B.C. COURT OF APPEAL
REASONS FOR JUDGMENT

COMMERCIAL 2000

• 2000 BCCA 1 Matilda v. MacLeod
  Insurance-Motor Vehicle-Deduction of accident benefits paid by out-of-province insurer to non-resident plaintiffs injured in British Columbia accident.The issue framed as a special case under R. 33 was whether the out-of-province insurer could pursue a subrogated claim for medical expenses paid on behalf of its insured from defendants insured by ICBC. It was conceded the amounts paid were "accident insurance benefits similar to those described in Part 6 of the Insurance Act" with s. 25(1) of the Insurance (Motor Vehicle) Act. Held, dismissing the appeal, the amounts paid were deemed to have been released by the terms of s. 25(2) of the Insurance (Motor Vehicle) Act and were therefore not recoverable from the defendants insured by ICBC or from ICBC.
• 2000 YKCA 4 Ketza Construction Corp. v. Mickey
  Appeal from judgment declaring plaintiff’s/respondent’s entitlement to compensation on quantum meruit basis with judgment in the amount of $333,787.50, arising from an action involving the construction by the respondent of a home for the appellants, without a written contract. Construction was finished by other trades at substantial additional cost. Trial judge found that there was no oral fixed price contract, and that there was not an enforceable contract entered into on the basis of cost-plus compensation and the respondent was entitled to an award on quantum meruit. Court of Appeal found that the respondent was entitled to recover on quantum meruit basis but that the trial judge erred in adding 12% for overhead and fee. Respondent contributed to debacle by failing to warn appellants of escalating costs earlier than it did. Appeal allowed by reducing amount of judgment to $276,548.50. No error by trial judge in dismissing claims based on negligent misrepresentation.
• 2000 BCCA 22 J.W. Price Construction Ltd. v. Costco Wholesale Corporation et al.
  Builders’ Liens - Trust funds - Applies Ross Gibson Industries v. Greater Vancouver Housing Corp. to require sub-subcontractor who has been engaged on three projects having same owner, to apply trust funds to specific project for which payment was intended by payor, and reduce payee’s lien accordingly.
• 2000 BCCA 26 Twylight Pressure Controls Ltd. v. The Dominion of Canada General Insurance Company
  A plaintiff in other litigation was injured by an explosion and fire which occurred on Twylight's premises while one of its employees was pouring gasoline into a tank on a truck owned by Twylight. A judge on summary trial under Rule 18A held that only the vehicle insurer, ICBC, was obligated to provide Twylight with a defence of the suit of the injured plaintiff. Appeal allowed. Both the vehicle insurer and the general liability insurer, Dominion, were obliged under their policy wordings to provide a defence. Application referred back to trial judge for disposition of other defences raised by Dominion.
• 2000 BCCA 41 Babichuk et Verlaan et al.
  Insurance -- Automobile insurance –- Consent of Owner -- Motor Vehicle Liability Policy -- The contract, particular terms –- Peril Insured.    This was an appeal from a declaration that an insurance policy held by a car leasing company was not a motor vehicle liability policy. That policy insured the car leasing company against loss arising from a lessee’s failure to maintain insurance on the leased vehicle, a circumstance which applied in this case. At issue also was the question of whether the driver had the owner’s consent to operate the vehicle.   Saunders J.A., for the Court, dismissed the appeal. The driver had the owner’s implied consent to use the vehicle through a chain of permission from the owner to the lessee to the driver. This was a finding of fact made by the trial judge and was reasonable on the evidence. Further, the insurance policy was not a motor vehicle liability policy. Firstly, the insurance policy did not mention the conduct of the driver of the motor vehicle. Secondly, more than negligent driving, resulting injury and a claim were required to engage the insurer’s obligation of indemnity. The policy was only contingent coverage which required two additional elements: the lease agreement must have contained an insurance requirement and the lessee must have failed to maintain insurance. As such, the policy was more akin to an errors and omissions policy than to a motor vehicle liability policy.
• 2000 BCCA 46 Christie v. Suburban Motors Ltd.
  Employment - apprenticeship - breach of contract - constructive dismissal - similar fact evidence.  The action for breach of contract was dismissed by the trial judge who found that a breach of the apprenticeship agreement was not proved and no loss was suffered. Held: Appeal dismissed. The factual issue of the adequacy of the appellant's training under the apprenticeship agreement was resolved at trial in favour of the employer and cannot be reversed on appeal. Similar fact evidence about prior apprenticeships with the employer was inadmissible. An offer to extend the apprenticeship for an additional year was not a constructive dismissal because the employer was not bound to keep the apprentice after the regular term expired.
• 2000 BCCA 64 Calf v. British Columbia Securities Commission
  Indigent status refused to would-be appellant from a decision of the B.C. Securities Commission, due to very low likelihood of success and appellant’s intention to pursue appeal in any event.
• 2000 BCCA 65 Lasik Vision Canada Inc. v. TLC Vancouver Optometric Group Inc.
• 2000 BCCA 70 Gilchrist v. Western Star Trucks Inc.
  The appellant employer appealed the trial judge’s interpretation of an agreement between it and a former employee. The employee’s employment contract granted him an option over 70,000 shares. On the employer’s request, the employee agreed to temporarily relinquish the option over 30,000 of the shares and the parties entered into a new agreement. The new agreement provided that if the price at the date of re-issuance of the option exceeded the original price, then the employer would pay this difference, "upon demand which shall not precede exercise of the options". At issue was whether the employee was required to exercise the option and purchase the shares before the employer’s liability to pay the difference in price crystallized. The trial judge held that exercise of the option was not a pre-condition to the employee’s entitlement. Saunders J.A. (Ryan J.A concurring) allowed the appeal. The first inquiry in interpreting a contract is to determine whether there is only one reasonable meaning to the words in the contract, or more than one. In this search one must look to the surrounding circumstances and the whole of the contract. The words of the contract must be looked at in their ordinary and natural sense and cannot be distorted beyond their actual meaning. The trial judge’s conclusion that the optioned shares did not have to be purchased before the payment obligation crystallised is contrary to the plain and natural meaning of the agreement, in the context of the surrounding circumstances.
• 2000 BCCA 80 Bajan v. Istafund Financial Services Ltd.
  The trial judge ordered the appellants to pay a commission to a financial consultant for arranging financing for a condominium project The appellants refused to accept the financing on the basis the terms in the loan commitment differed substantially from those agreed in an Offer to Finance. The parties agreed the trial judge’s reasoning was flawed. The court allowed the appeal. The terms of the Offer to Finance differed significantly from those in the Commitment Letter. The appellant was not obliged to accept those terms or to negotiate other terms. Under the terms of the two agreements under which the deposit was paid and increased, the appellants are entitled to its return.
• 2000 BCCA 100 The Owners, Strata Plan No. VR1720 v. Jeck
  The issue whether personal defendants, who were employees of a corporate defendant, owed a duty of care to the employer's customer, could not fairly be decided on an application to dismiss the action on summary trial under Rule 18A, because the circumstances of the case were not sufficiently disclosed in the affidavit material. The issue of the employees' duty of care should be decided at trial. The appeal was dismissed.
• 2000 BCCA 101 369259 B.C. Ltd. et al. v. Nixon et al.
  The defendants appealed a judgment for breach of an employment agreement requiring the employer to compensate the employee for personal income tax he was liable to pay, including penalties and interest. This court reduced the damages to exclude the penalties and interest. They upheld the balance of the order on a different analysis than that of the trial judge.
• 2000 BCCA 105 Can-Dive Services Ltd. v. Pacific Coast Energy Corp.
  This was an appeal by one of the defendants below, Morrison-Knudsen Company Inc. ("M-K") and a cross-appeal by the plaintiffs below, Can-Dive Services Ltd. ("C-D") and Laurentian Pacific Insurance Corporation (now called Boreal P & C Insurance Company) from the 17 May 1995 judgment of Shaw J. The cross-appeal was adjourned pending judgment on the appeal. The case arises from the construction in 1990-91 of an underwater natural gas transmission pipeline from the British Columbia mainland to Vancouver Island. The pipeline span support work required underwater diving expertise. C-D had experience in underwater diving, but not in span supports of pipelines. Before it made its tender bid to the owner, M-K was in discussion with C-D. Each had the tender documents. The prices from various subcontractors were critical to M-K’s bid price as head contractor since it would include those prices plus a mark-up for overhead and profit. On May 30, 1990, the head contract was executed. On August 9, 1990, M-K and C-D entered into the subcontract. C-D began its work on the supports, but encountered problems arising from the slope conditions at the intended span support sites. C-D said its contractual obligations under the scope of the work relating to span support was simply the placing of grout bags on flat, firm surfaces. C-D insisted that the mechanical supports and attendant work to deal with the soft and sloping soil were extra to its contract with M-K. The owner insisted they were not extra. M-K, caught in the middle, at first adopted C-D’s position, but then took a neutral position. If the work was extra to the head contract, then it was extra to the subcontract, but if it were within the head contract, then it would be within the subcontract. At issue are the interacting lines of authority on rectification on the ground of mistake and contractual protecting clauses. The issue with the former is whether the judge rectified an instrument or whether he rectified the bargain to give C-D the benefit of the bargain which it erroneously (according to the trial judge’s construction of the contract) believed it had made. "Protecting clauses" encompass all clauses intended to confine a party’s obligations in contract to those which upon the true, i.e. judicial, construction of the contract it undertook. Southin J.A. was of the opinion that the trial judge began his approach to the problem from the wrong perspective. The question should have been whether a claim for rectification which, if successful would result in C-D subcontractor receiving more for the work encompassed in the subcontract than M-K head contractor would receive from the owner, was barred by terms 8 and 9 of the subcontract read in conjunction with the face page. Courts are bound by the terms of the contract as the law of the parties. In commercial affairs, written documents are considered final. Courts have uniformly recognized that the purpose of expressing agreements in writing is to reduce the terms to a permanent form and to prevent later disputes about the terms. One obvious reason is to avoid the costs of litigation. Another reason is because judges are not infallible. Clauses such as this are effectively an agreement by the parties that words not written in the contract are irrelevant to their legal obligations to one another and that a judge is not to consider their other words in the absence of fraud. Fraud in equity is broader than fraud at law. C-D did not plead facts that if proven would establish equitable fraud. There was no plea that these parties were equally innocent. There was no bargain by M-K to pay more than that which it was properly entitled to receive from the owner under the head contract except for the weather allowance. Both parties agreed to be bound by the head contract. The trial judge made an equitable finding in fraud on the part of M-K. Questions of unconscionability are not to be determined on what someone ought to have known, but what he did know. Here the critical "fact" of the true meaning of the head contract was not known until the trial judge handed down his judgment. A finding of equitable fraud was inconsistent with the finding of mutual mistake as to the meaning of the head contract. The trial judge found that that M-K was under an honest misapprehension of the scope of the work in the head contract. Had there been a finding that M-K, before the making of the subcontract, from conversations with the owner or the owner’s engineer, knew that the owner considered the unit prices included work necessary due to slopes and soft soil, and said nothing to C-D, the case may have been different. Southin J.A. was of the view that the trial judge rectified the bargain and not the instrument. The appeal was allowed, the judgment below set aside, and judgment granted to M-K in terms set out in paragraph 2 of the reasons, subject to the necessary modifications. Reasons of Braidwood J.A.: The findings of fact of the learned trial judge are amply supported by the evidence and should not be disturbed by this Court. Many of the important findings of fact were based on the credibility of the witnesses. In particular, the trial judge believed C-D’s evidence regarding a crucial meeting in May 1990 rather than that given by M-K. The judicial test for rectification demands that there be "convincing proof" that a continuing common intention existed between the parties. Braidwood J.A. held, in light of the findings made by the learned trial judge, that there is ample evidence to show that C-D and M-K shared a continuing common intention that work performed by C-D to stabilize span supports in soft soil or sloped conditions was to be considered "extra work" within the meaning of the contract. The evidence rises to the level of "convincing proof." This mutual mistake led to the omission of such a term in the written contract. The equitable remedy of rectification is appropriate for this kind of mistake. It is available when the parties have purposely used or omitted a term in a contract in the mistaken belief that it bore a different meaning from its correct meaning as a matter of true construction. However, the appeal must be allowed due to the presence of the "flow through" provision in the contract. At the time the of the contract, there was no agreement that M-K would be liable to C-D for slope stabilization work if, in turn, Pacific Coast was not liable to M-K. Despite the mutual mistake regarding "extra work," each party would still have understood that the amount paid for as "extras" would only be the amount that, in turn, Pacific Coast would pay to M-K. To allow the remedy of rectification in this case would effectively rectify the contract, rather than the instrument. In these circumstances, a court of equity cannot assist the respondent for it would deprive the appellant of a bargain that both parties agreed it should have. Braidwood J.A. agreed with Southin J.A. on the question of unilateral mistake.
• 2000 BCCA 133 Catalano et al. v. Canadian Northern Shield Insurance Company
  Insurance – Property damage – All-risks coverage – Flood exclusion. The insured sustained property damage from water originating in a flooding creek. The water would not have reached the premises of the insured but for the emergency actions of a municipal crew in diverting some of the water at blocked culverts. Held: dismissing the appeal, notwithstanding the diversion, the damage was caused by flood within the policy exclusion.
• 2000 BCCA 141 Micron Construction Ltd. v. Hong Kong Bank of Canada
  Commercial – negligent misrepresentation – fraudulent misrepresentation – disclaimer – voluntary assumption of responsibility – foreseeable and reasonable reliance – construction Micron, a sub-trade in a major construction project, claimed damages for fraudulent and negligent misrepresentation against the Bank. The claim was based on a letter of assurance received from the Bank in respect to financing of the project and subsequent telephone conversations with the Bank’s representatives. The trial judge dismissed the actions against the Bank finding that the representations in the letter were not false, there was no wilful intent to defraud, and that the disclaimer in the letter was sufficient to negate an action in negligent misrepresentation. Held (Ryan J.A. dissenting): Appeal allowed; remitted to trial court for assessment of damages. The letter, taken in context, was a false and negligent representation as to the nature and security of the financing in place. The telephone representations, while not deliberately deceitful, were likewise falsely and negligently made. The remaining issue was whether the Bank could rely on the disclaimer to say that no duty of care arose or that Micron’s reliance on the representations was unreasonable. The development in the law since Hedley Byrne has tended to broaden the scope of liability for negligent misrepresentation. Hercules Management Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165 replaces the test of "voluntary assumption of responsibility" with "forseeable and reasonable reliance": Anns v. Merton London Borough Council, [1978] A.C. 728. The indicia of reasonable reliance set out in Hercules are met in this case; the Bank ought reasonably to have foreseen that Micron would rely on its representations and Micron’s reliance was reasonable and justifiable. The policy consideration of "indeterminate liability" does not arise.
• 2000 BCCA 146 United Used Auto & Truck Parts Ltd. v. Aziz
  Companies’ Creditor Arrangement Act (CCAA) – Jurisdiction -- Priorities – Monitor’s fees and expenses – Debtors’ legal expenses The Chambers judge granted a stay of proceedings against the debtor companies under the CCAA and ordered that the fees and disbursements of the monitor and the legal fees of the debtors related to the restructuring be paid in priority to the secured creditors. On appeal, held that the jurisdiction of the Chambers judge under the CCAA extended to granting a "super-priority" ahead of secured creditors for the fees and disbursements of the monitor and the legal expenses of the debtor relating to the restructuring plan, the latter as a substitute for debtor in possession of financing. The court had an equitable jurisdiction to supplement the express provisions of the CCAA to give effect to the object of the Act.
• 2000 BCCA 158 Corp. of Dawson Creek (City) v. Zurich Insurance Co.
  Zurich's policy insured the City's property against all risks of loss or damage save as excluded. The City claimed indemnity for loss suffered as the result of the collapse in 1997 of the roof of its ice arena. The immediate cause of the collapse was a heavy snow load but the underlying cause was faulty construction of the roof in 1957. The insurer relied on the exclusion for "inherent vice or latent defect".  The decision of the trial judge reported at (1998), 5 C.C.L.I. (3d) 107, [1999] I.L.R. I-3616 in favour of the City is upheld. In the circumstances of this case, having regard to the policy wording, the construction defects were neither inherent vice nor latent defect. The policy, which excludes coverage for faulty workmanship "with respect only to property in the course of construction", implies that coverage is not excluded for damage by faulty construction occurring after completion.
• 2000 BCCA 170 Hospital Employees' Union v. Children & Women's Health Centre
  Where a collective agreement obliges an employer to obtain a long term disability plan for its employees (a "category three" arrangement), and a dispute arises between an employee and the insurer, an arbitration board appointed under the collective agreement does not have jurisdiction over the insurer, or the dispute, in the absence of the insurer's consent or some statutory mandate. Here there was neither, and the arbitration board correctly held it had no jurisdiction.
• 2000 BCCA 171 Rogers v. ICBC
  Issue of interpretation of Regulation 106(1) of the Insurance (Motor Vehicle) Act in an appeal from a judgment on a stated case where the trial judge ordered that a payment made to the plaintiff by his employer was not an "insured claim" and therefore not a deductible benefit. Southin J.A.: The word "insured" informs the rest of the regulation and indicates an element of insurance, however, it is not clear from this stated case whether the arrangement between the employer and its employees constitutes insurance in a proper use of that term, and it has not been shown that the money received falls within the exclusion. Lambert J.A.: Cunningham v. Wheeler (1994), 88 B.C.L.R. (2d) 273 (S.C.C.) should not be read to say that by the use of the words "insurance exception" any benefit obtained from which the employee pays an amount to his employer, by deduction or otherwise, thereby contains an element of insurance. Appeal dismissed.
• 2000 BCCA 172 Hobenshield v. ICBC
  A "knowing" misrepresentation on an application for insurance by one registered joint owner is not necessarily binding on the other joint owner who can not necessarily be said to be "knowing". A joint owner who is the only driver of a vehicle may have an insurable interest equal to the full value of the vehicle.
• 2000 BCCA 196 Alers-Hankey v. Solomon et al
  Parties A and B entering into a partnership on a 50-50 basis to operate a retail business following which company incorporated by agreement and business assets transferred to company. All of shares of company issued to B who was operating the business in the absence of A who was resident in England. B then sold all of the shares of the company to a third party C with notice of the details of the partnership relation between A and B. B along with C liable to account to A on ground that B held 50% of shares in trust for A and C knowingly participated in the breach of trust by B when B sold all the shares of the company to C. Case dealt only with liability of B and C to A with damages to be assessed at a later date.
• 2000 BCCA 198 Chan v. Chadha Construction et al.
  Proper remedy for breach of building contract is damages, not specific performance.
• 2000 BCCA 207 Blank v. Drummond Financial (B.C.) Ltd.
  Company law – Right of dissent – Application of s. 207 dissent provision to bond holder arrangement – Conflict in affidavit evidence – Opportunity for cross-examination required  On appeal from a decision of a Chambers judge resolving a conflict on affidavits as to whether a notice of dissent was delivered. Held, that the conflict could not be resolved on the affidavits alone without an opportunity for cross-examination and the matter should be remitted for a rehearing with an opportunity for viva voce cross-examination on affidavits. On the alternative submission of the respondent held, that the Chambers judge was correct in concluding that the power contained in s. 206 of the Company Act was inapplicable. The right of the respondent bond holder arose from the order of the Master independently of the Company Act and therefore it did not involve a breach of the Act which was a pre-condition for relief under s. 206.
• 2000 BCCA 215 British Columbia Life & Casualty Company v. Meek
• 2000 BCCA 223 Conway Consultant Inc. et al. v. Daystar Management Ltd. et al.
• 2000 BCCA 256 Clarke v. Caister
  Application for an absolute discharge from bankruptcy without condition dismissed. The lower courts made no palpable and overriding errors in the findings of fact.
• 2000 BCCA 262 Rossland (City) v. Kootenay Boundary (Regional District)
  Interpretation of a clause in a contract. Appeal dismissed.
• 2000 BCCA 275 Csonka v. Axton Manufacturing
  Appeal and cross-appeal from a finding that Mr. Csonka was entitled to 4 months' notice of dismissal from his employment dismissed.
• 2000 BCCA 276 Andrews v. Sleep Country Canada Inc.
  The Defendant obtained an order under Rule 18A that the Plaintiff's damages for wrongful dismissal were limited by the Employment Standards Act. The Defendant appealed and brought an application for directions regarding the question of whether the appeal was one for which leave to appeal was required. The Defendant sought an order that the appeal be dismissed as abandoned as it is long out of time. Held, with suggestions for the course of the trial that the appeal be dismissed as abandoned.
• 2000 BCCA 277 Recchia v. Co-operators Life Insurance Company
  Disability insurance - commencement of limitation period is when proof of loss filed - New York Life Insurance v. Handler, [1937] S.C.R. 127 does not apply to limitation period issue in case at bar.
• 2000 BCCA 291 Bank of British Columbia Pension Plan v. Kaiser
  The appellant claimed entitlement to proceeds of the Bank of British Columbia Staff Pension Plan being wound up under a distribution plan organized in Supreme Court. A Chambers judge ruled the appellant ineligible because he waived entitlement to the plan when he resigned from the Bank in 1985. The appellant’s appeal was dismissed. The reasons of the Chambers judge were upheld.
• 2000 BCCA 313 Bridgesoft Systems Corp. v. B.C.
  Contract - private company to produce software for bridge building to be tested and approved by government Ministry - waiver of time requirements - fundamental breach for failure to deliver workable software - applicability of Norwood Construction Ltd. v. Post 83 Co-operative Housing Association (1988), 30 C.L.R. 231 (B.C.C.A.), where contract specifies what Ministry to do if software delivered not workable.
• 2000 BCCA 311 Fraresso v. Wanczyk
  This appeal relates to whether a contract for the sale and purchase of shares had been reached. The decision turns on the interpretation of the contract formation documents. Mr. Justice Finch dissents.
• 2000 BCCA 330 Family Insurance v. Lombard Canada
  Insurance - competing excess insurance clauses - court finding that based on differing types of policies and consideration of circumstances that homeowner’s policy should be found to be primary insurance and general liability policy should be found to be excess insurance.
• 2000 BCCA 339 Sovereign Wood Products Corp. v. Thomson
  On appeal from a judgment dismissing an action on guarantees. Held: That the appeal should be dismissed. There was evidence to support the conclusion of the trial judge that the first guarantee had been terminated by mutual agreement and that the second guarantee did not guarantee the debts of the debtor in default.
• 2000 BCCA 350 Havens v. John Watson Ltd. et al.
  WRONGFUL DISMISSAL: Appeal and Cross-appeal from award based on entitlement to 16 months' notice of termination. DISMISSED, essentially for reasons given by the trial judge. Award to be reduced by amount earned by plaintiff during the notice period.
• 2000 BCCA 356 544553 B.C. Ltd. v. Sunshine Coast Mechanical Contractors Ltd.
  There is no principle of law in Canada that a proposal in bankruptcy can be annulled only if a creditor shows that the creditors will benefit from annulment.
• 2000 BCCA 408 Leahy v. Canadian Northern Shield Insurance Company
  Defendant insurer appeals an order declaring that the damage to the plaintiffs’ home was covered by the all-risk homeowners insurance policy. The damage to the property included settlement and sinking of the foundation and driveway and cracking in the garage and house. The settlement was alleged to have been caused by a soil collapse resulting from an underground water escape from the neighbour’s sprinkler system, but the trial judge did not make any finding as to the cause of the problem. Held: Appeal allowed. The trial judge correctly held against the insurer on the technical objections put forward by the insurer with respect to delay in reporting, adequacy of proof of loss, and the applicable limitation period. However, the claim falls within the exclusion clause which provides that the insurer does not cover "settling, expansion, contraction, moving, bulging, or cracking…" The language of the clause does not limit the settling to certain causes. There was no finding in this case that there was a collapse. As the meaning of the clause is clear and unambiguous, the contra proferentem rule has no application.
• 2000 BCCA 416 Hamer-Jackson v. McCall
  The employer appealed the decision of a trial judge awarding a former employee damages for wrongful dismissal. The court concluded that the trial judge did not err in awarding damages and an extended period of notice based on the principle in Wallace v. United Grain Growers, [1997] 3 S.C.R. 701. The award of special costs was justified. The trial judge concluded that the employer had taken action during the course of the litigation for an improper motive. The appeal was dismissed.
• 2000 BCCA 421 Rowan v. Dunwoody & Company
  Partnership - P. resigns from partnership in accordance with terms of partnership agreement after having been told he must leave the partnership and then sues for damages for wrongful dismissal - case dismissed in Supreme Court and appeal dismissed for reasons given by trial judge.
• 2000 BCCA 430 Royal Bank of Canada v. Tuxedo Transport Ltd.
  The issue on appeal is whether under ss. 227(4) and 227(4.1) of the Income Tax Act a trust deemed to cover unremitted deductions includes after acquired assets. The original context was between the Crown (Revenue Canada) and an assignee of a General Security Agreement over assets earned by Tuxedo Transport Ltd. after it was placed in interim receivership. The Chambers judge held that only property existing at the time the trust was created (i.e. the period of time when Tuxedo failed to remit source deductions) was included in the trust. As such, the assignee had priority over the Crown to the proceeds of the assets held by the receiver which were obtained after the trust came into existence. Held: Appeal allowed. The language of the ITA makes it clear that the deemed trust includes all assets whenever acquired. Beginning with the date the deductions are made the trust continues forward in time and attaches to any property of the debtor as it comes into existence. The Chambers judge erred in limiting the term "property" to that which existed when the trust became operative. The funds previously held by the interim receiver are to be paid to Revenue Canada.
• 2000 BCCA 435 Gold Key Pontiac Buick (1984) Ltd. v. 464750 BC Ltd.
  Where lessor of motor-vehicles registered its financing statements with the PPS registry by the correct serial numbers but erred seriously in stating the lessee’s name, the curative section of the Act (s. 43(6)) applied to preserve the lessor’s security interest. A reasonable person doing a PPS search would search by serial number and would therefore find the registrations. Accordingly, the trustee in bankruptcy of the lessee did not prevail over the lessor.
• 2000 BCCA 436 Canadian Resort Development Corporation v. Swaneset Bay Resort Ltd.
  Contract for management and development of golf course and resort - P asserts consideration for service to be 5% of construction costs and D asserts fixed monthly payment substantially less than figure P seeks - contract terminated by D during development without cause - whether principle of reasonable notice applies where nothing in contract as to termination - P successfully sues for damages limited to reasonable notice period - P appeals as to damages asserting expectation damages for whole of development period as well as increase of construction costs figure found by trial judge of which P entitled to 5% - D cross appeals asserting trial judge clearly wrong in accepting evidence of P over that of D as to terms of payment - D says balance of probabilities so favour its position that trial judge erred in principle relying on Faryna v. Chorny (1951) 4 W.W.R. (N.S.) 171 at 174-5 (B.C.C.A.) - both appeal and cross appeal dismissed. Chief Justice McEachern agrees with all the above except the quantim of plaintiff’s remuneration as to which he would direct an inquiry by the Registrar.
• 2000 BCCA 458 KPMG (Trustee in Bankruptcy of Ellingsen) v. Hallmark Ford Sales Ltd.
  Facts:Hallmark Ford Sales Ltd. agreed to sell a truck to Greg Allan Ellingsen and let him take the truck to his logging operations without paying for it. Hallmark transferred ownership to Ellingsen expecting the deal to be financed by a bank and through a trade-in. Three months later, the financing had still not been worked out and Ellingsen went into bankruptcy. The Trustee now has the truck (or its sale proceeds) and claims that it is an asset forming part of the general estate of the bankrupt. The trustee applied for an order that the truck is vested in the Trustee free and clear of any claims by Hallmark and for an order that Hallmark discharge a registration against the truck in the Personal Property Registry. The chambers judge granted this order and Hallmark appeals.  Donald J.A.: Appeal Allowed. Hallmark imprudently transferred ownership registration to Ellingsen. While this transfer implies a concluded contract of purchase and sale, on a full appreciation of all of the circumstances, it is apparent that the proposed sale never occurred because a condition precedent, that financing be obtained, was not fulfilled. The transfer facilitated the acquisition of insurance and moved the transaction along, but did not complete it. Hallmark argues that it had a constructive trust in the truck and that the property of a bankrupt held in trust for another is not the property of the bankrupt. The first question is whether a constructive trust is a security interest under the Personal Property Security Act. A constructive trust does not secure payment or the performance of an obligation rather, its purpose is to prevent an unjust outcome. A constructive trust is not therefore a security interest under the PPSA. It was appropriate to find a constructive trust in this case and the trust could be imposed prior to the bankruptcy.  McEachern C.J.B.C. (dissenting): The purchase agreement, while stating that it was subject to credit approval, also provided remedies for repossessing the truck in the event of non-payment. The purchase agreement therefore created a security interest between Ellingsen and Hallmark as defined in the PPSA. In addition, there is no constructive trust in the circumstances of this case as the PPSA provides a good juristic reason for the enrichment.   Lambert J.A. (concurring): Ellingsen’s interest was simple possession. The purchase agreement was never completed and Ellingsen never acquired title or ownership because financing was never arranged. It was appropriate to impose a remedial constructive trust in the circumstances of this case as of 15 March 1997.
• 2000 BCCA 466 Bains v. Bhandar
  Facts: In 1992, Mr. Bhandar obtained a judgment against Mr. Bains for fraudulent misrepresentation. Mr. Bains appealed that judgment unsuccessfully. In 1994, Mr. Bains began an action to set aside that judgment on the basis that it had been obtained by fraud. That action was dismissed on 15 July 1997. On 22 January 1999, this Court allowed an appeal by Mr. Bains from that decision and ordered a new trial. In allowing the appeal, the Court relied on the fact that Mr. Bhandar had failed to disclose a "Settlement Agreement" with a key witness in a related action which included a clause that she not actively assist Mr. Bains. The Court concluded that Mr. Bains had not discovered this agreement until August 1995. Subsequent to the release of that judgment, Mr. Bhandar brought this motion for a re-hearing of the appeal and the admission of new evidence.   Prowse J.A.: Application for re-hearing granted and new evidence admitted. Appeal dismissed. The new evidence established that counsel for Mr. Bains knew of the "Settlement Agreement" as early as September 1994. In addition, the new evidence established that Mr. Bains knew, in February 1992, that a settlement agreement with the witness in question had been reached, he knew the terms of the agreement were confidential and he knew that the result of this agreement was that the witness would no longer cooperate with him or his counsel. Mr. Bains could have, with reasonable diligence, discovered the terms of the settlement agreement before the trial of the original action for fraudulent misrepresentation. Further, Mr. Bains had not established that Ms. Thompson had material evidence to give with respect to the matters at issue. In the result, Mr. Bains has not met the test for setting aside a judgment regularly given and upheld on appeal.
• 2000 BCCA 507 The Owners, Strata Plan NW580 v. Canada Mortgage & Housing Corp.
  The plaintiff’s statement of claim alleged negligent misrepresentation and breach of trust by the defendant CMHC. On appeal from a Chambers judgment striking the pleading as disclosing no reasonable cause of action. Held: The appeal should be allowed. The Chambers judge misapplied the plain and obvious test set out in Hunt v. Carey Canada by going beyond the allegations in the statement of claim. Based on those allegations it could not be said to be plain and obvious that the action could not succeed.
• 2000 BCCA 512 Eriksen v. Fletcher Challenge Canada Limited
  The plaintiffs appeal the dismissal of their action seeking to require the defendant to give them the benefit of a "special severance program for salaried employees". Both plaintiffs were supervisors with long service. Each elected to take early retirement on terms which allowed them to cease working but to remain on payroll while they used up accumulated vacation pay and banked overtime. By the terms of that arrangement, they continued on payroll until those benefits were used up but were not required or entitled to return to work. The special severance program was created by the employer after the plaintiffs ceased work but were still on payroll. It provided substantially greater benefits than the arrangement to which they had agreed. The employer took the position that the new program, which was created to induce employees to take early retirement as part of reorganization, did not extend to the plaintiffs. It did extend the benefit of the new program to three other employees who elected to retire on the same basis as the plaintiffs at a time when the program had been decided upon by the company although not yet announced to employees. HELD: The trial judge was right in holding that the employer was under no obligation to extend the benefit of the program to the plaintiffs.
• 2000 BCCA 518 Douglas Symes & Brissenden v. LSBC Captive Insurance Co. Ltd.
  The issue on appeal and cross-appeal is whether the defendant insurers are obligated to provide a defence to the plaintiff law firm in two pending actions in which the Law Firm and Lawyer are named defendants. The underlying litigation involves allegations of solicitor's negligence, fraud and misrepresentation against the Law Firm and the Lawyer in relation to a joint venture development project which included a company ("Pacific Pilot") in which the Lawyer had a financial interest. Under the B.C. Lawyers’ Compulsory Professional Liability Insurance Policy, the insured is indemnified against errors made "in performing or failing to perform professional services for others" and the insurer is required to defend "any suit…even if any of the allegations…are groundless, false or fraudulent…" The insurer relies on an exclusion that precludes coverage for claims "arising out of, or in connection with", "an organization" in which the insured had, at the time of error, greater than 10% ownership. On an application by the Law Firm, the chambers judge ordered that the primary insurer ("Captive") was obligated to provide a defence to the Law Firm, but only with respect to the allegations subsequent to the date the Lawyer left the firm. He further ordered that the excess insurer ("Zurich") was under no obligation to provide a defence. The Law Firm appealed and Captive cross-appealed.    Held: The cross-appeal is allowed and the appeal dismissed but on grounds not considered by the chambers judge. The appellant may well be right in submitting that the chambers judge erred in the grounds upon which he found for the insurer and in failing to have regard to the principle that, where a defendant applies at the outset of an action to require an insurer to defend, the allegations in the statement of claim are the basis for determining whether the claim is within coverage and that a mere possibility that a claim within the policy may succeed will suffice (Nichols v. American Home Assurance Co., [1990] 1 S.C.R. 801). In this case, however, the pleadings in the underlying actions as they stood at the time of the hearing below are so deficient that one cannot determine what is the gravamen of the claim made in them. In this case, it would be inappropriate to purport to decide the issue of duty to defend at this stage. The result is that the petition of the law firm is dismissed against both insurers.
• 2000 BCCA 537 Strukoff v. Syncrude Canada Ltd.
  Foreign defendant – Jurisdiction simpliciter – R. 13(1)(g) – R. 13(3) "Real and substantial connection test" The defendant appealed dismissal of its application to set aside service of a writ in Alberta in a wrongful dismissal action on the ground that the B.C. court lacked jurisdiction over the defendant. The plaintiff had worked at the defendants’ plant in Alberta from 1978 to 1988. The plaintiff was then on disability leave until 1994 and moved to B.C. The defendant terminated the plaintiff’s employment contract in 1994 for cause. Held, appeal dismissed: The B.C. courts lacked jurisdiction under R. 13(1)(g) because the letter of termination was mailed in Alberta. However, as the alleged cause for termination was based on facts related to the plaintiff’s claimed disability in B.C. there was a real and substantive connection between the issue of cause and British Columbia sufficient for jurisdiction under R. 13(3).
• 2000 BCCA 552 Jalbert v. UBC
  The employer, University of British Columbia, appealed the basis upon which damages were awarded in a wrongful dismissal action. The employer had given working notice in two letters received by the employee eight months prior to termination. The letters indicated that the employee could expect to be rehired at the end of the notice period. Further discussions with the employer also reassured the employee in that regard. The trial judge found the letters could not be taken as notice given the conduct of the employer and awarded damages for wrongful dismissal accordingly. Held: The trial judge misapprehended the nature of the letters and their legal effect. Adequate notice had been given. The employer conceded it had breached an agreement to rehire. Damages of $405.53 were awarded for this breach as the employee had readily found other employment.
• 2000 BCCA 565 Coutts v. British Columbia
  Public Sectors Employers Act - Employment Termination Standards The provisions of s.6 do not abrogate the common law requirement of mitigation for public sector employees.
• 2000 BCCA 578 Canpotex Limited v. HMTQ
  The court affirmed the order of Vickers J. allowing an appeal from the assessment of tax under s. 21(1)(b) of the Social Services Tax Act. The court agreed railcars were being used by CN and CP, not the respondent, to transport potash through B.C. to the Port of Vancouver for export. It expressed no opinion on the constitutional issue discussed by Vickers J.
• 2000 BCCA 584 B.C. Human Rights Commission v. B.C. Human Rights Tribunal
  S.13(1) Human Rights Code – complainant incarcerated and employment terminated on grounds he could not show for work – no discrimination on basis of conviction.
• 2000 BCCA 589 Midwest Management (1987) Ltd/Monad Contractors Ltd. v. BC Gas Utility Ltd.
  A broad privilege clause in tender documents giving the owner a discretion to accept non-compliant bids does not have the effect of ordering any serious bid "capable of acceptance" so as to result in a "Contract A" upon the bid's receipt. An owner owes no "free-standing duty of fairness" to tenderers, independent of Contract A. Such a duty is inconsistent with an adversarial competitive tendering process.
• 2000 BCCA 594 Fraresso v. Wanczyk
  The Court varied its earlier judgment and directed a trial of all issues not decided by the earlier judgment.
• 2000 BCCA 607 Cachafeiro v. Amalgamated Mill Supplies Ltd. et al.
  On a trial under Rule 18A the trial judge found on the basis of documentary evidence that the plaintiff was not a contracting party. The action was dismissed: Held the judge was right and the appeal was dismissed.
• 2000 BCCA 615 Redfearn v. District of Elkford
  Wrongful dismissal - Trial judge concluding District of Elkford "no cause" to terminate. Court of Appeal agreed.
• 2000 BCCA 621 Panton v. Everywoman's Health Centre Society (1988)
  The appeal against dismissal of this wrongful dismissal action was allowed and the matter remitted to the trial court for assessment of damages. The circumstances surrounding the plaintiff’s compliance with an employer issued directive to deliver documents for use in a prosecution of interest to the employer, and the plaintiff’s approach to her participation as a witness in the proceedings did not constitute cause for dismissal.
• 2000 BCCA 627 Raphael v. Unum Life Insurance
  Disability insurance – Classification of Insurance Policy – Limitation of Actions – Definition of "Payable" The defendant insurance company was held liable to the estate of the deceased policyholder for benefits payable under a disability insurance policy. That judgment was appealed on the basis that the trial judge erred in granting relief from forfeiture, in failing to find the claim was barred by the expiry of the limitation period, and in finding that the deceased was totally disabled. Held: Appeal allowed and order varied reducing award. The trial judge’s finding that the deceased was totally disabled was supported by the evidence. This was a case of imperfect compliance, not non-compliance, with the terms of the policy and therefore relief from forfeiture was available. The insurer did not suffer any prejudice from the delay in filing the claim. Because the insurance policy is properly classified as accident and sickness insurance, the applicable limitation period is contained in s. 89 of the Insurance Act. The action had to be commenced no later than one year after the benefits became payable. Benefits under the policy became payable upon the expiration of the 180 day elimination period and were payable on a bi-monthly basis thereafter. The plaintiff had one year from the date of each bi-monthly payment to sue for recovery of that entitlement. The plaintiff’s action was time barred for all benefits which became payable prior to one year before the date the action was actually commenced.
• 2000 BCCA 632 Pacific International Securities Inc. v. Drake Capital Securities Inc.
  Jurisdiction – Securities Transaction – Rule 13(3) – Jurisdiction Simpliciter – Forum non conveniens The plaintiff, a B.C. Securities dealer, purchased shares by telephone with a defendants’ employee in California. The shares were not delivered. A chambers judge said there was no B.C. jurisdiction under Rule 13(1)(g) because the breach of contract was committed in California. He held that there was a real and substantial connection with B.C. sufficient for jurisdiction under Rule 13(3) because the plaintiff sustained damages in B.C. and B.C. was a convenient forum. On appeal, held, by a majority, that jurisdiction could be maintained under Rule 13(3) and the appeal should be dismissed.  Esson J.A. - Dissenting: Would allow the appeal.
• 2000 BCCA 637 Interclaim Holdings Limited v. Down et al
  Appeal from order setting aside order appointing interim receiver in bankruptcy dismissed. No reversible error.  Attachments not available electronically.
• 2000 BCCA 638 Endean v. British Columbia and Canada (Attorney General)
  Class Bankruptcy Act – Standing Appeal for approval of fees for class counsel following settlement. Held that the defendants do not have standing to appeal an order approving fees for class counsel.
• 2000 BCCA 644 Clendenning v. Lowndes Lambert (B.C.) Ltd.
  The defendant appealed a judgment holding it liable for the wrongful dismissal of the plaintiff, and awarding her damages of 36 months salary for the manner of her dismissal ("Wallace damages") in addition to six months salary in lieu of notice. The plaintiff cross-appealed the dismissal of her claim for punitive damages. All members of this Court agreed that the appeal against liability should be dismissed. A majority of the court held that the evidence did not support the extensive bad faith found by the trial judge to be the factual basis for extension of damages under Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701. The majority reduced the plaintiff’s damages to the equivalent of twelve months salary. The plaintiff’s cross appeal on punitive damages was dismissed.
• 2000 BCCA 663 West Shore Constructors Limited v. Sandspit Harbour Society et al.
  Construction Contract: Plaintiff contractors claim for delay caused by another contract reviewed by consultant under Standard CCDC 2-1994 and recommendation sent on to owner defendant. Defendant gave notes to other contractor that it was deducting delay claim from amount owing to it. Issue was whether quantum of delay claim was owing. Held at trial: Owner's acceptance of consultant's recommendation made determination under contract unnecessary. Appeal dismissed.
• 2000 BCCA 664 Dr. Richard L. Kofsky Inc. v. Zurich Insurance Company
  Insurance policy – Crime coverage – Distinction between continuous policies and consecutive but separate policies – Construction of limitation of liability clause. The appellant appeals a dismissal of its claim for a second amount of $25,000.00 under the crime coverage section of an insurance policy issued to it by the respondent insurer. Held, dismissing the appeal: the appellant's insurance policy is properly characterized as a series of separate contracts of insurance rather than a continuous policy with sequential policy periods. In this case, the combined effect of sections 7 and 8 is to limit the respondent's liability to a total of $25,000.00. The policy language was clear and unambiguous. The appellant's perceived unfairness of the result loses force once it is recognized that the policy continued to cover a risk.
• 2000 BCCA 671 Smith v. Ross et al.
  Claim For Wrongful Death - Duplicate Actions Under The Family Compensation Act A father brought an action claiming damages for the loss of his wife and one child in an accident. The surviving children brought a separate action for the death of their mother. The defendant in the father’s action appeals an order refusing an application to dismiss the father’s action as a nullity on the basis that it is a duplicate action contrary to section 6 of the Family Compensation Act. The surviving children’s action has been settled. Held: Appeal allowed and action dismissed. The fact that there were two actions could be treated as an irregularity, not a nullity, and could normally be cured by joining the two actions. That irregularity must be cured before any of the claims is resolved by settlement or judgment, however. Here the second action had been dismissed after it was settled and can not be revived to remedy the irregularity in this case. In these circumstances the resolution of the one action brought an end to the other action and therefore the father’s action is a nullity.