Reasons for Judgment of the Honourable Mr. Justice Hollinrake:

[1]         This is an appeal from a judgment granted against the appellants on a Rule 18A application by the respondent.

[2]         I should note at the outset that the style of cause in the court below was:

345257 B.C. LTD.

RICHARD BARKER-TAYLOR AND EDWARDO TAK SHINYEI

dba RBT GROUP OF COMPANIES

the said RICHARD BARKER-TAYLOR

the said EDWARDO TAK SHINYEI

The style of cause in this court reflects only the two individuals who are the subject-matter of this appeal.

[3]         The significant facts in this case are set out in the judgment below as follows:

[1]  This application under Rule 18A comes out of a contract entered into between Race-Way Construction & Management Ltd. ("Raceway") and RBT Group of Companies on September 21, 1998, for the renovation of space leased by a numbered company, 345257 B.C. Ltd., from the Eaton Centre in Metrotown.  The renovations called for under the contract were satisfactorily completed by October 28, 1998.  Unfortunately, the full contract price of $54,941.29 was not paid to the plaintiff because of financial difficulties experienced by the lessee of the premises which were renovated.

[2]  On November the 10th, 1998, 345257 B.C. Ltd. issued a promissory note for the amount of $44,079.94, being the amount then owing on the contract to the plaintiff.  Since then additional sums were paid by cheques issued from a separate numbered company, 397486 B.C. Ltd., amounting to $17,500.  In the result, the principal sum of $27,441 plus interest remains outstanding on account of the contract.

[3]  RBT Group of Companies is neither a proprietorship nor an incorporated entity.  It was described by Edwardo Shinyei, one of the principals of 345257 B.C. Ltd. in his examination for discovery, as a “handle,” that is a way of referring to “a bunch of numbered and doing business as companies.”  He testified that he signed the contract on behalf of “the numbered company,” although the contract did not refer to the numbered company.

[4]  Counsel for the defendant, B.C. 345257, concedes liability of that defendant.  It is with respect to the personal liability of Richard Barker-Taylor and Edwardo Shinyei that the issue in this lawsuit arises.

[5]  The evidence establishes that the only reference made to 345257 B.C. Ltd. in connection with the contract between the RBT Group of Companies and the plaintiff is in the promissory note issued November 10, 1998 after the contract was completed.  All other references in correspondence are either to the RBT Group of Companies, or some entity doing business under that umbrella.  All the documents issued in connection with the contract from any of the entities falling under the guise of the RBT Group of Companies were signed either by one or another or both of the personal defendants in their capacity as a principal of the particular entity.

[6]  It is apparent from the examination for discovery of the President of Raceway, who entered into the contract on its behalf, that she believed the contract was with the RBT Group of Companies.  There is no evidence she believed the plaintiff was contracting with either of the two individual plaintiffs.  Neither is there evidence that she was told of the existence of 345257 B.C. Ltd. as the party to the contract at issue.

[4]         The trial judge dismissed the action against the appellants insofar as it was asserted that they were liable at common law.  There is no appeal from that conclusion of the trial judge.

[5]         The appellants were found individually liable on the basis of s. 106 of the Company Act, R.S.B.C. 1996, c. 62 (the "Act").

106  (1)  Every company or extraprovincial company must display its name in legible characters

. . .

(c)  on all its contracts, business letters, and orders for goods, and on all its invoices, statements of accounts, receipts and letters of credit, and

(d)  on all bills of exchange, promissory notes, endorsements, cheques and orders for money signed by it or on its behalf.

. . .

[106]

(3)  If an officer or director of a company or an extraprovincial company, or a person on the company's or extraprovincial company's behalf, knowingly permits the company or extraprovincial company not to display or use its name as required by subsection (1)(a), (b) or (c) or by subsection (2), the officer, director or person, as the case may be, is personally liable to indemnify a purchaser or supplier of goods or services or a holder of any security of the company who suffers loss or damage as a result of being misled by that failure to display or use the name.

[6]         The evidence is clear that as far as the respondent was concerned, it was dealing with the RBT Group of Companies.  It was that name and that name only that the appellant Shinyei signed his name as "authorized signature" on the contract which underlies this lawsuit.

[7]         There are a number of legal entities that operate under the description of RBT Group of Companies.

[8]         It was not until after the contract was completed and payment sought by the respondent that it became aware through the appellants that as far as they were concerned, the contract signed by the appellant Shinyei on behalf of RBT Group of companies was between, in terms of legal entities, 345257 B.C. Ltd. and the respondent.  That numbered company is one of the RBT Group of Companies and the one that signed the lease of the premises in which the respondent performed services and supplied goods.

[9]         The appellants say that the respondent has not brought itself within s. 106 of the Act.  They say that "in the end result, the respondent received what it bargained for, namely, a contractual promise (i.e. the promissory note) from the corporate entity leasing the retail premises for payment of the amount owing under the contract."  That is to say, the respondent suffered no loss or damage.

[10]    At the hearing of this appeal, I thought initially there was some merit to this position taken by the appellants.  However, on reflection I have come to a different view.

[11]    The second ground of error asserted is when the trial judge concluded:

[18] In my view, the necessary causal connection between the defendants' failure to use the company name and the loss suffered by Raceway is established by the absence of evidence, as existed in Ostrom [v. Sadler (c.o.b. RSR Equipment), [1998] B.C.J. No. 565], affirmatively demonstrating the failure, did not influence the plaintiff.

[Emphasis mine.]

The appellants say this placed an onus on them to show that the failure to use the company name (or here, names) did not lead to a "loss as a result of being misled by the appellants' failure to display or use its company name or, in the alternative, the respondent failed to prove on a balance of probabilities that it suffered loss as a result of being misled."

[12]    I agree that in saying what he did as set out immediately above, the judge fell into error in terms of the onus.  This is a cause of action based solely on the provisions of s. 106 of the Act and to succeed on this section the respondent must bring itself within the section and that, not on the basis of a common law principle, but rather on the words of the provision itself.

[13]    However, I am of the opinion that on the whole of the evidence it is open to the court to draw inferences that bring the respondent within the provisions of s. 106 of the Act.  When the judge referred to "the defendants' failure to use the company name" in the reference I have set out above, I asked counsel what company and he could not say.  It must be kept in mind that insofar as the respondent was concerned, it had contracted with the RBT Group of Companies and not with any particular company.  It must also be kept in mind that it was the appellants who after the execution of the contract and the work being done, imposed, so to speak, 345257 B.C. Ltd. on the respondent as the contracting party.  While it is so that the respondent has a judgment against the numbered company it appears that judgment will not be paid.  The reason the respondent has a judgment against the numbered company only, in terms of the RBT Group of Companies, is because of the position taken by the individual appellants that the contracting legal entity was the numbered company when, as far as the respondent was concerned, it had contracted with the group not any one individual legal entity.

[14]    As I have said above, I am of the opinion that the respondent, on the basis of inferences to be drawn from the whole of the evidence, has brought itself within s. 106 of the Act.

[15]    This is how I see what happened here in terms of s. 106 of the Act.  The respondent company believed it was contracting with a group of companies.  It turned out that in law and at the initiative of the appellants, the company found itself dealing with the numbered company as the contracting party.  The company was misled by Shinyei signing for a group of companies and the loss suffered as a result of that was that there was no group of companies each one or more than one of that group that was legally liable with the exception of the numbered company which was, so to speak, thrust on the respondent company by the appellants.  This misleading of the respondent company resulted in it suffering loss or damage as a result of that misleading which left the respondent company with a promissory note that could not be collected and a judgment that would bring no recovery on execution of it.  When seen as I see it as set out above, the respondent company has brought itself within the requirements of s. 106 of the Act thus permitting it to look to the appellants for payment of that loss or damage.

[16]    I should record here that in my opinion the actions of this respondent were reasonable in all the circumstances and no criticism can be levelled at it for not having adopted a different course of action with respect to its claim.

[17]    I would dismiss this appeal.