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Citation: Trooper Technologies et al v.
Thermo Tech Technologies et al
1999 BCCA 493
Date: 19990830
Docket: CA024257
Registry: Vancouver
Court of Appeal for British Columbia
BETWEEN:
TROOPER TECHNOLOGIES INC. and INTERNATIONAL
ECO-WASTE SYSTEMS S.A.
PLAINTIFFS
(RESPONDENTS)
AND:
THERMO TECH TECHNOLOGIES INC., THERMO TECH WASTE
SYSTEMS INC., LOCKERBIE & HOLE LTD. and LOCKERBIE
THERMO TECH INC.
DEFENDANTS
(APPELLANTS)
Before: The Honourable Mr. Justice Esson
(In Chambers)
J. Fiddick
Counsel for the Appellants
D. Lunny, J. Dawson
Counsel for the Respondents
Place and Date of Hearing
Vancouver, British Columbia
August 17, 1999
Place and Date of Judgment
Vancouver, British Columbia
August 30, 1999
Reasons for Judgment of the Honourable Mr. Justice Esson:
[1] The appellants, defendants in the court below, seek leave to proceed with this appeal which
has been on the inactive list since February 25, 1999. The relevant provisions of the Court of
Appeal Act are:
25 (1) If a certificate of readiness is not filed in accordance with the
rules within one year after the filing of the applicable notice of appeal
or application for leave to appeal, as the case may be, the registrar shall
(a) place the appeal or application for leave to appeal
on the inactive appeal list maintained in the registry,
and
(b) mail notice of the action taken by the registrar
under paragraph (a) to the following persons at their
respective addresses for delivery:
(i) each counsel of record;
(ii) each unrepresented appellant
or respondent who has provided the
registry with an address for
delivery.
(2) An appeal or application for leave to appeal referred to in subsection
(1) shall be removed from the inactive list when a justice grants leave to
the appellant or the applicant to proceed with the appeal or application
for leave to appeal.
* * *
(5) An appeal or application for leave to appeal that
has remained on the inactive appeal list for 180
consecutive days shall, on the 181st day, stand
dismissed as abandoned.
[2] At the time of this application being heard, this appeal has been on the inactive list for
175 days or more.
[3] The action, begun in December 1997, was brought to enforce the provisions of a licensing
agreement by which the defendants were to provide certain technical information including
"standard certified engineering specifications" required for construction of plants which would
carry out waste management and recycling functions. The action was pressed urgently by the
plaintiffs. After the close of pleadings, they brought on an application under Rule 18 for
summary judgment; the relief sought being specific performance of the contractual obligations.
That application was heard on January 20, 1998 by Mr. Justice Cohen who did not grant all of
the relief sought but did make an order for delivery of "standard certified engineering
specifications", with respect to which he found the defendants had failed to raise any triable
issue. This appeal was launched on February 19, 1998, one day before the time for appeal
expired.
[4] On February 27, 1998 an application was brought in this court for an order staying the
January 20, 1998 order pending appeal. At that point, as Macfarlane J.A. observed in his
reasons, the defendants were continuing to refuse to comply with the order. In his reasons
Macfarlane J.A. went on to say:
I have read the pleadings and the reasons for judgment of Mr. Justice
Cohen. I have also read the agreement in question. The distinction which
the defendants now draw and to which I have just referred is a fine one and
it does not appear to me that distinction was drawn in the statement of the
defence filed in this case. It is not a distinction which was referred to
by Mr. Justice Cohen although I am told an attempt was made to argue that
point before him.
[11] After reading the material to which I have referred I am quite unable
to identify any bona fide defence to the claim made by the plaintiffs.
There may be some issue with respect to the interpretation of the agreement
which I do not grasp but I have grave doubts that there is a serious
question to be tried by this Court.
* * *
[14] I am not persuaded that the defendant will suffer irreparable harm if
the stay is not granted. In my view, damages will provide the defendants
with a suitable remedy if they suffer harm by reason of complying with Mr.
Justice Cohen's order. In my view, the balance of convenience favours the
plaintiffs who must proceed expeditiously with their plans to construct
plants in Poland or have their venture fail. I do not think it is a case
where it is fair to say that damages would be an adequate remedy for them
in all of the circumstances.
[5] On March 5, 1998 the plaintiffs applied to find the defendants in contempt for failing to
comply with the January 20 order. That led to an extended hearing before Cohen J. who, on July
10, found the defendants in contempt, imposed a fine of $25,000.00 against each defendant, and
ordered delivery of the documents by July 17.
[6] A notice of appeal against that order was filed on July 14 and, on July 17, an application
to stay execution of that order was heard by me. In refusing that application I called it as an
attempt by the defendants to defer the obligation to comply with the original order and noted
that there had been a long course of non-compliance by them. The appeal against the contempt
order has apparently never been proceeded with. Nor, it may be noted, did the defendants seek
review of the refusal by Macfarlane J.A. and me of the stay applications.
[7] When this appeal was launched in February, 1998 the plaintiffs made it clear that they
would require the defendants to comply strictly with all time limits. They have never deviated
from that position. In an affidavit sworn in opposition to this application, Mr. Lis, an
officer of both plaintiffs, said this:
4. This position was adopted from the outset in view of the inherent nature
of the case, involving the transfer and employment of engineering
specifications and drawings, where any subsequent reversal of the judgment
would mean that all efforts and expenditures made from the date of the
original judgment would be wasted and thrown away, resulting in real and
significant prejudice to the Respondents if the appeal was delayed beyond
the time within which it could be brought on under the Act and Rules. Such
prejudice will result if this application is granted.
This appeal proceeded in compliance with the Rules until July, 1998. While there is no
indication that the appellants sought to go any more quickly than the Rules require, they had
by July 8 taken all of the steps necessary to perfect the appeal other than filing the
certificate of readiness. On July 2, while the contempt application was still under reserve,
appellants' then counsel wrote to Mr. Lunny expressing the view that no more than 1/2 day would
be required for hearing the appeal and he expected to file the certificate of readiness "early
next week." At that point, then, the appeal could have been set for hearing before the end of
1998. But until this application was launched 13 months later, no further step was taken.
[8] On July 7, after the application for stay was refused, further documents were delivered to
the plaintiffs. As they had with the original production, the plaintiffs took the position that
this was a "bogus" production in that the documents delivered were not those described in the
summary judgment of January 20 and were not those which the plaintiffs needed to carry on with
commitments which they had made to construct plants in Poland. The plaintiffs therefore
launched, within a matter of days, a further application to hold the defendants in contempt.
That application was directed not only against the defendants but against two officers of the
companies. At that point, the defendants terminated the retainer of the solicitors and counsel
who had acted for them to that point, and retained the firm which now represents them. The
partner who assumed conduct of the matter (not Mr. Fiddick who was counsel on this application)
I will refer to as "the defendants' solicitor". He has sworn a lengthy affidavit purporting to
explain and justify the course of masterful inactivity which has been followed by the
appellants since July, 1998.
[9] The second contempt application proved to be a lengthy proceeding in which the final
hearing took place on April 1, 1999 after which Cohen J. reserved decision until April 22.
Again, he found the production by the defendants to have been "bogus" and again he found the
defendant corporations in contempt and imposed substantial fines. However, he found the case
against the two individuals not to have been proved to the necessary degree of certainty.
However, he rejected the evidence of both officers because, in one case, it was unreliable and
in the other on the ground that it was irrelevant and inadmissible. No appeal has been taken
from that decision and, as I have stated, no step has been taken to prosecute the appeal
against the first contempt conviction of July 10, 1998.
[10] That brings me to the evidence of the defendants' solicitor. He swears that when he first
reviewed the files following the retainer of his firm, he simply could not understand how
summary judgment could have been given against the two principal defendants and that on the
basis of his careful examination of the pleadings and motion materials, he could discover no
basis for contractual claims by or against those companies. He goes on to assert that it is not
clear from the reasons for judgment whether the January 20, 1998 order (which he calls an order
"for delivery of documents") was an "actual summary judgment of the liability issues" or
whether it was something else. The errors sworn to as a fact by the defendants' solicitor
appear to be essentially the errors set out in the appellants' factum filed on May 29, 1998.
His difficulty with the nature of the order is one which appears to be obvious only to him and
may be no more than a play on words.
[11] In any event, having reached those conclusions, the defendants' solicitor conceived the
notion of going back before Cohen J. to give him an opportunity to understand how seriously he
had erred and to reverse his decision and explain what he had meant. On September 30, 1998 he
wrote to Mr. Lunny to suggest that "clarification" was required with respect to several issues.
He identified three and said it was his intention to "seek clarification from Mr. Justice
Cohen." He said he would raise them at a prehearing conference which was then pending. He also
expressed an intention to amend the statement of defence to put in issue "some of the very
matters raised above."
[12] Mr. Lunny's response in a letter dated October 1, included this:
Thirdly, we say that your comments with respect to the "reach" of the Rule
18 Order are wholly ill founded. They constitute at most a form of backdoor
collateral attack on an Order of the Court, which on the face is clear,
speaks for itself and needs no "clarification". Without restricting the
generality of this statement, we would point out that the distinctions
drawn by you with respect to the position respectively of International
Eco-Waste Systems S.A., as a Plaintiff, and Thermo Tech Technologies Inc.,
as a defendant, have already been argued and rejected in the Supreme Court
and in the Court of Appeal of British Columbia. In any event, these are
certainly not matters which should be part of any of the issues to be dealt
with at the pre-hearing conference with relation to the contempt
application.
Fourthly, it goes without saying that it is our position that the matters
which are to be the subject of your proposed amendment are res judicata by
the award and entry of judgment. There is no ability to amend to raise them
at this stage in the Supreme Court proceedings. In addition, they were
addressed fully in the Court of Appeal during the stay application and the
learned Court of Appeal judge considered them to be without merit.
[13] There is perhaps a touch of overstatement in describing decisions of chambers judges in
this court as decisions of the court but otherwise the response appears to have been correct.
The reference to "entry of judgment" in the last sentence of the extract is of some interest.
The fact is that the decision of January 20, 1998 was embodied in a formal order entered in
February, 1998 at which point, in accord with the well known rules in these matters, it would
seem that the judge may have ceased to have any power to vary its terms. However, it may be
that the proceeding is somehow outside the scope of that rule because, over the ensuing many
months, the defendants' solicitors continued to pursue his application for "clarification".
[14] It does not appear that the application was dealt with at a pre-hearing conference. In
January, 1999 the defendants' solicitor filed a notice seeking a hearing of that application
which was to have been heard on April 1 with the contempt application but had to be put over
for lack of time. It finally was heard on July 5, 1999 at which time decision was reserved but,
on July 9, Cohen J. gave extensive reasons for declining to make the order sought, and
indicated that those matters could be dealt with only on appeal.
[15] I point out here an obvious consideration, viz., if the defendants and their solicitors
had had any faith in the proposition that the decision of January 10 was seriously flawed, the
only reasonable course for them to have taken was to seek the earliest possible date for the
hearing of the appeal. Only thus could the asserted errors be corrected. Given the significance
of the issues to the parties, and the fact that the case could have been argued in one
half-day, it is likely that the appeal could have been brought on for hearing within very few
months after the appeal was ready for hearing. But the appellants chose instead to follow a
course which could not, on any reasonable assessment of the issues, achieve any purpose but
delay. These are people of considerable sophistication in matters of law and business. It is
reasonable to apply to them the common sense inference that they intended the natural
consequence of their acts - delay and obfuscation. In this application, Mr. Fiddick did not
seriously attempt to defend the course taken by them but suggested that the logical inference
is that the unfortunate clients, in all innocence, followed the misguided advice given to them.
As Mr. Lunny points out, none of the clients gave evidence to that effect. Had they done so,
they would, of course, have exposed themselves to the hazards of being found to have waived the
solicitor and client privilege.
[16] To complete the chronology, I will note again that on February 25, 1999 the defendants'
solicitor was advised that the appeal had been placed on the inactive list. His only reaction
to that apparently was to write to the Deputy Registrar advising that he was seeking
clarification of the order and that once that was obtained:
..., the appeal will either be pursued or abandoned accordingly. In that
regard we note that if no steps are taken in the appeal within 180 days of
February 25th, 1999 the appeal will stand dismissed as abandoned.
[17] On July 12, following the dismissal of the "clarification" application, the defendants
solicitor wrote to plaintiffs' counsel saying that "it is now necessary to proceed with the
appeal" and inviting the plaintiffs to consent to an order granting leave to proceed. No
consent having been given, this application was launched on August 9
[18] In Stasiuk v. Szabo (1997), 29 B.C.L.R. (3d) 49, Finch J.A., in giving judgment for the
court, said at p.51:
[5] The test on whether to reinstate an appeal under section 25(2) is a
three part test set out in Frew v. Roberts (1990) 44 C.P.C. (2d) 34 where
it was said that in order to dismiss an appeal for delay there must be
inordinate delay, the delay must be unexplained or inexplicable, and there
must be prejudice.
In my separate concurring reasons in that case, I expressed the view that under the present
version of s.25 there will be cases in which other matters should be taken into consideration.
However, I accept that this application should be decided upon the basis of the three part test
in Frew v. Roberts. In effect, the test to be applied is the same as if, under the former
Rules, the plaintiffs had applied to have the appeal dismissed as abandoned. While the test is
the same, the present legislation shifts the onus to take the initiative to the delinquent
appellant. Clearly, the intention of the present law is to impose upon the appellant the burden
to do something to terminate the delay.
[19] Here, the relevant period of delay is one of some 13 months beginning with the time when
the defendants' then counsel promised to immediately file the certificate of readiness. Mr.
Fiddick, in submitting that that period cannot qualify as "inordinate", points to the fact that
in a number of cases delay periods of two to three years have been held not to be inordinate.
But the question must be resolved having regard to the circumstances of the particular case.
The action is one of crucial importance to the commercial health of the plaintiffs. They
pressed it to a conclusion with the least possible delay and made it clear that they would
agree to no delay in this appeal. The step which had to be taken to avert the delay was the
simplest possible one - that of filing a certificate and arranging a date for hearing. The
decision of the appellants to not fulfill the promise given by their counsel on July 2, 1998
can, for the reasons set out above, only be seen as a deliberate one designed to put off the
day of judgment in an appeal in which they obviously had little chance of success. In that
regard, I note again what I see as a highly relevant circumstance, i.e., that in refusing a
stay of the original order, Macfarlane J.A. considered carefully whether any triable issue had
been raised by the defendants and could find none. That is reinforced by my decision in July,
1998 refusing a stay in the contempt proceeding when I emphasized the deliberate delay tactics
engaged in by the defendants. In the circumstances of this case, the delay period of 13 months
was clearly inordinate.
[20] I turn then to the second question - whether the delay is unexplained or inexplicable. In
relation to that, Mr. Fiddick points out that his partner has provided an explanation - he
formed the opinion that the decision under appeal was clearly insupportable and that the order
required "clarification". The proffered explanation suffers the defect of being inexplicable in
that it is logically incomprehensible. Assuming there was a reasonable basis for seeking a
re-hearing before the chambers judge, that could have been done without delaying the appeal.
The explanation is one which leads to the conclusion that the appellants decided on a course of
inaction in order to put off the day of decision. Thus, it is no explanation at all.
[21] As to the matter of prejudice, an officer of the plaintiff companies has sworn to the
serious consequences which continue to flow from the uncertainty which hangs over a crucial
aspect of their business. Counsel for the appellants makes the point that some of the
statements of fact in that affidavit are somewhat lacking in detail. But he filed no evidence
to the contrary effect and did not seek to cross-examine. Largely it is a matter of common
sense. I have no doubt that the plaintiffs have suffered and are continuing to suffer prejudice
from the delay in resolving this litigation.
[22] The application to remove the appeal from the inactive list is dismissed.
"THE HONOURABLE MR. JUSTICE ESSON" |
