Graham v. Moore

2003BCCA497.htm COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Graham et al. v. Moore et al., 2003 BCCA 497 Date: 20030916 Docket: CA029741; CA030251; CA030392 Docket: CA029741 Between: Nancy Jane Graham and Donald James Ferrier Respondents (Plaintiffs) And Mildred Elizabeth Moore, aka Mildred Elisabeth Moore, aka Mildred Moore, The Bank of Nova Scotia Trust Company (formerly known as Montreal Trust Company of Canada) and Barrie Wendell Moore in their capacities as the Executors of the estate of Mildred Elizabeth Moore, and Barrie Wendell Moore in his personal capacity Respondents (Defendants) And Bernard Campa Appellant (Defendant) And The Bank of Nova Scotia Trust Company Respondent (Defendant by Counterclaim) - and - Docket: CA030251 Between: Nancy Jane Graham and Donald James Ferrier Respondents (Plaintiffs) And Mildred Elizabeth Moore, aka Mildred Elisabeth Moore, aka Mildred Moore, The Bank of Nova Scotia Trust Company (formerly known as Montreal Trust Company of Canada) and Barrie Wendell Moore in their capacities as the Executors of the estate of Mildred Elizabeth Moore, and Barrie Wendell Moore in his personal capacity Respondents (Defendants) And Bernard Campa Appellant (Defendant) And The Bank of Nova Scotia Trust Company Respondent (Defendant by Counterclaim) - and - Docket: CA030392 Between: Nancy Jane Graham and Donald James Ferrier Respondents (Plaintiffs) And Mildred Elizabeth Moore, aka Mildred Elisabeth Moore, aka Mildred Moore, The Bank of Nova Scotia Trust Company (formerly known as Montreal Trust Company of Canada) and Barrie Wendell Moore in their capacities as the Executors of the estate of Mildred Elizabeth Moore, and Barrie Wendell Moore in his personal capacity Respondents (Defendants) And Bernard Campa Appellant (Defendant) And The Bank of Nova Scotia Trust Company Respondent (Defendant by Counterclaim) Before: The Honourable Mr. Justice Donald The Honourable Madam Justice Newbury The Honourable Mr. Justice Smith B.E. McLeod G.P. Holeksa Counsel for the Appellant D.P. Church A.J. Pearson Counsel for the Respondents, N.J. Graham and D.J. Ferrier G.A. Phillips Counsel for the Respondent, B.W. Moore E.J. Milton Counsel for the Respondent, Bank of Nova Scotia Trust Company Place and Dates of Hearing: Vancouver, British Columbia 28 and 30 May 2003 Place and Date of Judgment: Vancouver, British Columbia 16 September 2003 Written Reasons by: The Honourable Mr. Justice Donald Concurred in by: The Honourable Madam Justice Newbury The Honourable Mr. Justice Smith Reasons for Judgment of the Honourable Mr. Justice Donald: [1] The subject of these three appeals is the purchase and sale of a residential property in the west side of Vancouver. Mr. Campa thought he had the inside track to buy the property. The two executors of the Moore estate, which owned the property, The Bank of Nova Scotia (Scotiatrust) and Barrie Wendell Moore, sold it to the plaintiffs, Drs. Nancy Graham and Donald Ferrier. [2] Mr. Campa then embroiled the parties in complex and expensive litigation. He failed to persuade the trial judge, Mr. Justice Melnick, in two Rule 18A summary trials that he had a prior right to the property or any basis for a claim in negligence against The Bank of Nova Scotia Trust Company. [3] The trial judge found that Mr. Campa should pay the plaintiffs' special costs which he assessed at $114,242.14 on the ground that Mr. Campa's conduct of the litigation with respect to the plaintiffs deserved rebuke. He said: While a party is always entitled to vigorously pursue his or her legal rights, Mr. Campa's conduct of this litigation has left me with the impression, at least in relation to the plaintiffs, that it was pursued in a manner designed to drive up their costs to discourage them from pursuing the enforcement of their contract to purchase the property. [4] For the same reason, the trial judge awarded special costs to Scotiatrust and Mr. Moore regarding the first summary trial but gave them only party and party costs for the second trial. The trial judge did not determine the amounts for the second set of costs nor, to my knowledge, have they been assessed by the Registrar. [5] Mr. Campa's case is fundamentally defective because it is based on his underhanded conduct in dealing with only one of the two executors, Mr. Moore, when both executors were required to agree to any binding arrangement regarding the property. He asserted that he had an agreement to meet or better any offer made by another bidder. He claimed that he concluded a binding agreement for purchase and sale of the property on 2 April 2001. [6] Only Mr. Moore agreed to the "meet or better" arrangement; Scotiatrust knew nothing about it. Only Mr. Moore signed the 2 April 2001 agreement. Neither did Scotiatrust know that Mr. Moore's daughter, Brenda, and later Mr. Moore directly, fed Mr. Campa with information concerning offers by other potential purchasers. Scotiatrust declined to reveal other offers to Mr. Campa and, for obvious reasons, Dexter Properties Inc., the listing agent, also wanted the other offers kept confidential. [7] As Mr. Campa's willingness to buy was known prior to the listing agreement, he was treated as exempt from commission, that is, the estate would not have to pay commission if he bought the property. This exempt status placed Mr. Campa in the position of offering only a small amount above the other offers, net of commission and thereby enabling him to acquire the property for much less than the highest bidder. But, of course, for this scheme to work, he needed to know what Scotiatrust and the listing agent did not want him to know, namely, the amount of other bids. As I have said, Mr. Moore and his daughter supplied him with that information. [8] The plaintiffs' original offer was $740,000. They made another offer of $752,000, a counter-offer, on 30 March 2001, which Scotiatrust accepted by a fax message. The trial judge found that Mr. Moore gave his express authority to Scotiatrust to communicate acceptance on his behalf as well. [9] That same day, Mr. Moore was on his way home from vacation. Upon his return he signed an agreement with Mr. Campa on 2 April 2001 but, after taking legal advice, he executed a form of purchase and sale in favour of the plaintiffs on 5 April 2001. Mr. Campa filed a caveat on the property shortly before the closing date of the plaintiffs' conveyance alleging a contract of purchase and sale in his favour dated 2 April 2001. [10] The plaintiffs sued for specific performance. It was defended by Mr. Campa on the basis that the plaintiffs' contract of purchase was unenforceable because: (1) he had the right to meet or beat any offer; (2) when invited by the listing agent to put in his best offer on 29 March 2001, he placed a higher net offer than the plaintiffs and the executors were bound to accept it; (3) the plaintiffs' 30 March 2001 offer was accepted by Scotiatrust without Mr. Moore's authority and was, therefore, invalid; (4) the 2 April 2001 contract was valid and binding; (5) Mr. Moore executed the plaintiffs' contract on 5 April 2001 under duress (threats of litigation by the plaintiffs' realtor). [11] Mr. Campa counterclaimed for specific performance of either the 29 March 2001 agreement (to sell to the highest bidder) or the 2 April 2001 agreement or damages for breach of contract by the executors. He also claimed damages from Scotiatrust for negligence, misrepresentation by the plaintiffs' realtor and as against Scotiatrust and the plaintiffs for interference in his contractual relations and inducing breach of contract. [12] The negligence claim against Scotiatrust proceeds on the theory that Scotiatrust failed to confirm with the listing agent that a sale to Mr. Campa was to be exempt from commission and so, when on 29 March, he presented a lower offer than the plaintiffs' offer, the agent might not have realized that without commission his offer was actually better than the plaintiffs'. I regard this as a specious argument. The listing agreement was amended on 20 March 2001 to include a reference to Mr. Campa's exempt status, well before the material events. [13] Mr. Justice Melnick assumed case management of the action in January 2002. He dealt with the matter by hearing the plaintiffs' application under Rule 18A for summary judgment on their specific performance claim. This was over the objection of Mr. Campa who wanted a conventional trial on all issues. The trial judge gave judgment in favour of the plaintiffs on 10 May 2002: 2002 BCSC 691. [14] Scotiatrust and Mr. Moore then brought another Rule 18A application for summary dismissal of the counterclaim against them. The trial judge agreed to conduct a summary trial on that issue, again over Mr. Campa's objection. He dismissed the counterclaim on 4 October 2002: 2002 BCSC 1411. [15] Having reserved on the issue of costs, the trial judge delivered reasons for judgment as to costs relating to both summary proceedings on 2 December 2002: 2002 BCSC 1659. [16] Mr. Campa appeals from the first trial judgment, CA029741, on grounds expressed in his factum this way: 1. The learned 18A trial judge erred in attempting to sever and resolve the issue of specific performance in an 18A procedure. 2. The learned 18A trial judge erred in deciding issues that were not before the court on the 18A application. 3. The learned 18A trial judge erred in refusing Campa the opportunity to complete discoveries prior to the 18A application. 4. The learned 18A trial judge erred in finding a fact which was contrary to an admission. 5. The learned 18A trial judge erred in finding that the March 30th fax was capable of specific performance. 6. The learned 18A trial judge erred in finding that the April 2nd agreement did not bind the estate. 7. The learned 18A trial judge erred in disallowing Campa to amend the pleadings by adding a prayer for permanent injunctive relief. [17] Mr. Campa appeals from the second trial judgment, CA030251, on a single ground: 1. The learned summary trial judge proceeded with a bifurcated Rule 18A application when it was manifestly unfair to do so. [18] Mr. Campa brought a separate appeal against the disposition on costs, CA030392, alleging: 1. The learned judge erred in principle and was clearly wrong to order Campa to pay special costs of the proceedings in whole or in part. 2. The learned judge erred in principle and was clearly wrong to quantify special costs as 90% of actual legal fees, disbursements and taxes without assessment. [19] I would interfere only with the decision on costs. In my view, Mr. Moore's dealings with Mr. Campa created the potential for conflict. In light of that, I can see no justification for awarding him special costs, and I would, therefore, substitute an order that he receive party and party costs throughout on Scale 3. I cannot give effect to any of the other grounds, and I would accordingly dismiss the appeals except for the adjustment on costs. [20] As an overview, I would say that Mr. Campa has submitted no reasonably arguable point of law in this appeal. As many of the grounds indicate, he complains that the process was unfair to him. The gist of his complaint in this regard, as I understand it, is that the trial judge allowed the case to be litigated in slices by way of Rule 18A with the result that overlapping issues were decided without a full opportunity to present his case, and rulings were made that were likely to affect the outcome of issues not yet tried. [21] In my respectful opinion, the trial judge had good reason for exercising his discretion to manage the process in the way he did. The principal issue, who had the right to buy the property, was dealt with first and appropriately so because the parties needed to know where they stood without further delay. Mr. Campa had ample opportunity to put forth his own evidence and to challenge the evidence of his opponents. There were examinations for discovery and many key witnesses were cross-examined on their affidavits before the trial judge. [22] In order for Mr. Campa to defend the plaintiffs' specific performance action, he had to establish his own prior or superior right to the property. Thus, a decision had to be made that would directly bear on his specific performance claim. Moreover, this decision would unavoidably touch on the contractual bases for his damage claims advanced as alternative relief in the counterclaim. [23] I propose to deal with the errors of law first and then address the process arguments. Finally, I shall discuss the issue on costs. Finding a Fact Contrary to an Admission (Ground 4) [24] This ground relates to the question whether Scotiatrust had Mr. Moore's specific authority to accept the plaintiffs' offer of $752,000 on 30 March 2001. Without that authority, Mr. Campa argues that the acceptance was invalid and, in the result, the purported agreement is unenforceable. [25] Scotiatrust's pleadings were somewhat unclear on the matter of authority. Paragraph 8.t) of its defence suggests that Mr. Moore's authority was implied rather than expressed. It reads: t) since Moore had earlier authorized Scotiatrust to accept the Plaintiffs' offer of $740,000.00; and the Defendant Bernard Campa had not increased his offer of $720,000.00; Scotiatrust accordingly informed the Realtor that the price of $752,000.00 was acceptable to the Executors and confirmed acceptance in writing late in the afternoon of Friday, March 30, 2001. [26] But then in ¶8.u) the fact of acceptance by both executors is plainly asserted: u) on March 30, 2001, the Executors accepted the offer of the Plaintiffs to purchase the House for the price of $752,000.00, all cash; the sale to be completed on April 26, 2001; [27] Scotiatrust called the evidence of its officer who dealt with the transaction. He testified that on 30 March, he spoke to Mr. Moore by telephone and obtained his agreement to it. The trial judge accepted that evidence. In my view, Mr. Campa cannot say that this was contrary to an admission. The pleadings in question were ambiguous. The trial judge quite properly entertained evidence to settle the issue. The 30 March Fax - Not Capable of Specific Performance (Ground 5) [28] This ground depends on a determination that Scotiatrust did not have Mr. Moore's authority to communicate acceptance. As I said, the trial judge believed the trust officer when he said that he received express authority. Mr. Moore's evidence to the contrary was rejected. I would note that the trial judge did not find Mr. Moore to be a reliable witness generally. The evidence supports the finding of authority and, therefore, cannot be disturbed. The 2 April Agreement was Binding (Ground 6) [29] Mr. Campa argued that where one of two executors purports to speak for both but does not in fact have the authority of the other, then the estate cannot be bound. That is his proposition in support of the previous ground, and I think it is incontestable. But he says that if one executor does not purport to speak for the other then his actions can bind the estate. This highly doubtful proposition, said to be supported by some old English cases, was firmly, and correctly in my view, rejected by the trial judge as running contrary to s. 78 of the Estate Administration Act, R.S.B.C. 1996, c. 122, which provides: 78.(3) The powers, rights, duties and liabilities of personal representatives in respect of personal estate and all enactments and rules of law relating to (a) the effect of probate or letters of administration as respects chattels real, (b) dealings with chattels real before probate or administration, and (c) the payment of costs of administration and other matters in relation to the administration of personal estate, apply to real estate, so far as they are applicable, as if that real estate were a chattel real vesting in the personal representatives. (4) As an exception to subsection (3), it is not lawful for some or one only of several joint personal representatives to sell or transfer real estate without the authority of the court. [30] It follows that the 2 April contract for purchase and sale had no validity. The Process Arguments -Grounds 1, 2, 3, and 7 in Appeal CA029741; Ground 1 in Appeal CA030251) [31] Mr. Campa recites a litany of complaints in both appeals about the Rule 18A procedures used in both trials in aid of a request for a new trial. [32] As I said in my introductory remarks, it made good sense to deal first with the issue of who was entitled to buy the property. Such a determination is discretionary in nature and not to be lightly interfered with by this Court. The trial judge was careful to give a generous opportunity to the parties to present their own evidence and to test the opposing evidence through cross-examination. In many important respects, the proceedings amounted to a full dress trial. [33] The ground alleging that Mr. Campa was deprived of the opportunity to complete examinations for discovery is without merit. The trial judge disallowed further discovery because he found that the questioning along the lines indicated by Mr. Campa was unnecessary or irrelevant, and the request was untimely. Leave to appeal the ruling was refused by this Court, and no review was sought. [34] In his ruling of 15 February 2002 the trial judge said: I am dealing now with the preliminary application of the defendant Campa to adjourn the Rule 18A application so that further examinations for discovery may be conducted. Mr. McLeod, his counsel, suggests that on a number of occasions Mr. Gregory, counsel for the plaintiffs, wrongfully instructed the plaintiff, Ms. Graham, not to answer certain of his questions. He raises the same objection with respect to his examination of the realtor of the plaintiffs, Ms. Bardsley. While some, not all, of the objections were justified I would rather resolve this part of Mr. Campa's application by concluding that where not justified, answers to the further questions are not necessary to determine the central issues on the Rule 18A application. If I am wrong in that conclusion I add that the further delay of the proceedings would not be justified by whatever benefit Mr. Campa might obtain from further discovery. Further, had he wished to pursue further examination for discovery (and I recognize that the discoveries were held not that long ago), he should have brought this application before now, particularly given that the date for this hearing has been known for some time. I therefore dismiss the application to adjourn the hearing so that counsel for Mr. Campa can conduct further examinations for discovery. As the reasoning shows, the issue engaged the discretion of the trial judge in managing the case and required his informed judgment about the nature of the proposed question. No error in the exercise of his discretion has been demonstrated. [35] Sometimes splitting the issues in a case can lead to the unavoidable result that findings carry over to the later determination of unresolved issues. That is a consideration to be factored into the decision whether to grant a Rule 18A trial on part of a case, but it is not necessarily a determinative factor. Where, as here, the case is under the management of a single judge who hears all aspects of the case, the danger of an injustice is minimized. [36] In any event, the record shows that Mr. Campa raised all the issues, either by his questioning of the witnesses or in argument during the first Rule 18A trial. This made it necessary for the trial judge to comment on those issues in the first instance although in the second trial he reconsidered and affirmed his view on some of them. [37] As for the contention that the findings extant will influence the determination of issues yet to be tried, primarily the allegation of inducing breach of contract and interference with contractual relations, Mr. Campa cannot be heard to complain that he did not prove a contract or that his contractual relations were not above board. These conclusions were necessary to a proper disposition of the matters before the trial judge in the two summary trials. [38] I am not persuaded that the process was unfair, and I would refuse an order for a new trial. [39] The plaintiffs applied for leave to present fresh evidence concerning improvements they made to the property since the trial. This would address the appropriateness of the specific performance remedy sought by Mr. Campa. Since I have rejected Mr. Campa's appeals, I find it unnecessary to consider this evidence. Costs [40] There are two parts to the appeal on costs: the form of costs and their quantification. [41] The trial judge levied a severe sanction in costs for Mr. Campa's attempt: ". . . to drive up their [the plaintiffs'] costs to discourage them from pursuing the enforcement of their contract to purchase the property." Mr. Campa's case was always spurious: he had no written agreement with the executors and, as I have said, the arrangements upon which he relied were procured by questionable conduct. In my judgment, the trial judge was not wrong in finding his conduct of the action deserved rebuke. [42] Mr. Moore's behaviour as executor helped create the basis for the conflict, although he wisely repudiated any side deals with Mr. Campa before the litigation began. That entitles him to costs but since he contributed to the problem at the early stages, I think it was an error in principle to provide him with such a generous indemnity. [43] Scotiatrust is blameless in the matter, and I would not disturb the costs order in relation to that party. [44] Mr. Holeksa, counsel for Mr. Campa on the costs appeal, engaged us in an interesting discussion on how much time was devoted to what issues, and he sought to mitigate Mr. Campa's behaviour in various ways. But I remain unconvinced that there is any justification for Mr. Campa's misuse of the court processes. I defer to the trial judge's judgment in this regard, and I would not interfere with his determination that special costs were appropriate. [45] There remains the issue whether the plaintiffs' costs should have been assessed before the Registrar rather than by the trial judge. It is said that Mr. Campa was denied the procedural protections of a Registrar's hearing, and he did not have an adequate opportunity to challenge items in the solicitor's bill. The Registrar's hearing would have involved more litigation in a losing cause; a problem that underlies all of Mr. Campa's process arguments. [46] It is well settled that a trial judge has the authority to determine the quantity of the award although it is a power to be exercised sparingly: Harrington v. Royal Inland Hospital (1995), 131 D.L.R. (4th) 15 (b.c.c.a). As in Harrington, the trial judge in the present case did not want to burden the parties with the task of acquainting the Registrar with the complexities of the case when he was fully familiar with all aspects of it. [47] Mr. Campa was unable to demonstrate any denial of the opportunity to address the reasonableness of the bill. [48] I would allow the appeal against costs in relation to Mr. Moore in accordance with these reasons, and otherwise dismiss the appeal. "The Honourable Mr. Justice Donald" I Agree: "The Honourable Madam Justice Newbury" I Agree: "The Honourable Mr. Justice Smith"