Orange Julius Canada Ltd. v. Surrey (City of )

C99-0430.html Citation: Orange Julius Canada Limited Date: 19990706 v. Surrey (City) Docket: CA024340 1999 BCCA 430 Registry: Vancouver COURT OF APPEAL FOR BRITISH COLUMBIA BETWEEN: ORANGE JULIUS CANADA LIMITED et al PLAINTIFFS (RESPONDENTS) AND: CITY OF SURREY et al DEFENDANTS (APPELLANTS) AND: LAING PROPERTY CORPORATION, MICHAEL MYLETT, JERI LYNNE COX and FRANK FROST THIRD PARTIES (RESPONDENTS) Before: The Honourable Madam Justice Southin (In Chambers) C. L. McLean and W. G. Neen Counsel for the Appellants P. W. Walker and A. Sayn-Wittgenstein Counsel for the Respondents Place and Date of Hearing: Vancouver, British Columbia 29th June, 1999 Place and Date of Judgment: Vancouver, British Columbia 6th July, 1999 Reasons for Judgment of the Honourable Madam Justice Southin: [1] The style of cause on these reasons is taken from the notice of motion now before me. The style of cause is hopelessly misleading. [2] The respondent in the appeal with which I am now concerned is Laing Property Corporation. [3] This is the application now at hand: TAKE NOTICE that an application will be made by the Respondent, Laing Property Corporation, to the presiding Justice at the Courthouse, 800 Smithe Street, Vancouver, British Columbia at 9:30 a.m. on Tuesday, the 29th day of June, 1999 for an order pursuant to s. [28] of the Court of Appeal Act, R.S.B.C. 1996, c. 77, that paragraphs 62 to 78 and the last two lines of paragraph 80 of the factum filed on behalf of the Appellants, Gage Babcock & Associates Ltd., Western Fibres Ltd., All Seasons Display Inc., David Rowland, Martin Stewart, Concord Security Corporation, and David Reynolds, be struck with costs. [4] Section 28 of the Court of Appeal Act, R.S.B.C. 1996, c. 77 [formerly s. 29, S.B.C. 1982, c. 7] says this: 28 If a party fails to comply with this Act or the rules, the court or a justice may (a) dismiss the appeal as abandoned if the party is the appellant, (b) refuse to hear the party, or (c) impose terms including terms respecting the payment or disallowance of costs or disbursements. [5] The reason this application was brought pursuant to s. 28 is that the section, then numbered s. 29, was said by Legg J.A. in Perron v. R.J.R. MacDonald Inc. (1996), 81 B.C.A.C. 2, to be the foundation for the order there made of striking out a portion of a reply factum "on the ground that the appellant is not entitled to reply upon the issues raised in that factum". The underlying proposition there was that the appellant was attempting to raise an entirely new argument which it had not raised in its own factum or raised in the court below. [6] With the greatest deference for the judgments of Legg J.A., I do not see what s. 28 had to do with the matter in issue in the Perron case. [7] That the court has power under s. 9(1)(c) ["On an appeal the court may ... (c) make or give any additional order that it considers just"] to strike out a portion of a factum in order that proceedings in the court shall be both just and efficient, I do not doubt. It may also be that the power can be exercised by a single judge: 10. ... (2) In an appeal or other matter before the court, a justice may do one or more of the following: (a) make an order incidental to the appeal or matter not involving a decision of the appeal on the merits; [8] At present, I do not see s. 28 as the foundation for this application. I do not propose, however, to decide this application on that interesting and esoteric point because if a single judge has the power under some section of the Act or Rules to strike out a portion of the factum, I would not, for reasons hereafter appearing, exercise it in this case. [9] The appeal itself is from this order pronounced the 4th February, 1998: THE APPLICATION of the Third Parties, Laing Property Corporation, Michael Mylett, Jeri Lynne Cox, and Frank Frost, to strike all third party proceedings against them, coming on for hearing at The Law Courts, 800 Smithe Street, Vancouver, British Columbia on November 12, 13, and 14, 1997, and on hearing counsel for all parties, and on reading: [here followed a list of affidavits] AND JUDGMENT being reserved to this date; THIS COURT ORDERS that all third party proceedings against Laing Property Corporation in the within proceedings be struck out. THIS COURT FURTHER ORDERS that the application of the Third Parties, Michael Mylett, Jeri Lynne Cox, and Frank Frost be dismissed. [10] This was the motion leading to the order: TAKE NOTICE that an application will be made by the Third Parties, Laing Property Corporation, Michael Mylett, Jeri Cox, and Frank Frost to the Presiding Judge at the Courthouse at 800 Smithe Street, in the City of Vancouver, in the Province of British Columbia, at a date and time to be set, for an order under Rules 18A, 19(24), and 57 that: 1. the Third Party Notices issued against the Applicants in Vancouver Registry Action No. C957265 be dismissed as against the Applicants; 2. the Third Party Notices issued against the Applicants in Vancouver Registry Action Nos. C943577 and C956076 be dismissed as against the Applicants, or alternatively, that the Plaintiffs' claims in Vancouver Registry Action Nos. C943577 and C956076 be dismissed in their entirety; and 3. costs. [11] What this case, and a number of other proceedings in the court below, is all about is a fire that took place on Boxing Day in 1993 in the Santa's Castle at the Guildford Mall in Surrey. [12] The present applicant, the respondent to this appeal and a third party below, is the landlord. The plaintiffs below, not parties to this appeal, are the tenants of the mall. The defendants below, in this appeal the appellants, and respondents to this application, were variously concerned in the installation of Santa's Castle, the maintenance of the fire protection system, and so forth. I need not say what the exact involvement of each is said to be. I will call them "the trades". [13] Santa's Castle was in the common area of the mall and the fire which broke out from it or in it, I need not say which, caused much damage to the tenants who, as is usual in matters such as this, sued everyone in sight. The trades, for their part, brought various third party proceedings against, among others, the landlord. [14] In one of those proceedings, action C956076, a present respondent, All Seasons Display Inc., alleged: 10. If the fire which occurred on December 26, 1993, at Guildford Town Centre was caused or contributed to by any of the electrical components in the Christmas display as alleged in the Amended Statement of Claim, which is denied, the fire and resulting loss, damage and expense were caused or contributed to by the negligence of the Third Parties and All Seasons, Rowland and Stewart plead and will rely upon the provisions of the Negligence Act, R.S.B.C. 1979, c. 298. 11. Particulars of the negligence of the Third Parties, Laing, Mylett, Cox and Frost, are as follows: (a) in failing to ensure that the display lights and equipment in the Christmas display were not continuously energized and were turned off overnight contrary to the express request by All Seasons that the display lights and equipment be turned off; [15] On the 12th, 13th and 14th November, 1997, Lowry J. heard the application of the third parties, Laing Property Corporation et al, in accordance with the notice of motion which was before him. [16] Mr. Justice Lowry described what was before him in these terms [Laing Property Corp. v. All Seasons Display Inc. (1998), 53 B.C.L.R. (3d) 142 at 145, 146]: The owner of a shopping centre, and certain of its employees, make application for the summary disposition of third party proceedings for contribution and indemnity taken against them by the defendants in negligence actions arising out of a fire in which the owner and many of its tenants sustained losses that are said to exceed $8 million. The tenants' lease obligations included covenants to insure against fire. The owner was to be named as a joint insured and all rights of subrogation against it were to be waived. In the main, the application raises the question of whether those obligations as between landlord and tenant preclude any third party claim for contribution being made against the owner by the defendants and whether such claims can, in any event, be maintained against its employees. * * * The owner makes application for the disposition of the third party claims against it in the tenants' actions and its employees make the same application in all three actions. I have been given to understand that counsel consider a determination of the issues to which the application gives rise now will best facilitate the orderly progression of the interlocutory proceedings necessary to bring the case to trial. No determination of the merits of the allegations of negligence against the owner or its employees is required and none is to be made. The positions taken by all parties are based primarily on the pleadings. The only reference to evidence is to the various leases for the retail space in the Mall and the original building permit issued for the construction of the shopping centre by the City of Surrey. The wording of the insurance clauses is not the same in each lease and the three different forms employed are set out in the Appendix to these reasons. [17] In the leases, there were covenants to insure (at 147): The tenant covenants and agrees to effect and maintain throughout the term of this lease in joint names of the Landlord and Tenant the following insurances in forms, amounts and with insurance carriers satisfactory to the Landlord: a) Public Liability and Property Damage Liability insurance in an amount not less than $1,000,000 per occurrence ... b) Insurance against loss or damage to property located on the Premises by reason of theft, robbery, and burglary, ... c) Fire and extended coverage risks ... in an amount not less than the full replacement value thereof. d) Plate glass insurance. ... All such policies shall waive recourse and any other rights of subrogation against the Landlord. [18] The position of the landlord was: 1. The insurance covenants had the effect of absolving it of any liability to any tenant for any loss caused by the fire. 2. Any claim for contribution and indemnity made against it by those sued by the tenants was barred, even if the tenants' losses were to some extent caused by its negligence, relying on Dominion Chain Co. v. Eastern Construction Co. (sub. nom. Giffels Associates Ltd. v. Eastern Construction Co.) [1978] 2 S.C.R. 1346, 84 D.L.R. (3d) 344 (S.C.C.). [19] I need not set out what the position was of the respondents to the application below for the purpose of deciding the matter now before me. [20] The paragraphs of the factum of the appellants which are in issue are, in part: C. THE LEARNED SUMMARY TRIAL JUDGE ERRED IN FAILING TO FIND AN INDEPENDENT RIGHT OF INDEMNITY WAS OWED BY LAING TO THE DEFENDANTS 62. It is alleged that this fire was caused by Laing's failure to ensure that the display lights and equipment in the Christmas display were turned off overnight contrary to an express request by All Seasons. 63. In circumstances where a person is, without fault on his part, exposed to liability and compelled to pay damages on account of the negligence or tortious act of another, an implied contract of indemnity arises in favour of that person. 64. All Seasons maintains that it is blameless for this fire and that any fault associated with the fire is that of Laing. As All Seasons expressly requested Laing to turn off the Christmas display, an implied contract to do so existed between All Seasons and Laing, giving rise to the "implied contract of indemnity" referred to in McFee v. Joss, [[1925] 2 D.L.R. 1059 (Ont. S.C.A.D.)]. and: 69. In the present case, it is submitted that it is open to a trial judge to determine that the direction by All Seasons to Laing to turn off the display should give rise to an equitable duty to indemnify as a result of Laing's assumed promise "to do what, under the circumstances, he ought to do" and that the failure to do that should "raise upon his [Laing's] conscience an obligation to indemnify" All Seasons against the loss or damage resulting. 70. On this basis, All Seasons has an independent cause of action against Laing for, at a minimum, its solicitor and client costs of defending the main action arising out of the implied contract of indemnity and, as a result, the Third Party proceedings ought not to have been dismissed. and: 80. It is further respectfully submitted that the learned Summary Trial Judge erred in applying the Giffels [supra] and Bow Valley [[1997] 3 S.C.R. 1210, 153 D.L.R. (4th) 385] decisions to find no right of contribution against Laing when the B.C. Negligence Act differs in words and effect from that in Giffels and when there is an independent right of contribution by virtue of both s.1 and 4 of the Negligence Act as well as an independent right of indemnity found in Parmley, [Yule v. Parmley, [1945] 2 D.L.R. 316 (B.C.C.A.)]. [21] There is a difference on the pleadings in the court below between the positions of All Seasons Display Inc., on the one hand, and the other present appellants, on the other, but the difference between those positions is not significant to the matter before me. [22] What Mr. Walker now says is that what took place before Lowry J. was a trial pursuant to Rule 18A and as the question of an independent right of indemnity was neither pleaded in the court below nor was any evidence called in support of it, and no argument was addressed to the learned trial judge on the footing of s. 1 of the Negligence Act, the appellants ought not to be heard to raise those points in this Court. [23] That this third party proceeding could have been tried under Rule 18A, I do not doubt, for the Rule begins thus: (1) A party may apply to the court for judgment, either on an issue or generally, in any of the following: (a) an action in which a defence has been filed, (b) an originating application in respect of which a trial has been ordered under Rule 52(11)(d), (c) a contested proceeding under the Divorce Act (Canada). [24] But it appears to me that the only thing that was being tried on Rule 18A was the effect in law of a covenant to insure. The question of liability of the landlord to the trades was not completely tried. In other words, it does not appear to me at present that determining the issue about the effect of a covenant to insure also determined that there were no other possible grounds upon which the trades could sue the landlord. [25] The muddle which has arisen is not unusual when parties attempt to have an order under Rule 18A relating not to the whole of a proceeding but to "an issue". [26] I do not think it would be right for me as a single judge, even if I have the power under Rule 10 to strike out a part of the factum, to exercise that power when it is not at all clear to me that the course of proceeding below precludes the present appellants from raising questions of law which if decided in their favour might result in this appeal being allowed or, at the very least, the questions at issue being remitted to the court below, so that there can be a proper trial of those issues. [27] There are, of course, many authorities in this Court in which the Court, upon hearing an appeal, has refused to permit a party to raise an issue which he might have raised in the court below but did not. When questions of that kind arise, there are many considerations, such as whether the pleadings support the position being taken in this Court, whether evidence was or ought to have been adduced upon it, and so on. I need not address those authorities. [28] I dismiss this application on the simple ground that if the appellants are to be precluded from taking the points that they take in their factum, it is only right that that course be taken by the court and not by a single judge. "THE HONOURABLE MADAM JUSTICE SOUTHIN"