In paragraph 11, Master Horn states:

There is no conflict between these decisions and I derive the following principles from them:

1) That the test is whether there is a triable issue which, in the interests of justice, should be determined on the merits and not disposed of by an admission of fact.

2) That in applying that test, all the circumstances should be taken into account including the following:

3) That the admission has been made inadvertently, hastily, or without knowledge of the facts.

4) That the fact admitted was not within the knowledge of the party making the admission.

5) That the fact admitted is not true.

6) That the fact admitted is one of mixed fact and law.

7) That the withdrawal of the admission would not prejudice a party.

8) That there has been no delay in applying to withdraw the admission.

[13] I take into account the following matters in concluding as I do: first, there were no actual admissions in that there were only deemed admissions. Second, these matters should be determined on the merits and not on the basis of deemed admissions. Third, to the extent that the deemed admissions conflict with the examination for discovery of the principal of the Plaintiff, then it can be said that the admissions are untrue. Fourth, some of the deemed admissions may well conflict with subsequently filed affidavits on behalf of the Plaintiff, and therefore the admissions may in due course be found to be untrue by a Court. Fifth, some of the deemed admissions of fact may well be issues of mixed fact and law.

[14] Sixth, as to whether there has been a delay in applying to withdraw the deemed admissions, I find that there has been considerable delay but that no prejudice accrues to the Plaintiff as a result of that delay. I note that counsel for the Plaintiff advised as early as August of 2007 that the Plaintiff would be taking the position that admissions had been made because there had not been compliance with Rule 31. Despite that, no steps were taken until March 2008 to have the issue of whether or not there were deemed admissions. In that regard, steps could have been taken to provide a response to the notice to admit that was in accordance with Rule 31, or this application could have been brought in the fall of 2007 to determine the matters which are before me today. However, it appears that it was not until March of 2008 that an application under Rule 18A was set so that it was not until March, 2008 that the Plaintiff set an application which would rely upon the deemed admissions. Shortly thereafter, the Defendants proceeded with this application and it is only now that the application of the Defendants can be heard and it is only November 28, 2008 that the application under Rule 18A of the Plaintiff will be heard. On the assumption that some of the facts sought to be admitted are admitted by the Defendants, I am satisfied that no prejudice has accrued to the Plaintiff on the assumption that the application pursuant to Rule 18A can proceed soon after November 28, 2008.

[15] I find that the failure to respond to the notice to admit did produce admissions. However, I am satisfied that the interests of justice require that the Defendants be at liberty to withdraw them, and I make that order.

[16] I make the following additional orders: first, a response to the notice to admit in accordance with Rule 31(2) is to be provided no later than November 14, 2008. Second, a new Rule 18A hearing date is to be set at a date which is convenient to counsel for the Plaintiff and, if possible, convenient to counsel for the Defendants. That the new date is to be no later than February 1, 2009. In this regard, I am advised by the Registry that dates are readily available throughout all of January. That date will be set by counsel for the Plaintiff no later than November 4, 2008, and counsel for the Defendants advised of that date no later than November 5, 2008. I am satisfied that no substantial prejudice results by virtue of the delay between the end of November and the end January in setting the Rule 18A application for hearing.

[17] There will be a deadline on counsel for the Plaintiff to produce any new affidavit material required. That material is to be to counsel for the Defendants no later than December 19, 2008. That gives counsel for the Plaintiff more than a month to respond to a response to the notice to admit and to arrange for new affidavits to respond to what will be admitted and what will not be admitted. Any responding affidavits in support of the position of the Defendants are to be available to counsel for the Plaintiff no later than January 11, 2009.

[18] The order that I make today does not assume that the response to be received by November 14 will be in an appropriate form and is specifically without prejudice to any application or any reliance on the notice to admit that the Plaintiff wishes to advance. However, counsel for the Plaintiff will advise counsel for the Defendants no later than December 12, 2008 whether any reliance will be placed on particular paragraphs of the notice to admit by virtue of the position taken that the response to the notice to admit is not in an appropriate form.

[19] I am satisfied that the Plaintiff should be entitled to its costs of today in any event of the cause. In order to avoid the necessity of an assessment of those costs before the Registrar of the Court, I assess the costs inclusive of fees, disbursements and government taxes at $675 under Rule 57(13.1). That amount can be paid out of the trust account forthwith.

[20] I also make an order that the money in Court is to be paid out of Court in order that it can be deposited with counsel for the Plaintiff in an interest-bearing trust account. I am satisfied that the interest that will be available that way is in excess of the interest that is available when monies are paid into Court. The funds held by counsel for the Plaintiff less the $675.00 for costs will stand as if those funds had been paid into Court and can be disbursed from the trust account of counsel for the Plaintiff only on further order of the Court or by agreement of the parties.

[21] I will be seized of any further applications regarding the suitability of the response provided by the Defendants to the notice to admit but will not be seized of any application pursuant to Rule 18A of the Rules of Court.

“The Honourable Mr. Justice Burnyeat”