Pan Afric Holdings Ltd. v. Athabasca Holdings Ltd.

2018 BCCA 257 Pan Afric Holdings Ltd. v. Athabasca Holdings Ltd.

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Pan Afric Holdings Ltd. v. Athabasca Holdings Ltd., 2018 BCCA 257 Date: 20180625 Docket: CA44561 Between: Pan Afric Holdings Ltd. The Executive Inn Hotels General Partnership Appellants (Plaintiffs) And Athabasca Holdings Ltd. Respondent (Defendant) Before: The Honourable Mr. Justice Frankel The Honourable Madam Justice MacKenzie The Honourable Madam Justice Fisher Supplementary Reasons to Pan Afric Holdings Ltd. v. Athabasca Holdings Ltd., 2018 BCCA 113. Counsel for the Appellants: J.K. McEwan, Q.C. O. James Counsel for the Respondent: D.M. Gyton A. Fraser Place and Date of Hearing: Vancouver, British Columbia March 9, 2018 Place and Date of Judgment: Vancouver, British Columbia March 27, 2018 Written Submissions received: May 31, June 7 and 12, 2018 Date of Supplementary Judgment: June 25, 2018 Written Reasons by: The Honourable Madam Justice Fisher Concurred in by: The Honourable Mr. Justice Frankel The Honourable Madam Justice MacKenzie Summary: The respondent seeks an order that each party bear their own costs for the appeal and in the court below on the basis that the appellants took a position in oral reply submissions that raised a new issue on appeal, and that the action will now have to proceed in the court below. Held: Application dismissed. The issue raised by the respondent was not significant to the outcome of the

appeal, which set aside the order striking the action. The appellants are entitled to their costs of the appeal and in the court below. Supplementary Reasons for Judgment of the Honourable Madam Justice Fisher: [1] In our reasons for judgment in this appeal (indexed as 2018 BCCA 113), we allowed the appeal and set aside the order of the chambers judge, which had struck the appellants' claim as both res judicata and an abuse of process. The parties now disagree on whether the appellants are entitled to their costs, both of the appeal and in the court below. [2] The respondent seeks an order that the parties each bear their own costs in both proceedings on the basis that a position taken by the appellants in their oral reply submissions raised what amounted to a new issue on appeal. The appellants submit that there is no basis on which this Court should depart from the usual rule, in s. 23 of the Court of Appeal Act, R.S.B.C. 1996, c. 77, that the successful party is entitled to their costs in this Court. They also submit that they should have their costs in the court below due to the outcome of the appeal. [3] The circumstances giving rise to this issue relates to one aspect of the basis on which the chambers judge had found inconsistencies between the two actions in issue, which were in turn based on inconsistencies in the agreements founding each of those actions. To explain

the nature of the issue, I reproduce portions of our reasons: [44] As I understand the chambers judge's reasons, the primary basis on which he concluded that the Second Action should be struck as an abuse of process was that it claims relief that is inconsistent with what was ordered in the First Action, stemming from two inconsistencies he found between the 1989 and 2007 Agreements. He described the inconsistencies as follows: [55] The first inconsistency is the height restriction. The 1989 agreement provided for, in effect, a two-storey height restriction Reading several provisions of the 2007 agreement together, it calls for the building of an approximate 13-storey tower. Section 5.2 requires that the obligations of the parties will be secured as an equitable charge on title to both the Pan Lands and the Vinar Lands. These obligations include, as per section 2.1, a requirement to "work diligently and in good faith to achieve the Rezoning". "Rezoning" is defined as Rezoning Reference #00-29 - the application incorporating the CEI Plans with the 13-storey Athabasca Tower. [56] The second inconsistency relates to the reorganisation of the lands. The 1989 agreement contemplated consolidation of the combined site by stratification of the Pan Lands and their addition to the Strata Corporation. In contrast, the 2007 agreement contemplates sub-division of the combined site to

re-align the property line between the Pan Lands and the Vinar Lands, and, pursuant to s. 2.6, the eventual collapse of the Strata Corporation. [45] He therefore concluded that the two Agreements could not be complied with at the same time: [57] The Second Action seeks enforcement of the 1989 agreement and, amongst other things, an order that the height restriction be registered as a restrictive covenant against the Vinar Lands. The consent order declared that the 2007 agreement remains in force. [4] The issue raised here by the respondent stems from the second inconsistency described above, which was reflected in a declaration sought by the appellants in their pleadings that the respondent was bound by a "Phasing Declaration" in the 1989 agreement. The respondent submits that the appellants changed their position as to the meaning of this relief during reply submissions, when responding to questions from the Court about the effect of such a declaration. Counsel refers to this excerpt from the transcript: MR. McEWAN: Yes. Declaration -- so it's a declaration of right that the defendant is bound by the provisions in the Vinar agreement applicable to the lands it's bound by the provisions, including the phasing declarations and the height restriction, but that doesn't mean that if the phase [sic] declaration says it has to happen by a date in 1991 -- THE COURT: Bound by an

expired agreement. Well, it's bound by the fact that it can't go ahead with that, anyways. Maybe that's what it means. It's bound by the phasing declaration because it's expired. MR. McEWAN: It can't go ahead. THE COURT: Right. MR. McEWAN: It's just -- it's a declaration. It is what it is. Nobody's seeking -- the only subsequent relief that's been pointed out that's really sought is -- is the restrictive covenant to get enforced to the height declaration. But I -- I can tell the court -- we've checked our instructions. Nobody's saying, "Well, we're going ahead with the consolidation or part 2." That's expired. And I answered that question to My Lady, Madam Justice Fisher, going ahead. That date is passed [5] The respondent submits that the Court may depart from the usual rule where a new issue is raised for the first time on appeal, or where a party succeeds on a point not argued in the court below, citing Xiao v. Fan, 2018 BCCA 143; Cowichan Valley (Regional District) v. Little (1987), 12 B.C.L.R. (2d) 103 (C.A.); Quan v. Cusson, 2009 SCC 62; Sierra Club of Western Canada v. British Columbia (Chief Forester), [1995] B.C.J. No. 1324 (C.A.); and Transportaction Lease Systems Inc. v. Virdi, 2010 BCCA 347. [6] In my view, the respondent has overstated the import of these decisions. Generally, it is only where the outcome of the appeal primarily or substantially turns on the new issue that the Court will depart from the usual rule: see in particular, Transportaction at para. 68 and Xiao at para.

45. In this case, the inconsistency arising from the relief sought by the appellants in respect of the Phasing Declaration was a relatively minor aspect of the basis on which the appeal was allowed. [7] The respondent's argument on this issue touches on its interpretation of the 1989 agreement, and the concession made by counsel for the appellants, as indicated in the transcript, reflecting the fact that the interpretation of that agreement is a matter of dispute that will ultimately be determined in the underlying action. Whether or not the declaration sought by the appellants is limited to the expiry of the Phasing Declaration, the basis for our conclusion that the judge erred in finding that the two agreements were inconsistent is explained at para. 51 of our reasons: [51] As this example and the foregoing discussion illustrate, the interpretation of the 1989 Agreement is a matter of some dispute. The chambers judge's conclusion that the two Agreements could not be complied with at the same time was not based on any considered analysis of the Agreements or the actual effect of the relief sought in the Second Action. Given that the 1989 Agreement addresses past and existing rights and obligations, and the 2007 Agreement addresses obligations to work towards a future redevelopment, it is my opinion that the chambers judge - for the purposes of determining whether abuse of

process applied - made a palpable and overriding error in concluding that the two Agreements could not be complied with at the same time. [8] Importantly, the appeal was allowed on a broader basis than this issue of inconsistency. This was outlined in a general way at para. 29: [29] As I explain below, it is my opinion that the chambers judge erred in determining that the Second Action was barred by res judicata - more particularly, in concluding that the Second Action was not separate and distinct from the First Action. This error affected the judge's analysis of abuse of process in respect of the relationship between the two Actions and the alleged inconsistencies in the relief sought. The chambers judge also failed to consider the applicable legal principles of abuse of process, and therefore erred in concluding that the Second Action was an abuse of process. [9] In the circumstances here, I see no basis on which to depart from the usual rule in s. 23 of the Court of Appeal Act with respect to costs in this Court. [10] As to costs in the court below, the respondent submits that this issue should be remitted to the chambers judge because the proceedings will continue and therefore the costs of the application should remain in the discretion of the Supreme Court. In support of this, the respondent cites Paterson v. Burgess, 2018 BCCA 126. The appellants submit that this is a

case where the costs order below automatically falls because of this Court's order setting aside the order of the chambers judge, citing Chief Councillor Matthew Hill v. British Columbia (Minister of Forests), 1999 BCCA 305. [11] This is not a case where this Court remitted the matter back to the Supreme Court, as in Paterson. Rather, it is a case where this Court set aside the decision below. Therefore, it is my view that the principle in Hill is applicable, and the appellants should have their costs in the court below. [12] For these reasons, I would order that the appellants are entitled to their costs of the appeal and of the application in the court below. "The Honourable Madam Justice Fisher" I AGREE: "The Honourable Mr. Justice Frankel" I AGREE: "The Honourable Madam Justice MacKenzie"