JLA & Associates Inc. v. Kenny

2000 BCCA 700 JLA&Associates Inc. v. Kenny

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: JLA & Associates Inc. v. Kenny, 2000 BCCA 700 Date: 20000508 Docket: CA027000/ CA27001 Between: JLA & ASSOCIATES INC. Plaintiff (Appellant) And EDWARD F. KENNY Defendant (Respondent) Before: The Honourable Madam Justice Southin (In Chambers) Oral Reasons for Judgment D. W. Donohoe Counsel for the Appellant G. James Killam Counsel for the Respondent Place and Date: Vancouver, British Columbia May 8, 2000 (application for Leave to Appeal) [1] SOUTHIN, J.A.: There are before me two applications, one for leave to appeal from an order of the Chambers judge granting the defendant leave to file an amended statement of defence. That order has not been entered and there is a question about whether a term which Mr. Donohoe thinks is supposed to be in it ought to be in it, and if it is not in it, whether or not there is really any basis for the application for leave to appeal. For that and other reasons connected with that application, I earlier adjourned it sine die. I am seized of it, and if it is necessary to be brought on again, I will dispose of it. [2] The other application is an application for leave to appeal an order of the Chambers judge fixing security for costs in this action at the sum of $50,000 Canadian and fixing 90 days as the time within which that security for costs must be posted. As Mr. Killam rightly points out, an order

of this kind is generally a matter of discretion and the considerations to be addressed by a Chambers judge are those set out in Kropp v. Swaneset Bay Golf Course (1997) 29 B.C.L.R. (3d) 252. [3] The difficulty I have with the case at bar, and it is this which leads me to grant leave, is that either the plaintiff in this case is innocent and has been a victim of a terrible fraud on the part of the defendant and others, or the plaintiff is part of a complex fraudulent scheme. If the first be so, it would be a very bad thing for the plaintiff to be kept from the seat of judgment by a lack of money to put up for security for costs. That was not the kind of issue which confronted the court in the Kropp, supra, case. Whether it is a point to be properly taken into account in these applications is for a division of the court to address. [4] The shareholders of the plaintiff deposed in the court below that they were impecunious, although I do not suppose it can be said that the material filed before the learned Chambers judge condescended to particulars of their financial affairs. Now on this application, Mr. Donohoe has filed further material on their behalf which will form a foundation for an application on the hearing of the appeal to adduce fresh evidence. It, of course, will be for the panel hearing the appeal to decide whether to permit such further evidence. [5] Mr. Killam has

asked for leave to cross-examine on those affidavits and I have given him leave. An issue arose as to who should pay for the witnesses to come here. On that, I simply ruled that that is up to the plaintiff because the plaintiff puts the witnesses forward and the plaintiff must produce them when necessary. [6] This is a very unusual case in that either the plaintiff company and its shareholders are participants in very fraudulent schemes, or they are innocents who have been victimized by the defendant and his associates. "The Honourable Madam Justice Southin" Correction: February 16, 2004 The date of the Hearing was changed from May 2, 2000 to the correct date of May 8, 2000