



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Coal Harbour Properties Partnership v. Liu et al,









2004
            BCCA 65




Date: 20040122




Docket: CA031533

Between:

Coal Harbour Properties Partnership

Appellant

(
Plaintiff
)

And

Wei Wei Liu and James Chien Sheng Liu

Respondents

(
Defendants
)



And

Parolin & Company, Coal Harbour Properties Partnership,
Delta Real Estate Services Ltd. and Anthony Li

Appellants

(
Defendants by Counterclaim
)













Before:



The
            Honourable Madam Justice Saunders





(In
            Chambers)




Oral Reasons for Judgment




C.
            McKechnie



Counsel for the Appellant





K.
            P. Regier, Q.C.



Counsel for the Respondent





Place
            and Date:



Vancouver, British Columbia





January 22, 2004




(application for
      a stay)


[1]

SAUNDERS,
        J.A.
:
        The appellant, Coal Harbour Properties Partnership, appeals an order
        dismissing its claim to $391,000 plus interest and ordering that that
        sum, a deposit on a real estate transaction now held by the appellants
        solicitors, be paid to the respondent Lius.  This application by the
        appellant is for an order staying the order for payment of the deposit.

[2]

The
      issue between the parties arises from a sale of real estate, a condominium
      unit in the Coal Harbour area of Vancouver, British Columbia, that did
      not complete.  The respondents had paid a deposit in the amount of $391,000.  The
      real estate project was undertaken by Coal Harbour Properties Partnership,
      but the property was in the name of the managing partner, Carina Properties
      Ltd.  The agreement for sale named Coal Harbour Properties Partnership
      as vendor and was accepted by Coal Harbour Properties Partnership, by
      its managing partner, Carina Properties Ltd.

[3]

A
      disclosure statement provided to the respondents set out the scheme of
      the development, being that the developer was Coal Harbour Properties Partnership,
      a general partnership between Carina Properties Ltd. and the Coal Harbour
      Trust.  That statement provided that Legal Title to the property is held
      by Carina Properties Ltd. as agent and nominee for the Developer.

[4]

The
      sale did not complete and both the appellant and the respondents claimed
      entitlement to the deposit monies.  The respondents defended the claim
      to the deposit saying as to one ground that Coal Harbour Properties Partnership
      was not ready, willing and able to complete because it did not have in
      its own name the title to the property, raising s. 6 of the
Property
      Law Act
, R.S.B.C. 1996 c. 377.  That section says:

6

(1)
      A person who transfers land, or who makes an agreement, or assignment of
      an agreement, for the sale of land by which the purchase price is payable
      by installments or at a future time, must register his or her own title
      in order that a person to whom all or part of the land is transferred and
      a person claiming under the agreement or assignment can register their
      instrument under the
Land Title Act
.

(2)
      An action must not be brought on the agreement or assignment referred to
      in subsection (1) by a person who fails to comply with this section.

[5]

In
      his reasons for judgment the learned trial judge said:

[25] I do not accept from the fact that Coal
      Harbour, as a partnership, was not able to hold title to land, together
      with the knowledge of Mr. and Mrs. Liu that the property was registered
      in the name of Carina Properties Ltd., that they consented to a direct
      transfer from Carina Properties Ltd.  They were entitled to assume, on
      reading the Agreement, that the transfer would come from Coal Harbour.  The
      fact that Coal Harbour could not hold title to the land was a problem for
      Coal Harbour, as vendor, not for Mr. and Mrs. Liu as purchasers.

[26] Coal Harbour, as the vendor, was not in a position to convey registrable
    title, and is thus not entitled to sue on the Agreement.

[6]

The
      order made disposed entirely of the appellants claim, but not the respondents
      counterclaim for damages.  On the other hand a successful appeal will not
      dispose of the appellants claim as other defences raised by the respondents
      would be required to be tried.

[7]

The
      issue here is whether there should be a stay of the payment out of the
      deposit monies.  This Court derives jurisdiction to order a stay through
      s. 18 of the
Court of Appeal Act
.  In
Coburn v. Nagra
,
      (2001) BCCA 607, this Court discussed the jurisprudence relating to stay
      applications, observing that the tests for a stay are the same as for an
      injunction:

¶3    On
      the theory that a stay of execution is a particular brand of stay of proceedings,
      the parties urged this Court to apply the three part test for an interlocutory
      injunction described in Manitoba (Attorney General) v. Metropolitan Stores
      (MTS) Ltd., [1987] 1 S.C.R. 110, re-affirmed inn RJR-Macdonald Inc. v.
      Canada (Attorney General), [1994] 1 S.C.R. 311: That there is some merit
      to the appeal in the sense that there is a serious issue to be resolved;
      that the applicant would suffer irreparable harm if the application were
      denied; and that the balance of inconvenience favours a stay.

¶4 The relevance of the criteria for injunctions to the criteria for a stay of
proceedings is explained by Mr. Justice Beetz in Metropolitan Stores by reference
to their common roots:



Prior to the Supreme court of Judicature
      Act, 1873, 36 & 37 vict., c. 66, no distinction between injunctions
      restraining proceedings and other sorts of injunctions was drawn in English
      law (Halsburys Laws of England, vol. 24, 4
th
ed., p. 577) The
      Parliament of Westminster then enacted the Act referred to above, which
      in the main has been adopted by all of the provinces of Canada except Quebec
      where the distinction between equity and law is unknown.  The distinction
      the English Judicature Act created between a stay of proceedings and an
      injunction was, however, essentially procedural



A stay of proceedings and an interlocutory
      injunction are remedies of the same nature.  In the absence of a different
      test prescribed by statute, they have sufficient characteristics in common
      to be governed by the same rules and the courts have rightly tended to
      apply to the granting of the interlocutory stay the principles which they
      follow with respect to interlocutory injunctions: [citations deleted]







¶7    Whether
      the criteria for an injunction is two part or three may be a topic of debate
      for scholars.  In British Columbia the common test for injunctions has
      been two-pronged since B.C. (A.G.) v. Wale (1986), 9 B.C.L.R. (2d) 333
      (C.A.), with the issue of irreparable harm being subsumed into the discussion
      of balance of convenience (or inconvenience).  As Madam Justice McLachlin
      (now C.J.C.) noted in Wale, the distinction is likely without practical
      effect.  The question in most cases is the relative weight of the convenience
      and inconvenience of the order sought, always considering the paramount
      measure, the interests of justice.



[8]

As
      observed by Madam Justice Southin in concurring reasons:

¶19
      When the loser in an action in the court below appeals and seeks a stay
      of execution, two rights compete:  the right of the successful party to
      the fruits of victory, whether those fruits be a money judgment, a decree
      of specific performance, or an order for the recovery of property and the
      right of the defendant to appeal and if his appeal succeeds, to be in as
      good a position as if the judgment below had never been pronounced.  To
      put it another way, it is a right not to have his right of appeal made
      nugatory.  See
Wilson v. Church (No. 2)
(1879), 12 Ch.D.
      454 (C.A.), in which Brett L.J. said, at 459:



This
      is an application to the discretion of the Court, but I think that Mr.
Benjamin
has
      laid down the proper rule of conduct for the exercise of the judicial discretion,
      that where the right of appeal exists, and the question is whether the
      fund shall be paid out of Court, the Court as a general rule ought to exercise
      its best discretion in a way so as not to prevent the appeal, if successful,
      from being nugatory.

She further observed:

¶25
      An underlying problem now is the length of time it takes for appeals to
      this Court to be heard and determined.



¶29 My purpose in making in this context a reference to this aspect of litigation
is this:  a respondent should not hesitate to seek as a term of a stay, whether
of proceedings or execution, an order putting the appellant on terms to be expeditious
and if the appellant does not observe the terms, to seek an order dissolving
the stay.



[9]

In
      the case before me, it is said for the respondents that the appeal lacks
      merit, that there is no prejudice to the appellant if the sum is paid to
      the respondents and that the balance of convenience in general does not
      favour a stay.

[10]

The
      appellant contends that the application of s. 6 of the
Property Law
      Act
failed to consider the inability of the Partnership, under
      our land titles system, to be shown on title as registered owner, the effect
      of the
Partnership Act
R.S.B.C. c. 348, and all aspects of
      the Agreement.  The respondents argue to the contrary, and say there is
      so little merit to the appeal the application may be dismissed on this
      ground alone.

[11]

In
      my view, given the issue of the application of s. 6 to a partnership vendor,
      I cannot say there is not an arguable appeal, or to put it another way,
      that there is no serious issue to be resolved.  The first test for a stay,
      in my view, is met.

[12]

The
      second question then is the balance of convenience.  There is no evidence
      before me that would assist in determining the balance of convenience other
      than information that the respondents own two other properties and information
      relating to the status quo.  The tension is truly between preserving the
      subject matter of the lawsuit, the deposit, versus permitting the respondents
      immediate use of the fruits of the litigation.  In this, consideration
      of the status quo favours the appellant.  The monies are, and were when
      the litigation commenced, on deposit and out of the hands of the respondents.  Considering
      the contingencies that may cause that fund to disappear if paid out before
      the appeal is heard, and I say this without suggesting at all that there
      would be fault by the Lius, I am of the view that the balance of convenience
      favours a stay of proceedings.

[13]

The
      funds, however, are now in the hands of the solicitors for the appellant.  It
      seemed to me in the hearing of this application that the respondents were
      uneasy with that arrangement.  On the advice of Mr. Regier they would prefer
      the funds to be paid into Court which is, of course, what his client is
      entitled to, I order that the funds be paid by Parolin & Company into
      Court.  Upon the respondents counsel filing with the Registrar a letter
      of credit, in a form acceptable to the appellant or to the Registrar, to
      secure repayment with interest at post-judgment interest rates if the appeal
      be successful, the respondents may withdraw the funds from Court.  And,
      consistent with the comments of Madam Justice Southin in
Coburn v.
      Naga
,
supra
, this order is given on the basis that the appeal
      proceed expeditiously.  Given the nature of the issue that was heard it
      should not take long to prepare the appeal books.  I am told that there
      are appeal dates that may secured before the summer recess.

[14]

If
      the appellant does not proceed expeditiously the respondents may apply
      for an order varying this order.



The Honourable
      Madam Justice Saunders


