



COURT 
    OF APPEAL FOR BRITISH COLUMBIA




Citation:


Kamloops 
          Square Mgmt. Ltd. v. Baron,







2006 
          BCCA 37



Date: 20060127





Docket: CA032304

Between:

Kamloops 
    Square Management Ltd.

Respondent

(
Plaintiff
)

And

Roy 
    Baron

Appellant

(
Defendant
)

And

Blair 
    Curtis and Anita Perazich

Defendants












Before:


The 
          Honourable Madam Justice Prowse




The 
          Honourable Mr. Justice Donald




The 
          Honourable Madam Justice Saunders










J.B. 
          Carter


Counsel for the Appellant




D.A. 
          Carroll


Counsel for the Respondent




Place 
          and Date of Hearing:


Kamloops, British Columbia




September 21, 2005




Place 
          and Date of Judgment:


Vancouver, British Columbia




January 27, 2006








Written 
          Reasons by
:




The 
          Honourable Madam Justice Saunders




Concurred 
          in by:




The 
          Honourable Madam Justice Prowse

The 
          Honourable Mr. Justice Donald





Reasons for Judgment of the Honourable Madam Justice 
    Saunders:

[1]

Mr. Baron appeals from the order made September 2, 2004, that he pay 
    to Kamloops Square Management Ltd. the sum of $160,000 as damages under a 
    commercial lease.  Judgment in the same amount was given against the co-defendant 
    Mr. Curtis, who did not defend the case and has not filed a notice of appeal.  
    Judgment was not taken against the third defendant for the stated reason that 
    she was then a bankrupt.

[2]

The trial judge laboured under several difficulties.  First, as I have 
    stated, the defendant Mr. Curtis against whom judgment was taken did not defend 
    the action.  Second, the trial judge did not have the assistance of counsel 
    for Mr. Baron.  Third, the original lease was not tendered in evidence.  Fourth, 
    a key witness, one Mr. Chalmers who was agent for the lessor, by reason of 
    a medical problem had lost all recollection of the critical events.  Facing 
    those limitations, the trial judge reached the conclusion that judgment should 
    go in favour of the plaintiff for $160,000.  With the benefit of counsel for 
    Mr. Baron on this appeal, I have come to a different conclusion and would 
    order that the matter be remitted to the trial court for an assessment of 
    damages, for the reasons that follow.

[3]

Mr. Baron admitted in his testimony that he was one of three lessees 
    of about 8,000 sq. ft. of retail commercial space in Kamloops, British Columbia. 
    The other two lessees, he said, were Mr. Friesen Jr. who was the son-in-law 
    of the principal of the lessor, and Ms. Perazich.   Kamloops Square Management 
    Ltd. was the lessor.   Mr. Baron testified that he did not have the original 
    or a copy of the lease, and the lessor was only able to tender in evidence 
    a document described by the learned trial judge as "a purported copy 
    of the lease".  This document, which set out a term of five years, displayed 
    black lines through the names of Mr. Friesen Jr. and the name of the defendant 
    Mr. Curtis was inserted.  Black lines also obliterated all of clause 9.  Adjacent 
    to the substitution, was the signature and initials of both Mr. Friesen and 
    Mr. Chalmers, but not of the other two lessees.  The document also displayed 
    initials of, apparently, the three original lessees and Mr. Chalmers opposite 
    all amendments to the original typewritten text except for the black lines 
    through clause 9, against which there were no initials.   Mr. Chalmers, for 
    lack of memory, was unable to assist the court with an explanation of the 
    events that led to the document, or to explain the whereabouts of the original 
    lease.

[4]

The statement of claim joined the appellant Mr. Baron, Mr. Curtis and 
    Ms. Perazich.  Paragraph 5 of the Second Further Amended Statement of Claim 
    pleaded:

5.         
    The Plaintiff and each of the Defendants, Baron, Curtis & Perazich, entered 
    into a written lease agreement (the Lease) with the Plaintiff as the Landlord 
    and each of the Defendants as the Tenant, which Lease was for that portion 
    of . . .





[5]

Only Mr. Baron filed a statement of defence.  He pleaded:

2.         Baron denies the allegation contained in paragraph 5 of the 
    Statement of Claim and amendments thereto and says that the Plaintiff and 
    Roy Baron, Thane Friesen Jr. and Anita Perazich entered into a lease agreement 
    with the Plaintiff, as landlord, and Roy Baron, Thane Friesen Jr. and Anita 
    Perazich, as tenant.

3.         Baron states that it was a condition precedent to his signature 
    on the Lease that Thane Friesen Jr. also be a signatory to the Lease as a 
    lessee.



5.         Baron states that at a date unknown to him the said lease was 
    altered without his knowledge or consent and the name "Thane Friesen 
    Jr." was blacked out on the first page of the lease agreement and the 
    name "Blair Curtis" was inserted by hand.

6.         Baron was aware that Blair Curtis had become a party to the 
    lease but believed at all times material hereto that Thane Friesen Jr. remained 
    a party to the lease.



8.         At all times material hereto, prior to the commencement of 
    the within action, Baron relied on the fact that Thane Friesen Jr. was a party 
    to the Lease Agreement and that his removal from the Lease at the instance 
    of the Landlord without the prior consent of Baron, seriously prejudices Baron 
    and voids the Lease dated July 1, 1996.

[6]

In reply, Kamloops Square pleaded:

1.         In reply to paragraphs 2 and 3 of the Amended Statement of 
    Defence of the Defendant Roy Baron, the Plaintiff admits that the Plaintiff 
    and Roy Baron, Thane Friesen Jr. and Anita Perazich executed a lease agreement 
    as alleged, but says that the lease agreement was shortly thereafter amended, 
    with the knowledge and consent of all parties, to substitute Blair Curtis 
    as a tenant in the place of Thane Friesen Jr.



3.         In reply to paragraphs 5 to 8 inclusive of the Amended Statement 
    of Defence of the Defendant Roy Baron, the Plaintiff says that the lease agreement 
    was in fact amended with the knowledge and consent of all parties, including 
    the Defendant, Roy Baron,
and that the resulting lease agreement is as 
    pleaded by the Plaintiff in its Statement of Claim, as amended.

4.         In the alternative, if the lease agreement was amended without 
    the prior knowledge and consent of the Defendant Roy Baron, which is not admitted 
    but specifically denied, then the Defendant is estopped and precluded from 
    saying that the lease is void as against him by virtue of the following:

a.         
    The Defendants and each of them, whether with or without Thane Friesen Jr., 
    entered into the lease agreement for the purpose of carrying on a business 
    in partnership, which business was known as the Creators and Collectors Craft 
    Mall (the "Partnership");

b.         
    The Partnership carried on the business of the Creators and Collectors Craft 
    Mall without Thane Friesen Jr. and at all material times performed the covenants 
    of the tenant pursuant to the lease agreement without protest, notice of protest 
    or notice of any kind concerning the validity of the lease; and

c.         
    The Defendant Roy Baron by his silence aforesaid permitted and induced the 
    Plaintiff to believe the lease was valid.

[Underlining added.]

[7]

At trial, counsel for Kamloops Square presented four issues, saying:

from the pleadings there are essentially four issues.  The first is 
    whether or not there is liability on the part of Mr. Baron and Mr. Curtis 
    for damages under the lease.  Is the lease enforceable against them?  Mr. 
    Baron, in his defence, has argument that he says the lease is not enforceable 
    against him.  The second issue, My Lord, is that if the lease is in fact enforceable, 
    what are the damages owing under the lease.  Third, is if the lease is not 
    enforceable, if there's no valid lease, are the defendants liable for damages 
    as a result of use and occupation of the premise.  And if so, what damages 
    is payable  are damage  are payable for use and occupation.

[8]

He then described an agreement as to damages without providing the 
    amount:

Now, thankfully, the parties have settled B, which would 
    have taken this court some significant amount of time, and B being the damages 
    owing under the lease.  The amount of that, my friend, Mr. Baron prefers me 
    not to tell you at this stage, but I can say that the settlement of damages 
    is without prejudice in every respect to the defendant's right to argue that 
    the lease is not enforceable.

[9]

The testimony as to the document tendered focused upon the deletion 
    of Mr. Friesen Jr.s name, and the insertion of the name of Mr. Curtis, without 
    reference to the deleted paragraph 9.  Mr. Baron agreed that initials on each 
    page and a signature were copies of his initials and signature and that the 
    terms in the document were the terms he agreed to:

Q         Now, Mr. Baron, you acknowledged already that 
    your initials appear on the bottom right-hand corner of every page of this 
    document?

A          I believe every page, yes.

Q         And your signature is also at the signature 
    line at the back of the document, Page 23 of the document?

A          Yes, sir.

Q         And this document, in substance, barring the 
    removal of Thane Friesen, Junior, is the lease document that you would've 
    signed with Mr. Chalmers back in June or July of 1996, correct?

A          Well, other than this not being an original 
    document, which leaves open to question, I guess, whether it is the original 
    document or not, I would accept that it probably is.

Q         It's a copy of 

A          It appears to be.  Obviously it's a copy by 
    the black lines on it.

Q         But I'm going to suggest to you, you're taking 
     you take no issue with that  that the terms in here are the terms that 
    you agreed to with Kamlops Square Management Limited, save and except for 
    the removal of Thane Friesen, Junior?

A          Yes, sir.

Q         And am I right, Mr. Baron, but for the fact 
    that Mr. Friesen was removed and I guess  and I think your argument, if I 
    have it right, is that you didn't get a chance to initial that removal, but 
    for that fact, this would be  you would have no difficulty with these [
sic
] 
    lease?

A          If the original parties and everything were 
    still on it and it was  nothing else had transpired since, I'd have no difficulty 
    with this lease.

[10]

Mr. Baron further testified that he had no issue with the addition 
    of Mr. Curtis as lessee, but that he did not want Mr. Friesen released from 
    his obligations under the lease until he, Mr. Baron, met with Mr. Chalmers 
    or the lessor to address issues that had arisen:

Q         All right.  So we've got an original agreement 
    between yourself, Mr. Friesen and Ms. Perazich and Kamlops Square Management 
    Limited, the original lease commencing July 1, 1996?

A          Yes, sir.

Q         There is essentially two changes that happened 
    to that lease.  One is that Mr. Friesen's removed, and the other is that Mr. 
    Curtis is added?

A          Yes, sir.

Q         You agree and consent to the adding of Mr. 
    Curtis?  You take no issue with that?

A          Yes, sir.

Q         That doesn't affect the validity of the lease 
    as far as you're concerned?

A          No, sir.



Q         All right.  And you  I think you'd said that 
    your evidence was that you suggested to him that he go down and remove himself 
    from the lease?

A          That's correct.

Q         All right.  You were agreeable to him doing 
    that?

A          Yes.

Q         All right.  And if Mr. Chalmers  you've given 
    evidence that no one ever phoned you or confirmed that he did that, but if 
    someone would have at the time, you would've said no problem?

A          No, I wouldn't have.

Q         Why not?

A          Because I wanted to have a meeting with Mr. 
    Chalmers and/or the plaintiff and address issues that they were either dodging 
    or running away from or refusing to negotiate.

Q         Oh, I understand that.  But that had nothing 
    to do with Mr. Friesen getting off the lease.  You didn't 

A          Yes, it did, because I felt that he should 
    stay on the lease until this was renegotiated or whatever was going to happen.

Q         Oh, I see.  So your evidence is that you had 
    a conditional agreement to Mr. Friesen being off the lease?

A          Well, in my mind it was conditional, I guess.

[11]

On May 31, 1999, Kamloops Square terminated the tenancy for failure 
    to pay rent, leading to this action.

[12]

The trial judge first found that Mr. Friesen Jr. had left the partnership.  
    He then went on to discuss Mr. Friesens place in the lease, and held:

[8] 
    . . . I accept that Roy Baron at no time consented to the removal of Thane 
    Friesen Jr. from the lease.  I accept that he was prepared to do so at a meeting 
    between the plaintiff and the lessees.  However, that meeting never occurred.



And:

[12]      
    This was a unilateral change by the plaintiffs, made without consent.  This 
    was not a valid amendment.  The attempt to change the lease did not invalidate 
    the lease.  The original lease remained in effect.  Therefore, the lease remains 
    in its original form, with Thane Friesen Jr. as one of the lessees.



[13]      I note that Roy Baron has testified that the copies of the lease, 
    filed as Exhibit 2 and Exhibit 3, set out the essential terms of the lease 
    regarding location, size of premises and rent due.  He admitted that the original 
    lease between the plaintiff and himself, Thane Friesen Jr. and Anita Perazich 
    was valid and enforceable.

[14]      One of the essential terms is that the partners are liable, 
    jointly and severally.  The plaintiff has pursued Blair Curtis and Roy Baron 
    only, as is their option.  Blair Curtis did not file a defence to the plaintiff's 
    claim that he is liable under the amended lease which shows him as an added 
    lessee.  He did not call any evidence or make any submissions in court, despite 
    having been given the opportunity to do so.  Not having disputed the plaintiff's 
    claim, Blair Curtis is liable under the lease as amended.

[13]

This is only Mr. Baron's appeal; Mr. Curtis as yet has not challenged 
    the order against him although it is premised upon the so-called amended lease.

[14]

At the hearing of the appeal, the issues resolved to two.  The first 
    was whether the trial judge erred in finding the original lease was valid 
    and enforceable, absent production of the original lease or at least a copy 
    that witnesses could say was a true copy of the document they signed.  In 
    this Mr. Baron relies upon the best evidence rule articulated by
R. 
    v. Betterest Vinyl Mfg. Ltd.
(1989), 42 B.C.L.R. (2d) 198, 52 C.C.C. 
    (3d) 441 (C.A.).  The second issue was whether the trial judge erred in assessing 
    damages in the amount of $160,000.  Mr. Baron contends that his agreement 
    on the quantum of damages was an agreement in the event that the trial judge 
    found the lease to be as pleaded, that is, the amended document that substituted 
    Mr. Curtis in place of Mr. Friesen Jr.

[15]

The best evidence rule is not as strict as in former days.  In
Betterest 
    Vinyl Mfg. Ltd.
Cumming J.A., observed:

As I read the text writers and the authorities we are no longer bound 
    to apply strictly the best evidence rule as it relates to copies of documents 
    and especially to photocopies of them.

[16]

Mr. Justice Cumming then went on to quote from various learned texts 
    and recent cases, all to the effect that the question on the admission of 
    evidence that is not the original is largely a matter of weight, with the 
    issues being its authenticity and accuracy and the reason the original is 
    not tendered.

[17]

In this case Mr. Baron, in the passages quoted above, agreed that the 
    substance of the original lease is to be found in the document tendered in 
    evidence. On that evidence, the best evidence rule permitted the introduction 
    of the document as evidence of the terms of the lease.  However, it appears 
    that no person noticed, or at least commented upon, the obliteration of clause 
    9 nor addressed the matter of its content.  Apart from my concern as to clause 
    9, I would have no hesitation in concluding that the trial judge was correct 
    in finding a lease between Mr. Baron and Kamloops Square in the terms pleaded, 
    albeit with different parties than pleaded.  Given my resolution of the second 
    issue which I now address, however, I consider that the question of the content 
    of that provision and its effect upon damages should be referred to the trial 
    court.

[18]

I turn to the question of the order as to damages based upon the agreement 
    described to the trial judge by counsel for the plaintiffs.  Here the respondent 
    contends that the question answered by the trial judge was: is the July 1, 
    1996 lease enforceable against the defendants given the subsequent deletion 
    of Mr. Friesen Jr. as a party to the lease?  It says that the agreement on 
    damages was based upon that question and that the trial judge was correct 
    in assessing damages as he rightly concluded that the lease was enforceable 
    against Mr. Baron.

[19]

On the matter of the agreement, however, I think it can be said that 
    the parties were at cross purposes.  While counsel for Kamloops Square obviously 
    understood the agreement to be an agreement in the event that a lease was 
    established between Mr. Baron and Kamloops Square, Mr. Baron appears to have 
    understood it to be an agreement in the event the lease as pleaded, that is, 
    one without Mr. Friesen Jr. as lessee, was established.

[20]

There is no documentation in evidence as to the agreement, only the 
    passage from the opening of counsel for Kamloops Square quoted above.   It 
    would not be unreasonable for a lay person, in my view, to consider that the 
    agreement applied only in the event the plaintiff proved all aspects of the 
    lease that were pleaded.  Much of the evidence adduced addressed the removal 
    of Mr. Friesen Jr.s name as lessee, and the statement of claim certainly 
    directed attention to the document that supported the theory that he was not 
    a lessee, rather than to the original lease.  In defence, Mr. Baron pleaded 
    the facts that were found by the trial judge, that is, that the lease was 
    the one with himself, Mr. Friesen Jr. and Ms. Perazich as lessees.  Kamloops 
    Square in reply reiterated its contention that the lease was one with Mr. 
    Curtis, not Mr. Friesen Jr. as a lessee, and pleaded alternatively estoppel, 
    a defence not dealt with by the trial judge.

[21]

We do not know what mischief the above described focus caused, or whether 
    steps would have been taken in a timely way to join Mr. Friesen as a third 
    party had the plaintiff correctly defined the parties to the lease.  Nor do 
    we know the basis upon which the agreement as to damages was reached and the 
    effect, if any, of the identity of the parties liable under the lease upon 
    any compromise reflected in that amount.

[22]

With respect, given the trial judge's conclusion that Mr. Friesen Jr. 
    was still a party to the lease and that the unilateral amendment was not binding 
    upon Mr. Baron, the premise of the question that Kamloops Square says was 
    addressed in the trial, fails.  While it was open to the trial judge to find 
    that there was a lease, he was not in a position to adopt the amount agreed 
    as damages.

[23]

It follows that I would allow the appeal and would remit the matter 
    to the trial court for an assessment of damages.  In completing that task 
    the trial court should include in its enquiry the content of clause 9, the 
    circumstances of its obliteration, and the effect, if any, of those conclusions 
    upon the damages that are payable.

The 
    Honourable Madam Justice Saunders

I AGREE:

The Honourable Madam Justice Prowse

I AGREE:

The Honourable Mr. Justice Donald


