Citation:
Harbour Management Inc. v. Cleland,
2007 BCCA 117
Date: （略）
Docket: CA034444
Between:
Harbour Management Inc.
Respondent
(Plaintiff)
And
Gordon Michael John Cleland
Appellant
(Defendant)
Before:
The Honourable Madam Justice Ryan
(In Chambers)
G. Kent
Counsel for the Appellant
L.V. Halyn
Counsel for the Respondent
(by written submission)
Place and Date of Hearing:
Vancouver, British Columbia
8 December 2006
Written submissions received:
Place and Date of Judgment:
Vancouver, British Columbia
23 February 2007
Reasons for Judgment of the Honourable Madam Justice Ryan:
Introduction
[1] On October 20, 2006, Madam Justice Rowles gave directions in Chambers that an order made by Mr. Justice Holmes dismissing Gordon Cleland’s application for judgment under Rule 18A required leave to appeal to this court. This application for leave to appeal is the result of that direction.
[2] The order of Mr. Justice Holmes was pronounced June 22, 2006, in Supreme Court Chambers. He dismissed the application for judgment of Gordon Cleland, the defendant at trial, on the basis that he was unable pursuant to Rule 18A(11)(i) to find the facts necessary to decide the issues arising in Mr. Cleland’s application.
[3] The applicant on this motion, Gordon Cleland, is the defendant in an action brought against him by Harbour Management Inc. ("Harbour Management") seeking specific performance or damages for breach of a contract for the purchase and sale of about ten acres of commercial property in Invermere.
Background
[4] The parties entered into an agreement for the purchase and sale of the property on April 29, 2005 (the "April Agreement"). Under the April Agreement Mr. Cleland agreed to subdivide the property into two parcels of approximately five acres in size. One of the parcels was to be sold to Harbour Management at a price of $200,000.00 per acre. The April Agreement provided an option to Harbour Management to purchase the remaining five acre parcel following completion of a subdivision.
[5] A second written agreement was entered into by the parties on June 22, 2005 (the "June Agreement"). The option to purchase the remaining parcel was not a part of that agreement. It is unclear to me whether the April Agreement was before the learned Chambers judge. If it was, it has not found its way into the materials provided to me for this application.
[6] The paragraphs of the June Agreement relevant to this application are the following:
4.01 The obligations of the Purchaser to complete this transaction shall be subject to the following conditions being satisfied, which if not met within the indicated time period will render the Offer null and void and entitle the Purchaser to the return of all deposit monies and accrued interest. Unless otherwise indicated the following conditions shall be waived at the Purchaser’s sole and absolute discretion;
a. The Purchaser shall have no more than 90 days from the receipt of all documentation specified in paragraph 9 herein (provided the Purchaser shall use its reasonable best efforts to remove this condition as soon as possible):
i. to examine and approve, acting reasonably the records, title contracts, permitted encumbrances, soil, environmental, engineering and geo-technical reports and other aspects pertaining to the Lands; and
ii. to examine the Lands to determine its suitability for the Purchaser's purpose including economic studies.
b. The Purchaser shall have 30 days from the date it is advised by the Vendor that the subdivision plans are available for inspection and review to approve such plans and the proposed zoning as it relates to the Lands.
4.02 All costs related to the development permit applications shall be to the account of the Purchaser. The Vendor agrees to cooperate and provide all necessary consents required by the Purchaser in respect of the Purchaser's efforts to obtain Purchaser's Planning Approvals.
4.03 The parties agree that the foregoing Conditions have been inserted for the sole benefit of the Purchaser and may be unilaterally waived by it in whole or in part by notice in writing to the Vendor at any time on or before the said condition dates.
5.01 Vendor's Condition Precedent
a. The Purchaser acknowledges that the Lands are contained within the title to the Gross Lands and that subdivision approval must be obtained to subdivide the Lands from the title to the Gross Lands. The Vendor covenants and agrees, on behalf of both the Vendor and the Purchaser (but at the Vendor's sole costs and expense), to use all reasonable commercial efforts to obtain approval to subdivide the Gross Lands as contemplated herein to create a separate certificate of title to the Lands substantially in accordance with the Subdivision Plan and to have the Lands zoned to allow the proposed uses and to register such subdivision prior to the Subdivision Condition Date. In the event that due to no default of the Vendor, subdivision approval, subject to subdivision conditions acceptable to the Vendor in its sole discretion, has not been obtained to subdivide the Gross Lands to create a separate certificate of title to the Lands substantially in accordance with the Approved Subdivision Plan and a plan of subdivision (or instrument effecting a subdivision) has not been registered to create a separate certificate of title to the Lands substantially in accordance with the Approved Subdivision Plan and have the Lands zoned to allow the proposed uses on or before the Subdivision Condition Date (the "Subdivision Condition Precedent), then this Agreement shall terminate, the Deposit shall be returned to the Purchaser and the Purchaser shall have no further interest in the Gross Lands or the Lands.
. . .
c. For the purposes hereof, the term "Subdivision Condition Date" means November 1, 2005, provided that either party hereto may elect to extend the Subdivision Condition Date to December 31, 2005 by providing written notice to the other any time on or prior to November 1, 2006 of such extension. In the event that either party wishes an additional extension to the Subdivision Condition Date beyond December 31, 2005, the party requesting such further extension must provide written notice of the request to the other party on or before December 1, 2005. Both parties agree to immediately commence mutual negotiations for a reasonable extension to the Subdivision Condition Date. If the parties are unable to mutually negotiate a reasonable extension of the Subdivision Condition Date by December 31, 2005, the matter shall be settled by arbitration in accordance with the provisions of this Agreement.
. . .
22 Any notice, communication or request given to either party shall be in writing by registered mail, postage prepaid, by personal delivery or by facsimile transmission, addressed to such party at the following address: . . .
[7] In its written material Harbour Management says that it provided a $10,000.00 deposit in accordance with the April Agreement on May 2, 2005, and that the deposit continues to be held in trust by its solicitors. Harbour Management also claims that before the April Agreement was signed, it had been provided with the required documentation referred to in clause 4.01(a) of the June Agreement and had verbally indicated its approval of them. It does not say that it provided written notice of waiver of the conditions set out in clause 4.01(a) at any time but says that before the signing of the June Agreement, Mr. Cleland accepted that approval.
[8] Mr. Cleland denies that he received either verbal or written notice of the waiver.
[9] As set out in paragraph 5.01 above, the June Agreement provided that it would terminate if the subdivision had not been completed by November 1, 2005. Paragraph 5.01(c) provided that by notice in writing either party had the right to extend the date by which the subdivision had to be completed. Neither party provided written notice extending the date for subdivision.
[10] Before the Chambers judge, Harbour Management claimed that a telephone conversation took place on October 3, 2005, between Mr. Cleland and its director, Mr. Roberts. Harbour Management alleged that Mr. Cleland indicated that he needed more time to complete the subdivision and that the parties had agreed to “continue to work closely”.
[11] Mr. Cleland denied this conversation took place. He denies that he indicated to Harbour Management that he wanted any extension of time to complete the subdivision.
[12] The June Agreement contains an “entire agreement clause” that states:
The terms and conditions of this Agreement and all Schedules hereto are the full and complete terms of the purchase and sale of the Lands as of the date hereof and there are no collateral warranties, representations or conditions other than those contained herein. The parties hereto agree that only those amendments and further agreements in writing signed by the parties shall be binding on them. This Agreement supersedes all previous arrangements and understandings between the parties.
[13] On November 16, 2005, Harbour Management’s counsel faxed a proposed “amending agreement” to counsel for Mr. Cleland. It was proposed that the June Agreement be deemed to continue and that the date for completing the subdivision be extended to some future date.
[14] On November 17, 2005, Mr. Cleland’s counsel faxed a letter to Harbour Management’s counsel indicating that Mr. Cleland took the position that the June Agreement had terminated and that Harbour Management was entitled to the return of its deposit.
[15] After Harbour Management commenced the litigation in this case, Mr. Cleland brought an application for dismissal of the action pursuant to Rule 18A. Unfortunately, the application for leave to appeal does not contain the notice of motion initiating that application. However, counsel for Mr. Cleland took the position that had its argument been accepted by Mr. Justice Holmes, the litigation would have been brought to an end.
[16] Mr. Cleland’s position before the Chambers judge was that Harbour Management’s action should be dismissed on the basis that Harbour Management had not given its approval, in writing, to the matters set out in clause 4.01(a) nor extended the time for subdivision approval in clause 5.01(c). Clause 5.01(a) provided that if the date provided in the clause was not met, the June Agreement would be “null and void”. Relying on the “entire agreement clause” for the proposition that the June Agreement could not be amended orally, Mr. Cleland took the position that it had expired and that the contract had come to an end.
[17] Counsel for Mr. Cleland submitted that his position, that the written contract between the parties should prevail, was supported by the decisions of this court in MacMillan v. Kaiser Equipment Ltd., [2004] B.C.J. No. 969 (QL) (C.A.), and Sultani v. Blenz the Canadian Coffee Co., [2005] B.C.J. No. 2560 (QL) (C.A.)
[18] Directing the court’s attention to the evidence of the conversations Harbour Management said it had with Mr. Cleland before and after the June Agreement had been signed, Harbour Management took the position that the agreement had been “amended on the basis of estoppel or waiver.”
[19] Mr. Justice Holmes accepted that MacMillan and Sultani precluded the introduction of collateral contracts or additional terms “which substantially varied from the negotiated agreement between the parties.” He observed that what was at stake in the case at bar was something different, which he described as “matters of procedure in providing notice under the agreement to ostensibly make it easier and less formal.” Referring to John Burrows Ltd. v. Subsurface Surveys Ltd., [1968] S.C.R. 607 and Kempling v. Hearthstone Manor Corp., [1996] A.J. No. 654 (QL) (Alta. C.A.), Mr. Justice Holmes concluded that the entire contract provision did not necessarily preclude “a properly founded change to the agreement that is grounded on the basis of estoppel or waiver.” Mr. Justice Holmes then went on to note the conflict in the affidavit evidence before him and said:
The course of conduct of the parties following alleged verbal notices, acceptances or oral agreements also invokes consideration of the consistency of evidence and credibility issues between the parties.
Issues arise as to whether parties relied or acted upon words or conduct that are consistent with a continuing enforceability of the agreement when it would otherwise have been terminated under the agreement provisions.
[20] In the end, the Chambers judge accepted that the evidence of Mr. Roberts and Mr. Cleland was relevant to the litigation. He concluded that it would not be fair or just to evaluate and decide the issues of credibility without hearing the witnesses and observing their evidence and cross examination as witnesses before the court. He dismissed Mr. Cleland’s application.
Discussion
[21] In the case at bar, the issue is whether the Chambers judge properly exercised his discretion. In determining whether leave should be granted on this issue, I must consider a number of factors, including that the party seeking leave bears the onus of establishing that the conditions for leave have been met: British Columbia Teachers’ Federation v. British Columbia (Attorney General) (1986), 4 B.C.L.R. (2d) 8 at para. 5 (C.A.), McLachlin J.A. (as she then was), (In Chambers). The other factors to be considered are familiar and are summarized by Saunders J.A. in Goldman, Sachs & Co. v. Sessions, [2000] B.C.J. No. 998 (QL), 2000 BCCA 326 at para. 10:
The criteria for leave to appeal are well known. As stated in Power Consolidated (China) Pulp Inc. v. B.C. Resources Investment Corp. (1988), 19 C.P.C. (3d) 396 (C.A.) they include:
(1) whether the point on appeal is of significance to the practice;
(2) whether the point raised is of significance to the action itself;
(3) whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and
(4) whether the appeal will unduly hinder the progress of the action.
[22] Putting the third factor differently, it has been said that the appeal must be of sufficient merit to warrant scrutiny by a division of the court. In A.L.J. v. S.J.M. (1994), 46 B.C.A.C. 158 Hinds J.A said this (at para. 10):
First, the merits of the appeal. Whether the applicant has identified a good arguable case of sufficient merit to warrant scrutiny by a division of this Court. In my view, the applicants have not identified a good arguable case of enough merit to warrant consideration by a division of this Court. . . .
[23] With respect to discretionary orders, such as was before Mr. Justice Holmes, this court should be reticent to grant leave. Leave to appeal a discretionary order will only be granted where the order is clearly wrong or serious injustice will occur, or where discretion was not exercised judiciously or was exercised on a wrong principle. As Proudfoot J.A. said in Strata Plan LMS 2019 v. Green, [2001] B.C.J. No. 741 (QL), 2001 BCCA 286 (at para. 6):
Before I assess the merits of these arguments, I point out that an order under R. 52(11)(d) [for which leave to appeal is sought] is a discretionary order. This court is slow to grant leave from a discretionary order unless the order is clearly wrong or a serious injustice will occur: Watson v. Imperial Financial Services Ltd. (1992), 65 B.C.L.R. (2d) 281 (C.A.).
[24] Likewise, in Yang v. Yang, [2000] B.C.J. No. 1765 (QL); 2000 BCCA 486, Saunders J.A. said (at para. 3):
Where, as here, the matter appealed is a matter of the exercise of judicial discretion the burden on the applicant is substantial. The reasons is simple, this Court does not lightly interfere with the exercise of discretion of a chambers judge and will only do so when satisfied that the discretion was not exercised judicially or was exercised on a wrong principle.
[25] In the case at bar, the applicant says the Chambers judge did not exercise his discretion properly because he did not appreciate that the principles in MacMillan and Sultani were the only governing principles that emerged from the facts of the case before him.
[26] In the materials filed in his application for leave to appeal and in the course of oral argument, counsel for Mr. Cleland pressed for the application of the principles in MacMillan and Sultani, but did not address his argument as to why the exception to those cases, identified by the Chambers judge in his reasons, had no application to the case at bar.
[27] Considering the factors outlined above, I am not persuaded that leave should be granted in this case. The legal argument put forward by the parties has made it difficult to properly evaluate the merits and significance of the proposed appeal. Although I cannot say that the underlying legal issue is without merit, the need for examination by this court is not so clear as to warrant interference with the Chambers judge’s discretion.
[28] Thus, it seems to me that the words of Hall J.A. in Terbasket v. Harmony Co-ordination Services Ltd., [2003] B.C.J. No. 854 at paras. 11-12 (QL), 2003 BCCA 238 are apt in these circumstances:
. . . However, I have decided that in the circumstances of the present case I ought not to grant leave to appeal. I do so for the following reasons. It seems to me that this is an area of the law that is not yet fully developed, if I may use that terminology. It is obviously a matter of some importance, as counsel have pointed out, and the significance of the legal issues may extend beyond this single case. Having regard to that circumstance, it seems to me that it would be desirable that before the matter comes before this Court there should be, what I might describe as a reasonable elucidation and definition of the underlying factual issue so that the case may be fully addressed in a proper context by the Court. The Court then will have an adequate factual basis upon which to address what may be somewhat difficult and complicated legal issues.
It seems to me that having regard to the relatively early stage of these proceedings and the, as yet, rather limited illumination of the underlying facts, that it would not presently be appropriate for this Court to deal with the matter. It is essentially for that reason that I am not inclined to grant leave to appeal at the present time.
[29] The Chambers judge in the case at bar was persuaded that if the facts of this case were developed more fully at trial, a decision could be made as to what principles applied to those facts. Given the paucity of the legal argument before me on this application, and the opinion of the Chambers judge with respect to the state of the evidence, I am of the view that this is a case where “it would not presently be appropriate for this Court to deal with the matter.”
[30] I would refuse leave to appeal.
“The Honourable Madam Justice Ryan”
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