Vancouver, Harbourside Park: Court decides leave to appeal required in continuing battle between leaky condo developer and contractor

                                                 Date: 19970911
Docket: CA023594
Registry: Vancouver




Court of Appeal for British Columbia



BETWEEN:

NOEL DEVELOPMENTS LTD. and SPF PROPERTIES INC.

PLAINTIFFS
(RESPONDENTS)
AND:

METRO-CAN CONSTRUCTION LTD.

DEFENDANT
(APPELLANT)

AND:
METRO-CAN CONSTRUCTION (HS) LTD.,
and THE GUARANTEE COMPANY OF NORTH AMERICA

DEFENDANTS



Before: The Honourable Mr. Justice Donald
(In Chambers)




Brad Cramer Counsel for the Appellant


John Logan Counsel for the Respondents



Place and Date of Hearing Vancouver, British Columbia
August 27, 1997


Place and Date of Judgment Vancouver, British Columbia
September 11, 1997



Reasons for Judgment of the Honourable Mr. Justice Donald:


[1] Metro-Can Construction Ltd. (the applicant) seeks
direction whether leave is required for the proposed appeal.
The appeal is against the decision of Madam Justice Koenigsberg
on 9 July 1997 dismissing the applicant's motion, advanced
under Rule 19(24)(d) of the Rules of Court, to strike out
portions of the statement of claim with the effect of
dismissing the whole claim against the applicant.

[2] In brief, the applicant argued below that the action
against it is an abuse of process because the plaintiffs
maintained in a previous action that Metro-Can Construction
(HS) Ltd. was a corporate entity separate from the applicant,
but now assert that the two companies are so closely related
that the applicant should bear responsibility for the acts of
Metro-Can Construction (HS) Ltd.; in other words, the
plaintiffs should not be permitted to blow hot and cold.

[3] I have decided that leave to appeal is required. My
judgment in Burlington Northern Railroad Co. v. Canadian
National Railway (1994), 10 B.C.L.R. (3d) 302 (C.A.), was an
attempt to distill from the somewhat varied opinions expressed
by judges of this Court and from other authority, a working
principle for distinguishing final orders from those requiring
leave. That decision was followed by Hinds J.A. in Primex
Investments Ltd. v. Northwest Sports Enterprises Ltd. (1995),
23 B.C.L.R. (3d) 251, where, at 255 he adopted the test set out
in Burlington Northern:

... an examination of the effect the order has on the
status of the litigation leads to a determination of
whether an order is final or interlocutory ...

[4] In Hamelin v. Davis (1996), 18 B.C.L.R. (3d) 85, Newbury
J.A. said, at 91:

Two preliminary matters arose on the main
appeal. First, Ms. Ross on behalf of the Auditors
had never obtained leave to appeal the Chambers
judge's ruling, perhaps on the assumption that it was
a final order. Mr. McAfee did not take objection to
our proceeding with the appeal, however, and we
advised counsel that if we ultimately concluded that
leave was necessary, it would be granted.

On reflection, it does appear that the order
dismissing the Auditors' application to strike Mr.
Hamelin's pleadings was an interlocutory one, since
it did not finally dispose of the rights of the
parties but instead "set the stage for determination
on the merits." Here I quote from Sopinka and
Gelowitz, The Conduct of an Appeal (Toronto, 1993) at
15. The authors also state at 13-14:

. . . numerous species of orders arising
between parties to litigation have been
authoritatively classified as final for the
purposes of appeal, for example: orders
striking out a Statement of Claim . . .
Numerous other orders have been classified
as interlocutory, for example: orders . . .
refusing to strike out a Statement of
Claim.

This is so even though the opposite result would have
occurred if the Chambers judge had allowed the
Auditors' application. As noted recently by Donald,
J.A. in Burlington Northern Railroad Co. v. Canadian
National Railway Co. (1994), 10 B.C.L.R. (3d) 302 at
306 (C.A.), "Many examples can be cited to illustrate
the point that an application decided one way could
be final, but if decided the other way interlocutory;
the most obvious is a Rule 18A application for
summary judgment. Leave is required where the
application has been refused, but not if it is
granted."

It follows of course that the Chambers judge's
order striking out certain portions of the Statement
of Claim was a final one in respect of which leave to
appeal was not necessary.

[5] Applying that test to the instant case, I observe that the
applicant invoked Rule 19(24)(d) as the means of advancing the
abuse of process point and that in doing so, the applicant bore
the onus of showing a plain and obvious case of abuse. Counsel
before me were divided as to the effect of Madam Justice
Koenigsberg's order. Mr. Cramer argued that all she decided,
and all she was empowered to decide, was that the applicant
failed to meet the onerous standard to which I just referred in
supporting a motion to strike out the statement of claim. As a
result, the issue remained open for determination after all the
evidence has been adduced at trial. On the other hand, Mr.
Logan submitted that the question of abuse has been finally
settled and thus cannot be revisited in the remainder of the
action.

[6] I prefer Mr. Cramer's position. It is supported by the
decision of this Court, Lomak Industries Corp. v. Bull, Housser
& Tupper (1995), 9 B.C.L.R. (3d) 155, where Cumming J.A. said
for the Court, at 162, "... a refusal to strike a claim under
R. 19(24) is not a final determination of the issue".

[7] Even if the decision in question closed the abuse of
process issue, as was argued by Mr. Logan, I would nevertheless
hold that leave is required. The effect of the decision did
not bring an end to the litigation between these parties and
therefore the rationale for the leave process comes into play
(see the relevant factors for leave in the Court's Practice
Directive, conveniently collected in British Columbia Annual
Practice 1997-98 at p. 614). In my opinion, it is not the
nature of the proceedings but the outcome that matters. The
fact that the Rule 19(24) application had the potential for
finally disposing of the action does not resolve the question
of whether leave is necessary. If the learned chambers judge
had decided the motion the other way, then the case against the
applicant would have been over and the plaintiffs would have
had an appeal as of right. In this respect, my reasoning
differs from that of Macdonald J.A. in Evans v. Campbell
Mitchell (1991), 11 B.C.A.C. 1, where he found that an order
refusing the defendant's Rule 18A application to dismiss the
action for res judicata was a final order because if res
judicata were found on appeal the litigation would be at an
end. With deference, I do not think that approach allows the
court to prevent appeals which may unduly impede the course of
trial proceedings.


[8] For these reasons, I direct that leave to appeal must be
obtained. I note that Mr. Logan has kindly consented to a
reasonable extension of time for completing the leave process.





"THE HONOURABLE MR. JUSTICE DONALD"