Fraser v. Houston et al.

2005 BCSC 1781err1.doc Fraser v. Houston et al

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Fraser v. Houston et al., 2005 BCSC 1781 Date: 20051220 Docket: S010060 Registry: Vancouver Between:

BRIAN FRASER

PLAINTIFF And JAMES RALPH HOUSTON, URBAN PROJECTS LTD., URBAN PROJECTS (BARBADOS) LTD., ADDWEST MINERALS, INC. and ADDWEST MINERALS INTERNATIONAL LTD.

DEFENDANTS And MARSDEN TRADING LIMITED (formerly named 553358 B.C. LTD.) JOHN DOE NO. 1, JOHN DOE NO. 2, COMPANY NO. 2 AND COMPANY NO. 2

DEFENDANTS BY COUNTERCLAIM And

DAVID RENNIE

THIRD PARTY Before: The Honourable Mr. Justice Williamson Reasons for Judgment Counsel for the Plaintiff Daniel Barker Counsel for the Defendants Robert D. Holmes Date and Place of Hearing: November 4, 2005 Vancouver, B.C. [1] Reasons for judgment in this matter were handed down May 13, 2005. The plaintiff had claimed judgment against the defendants for breach of a settlement agreement which the parties had reached in an earlier proceeding. I awarded judgment to the plaintiff for: 1) $200,000 Canadian, with court ordered interest from March 17, 1998; 2) $195,000 U.S. in the equivalent Canadian funds at the exchange rate pertaining at the time of each monthly payment, with interest from the date of each monthly payment; and 3) damages for failure to deliver shares in the amount of $18,000. [2] I also said the parties would have liberty to apply with respect to costs. They have done so. [3] In this application the plaintiff seeks special costs, or in the alternative increased costs, against the defendants. The defendants seek an order striking out certain portions of affidavits filed by the plaintiff. They also seek an order that each party bear its own costs and that the Foreign Money Claims Act R.S.B.C. 1996, c. 155, be applied to the U.S. $195,000 awarded to the plaintiff. [4] The third party, David Rennie, seeks costs against the plaintiff.

SPECIAL COSTS [5] The plaintiff submits that the defendants' conduct from the commencement of the action through to final submissions was reprehensible as that term is used in the authorities. The plaintiff points to the Statement of Defence which alleges that the plaintiff committed frauds on the defendants, breached an agreement himself and otherwise acted illegally. [6] In order to find the conduct of a party reprehensible, the court must conclude that the conduct of the impugned party is deserving of denunciation or rebuke. In Leung v. Leung (1993), 77 B.C.L.R. (2d) 314, 15 C.P.C. (3d) 42 (S.C.) at para. 7, Chief Justice Esson, as he then was, said: But "reprehensible" is a word of wide meaning. It can include conduct which is scandalous, outrageous or constitutes misbehaviour; but it also includes milder forms of misconduct. It means simply "deserving of reproof or rebuke". [7] The defendants say that in the circumstances of this case their conduct cannot be characterized as deserving of reproof or rebuke. They point to a number of positions taken, or steps taken, by the plaintiff which demonstrate that it was the plaintiff's behaviour that was reprehensible. I do not find that persuasive. The issue here is not whether the plaintiff's action was reprehensible; rather it is whether the defendants' actions were reprehensible. [8] However, I am persuaded by the defendants'

submission that a perusal of the reasons for judgment discloses that the Court did not make findings of fact that would warrant an order for special costs. The defendants note that many of the matters raised in the Statement of Defence were the subject of evidence at trial and the plaintiff did not object to the admissibility of that evidence. Further, while credibility did not ultimately prove to be critical in the trial, there was a reasonable possibility that it could have been. Much of the evidence now said by the plaintiff to be reprehensible was directed to the issue of the plaintiff's credibility. [9] I am satisfied that while there was evidence that raised questions about the conduct of the plaintiff and while the court did not accept some of that evidence, there was a basis for raising those allegations. The defendants' conduct in so doing was not reprehensible. [10] I also note that there was no evidence that of the position taken by the defendants caused the plaintiff lost business or damage to reputation. Where there is no evidence of such loss, or prejudice to the reputation of the plaintiff, a court is entitled to consider that fact in weighing an application for special costs: see Paz v. Hardouin (1996), 138 D.L.R. (4th) 292, 25 B.C.L.R. (3d) 201, 2 C.P.C (4th) 210 (C.A.) at para. 8. [11] Finally, I observe that it would be most unusual to award special costs

against a party for reprehensible conduct when there is written material on file in which counsel for the party seeking such costs has complimented counsel for the other party for his "professionalism and skill" in this very matter. Such communication does not suggest that counsel put forward unwarranted or reprehensible claims. [12] For all of the above reasons, I decline to order special costs against the defendants.

THE IMPUGNED AFFIDAVITS [13] The defendants seek an order that certain paragraphs in an affidavit sworn by the plaintiff June 8, 2005 be struck as, among other thing, unnecessary and vexatious. [14] The first impugned statement concerns the plaintiff's belief that certain allegations in the Statement of Defence were made without any substantive evidence to support them and without the defendants making reasonable attempts to verify them. The remaining matters that are related to this application are generally concerned with the legal costs sustained by the plaintiff and his allegation that they were increased by "the false and scandalous allegations" made against him. [15] I have some concern about these matters being contained in an affidavit. They appear to be both opinion and of questionable relevance. However, I have not needed to refer to these paragraphs, other than on this narrow point, and therefore they have had no impact on my rulings. It is unnecessary to make any order.

EACH PARTY BEARING THEIR OWN COSTS [16] The defendant says that should it succeed in defending against the claim for special costs by the plaintiff, which it has, that each party should bear its own costs of this action. I am not persuaded. There is nothing here that would cause me to depart from the normal rule that costs follow the event.

FOREIGN MONEY CLAIMS ACT [17] As noted above, in the May 13, 2005 reasons for judgment I ordered that the plaintiff will have judgment for $195,000 U.S. in the equivalent Canadian funds at the exchange rate pertaining at the time of each monthly payment, with interest from the date of each monthly payment. The defendants say that as the order has not been entered it is open to me, and I should, depart from what I said in those reasons and that the payments should be made in the terms set out in the Foreign Money Claims Act. Section 1 of that Act reads as follows: 1 (1) If, before making an order for the payment of money arising out of a claim or loss, the court considers that the person in whose favour the order will be made will be most truly and exactly compensated if all or part of the money payable under the order is measured in a currency other than the currency of Canada, the court must order that the money payable under the order will be that amount of Canadian currency that is necessary to purchase the equivalent amount of the other currency at a chartered bank located in British Columbia at the close of business on the conversion date. (2) The conversion date is the last day, before the day on which a payment under the order is made by the judgment debtor to the judgment creditor, that the bank referred to in subsection (1) quotes a Canadian dollar equivalent to the

other currency. [18] Given the wording of the settlement agreement at issue in these proceedings, I have no difficulty in finding that the plaintiff will be most truly and exactly compensated if the money payable under para. 49(2) of the reasons for judgment of May 13, 2005 is measured in U.S. dollars. [19] Having made that finding, I conclude that the Foreign Money Claims Act applies and that the conversion date should be as set out in s. 1(2) of the Act. [20] Furthermore, I agree with the conclusion of Burnyeat J. in Refco Futures (Canada) v. SYB Holdings (2001), 16 B.C.L.R. (3d) 243, 2001 BCSC 1037, rev'd on other grounds (2004), 23 B.C.L.R. (4th) 309, 40 B.L.R. (3d) 130, 2004 BCCA 15, that where there was no agreement regarding the currency of the interest to be paid, it is appropriate to apply the Court Order Interest Act R.S.B.C. 1996, c. 79. [21] The interest payable on the $195,000 U.S. award will be the Canadian dollar equivalent (at the conversion date set out by s. 1(2) of the Foreign Money Claims Act) of the interest accrued in U.S. dollars by application of the Registrar's rates as varied from time to time for the period between the due date of each unpaid monthly payment and the date of the judgment.

THIRD PARTY COSTS [22] On the first day of the proceedings at the trial in April, third party proceedings against David Rennie were dismissed. Mr. Rennie seeks an order that the plaintiff, and Daniel Barker, his solicitor, pay the costs of the third party proceedings and that these costs be assessed as special costs. [23] I conclude that Mr. Rennie should have his costs. However, I see no reason to depart from the normal rule and assess those costs as special costs. Further, I see no reason why those costs should be assessed against the plaintiff's solicitor. I decline to do so. [24] The only real issue with respect to these third party costs is whether the plaintiff, Brian Fraser, should be responsible personally for the third party costs when third party proceedings were brought by a company, Marsden Trading Limited. [25] I am satisfied that he should. Mr. Fraser is in the same situation as was Interclaim Recovery Limited in the case of Interclaim Holdings Ltd. v. Down, 2002 BCCA 632. In para. 46 of that judgment, Southin J.A., speaking for the Court, said: Suffice it to say that on the evidence in this case, Interclaim Recovery Limited stands behind Interclaim Holdings Limited in such a way that it should be taken to be a promoter of and to have a direct interest in this litigation and, thus, to be liable for whatever costs are awarded. [26] Here, it was Fraser who in fact directed the third party proceedings against Mr. Rennie. Mr. Rennie will have the costs against the plaintiff Brian Fraser. [27] Order accordingly. "L.P. Williamson, J." The Honourable Mr. Justice L.P. Williamson March 20, 2006 - Revised Judgment On page 8, paragraph 20, the neutral citation number should read: "Refco Futures (Canada) v. SYB Holdings ., 2001 BCSC 1037, "