Sunday, 29 April 2012

No Automatic Forfeiture of Deposits Unless They Are "Non-Refundable"

Standard Contracts of Purchase and Sale, developed by BCREA and CBABC and used for the vast majority of residential real estate transactions in BC, include provisions for payments and holding of deposits (section 2) and for forfeiture of deposits "on account of damages" in case of non-completion (section 12).

In a pithy judgment rendered in Tang v. Zhang, 2012 BCSC 213 (originally released in February but republished last week), the court held that, unless a deposit is specifically described as "non-refundable" in the contract, in case of non-completion, it will only be "absolutely forfeited" to the seller "on account of damages".  Accordingly, if the seller suffered no actual damages, the deposit will be refunded to the buyer.  In arriving at this conclusion, the court rejected an argument that two leading BCCA authorities dealing with forfeiture of deposits under standard contracts - Williamson Pacific Developments Inc. v. Johns, Southward, Glazier, Walton and Margetts (1997), 35 B.C.L.R. (3d) 180(C.A.) and Agosti v. Winter, 2009 BCCA 490 - are in conflict with each other or create "a non-refundable deposit scheme that does not require proof of damages."

Thursday, 19 April 2012

Addition to Master's Jurisdiction

A few weeks ago, several minor amendments were made to the BC Civil Rules, effective on April 25, 2012.  Specifically:
  • Rules 12-2 [TMC] and 15-1 [Fast Track] were amended to allow Masters to conduct trial management conferences; and 
  • Forms 8 [Default Judgment], 35 [Order After Application] and 79 [Order for Indigent Status] were amended to clearly explain that inapplicable paragraphs must be deleted.
On the heels of these amendments, BCSC released Practice Direction 34 - Masters' Jurisdiction, which replaces PD-14 previously dealing with the same subject.  The only difference between the PDs is the removal of paragraph 2(m) which previously prohibited Masters from conducting TMCs.

Tuesday, 17 April 2012

New Limitation Act - 2-year Limitation Period for (almost) All Claims

As some may recall, in September, 2010, the BC AG published an extensive whitepaper on reforming the existing Limitation Act. On April 16, the new Limitation Act was introduced in the Legislature as Bill 34 (for first reading).  The introduction was accompanied by an extensive press release and an information page touting the virtues of the reform. The key proposed changes in the new Act, which will entirely replace the existing Act, are described as follows:
  • moving from a variety of basic limitation periods, based on the type of legal action, to a single two-year basic limitation period for all civil claims. Exceptions to this are civil claims that enforce a monetary judgment, exempted claims and actions that have limitation periods set by other statutes;
  • moving from a general 30-year ultimate limitation period to a single 15-year ultimate limitation period;
  • reforms also include changing the commencement model of the ultimate limitation period from an “accrual” model to a model that starts the clock running on the ultimate limitation period based on an “act or omission.”
Notably, s. 30 of the proposed Act, as well as the press release, confirm that the new Act will not be retroactive and will not apply to causes of action that existed before its ultimate enactment:

Monday, 16 April 2012

Evidence of Potential Harm Required to Seal Exhibits

Following up on my previous post about redactions, here is another decision, this time out of the Ontario Court of Appeal, dealing with confidentiality of business information filed in court.

This week, the The Lawyers Weekly reported that the Ontario Court of Appeal, in Out-Of-Home Marketing Association of Canada v. Toronto (City), 2012 ONCA 212, upheld Toronto's sign levy and agreed that that it was not an indirect, and therefore unconstitutional, tax.  Personally, I am more interested in another aspect of this decision where the court overturned the sealing order for the financial information filed by the Petitioner in support of its constitutional challenge, finding that the Petitioner did not establish a public interest in protecting the information.

Redaction of Listed Documents Under the New Rules

In a not uncommon situation, a party receives a list of documents produced under R. 7-1(1) or 7-1(12), requests copies of listed documents, and then discovers that portions of documents have been redacted for purported reasons such as "relevance", "confidentiality", "privacy", etc.  However, as there is no provision for redaction of documents under R. 7-1, what can/should be done about such redactions?  The decision of Master MacNaughton in 0878357 B.C. Ltd. v. Tse, 2012 BCSC 516, provides some welcome guidance and confirms that, without a court order to the contrary, the entire document must be produced.

Thursday, 12 April 2012

Practice Resource - Consolidated "Registrar's Newsletter

Thanks to a post on Courthouse Library’s New and Notable feed, I found out that the BCSC publishes a “Registrar’s Newsletter” which is "a Question and Answer resource that is used by District Registrars and Deputy District Registrars throughout the province to help clarify registry practice with respect to a number of provincial and federal statutes and the Supreme Court Civil and Family Rules."  It is not clear whether individual Newsletters are publicly available, but the court did publish a comprehensive updated and consolidated version last week.

Overall, the Consolidated Newsletter is a wealth of useful information, for lawyers as well as paralegals, albeit there are some things in there which, in my view, do not accurate summarize the law on a particular issue.  That said, from a business litigation practice, I found a large number of very useful tidbits of information in the document, including, for example:

Wednesday, 4 April 2012

Special Costs for Failure to Dismiss after Settlement

It is well accepted that terms of a settlement may be enforced in a separate action, in an application in the action that was settled, or by claiming the settlement as a defence to new claims.  The question sometimes arises, however, what is the proper remedy against a party who is refusing to live by the settlement and fails to dismiss existing claims or brings a new action for claims that have been settled.  

In Chemainus First Nation v. Bullock Baur Associates Ltd., 2012 BCSC 479, the court confirmed that the proper remedy in such circumstances, in addition to ordering the dismissal of the action, is special costs.  In particular, the court relied on Ring Contracting Ltd. v. B & G Logging Ltd., (1998), 119 B.C.A.C. 166 to find that:
  1. although the settlement agreement did not expressly state that the parties will sign a CDO, "this would be the effect of their agreement to its terms"; and
  2. special costs are a proper remedy to failure to sign the CDO:
    The reasoning from Ring once a party has agreed to settle a cause of action, continued pursuit of that cause of action is reprehensible conduct.  It does not matter whether such pursuit is via a new claim based on the same cause of action or by pursuing the very claim a party agreed to settle.  Based on the principle from Ring, having found that there was a valid settlement of causes of action arising out of the original construction of the CFN sewer system, WIC’s refusal to consent to a release of the claims under the Action amounts to reprehensible conduct deserving of rebuke via an order for special costs.

Monday, 2 April 2012

Extraprovincial Registration and Territorial Competence

Section 375 of the Business Corporations Act provides that a "foreign entity" must register in B.C. as an extraprovincial company "within 2 months after the foreign entity begins to carry on business in British Columbia".  More specifically, s. 375(2) provides that a foreign entity is deemed to carry on business in B.C., inter alia, if it has a "resident agent" in B.C. or " it otherwise carries on business" in B.C.

In Moore v. NextEnergy Inc., 2012 BCSC 458, the court rejected the Defendant's argument that it did not fall within the ambit of this section because it did not have any officers, directors or an office in B.C.  Rather, relying on the facts that the Defendant did have two employees in B.C., a sales rep who distributed products in B.C., and a sales technician to assist with installation of the products, the court found that there was "an arguable case" that the Defendant carried on business in B.C.

Why is this particularly important? Because of s. 7 of the Court Jurisdiction and Proceedings Transfer Act, which provides that a corporation is ordinarily resident in B.C. and therefore is within the territorial jurisdiction (jurisdiction simpliciter) of B.C. courts if, inter alia:
(a) the corporation has or is required by law to have a registered office in British Columbia,
Having found that the Defendant was likely required to be extraprovincially registered, the court also found that it was ordinarily resident in B.C. and thus within the court's jurisdiction.