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BCCA
|
2009 BCCA 397
|
Cosgrove v. L & C Canada Coastal Aviation Inc.
| 2009-09-17T00:00:00
|
https://www.bccourts.ca/jdb-txt/CA/09/03/2009BCCA0397.htm
| 2026-01-18T07:46:27.670000
|
2009 BCCA 397 Cosgrove v. L & C Canada Coastal Aviation Inc.
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Cosgrove v. L & C Canada Coastal Aviation Inc.,
2009 BCCA 397
Date: 20090917
Docket: CA036335
Between:
Terrance M. Cosgrove
Appellant
(Petitioner)
And:
L & C Canada Coastal Aviation Inc.,
David Lindsay and Maureen Lindsay
Respondents
(Respondents)
Before:
The Honourable Madam Justice Huddart
The Honourable Madam Justice Saunders
The Honourable Mr. Justice Low
Supplementary Reasons to: Court of Appeal for British Columbia,
February 20, 2009, (Cosgrove v. L & C Canada Coastal, 2009 BCCA 81, CA036335)
Counsel for the Appellant:
M. J. Watson
Counsel for the Respondents:
W. R. Southward
Place and Date of Hearing and Judgment:
Victoria, British Columbia
February 20, 2009
Place and Date of Supplementary Judgment:
Vancouver, British Columbia
September 17, 2009
Supplementary Reasons of the Court
[1]
Supplementary Reasons for Judgment of the Court:
[1] When this appeal from an order made under Rule 32A by a judge in chambers came on for hearing, this Court determined the order being appealed was from an interlocutory order and that leave to appeal was required. We refused that leave. In oral reasons, Huddart J.A. explained:
As the chambers judge was entitled to do under Rule 32A, he authorized the appointment of an independent expert, in this case a chartered business valuator, to provide an opinion that may assist the court in the final determination of all the claims set down in the petition, including the appointment of an auditor. In these circumstances, leave to appeal is refused. There is simply no prospect of success.
[2] The unsuccessful appellant now seeks an order that the parties bear their own costs of the appeal/motion for leave to appeal, noting that the "primary relief sought in the appeal was to have the respondents comply with the Canada Business Corporations Act , and that "... the reasons for judgment ... are unclear as to the disposition of the relief sought with respect to compliance with the requirements to appoint an auditor." This Court considered the reasons for judgment clear and unambiguous, as did the respondents.
[3] The usual rule is that an unsuccessful applicant for leave to appeal or an unsuccessful appellant will be required to pay the costs of the application or appeal. That rule applies unless there is good reason to depart from it: Ngo v. South Pacific Development Ltd., 2007 BCCA 119.
[4] In our view the respondents are entitled to their costs as if responding to an unsuccessful chambers application for leave to appeal, but not to their costs of responding to the misconceived appeal. We do not accept that the respondents were "bound by the Court of Appeal Rules to take each step of the process to defend itself, including the review of the Appellant's Factum, approval of Joint Appeal Books, research, and the preparation and service of the Respondent's Factum and Book of Authorities." The review of the appellant's factum in this case was equivalent to the review of an application for leave. Upon concluding the appeal was founded on a misapprehension of the trial judge's order, the respondent could and should have applied to strike the appeal or require leave to be obtained. They chose to respond with a factum and continue the appeal, thereby incurring needless expense.
[5] In determining the appropriate order of costs, it is appropriate for this Court to consider that what, in the end, was heard was only an unsuccessful application for leave to appeal. That being so, in our view the respondent should only be entitled to costs as if they had responded to an application for leave to appeal, that being all the business that was properly before the court.
"The Honourable Madam Justice Huddart"
"The Honourable Madam Justice Saunders"
"The Honourable Mr. Justice Low"
| null | null | null | null | null | null | null |
See upstream license, including non-commercial use and other restrictions: https://perma.cc/EA5C-R5DK. Note: This is an unofficial reproduction of a British Columbia Court of Appeal decision, without endorsement or affiliation by the British Columbia courts.
|
|
BCCA
|
2009 BCCA 396
|
Petro-Canada v. British Columbia (Workers' Compensation Board)
| 2009-09-16T00:00:00
|
https://www.bccourts.ca/jdb-txt/CA/09/03/2009BCCA0396.htm
| 2026-01-18T07:46:33.909000
|
2009 BCCA 396 Petro-Canada v. British Columbia (Workers' Compensation Board)
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Petro-Canada v. British Columbia (Workers' Compensation Board),
2009 BCCA 396
Date: 20090916
Docket: CA036345
Between:
Petro-Canada
Respondent
(Petitioner)
And
Workers' Compensation Board of British Columbia
Appellant
(Respondent)
Before:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Frankel
The Honourable Mr. Justice Groberman
On appeal from Supreme Court of British Columbia, July 18, 2008, Petro-Canada v. British Columbia (Workers' Compensation Board), 2008 BCSC 841, S075162
Counsel for the Appellant:
Scott A. Nielsen
Laurel M. Courtenay
Counsel for the Respondent:
David A. Gooderham
Eileen E. Vanderburgh
Place and Date of Hearing:
Vancouver, British Columbia
February 26, 2009
Place and Date of Judgment:
Vancouver, British Columbia
September 16, 2009
Written Reasons by:
The Honourable Mr. Justice Groberman
Concurred in by:
The Honourable Madam Justice Newbury
The Honourable Mr. Justice Frankel
Reasons for Judgment of the Honourable Mr. Justice Groberman:
[1] Following inspections of two service stations, the Workers' Compensation Board made orders against Petro-Canada under s. 115(1) of the Workers Compensation Act, R.S.B.C. 1996, c. 492, and provisions of the Occupational Health and Safety Regulation, B.C. Reg. 296/97.
[2] Petro-Canada sought a review of four of the orders, arguing that the service stations were operated by franchisees, and that it was not an "employer" in respect of those stations for the purposes of the Act and the Regulation. In responding to the review application, the Compliance Section of the W.C.B. conceded that three of the orders were invalid, and accepted that those orders should be rescinded or cancelled. Notwithstanding the concession, the W.C.B. Review Officer confirmed all four orders.
[3] Petro-Canada sought judicial review, contending that the Review Officer misconstrued the Act by adopting an unreasonable definition of "employer". It also alleged that it had been denied procedural fairness on the Review, because it had been lulled into thinking that it did not have to present argument in respect of the three orders that the Compliance Section had conceded were invalid.
[4] In a decision indexed as 2008 BCSC 841, the Supreme Court granted judicial review, finding the Board's characterization of Petro-Canada as an employer in respect of the two service stations to be unreasonable. The chambers judge quashed all four orders, and remitted them to the Review Officer for reconsideration. He found it unnecessary, in the circumstances, to address the procedural fairness issue.
[5] The Workers' Compensation Board appeals from the quashing of the orders. Both the reasonableness of the Review Officer's decision and the procedural fairness issue are before the Court.
The Board Orders
[6] In February 2005, a robbery occurred at a Petro-Canada service station in Langley. The perpetrator gained access to the area behind the service counter by kicking down a small swinging door that was the only barrier to entry. He was then able to hold a worker at knifepoint.
[7] On July 5, 2006, a W.C.B. Prevention Officer conducted an inspection of the premises. She determined that some corrective action had been taken - a pay window had been installed, and lighting had been increased - but that no action had been taken to improve the layout and design of the sales register counter to prevent future violent incidents. The Officer noted that better layouts and designs were used in newer Petro-Canada stations.
[8] She made four orders. The first order declared that Petro-Canada had contravened s. 115(1)(a)(ii) of the Workers Compensation Act. Section 115 provides as follows:
General duties of employers
115(1) Every employer must
(a) ensure the health and safety of
(i) all workers working for that employer, and
(ii) any other workers present at a workplace at which that employer's work is being carried out, and
(b) comply with this Part, the regulations and any applicable orders.
(2) Without limiting subsection (1), an employer must
(a) remedy any workplace conditions that are hazardous to the health or safety of the employer's workers,
(b) ensure that the employer's workers
(i) are made aware of all known or reasonably foreseeable health or safety hazards to which they are likely to be exposed by their work,
(ii) comply with this Part, the regulations and any applicable orders, and
(iii) are made aware of their rights and duties under this Part and the regulations,
(c) establish occupational health and safety policies and programs in accordance with the regulations,
(d) provide and maintain in good condition protective equipment, devices and clothing as required by regulation and ensure that these are used by the employer's workers,
(e) provide to the employer's workers the information, instruction, training and supervision necessary to ensure the health and safety of those workers in carrying out their work and to ensure the health and safety of other workers at the workplace,
(f) make a copy of this Act and the regulations readily available for review by the employer's workers and, at each workplace where workers of the employer are regularly employed, post and keep posted a notice advising where the copy is available for review,
(g) consult and cooperate with the joint committees and worker health and safety representatives for workplaces of the employer, and
(h) cooperate with the Board, officers of the Board and any other person carrying out a duty under this Part or the regulations.
[9] The second order declared that Petro-Canada had failed to meet the requirements of ss. 4.28 and 4.29 of the Occupational Health and Safety Regulation, and thereby contravened s. 115(1)(b) of the Act. The relevant provisions of the Regulation are as follows:
Definition
4.27 In sections 4.28 to 4.31, "violence" means the attempted or actual exercise by a person, other than a worker, of any physical force so as to cause injury to a worker, and includes any threatening statement or behaviour which gives a worker reasonable cause to believe that he or she is at risk of injury.
Risk assessment
4.28(1) A risk assessment must be performed in any workplace in which a risk of injury to workers from violence arising out of their employment may be present.
(2) The risk assessment must include the consideration of
(a) previous experience in that workplace,
(b) occupational experience in similar workplaces, and
(c) the location and circumstances in which work will take place.
Procedures and policies
4.29 If a risk of injury to workers from violence is identified by an assessment performed under section 4.28 the employer must
(a) establish procedures, policies and work environment arrangements to eliminate the risk to workers from violence, and
(b) if elimination of the risk to workers is not possible, establish procedures, policies and work environment arrangements to minimize the risk to workers.
[10] The third order declared that Petro-Canada, having been made aware of previous violent incidents at the service station, failed to meet the requirements of s. 3.10 of the Regulation. The relevant section of the Regulation is as follows:
Reporting unsafe conditions
3.10 Whenever a person observes what appears to be an unsafe or harmful condition or act the person must report it as soon as possible to a supervisor or to the employer, and the person receiving the report must investigate the reported unsafe condition or act and must ensure that any necessary corrective action is taken without delay.
[11] Finally, the inspector issued an order under s. 179(3)(g) of the Act directing Petro-Canada to provide the Board with copies of certain incident investigation reports relating to violent incidents at the service station in 2004 and 2005.
[12] On May 8, 2006, a violent incident occurred at a Petro-Canada station in Surrey. A driver filled his vehicle with gasoline, and started to drive away without paying. An attendant attempted to stop him, and was struck by the vehicle.
[13] On May 30, 2006, a W.C.B. Prevention Officer attended at the service station and issued an order declaring Petro-Canada to have contravened s. 115(1)(a)(ii) of the Workers Compensation Act by failing to conduct a site-specific risk assessment of the station where there was a risk of injury to workers from violence arising out of their employment. While no provisions of the Occupational Health and Safety Regulation were cited in the order, the Prevention Officer evidently had ss. 4.28 and 4.29 of the Regulation in mind when he issued the order.
The Review Process
[14] Section 96.2(1)(c) of the Act gave Petro-Canada the right to request a review of the Prevention Officers' orders. It requested reviews of all four orders in respect of the Langley service station, though it eventually abandoned the request with respect to the order for disclosure of investigation reports. It contended that the other orders were invalid because Petro-Canada was not an employer to which s. 115(1) applied in respect of service stations operated by franchisees.
[15] The review process was a formal one, in which Petro-Canada and the Compliance Section of the W.C.B.'s Investigations Division (represented by a Case Officer) were each invited to file affidavits and written submissions. After receiving a copy of Petro-Canada's request for a review of the orders in respect of the Langley service station, the Case Officer agreed that the second and third orders should not have been made. In her submissions, she stated:
A review of sections 4.28 and 4.29 of the Regulation indicates that while the obligations imposed under these sections definitely apply to the direct employer, namely, the Licensee, they do not apply to Petro-Canada. This is largely based on the fact that the obligation imposed under 4.29 is on "the employer" and not "an" or "every" employer.
...
For [this reason, the Prevention Officer] is content that Order 2 be rescinded ...
...
[Section 3.10] like section 4.29 imposes an obligation on "the employer". [The Prevention Officer] admits that while section 3.10 imposes a duty on the Licensee, as they are the direct employer of the Service Station workers, it may not impose a duty on Petro-Canada. [The Prevention Officer] is therefore content that Order 3 be rescinded. That being said, Petro-Canada still has an obligation under section 115(1)(a)(ii) to ensure the health and safety of the Service Station workers.
[16] Petro-Canada filed its detailed written submissions after receiving the submissions of the Case Officer. It noted that the review was now concerned only with the first order in respect of the Langley service station:
A total of four Orders were issued against Petro-Canada under Inspection Report #IR2006130260134. Orders number 2 and 3 have since been rescinded by the Prevention Officer. Order number 4 was an order to produce records pursuant to s. 179(3). Petro-Canada has produced the records sought by Order number 4 and ... is no longer challenging that Order
Given Petro-Canada's understanding that Orders No. 2 and 3 have been rescinded we will not specifically address the propriety of those Orders in the following submissions. Suffice it to say that Petro-Canada agrees that the Orders were not properly made against Petro-Canada and were appropriately rescinded.
[17] Petro-Canada also sought a review of the order with respect to the Surrey service station. Initially, the Case Officer argued that the order should be upheld. After receiving Petro-Canada's detailed submissions, however, the Case Officer agreed that the order should be cancelled:
[The Prevention Officer] has reviewed Petro-Canada's December 8, 2006 submissions along with the wording of [the order] and is content that Review Division cancel this Order. It should be noted that the decision to agree to cancel [the order] should not be taken as an acceptance of Petro-Canada's submissions regarding the interpretation and applicability of s. 115(1)(a)(ii) to employers such as Petro-Canada. The decision to agree to the Order being cancelled was based largely on the wording of the Order, namely, that it was based on Petro-Canada failing to ensure the health and safety of the service station workers by failing to conduct a risk assessment. [The Prevention Officer] agrees that the obligation to conduct a risk assessment pursuant to s. 4.28 [of the Regulation] is not an obligation of Petro-Canada but of the direct employer of the service station workers, namely [the franchisee].
[18] The final submissions of the Case Officer and of Petro-Canada confirm that they considered the only issue on the reviews to be the validity of the first order in respect of the Langley service station. The Case Officer's last submission in respect of that review opens with the following paragraph:
The Case Officer's submissions of November 2, 2006 and the Employer's submissions of December 8, 2006 suggest that although Orders 1, 2, 3 and 4 are the subject of this review only Order 1 remains at issue. This is the result of [the Prevention Officer] agreeing to Review Division rescinding Orders 2 and 3, and of Petro-Canada no longer challenging the validity of Order 4.
[19] Petro-Canada sent its final responsive submissions to the Review Officer on March 2, 2007. The parts of the submissions dealing with the Langley service station deal only with Order 1. In respect of the Surrey order, the submissions state:
As the Prevention Officer has now recommended that the sole Order under consideration in this Review Application be cancelled, Petro-Canada will not comment further on the merits of this Order.
[20] In short, the submissions of both Petro-Canada and of the W.C.B. Case Officer clearly indicate that they understood only the first order in respect of the Langley service station to be in issue on the review.
The Review Officer's Decision
[21] The Review Officer provided his decision on May 29, 2007 (Review Decision #R0069701 and #R0071089). He characterized the issue as follows:
Both of these reviews ... deal with the extent that the employer is responsible for ensuring the safety of the licensees' employees from the threat of violence. There can be no doubt that the individual licensees are responsible for ensuring the safety of their own employees. The question before me is whether the Act and Board policy impose parallel safety obligations upon this employer, as well, even though it does not actually have a presence in the day-to-day activities of the individual service stations.
[22] In interpreting s. 115(1) of the Act, the Review Officer began by considering the proper definition of "employer". The term is defined in Part 3 of the Act (which deals with occupational health and safety, and includes s. 115) as follows:
Definitions
106 In this Part and in the regulations under this Part:
"employer" means
(a) an employer as defined in section 1,
(b) a person who is deemed to be an employer under Part 1 or the regulations under that Part, and
(c) the owner and the master of a fishing vessel for which there is crew to whom Part 1 applies as if the crew were workers,
but does not include a person exempted from the application of this Part by order of the Board;
[23] The definition of "employer" in s. 1 of the Act is as follows:
Definitions
1 In this Act:
"employer" includes every person having in their service under a contract of hiring or apprenticeship, written or oral, express or implied, a person engaged in work in or about an industry;
[24] On the face of it, the question of whether Petro-Canada comes within the definition of "employer" is a straightforward one. It has many employees under contract in British Columbia, and has been registered as an employer with the Workers' Compensation Board for decades. As is conceded by Petro-Canada, the company is an "employer" under s. 1 of the Act.
[25] The Review Officer appears to have considered the issue of whether Petro-Canada is an "employer" to be more complex. He noted that the definition in s. 1 of the Act is an inclusive rather than an exhaustive one. He took the view that s. 1 merely provides an example of the type of party that may be considered an employer for the purposes of the Act. He then noted that s. 106 expands the definition of "employer" for the purposes of Part 3 of the Act. He concluded that the intent of the statute is to provide a "flexible and expansive concept of 'employer'". He summarized his view thus:
It is clear, therefore, that Part 3 of the Act takes an expansive view of occupational health and safety by implicating a wide constituency into the process. When all of these provisions are read together, there can be no doubt that the legislature contemplated the imposition of responsibilities upon parties whose relationship may not conform to the legally strict employer/employee relationship. It is clear that Part 3 of the Act is remedial legislation whose goal is foster a culture of safety in the workplace. Therefore, any party that may have a role in affecting the condition of safety is contemplated by Part 3 of the Act.
[26] While he acknowledged that Part 3 of the Act imposes specific obligations on persons other than employers - other provisions in Part 3 impose obligations on suppliers, supervisors, owners, prime contractors and workers - the Review Officer considered that the purposes of the statute are best achieved by interpreting the word "employer" broadly. In doing so, he considered s. 107 of the Act, which sets out the purposes of Part 3:
Purposes of Part
107(1) The purpose of this Part is to benefit all citizens of British Columbia by promoting occupational health and safety and protecting workers and other persons present at workplaces from work related risks to their health and safety.
(2) Without limiting subsection (1), the specific purposes of this Part are
(a) to promote a culture of commitment on the part of employers and workers to a high standard of occupational health and safety,
(b) to prevent work related accidents, injuries and illnesses,
(c) to encourage the education of employers, workers and others regarding occupational health and safety,
(d) to ensure an occupational environment that provides for the health and safety of workers and others,
(e) to ensure that employers, workers and others who are in a position to affect the occupational health and safety of workers share that responsibility to the extent of each party's authority and ability to do so,
(f) to foster cooperative and consultative relationships between employers, workers and others regarding occupational health and safety, and to promote worker participation in occupational health and safety programs and occupational health and safety processes, and
(g) to minimize the social and economic costs of work related accidents, injuries and illnesses, in order to enhance the quality of life for British Columbians and the competitiveness of British Columbia in the Canadian and world economies.
[27] Relying particularly on s. 107(2)(e), the Review Officer stated:
I conclude that Part 3 of the Act will impose safety obligations upon parties that are in the best position to oversee and deal with particular safety concerns that arise. These parties can be employers, workers, owners, prime contractors or others. The goal is to ensure that all relevant parties have responsibilities for occupational health and safety. A corollary is that the definition of employer should be viewed expansively.
[28] The Review Officer then focussed on the question of whether Petro-Canada was sufficiently connected to the operations of service stations operated by franchisees to be considered an "employer" for the purposes of s. 115. He found that it was:
The employer denies that it has much power or authority in the day-to-day running of the service stations. I have considered the evidence before me, and do not entirely agree. First, the Retail License Agreement makes it clear that the licensee is simply an agent of the employer, for the purposes of sales. All title to the petroleum products remains with the employer until the point of sale. In addition, the employer dictates the type and quality of product that the licensee must sell and provides it. The employer also dictates the price and the manner of payment, which may include coupons. The licensee holds all monies earned from sales transactions in trust for the employer, who then pays the licensee a commission. In addition, the employer dictates the hours of operation, and retains the right to authorize others to access or use the control room containing the console.
Second, it is clear that the employer has specifically retained the right to inspect the service stations for safety concerns and the right to dictate safety policy, to a certain extent. Both the Retail License Agreement and the Site Operating Procedure discuss the employer's expectations in the realm of safety and empower the employer with the authority to conduct inspections and demand remedies if deficiencies are found.
Overall, I have found the relationship between this employer and its licensees to be sufficiently close that it would not be unreasonable to conclude that the licensee is simply an agent of the employer. Indeed, this is what the contract between the parties states.
[29] Having found Petro-Canada to be an "employer" for the purposes of s. 115, the Review Officer turned to Petro-Canada's primary argument, which was that s. 115(1)(a)(ii) is applicable only in respect of workers who are present at a workplace where the employer's own workers are also present. I reproduce s. 115(1)(a) of the Act, again, for convenience of reference:
General duties of employers
115(1) Every employer must
(a) ensure the health and safety of
(i) all workers working for that employer, and
(ii) any other workers present at a workplace at which that employer's work is being carried out
[30] The Review Officer rejected Petro-Canada's interpretation:
In light of the fact that the Act views the definition of employer expansively, and in light of the clear wording of section 115(1)(a)(ii), which states "any other workers present at a workplace at which that employer's work is being carried out", it seems that the Act intended this obligation to arise as long as some workers carried out the employer's work, regardless of whether the employer's own employees were also present. I can see no indication that the legislature specifically rejected this interpretation and it flows logically and organically from the scheme and text of the Act as a whole.
[31] The Review Officer completed his interpretation of s. 115 by considering whether Petro-Canada's "work" was being carried out at the service stations, and concluded that it was:
The next question is whether the retail sale of petroleum products is the employer's "work", for the purposes of section 115(1)(a)(ii) of the Act. The employer denies that it is directly involved in the retail sale of petroleum products. It denies that the activities of the service station employees may be characterized as its "work". I am not convinced by this argument. It requires an overly narrow and technical understanding of the concept of "work". The truth is that this employer owns the premises, owns the products sold, chooses, dictates, supplies and prices the products, requires exclusivity on the part of the licensee and requires the licensee to hold all monies in trust until it receives them and pays the licensee a commission. It even labels the licensee as its agent, for the purpose of sales transactions. Therefore, in the circumstances, there can be no doubt that in operating the service stations, the licensee and its employees are carrying out the employer's "work" in an overall sense.
[32] The Review Officer next considered the individual Board orders. Early in his reasons, he had noted the concessions made by the Case Officer to the effect that all but one of the orders should be rescinded or cancelled:
The Compliance Department appears to concede that some of the orders under review may not have been properly issued. With regard to the order of May 30, 2006, the Compliance Department maintains that the employer has obligations under section 115 of the Act to ensure the health and safety of workers at that individual service station. However, the Compliance Department concedes that the order under review may not have been justified on the merits. The facts cited to justify the order involve the apparent failure of the employer to conduct a site-specific assessment of the risk of violence. It now appears to concede that "the obligation to conduct a risk assessment pursuant to s. 4.28 [of the Regulation] is not an obligation of [this employer] but of the direct employer of the service station workers."
Similarly, with regard to the Inspection Report of July 6, 2006, the Compliance Department appears to concede that orders number 2 and 3 may not have been validly issued. It reiterates that the obligations under sections 4.28 and 4.29 of the Regulation apply to the direct employer of the subject workers only. It also suggests that the obligation to take corrective action under section 3.10 of the Regulation apply to the direct employer only.
[Words in brackets in the above quotation are bracketed in the Review Officer's Decision.]
[33] The Review Officer rejected the concessions, finding that Petro-Canada's role with respect to the two service stations brought it within the contemplation of the phrase "the employer" in ss. 3.10 and 4.29 of the Regulation.
Judgment on Judicial Review
[34] Petro-Canada sought judicial review of the Review Officer's decision. The chambers judge commenced his analysis by considering the standard upon which the Review Officer's decision should be reviewed, carefully considering the factors enunciated by the Supreme Court of Canada in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190. He noted that s. 113(1) of the Act is a strong privative clause that protects decisions of Review Officers from review:
Board jurisdiction under this Part
113(1) [T]he Board has exclusive jurisdiction to inquire into, hear and determine all those matters and questions of fact and law arising or required to be determined under this Part, and the action or decision of the Board is final and conclusive and is not open to question or review in any court.
[35] Next, the chambers judge considered the purpose of Part 3 of the Act, making reference to Pasiechnyk v. Saskatchewan (Workers' Compensation Board), [1997] 2 S.C.R. 890, and Speckling v. British Columbia (Workers' Compensation Board), 2005 BCCA 80, 46 B.C.L.R. (4th) 77. He concluded, at para. 30, that Part 3 of the Act involved a balancing of public interests, a factor favouring a posture of deference toward the Board:
Petro-Canada argues that the specific statutory provision at issue, s. 115, does not involve balancing multiple interests; its sole purpose is to promote a safe workplace. In my opinion, that is too narrow a view. Decisions made under Part 3 of the Act, and s. 115 in particular, have an impact on numerous parties representing a variety of interests, including workers, supervisors, employers and owners. These considerations are taken into account generally within Part 3 of the Act. Accordingly, in my view, the purpose of the enabling legislation favours a standard of reasonableness.
[36] Turning to the nature of the questions in issue, the chambers judge accepted that the issues determined by the Review Officer were questions of law and of mixed law and fact. At para. 32, citing from para. 56 of Dunsmuir, he noted that "there is nothing unprincipled about the fact that some questions of law will be decided on the basis of reasonableness."
[37] The final factor considered by the chambers judge with respect to standard of review was the expertise of the Workers' Compensation Board. Referring to Pasiechnyk, he concluded that the Board has considerable expertise in the regulation of occupational health and safety.
[38] The chambers judge concluded that the Review Officer's decision should be reviewed on a standard of reasonableness. At para. 36, he referred to para. 47 of Dunsmuir, describing the appropriate role of the court when reviewing an administrative decision on a standard of reasonableness:
Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.
[39] Like the Review Officer, the chambers judge approached the matter by considering how the word "employer" should be defined for the purpose of s. 115 of the Act. However, he found the Review Officer's reasoning to be flawed (at para. 38):
The Review Officer's interpretation of the scope of the definition of "employer" under Part 3 of the Act, and as applicable to s. 115, appears to be critical to his finding that the orders in Inspection Report #1 and Inspection Report #2 should not be rescinded. In my view, the Review Officer's interpretation that the definition of "employer" under Part 3 has been defined "loosely and expansively", and that there is a "flexible and expansive concept of employer for the purposes of occupational health and safety" is based on a multitude of obvious errors in his interpretation of the provisions within Part 3 of the Act.
[40] In particular, the chambers judge found that the Review Officer erred by overemphasizing the inclusive nature of the definition of employer in s. 1 and by considering the expanded definition in s. 106 to amount to an invitation to further expand the scope of the term. At paras. 49, 50 and 52, he concluded that the Review Officer's interpretation was unreasonable:
49. The Review Officer's interpretation of the scope of "employer" within the meaning of Part 3 is, in my view, evidently not in accordance with reason. His interpretation that an "employer" should essentially encompass anyone with the ability to affect the occupational health and safety of a worker ignores the plain meaning of the definitions set out in s. 106 and the subsequent sections within Part 3, which allocate responsibility for health and safety among a variety of parties. There is simply no convincing rationale for the notion that the definition of "employer" in Part 3 should be given the scope as set out by the Review Officer. Overall, I find that the Review Officer's interpretation of the scope of "employer" under Part 3 clearly does not follow the plain and ordinary meaning in the Act.
50. Accordingly, it follows that it was unreasonable for the Review Officer to conclude that Petro-Canada is an "employer" with respect to the two service stations for the purposes of s. 115(1)(a)(ii) of the Act. The relationship of Petro-Canada to the service station workers does not fall within the definition of "employer" set out in s. 1, nor within any conceivable common meaning of the word "employer". There was no evidence of any contract between Petro-Canada and any of the workers at the [Surrey] Service Station or between Petro-Canada and any of the workers at the Langley Service Station. In fact, while the Review Officer relies on the Retail Licensee Agreement with respect to the Langley Service Station at p. 8 of his decision to bolster his finding that that operator is merely an agent of Petro-Canada, he simply dismisses the fact that the contract stipulates that the operator undertakes to take all responsibility for its own employees.
52. The clear contractual wording that Petro-Canada is not an "employer" of the service station workers should not have been glossed over in the absence of clear evidence to the contrary. When the Review Officer reviewed the contractual terms to analyze the allocation of responsibilities between Petro-Canada and the service station operators, he had an obligation to give full consideration to the very clear terms in the contracts where the allocation of responsibilities were set out. Given these clear contractual terms, using the contract to determine that Petro-Canada is an "employer" of the service stations' employees for the purposes of Part 3 was unreasonable.
[41] The chambers judge quashed the Review Officer's decision, and remitted the review back to the W.C.B. Review Division, with instructions to interpret "employer" in accordance with his judgment. In effect, this amounted to a direction to cancel the orders.
The Concentration on the Word "Employer"
[42] On this appeal, Petro-Canada concedes that the appropriate standard of review on the judicial review was reasonableness. For substantially the reasons given by the chambers judge, I agree that the Review Officer's decisions were properly reviewed on a standard of reasonableness.
[43] It is unfortunate, in my view, that both the Review Officer and the chambers judge fixed as much attention as they did on the definition of the word "employer" in s. 115 of the Act. This led the Review Officer to the conclusion that it was open to him to expand the definition in a manner not limited by the language of the statutory definition itself. On the other hand, the chambers judge appears to have decided that the word "employer" for the purposes of s. 115, should be defined in a strictly contractual manner, so that a party would be an "employer" for the purposes of the section only if it had direct contractual obligations to the workers that the section requires be protected. In my view, both approaches to the definition of "employer" are inconsistent with the clear wording of the statute, and ignore the key elements of s. 115.
[44] The word "employer" is defined in ss. 1 and 106 of the Act. It was not open to the Review Officer to take those definitions as mere jumping off points from which he could adopt a more expansive scope for the term. On the other hand, the chambers judge erred in treating the word "employer" as if it had a special definition applicable to s. 115. The chambers judge's view that the employer must be the employer of workers at the worksite is inconsistent with the wording of s. 115(1)(a)(ii), which specifically fixes an employer with responsibilities for the safety of employees at a worksite who are not its own workers.
[45] As the Board has argued on this appeal, the statute uses the word "employer" in a consistent manner. Petro-Canada, as a company that has numerous workers under contract in British Columbia, obviously meets the definition of "employer" in s. 1 of the Act. Nothing in s. 115 compels the adoption of a narrower definition of "employer" than that dictated by ss. 1 and 106.
[46] In saying this, I do not ignore Petro-Canada's argument that interpreting "employer" broadly for the purposes of s. 115 may result in a level of redundancy in the Act, in that a single entity will often have responsibilities both as an "employer" and as an "owner" under Part 3. I do not find this notion troubling. Indeed, s. 123 of the Act specifically allows for the fact that an entity may have multiple functions, and therefore responsibilities, under Part 3 of the statute:
Persons may be subject to obligations in relation to more than one role
123(1) In this section, "function" means the function of employer, supplier, supervisor, owner, prime contractor or worker.
(2) If a person has 2 or more functions under this Part in respect of one workplace, the person must meet the obligations of each function.
[47] I am also untroubled by Petro-Canada's assertion that a broad definition of "employer" will open floodgates, and fix entities that have limited control over a workplace with obligations that they cannot reasonably fulfill. As I read s. 115, the "floodgates" are controlled not by the use of the word "employer" but by the requirement that the employer's work be carried on at the workplace, and by the appropriate interpretation of what it means to "ensure the health and safety of workers". While the interpretation of this latter phrase is primarily one for the Board rather than for the Court, it is my tentative view that the degree to which an employer can "ensure" health and safety will, of necessity, be dependent on the degree of control that the employer has over the workplace.
[48] The difficult question for the purposes of s. 115, then, is not whether Petro-Canada is an "employer" - it clearly is. Rather, the Review Officer had to consider whether the service stations operated by franchisees were workplaces at which Petro-Canada's work was being carried out. He also had to consider what Petro-Canada could reasonably do to "ensure the health and safety of workers" in the context of its control over the service station premises.
Was the Decision Unreasonable?
[49] I do not disagree with the chambers judge's finding that the Review Officer's discussion of the scope of the word "employer" contained several errors. I would even go so far as to agree with him that the Review Officer's discussion of the meaning of the word ignored well-established principles of statutory interpretation to such an extent that it might be characterized as unreasonable. That alone, however, does not mean that the decision must be quashed as unreasonable. Not every error in a tribunal's chain of reasoning will compel the quashing of its decision. The role of the error in the decision is critical.
[50] The Board argues that the Court should not focus on whether the reasons given by the Review Officer were reasonable, but rather on whether the result that he reached could be supported by a chain of reasoning that is reasonable. Indeed, counsel goes so far as to suggest that the Court can look to other decisions by Review Officers that reach a similar result through different chains of reasoning - in particular, we have been referred to Review Decision #R0082711, another decision concerned with service stations. While that Review Decision does appear to offer a less controversial path to the result reached by the Review Officer in this case, I do not find it helpful in determining whether the decision under review here was unreasonable. I note, too, that Review Officers are not bound by decisions of other Review Officers (see s. 99 of the Act).
[51] The proposition that the Court should focus on the result reached by the tribunal rather than on its reasons in assessing reasonableness enjoys some support in the case law. In Kovach, Re (1998), 52 B.C.L.R. (3d) 98 (C.A.) at para. 26, Donald J.A. (dissenting) stated:
[The majority judgment] identified serious flaws in the Board's reasoning but I think that the review test must be applied to the result not to the reasons leading to the result. In other words, if a rational basis can be found for the decision it should not be disturbed simply because of defects in the tribunal's reasoning.
[52] The Supreme Court of Canada allowed the appeal from this Court's decision "substantially for the reasons of Donald J.A.": Kovach v. British Columbia (Workers' Compensation Board), 2000 SCC 3, [2000] 1 S.C.R. 55.
[53] The Board also relies on a quotation from David Dyzenhaus to the effect that deference requires "respectful attention to the reasons offered or which could be offered in support of a decision": "The Politics of Deference: Judicial Review and Democracy", in M. Taggart, ed., The Province of Administrative Law (Oxford: Hart Publishing, 1997) 279 at p. 286. The quotation has been cited by the Supreme Court of Canada with approval in several cases, most recently in Dunsmuir, at para. 48.
[54] The idea that the Court should review a decision based on the reasonableness of the result as opposed to the chain of reasoning leading to the result must be applied with considerable caution, in my opinion. A court cannot properly be said to defer to a tribunal when it ignores the tribunal's reasons and fashions its own rationale for the result that the tribunal reached. It should also be kept in mind that both this Court's judgment in Kovach and the quotation from Professor Dyzenhaus' article pre-date the Supreme Court of Canada's decision in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, the case which clearly established the duty of tribunals to provide reasons for their decisions. It would make little sense to impose on a tribunal a duty to give reasons if those reasons could be ignored on judicial review. The Supreme Court of Canada has recently adverted to the problems inherent in over-emphasizing deference to reasons which could have been, but were not, given by the tribunal. In Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339 at para. 63, the Court noted:
Although the Dunsmuir majority refers with approval to the proposition that an appropriate degree of deference "requires of the courts 'not submission but a respectful attention to the reasons offered or which could be offered in support of a decision'" (para. 48 (emphasis added)), I do not think the reference to reasons which "could be offered" (but were not) should be taken as diluting the importance of giving proper reasons for an administrative decision, as stated in Baker at para. 43.
[55] The correct approach to the matter was articulated by the Supreme Court of Canada in Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] 1 S.C.R. 247 at para. 56:
[The fact that the reviewing court must look to the reasons given by the tribunal to determine reasonableness] does not mean that every element of the reasoning given must independently pass a test for reasonableness. The question is rather whether the reasons, taken as a whole, are tenable as support for the decision. At all times, a court applying a standard of reasonableness must assess the basic adequacy of a reasoned decision remembering that the issue under review does not compel one specific result. Moreover, a reviewing court should not seize on one or more mistakes or elements of the decision which do not affect the decision as a whole.
[56] A court assessing an administrative tribunal's decision on a standard of reasonableness owes the tribunal a margin of appreciation. The court should not closely parse the tribunal's chain of analysis and then examine the weakest link in isolation from the reasons as a whole. It should not place undue emphasis on the precise articulation of the decision if the underlying logic is sound. On the other hand, a court does not have carte blanche to reformulate a tribunal's decision in a way that casts aside an unreasonable chain of analysis in favour of the court's own rationale for the result.
[57] On this appeal, the Review Officer's discussion of the definition of the word "employer" was unsound. On the other hand, the error was harmless, because it is obvious that Petro-Canada is, indeed, an employer for the purposes of s. 115. While Petro-Canada argues that the Review Officer's concentration on the appropriate definition of "employer" permeated the balance of his decision, I am unable to agree. The Review Officer proceeded through his reasons methodically, and his misstep with respect to the definition of "employer" cannot fairly be said to have affected the balance of his reasons.
[58] As I have indicated, the real issues for the Review Officer were whether Petro-Canada's work was being carried out at the service station, and whether, in the context of the case, Petro-Canada's degree of control over the workplace permitted a finding that it had failed to ensure the safety of workers.
[59] The Review Officer considered the question of whether Petro-Canada's work was being carried out at the service station carefully, and determined that it was. I cannot say that the Review Officer's reasons for that determination were unreasonable.
[60] Petro-Canada strongly asserts that the phrase "a workplace at which that employer's work is being carried out" requires a closer connection between the employer's operations and the workplace than was present in these cases, and cites a number of dictionary definitions in support of its argument. Such an argument might have been persuasive had the standard of review been one of correctness. I am not convinced, however, that the fact that the section might be interpreted more narrowly than the Review Officer interpreted it shows that his interpretation was unreasonable.
[61] The Review Officer did not specifically connect the phrase "ensure the health and safety" of workers to the concept of the employer's control over the workplace, but his decision did carefully consider the level of control exercised by Petro-Canada. The reasons are, in my view, sufficient to show that the Review Officer considered Petro-Canada's control over the workplace to have been such as to show that it failed to take appropriate steps within its means to ensure worker safety.
[62] In the result, I cannot agree with the chambers judge's finding that the Review Officer's decision was unreasonable. It ought not to have been quashed on that basis.
Procedural Fairness
[63] Because the chambers judge found the Review Officer's decision to be unreasonable, he found it unnecessary to consider Petro-Canada's argument that it had been denied procedural fairness. We do not, therefore, have the benefit of his analysis on the point.
[64] Petro-Canada does not suggest that the Review Officer was required, as a result of the Case Officer's concessions, to cancel or rescind the Prevention Officers' orders. It says, however, that the manner in which the review proceeded left it with an inadequate opportunity to make full submissions with respect to the second and third orders relating to the Langley service station, and with respect to the order relating to the Surrey service station. It says that in the face of the concessions, and of the obvious understanding of Petro-Canada that it was unnecessary to address the validity of those orders, the Review Officer ought to have sought additional submissions from the parties before determining that the orders were valid.
[65] Procedural fairness requirements in administrative law are not technical, but rather functional in nature. The question is whether, in the circumstances of a given case, the party that contends it was denied procedural fairness was given an adequate opportunity to know the case against it and to respond to it. In some circumstances, a tribunal's decision to address an issue not raised by the parties may constitute a denial of procedural fairness - see, for example, MacNeil v. Nova Scotia (Workers' Compensation Board), 2001 NSCA 3, 189 N.S.R. (2d) 310.
[66] I am not persuaded, in this case, that Petro-Canada was denied a full opportunity to present its case in respect of the order concerning the Surrey service station. While it is true that the Case Officer conceded that the order should be cancelled, she did so only after Petro-Canada had presented complete submissions on the issue to the Review Officer. While Petro-Canada may have been surprised by the Review Officer's decision in light of the Case Officer's concession, it did not suffer any procedural unfairness in the manner in which matters unfolded.
[67] The same cannot be said with respect to the review of the second and third orders concerning the Langley service station. In respect of that review, the Case Officer's concession occurred before Petro-Canada provided its submissions to the Review Officer. Petro-Canada's submissions made it clear that it was refraining from addressing the two orders because it understood that they were no longer at issue. In the circumstances, I am persuaded that it was inappropriate for the Review Officer to decide the issue without correcting Petro-Canada's understandable impression that there was no need for it to make submissions.
[68] I note, as well, that it is not clear that submissions from Petro-Canada would have been futile. The regulatory provisions in issue in orders 2 and 3 used the expression "the employer" rather than the expressions "every employer" and "an employer" which are present in s. 115 of the Act.
[69] Counsel for the Board argues that Petro-Canada ought to have raised the issue of procedural fairness prior to the judicial review proceedings, and ought to have sought a reconsideration by the Board under s. 96.5 of the Act:
96.5(1) The chief review officer may direct a review officer to reconsider a decision under section 96.4(8) in either of the following circumstances:
(a) on the chief review officer's own initiative;
(b) on application from a party to a completed review of a decision that may not be appealed to the appeal tribunal, if the chief review officer is satisfied that new evidence has become available or been discovered that
(i) is substantial and material to the decision, and
(ii) did not exist at the time of the review or did exist at that time but was not discovered and could not through the exercise of reasonable diligence have been discovered.
(2) Each party to a completed review may apply for reconsideration of a decision under subsection (1)(b) on one occasion only.
(3) Despite subsection (1), a review officer must not reconsider a decision
(a) more than 23 days after the decision was made, if a direction to reconsider was given under subsection (1)(a), or
(b) if the decision has been appealed under section 239.
[70] It is not apparent to me that s. 96.5 contemplates a party seeking a reconsideration based on an alleged denial of procedural fairness. It is at least arguable that the only remedy available to an aggrieved party is judicial review. Even if a reconsideration might have been requested, however, I would not accede to the argument that a failure to make the request, in the context of this legislative scheme and this case, should be seen as amounting to a waiver of the breach by Petro-Canada.
Conclusion
[71] I conclude that the chambers judge erred in quashing the Review Officer's decision on the basis that it was unreasonable. I am, however, of the view that Petro-Canada was denied procedural fairness in respect of the review of orders 2 and 3 relating to the Langley service station.
[72] I would, therefore, allow the appeal and reinstate the Review Officer's decision to confirm the order relating to the Surrey Service Station (Review Reference #R0069701). I would also reinstate the Review Officer's decision to confirm the first order relating to the Langley service station (Review Reference #R0071089). I would remit the review of the second and third orders relating to the Langley service station (Review Reference #R0071089) to the Review Division to conduct a review after giving Petro-Canada and the Case Officer an opportunity to make submissions.
"The Honourable Mr. Justice Groberman"
I agree:
"The Honourable Madam Justice Newbury"
I agree:
"The Honourable Mr. Justice Frankel"
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See upstream license, including non-commercial use and other restrictions: https://perma.cc/EA5C-R5DK. Note: This is an unofficial reproduction of a British Columbia Court of Appeal decision, without endorsement or affiliation by the British Columbia courts.
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BCCA
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2009 BCCA 395
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Strata Plan LMS 3851 v. Homer Street Development
| 2009-09-16T00:00:00
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https://www.bccourts.ca/jdb-txt/CA/09/03/2009BCCA0395cor1.htm
| 2026-01-18T07:46:35.732000
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2009 BCCA 395 Strata Plan LMS 3851 v. Homer Street Development
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Strata Plan LMS 3851 v. Homer Street Development ,
2009 BCCA 395
Date: 20090916
Dockets: CA036475, CA036478, CA036481
Docket: CA036475
Between:
The Owners, Strata Plan LMS 3851, and others
Respondents
(Plaintiffs)
And
Homer Street Development Limited Partnership,
formerly Cressey (Homer) Limited Partnership, and others (the "Defendant Developers")
Appellants
(Defendants)
And
MM&R Valuation Services, Inc. doing business as HVS Hospitality Valuation Services, Canada ("HVS")
Respondent
(Defendant)
And
O'Neill Hotels & Resorts Ltd., OHR Grand Management Ltd. ("OHR"), John Doe Nos. 1 to 10, Jane Doe Nos. 1 to 10, XYZ Company Nos. 1 to 10,
and Persons Unknown
Respondents
(Defendants)
And
O'Neill Hotels & Resorts Ltd., OHR Grand Management Ltd., Robert F. O'Neill, John C. O'Neill
Respondents
(Third Parties)
Docket: CA036478
Between:
The Owners, Strata Plan LMS 3851 and others
Respondents
(Plaintiffs)
And
Homer Street Development Limited Partnership and others
Respondents
(Defendants and Third Parties)
And
MM&R Valuation Services, Inc. doing business as HVS Hospitality Valuation Services, Canada
Respondent
(Defendant and Third Party)
And
O'Neill Hotels & Resorts Ltd. and OHR Grand Management Ltd.
Appellants
(Defendants)
And
O'Neill Hotels & Resorts Ltd., OHR Grand Management Ltd.,
Robert F. O'Neill and John C. O'Neill
Appellants
(Third Parties)
Docket: CA036481
Between:
The Owners, Strata Plan LMS 3851 and others
Respondents
(Plaintiffs)
And
Homer Street Development Limited Partnership and others
Respondents
(Defendants and Third Parties)
And
O'Neill Hotels & Resorts Ltd. and OHR Grand Management Ltd.
Respondents
(Defendants)
And
O'Neill Hotels & Resorts Ltd., OHR Grand Management Ltd.,
Robert F. O'Neill and John C. O'Neill
Respondents
(Third Parties)
And
MM&R Valuation Services, Inc. doing business as HVS Hospitality Valuation Services, Canada
Appellant
(Defendant and Third Party)
Corrected Judgment: Names of Counsel
reflect the parties for whom they acted without specifying the roles of the parties.
Before:
The Honourable Madam Justice Levine
The Honourable Mr. Justice Tysoe
The Honourable Madam Justice D. Smith
On appeal from the Supreme Court of British Columbia, New Westminster Registry, Strata Plan LMS 3851 v. Homer Street Development,
August 26, 2008, 2008 BCSC 1160
Counsel for Strata Plan LMS 3851, and others (investors):
B.W. Dixon
S.T.C. Warnett
Counsel for Homer Street Development Limited Partnership and others:
Counsel for MM&R Valuation Services Inc. dba HVS Hospitality Valuation Services, Canada
Counsel for O'Neill Hotels & Resorts Ltd., OHR Grant Management Ltd., Robert F. O'Neill,
and John C. O'Neill
D.C. Harbottle
G.N. Corson
R.J.R. Hordo, Q.C.
M.A. Lakhani
M.W. Mounteer
D. Rae, Q.C.
A. Borrell
Place and Date of Hearing:
Vancouver, British Columbia
May 4, 5, 6, 2009
Place and Date of Judgment:
Vancouver, British Columbia
September 16, 2009
Written Reasons by:
The Honourable Madam Justice Levine
Concurred in by:
The Honourable Mr. Justice Tysoe
The Honourable Madam Justice D. Smith
Reasons for Judgment of the Honourable Madam Justice Levine:
Introduction
[1] These three appeals and two cross-appeals concern alleged misrepresentations made during the course of marketing and selling strata units in the Westin Grand Hotel in Vancouver.
[2] They are from the judgment of a Supreme Court justice pronounced August 26, 2008, following the trial of some of the issues arising from an action brought by about one-half of the investors in the hotel against, among others, the developers of the hotel, Homer Street Development Limited Partnership, Trilogy Robson Development Limited Partnership and 455322 B.C. Ltd., carrying on business as The Grand Development Limited Partnership (collectively the "Developers"), the manager of the hotel, O'Neill Hotel & Resorts Ltd. ("OHR"), and subsequently OHR Grand Management Ltd. ("OHR Grand"), and the hotel consultant, MM&R Valuation Services, Inc., doing business as HVS Hospitality Valuation Services, Canada ("HVS").
[3] In these reasons for judgment, I will refer to the investors who brought the action as the "Investors", and to the Developers, OHR, and HVS collectively as the respondents.
[4] The essence of the Investors' claims was that the Disclosure Statement issued by the Developers contained negligent misrepresentations of financial projections for the hotel (the "Projections"), in breach of the obligations of the Developers and their directors under the Real Estate Act, R.S.B.C. 1979, c. 356, (subsequently R.S.B.C. 1996, c. 397, repealed by the Real Estate Services Act, S.B.C. 2004, c. 42. s. 146) and the Securities Act, S.B.C. 1985, c. 83 (subsequently R.S.B.C. 1996, c. 418), and of the respondents at common law.
[5] The trial judge, who case-managed the proceedings, granted an application by the Investors to sever the issues of "whether there were any breaches of duties of care to the Investors through representations by any of the defendants in the original Disclosure Statement, or in any amendments to the Disclosure Statement", from the issues of reliance and damages (at paras. 5 and 7). Thus, the trial was restricted to the issue of whether the alleged misrepresentations were breaches of any duties of care owed to the Investors by any of the respondents. The Investors gave no evidence at trial concerning their reliance on the Disclosure Statement and in particular the portions alleged to be misrepresentations, nor of any losses suffered. Nor was there any evidence of the actual performance of the hotel after opening. The respondents gave evidence of the sources of the Projections in the Disclosure Statement, and three experts provided their opinions concerning the reasonableness of the projections of hotel occupancy rates made by HVS with input from OHR (Mr. Kleinschmidt for the Investors, Mr. Flood for HVS, and Mr. Rosen for OHR).
[6] The main issue at trial and on appeal was the projection of hotel occupancy rates by HVS. The trial judge found (at paras. 538, 555, 556, 563) it was "unreasonable and negligent". He found (at para. 564) that the Developers and OHR had thus negligently misrepresented that the Projections, which were based in large part on the occupancy rates, were "objectively reasonable". He found further (at paras. 164-165) that the Developers and their directors had made a "material false statement" within the meaning of s. 59 of the 1979 Real Estate Act (s. 75 of the 1996 Act) with respect to a statement concerning the calculation of the occupancy rates (the "Impugned Note"). The trial judge also found the Developers had made a "material false statement" by attributing a statement to HVS that it had not made (at para. 195).
[7] Other findings of the trial judge at issue on the appeals concerned a budget prepared in 1998 which was not disclosed to the Investors until after they closed the purchase of their units in April 1999 (the "1999 Budget") (at para. 762), whether the Developers and OHR made a representation concerning the first year operating plan and budget for the hotel (at para. 814), and the status of OHR Grand as the "alter ego" of OHR (at para. 828).
[8] It is my opinion that the trial judge erred in law in concluding that HVS' projected hotel occupancy rates were not reasonable, because he rejected the application of a "range of reasonableness". It is common ground that if HVS' projected hotel occupancy rates were not unreasonable, then the Developers and OHR could not be found liable for breach of the implied representation of "objective reasonableness" of the Projections with respect to the projected hotel occupancy rates.
[9] I am of the view that the trial judge made no error in concluding that the Impugned Note was a "material false statement", but erred in concluding that the statement that was falsely attributed to HVS was a "material false statement" when the statement itself was not proven to be false.
[10] I agree with the Investors that the trial judge erred in concluding that the Impugned Note could not be a negligent misrepresentation at common law because it was a statement of fact, not an assumption. I would find the Developers negligently breached their express statutory representation that the Disclosure Statement "constitutes...true...disclosure of all material facts" and their implied representation of objective reasonableness of the Projections with respect to the Impugned Note, but would not find that OHR breached its duty of care to the Investors with respect to the Impugned Note.
[11] As to the other matters at issue on the appeals, I am of the view that the trial judge did not err in concluding that the 1999 Budget was a "proposal" or a "fact" about which an amendment to the Disclosure Statement should have been made; he erred in concluding that the Developers and OHR represented that the first year operating plan and budget would be the same in 1999 as in 1996; and he did not err in concluding, on the facts before him, that OHR Grand was the alter ego of OHR, but I would limit that factual finding to the issues that were before him at this trial.
[12] I will summarize the outcome of the appeals and cross-appeals at the conclusion of these reasons for judgment.
Development and Sale of the Westin Grand Hotel
[13] The Developers purchased the site for the development of a hotel at Robson and Homer Streets in Vancouver in early 1996. They approached OHR, a hotel operator, to provide advice concerning the feasibility of the hotel. The intention was to sell strata lots to investors, whose individual units would be managed as a hotel by OHR. OHR developed some financial projections over the period from February to June 1996. In June 1996, the Developers retained HVS to review and provide its opinion on OHR's projections, and filed a Disclosure Statement, including financial projections, with the Superintendent of Real Estate. Between June and October 1996, OHR and HVS discussed the financial projections. In October 1996, the Developers and OHR negotiated the terms of the Hotel Management Agreement ("HMA") to be entered into by each investor and OHR, and signed the Master Agreement, which set out their respective responsibilities for the project.
[14] In October 1996, the BC Securities Commission directed that a financial projection contained in a disclosure statement for the sale of "real estate securities" must be audited. The Developers retained a firm of chartered accountants to audit the financial projections. The Disclosure Statement, dated November 8, 1996, included, as Exhibit M, the "Financial Forecast and Auditors' Report", which in turn included:
Auditors' Report on Financial Projection
Exhibit A: Projected Statement of Net Income
Exhibit B: Projected Net Cash Flow to an Individual Strata Lot Owner and Cash Return on Down Payment
Exhibit C: Notes to Financial Projection
[15] On November 8, 1996, HVS provided its opinion to the Developers that "the annual operating projection for the initial five years of the Hotel's operation, are reasonable and achievable." HVS' opinion was attached to the Disclosure Statement as Exhibit N.
[16] For completeness, copies of Exhibits M and N to the Disclosure Statement are reproduced as Appendix A to these reasons for judgment.
[17] All 207 strata lots, comprising individual suites in the hotel, were sold to investors, following receipt of the Disclosure Statement, pursuant to Offers of Purchase and Agreement of Sale (the "Sale Agreements") in November 1996 (some units were later assigned to other purchasers, and some sales collapsed and were remarketed to other purchasers, up to and after completion in April 1999 (trial judge's reasons for judgment at para. 675)). Construction of the hotel commenced after the units were sold, and the hotel opened on April 1, 1999. The Sale Agreements were completed on April 13, 1999, when the investors entered into the HMA with OHR Grand, which had by then been substituted for OHR as the manager.
The Disclosure Statement
[18] The Disclosure Statement was issued by the Developers as required by the Real Estate Act. The Developers and their directors signed declarations attesting to, among other things, the truth of the material facts relating to the development of the hotel (at paras. 51-52).
[19] The Disclosure Statement described in detail the development and management of the proposed hotel. It incorporated the Sale Agreement (Exhibit G) and the HMA (Exhibit K), as well as the Financial Forecast and Auditors' Opinion (Exhibit M) and HVS' Opinion (Exhibit N).
Representations Concerning the Financial Projections
[20] The Investors' allegations focused on representations made concerning the financial projection in s. 1.4 of the Disclosure Statement. It stated:
1.4 Financial Projection
The financial projection (the "Projection") attached as Exhibit M to this Disclosure Statement was prepared by O'Neill for approval by the management committee of the Developer on November 8, 1996. The Projection has been prepared based on assumptions and hypotheses which reflect the course of action planned by the Developer and O'Neill for the period covered by the Projection (the "Projection Period") given the judgment of the management committee of the Developer and management of O'Neill as of November 8, 1996, as to the most probable set of economic conditions. The Projection has been prepared solely to provide information to prospective purchasers of the Hotel Lots. An Auditor's Report on the Projection is included as part of Exhibit M and a hotel appraiser's opinion letter as to the reasonableness of the Projection is included as Exhibit N.
The reader is cautioned that some of the assumptions and hypotheses used in the preparation of the Projection, although considered reasonable by the Developer and O'Neill at the time of preparation, may prove to be incorrect. The actual results achieved for the Projection Period will vary from the Projection and the variations may be material.
[21] An issue at the trial was the proper definition of "Projection". In their statement of claim, the Investors defined the "Projections" represented to them as the "return on investment" (at para. 94):
The return on investment would be sufficient to cover each investor's assumed seventy-five percent mortgage plus cash returns on an assumed twenty-five percent down payment of 11.5 percent in 1999, 10.4 percent in 2000, 13.1 percent in 2001, 11.5 percent in 2002 and 11.5 percent in 2003. (the "Projections")
[22] These figures were set out in Exhibit B to Exhibit M, as an illustration of the return to an owner of a $208,800 hotel strata lot based on the hypotheses contained in note 1(f) (in Exhibit C to Exhibit M) (at para. 95). The trial judge commented (at para. 102) that: "No time was spent on the chart at Exhibit "B" that had its origin in the figures of Exhibit "A"." Exhibit A set out "line items" of revenue (comprising 85% to 87% rooms revenue, according to HVS' opinion), operating expense, fixed expense, operating income, management incentive fee, net income, and owner's share of net income, per $1,000 of projected value. Both Exhibits A and B referred to the "accompanying notes", in Exhibit C, which listed the "assumptions and hypotheses" referred to in s. 1.4 of the Disclosure Statement.
[23] The trial judge determined (at para. 105):
I intend to proceed on the basis that the "Projection" or "Projections" are those financial projections in Exhibit M consisting of Exhibits "A" and "B" to the Auditors' Report together with the assumptions and hypotheses as set out in Exhibit "C".
He stated (at para. 106) that "[i]f it is considered necessary" he would grant an amendment to the statement of claim to properly define the projections in issue to be consistent with the evidence.
[24] Despite the Investors' focus on the "return on investment" in Exhibit B, and the trial judge's conclusion that the Projection included all of Exhibits A, B, and C, most of the evidence and the balance of the trial judge's reasons for judgment focused on the projection of hotel occupancy rates, as set out in the two underlined parts of note 2(a) of Exhibit C:
2. Revenue
(a) Rooms Revenue -
Rooms revenue is derived from assumptions regarding hotel occupancy levels and average daily room rates. The following assumptions were derived in consultation with an independent consulting company with extensive experience in the hotel industry, Hospitality Valuation Services Canada:
1999
2000
2001
2002
2003
Hotel occupancy rate
72.1%
76.7%
80.0%
80.0%
80.0%
Average daily room rate
$167.73
$177.53
$185.26
$190.82
$196.55
The hotel occupancy rates are equal to the expected average occupancy rates for downtown Vancouver hotels of similar quality except for 1999 and 2000 which are 92.5% and 97.5% of the average, respectively, recognizing the start-up nature of the operation.
The average daily room rates are based on a month by month analysis of the competitive hotels actual average room rates by month in 1995, and adjusted for inflation and real growth. [Underlining added.]
Hotel Occupancy Rates
[25] HVS' opinion (Exhibit N) stated:
We have reviewed the Hotel's annual operating projections for the initial five years (only as to the operating income before debt service) as prepared by [OHR] and it is our considered opinion that they are reasonable and achievable.
[26] The trial judge concluded (at para. 221) that the reference to "annual operating projections for the initial five years" was to the items and figures in the Projected Statement of Net Income in Exhibit A, which included the revenue from rooms. He noted (at para. 222-223):
The HVS opinion letter informs the reader that 85% to 87% of projected revenues are from rooms revenues and rooms revenues are based on estimated occupancy levels and average room rates. The Westin Grand's occupancy is estimated at 72% in the first year of operation increasing to 80% by its third year of operation.
It is these figures for occupancy that the Investors principally attack as being unreasonably projected.
[27] Thus, the principal issue at the trial became whether HVS' projected hotel occupancy rates were "reasonable", and whether the Developers and OHR had negligently misrepresented the reasonableness of the Projection with respect to the projected hotel occupancy rates. The trial judge found all of the respondents had breached their duty of care to the Investors, and all of them appeal from that finding.
[28] The trial judge concluded, however, (at paras. 196-201) that any "implied assertions of fact, or representations, in the Projection are not statements within s. 59 (s. 75) [of the Real Estate Act]", and therefore the Developers had no statutory liability for the projected hotel occupancy rates. The Investors appeal (by cross-appeal) this finding.
The Impugned Note
[29] The following statement in note 2(a) is the "Impugned Note":
The hotel occupancy rates are equal to the expected average occupancy rates for downtown Vancouver hotels of similar quality except for 1999 and 2000 which are 92.5% and 97.5% of the average, respectively, recognizing the start-up nature of the operation.
[30] The trial judge found that the Impugned Note was a "material false statement", for which the Developers and their directors were "liable to make compensation for any loss or damage" under s. 59 of the 1979 Real Estate Act, having rejected their claims to statutory defences under s. 59(1)(b)(viii) and (ix) (at paras. 159-160, 164-165).
[31] The Developers and their directors appeal from the finding that the Impugned Note was a "material false statement" for the purpose of s. 59 of the Real Estate Act.
[32] It should be noted that the trial judge made no reference in his reasons for judgment, or in the order, to s. 59(1)(a) of the Real Estate Act, which provided:
every purchaser or any part of the subdivided land or time share interest to which the prospectus relates shall be deemed to have relied on the representations made in the prospectus whether the purchaser has received the prospectus or not; ...
[33] The issue of "deemed reliance" was not raised by any of the parties in any of the appeals or cross-appeals, and nothing in these reasons for judgment should be taken as addressing that issue.
[34] The trial judge found that none of HVS, the Developers or OHR had breached their duty of care at common law in respect of the Impugned Note (at paras. 208, 212-216). The Investors appeal (by cross-appeal) from that finding.
Representation Attributed to HVS
[35] A second issue relating to representations made in the Disclosure Statement concerned s. 6.7, which stated:
The Developer has consulted with HVS International - Canada MM&R Valuation Services, Inc. ("HVS"), an international hotel consultant, which has advised the Developer as follows:
(iv) tourism is the number one growth industry in Vancouver; ...
[36] The trial judge said (at para. 191-195) that he could not say that this statement was false because he had no evidence of that, but because it was falsely attributed to HVS, he held that it was a "material false statement" for which the Developers and their directors were liable under s. 59 of the Real Estate Act.
[37] I will deal here with the Developers' appeal with respect to this part of the trial judge's order by acceding to it. A statement that is not by itself false does not become a false statement because it is falsely attributed to another person.
1998-1999 Issues
[38] The trial judge made three findings concerning issues that arose in 1998 and 1999. These are the 1999 Budget, the operating plan and budget attached to the HMA as Schedule D, and the status of OHR Grand as the alter ego of OHR.
[39] I will deal with the details and appeals in respect of each of these issues later in these reasons for judgment.
Projected Hotel Occupancy Rates
HVS' Opinion
[40] The trial judge's findings that HVS' projection of hotel occupancy rates was "unreasonable and negligent" (at paras. 538, 555, and 556), and that "HVS was negligent in giving its opinion in its letter of November 8, 1996 that the annual operating projections for the initial five years were reasonable and achievable" (at para. 563) focused on the figures set out in note 2(a) to Exhibit C of Exhibit M of the Disclosure Statement:
1999
2000
2001
2002
2003
Hotel occupancy rate
72.1%
76.7%
80.0%
80.0%
80.0%
[41] In its letter of November 8, 1996 (Exhibit N to the Disclosure Statement), HVS stated that it was "retained...to review and comment on the annual operating projections prepared by [OHR] for The Westin Grand." It stated its opinion that:
We have reviewed the Hotel's annual operating projections for the initial five years (only as to the operating income before debt service) as prepared by [OHR], and it is our considered opinion that they are reasonable and achievable. Our rationale concerning the achievability of the operating income before debt service is as follows:
[42] HVS described its rationale for the projected hotel occupancy rates:
Approximately 85% to 87% of the Hotel's projected revenues are from rooms revenue. Rooms revenue is based on estimated occupancy levels and average room rates. The proposed 207-suite Hotel's occupancy is estimated at 72% in it's [sic] first year of operation, increasing to 80% by it's [sic] third year of operation. We believe this is reasonable in light of the strength of the downtown Vancouver hotel market, and our review of hotel occupancy levels and average room rates currently being achieved. In our opinion, the following hotels will be competitive with the Hotel based on their location, room rates, amenities, and commonality of demand generators: the Four Seasons, Wedgewood, Metropolitan, Pan Pacific Hotel, Waterfront Centre Hotel, and the Westin Bayshore. In 1995, these competitive hotels achieved an overall average occupancy of 78.6% at a $148.63 average daily room rate. Year-to-date through August, both hotel occupancy levels and average room rates for these competitive hotels have increased in comparison to 1995.
[43] HVS described a "month by month occupancy analysis", undertaken to determine "if the Hotel's projected occupancy levels and average room rates were reasonable", and outlined its consideration of "future competitive rooms supply", stating that in light of "over 12 hotels proposed or rumoured for downtown Vancouver ... over the 1995 through 1999 period, we have increased the competitive rooms supply by 60%, or have added an additional 1,299 guestrooms to the competitive rooms supply." It cautioned that the new hotels "may or may not reach fruition", and "our Hotel's estimated operating results may be positively or negatively affected depending on which hotels enter the competitive hotel market." It expressed its opinion that:
However, based on our assumptions of growth in room demand and the future competitive rooms supply, as well as our knowledge of Westin Hotels and Resorts and their outstanding performance in other hotel markets, we believe the proposed occupancies and average room rates to be achievable.
[44] The focus of the Investors' arguments at trial was on discrepancies between certain calculations prepared by Ms. MacDonald, the principal of HVS, in determining the projected hotel occupancy rates, and her final opinion (at paras. 224 and 226):
Specifically the Investors focus on the difference between the occupancy projections of Ms. MacDonald for the Westin Grand for the five years 1999 - 2003 inclusive of 72.1%, 76.7% and 80% for the last three years, and her occupancy projections for the competitive set of hotels for the same five years of 66.6%, 69.1%, 71.2%, 72.6% and 74.1%. This difference between the projected occupancy figures for the Westin Grand and the projected occupancy figures for the competitive set resulted in Ms. MacDonald concluding an overall penetration of the Westin Grand into the competitive market of 108.8% of its fair share in 1999, 111.2% of its fair share in 2000 and 112.3% in 2001.
...
What the Investors do allege is that there was no reasonable foundation for the projections of occupancy rates for the Westin Grand as stated in the opinion letter, and HVS was negligent in opining that these projections were reasonable and achievable.
The "competitive set" were the six competitive hotels referred to in HVS' letter: the Four Seasons, Wedgewood, Metropolitan, Pan Pacific Hotel, Waterfront Centre Hotel, and the Westin Bayshore.
[45] The trial judge reviewed in detail Ms. McDonald's evidence concerning the methodology she used to determine the projected hotel occupancy rates (at paras. 244-296). He found that she had made the following errors in her calculations:
(a) In some of her calculations, she used 200, instead of 207, as the number of hotel rooms in the Westin Grand. Her opinion letter, however, refers to 207 rooms.
(b) She used the wrong figure for the "commercial penetration rate" for the Metropolitan Hotel in 1995: 141.7% instead of 109%. (The "penetration rate" is how much of the market a particular hotel occupies. A penetration rate of 100% means that the hotel occupancy is equal to the ratio of the number of its hotel rooms to the total number of competitive hotel rooms considered relevant to the calculation. A penetration rate of more than 100% means that the hotel occupies more than its market share.) Ms. MacDonald projected that 44% of the Westin Grand's business would be from the commercial sector (other sectors (sources of hotel business) are leisure and convention), based on the comparison with the Metropolitan Hotel, which required that the Westin Grand's penetration rate in the commercial sector be 160%.
(c) She did three computer runs, calculating the projected occupancy rates for the competitive set for 1999-2003 based on their 1995 occupancy rates, on the assumption that new competitive rooms would be added to the market before 1999. These three computer runs estimated 852, 752, and 1,298 new competitive rooms (including the Westin Grand's 207 rooms). The final run, on October 16, 1996, assuming 1,298 new rooms, indicated that "the market wide occupancy for the competitive set would fall from 78.6% in 1995 to 66.6% in 1999, 69.1% in 2000, 71.2% in 2001, 72.6% in 2002, and 74.1% in 2003" (at para. 262). She did not, however adjust her projected hotel occupancy rates for the Westin Grand as a result of this calculation, although in her opinion she stated that HVS had "over the 1995 through 1999 period...added an additional 1,299 guestrooms to the competitive rooms supply."
(d) Her projected hotel occupancy rates required that the Westin Grand exceed its fair share (100% penetration rate) in its first two years of operation. There was evidence that a new hotel typically achieves less than its fair share in years one and two as it builds business and market awareness (at para. 561).
Expert Evidence
[46] Mr. Kleinschmidt gave expert evidence for the Investors. The trial judge summarized his opinion (at para. 303):
He is of the opinion that many of the assumptions/analysis for the projections have an absence of supporting market information, contain differences from industry benchmark data, and are unreasonable based on his knowledge of the Vancouver hotel market and experience in the industry.
[47] Mr. Flood gave expert evidence for HVS. The trial judge summarized his opinion (at paras. 321-325):
He is of the opinion that HVS followed accepted steps and procedures in reviewing the projected operating results for the Westin Grand and he considers that HVS exercised the average degree of skill, care and diligence to be exercised by members of the profession at that time.
In his opinion it met the standard of care of a hotel consultant practising in the latter half of 1996 when it expressed the opinion that the Westin Grand's annual operating projections were reasonable and achievable.
He also holds the view that given the number of variables to be considered in creating hotel financial projections, two consultants acting reasonably can arrive at different conclusions on occupancy, average room rate and expense levels for a hotel. The range of reasonableness in his view is dependent on the complexity of the assignment and in his experience a reasonable range in conclusions is 5% for less complex types of property and 10% for an established operating hotel or similar.
He considers this assignment to have been very complex involving a yet to be built hotel and a rapidly changing market with many variables.
Based on his view of the complexity of the assignment he says that the opinions expressed by HVS were within the range of a reasonably competent consultant for this type of assignment.
[48] Mr. Rosen was the expert for OHR. His report critiqued that of Mr. Kleinschmidt. The trial judge summarized his criticism (at paras. 367 and 375):
He is of the opinion that a consultant acting reasonably would not conclude that the projections were unreasonable based solely on the fact that there is an absence of supporting market information and the projections are different from industry benchmark data. In his view hotels can perform well above and below industry benchmarks.
...
In his opinion Mr. Kleinschmidt could not reasonably reach the conclusions he did in the absence of supporting market information and solely on the basis that the projections differ from industry benchmarks.
[49] Mr. Rosen did his own tests to determine the reasonableness of the projections. The trial judge summarized Mr. Rosen's findings (at paras. 407-411):
Mr. Rosen did not adjust the Westin Grand occupancy rates for 1999 - 2003 as HVS had projected, in any of his scenarios, as he considered those occupancy rates to be reasonable.
He says the purpose of his scenarios was to test the HVS occupancy rates, which he had already concluded to be reasonable, by comparing them to where he thought, on his own knowledge of the market in 1996, and on his own analysis, the competitive market occupancy rates would be in the projection period. He says he could then see where the Westin Grand occupancy rates projected by HVS ended up by comparison and determine whether he considered the differences to be reasonable.
In his scenarios the Westin Grand occupancy rates all ended up still being above the market occupancy rates, but to different degrees. He considers the differences to all be reasonable.
When asked what his threshold of reasonableness was Mr. Rosen said it could have been a penetration rate of 120%, he did not know, it was hard to say. He says he was only testing whether the HVS occupancy rates were reasonable and these tests suggested to him that they were reasonable.
When asked how all this was of assistance to the court in determining the reasonableness of the assumptions Ms. McDonald used in 1996, he again says at the end of the day what is important is whether the 72% occupancy was reasonable. She may have a different way of getting there in his view, a different approach than how he gets there, but in his view the test is whether her occupancy was reasonable against the market.
The Trial Judge's Conclusions
[50] The trial judge began his analysis of the reasonableness of the occupancy projections (at para. 488):
I have some difficulty in determining from Ms. MacDonald's evidence exactly how she went about deciding that for 1999 the projected occupancy rate for the Westin Grand would be 72%, its commercial business would constitute 44% of its overall business, and its overall penetration into the competitive hotel market would be 108.8%. I have the same uncertainty as to how she decided the projections for at least 2000 and 2001.
[51] After his consideration of the evidence as to the methodology undertaken by Ms. MacDonald in projecting the hotel occupancy rates, considering primarily the errors outlined above, and accepting the evidence of Mr. Kleinschmidt over that of Mr. Flood and Mr. Rosen, he concluded (at paras. 555, 556, and 563):
In my view the occupancy projection for 1999 of 72% was not a reasonable conclusion and was not formulated using reasonable care and skill. HVS through Ms. MacDonald, in my view, was in breach of its duty of care to the Investors in projecting that figure and breached the standard of reasonable care and skill. It was negligent in doing so.
Ms. MacDonald's occupancy projections for 76.7% for the second year and 80% for the third year of operation in my view were also unreasonable and negligent because they were also initially based on 200 rooms and were also not reduced when the supply of over 400 rooms was added between October 11, 1996 and October 16, 1996.
...
In conclusion I find that HVS was negligent in giving its opinion in its letter of November 8, 1996 that the annual operating projections for the initial five years were reasonable and achievable when its projected occupancy levels that played a large part in determining projected revenues were negligently overstated.
The Trial Judge's Reasoning
[52] The task of the trial judge was to decide whether HVS' opinion that the "annual operating projection for the initial five years of the Hotel's operation are reasonable and achievable" was a negligent misrepresentation. The proxy for that question became whether HVS' projected hotel occupancy rates were reasonable (at para. 505).
[53] The unstated starting point for the legal analysis had to be the five requirements for a successful claim of negligent misrepresentation set out by Iacobucci J. in Queen v. Cognos Inc., [1993] 1 S.C.R. 87 at 110:
The required elements for a successful Hedley Byrne claim have been stated in many authorities, sometimes in varying forms. The decisions of this Court cited above suggest five general requirements:
(1) there must be a duty of care based on a "special relationship" between the representor and the representee;
(2) the representation in question must be untrue, inaccurate, or misleading;
(3) the representor must have acted negligently in making said misrepresentation;
(4) the representee must have relied, in a reasonable manner, on said negligent misrepresentation; and
(5) the reliance must have been detrimental to the representee in the sense that damages resulted.
[54] The first three of these five requirements were the subject of the trial. The last two were "reserved for determination" after the resolution of the first issues (at para. 8).
[55] There is no dispute with the trial judge's conclusion that HVS owed a duty of care to the Investors in preparing its opinion and projections (at para. 232).
[56] The next question for the trial judge should have been whether the representation - that the annual operating projections for the initial five years were reasonable and achievable - was untrue, inaccurate, or misleading.
[57] Instead, the trial judge focused on the Investors' submissions that there were "implied representations of fact involved in the preparation of the projections" (at para. 228). These implied representations were:
(a) that there were no undisclosed material facts that would or might prevent the Projections from being realized or seriously undermine the accuracy of the Projections.
(b) that the assumptions and hypotheses on which the Projections were based were reasonable and reflected circumstances that were likely to exist.
(c) that the Projections had been prepared in good faith, using reasonable care and skill, objectively and independently and had not been prepared nor adjusted so as to unreasonably or artificially increase the projected returns to investors.
[58] The trial judge accepted (at para. 229) that the implied representations of fact were "to be implied in the projections as they mirror the implied factual assertions accepted in Danier Leather" (see Kerr v. Danier Leather Inc. (2004), 46 B.L.R. (3d) 167 (Ont. S.C.J.) (especially at para. 57); rev'd. on other grounds (2005), 261 D.L.R. (4th) 400 (Ont.C.A.); aff'd. 2007 SCC 44, [2007] 3 S.C.R. 331 [Danier Leather]).
[59] After stating that HVS owed the investors a duty of care, the trial judge turned in his analysis to the standard of care, and accepted (at paras. 233-234) the comments of the trial judge in Sharbern Holding Inc. v. Vancouver Airport Centre Ltd., 2007 BCSC 1262 at paras. 185-186, 38 B.L.R. (4th) 171, aff'd (on this point) 2009 BCCA 224:
I accept the comments of Wedge J. in Sharbern, at 2007 BCSC 1262, as to the standard of care of a market feasibility projection.
[185] The task of a market feasibility analyst is to assess the feasibility of building a new hotel and project the likely financial performance of the hotel in the future. The analysis involves the estimation of numerous variables to reach a final projection. Each variable requires prediction and estimation, which compounds the uncertainty of the projection. Market feasibility analysis is not a science. The consensus among the experts who testified at trial was that it is more an art than a science, engaging the analyst's judgment, experience, and opinion.
[186] Stated more candidly, market feasibility studies consist of a great deal of educated guesswork.
[189] An appraiser is not negligent simply because his or her appraisal proves to be wrong. While gross over-evaluation may be an indication of negligence in the absence of a reasonable explanation, it does not, by itself, establish negligence. In Regency Mortgage Corp. v. Buchan, [1984] B.C.J. No. 973 (S.C.) McLachlin J. (as she then was) said the following at para. 10:
What then is required to establish that an appraiser is negligent? Gross overvaluation (or undervaluation) which is not satisfactorily explained may suffice.... Conversely, a small overvaluation, or a large overvaluation which is adequately explained, will not give rise to liability. In the final analysis, the court must determine whether the defendant acted reasonably having regard to the standards prevailing in the profession and the inexactitude inherent in the methods by which the value of a property is determined. [Emphasis of the trial judge.]
Even if the standard of care is low involving a great deal of educated guesswork, the implied representation of the exercise of reasonable care and skill, having regard to the inexactitudes inherent in the appraisal, must still be present and applicable. Otherwise no forecaster could ever be held liable in negligence for a forecast, and that cannot be the law. Gross overvaluation or undervaluation which is not satisfactorily explained may suffice as negligence.
[60] Despite the trial judge's apparent acceptance that a projection of financial performance involves a "great deal of educated guesswork", and of the "inexactitudes inherent in the appraisal", the trial judge rejected the standard actually applied in Sharbern, and the evidence of two of the expert witnesses, that a projection of future performance is reasonable if it falls within a "range of reasonableness" (at paras. 502-503):
Mr. Flood and Mr. Rosen say the occupancy projections and the overall penetration rates were reasonable as being within the range of reasonableness. They do not say what that range is nor where it begins and ends. It is unknown on their evidence whether they believe the projections are barely in the range or well into the range or whether their ranges are even the same. Sharbern was a case all about reasonable ranges. This case is not in my view.
I reject the suggestion that a range of reasonableness is relevant to the issue of the reasonableness of the projections here. Ms. MacDonald did not give a range of reasonableness in her opinion letter. She gave specific numbers for occupancy as reasonable projections starting with 72% in the first year and increasing to 80% by the third year. As she said, those numbers played a large part in determining rooms revenue figures that were to make up 85% - 87% of the hotel's projected revenues which in turn would be expected to have a direct impact on the net returns.
[61] Further, without determining what hotel occupancy rates would be reasonable, the trial judge concluded that HVS' projections met the test of a gross overvaluation and were outside any range of reasonableness (at para. 557):
I am unable to conclude what the projected occupancies for the Westin Grand should have been as corrected for 207 rooms and with some additional room supply affecting it as well. I do know that they should have been lower projected rates. In my view the HVS projections of occupancy meet the test of a gross overvaluation not satisfactorily explained and outside any range of reasonableness even if that is a standard that has any applicability.
Range of Reasonableness
[62] The trial judge's rejection of the test of a "range of reasonableness" in determining whether the projected hotel occupancy rates were reasonable was an error of law. It arose because of the focus, in determining whether HVS had made a misrepresentation, on the implied representation of the exercise of reasonable care and skill, and thus on HVS' methodology, and not on the express representation of reasonableness. In addition, the Investors did not provide any evidence of a range of reasonableness of projected hotel occupancy rates, any comparative projections from which the trial judge could determine a range of reasonableness, or of the impact of "reasonable" hotel occupancy rates on the projected annual operating income.
[63] This is apparent from the trial judge's attempt to distinguish Sharbern as a "case all about reasonable ranges" that "[t]his case is not".
[64] A review of Wedge J.'s reasons for judgment in Sharbern demonstrates that the issues addressed there were "on all fours" with those before the trial judge in this case.
[65] In Sharbern, HVS had projected hotel occupancy rates for 2000-2004 for a hotel to be built in Richmond, BC, and sold as strata units to investors pursuant to a disclosure statement. The disclosure statement for the hotel included projections of net income and annual cash return to individual investors, calculated and opined upon by an auditor, based on HVS' projections of net income, occupancy and rooms rates, all as set out in the Disclosure Statement in this case. HVS' projections of occupancy and room rates were set out in a note to the auditors' report in the disclosure statement, also in the same form as set out in the Disclosure Statement in this case. Its projections of occupancy rates were 72% for 2000 and 2001, 76% for 2002, and 80% for 2003 and 2004.
[66] The issues with respect to HVS' projections were whether HVS owed the investors a duty of care, whether HVS represented to the investors that the projected occupancy rates (and average daily room rates - not in issue here) were reasonable, and whether HVS was negligent (Sharbern, at para. 179). Those were the questions before the trial judge in this case.
[67] Madam Justice Wedge described (at paras. 185-191) the standard of care as quoted by the trial judge in this case (at paras. 233-234). She summarized the evidence of three experts: Mr. Instance for the investors, Mr. Flood for the developers and Mr. Rosen for HVS.
[68] Mr. Instance criticized several aspects of HVS' methodology, but essentially disagreed with its projection of hotel occupancy levels given the likelihood of increased competition from an expanding supply of hotel rooms in Richmond (at para. 197). Mr. Instance provided his opinion of what the projected occupancy for the new hotel would have been had HVS properly undertaken the analysis (at para. 200), and then calculated the "range of returns on investment" ("ROI") using his projected occupancy rates (at para. 203). He also calculated the ROI using projections that had been prepared by PKF, another consultant which had been retained before HVS (at para. 205). These comparable projections illustrated a range within which HVS' projections could be located.
[69] Mr. Flood gave evidence similar to that in this case: "given the number of variables to be considered in creating projections for a proposed hotel, two consultants acting reasonably can arrive at different conclusions on forecasted occupancy" (at para. 215). His comments on the range of reasonableness were also the same as in this case (see para. 47 of these reasons for judgment): it is dependent on the complexity of the assignment; a reasonable range in value conclusion is 5% for less complex types of property, and 10% for an established, operating hotel; this assignment was very complex, involving a yet to be built hotel in a rapidly changing market with many variables. He opined that the potential variance between reasonable consultants could be even greater than 10% given the range of variables and the complexity of the Richmond market in 1997 (at para. 216).
[70] As in this case, Mr. Rosen outlined the steps required of a reasonable consultant completing a market feasibility study and concluded that the methodology used in the HVS Report conformed to those requirements (at para. 222). He criticized many of Mr. Instance's comments and conclusions as unreasonable (at para. 223).
[71] From this evidence, and the projections prepared by PKF, Wedge J. was able to compare the methodology and results of HVS' calculations, determine a range of reasonableness, and conclude that although HVS' occupancy rate projections were high, in all of the circumstances they were not unreasonable (at para. 248). She considered all of the factors affecting the Richmond hotel market as described by Messrs. Flood and Rosen, and accepted the evidence of Mr. Flood that "the occupancy rates projected by HVS for the five years in question were within a reasonable range". She was also able to compare the ROI derived from the PKF and Instance projections (at paras. 256 and 258).
[72] With respect to "range of reasonableness", Wedge J. said (at para. 256):
There is no generally accepted range of reasonableness with respect to hotel market forecasts. I do not accept that a fixed range of reasonableness can be usefully applied to the forecasts of hotel consultants. I do accept that revenue projections of reasonably competent hotel consults can differ by substantial margins. How substantial the margin will depend on the circumstances existing in the market at the time. The experts all agreed that hotel market forecasts are based in large part on the personal experience, opinion and judgment of individual consultants who are attempting to predict the future. As observed by Instance in his preliminary report, there will always be unexpected events or circumstances that will change the market place, and any number of unforeseen factors may negate the consultant's forecast.
[73] There was no basis on which the trial judge could reasonably distinguish Sharbern factually or legally. The factual background and the issues before Wedge J. were the same as the issues he was required to decide. The difference between the cases lay in the evidence, which led to the focus on the implied representation of reasonable care and skill, rather than the express representation of reasonableness. The trial judge in this case was not assisted by any comparable projections of hotel occupancy rates, against which he could measure the reasonableness of HVS' projections, and develop a range of reasonableness from which he could determine if HVS had made any misrepresentation. Nor was he provided with any evidence of how the projected hotel occupancy rates would impact the annual operating projections (as to net income before debt service) for the initial five years (on which HVS had opined), or the ROI of the Investors (which were the "Projections" about which the Investors had complained in their statement of claim). In the absence of this kind of evidence, which was necessary to determine whether HVS had made any misrepresentation as to reasonableness, the trial judge focused his analysis solely on the projected hotel occupancy rates, and on HVS' methodology. The evidence before him, which provided no comparison to any other estimations or projections, and therefore no basis on which to develop a range of reasonableness, simply could not support his conclusions that HVS' projection of hotel occupancy rates was unreasonable and a "gross overvaluation" (at para. 557), or that HVS was negligent in giving its opinion that the annual operating projections for the initial five years were reasonable and achievable (at para. 563).
[74] In my opinion, Wedge J.'s analysis of the representation of reasonableness reflects a principled approach to the question. The very concept of "reasonableness", especially when applied to the nature of the question in these cases, a projection of future performance of a to-be-built hotel, subsumes a range of reasonable outcomes, not a pinpoint conclusion. This is implicit in the standard of care as outlined by Wedge J. and purportedly accepted by the trial judge in this case.
[75] In her discussion of the standard of care applicable to the hotel market forecasts in Sharbern, Wedge J. cited Regency Mortgage Corp. v. Buchan, [1984] B.C.J. No. 973 (S.C.), with regard to the "inexactitude inherent in the methods by which the value of a property is determined", and the impact of a gross overvaluation or undervaluation on establishing negligence. The analysis of the evidence in Regency reflects that in Sharbern, and makes the flaws in the evidence and reasoning in this case apparent. Madam Justice McLachlin, as she then was, considered whether a property appraiser had negligently misrepresented the value of property (at para. 12):
The evidence of [three] appraisers established that a variation of plus or minus 10% is acceptable on this type of property. Given this range of variation, Mr. Rogers' appraisal supports that of Mr. Buchan. However, the opinions of Messrs. Falcus and Cunningham, if accepted, would establish a gross overvaluation of the property by Mr. Buchan.
[76] She then analyzed the evidence, decided which to accept and which to reject, and concluded (at para. 31), that the appraiser's valuation was
within the plus or minus 10% range of variation which may be regarded as acceptable in the appraisal of properties of this type. It follows that Mr. Buchan's appraisal did not significantly overvalue the property. Misrepresentation is not established ...
[77] Another example of a case involving a valuation is Simon Fraser University Administrative/Union Staff Pension Plan (Trustee of) v. Administrative and Professional Staff Assn. of the Simon Fraser University, [1997] B.C.J. No. 1671 (S.C.). The parties were seeking directions in respect of an actuary's valuation of the University's pension fund, and a determination of whether that valuation was mistaken. The Court concluded that the valuation was not mistaken, because the actuary had used accepted methods and it was within the range of reasonable results. In the course of reaching this conclusion, Tysoe J. (as he then was) noted the distinction between methodology and result, and the significance of a "range of values" in determining whether a valuation is mistaken (at paras. 60 and 62):
[I]t does not follow in my view that a valuation should be considered mistaken simply because the actuary used a methodology or an assumption which is not generally accepted in actuarial practice. There are too many variables in an actuarial valuation to conclude in each case that an incorrect methodology or incorrect assumption will produce a mistaken valuation. The effect of the "mistake" could be offset by the effects of other generally accepted methodologies and assumptions used by the actuary and the end result may not be mistaken.
...
In principle, it seems to me that a valuation result cannot be said to be mistaken unless it falls outside a range of values which is produced by employing different assumptions and methodologies, all of which are generally accepted in actuarial practice. If an actuary can produce a particular valuation utilizing generally accepted actuarial methods and assumptions, I do not believe that the same valuation result by another actuary should be considered mistaken because the second actuary used a method or assumption which is not generally accepted in actuarial practice.
[78] Thus, accepted methodologies and assumptions are used to define the range of reasonable outcomes, and as long as the result falls within this range, it is not mistaken. It does not matter if an incorrect methodology or assumption was used in its calculation.
[79] The concept of a "range of reasonableness" is also found in other areas of the law where a "reasonableness" standard is applied. Two examples where a "range of reasonable outcomes" is relevant are the business judgment rule in corporate law, and the reasonableness standard of review in administrative law.
[80] The application of a "range of reasonableness", in the context of the business judgment rule and its application to financial forecasts, was considered in Danier Leather. The Supreme Court of Canada quoted (at para. 54) Weiler J.A.'s statement of the business judgment rule in Maple Leaf Foods Inc. v. Schneider Corp. (1998), 42 O.R. (3d) 177 at 192 (C.A.):
The court looks to see that the directors made a reasonable decision not a perfect decision. Provided the decision taken is within a range of reasonableness, the court ought not to substitute its opinion for that of the board even though subsequent events may have cast doubt on the board's determination. As long as the directors have selected one of several reasonable alternatives, deference is accorded to the board's decision. [Emphasis added.]
[81] The Supreme Court commented (at para. 54) that "while forecasting is a matter of business judgment, disclosure is a matter of legal obligation."
[82] The concept of a "range of reasonableness" is also reflected in the consideration of the reasonableness standard of review in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190. Justices Bastarache and LeBel, for the majority, articulated the reasonableness standard of review (at para. 47):
Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. [Emphasis added.]
[83] In his minority opinion, Binnie J. noted that reasonableness depends on context, and depending on the circumstances, the range of reasonable outcomes will be more broadly or narrowly defined (at paras. 150-155).
[84] These comments suggest that in determining whether a conclusion or opinion is reasonable, regard must be had to the nature of the question. That is, certain questions may lend themselves to one specific, particular result. If this is so, then it may be said that there is only one reasonable answer, i.e., no range of reasonable alternatives. However, if the nature of the question is such that it gives rise to a number of possible, reasonable conclusions, then there must be a corresponding "range of reasonableness". Depending on the circumstances, as noted by Binnie J., the range may be more broadly or narrowly defined.
[85] Madam Justice Ryan came to a similar conclusion in Teamsters, Local 31 v. Shadow Lines Transportation Group, 2009 BCCA 130, 90 B.C.L.R. (4th) 74. After a lengthy discussion of Dunsmuir, she summarized the meaning of "reasonable" (at para. 85):
The main theme of the majority is that a decision is reasonable if it falls within a range of possible, acceptable outcomes which are defensible with regard to the facts and the law (para. 47).
[86] Madam Justice Ryan also reviewed Canada (Citizenship & Immigration) v. Khosa, 2009 SCC 12, 304 D.L.R. (4th) 1, and said (at para. 94):
I conclude from these comments that the "range of acceptable outcomes" described by the new reasonableness test will be dictated by the nature of the question that the particular tribunal is required to examine. Here the question was fact driven, policy laden and discretionary. Thus, the range of outcomes was broad, and it was open to the Immigration Appeal Division to come to the conclusion that it did.
[87] Thus, authorities in diverse areas of the law suggest that where the question to be determined is whether an opinion or decision is "reasonable", the nature of the question asked of the expert or decision-maker will determine the "range of acceptable outcomes". It is only if the opinion or decision falls outside that range that it will be considered unreasonable.
[88] Where, as in this case, HVS' projection of hotel occupancy rates involved a consideration of numerous variables requiring prediction and estimation, engaging its judgment, experience, and opinion, "a great deal of educated guesswork", and "inexactitude inherent in the methods", it could not be determined that the opinion was unreasonable, much less a "gross overvaluation ... outside any range of reasonableness", without considering the proper "range of reasonableness".
[89] In so concluding, the trial judge erred. A "range of reasonableness" was a necessary element of the analysis. If the trial judge could not determine a "range of reasonableness" from the evidence, then the Investors failed to meet their onus of showing that HVS' projection of hotel occupancy rates was not reasonable, and that it had made any representation that was untrue, inaccurate, or misleading.
Representation of Reasonable Care and Skill
[90] My conclusion that the trial judge erred in rejecting the relevance of a "range of reasonableness" because he focused on the implied representation of the exercise of reasonable care and skill and not the express representation of reasonableness should not be taken as rejecting the relevance of the exercise of reasonable care and skill.
[91] The Investors argue that even if the projection is reasonable and therefore there is no express misrepresentation with respect to it, if reasonable care and skill were not exercised in the formulation of the projection, HVS' implied representation of reasonable care and skill would be untrue, and thus a misrepresentation.
[92] This argument seems to stem from the reference to Esso Petroleum Co. Limited v. Mardon, [1976] 2 All E.R. 5 (C.A.), in the trial decision in Danier Leather at para. 57:
An expression of opinion, such as a forecast, may be a misrepresentation in contract, as it "may often include an implied statement of fact, for example, that no facts exist to rebut the opinion or that the opinion was based on the use of reasonable care, and that the opinion was honestly held:" S.M. Waddams, The Law of Contracts, 4th ed. (Toronto: Canada Law Book Inc., 1999) at 301-302 [footnotes omitted]. In Esso Petroleum Co. v. Mardon, [1976] 2 All E.R. 5 (Eng. C.A.) [Esso], Lord Denning M.R. stated, at 14, that if a person with special knowledge and expertise "makes a forecast - intending that the other should act on it and he does act on it - it can well be interpreted as a warranty that the forecast is sound and reliable in this sense that they made it with reasonable care and skill." A factual assertion that the forecast is sound and reliable can be implied from the making of the forecast in these circumstances.
[93] Esso involved the liability of the petroleum company for a negligent statement concerning the potential throughput of a service station made in pre-contract negotiations by experienced employees of the company holding themselves out as experts. The plaintiff was induced by the statement to enter into a tenancy of the service station, and suffered financial loss when the throughput fell far short of that predicted. There was no question that the statement was a misrepresentation - Lord Denning called it a "fatal error" (at 11) - or that it was made negligently. The question for the Court was whether there was liability in contract, tort, or both.
[94] In this case, the question for the trial judge was whether HVS had negligently misrepresented that the annual operating projections for the initial five years were reasonable. As I have explained, he did not answer that question. Rather, he found that because HVS made mistakes in its calculations of the projected hotel occupancy rates, it did not exercise reasonable care and skill, and that made the projections unreasonable. That analysis, and the Investors' argument in support of it, effectively eliminates from the determination of negligent misrepresentation, in accordance with the accepted authority of Cognos, the second step - whether the statement made was a misrepresentation - and collapses it into the third step - whether the maker of the statement acted negligently. Further, it raises questions of causation and damages. If the projection was reasonable, it is not clear how the failure to take reasonable care in its formulation could cause financial detriment to the Investors.
Hotel Occupancy Rates - Summary and Conclusion
[95] The trial judge erred in law in rejecting the relevance of a "range of reasonableness" in determining whether HVS' projected hotel occupancy rates were reasonable. The evidence did not support his conclusions that they were not reasonable, were a "gross overvaluation", and were "outside any range of reasonableness". Nor was there evidence of the impact of the projected hotel occupancy rates on the projection of operating income for the initial five years, or on the Investors' ROI, and the trial judge made no findings on these matters. Thus, there was no basis for the trial judge to conclude that HVS' opinion was a negligent misrepresentation, or that the Developers and OHR had negligently misrepresented that the hotel occupancy rates were objectively reasonable.
[96] I would allow HVS' appeal, and accede to the Developers and OHR's grounds of appeal, from those parts of the trial judge's order that held any of them breached their duty of care to the Investors with respect to the projected hotel occupancy rates. I would dismiss the Investors' cross-appeal seeking an order that the Developers were liable for making a "material false statement" under the Real Estate Act that the hotel occupancy rates were objectively reasonable.
The Impugned Note
[97] The Impugned Note, which followed the projected hotel occupancy rates (and room rates) in note 2(a) to Exhibit C of Exhibit M of the Disclosure Statement, stated:
The hotel occupancy rates are equal to the expected average occupancy rates for downtown Vancouver hotels of similar quality except for 1999 and 2000 which are 92.5% and 97.5% of the average, respectively, recognizing the start-up nature of the operation.
[98] The trial judge found that the auditor, using material received from the Developers, prepared the Impugned Note, and that neither HVS nor OHR had any involvement in its preparation or direct knowledge of its inclusion in the Disclosure Statement (at paras. 208-209).
[99] Ms. MacDonald's evidence was that she had developed projected occupancy rates for six competitive downtown Vancouver hotels (the "competitive set") for 1999-2003 of 66.6%, 69.1%, 71.2%, 72.6% and 74.1%. Thus, the trial judge concluded (at para. 155) that the projected hotel occupancy rates for the Westin Grand were not equal, as stated in the Impugned Note, but:
... the HVS hotel occupancy rates that were projected in the chart for the Westin Grand were in fact all above the projected occupancy rates for hotels of similar quality for all five years.
[100] He therefore found (at para. 152) that the Impugned Note:
was a false statement of present factual comparison between the assumed hotel occupancy rates in the chart applicable to the Westin Grand and the assumed or expected average occupancy rates by HVS for downtown Vancouver hotels of similar quality in the same years.
[101] It is common ground that the projected hotel occupancy rates for the Westin Grand for 1999 and 2000 (that is, 72.1% and 76.7%) were not 92.5% and 97.5% of the "expected average occupancy rates for downtown Vancouver hotels of similar quality", whether the expected average was 80%, as projected for the Westin Grand for 2001 through 2003, or 78.6%, which HVS reported in its letter of November 8, 1996 was the overall average occupancy for the competitive set in 1995. There was no other reference in the Disclosure Statement to "expected average occupancy rates".
[102] The trial judge found the Developers and their directors made a "material false statement" under the Real Estate Act, but did not find either the Developers or OHR breached their duty of care at common law with respect to the Impugned Note.
Representations
[103] The trial judge identified three representations in the Disclosure Statement concerning the Projection.
Statutory Declarations
[104] The Developers signed declarations containing express representations that the Disclosure Statement "constitutes full, true and plain disclosure of all material facts relating to the Development" and their directors declared that the Disclosure Statement "contains no untrue statement of a material fact" (at paras. 51-52). These declarations were the basis for finding the Impugned Note was a "material false statement" under s. 59 of the Real Estate Act.
Reasonableness - s. 1.4 of the Disclosure Statement
[105] The Developers and OHR represented in s. 1.4 of the Disclosure Statement that in their judgment they considered the assumptions and hypotheses in the Projection to be reasonable:
1.4 Financial Projection
The financial projection (the "Projection") attached as Exhibit M to this Disclosure Statement was prepared by O'Neill for approval by the management committee of the Developer on November 8, 1996. The Projection has been prepared based on assumptions and hypotheses which reflect the course of action planned by the Developer and O'Neill for the period covered by the Projection (the "Projection Period") given the judgment of the management committee of the Developer and management of O'Neill as of November 8, 1996, as to the most probable set of economic conditions. The Projection has been prepared solely to provide information to prospective purchasers of the Hotel Lots. An Auditor's Report on the Projection is included as part of Exhibit M and a hotel appraiser's opinion letter as to the reasonableness of the Projection is included as Exhibit N.
The reader is cautioned that some of the assumptions and hypotheses used in the preparation of the Projection, although considered reasonable by the Developer and O'Neill at the time of preparation, may prove to be incorrect. The actual results achieved for the Projection Period will vary from the Projection and the variations may be material.
[106] The trial judge found that the express representation of reasonableness in s. 1.4 did not extend to statements of fact, and that the Impugned Note was a statement of fact (at paras. 210-216).
[107] On that basis, the trial judge found that neither the Developers or OHR had made a negligent misrepresentation with respect to the Impugned Note.
Objective Reasonableness
[108] The trial judge also found that the Developers and OHR had impliedly represented that the Projection, as well as the assumptions and hypotheses, were "objectively reasonable" (at para. 243). That conclusion followed Danier Leather, where, on similar wording in a prospectus to that in s. 1.4 and Exhibit M of the Disclosure Statement, the Supreme Court of Canada found (at para. 50):
The forecast was prepared as of April 2, and in the prospectus it is stated that "[t]he Forecast is based on assumptions that reflect management's best judgment of the most probable set of economic conditions and the Company's planned course of action as of April 2, 1998" (Final Prospectus, at p. 26). Likewise, the Auditors' Report, dated April 6, advises that "the assumptions developed by management are suitably supported and consistent with the plans of the Company, and provide a reasonable basis for the forecast" (Ibid.). The prospectus further states that the assumptions were "considered reasonable by the Company at the time of preparation of the forecast" and that "[t]he Forecast has been prepared using generally accepted accounting principles" (p. 27). Significant assumptions are then listed. That is enough, it seems to me, for potential investors to infer not just that the forecast represents management's best judgment (as the Court of Appeal held), but also that management's judgment is based on facts and assumptions that reasonable business people in possession of the same information as Danier's management would reasonably regard as reliable for the purpose of a forecast. [Emphasis added.]
[109] The trial judge did not expressly consider, however, whether the implied representation of objective reasonableness, derived from Danier Leather, extended to statements of fact, and he did not consider whether either the Developers or OHR could be liable on that basis for negligent misrepresentation at common law for breach of their duty of care to the Investors for the Impugned Note.
[110] In my opinion, the implied representation of objective reasonableness extends to the objective reasonableness of facts and information included in a forecast or projection. That is what the Supreme Court of Canada said: investors could infer that "management's judgment is based on facts and assumptions that reasonable business people in possession of the same information as Danier's management would reasonably regard as reliable" (emphasis added).
[111] The Developers and OHR attempted to distinguish the representations made in s. 1.4 of the Disclosure Statement from those summarized in Danier Leather at para. 50, and argued that the conclusion reached by the Supreme Court of Canada in that case did not extend to this case.
[112] None of the reasons for judgment of the various courts in Danier Leather set out in full the representations made in the Danier Leather Inc. prospectus concerning the "Financial Forecast". For purposes of comparison with the representations about the Projection in the Disclosure Statement, a copy of that part of the Danier Leather Inc. prospectus is attached to these reasons for judgment as Appendix B.
[113] Comparing these two documents, there is little difference in form and content. There is a good explanation for that. Both documents were subject to securities and accounting regulations that required and established standards for the disclosure of "future-oriented financial information" ("FOFI").
[114] In this case, the Projection was subject to British Columbia Securities Commission Policy Document NIN 96/37, effective October 10, 1996, Form 43B of which required:
ITEM 15 Financial Forecasts or Projections
Any financial forecasts or projections used in the disclosure statement or prospectus must be prepared in accordance with section 4250 of the CICA [Canadian Insitute of Chartered Accountants] Handbook and must be audited in accordance with the Auditing and Related Services Guideline of the CICA Handbook entitled Examination of a financial forecast or projection included in a prospectus or other offering document. [Emphasis added.]
[115] In 1996, the CICA Auditing Guideline (AuG-6) and section 4250 of the CICA Handbook (Toronto: CICA, 1989) defined "Future-oriented financial information":
Future-oriented financial information is information about prospective results of operations, financial position and/or changes in financial position, based on assumptions about future economic conditions and courses of action. Future-oriented financial information is presented as either a forecast or a projection. [Emphasis added.]
[116] The FOFI in the Disclosure Statement was a "projection", which is also defined:
A projection is future-oriented financial information prepared using assumptions that reflect the entity's planned courses of action for the period covered given management's judgment as to the most probable set of economic conditions, together with one or more hypotheses that are assumptions which are consistent with the purpose of the information but are not necessarily the most probable in management's judgment. [Emphasis added.]
[117] A "forecast" is based only on assumptions, not hypotheses, which explains the different wording of the representations and auditors' report in the prospectus in Danier Leather from the wording in the Disclosure Statement.
[118] These definitions are essentially identical to those contained in National Policy Statement 48 - Future-Oriented Financial Information (1992), 15 O.S.C.B. 5978 [National Policy 48], which governed the disclosure of the "forecast" in the prospectus in Danier Leather (trial judgment at para. 134). Section 9.2 of National Policy 48 required auditors to use the same auditing standards referred to in BC Securities Commission Policy NIN 96/37, which governed the auditors' report in this case.
[119] Thus, in both this case and Danier Leather, the auditors' report stated: "Our examination was made in accordance with the applicable Auditing Guideline issued by The Canadian Institute of Chartered Accountants", as required by the applicable securities disclosure requirements. The representations and description of the assumptions, and in this case, the hypotheses, reflected the definitions in the CICA Handbook.
[120] I find no difference in substance or principle between the disclosure of FOFI in this case and in Danier Leather, and no basis on which to distinguish the finding of the Supreme Court of Canada that, on those facts, there was a representation of objective reasonableness, and that it extended to "facts" and "information" on which the forecast or projection was based.
Material False Statement - Developers' Appeal
[121] Section 59(1)(b) of the Real Estate Act provided that: "[i]f any material false representation is contained in the prospectus", developers and their directors were "liable to make compensation" to all purchasers "for any loss or damage those persons may have sustained", unless one of six defences was proven. The defences relevant to this appeal are: (viii) a reasonable belief that the statement is true, and (ix) the statement was made on the authority of an expert.
[122] The Developers made five arguments in their factum with respect to their appeal from the finding that the Impugned Note was a "material false statement":
(a) the conclusion that Exhibit M (including Exhibits A, B and C thereto) to the [Disclosure Statement] was part of the prospectus, for the purposes of the statutory cause of action pursuant to s. 59 of the Act;
(b) the conclusion that the Impugned Note was a statement within the meaning of s. 59 of the Act;
(c) the conclusion that the Impugned Note described the penetration results calculated by HVS and was thus a false statement;
(d) the conclusion that the Impugned Note was material;
(e) the failure to apply the defences in ss. 59(1)(b)(viii) and (ix).
[123] At the hearing, counsel for the Developers focused his argument on (c). He argued that the trial judge misinterpreted the meaning of the Impugned Note.
[124] It is apparent, however, that the Impugned Note was false. The projected hotel occupancy rates for the Westin Grand were not equal to any known "expected average occupancy rates" of any known set of "downtown Vancouver hotels of similar quality", and the projected occupancy rates for 1999 and 2000 were not 92.5% and 97.5% of any known "average".
[125] The other grounds of appeal are without merit, and I will not deal with them in any detail.
[126] The trial judge made no error in interpreting the relevant provisions of the Real Estate Act (at paras. 146-149), and the Disclosure Statement, in concluding that s. 59 applied to all of the Disclosure Statement, including the Exhibits. The Disclosure Statement stated on the first page: "The Exhibits attached hereto are deemed to be included in, and form an integral part of, this Disclosure Statement."
[127] Nor was there any error in concluding that the Impugned Note was a "statement" for the purpose of s. 59 of the Real Estate Act (at paras. 152-153). It was not, in itself, a projection or forecast (although it was included in the Projections, as defined by the trial judge as all of Exhibit M, including Exhibits A, B and C). It was a statement of comparison and percentages of projected occupancy rates in the relevant years.
[128] The Developers do not argue that the trial judge applied a wrong principle in determining that the Impugned Note was "material". He applied the standard of materiality articulated in Inmet Mining Corp. v. Homestake Canada Inc., 2003 BCCA 610 at paras. 25-26, 24 B.C.L.R. (4th) 1, and approved in Sharbern Holding Inc. v. Vancouver Airport Centre Ltd., 2006 BCCA 96 at para. 18, 52 B.C.L.R. (4th) 144 [Sharbern BCCA 2006]: is there a substantial likelihood that the statement would have assumed actual significance in the deliberations of a reasonable investor? (at paras. 161-162). He concluded (at para. 163):
I have no doubt that a reasonable investor would have considered it very material to know that the occupancy rates for the Westin Grand for 1999-2003 were in fact all projected to be higher than the projected average occupancy rates for downtown Vancouver hotels of similar quality for those years.
[129] The Developers have not shown that the trial judge made any palpable and overriding error in drawing this inference from the circumstances surrounding the offer: see Sharbern BCCA 2006 at para. 25.
[130] The trial judge considered and rejected the Developers' claims to statutory defences under s. 59(1)(b)(viii) and (ix) of the Real Estate Act, on the basis that the Developers had no reasonable grounds to believe the statement was true, and the Impugned Note was not made on the authority of any expert (at paras. 159-160, 164).
[131] Given the fact that the projected hotel occupancy rates for the Westin Grand were not, on their face, 92.5% or 97.5% of any known average, there is no error in the trial judge's rejection of the Developers' claim that they reasonably believed them to be true. The facts also showed that the Impugned Note was not made on the authority of any expert: neither HVS nor OHR was involved, and the auditor drafted the Impugned Note based on material he received from the Developers.
[132] I would not accede to the Developers' ground of appeal.
Common Law Liability - Investors' Cross-Appeal
[133] The trial judge found no basis to find HVS breached its duty of care at common law in respect of the Impugned Note (at para. 208). The Investors abandoned their cross-appeal from this finding.
[134] The trial judge also concluded that the Developers and OHR did not breach their duty of care at common law in respect of the Impugned Note, based on his conclusion that the express representation of reasonableness in s. 1.4 of the Disclosure Statement did not extend to statements of fact, including the Impugned Note.
[135] The Investors appeal (by cross-appeal) from the trial judge's finding that the Developers and OHR did not make any negligent misrepresentation with respect to the Impugned Note.
Common Law Liability of the Developers
[136] The Developers expressly represented that the material facts disclosed in the Disclosure Statement were true, and impliedly represented that the facts and information in the Projection were objectively reasonable. The Impugned Note was an untrue statement of fact, and objectively unreasonable. Applying the principles from Cognos, the first three criteria for establishing liability for negligent misrepresentation are satisfied.
[137] There is no serious dispute that the Developers owed a duty of care to the Investors. As La Forest J. said in Hercules Managements. Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165 at para. 41:
a prima facie duty of care will arise on the part of a defendant in a negligent misrepresentation action when it can be said (a) that the defendant ought reasonably to have foreseen that the plaintiff would rely on his representation and (b) that reliance by the plaintiff, in the circumstances, would be reasonable.
[138] As previously explained, the representation of fact in the Impugned Note was patently false.
[139] The applicable standard of care of the Developers is aptly described in Cognos (at 121):
The applicable standard of care should be the one used in every negligence case, namely the universally accepted, albeit hypothetical, "reasonable person". The standard of care required by a person making representations is an objective one. It is a duty to exercise such reasonable care as the circumstances require to ensure that representations made are accurate and not misleading [citations omitted].
[140] The trial judge "assigned responsibility for this material false statement to the Developers and directors under s. 59 (s. 75)" (at para. 203). As the issuer of the Disclosure Statement, the Developers were responsible for the truth and objective reasonableness of all of the facts and information, including the assumptions and hypotheses, on which the Projection was based. Their evidence was that they had not specifically reviewed the Impugned Note before the Disclosure Statement was distributed to investors in the hotel. It was clear from their evidence that they did not understand it. It can only be concluded from this evidence that they did not exercise reasonable care to ensure that the representation of fact made in the Impugned Note was accurate and not misleading, or that it was objectively reasonable.
[141] I would accede to the Investors' cross-appeal on this ground, and order that the Developers breached their duty of care at common law in respect of the Impugned Note.
Common Law Liability of OHR
[142] OHR was not an issuer of the Disclosure Statement, and made no declarations about the truth of the representations of material facts. Its representations about the Projection are found in s. 1.4 and the accompanying Exhibits. The question on the cross-appeal is the scope of OHR's representations, and whether they extend to the truth of the Impugned Note.
[143] I find no reason to interfere with the trial judge's findings that the express representation of reasonableness in s. 1.4 did not extend to statements of fact, and that the Impugned Note was a statement of fact. Thus, the only basis on which OHR could be said to have breached its duty of care at common law is if it was negligent in impliedly representing that the Impugned Note was objectively reasonable.
OHR's Role in the Preparation of the Impugned Note
[144] OHR's position is that it had no involvement in the preparation of the Impugned Note, and no knowledge of its inclusion in the Disclosure Statement until after the Disclosure Statement had been filed. The trial judge's conclusions, after reviewing the evidence of the Developers, OHR and the auditor, essentially support OHR's view of the facts.
[145] The trial judge found that OHR "was content to have s. 1.4 represent that it prepared the Projection" (at para. 137). He summarized OHR's role in the preparation of the Projection (at paras. 138 and 142):
I conclude s. 1.4 is otherwise accurate in stating that the Projection has been prepared based on assumptions and hypotheses which reflect the course of action planned by the Developer and OHR given their judgment as to the most probable set of economic conditions, and the assumptions and hypotheses are considered reasonable by them. I believe OHR knew and accepted that this representation was being made in its name and was content with that as well.
...
While I am not satisfied that there is any direct evidence of actual knowledge of OHR that the notes would attribute the hypotheses and assumptions to it as well, I believe that it must have known this, or reasonably expected this, at least as far as it had contributed, because of the evidence of direct communications with Mr. Donnelly by both Mr. McAuley and Mr. Robert O'Neill, for the purpose of Mr. Donnelly's audit report.
[146] As to OHR's role in the preparation of the Impugned Note, the trial judge said (at para. 209):
On the evidence OHR had nothing personally to do with the preparation of Note 2(a). However s. 1.4 of the Disclosure Statement and the Notes to Financial Projection advised the investor that the assumptions and hypotheses were provided by OHR as well as the Developer and advised that the assumptions and hypotheses reflected the course of action planned by both given their judgment as to the most probable set of economic conditions, and were stated to be reasonable. OHR had knowledge of and accepted attribution to it of these statements. One assumption was at Note 2(a).
Duty and Standard of Care
[147] The question here is whether OHR owed the Investors a duty of care in respect of the Impugned Note, and if so, whether it breached the applicable standard of care.
[148] OHR impliedly represented that the Projection was objectively reasonable; however, it had no involvement in the preparation of the Impugned Note, nor knowledge of the inclusion of the Impugned Note in the Disclosure Statement.
[149] In my opinion, OHR had a duty of care to the Investors with respect to everything that was included in the Projection, including assumptions, hypotheses, facts, and information. It knew that the Investors would rely on its representation, and their reliance would be reasonable (Hercules Managements at para. 41).
[150] Turning to the applicable standard of care, OHR had a duty to exercise such reasonable care as the circumstances required to ensure that the implied representation that the Projection was objectively reasonable was accurate and not misleading (Cognos at 121). I am of the view that, in all the circumstances, OHR did not breach the standard of care by failing to detect the error in the Impugned Note. It was not the issuer of the Disclosure Statement, and did not retain the auditor to prepare his opinion or the Notes in Exhibit C to Exhibit M. Certainly it would have been prudent for Robert O'Neill to read the final Disclosure Statement, knowing that it would include a representation on OHR's behalf concerning the Projection, but there is no evidence from which to infer that it would have been reasonable for him to have discerned the error in the Impugned Note if he had read it. OHR had no obligation to "audit the auditor". As the trial judge found, OHR reasonably expected that the Notes in Exhibit C would attribute the hypotheses and assumptions to it, "at least as far as it had contributed" (at para. 142). I would not extend its legal liability any further.
[151] I would therefore not accede to the Investors' cross-appeal seeking an order that OHR made a negligent misrepresentation in respect of the Impugned Note.
Impugned Note - Summary and Conclusions
[152] The trial judge made no error in finding the Impugned Note was a "material false statement" under s. 59 of the Real Estate Act. He erred, however, in failing to find that they breached their duty of care at common law, for both their express representation that all material facts in the Disclosure Statement were true, and their implied representation that the facts and information in the Projection were objectively reasonable. I find that the Developers breached their duty of care to the Investors in respect of the Impugned Note.
[153] OHR also made an implied representation of objective reasonableness, and owed a duty of care to the Investors with respect to the Projection, including the facts and information included in it. It did not, however, breach the standard of care in failing to identify the misstatement in the Impugned Note. It had no obligation to "audit the auditor".
[154] Thus, on the grounds of appeal relating to the Impugned Note, I would not accede to the Developer's appeal, I would accede to the Investors' cross-appeal seeking an order that the Developers breached their duty of care to the Investors at common law with respect to the Impugned Note, and I would not accede to the Investors' cross-appeal seeking an order that OHR negligently misrepresented the reasonableness of the Impugned Note.
1998-1999 Issues
The 1999 Budget
[155] The trial judge found (at para. 762) that on December 4, 1998, the Developers accepted a 1999 operating budget for the hotel (the "1999 Budget") that showed a variance of 3.5% less than the "Projections". The 1999 Budget was disclosed to the investors for the first time the day after the closing of the Sale Agreements, on April 14, 1999. The trial judge found that the 1999 Budget was a "proposal" that should have been disclosed to the investors in an amendment to the Disclosure Statement at the time it was accepted by the Developers, and that by failing to disclose it, the Developers and their directors had made a false declaration in the Second Amendment (issued March 19, 1999) to the Disclosure Statement. An original purchaser after December 4, 1998 would be entitled to have the 1999 Budget disclosed before purchasing.
[156] The Developers and their directors appeal from this finding.
[157] Section 56 of the Real Estate Act required an amendment to the Disclosure Statement if a change occurred with regard to any of the matters set out in the disclosure statement:
(a) that would have the effect of rendering a statement in the [disclosure statement] false or misleading; or
(b) that brings into being a fact or proposal which should have been disclosed in the [disclosure statement] if the fact or proposal had existed at the time of the filing ...
[158] The trial judge's findings concerning the 1999 Budget are supported by the evidence. Once the Developers accepted it in December 1998, they "knew and expected that OHR Grand would put the 1999 Budget before the Investors at the presentation meeting on April 14, 1999" (at para. 762). It was open to the trial judge to find that it had then become a "proposal" or a "fact" that was required to be disclosed.
[159] I would not accede to this ground of appeal.
Operating Plan and Budget - Schedule D to the HMA
[160] The Disclosure Statement stated in s. 6.3 that each investor would be required to enter into "a hotel management and rental pool agreement with the Manager." Section 5.1 of the HMA, attached to the Disclosure Statement as Exhibit K, stated: "For the first Operating Year, the Operating Plan and Budget has been prepared by the Manager as set forth in Schedule D." Schedule D was the same as the "Projected Statement of Net Income" attached as Exhibit A (not including the last line, "Owner's share of net income, per $1,000 of projected value") to Exhibit M, the "Financial Forecast and Auditors' Report". Exhibit A actually set out projected net income for the first five years of operation of the hotel.
[161] The Sale Agreement required the investors to enter into the HMA in the form attached as Exhibit K to the Disclosure Statement. The Investors executed the HMA on April 13, 1999. The HMA executed by the Investors included the same Schedule D as was included in the 1996 Disclosure Statement. On April 14, 1999, OHR Grand made a presentation to the investors, which included information from the 1999 Budget.
[162] The trial judge found (at para. 814):
I do, however, consider that the delivery of Schedule D with the HMA to the Investors for execution in 1999, constituted a representation to them by both the Developer and OHR Grand that the first year Operating Plan and Budget remained the same as had been set out originally in Schedule D in 1996.
[163] The trial judge made no finding of liability for the representations. He said (at para. 819):
Whether Schedule D does constitute a misrepresentation of the actual first year Operating Plan and Budget remains to be determined however, as does any remedy for the Investors for any difference.
[164] The Developers and OHR appeal the finding that Schedule D attached to the HMA was a representation at the time of closing.
[165] I see no basis on which to conclude that by presenting the HMA for execution in the same form as was attached to the Disclosure Statement, OHR or OHR Grand made any representation that the Operating Plan and Budget would be as set out in Schedule D, which was the same as the document attached to the HMA attached to the Disclosure Statement as Exhibit K. The Investors were required to sign the HMA in that form. It could not have been unclear to anyone that Schedule D contained information dating from 1996 that had not been updated.
[166] Whether there was a breach of s. 5.1 of the HMA was not dealt with at this trial.
[167] I would accede to this ground of appeal.
OHR - OHR Grand
[168] The Developers issued the Second Amendment to the Disclosure Statement on March 19, 1999, disclosing that OHR Grand was substituted for OHR as the hotel manager. The trial judge concluded (at para. 828):
With the officers and directors being common to both I conclude that OHR Grand was under the complete control of OHR as its alter ego and OHR is responsible at law for any liability of OHR Grand.
[169] OHR and OHR Grand appeal this finding.
[170] This was a finding of fact, and OHR and OHR Grand have demonstrated no palpable and overriding error. However, the result of this appeal is that neither OHR nor OHR Grand have any liability to the Investors. To the extent that this finding may be relevant in future proceedings, particularly with respect to allegations of mismanagement, I would restrict the trial judge's finding to the issues dealt with at this trial, and direct that it will not be res judicata with respect to issues not dealt with.
Summary and Conclusions
[171] The trial judge erred in concluding that HVS' projected hotel occupancy rates were unreasonable. I would allow HVS' appeal, and the Developers and OHR's appeals from the order that they negligently misrepresented the reasonableness of the projected hotel occupancy rates.
[172] The trial judge did not err in finding that the Impugned Note was a "material false statement" for the purpose of s. 59 of the Real Estate Act. I would dismiss the Developers' appeal on this issue.
[173] The trial judge erred in finding that the attribution of a statement to HVS was a "material false statement". I would allow the Developers' appeal on this issue.
[174] The trial judge erred in failing to find that the Developers negligently misrepresented the accuracy and reasonableness of the Impugned Note. I would allow the Investors' cross-appeal on this issue, and order that the Developers had a duty of care and breached the standard of care with respect to the Impugned Note.
[175] The trial judge did not err in failing to find OHR breached its duty of care to the Investors in respect of the Impugned Note. I would dismiss the Investors' cross-appeal on this issue.
[176] The trial judge did not err in finding that the 1999 Budget was a "proposal" or "fact" about which an amendment to the Disclosure Statement should have been made. I would dismiss the Developers' appeal on this issue.
[177] The trial judge erred in finding that the Developers and OHR (or OHR Grand) had represented that the first year operating budget included in Schedule D to the HMA would be the same in 1999 as in 1996. I would allow the Developers and OHR's (and OHR Grand's) appeal on this issue.
[178] The trial judge did not err in finding that OHR Grand was the alter ego of OHR Grand, but that finding is restricted to the facts and issues dealt with at this trial. I would dismiss OHR's appeal on this issue.
[179] In the result, I would order as follows:
(a) In appeal and cross-appeal CA36475 (the Developers' appeal):
I would allow the Developers' appeal from the trial judge's order that:
(i) the Developers negligently misrepresented the reasonableness of the projected hotel occupancy rates;
(ii) the Developers made a material false statement with respect to the attribution of a statement to HVS;
(iii) the Developers made a representation that Schedule D of the HMA was the first year operating plan and budget.
I would dismiss the Developers' appeal from the trial judge's order that:
(iv) the Developers made a material false statement with respect to the Impugned Note;
(v) The Developers had an obligation to amend the Disclosure Statement to disclose the 1999 Budget.
I would allow the Investors' cross-appeal from the trial judge's finding that the Developers' had not made a negligent misrepresentation with respect to the Impugned Note, and order that the Developers had a duty of care and breached the standard of care with respect to the Impugned Note.
I would dismiss the Investors' cross-appeal from the trial judge's finding that the Developers did not make a material false statement with respect to the projected hotel occupancy rates.
(b) In appeal and cross-appeal CA36478 (OHR's appeal):
I would allow OHR's appeal from the trial judge's order that:
(i) OHR negligently misrepresented the reasonableness of the hotel occupancy rates;
(ii) OHR Grand made a representation that Schedule D of the HMA was the first year operating plan and budget.
I would dismiss OHR and OHR Grand's appeal from the trial judge's order that OHR Grand is the alter ego of OHR, on the facts and for the purpose of the issues raised at this trial.
I would dismiss the Investors' cross-appeal.
(c) In appeal CA36481 (HVS' appeal), I would allow the appeal.
"The Honourable Madam Justice Levine"
I Agree:
"The Honourable Mr. Justice Tysoe"
I Agree:
"The Honourable Madam Justice D. Smith"
Appendix A
Disclosure Statement dated November 8, 1996
Exhibit "M"
Financial Forecast and Auditors' Report including
Exhibits "A", "B", and "C"
APPENDIX B
DANIER LEATHER INC.
Prospectus dated May 6, 1998
Financial Forecast
| null | null | null | null | null | null | null |
See upstream license, including non-commercial use and other restrictions: https://perma.cc/EA5C-R5DK. Note: This is an unofficial reproduction of a British Columbia Court of Appeal decision, without endorsement or affiliation by the British Columbia courts.
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BCCA
|
2009 BCCA 399
|
Lougheed v. Wilson
| 2009-07-31T00:00:00
|
https://www.bccourts.ca/jdb-txt/CA/09/03/2009BCCA0399.htm
| 2026-01-18T07:48:24.409000
|
2009 BCCA Lougheed v. Wilson
COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Lougheed v. Wilson,
2009 BCCA 399
Date: 20090731
Docket: CA037108
Between:
William F. Lougheed, in his capacity as executor of the estate
of Norma Yvonne Lougheed, deceased, and William F. Lougheed, in his personal capacity, and Norbill Investments Ltd.
Respondents
(Plaintiffs)
And
Kelly Janine Wilson and Charles Blair Wilson
Respondents
(Defendants)
And
Mark Allan Marissen, Elaine O'Connor, Canwest Publishing Inc.
Publications Canwest Inc., and Steve Janke
Respondents
(Defendants by counterclaim)
And
Judeline Tyabji Wilson and
Tugboat Enterprises Ltd.
Appellants
(Defendants by counterclaim)
Before:
The Honourable Mr. Justice Chiasson
(In Chambers)
On appeal from: Supreme Court of British Columbia, April 17, 2009
(Lougheed v. Wilson, Vancouver Registry, S081334)
Oral Reasons for Judgment
Counsel for the Appellants:
T.A. Hakemi
Counsel for the Respondent, C.B. Wilson:
J.L. Straith
Place and Date of Hearing:
Vancouver, British Columbia
July 31, 2009
Place and Date of Judgment:
Vancouver, British Columbia
July 31, 2009
[1] CHIASSON J.A.: The defendants by counterclaim Ms. Tyabji Wilson ("Ms. Tyabji) and Tugboat Enterprises Ltd. apply for leave to appeal the dismissal of their application to have a counterclaim dismissed against them pursuant to Rule 18(6) of the Rules of Court and if leave be granted a stay of all discovery against them pending this Court's determination of the appeal.
[2] The counterclaim alleges Ms. Tyabji authored or published material that defamed Mr. Wilson, who then was a sitting member of Parliament. He asserts Tugboat participated in the publication and was paid by his father-in-law, Mr. Lougheed, to do so. Mr. Wilson also advances a claim under s. 114 of the Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2.
[3] The applicants assert the focus of Mr. Wilson's claim is an anonymous October 24, 2007 letter to the Commissioner of Canadian Elections.
[4] The criteria for granting leave to appeal were stated in Goldman, Sachs & Co. v. Sessions, 2000 BCCA 326:
[10] The criteria for leave to appeal are well known. As stated in Power Consolidated (China) Pulp Inc. v. B.C. Resources Investment Corp. (1988), 19 C.P.C. (3d) 396 (C.A.) they include:
[1] whether the point on appeal is of significance to the practice;
[2] whether the point raised is of significance to the action itself;
[3] whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and
[4] whether the appeal will unduly hinder the progress of the action.
[5] I reproduce the reasons of the chambers judge, which are short:
[1] THE COURT: (Oral) This is an application pursuant to Rule 18(6) by Judeline Tyabji Wilson, hereafter "Tyabji", and Tugboat Enterprises Ltd., hereafter "Tugboat", that the claim against them by Charles Blair Wilson be dismissed.
[2] Hornbook law applicable to applications such as this under Rule 18(6) include the propositions that on an 18(6) application questions of law are not to be decided; matters of fact cannot be weighed; inferences from the facts must be viewed in the light most favourable to the respondent to the 18(6) application; and - no, the Operation Dismantle Inc. v. the Queen, [1985] 1 S.C.R. 441 gloss has not been forgotten - material facts as asserted in the counterclaim must be taken as true.
[3] The case came before me on a chamber referral this afternoon. But the chamber's brief was brought to me at noon or shortly thereafter. And from 12:15 to 2 p.m. or 10 minutes to, I sat in my office and focused on the application, the written submissions and what actually matters here in light of the fact that this is an 18(6) application. This afternoon I listened to the oral submission of counsel for the applicants. It is no criticism of counsel to say that nothing in the oral submission was new or fresh in any way material to what I should do with the narrow application that is before me today. After preparing these reasons, and upon my return to the courtroom, I told counsel for the respondents that I need not hear from him.
[4] I begin with the 18(6) application insofar as it relates to Tyabji.
[5] The less said the better at this stage of the litigation, but I do say that the 18(6) application comes a cropper because of at least the following: (A) The role, if any, of Tyabji in connection with the preparation and/or distribution of an anonymous letter is crucial to Charles Wilson's case and as to that I read sufficient to conclude that the weighing of evidence would lie at the heart of any ruling on this point in favour of Tyabji. Interestingly, the submission of counsel for the applicant on this 18(6) application often contained these words or their functional equivalent in connection with a point of evidence proffered by the other side: "Strongly suggests" or "strongly implies." That kind of thinking, analysis - whatever you wish to call it - is for a trier of fact. And today I am not a trier of fact. (B) A fallback position taken by Tyabji involves issues that circle in and about the existence of, and the loss of, privilege within the context of the tort of libel. Apart from all else, the law with respect to qualified privilege - and the effect of malice which is alleged here - demands nuanced findings of fact and a recognition that for the purposes of legal analysis when malice will be inferred is a shifting body of case law. The case of Haight-Smith comes to mind, a decision of our Court of Appeal a few years ago. [2002 BCCA 132] Counsel can find it if they wish to see it. (C) As to the Business Practices and Consumer Protection Act allegations, here the applicant says in effect that there are insufficient allegations on the face of the pleadings. In this day and age of easy amendment of pleadings in ordinary cases in light of the evidence that has been heard at trial - and, yes, that is backwards but that is the way it is - it would be wrong to even consider wiping out the claim against Tyabji under s. 11 of the Act at this stage of the litigation.
[6] I turn to the applicant, Tugboat.
[7] The applicant's submission that if the claim against Tyabji is dismissed so should the claim against Tugboat be dismissed is now obviously otiose. I move to additional points made by the applicant in connection with Tugboat.
[8] The action in libel against Tugboat rests on whatever findings of fact are made about the relationship, if any, between Tyabji, the company and a number of people, and Rule 18(6) is not the vehicle for resolving such issues. As a subset of that, what actually lay behind an acknowledged transfer of funds is towards the heart of the claim and is, to put it mild, hotly disputed. At the risk of repetition, I say that 18(6) is the opposite of the appropriate vehicle for resolving this.
[9] In addition, the claim may be in libel with the heightened need for precise pleading that that entails, but the fact is that the need to plead material facts does not convert, even in a case like this, to a need to touch down on what amounts to possible points of evidence. And in my respectful opinion, although Tugboat does not phrase it that way, that is what the 18(6) application, insofar as it rests on assertions that there are holes in the pleadings, rests. To me the applicant's reliance on Craig v. Langley Citizens' Coalition, 2003 BCSC 124 here and elsewhere in what I have heard this afternoon in connection with an attack on the pleadings, was not apt. What was afoot in that case was an application for particulars, a wholly different thing from what confronts me this afternoon; and as for the statements at paragraph 15 and 16 of that case I say this: they are case specific and statements made within the context of the application that was then before the judge and the law applicable to that discrete application.
[10] In summary, I say that I have considered the whole of the application and the submissions made to me in writing and orally and having considered the whole of it, and said only what I choose to say as above, the application under Rule 18(6) is dismissed in its entirety.
[11] With respect to costs, on the face of it Rule 57(12)(b) says that costs are in the cause to the respondents to the application. Is there any submission with respect to that? That will be the order.
[6] The applicants advance a number of issues:
(a) Did the Learned Chambers Judge err in failing to grant the application for summary judgment under Rule 18(6) of the defamation claims given that, among other things: (i) a heightened pleading standard applies to defamation claims; (ii) speculative pleadings are not entitled to the presumption of truth; and (iii) the Counterclaimant failed to submit any facts contradicting the affidavit of Tyabji categorically denying the speculation that she prepared the Anonymous Letter?
(b) Did the Learned Chambers Judge err in failing to grant the application for summary judgment under Rule 18(6) of the defamation claims because even if the speculative and refuted allegations of the Counterclaim were assumed to be true, they would give rise to a qualified privilege that bars the defamation claim?
(c) Did the Learned Chambers Judge err in failing to grant the application for summary judgment under Rule 18(6) of the claim against Tyabji pursuant to s. 114 of the Business Practices and Consumer Protection Act on the ground that the pleading could be amended?
(d) Did the Learned Chambers Judge err in failing to grant the application for summary judgment under Rule 18(6) of the claim against Tugboat given that undisputed evidence shows that: (i) Tugboat is not the alter ego of Tyabji; and (ii) the transfer of money from Norbill to Tugboat was an investment and unrelated to the Counterclaimant.
[7] While agreeing with the judge's observation that Craig v. Langley, 2003 BCSC 124, concerned an application for particulars and was not a Rule 18(6) application, the applicants assert that the case confirms the general proposition that pleadings in a libel action must be precise and not vague. They contend this Court should confirm that this general proposition is applicable on a Rule 18(6) application and assert that this is a point of significance to the practice.
[8] The applicants submit the issue is important to the action because if they were correct and their Rule 18(6) application were successful they no longer would be obliged to participate in the action.
[9] The applicants contend the appeal is meritorious.
[10] Ms. Tyabji deposed she had nothing to do with the letter. Mr. Wilson states he believes she was the author or was involved in its distribution.
[11] The applicants assert that although the pleadings are taken to be true on a Rule 18(6) application, the judge's assertion it was necessary to weigh evidence was based on his failure to recognize that pleadings in a libel action must be precise and not vague. Mr. Wilson filed an affidavit, but it merely confirmed the vague assertions in the counterclaim. There was no "evidence" from Mr. Wilson that could be weighed.
[12] The applicants refer to the text of the letter and state that on its face it was written by a group.
[13] The respondent contends the case against the applicants is circumstantial and that the affidavit of Mr. Wilson contains sufficient detail to support his belief.
[14] Alternatively, the applicants contend that if Ms. Tyabji did author or distribute the October 2007 letter she is protected by qualified privilege. They refer to the text of the letter and the fact it was written to an authority charged with looking into irregularities in the election process. The respondent challenges this proposition. The judge stated that the law, particularly with respect to malice, "demands nuanced findings of fact" and that there is a "shifting body of case law" concerning when malice will be inferred.
[15] I gleaned that the statutory cause of action is based on the theory the applicants assisted Mr. Lougheed to collect a debt he alleged was owed to his wife's estate by Mr. Wilson and his wife. The applicants state if this is the theory, the material facts to support it were not pleaded.
[16] The judge refused to dismiss the statutory claim on the basis the pleadings could be amended.
[17] Rule 18(6) is an important provision that enables a defendant to avoid litigation by establishing the case alleged has no merit in whole or in part. In my view, regardless of the outcome of an appeal, this case may provide a division of this Court with an opportunity to provide guidance concerning the role of pleadings and evidence on a Rule 18(6) application and the extent to which the possibility of amending pleadings should play a part on such an application.
[18] I make no comment on the merits of the appeal save to state I do not consider it to be frivolous or without merit.
[19] Leave to appeal is granted.
[20] The applicants request a stay of oral and document discovery. The respondent seeks discovery of documents and is content to defer oral discovery. The applicants state that an objective of Rule 18(6) is to spare a party from the need to give discovery. The trial of this action is scheduled for October 2010.
[21] In a Notice to the Profession entitled "Expediting Interlocutory Appeals", the professions was advised:
... when granting leave, the chambers judge will give directions and set time limits for the filing of appeal books (the order may be that the motion book stand as the appeal book), set dates for the filing of the factums, and, if possible, set the hearing date for the appeal. The time allotted for hearing interlocutory appeals will ordinarily be set at no more than 1/2 day.
[22] I am advised the following dates are available for a one-half day appeal: September 29, October 7, 8, November 13, 16, 20, 27, or 30, 2009. In these circumstances, I do not think the granting of leave to appeal imperils the October 2010 scheduled trial date.
[23] I wish to hear from the parties with respect to the dates for a hearing in this Court and with respect to the treatment of the materials presently before me as materials to be used on the hearing of the appeal.
(discussion with counsel)
[24] After discussion with counsel, I direct that the Motion Book, Reply and Chambers Record stand as the material for the appeal and that the appeal be heard on November 16, 2009.
[25] In these circumstances, I order that all discovery of the applicants be stayed pending this Court's determination of the appeal. I remind the applicants that they are obliged to preserve all documents, hard copy and electronic, pending the determination of the counterclaim.
"The Honourable Mr. Justice Chiasson"
| null | null | null | null | null | null | null |
See upstream license, including non-commercial use and other restrictions: https://perma.cc/EA5C-R5DK. Note: This is an unofficial reproduction of a British Columbia Court of Appeal decision, without endorsement or affiliation by the British Columbia courts.
|
|
BCCA
|
2009 BCCA 393
|
Doucette v. McInnes
| 2009-09-15T00:00:00
|
https://www.bccourts.ca/jdb-txt/CA/09/03/2009BCCA0393.htm
| 2026-01-18T07:46:39.296000
| "\n2009 BCCA 393 Doucette v. McInnes\nCOURT OF APPEAL FOR BRITISH COLUMBIA\nCitation:\nDoucette v. M(...TRUNCATED)
| null | null | null | null | null | null | null | "See upstream license, including non-commercial use and other restrictions: https://perma.cc/EA5C-R5(...TRUNCATED)
|
|
BCCA
|
2009 BCCA 392
|
Crookes v. Newton
| 2009-09-15T00:00:00
|
https://www.bccourts.ca/jdb-txt/CA/09/03/2009BCCA0392err1.htm
| 2026-01-18T07:46:37.444000
| "\n2009 BCCA 392 Crookes v. Newton\nCOURT OF APPEAL FOR BRITISH COLUMBIA\nCitation:\nCrookes v. Newt(...TRUNCATED)
| null | null | null | null | null | null | null | "See upstream license, including non-commercial use and other restrictions: https://perma.cc/EA5C-R5(...TRUNCATED)
|
|
BCCA
|
2009 BCCA 391
|
Fairfield v. Canada (Ministry of Citizenship and Immigration)
| 2009-09-09T00:00:00
|
https://www.bccourts.ca/jdb-txt/CA/09/03/2009BCCA0391.htm
| 2026-01-18T07:47:05.835000
| "\n2009 BCCA 391 Fairfield v. Canada (Ministry of Citizenship and Immigration)\nCOURT OF APPEAL FOR (...TRUNCATED)
| null | null | null | null | null | null | null | "See upstream license, including non-commercial use and other restrictions: https://perma.cc/EA5C-R5(...TRUNCATED)
|
|
BCCA
|
2009 BCCA 390
|
R. v. Sharif
| 2009-09-11T00:00:00
|
https://www.bccourts.ca/jdb-txt/CA/09/03/2009BCCA0390cor1.htm
| 2026-01-18T07:46:57.006000
| "\n2009 BCCA 390 R. v. Sharif\nCOURT OF APPEAL FOR BRITISH COLUMBIA\nCitation:\nR. v. Sharif,\n2009 (...TRUNCATED)
| null | null | null | null | null | null | null | "See upstream license, including non-commercial use and other restrictions: https://perma.cc/EA5C-R5(...TRUNCATED)
|
|
BCCA
|
2009 BCCA 4
|
R. v. Wasfi
| 2009-01-09T00:00:00
|
https://www.bccourts.ca/jdb-txt/CA/09/00/2009BCCA0004.htm
| 2026-01-18T08:03:40.493000
| "\n2009 BCCA 4 R. v. Wasfi\nCOURT OF APPEAL FOR BRITISH COLUMBIA\nCitation:\nR. v. Wasfi,\n2009 BCCA(...TRUNCATED)
| null | null | null | null | null | null | null | "See upstream license, including non-commercial use and other restrictions: https://perma.cc/EA5C-R5(...TRUNCATED)
|
|
BCCA
|
2009 BCCA 39
|
British Columbia Teachers' Federation v. British Columbia Public School Employers' Assn.
| 2009-02-04T00:00:00
|
https://www.bccourts.ca/jdb-txt/CA/09/00/2009BCCA0039err1.htm
| 2026-01-18T08:01:15.660000
| "\n2009 BCCA 39 British Columbia Teachers' Federation v. British Columbia Public School Employers' A(...TRUNCATED)
| null | null | null | null | null | null | null | "See upstream license, including non-commercial use and other restrictions: https://perma.cc/EA5C-R5(...TRUNCATED)
|
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A2AJ Canadian Case Law
Last updated: 2026-02-01 Maintainer: Access to Algorithmic Justice (A2AJ)
Dataset Summary
The A2AJ Canadian Case Law dataset provides bulk, open-access full-text decisions from Canadian courts and tribunals. Each row corresponds to a single case and contains the English and French versions of the decision where both are publicly available. The project builds on an earlier version that was maintained by the Refugee Law Lab (RLL) and is now maintained by A2AJ, a research project co-hosted by York University's Osgoode Hall Law School and Toronto Metropolitan University's Lincoln Alexander School of Law. The dataset is intended to support empirical legal research, legal-tech prototyping, and language-model pre-training in the public interest—especially work that advances access to justice for marginalised and low-income communities.
Dataset Structure (~ 184k cases)
| Code | Court / Tribunal / Reporter | First document - Last document | Rows |
|---|---|---|---|
| SCC | Supreme Court of Canada | 1877-01-15 – 2026-01-30 | 10,865 |
| FCA | Federal Court of Appeal | 2001-02-01 – 2026-01-30 | 7,686 |
| FC | Federal Court | 2001-02-01 – 2026-01-30 | 35,003 |
| TCC | Tax Court of Canada | 2003-01-21 – 2026-01-29 | 8,002 |
| CMAC | Court Martial Appeal Court of Canada | 2001-01-19 – 2026-01-15 | 151 |
| CHRT | Canadian Human Rights Tribunal | 2003-01-10 – 2026-01-09 | 1,099 |
| SST | Social Security Tribunal of Canada | 2013-03-08 – 2025-12-30 | 17,212 |
| RPD | Refugee Protection Division (IRB) | 2002-07-16 – 2020-12-14 | 6,729 |
| RAD | Refugee Appeal Division (IRB) | 2013-02-19 – 2025-08-05 | 14,108 |
| RLLR | Refugee Law Lab Reporter (RPD, IRB) | 2019-01-07 – 2024-12-13 | 927 |
| BCCA | British Columbia Court of Appeal | 1999-01-04 – 2026-01-30 | 14,348 |
| BCSC | British Columbia Supreme Court | 2000-01-04 – 2026-01-29 | 50,526 |
| ONCA | Ontario Court of Appeal | 2007-01-02 – 2026-01-30 | 17,340 |
| YKCA | Yukon Court of Appeal | 2000-05-15 – 2026-01-19 | 269 |
Note: Counts are approximate and will drift as the dataset is updated.
Data Fields
| Field | Type | Description |
|---|---|---|
dataset |
string |
Abbreviation identifying the court/tribunal (see above) |
citation_en / citation_fr |
string |
Neutral citation in English / French |
citation2_en / citation2_fr |
string |
Secondary citation(s) where available |
name_en / name_fr |
string |
Style of cause |
document_date_en / document_date_fr |
datetime64[ns, UTC] |
Decision date |
url_en / url_fr |
string |
Source URL for the official online version |
scraped_timestamp_en / scraped_timestamp_fr |
datetime64[ns, UTC] |
Timestamp when the page was scraped |
unofficial_text_en / unofficial_text_fr |
string |
Full unofficial text of the decision |
upstream_license |
string |
License terms from the source court/tribunal |
Missing values are represented as empty strings ("") or NaN.
Data Languages
Where availble, rows include both English and French texts. Where only one language is published, the fields for the other language are empty.
Data Splits
All rows are provided in a single train split.
Data Loading
from datasets import load_dataset
import pandas as pd
# load decisions for a specific court / tribunal (e.g. Supreme Court of Canada)
cases = load_dataset("a2aj/canadian-case-law", data_dir = "SCC", split="train")
## ALTERNATIVELY
## load the entire corpus
# cases = load_dataset("a2aj/canadian-case-law", split="train")
# covert to df
df = cases.to_pandas()
df.head(5)
The dataset is also offered in Parquet format for fast local use. Files are in subfolders with the court/tribunal names.
Dataset Creation
Curation Rationale
Building on the RLL's earlier bulk-data programme, A2AJ is collecting and sharing Canadian legal data to:
- democratise access to Canadian jurisprudence;
- enable large-scale empirical legal studies; and
- support responsible AI development for the justice sector.
We scrape data only where we are permitted to do so by terms of service of websites that host the data. We also obtain some additional data directly from courts and tribunals.
Source Data & Normalisation
Cases are scraped directly from the official websites of the respective courts and tribunals, or is obtained directly from the tribunals through email or other distruction processes. Where possible, text is stored verbatim with minimal normalisation (e.g. HTML → plain text, whitespace cleanup).
Personal & Sensitive Information
Court and tribunal decisions can contain sensitive personal information. Although all documents are already public, easy bulk access increases privacy risk—particularly for refugees, criminal-justice-involved persons and other marginalised groups. Users who reproduce the data from this dataset are responsible for complying with relevant privacy laws, as well as other laws relating to disseminating information such as publication bans.
Non-Official Versions & Disclaimer
The texts here are unofficial copies. For authoritative versions, consult the URLs in url_en / url_fr.
Non-Affiliation / Endorsement
A2AJ and the production of this dataset are not affiliated with, nor endorsed by, the Government of Canada, provincial courts, or the listed tribunals.
Considerations for Using the Data
- Social Impact. Open legal data can reduce information asymmetries but also facilitate surveillance or discriminatory profiling. We encourage downstream users to collaborate with community organisations and ensure that derivative tools advance—rather than undermine—access to justice.
- Bias & Representativeness. Published decisions are not a random sample of disputes. For example, positive administrative decisions are less likely to be appealed and thus under-represented in court records. Models trained on this corpus may therefore skew negative.
- Limitations. The dataset excludes annexes, schedules and appendices that are sometimes attached as separate PDFs. Long historical gaps exist for some courts (e.g. ONCA pre-1990).
Licensing Information
The code used to create the dataset by the A2AJ and any work on the dataset undertaken by the A2AJ is subject to an open source MIT license.
Users must also comply with upstream licenses found in the upstream_license field in the dataset for each document, which reflects the licenses through which the A2AJ obtained the document. These upstream licenses may include limits on commercial use, as well as other limitations.
The A2AJ is committed to open source methodologies, and we are actively working to obtain more permissive licenses for this data.
Warranties / Representations
While we make best efforts to ensure the completeness and accuracy of the dataset, we provide no warranties regarding completeness or accuracy. The data were collected through automated processes and may contain errors. Always verify data against the official source.
Dataset Curators
- Sean Rehaag - Co-Diretor, A2AJ
- Simon Wallace - Co-Director, A2AJ
- Contact: a2aj@yorku.ca
Citation
Sean Rehaag & Simon Wallace, "A2AJ Canadian Case Law" (2025), online: Hugging Face Datasets https://huggingface.co/datasets/a2aj/canadian-case-law.
Acknowledgements
This research output is supported in part by funding from the Law Foundation of Ontario and the Social Scienes and Humanities Research Council of Canada, by in-kind compute from the Digital Research Alliance of Canada and by adminstrative support from the Centre for Refugee Studies, the Refugee Law Lab, and Osgoode Hall Law School. We also thank the Canadian judiciary and tribunal staff who publish decisions in open formats.
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