Delta Hotel, Whistler: Court awards limited partners $3,385,000 in damages from breach of trust

 The Delta Hotel and Village Suites, Whistler, BC

                                                Date:  19990125
Docket: C953819
Registry: Vancouver



IN THE SUPREME COURT OF BRITISH COLUMBIA




BETWEEN:


VILLAGE GATE RESORTS LTD.


PLAINTIFF
AND:


ANDREW MOORE, THOMAS MORRISON, ROLF GILLARDON,
FRANCIS CHANG, SAITOH HOLDINGS LTD., DONALD J. EGGERTSON,
MR. AND MRS. R. LEMP, TUDOR SALES LTD., PATRICK ROBINSON,
NORTHSHORE CREDIT UNION, AUSTERVILLE PROPERTIES LTD.,
WILLIAM ROBINSON, AMELIA MAINARDI, DOUGLAS ALLEN,
JACK RIDLEY, PETER R. KEARNEY, TERRY LAMB, EDWARD G. BYRD,
MRS. ROY CARROLL, DONALD CARR, GORDON UGGLA, DAVID DANSKIN,
ALICE-MARIE MAUGHAN, ARTHUR GRIFFITHS, FRANK MOSER,
MR. AND MRS. MAURICE LE GALLAIS, DAVID CHAN, IVY CHAN,
CALVIN EDWARDH, JAMES PERKINS, LYNDA BURROUGH,
GERALD TRODDEN, ORVILLE WRIGHT, DORIS BURROUGH,
HARRY NATAROS, DOUGLAS BRAWN, HELEN JENKINS, JOHN FLEMING,
SQUAMISH MUSIC LTD., KATRIN ANN TURU, NORMA LOUGHEED,
CHARLES B. STEWART, EDDISON SINANAN, JAMES BULLARD,
ALLAN TONE, WILLIAM LOUGHEED, DESMOND COCKROFT,
IAN ELLIOTT, MR. AND MRS. DONALD STEWART, KENNETH STEVENSON,
GEOFFREY G. COLESHILL, FRANK KAPLAN, DAVID SPICER,
HECTOR G.N. FRITH, JOHN ROSS, GRAHAM C. MORLEY,
DAVID WILLIAMS, UTA WILLIAMS, THOMAS BRENEMAN,
LOUIS METZNER, B. JUSTICE, ZALICK PERLER, ROBERT SIMMONS,
DAVID GALPIN, HOWARD FENSTER, CLARK MACDONALD,
ROBERT L. WAY, ANGELYN CHAN, JEFFREY WERRY,
ROBERT F. EDWARDS, CYRIL CHAN, NIZARALI DAMJI,
WALTER R. LAYZELL, BARRY DOWNS, ALISTAIR I. MUNRO,
RICHARD ARCHAMBAULT, B.P.Y.A. 138 HOLDINGS LTD.,
AVON HOLDINGS LTD., ANDREW McLAREN, NINA MOSER,
KEICHIRO OISHI, JANE ROBINSON, carrying on business
as WHISTLER MOUNTAIN INN, LIMITED PARTNERSHIP, and
the said Partnership WHISTLER MOUNTAIN INN, LIMITED PARTNERSHIP

DEFENDANTS
Docket: C891212
Registry: Vancouver
BETWEEN:
VILLAGE GATE RESORTS LTD.

PLAINTIFF
AND:
ANDREW MOORE, THOMAS MORRISON, ROLF GILLARDON,
FRANCIS CHANG, SAITOH HOLDINGS LTD., DONALD J. EGGERTSON,
MR. AND MRS. R. LEMP, TUDOR SALES LTD., PATRICK ROBINSON,
NORTHSHORE CREDIT UNION, AUSTERVILLE PROPERTIES LTD.,
WILLIAM ROBINSON, AMELIA MAINARDI, DOUGLAS ALLEN,
JACK RIDLEY, PETER R. KEARNEY, TERRY LAMB, EDWARD G. BYRD,
MRS. ROY CARROLL, DONALD CARR, GORDON UGGLA, DAVID DANSKIN,
ALICE-MARIE MAUGHAN, ARTHUR GRIFFITHS, FRANK MOSER,
MR. AND MRS. MAURICE LE GALLAIS, DAVID CHAN, IVY CHAN,
CALVIN EDWARDH, JAMES PERKINS, LYNDA BURROUGH,
GERALD TRODDEN, ORVILLE WRIGHT, DORIS BURROUGH,
HARRY NATAROS, DOUGLAS BRAWN, HELEN JENKINS, JOHN FLEMING,
SQUAMISH MUSIC LTD., KATRIN ANN TURU, NORMA LOUGHEED,
CHARLES B. STEWART, EDDISON SINANAN, JAMES BULLARD,
ALLAN TONE, WILLIAM LOUGHEED, DESMOND COCKROFT,
IAN ELLIOTT, MR. AND MRS. DONALD STEWART, KENNETH STEVENSON,
GEOFFREY G. COLESHILL, FRANK KAPLAN, DAVID SPICER,
HECTOR G.N. FRITH, JOHN ROSS, GRAHAM C. MORLEY,
DAVID WILLIAMS, UTA WILLIAMS, THOMAS BRENEMAN, PHILIP KUEBER
LOUIS METZNER, B. JUSTICE, ZALICK PERLER, ROBERT SIMMONS,
DAVID GALPIN, HOWARD FENSTER, CLARK MACDONALD,
ROBERT L. WAY, ANGELYN CHAN, JEFFREY WERRY,
ROBERT F. EDWARDS, CYRIL CHAN, NIZARALI DAMJI,
REG G. HUMPHREYS, WALTER R. LAYZELL, BARRY DOWNS,
ALISTAIR I. MUNRO, AVCO FINANCIAL SERVICES,
RICHARD ARCHAMBAULT, B.P.Y.A. 138 HOLDINGS LTD., carrying on
business as WHISTLER MOUNTAIN INN, LIMITED PARTNERSHIP, and
the said Partnership WHISTLER MOUNTAIN INN, LIMITED PARTNERSHIP

DEFENDANTS
AND:

BARBICAN PROPERTIES INC., AVON HOLDINGS LTD., ANDREW
MCLAREN, NINA MOSER, KEICHIRO OISHI and JANE ROBINSON

DEFENDANTS BY COUNTERCLAIM


REASONS FOR JUDGMENT

OF THE

HONOURABLE MADAM JUSTICE DILLON



Counsel for the Plaintiff:
and BPYA 138 Holdings Ltd. W.B. McAllister, Q.C.

Counsel for certain
defendant limited partners: D. Rae, Q.C.

Counsel for certain
defendant limited partners: A. Borrell


Place and Dates of Hearing: Vancouver, B.C.
October 19, 1998
November 30, 1998


[1] This is an inquiry into whether the defendant limited
partners have sustained any damage and, if so, the amount of
such damage, by reason of the injunctions granted and the
undertakings given by the plaintiff on May 24, 1989 and July
12, 1995. The inquiry was ordered on March 13, 1998 following
lengthy proceedings at trial in 1995 and an appeal in 1997.

Factual Background

[2] The inquiry arises from injunctions that were granted to
prevent certain limited partners from holding an extraordinary
meeting of the partnership to consider a resolution for
dissolution of the partnership. The plaintiff obtained an
interim injunction to prevent dissolution of the partnership on
March 16, 1989, which became an interlocutory injunction on May
24, 1989. Following a lengthy trial in 1995, the British
Columbia Supreme Court ordered the first injunction to be set
aside, amongst other decisions made. When certain limited
partners again attempted to hold an extraordinary meeting to
dissolve the partnership, the plaintiffs obtained a second
injunction to restrain dissolution of the partnership. The
matter went to appeal. The British Columbia Court of Appeal
found the plaintiff to be in breach of trust by co-mingling
partnership trust revenues with plaintiff's funds, to be in
default of duty in the effective borrowing of partnership funds
for the plaintiff's benefit and the benefit of its operating
group, and to be in default of duty in the granting of a
floating charge over partnership assets as security for loans
made by the plaintiff's affiliated companies (Village Gate
Resorts Ltd. v. Moore (1997), 47 B.C.L.R. (3d) 153 at 173
(B.C.C.A.)). The Court of Appeal also set aside the second
injunction which then allowed the limited partners to proceed
with the extraordinary general meeting. In November 1997, the
partners resolved to dissolve the partnership and place it in
receivership.

The Measure of Damage at Law

[3] The plaintiff and the defendant disagreed on the
appropriate measure of damage pursuant to an undertaking for
damages given in support of an injunction. The plaintiff said
that the measure of damage was as in tort so that the
defendants would be entitled to be placed in the position that
they would have been if the injunction had not been granted.
This principle arises in the law of negligence so that the pre-
negligence situation is restored. The plaintiff argued that
since the effect of the injunction here was to retain the
status quo, what would have happened was a change of
circumstance, particularly, the partnership would have been
dissolved at an extraordinary meeting. It said that the
defendants had the burden of proving what the changed
circumstance would have been, what their changed financial
circumstance would likely have been, and what their financial
circumstance actually was. The damages was the assessment of
the difference between their actual and likely financial
situations. The plaintiff went on to say that there was no
such evidence before the court so that the defendants failed to
prove any damage. No authority was cited for the application
of this principle to the measurement of damage following an
undertaking for damages on an injunction.

[4] The defendants submitted that the measure of damage was
such loss as was the natural consequence of the injunction or
such damages as naturally flowed from the injunction based upon
an analogy with contract law (Islands Trust v. Pinchin Holdings
Ltd. (1980), 25 B.C.L.R. 150 (B.C.S.C.); Fletton Ltd. v. Peat
Marwick Ltd. (1986), 7 B.C.L.R.(2d) 307 (B.C.S.C.)). The
natural consequence of the injunction was the continued payment
of management fees to the plaintiff pursuant to the partnership
agreement in an amount that exceeded the cost of providing
those services. The converse consideration would be: what
would be the measure of damage if the partnership was found to
have been improperly dissolved. The plaintiff would then have
been entitled to the management fees that it would have earned
minus expenses to earn those fees. While it appeared at first
that the defendant also argued that the measure of damage could
be determined by assessment based upon the breach of trust,
this was clarified to be useful by analogy only.

[5] I have not been asked and I am not assessing damages for
breach of trust or default of duty under the partnership
agreement as these are damages flowing from the litigation
itself. My sole task is the assessment of damages arising from
the injunctions. The equitable nature of this remedy is,
however, readily apparent (see Air Express Ltd. v. Ansett
Transport Industries (Operations) Pty. Ltd., [1979-1981] 146
C.L.R. 249 at 261 (Aust.H.C.)).

 

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The Palladain/Palladium (Vancouver): Court refuses to adjourn scheduled trial; leaky condo owners will not pusue toxic mould claims

 

                                                Date:  19990108
Docket: C946094
Registry: Vancouver

IN THE SUPREME COURT OF BRITISH COLUMBIA


BETWEEN:

THE OWNERS, STRATA PLAN VR 2000

PLAINTIFF

AND:

STEPHEN DOUGLAS SHAW, ERIC CAMPBELL, GEORGE REIFEL, 1705
NELSON HOLDINGS LTD., ALLAN MILLIGAN ENGINEERING LTD.,
SARANGI AND RODGER CONSULTANTS LTD., THADDEUS YOUNG
carrying on business as SPACEWORKS ARCHITECTS, and the said
SPACEWORKS ARCHITECTS, MIERAU CONSTRUCTION LTD.,
WESTCOST STUCCO INC., GORDON SPRATT & ASSOCIATES LTD., and
PACIFIC NEW HOME SERVICES, INC. carrying on business as
NEW HOME WARRANTY PROGRAM OF BRITISH COLUMBIA AND THE YUKON,
and the said NEW HOME WARRANTY PROGRAM OF BRITISH COLUMBIA
AND THE YUKON

DEFENDANTS

AND:

JONET CONSTRUCTION LTD., JEM SUNDECKS LTD., and
LEVELTON ENGINEERING LTD.

THIRD PARTIES


REASONS FOR DECISION

OF THE

HONOURABLE MADAM JUSTICE LEVINE


Counsel for the Plaintiff: D. Sutherland
K. Singer

Counsel for the Defendants, Sarangi & Rodger D. Garner
Consultants Ltd. and Gordon Spratt & Associates Ltd.: C. Hirst

Counsel for the Defendant, Mierau Construction Ltd: R. Wattie

Counsel for the Defendant, New Home Warranty Program: R. Kuhn
M. Prohl

Counsel for the Defendant, Westcoast Stucco Inc.: J. Beggs
Counsel for the Defendants, K. Short
Thaddeus Young and Spaceworks Architects:

Counsel for the Defendant, Milligan Engineering Ltd.: S. Coyle


Place and Date of Hearing: January 5, 1999
Vancouver, B.C.



I. INTRODUCTION

[1] The trial of this action, which concerns a "leaky
condominium", is set to commence March 1, 1999 for 80 days. The
litigation is subject to the case management process for long
trials. The first case management conference was held on
September 10, 1997, when the trial date was set with the
agreement of all parties.

[2] The defendants, Sarangi and Rodger Consultants Ltd. and
Gordon Spratt & Associates Ltd., supported by the other
defendants, apply for adjournment of the trial. They raise the
following issues in support of their application:
(a) There are outstanding appeals of rulings made in
response to interlocutory applications and it is
unlikely the appeals will be heard and
determined before March 1, 1999.
(b) There is no urgency to hear this case.
(c) The defendants are uncertain about the
plaintiff's position concerning claims relating
to toxic mould in the building.

[3] The defendant, New Home Warranty Program, claims that the
case is not ready to proceed to trial because of the issues
identified by Sarangi and Spratt, and raises as a further issue
that a "Scott Schedule" requested by the defendants has not
been completed by the plaintiff in the form agreed to by the
parties.

[4] The plaintiff opposes the application to adjourn. Counsel
says that the case is ready for trial. He argues that it is not
necessary that the appeals be resolved before the trial
proceeds; there is urgency to have the case heard as scheduled;
and the Scott Schedule is moving towards completion. Further,
in his outline for this application, plaintiff's counsel
states:


Provided the action proceeds as scheduled, the
plaintiff will not claim for any damages due to the
health risks associated with mould, nor for damages
associated with precautions in respect of those
risks.


At the hearing of this application, plaintiff's counsel advised
that the plaintiff and owners of strata units would not be
seeking any damages arising from the presence of toxic mould
and he would not rely at trial on any experts' reports relating
to toxic mould. He advised further that at the close of
evidence, the plaintiff and owners will consent to dismissal of
all claims for personal injury relating to toxic mould.

II. PRINCIPLES OF LAW

[5] All counsel are in agreement with the principles
applicable to an application for adjournment. These are stated
in Sidoroff v. Joe (1992), 76 B.C.L.R. (2d) 82 at 84 (C.A.):


...the question of granting an adjournment is a
matter of discretion, it is a discretion that has to
be exercised in accordance with settled principle.
The settled principle is that the interests of
justice must govern whether to grant an adjournment.
The interests of justice always require a balancing
of interests of the plaintiff and the defendant.

[6] The Court of Appeal went on to say that one of the
elements to be considered in balancing the interests of justice
is the expeditious and speedy bringing to a conclusion of
matters. This factor reflects Rule 1(5) of the Rules of Court
which provides that:


The object of these rules is to secure the just,
speedy and inexpensive determination of every
proceeding on its merits.

[7] In Novak v. Bond, [1998] B.C.J. No. 2034 (S.C.) (QL),
Martinson J. said at para 11:


The paramount consideration that must be maintained
in the exercise of that discretion is to ensure that
there will remain a fair trial on the merits of the
action: Cal-Wood Door v. Olma, [1984] B.C.J. No. 1953
(C.A.).

III. DECISION

[8] I have reviewed and considered the submissions of counsel
and the authorities cited and have concluded that the interests
of justice in this case will be served by dismissing the
application for an adjournment of the trial.

IV. ANALYSIS

[9] I will deal in turn with each of the defendants' concerns.

 

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