The Perils of Ignoring the Rules of Court


Failing to follow the obligations set out in the BC Supreme Court Rules can not only result in financial penalties, it can result in having your lawsuit outright dismissed before trial.  Reasons for judgement were released last week by the BC Supreme Court, New Westminster Registry, demonstrating this.
In last week’s case (Balaj v. Xiaogang) the Plaintiff was involved in a 2003 collision.  She sued for damages.  The Defendant admitted being at fault for the crash.  At times the Plaintiff had a lawyer, at others she was self represented.  In the course of the lawsuit plaintiff failed to discharge her disclosure obligations under the Rules of Court and further failed to obey court orders.
ICBC ultimately applied to have the claim dismissed before trial.  In granting the order and in further ordering that the Plaintiff pay costs Mr. Justice Brown provided the following reasons:

[34] Given the factual background in the case at bar, it is abundantly clear, beyond any doubt, that the defendants are entitled to an order dismissing the plaintiff’s action. The plaintiff has failed to comply with court orders on several occasions, has failed to produce relevant documentation upon numerous and repeated requests by the defendants, has failed to participate in examinations for discovery in good faith, and has failed to attend court appearances, such as the recent trial management conference. Moreover, it now appears the plaintiff will seek another adjournment in these proceedings after the date of September 30, 2011, in direct contravention of my Order dated August 11, 2011.

[35] With respect to want of prosecution, I find the length of the delay in these proceedings is inordinate. Nearly nine years have passed since the accident. I also find the delay, virtually all of which has been caused by the plaintiff, is inexcusable. I find the defendants have suffered serious prejudice due to the delay in these proceedings and, on balance, justice requires dismissal of the action.

[36] With respect to the plaintiff’s failure to comply with the Civil Rules, the onus is on the plaintiff to present a lawful excuse for her non-compliance. I find she has failed to present a lawful excuse that is worthy of acceptance.

[37] Finally, with respect to the plaintiff’s failure to comply with the direction of this Court, I also find the plaintiff has failed to present a lawful excuse for her repeated failure, either by refusal or through neglect, to comply with court orders, the most recent being my Order after the trial management conference on August 11, 2011.

[38] For these reasons, the plaintiff’s action will be dismissed under Rule 22-7 for want of prosecution, failure to comply with the Civil Rules, and failure to comply with the Order of this Court dated August 11, 2011. Although the dismissal of an action is a blunt tool that is to be used sparingly, I find the circumstances of the case at bar are such that this tool should be used. In my view, the application of Rule 22-7 in the circumstances furthers the object of the Civil Rules to “secure the just, speedy and inexpensive determination of every proceeding on its merits.”

Affidavits: A Reminder Not to Assume, Comment or Argue


Affidavits need to comply with the same rules that govern admissibility of evidence at trial.  Failure to do so can result in portions of affidavits being struck.   Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, demonstrating this.
In last month’s case (Haughian v. Jiwa) the Plaintiff was injured in a motor vehicle collision.  During a summary trial the Plaintiff introduced an affidavit from a witness who supported the Plaintiff’s version of events regarding the circumstances of the crash.  The affidavit, unfortunately, violated several evidentiary rules and the Defendant objected to its admission.  In striking portions of the affidavit the Court provided the following reasons:

[15] Rule 22-2(12) and 22-3(13) provides:

(12)      Subject to subrule (13), an affidavit must state only what a    person swearing or affirming the affidavit would be permitted to state in evidence at a trial.

(13)      An affidavit may contain statements as to the information and belief of the person swearing or affirming the affidavit, if

(a)        the source of the information and belief is given, and

(b)        the affidavit is made

(i)         in respect of an application that does not seek a final order, …

[16] As noted in Chamberlain v. Surrey School District # 36 (Surrey) (1998), 168 D.L.R. (4th) 222, 85 A.C.W.S. (3d) 72 (B.C.S.C.), by Saunders J. at para. 15:

[15]      The court has the power to strike inadmissible evidence from affidavits: Evans Forest Products Ltd. v. The Chief Forester of British Columbia (6 April 1995), Vancouver A943891 (B.C.S.C.) [summarized 54 A.C.W.S. (3d) 180].  In practical terms, when there is no time between the application to strike inadmissible evidence and the hearing of the lis, this means portions of filed affidavits are given no weight by the court.

[17] The witness was turning right onto Sunset Street.  He deposes the following in his affidavit (the bold portions are in dispute):

6.         At the time Mr. Jiwa turned left on to Sunset Street from Smith Avenue Southbound, I had been about to turn right onto Sunset Street from Smith Avenue Northbound.  Although I had the right of way to proceed onto Sunset Street, Mr. Jiwa was proceeding anyway so I braked and waited until it was safe to make my turn immediately after Mr. Jiwa made his turn.  Mr. Jiwa cut me off to make his turn and I am very confident that had I been continuing straight northbound on Smith Avenue instead of turning right onto Sunset Street, my vehicle would have been struck by Mr. Jiwa.

7.         I disagree with paragraph 11 of Mr. Jiwa’s affidavit.  It was very clear to me that Mr. Jiwa was in a hurry.  He was driving aggressively and too fast for the area.  He was driving dangerously immediately before the accident.

8.         When I turned onto Sunset Street at almost the same time as Mr. Jiwa, I immediately saw that Ms. Haughian’s vehicle was already in the process of parking.  I am certain that Ms. Haughian was not making a wide turn from the left lane at the time Mr. Jiwa struck her vehicle as Mr. Jiwa states at paragraph 12 of his affidavit.  I disagree that Mr. Jiwa was unable to stop before colliding with Mrs. Haughian’s car.  If Mr. Jiwa had not been speeding he had plenty of time to stop because I noticed the Plaintiff’s vehicle immediately upon turning onto Sunset Street and I was behind Mr. Jiwa.  Since I could see that Ms. Haughian was in the process of parking I cannot understand why Mr. Jiwa could not see that.

12.       After the accident, I gave my contact information to Ms. Haughian because I felt that Mr. Jiwa was absolutely the at fault driver.  Mr. Jiwa was driving too fast and could have avoided the accident.

13.       I provided a statement to ICBC on June 17, 2008. Attached hereto and marked as Exhibit “A” to this my affidavit is a true copy of the statement I provided to ICBC.  I do not have an unredacted copy of the statement.  I confirm that the contents of my June 17, 2008 statement to ICBC are true and accurately recount what I observed a the time of the accident.  I disagree only with: firstly that I observed the Haughian vehicle pulling in, and secondly that I referred to Mr. Jiwa as “Indo Canadian”.  As I did not sign the statement, I would have made those changes if I was asked to sign.

[18] The defendant seeks to have the bold portions struck as being hearsay, personal opinion, editorial commentary or argument rather than fact.

[19] The witness should have confined his evidence to facts.  He should not have added his descriptive opinions of those facts (see L.M.U. v. R.L.U., 2004 BCSC 95, at para. 40; Creber v. Franklin, 42 A.C.W.S. (3d) 231, at paras. 19-21).

[20] I agree that the portions of the affidavit that are in bold in paras. 6, 7 and 12 constitute personal assumptions, commentary and argument rather than fact.  However, I am not satisfied that the statements amount to hearsay, as alleged by the defendant.  Paragraph 8 is also struck for the same reasons with the exception of the first two sentences.  Given that the application to strike was concurrent with the hearing of this application, I place no weight on the portions noted when considering the issue of liability.

Want of Prosecution, Proportionality and the New Rules of Court

One of the overarching changes in the current Suprene Court Rules is the introduction of the principle of ‘proportionality’.  When any applicaiton is brought before the Court the presiding Judge or Master must consider this concept in applying the Supreme Court Rules.  Reasons for judgement were released last week by the BC Supreme Court, Chilliwack Registry, discussing this in the context of a dismissal application.
In last week’s case (Ellis v. Wiebe) the Plaintiff sued various Defendants for alleged misrepresentation in the course of a purchase and sale agreement relating to property.   The lawsuit started in 2004 and by 2011 still had not been resolved.
The Defendant Wiebe brought an application to dismiss the lawsuit for want of prosecution (failure to prosecute in a timely fashion).  Madam Justice Bruce held that while the delay in the prosecution was inordenate and inexcusable there was no prejudice and did not dismiss the claim for this reason.  The Court did, however, go on to dismiss the claim on it’s merits.  Prior to doing so the Court made the following findings with respect to the application of the proporitonality principle in want of prosecution applications:
[8] The parties do not dispute the test to be applied by the court in determining whether an action should be dismissed for want of prosecution. The test is concisely summarized in Shields v. Nishin Kanko Investments Ltd., 2008 BCSC 36 at para. 25, wherein Mr. Justice Parrett cites the comments of Scarth J. at para. 3 of March v. Tam, 2002 BCSC 1125:

… I conclude that the principles of law which govern the exercise of the Court’s discretion in the circumstances of this case may in summary form be stated as follows: The defendants must establish that there has been inordinate delay and that this delay is inexcusable. If those two factors are established a rebuttable presumption of prejudice arises and the onus shifts to the plaintiff to prove on a balance of probabilities that the defendants have not suffered prejudice or that on balance justice demands that the action not be dismissed.

[9] The authorities also consistently hold that the court must look to the objects of the Supreme Court Rules as these relate to the particular circumstances of the case to determine whether an action should be dismissed for want of prosecution….

[10] When the Supreme Court Rules were amended in July 2010, a new subsection was added to Rule 1-3 to further refine the meaning of “just, speedy and inexpensive determination”. Rule 1-3 (2) provides as follows:

(2)   Securing the just, speedy and inexpensive determination of a proceeding on its merits includes, so far as is practicable, conducting the proceeding in ways that are proportionate to

(a)      the amount involved in the proceeding,

(b)      the importance of the issues in dispute, and

(c)      the complexity of the proceeding.

[11] In my view, Rule 1-3 (2), in part, reflects the approach adopted by our Court of Appeal to the issue of dismissal for inordinate delay; that is, the facts of each case have a significant impact on the outcome of any particular application for dismissal based on want of prosecution. While the principles of law are relatively straightforward, it is the application of these principles to widely varied fact situations that is critical. As noted in Rhyolite Resources Inc. v. CanQuest Resource Corp., 1999 BCCA 36, at para. 16:

Cases vary so infinitely that it is not always easy to apply to one factual situation the decision in another very different factual situation. However, it is the task of the court to seek to apply in a rational fashion the principles that have been laid down in the decided cases, always bearing in mind that the facts in each case are going to have a significant influence on the actual outcome of the individual application. I believe, with respect, that this approach or principle can be found well expressed in a case that was cited to us, Lebon Construction Ltd. v. Wiebe (1995), 10 B.C.L.R. (3d) 102 (C.A.), a recent decision of this court. That was a builder’s lien case and in that class of case, one would expect a swifter pace to the action than might be the case of say a personal injury case where a very serious injury and the course of recovery of a plaintiff must be assessed over time. Although it is always desirable to move on promptly with litigation, the simple fact is that in certain cases the interests of justice demand a rather more stately and measured pace than would be proper with regard to another class of action. Although it is desirable that all cases proceed with reasonable promptitude, the key word is reasonable and the ultimate consideration must always be: what are the interests of justice?

Theft/Fire Loss Claims and ICBC "Examinations Under Oath"


If you purchase Theft of Fire Damage coverage from ICBC and need to take advantage of this insurance can ICBC force you to provide a statement under oath before processing your claim?  The answer is yes and reasons for judgement were released this week by the BC Supreme Court, Nelson Registry, dealing with this area of the law.
In this week’s case (Cort v. ICBC) the Plaintiff had fire insurance coverage with ICBC.  On September 18, 2010 his vehicle was destroyed by fire.  He asked ICBC to pay his loss but ICBC refused to respond until he provided them with an “Examination Under Oath“.  He refused to do so and sued ICBC.  ICBC brought an application for various pre-trial relief including an order to ‘stay‘ the lawsuit until the Examination Under Oath was provided.  Master Keighley granted this order finding that the lawsuit could not move ahead until this ‘investigative’ step took place.  In doing so the Court provided the following reasons:

[28] Sections 6 and 8 of the Prescribed Conditions to the Insurance (Vehicle) Regulation B.C. Reg. 156/2010 read as follows:

6(1)      If required by the insurer, the insured must, on the occurrence of loss or damage for which coverage is provided by this contract, deliver to the insurer within 90 days after the occurrence of the loss or damage a statutory declaration stating, to the best of the insured’s knowledge and belief, the place, time, cause and amount of the loss or damage, the interest of the insured and of all others in the vehicle, the encumbrances on the vehicle, all other insurance, whether valid or not, covering the vehicle and that the loss or damage did not occur through any wilful act or neglect, procurement, means or connivance of the insured.

(2)        An insured who has filed a statutory declaration must

(a)        on request of the insurer, submit to examination under oath,

(b)        produce for examination, at a reasonable time and place designated by the insurer, all documents in the insured’s possession or control relating to the loss or damage, and

(c)        permit copies of the documents to be made by the insurer.

8(1)      The insurer must pay the insurance money for which it is liable under this contract within 60 days after the proof of loss or statutory declaration has been received by it or, if an arbitration is conducted under section 177 of the Insurance (Vehicle) Regulation, within 15 days after the award is rendered.

(2)        The insured must not bring an action to recover the amount of a claim under this contract unless the requirements of conditions 4, 5 and 6 are complied with and until the amount of the loss has been ascertained by an arbitrator under section 177, by a judgment after trial of the issue or by written agreement between the insurer and the insured.

(3)        Every action or proceeding against the insurer in respect of loss or damage for which coverage is provided under this contract must be commenced within 2 years from the occurrence of the loss or damage.

[29] Accordingly, says ICBC, since the insured may not commence an action to recover the amount of his claim until he has, inter alia, submitted to an examination under oath, at the very least he should be enjoined from proceeding with the claim…

[32] ….The purpose of an EUO, on the other hand is investigative. The insured is contractually bound to co-operate with his insurer by submitting to an examination which may assist the insurer in determining its response to the claim. The insured may not, as a matter of contract, seek to attach conditions to his attendance.

[33] In the circumstances the contract claim will be stayed until the plaintiff has complied with the requirements of the Prescribed Conditions. In the event that the parties cannot resolve the issue of compliance by agreement, they will have liberty to apply.

This case is also worth reviewing for the Court’s discussion of transfer of claims to Small Claims Court under section 15 of the Supreme Court Act and further the severance of bad faith claims from breach of contract claims pursuant to Rule 22-5(6) and 12-5(67) of the Supreme Court Rules.

Affidavits and Exhibits: Take Care To Review the Whole of the Evidence


Once evidence is introduced at trial it is fair game for the finder of fact to rely on it even if the party that introduced it opposes this result.  Useful reasons for judgement were released this week by the BC Supreme Court, Kelowna Registry, illustrating this fact.
In this week’s case (Chow-Hidasi v. Hidasi) the Plaintiff was injured in a single vehicle accident.  She was a passenger and sued the driver claiming he was at fault for losing control for “overdriving the road conditions“.  The Defendant argued that he lost control because he experienced a sudden and unexpected mechanical failure and could not avoid the collision.  Ultimately this explanation was accepted and the Plaintiff’s lawsuit was dismissed.  Prior to reaching this conclusion the Court ruled on an interesting evidentiary issue.
The trial was a “summary trial” under Rule 9-7 in which the evidence is introduced through affidavits.  The Plaintiff’s lawyer’s legal assistant attached portions of the Defendant’s examination for discovery transcript as an exhibit to her affidavit.
The Plaintiff wished to only rely on portions of the reproduced transcript.  The Defendant decided to take advantage of other portions of his discovery evidence which was included in the affidavit.  The Plaintiff objected arguing that he introduced the evidence and only wished to rely on limited portions of it.  Mr. Justice Barrow rejected this argument finding once the evidence was introduced through the affidavit it was fair game for the defendant to rely on it.  The Court provided the following insightful reasons:

[6] The plaintiff objected to the admissibility of some of the examination for discovery evidence of Mr. Hidasi, evidence that Mr. Hidasi points to in support of his position. All of the impugned discovery evidence is exhibited to an affidavit of the plaintiff’s counsel’s legal assistant. As I understand the objection, it is that the questions in dispute were reproduced and exhibited to the legal assistant’s affidavit because they appear on pages of the transcript that contain other questions and answers which the plaintiff wishes to rely on. I pause to note that while that may be so, the affidavit itself does not contain a statement to that effect. On the first day of the hearing the plaintiff’s counsel provided the defendant with a list of specific discovery questions that he wished to rely on. The questions and answers to which objection is taken are not on that list.

[7] I am satisfied that the questions and answers are admissible, and that no prejudice inures to the plaintiff as a result. They are admissible because the plaintiff put them in evidence. As to the notice of the specific questions and answers the plaintiff wished to rely on, it does not alter of the foregoing. If it was intended to be a notice as contemplated by Rule 9-7(9), it was not filed within the time limited under Rule 8-1(8). It is therefore of no moment. As to the question of prejudice, the only reasonable inference to be drawn from the plaintiff’s notice of application is that the impugned evidence formed part of the plaintiff’s case. The defendant could have addressed the matters about which he gave evidence on discovery in his affidavit evidence. He may not have, I infer, because he concluded it was unnecessary given that the plaintiff had already put those matters into evidence. In any event, if the discovery evidence is excluded, fairness would require an adjournment to allow the defendant to supplement the evidence given the changed face of the evidentiary record he had reasonably thought would form the basis for the hearing. All that would have been accomplished in the result is that the evidence that is contained in the discovery answers would be before the court in the form of an affidavit.

This case is also worth reviewing for the Court’s discussion of the legal principle of ‘spoiliation’ at paragraphs 30-33 of the reasons for judgement.

Can Lawyers Swear Affidavits In Support of Their Clients Interlocutory Applications?


In British Columbia the short answer is yes.  Useful reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, addressing this topic at length.
In last week’s case (The Los Angeles Salad Company Inc. v. Canadian Food Inspection Agency) the Plaintiff’s lawyer filed an affidavit in support of two applications of the Plaintiff.  The Defendant objected to this arguing that it was an improper practice and breached the principles set out in the Canadian Bar Association’s Code of Professional Conduct and the BC Professional Conduct Handbook.  Mr. Justice Harris disagreed and provided the following helpful reasons:

[15] No authority was cited to me in that establishes a binding general rule that solicitors cannot not swear affidavits in interlocutory proceedings in which they or their firm are counsel. To the contrary, even the professional guidelines support such a practice within limits. The case law also indicates that counsel is legally competent to swear an affidavit, even in relation to matters in dispute, although that practice is to be discouraged: see, National Financial Services Corporation v. Wolverton Securities Ltd. (1998), 52 B.C.L.R. 302 (S.C.) at para. 7.

[16] The Canadian Bar Association Code of Professional Conduct qualifies its statement of principle about lawyers swearing affidavits by referring to local rules or practice authorizing lawyers to do so. In British Columbia it is the practice for counsel to swear affidavits, on occasion, particularly in respect to uncontroverted matters or matters relevant to the interlocutory issue before court. The practice obviously carries risks, not least that a solicitor may be cross-examined on the affidavit, waive privilege or may succeed inadvertently in putting his or her credibility in issue. There are many good reasons for counsel to take great care in swearing affidavits in cases in which they are counsel.

[17] Nonetheless, there are occasions when the use of counsel affidavits is justified as a matter of practice. Sometimes, at least in respect of interlocutory matters, the evidence of counsel may be the best evidence available. It may often be economical and timely to have counsel swear an affidavit in support of interlocutory application. Introducing a legal rule that upset this practice would defeat the object of the Supreme Court Civil Rules to secure the just, speedy and inexpensive determination of every proceeding on its merits including conducting the proceeding in ways proportionate to the amount involved in the proceeding, the importance of the issues in dispute and the complexity of the proceeding.

[18] Equally, the fact that the affidavit contains some evidence on information and belief provided to the affiant by Mr. Sanderson who then commissioned the affidavit and argued the matter in court does not in itself compel the conclusion that the affidavit is inadmissible. I was not taken to any particular examples of information provided by Mr. Sanderson that gave rise to a concern that counsel were merely attempting to circumvent the professional guideline that counsel should not speak to their own affidavits, particularly if the subject matter is contentious.

[19] In my view, it would be a mistake to recognize or create a special rule requiring the rejection of affidavits sworn by counsel if those affidavits contain both admissible and inadmissible evidence. Insofar as admissibility is concerned, solicitors’ affidavits are governed by the same rules as any other affidavit. Inadmissible content may be ignored or formally struck, but the affidavit as a whole need not be rejected.

You're Fired! Changing Lawyers During a BC Supreme Court Lawsuit

(photo taken by  Gage Skidmore)
As previously discussed, sometimes lawyers and clients have irreparable differences and it’s necessary to move on either by getting a new lawyer or representing yourself.  Reasons for judgement were released this week by the BC Supreme Court, Vernon Registry, discussing the different formal steps that could be taken under the Rules of Court  during an active lawsuit when a client and a lawyer have a parting of ways.
In this week’s case (Sandhu v. Household Reality Corporation Limited) the Plaintiffs and their lawyer had a falling out in the course of a lawsuit.  An application was brought to declare that the lawyers were no longer the “lawyers of record for the plaintiffs“.  In granting the application Mr. Justice Barrow provided the following concise and useful summary of the application of the Rules of Court when a fracture in the lawyer/client relationship occurs during an active BC Supreme Court lawsuit:

[7] The Rules of Court set out what amounts to a code governing how lawyers may cease to be the lawyer of record and their office the address for delivery in an action. There are essentially three ways that can be accomplished. The first and most common way is by the client filing a notice of intention to act in person or hiring another lawyer who files a notice of change of lawyer, the second is by the retiring lawyer filing a notice of intention to withdraw, and the third is by court order. The second method is intended to avoid an unnecessary court application in circumstances where, for one reason or another, the lawyer-client relationship has fractured but the client has not retained another lawyer or filed a notice of intention to act in person. It has the effect of putting the onus on the client to either object to the lawyer’s withdrawal or acquiesce in that result, in which case the address for delivery becomes the client’s address as set out in the notice.

[8] In addition to providing the method for changing lawyers, the rule operates such that the party whose lawyer is retiring will always have an address for delivery so that opposing parties, who have no interest in becoming embroiled in disputes that have nothing to do with them, are able to proceed with the litigation. That is the regime. It is set out in Rule 22-6. In the vast majority of cases, it works well. Mr. Merchant ignored this regime in this case.

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ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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