BC Take Five February 2011

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604-879-4280 | [email protected] February 2011 BRITISH COLUMBIA EDITION Inside this Issue: op We return to featuring cover photos of places around the world. This month, we thought somewhere warm would be appreciated- a beach on Paradise Island in in The Bahamas. ON POINT LEGAL RESEARCH Featured Cases: Workers’ Compensation; Judicial Review; Standards of Review- p.3 Limitation Periods- p.5 Civil Procedure; Security for Costs- p.6 Administrative Law; Procedural Fairness; Interpretation of Society Act- p.8 Civil Procedure; Discovery- p.10 Classified Section: Job opportunities, sales of law practices, and other law-related postings.- p.12 Prepare to Win.

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The February 2011 British Columbia edtion of OnPoint Legal Research's monthly newsletter, summarizing the top five cases from the British Columbia Court of Appeal from the previous month.

Transcript of BC Take Five February 2011

Page 1: BC Take Five February 2011

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February 2011

BRITISH COLUMBIA EDITION

Inside this Issue:

op

We return to featuring cover photos of places around the world. This month, we thought somewhere warm would be appreciated- a beach on Paradise Island in in The Bahamas.

ON PO I N TLEGAL RESEARCH

Featured Cases:

Workers’ Compensation; Judicial Review; Standards of Review- p.3Limitation Periods- p.5Civil Procedure; Security for Costs- p.6Administrative Law; Procedural Fairness; Interpretation of Society Act- p.8Civil Procedure; Discovery- p.10

Classified Section: Job opportunities, sales of law practices, and other law-related postings.- p.12

Prepare to Win.

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Kerton v. Workers’ Compensation Appeal Tribunal, 2011 BCCA 7

Areas of Law: Workers’ Compensation; Judicial Review; Standards of ReviewUnder Appeal: Justice Rice

This case involved an appeal by the appellants, the Workers’ Compensation Appeal Tribunal (“WCAT”) and the Workers’ Compensation Board (“WCB”) against the respondent worker Mr. Kerton. The appeal stemmed from an order granting judicial review of WCAT’s decision denying the respondent’s request for an extension of time to file an appeal. The respondent injured his left leg and knee on the job in 1991 and WCB compensated him for his injuries at that time. In 2005, as a result of ongoing knee difficulties, WCB

reopened his claim and paid him temporary benefits. The respondent requested a review of that decision, which ultimately confirmed WCB’s decision. The respondent filed an appeal of that decision to WCAT, but did so 186 days late. WCAT refused to grant him an extension of time on the basis that, although he had shown the existence of special circumstances and an injustice would result from the refusal of an extension, he had not adequately explained the delay in bringing the appeal. On reconsideration of its decision, WCAT concluded that the earlier decision was correct and should be upheld. The respondent applied for judicial review of these decisions. The chambers judge held that the two decisions addressed a jurisdictional issue and were therefore reviewable on the standard of correctness. He held that the decisions refusing an extension of time and refusing reconsideration were incorrect and should be set aside, but refused the respondent’s request for mandatory relief and referred the case back to WCAT for reconsideration.

[continued on the next page]

BACKGROUND

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The appeal was allowed. In deciding whether WCAT’s findings were to be reviewed on a standard of patent un-reasonableness or a standard of correctness, the Court held that a court must determine whether the matter under consideration falls within WCAT’s “exclusive jurisdiction under a privative clause”. The Court clarified that while the existing approach to determining the appropriate standard of review had commonly been referred to as “pragmatic and functional”, this phrase had misguided courts in the past. As such, the analysis could simply be referred to as the “standard of review analysis” in the future. The Court further stated that the analysis must be contextual, and must be dependent on the application of a number of relevant factors, including:

(1) the presence or absence of a privative clause; (2) the purpose of WCAT as determined by interpretation of enabling legislation; (3) the nature of the question at issue, and (4) the expertise of WCAT. In many cases, it will not be necessary to consider all of the factors, as some of them may be deter-minative in the application of the reasonableness standard in a specific case. The Court determined that s. 58 of the Administrative Tribunals Act S.B.C. 2004, c. 45 governed the standard of review in this case, in light of the fact that the Workers Compensation Act R.S.B.C. 1996, c. 492 contained a privative clause. In this case, the standard was one of patent unreasonable-ness. The Court concluded that the chambers judge erred in characterizing the issue as one of jurisdiction and erred

in applying the standard of correctness. Since neither of the impugned decisions could be said to be patently unreasonable, the appeal was allowed.

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Kerton v. Workers’ Compensation Appeal Tribunal (cont.)

APPELLATE DECISION

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The appeal was allowed. For the Court, Chief Justice Finch determined that the trial judge had erred in viewing the limitation as being triggered by a single occurrence and in applying instead s. 22(1) of the Act. After careful review of the language of the policy, the language of the Act, and the relevant caselaw, the Court concluded that the respondent insurer had to be held to the terms of the policy it provided, as these terms were more favourable to its participant than the provisions of the statute. By the terms of the policy, the appellant’s claim to disability benefits accrued monthly. According to the jurisprudence, the limitation period therefore had to be viewed as commencing anew on each successive entitlement. Interpreting the policy limitation as giving rise to a rolling limitation period was correct and accorded with precedent. The Court therefore allowed the appeal, set aside the trial judge’s order, and remitted the matter to trial for a determination of whether the appellant was entitled to benefits under the policy for two years preceding the date on which he issued the writ of summons and anytime thereafter.

The appellant in this case was Dr. Sander. The

respondent was Sun Life Assurance Company of Canada. Dr. Sander appealed from a judgment holding that the action he commenced was barred by s. 22(1) of the Insurance Act, R.S.B.C. 1996, c. 266 (the “Act”). The section mandates that “... every action on a contract [of insurance] must be commenced within one year after the furnishing of a reasonably sufficient proof of loss or claim under the contract...”. The trial judge held that the one-year limitation period was triggered when the respondent provided

Sander v. Sun Life Assurance Company of Canada, 2011 BCCA 3

Areas of Law: Limitation Periods; When Time Begins to RunUnder Appeal: Justice Greyell

the appellant with “clear and unequivocal notice” of denial by letter dated June 29, 2001. The limitation period for issuing a writ therefore expired on June 29, 2002. As a result, the trial judge found that the appellant’s writ, which was issued on November 9, 2004, was out of time. The appellant, a former dentist, received disability benefits from the respondent under a group insurance policy after being diagnosed with cataracts. The respondent advised the appellant in June 2001 that no further benefits would be made because the appellant had refused to

undergo cataract surgery as required under the policy. The appellant underwent cataract surgery in 2003 but maintained that he was still unable to practice dentistry. He then commenced the present action for disability benefits. The appellant argued that by the terms of the policy, the limitation period did not begin to run until his counsel provided the insurer with proof of loss or claim by letter in April 2004. He argued that the governing limitation period was that contained in the policy of insurance, which was two years after the date the insurance money became payable.

BACKGROUND

APPELLATE DECISION

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BACKGROUND

Procon Mining & Tunnelling Ltd. v. McNeil, 2011 BCCA 23Areas of Law: Civil Procedure; Security for Costs Under Appeal: Justice Garson

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Records and DocumentationIf you are carrying on a business, you are required to keep adequate records that provide sufficient details and support to determine how much tax you owe. Estimates and incomplete information are not acceptable to CRA. In this regard, I refer you to CRA’s Guide RC4409 Keeping Records, which can be found on CRA’s Website.

A CompanyAnother way to do business is through a company. A company is a separate legal entity that can undertake to do business and own property in its own name. A company has its own requirements to file tax returns, pay taxes, and meet other obligations. A company pays tax at different rates than does an individual proprietor.

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CautionThis article is not intended to provide a complete summary of issues and requirements relating to individuals in business; it highlights a few preliminary considerations. The comments provided herein are based on information available at the time of writing and are general in nature. We recommend that individuals consult their own tax advisors before acting on information contained in this article, to ensure that their own specific circumstances and current tax legislation are taken into account. s

Kathryn G. Edwards, CA, is a Partner with Pagnanini Edwards Lam Chartered Accountants.

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This case involved an application by the

appellant, Procon Mining and Tunnelling Ltd. (“Procon”), against the respondent, McNeil, Bonnar and Gladiator Equipment (“McNeil”), for review of a decision dismissing its application for security for special costs. The factual history involved a protracted

battle fought over the course of several hearings. On April 12, 2010, Madam Justice Ross granted Procon judgment for $2,658,248.71, based on findings of secret commissions and fraud. The order was appealed to the Court of Appeal. On October 7, 2010, Madam Justice Prowse ordered McNeil to post security for costs of

the appeal in the amount of $11,494.56, and dismissed Procon’s application for a stay of execution. The Security order was by consent. On October 13, 2010, Madame Justice Ross awarded Procon special costs.On November 24, 2010, Procon brought an application seeking security for the special costs and for the April 12, 2010 judgment. Madam Justice Garson heard this application on November 29, 2010, and released her judgment on December 14, 2010 (see: 2010 BCCA 571). Justice Garson dismissed the application, on grounds that McNeil had a meritorious appeal and that ordering security in any significant amount would prevent it from pursuing the appeal. In so finding, she noted that there was already a caveat issued against the home of the individual respondents and that $400,000 had already been paid on the judgment. Procon appealed this decision.not execute a resolution to approve the transfer, other shareholders did not waive their pre-emptive rights, and the share register did not record the transfer.

[continued on the next page]

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Procon Mining & Tunnelling Ltd. v. McNeil (Cont.)

The appeal was denied. Mr. Justice Chiasson, for the Court, upheld Justice Garson’s decision. The Court determined that while Justice Garson did not elaborate on her decision, she was alive to the fact that security was sought for the special costs as well as for the judgment. Ultimately, the Court was not persuaded that Justice Garson had failed to consider

the merits of the special costs appeal based on the material available to her, and therefore did not err in concluding that there was an arguable case on the appeal. The Court further determined that Justice Garson had properly exercised her discretion in refusing to interfere with the balance between the parties. According to the Court, she was entitled to conclude on the scant evidence

before her that security for special costs would prevent the appeal from going forward. In the context of the protracted litigation between the parties as a whole, the decision was reasonable.

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Sandhu v. Dhaliwal, 2011 BCCA 24

Areas of Law: Administrative Law; Procedural Fairness; Interpretation of Society ActUnder Appeal: Justice Walker

The appellants were the Khalsa Diwan Society (the “Society”), a religious not-for-profit organization, and Kashmir Singh Dhaliwal, the president of the Society’s elected Executive Committee. The respondents were individual members of the Society. The respondents were concerned that the Society’s bylaws were not being followed, and that members of the executive had been processing invalid membership applications in order to deliberately distort the membership list and ensure their re-election. The members of the executive denied these allegations. As a result, the respondents filed a Petition pursuant to s.85 of the Society Act, R.S.B.C. 1996, c.433. The Petition sought an order enabling the respondents to inspect all new membership applications and related records, an order that the new membership forms accepted to date be declared invalid, and a number of ancillary orders. Throughout the hearing, the trial judge indicated he was leaning toward a

finding that there was a systemic problem with the Society in relation to the applications. On the second day of hearing, the hearing adjourned to allow the parties to attempt to renegotiate a resolution. The negotiations did not succeed, and the appellants discharged their counsel. On the third day, the new counsel sought an adjournment of the proceedings, but the trial judge declined to grant the adjournment, noting that the new counsel had represented the Society in similar petitions before and found that the decision to change counsel was a tactical one to gain an advantage from delay. The judge held that it would be unfairly prejudicial to the members of the Society to adjourn the Petition, and that an adjournment would bring the entire membership drive and election process into disrepute. Ultimately, the trial judge found in favour of the respondents, invalidated all membership applications taken since the last election, and ordered the appointment of an independent electoral officer to conduct the Society’s next election. He also retained supervisory jurisdiction over the process until the election was completed. The appellants appealed from the trial judge’s order, alleging, inter alia, that they had been denied a fair hearing.

BACKGROUND

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The appeal was allowed. Mr. Justice Smith, for the Court, determined that in refusing to grant the Society the adjournment sought, the trial judge was obligated to give the Society an opportunity to address him on the question of whether the court’s jurisdiction was engaged pursuant to the Society Act. However, the trial judge erred in disallowing the Society from fully articulating its position that the application forms advanced as evidence were not necessarily non-compliant with the Society’s bylaws. The Court determined that the trial judge’s error resulted in a violation of the audi alteram partem rule of natural justice, which requires that courts provide those affected by their decisions an opportunity to be heard. The Court therefore concluded that the appellants had been denied a fair hearing, set aside the order, and remitted the Petition for a new hearing.

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Sandhu v. Dhaliwal (cont.)

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The appellant in this case is Ms. Donaghey, the defendant in the underlying action. The respondent is Cody Jones by his Litigation Guardians, Mr. Jones and Ms. Seward, who are his birth parents. The question in dispute was whether the chambers judge erred in concluding that the appellant’s mental condition was “an issue in the litigation” and consequently ordering her to attend for a psychiatric examination pursuant to Rule 7-6(1) of the Supreme Court Civil Rules. The facts were as follows: In 2006, when the minor respondent was two months old, the Director of Child Development removed him from his parents’ custody. Following a court hearing, the respondent child was ordered into the Director’s interim custody. The Director then placed him in the care of the appellant and her partner and while in their care, he suffered a traumatic brain injury when either the appellant or her partner shook him. The respondent child, through his litigation guardians, commenced a claim against

Jones (Litigation guardian of ) v. Donaghey, 2011 BCCA 6

Areas of Law: Civil Procedure; DiscoveryUnder Appeal: Justice Macaulay

BACKGROUND

BACKGROUND

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the appellant for battery, and against the Director and the appellant’s partner for negligence. In the course of this action, the appellant participated in an examination for discovery, in which she admitted that she had anger management issues more than 20 years prior, for which she received psychological counselling. On the basis of that admission and an expert psychiatric opinion that she displayed an exaggerated emotional response during videotaped evidence, the respondent contended that her mental condition was in issue in the action and sought an order requiring her to attend for a psychiatric examination. The chambers judge agreed and granted the order.

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The appeal was allowed. Justice Smith, for the Court, determined that the chambers judge erred in concluding that the appellant’s mental state was an issue in the litigation. The test under Rule 7-6(1) is not whether the party’s mental condition was relevant to an issue, but rather, whether it was in itself in issue. In this case, the issue set out in the pleadings was whether the appellant breached her duty of care to the respondent child in one or more of the specified ways, but none of these allegations puts the appellant’s mental condition in issue. As such, the Court concluded that the question of whether the appellant suffered from a personality disorder was not a material fact in respect of that issue. The Court set aside the order requiring the appellant to attend for a psychiatric examination, and dismissed the respondent’s application.

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Jones (Litigation guardian of ) v. Donaghey, (cont.)

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