



COURT OF
APPEAL FOR BRITISH COLUMBIA




Citation:



Aliperti
  v. Dhalla,









2013 BCCA
  16




Date: 20130116

Docket: CA040352

Between:

Arezoo Aliperti

Respondent

(Plaintiff)

And

Fatehali Dhalla

Appellant

(Defendant)




Before:



The
  Honourable Mr. Justice Harris





(In Chambers)




On appeal from:  Supreme Court of British Columbia,
October 5, 2012
(
Aliperti v. Dhalla
, Vancouver Registry C963127)




Counsel for
  the Appellant:



M. Tatchell





The
  Respondent appeared in person:
Acting as respondents agent:



A. Aliperti
I. Taher





Place and
  Date of Hearing:



Vancouver, British Columbia

December 20, 2012
and January 4, 2013





Place and
  Date of Judgment:



Vancouver, British Columbia

January 16, 2013










Reasons for Judgment of the Honourable

Mr. Justice Harris:

[1]      The
central issue in this series of applications is whether leave to appeal an
order denying a successful litigant his costs of an action and also requiring
him to pay special costs of the costs proceeding should be granted.  The matter
is complicated by the procedural route that brings the substantive matter to
court.

[1]

On November 5,
2009, the chambers judge granted an application by a defendant, Mr. Dhalla,
to dismiss an action against him for want of prosecution.  Those reasons are
indexed at 2009 BCSC 1774.  The action had started more than 13 years before
the successful application to dismiss it for want of prosecution.  The judge
ruled that if the parties could not reach an agreement on costs, either party
was at liberty to make further submissions.

[2]

No agreement was
reached on costs.  Mr. Dhalla applied for costs.  His application was
resisted.  During the course of the costs application, the chambers judge
adjourned the application to permit cross-examination on affidavits.  The point
in issue had to do with whether Mr. Dhalla may have misconducted himself
in the litigation by attempting in 2005 to evade, in a dangerous manner, personal
service of a notice of intention to proceed.  The reasons adjourning the
hearing to permit adjudication of this issue are indexed at 2010 BCSC 1909.

[3]

The matter came
back before the chambers judge on nine occasions before judgment was rendered
on October 5, 2012.  The reasons at issue in these applications are
indexed at 2012 BCSC 1466.  The chambers judge concluded that Mr. Dhalla
had indeed misconducted himself not only in attempting to evade service but also
in the evidence he gave about that matter during the course of the costs
application.  In the result, Mr. Dhalla was denied his costs of the action
and was ordered to pay special costs in respect of the costs hearing.

[4]

The findings of
fact relied on by the judge to support his order are set out at paragraph 33
of his reasons:

[33]      From
all of the evidence, I find that Mr. Dhalla is guilty of misconduct of the
type spoken of in the cases I have discussed in the next section of my reasons
for judgment. I find that Mr. Dhalla:

(a)        was aware that Mr. Zainescu
was trying to serve a legal document on him;

(b)        knew or suspected that the
document was connected to this proceeding;

(c)        was aware of Mr. Zainescus
previous attempts to contact and serve him;

(d)        intended to and took steps
to avoid being served by Mr. Zainescu;

(e)        tried to evade service by
rushing out of the rear of the building and then by driving away as quickly as
he could in the circumstances;

(f)         knew that the person he
saw in the driveway of the parking lot area was the process server;

(g)        failed to slow down or take
evasive action to avoid hitting Mr. Zainescu;

(h)        was reckless in continuing
to drive and in failing to stop his vehicle or  take evasive action to
avoid hitting Mr. Zainescu;

(i)         would have struck Mr. Zainescu
with his vehicle if he had not jumped out of the way;

(j)         was careless as to the
truth and, in some instances, was intentionally untruthful when providing his
account of his dealings with Mr. Zainescu and the incident in the parking
lot; and

(k)        was
argumentative and evasive when giving evidence and made up answers that were
convenient for him at the moment, all in an inappropriate attempt to deflect
the cross-examiner and to advance his case for costs.

[5]

The chambers judge
identified the legal principles relevant to the exercise of his discretion and
referred to a number of cases illustrating the application of those principles
in circumstances where a successful litigant was penalized in costs because of
his or her misconduct in the litigation.  The judge summarized the basis of his
conclusions as follows:

[43]      Mr. Dhalla
should be denied his costs because he has engaged in serious misconduct in
these proceedings that should be chastised. He sought to evade service in a
dangerous manner and then showed disdain for the judicial process when he
provided his untruthful account of what had occurred.

...

[50]      I
do not view this to be an appropriate case where each party should bear their
own costs. I found Mr. Dhalla deliberately sought to evade service in
egregious circumstances and then provided a dishonest account of his dealings
with Mr. Zainescu. His evidence was inconsistent and in some instances
deliberately untruthful, all in order to deflect the cross examiner and to
further his pursuit of an award of costs against Ms. Aliperti. His conduct
is worthy of rebuke; it is conduct that courts must seek to disassociate
themselves from. He should pay special costs to Ms. Aliperti in respect of
the costs hearing. To do otherwise, i.e., to order that the parties bear their
own costs, would overlook the highly reprehensible nature of Mr. Dhallas
misconduct that began in March 2005.

[6]

The issue before me has been complicated by the fact that Mr. Dhalla
chose to file a Notice of Appeal, rather than an application for leave to
appeal.  The Notice of Appeal was filed within time, thereby evincing an
intention to appeal.  The respondent took the position that leave was
required.  The matter came before Mr. Justice Low in chambers on
November 28, 2012.  Ms. Alipertis application to strike out the
appeal as a nullity was adjourned in order to allow Mr. Dhalla to bring
the necessary applications to extend time to apply for leave to appeal and to
file the necessary evidence explaining the delay.

[7]

In substance, albeit
marginally late, Mr. Dhalla has complied with the basis upon which the
application to strike the appeal was adjourned.  He has before me an application
for short leave, an application to convert the Notice of Appeal to an
application for leave to appeal
nunc pro tunc
, and an application to
extend time.  Ms. Aliperti opposes these applications, seeks an order that
the Notice of Appeal is a nullity and the appeal be dismissed, and in any event
opposes granting leave to appeal.

[8]

I propose to deal
directly with whether this is a matter in respect of which leave should be
granted.  In my view, the procedural irregularities which have complicated this
matter are simply procedural irregularities.  They do not provide a basis to
treat the appeal as a nullity.  Mr. Dhalla had, there is no doubt, an
intention to appeal.  His Notice of Appeal was filed and served within time.  His
counsel took an incorrect view that leave to appeal was not required.  I find
no merit in the suggestion that the decision to file a Notice of Appeal rather than
an application for leave to appeal was a tactical decision gone awry, as Ms. Aliperti
argued.  I am satisfied, moreover, that there is no prejudice to the respondent
in dealing with the substantive matter at hand.  As Mr. Dhalla pointed out,
had an application for leave to appeal been filed in the first instance, the
hearing of the application would have occurred only a very short time before
this came before the court in any event.  The minor delay occasioned by the
procedural errors has not prejudiced Ms. Aliperti.

[9]

I am satisfied
that, subject only to the issue of the merits of the appeal, the test to extend
time has been met.  There was a
bona fide
intention to appeal.  The
respondent was informed of the intention.   There is no prejudice to extend
time.  It is in the interests of justice to consider the leave application on
its merits.

[10]

I acknowledge that
whether an appeal has merit is a factor to be considered in considering whether
to extend time.  I propose, however, to deal with the merits in the context of
my consideration of whether leave should be granted.

[11]

The test for leave
to appeal is well settled.  It is conveniently summarized, as that test relates
to costs issues, by Mr. Justice Hinkson (in Chambers) in
Bradshaw
v. Stenner
, 2012 BCCA 481:

[27]      The
factors to be considered on an application for leave to appeal were
conveniently summarized by Madam Justice Saunders, in chambers, in
Goldman
Sachs & Co. v. Sessions
, 2000 BCCA 326 at para. 10:

(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.



[31]      Insofar
as the third factor is concerned, an appeal from an award of costs is often a
challenge for an appellant, given the discretionary nature of such an award.
The threshold for the third factor of merit for leave to appeal from an order
for costs is more nuanced than that for an appeal in general. It was discussed
by Madam Justice D.M. Smith, in chambers, in
Yung v. Jade Flower Investments
Ltd.
, 2012 BCCA 168, 319 B.C.A.C. 265 at paras. 1820:

[18]      The
test for leave to appeal an order of costs includes an added criteria that is
addressed in
Neufeld v. Foster
, 2000 BCCA 485 (Chambers)
per
Rowles J.A.:

[14]      Under
s. 7(2)(b) of the
Court of Appeal Act
, R.S.B.C. 1996, c. 77, leave is
required to appeal an order of costs only. As an award of costs generally
involves the exercise of discretion, the award is subject to limited appellate
review.
Generally, leave is not granted unless a question of principle is
involved
:
Raffele v. Janzen
, [1989] B.C.J. No. 1733 (B.C.C.A.).

[15]      The
factors that are generally taken into account on an application for leave to
appeal are the importance of the proposed appeal generally and to the parties,
the utility of the proposed appeal in the circumstances of the parties, and the
prospects of success of the proposed appeal.

[Emphasis
added by D.M. Smith J.A.]

[19]      This
test creates a more onerous burden on applicants seeking leave to appeal an
order for costs which flows from the highly discretionary nature of such an
order. Mr. Justice Low summarized the highly deferential standard of
review for costs orders in
Seminoff v. Seminoff
, 2007 BCCA 403
(Chambers):

[2]        ...
This Court should not interfere with the trial judges exercise of
discretion on the issue of costs unless persuaded that the trial judge
misdirected himself or herself on a matter of legal principle, or that the
trial judges decision is so clearly wrong as to amount to an injustice
:
see
Elsom v. Elsom
, [1989] 1 S.C.R. 1367 at 1377.

...

[4]        In
the absence of an identified error in principle it is difficult for a litigant
to obtain leave to appeal a costs order. The awarding of costs is a matter of
discretion and the trial judge is in a much better position than this Court to
appreciate the course of the proceedings and to ascribe responsibility for
duration of the trial. The trial judge is also in a much better position to
assess the length of time each issue occupied at trial. These matters and
others go into the exercise of discretion.

[Emphasis
added by D.M. Smith J.A.]

[20]      The
court will not interfere with the exercise of judicial discretion in awarding
costs if there was a sound basis for its exercise:
Currie v. Thomas Estate
(1985), 19 D.L.R. (4th) 594 (B.C.C.A.), quoted in
Oliviera v. McIntyre
,
[1998] B.C.J. No. 1682 (C.A.)
per
Donald J.A. (in Chambers) at para. 9.
Given this deferential standard of review, the merit requirement in the test
for leave to appeal of a costs order takes on a more prominent role and
generally includes the additional requirement, discussed above, that there be
some issue involving a matter of legal principle before leave will be granted.

[12]

Mr. Dhalla
submits that the chambers judge made a number of errors.  First, that he failed
to observe tenets of procedural fairness and permitted prejudicial and unfair
questioning as well as protracted and badgering questioning, all of which
resulted in a miscarriage of justice.  Secondly, that the chambers judge
committed palpable and overriding errors by making findings of fact that were
based on no evidence, evidence which did not meet the burden of proof, or was based
on discredited and inadmissible evidence.  Thirdly, that the chambers judge
erred in the exercise of his discretion by failing to exercise his discretion
judicially and based on grounds connected to the case.

[13]

Mr. Dhalla
submits that his proposed appeal satisfies the test for leave.  The points
raised are significant to the action itself because they are determinative of
it.  An appeal would not unduly hinder the progress of the action as the appeal
is the last step in it.  He argues that the errors alleged involve errors of
legal principle.  The appeal is sufficiently meritorious to merit review by a
division of this Court.  Beyond the significance of the appeal to the parties,
it does, he argues, raise issues that are significant to the practice generally
because it raises important questions regarding the discretion of judges in
awarding or denying costs generally and the basis on which special costs ought
to be awarded  in particular, the importance of exercising their discretion
judicially, proportionately and on a basis connected to the litigation.

[14]

In my opinion,
whether leave should be granted in this case turns on whether the chambers
judge erred in principle in making his orders or whether his orders are so
clearly wrong as to amount to an injustice.  I will deal with each of the
alleged errors in turn.

[15]

I have not been
provided with a transcript of the cross-examination of Mr. Dhalla.  The
record does include an affidavit from Mr. Dhalla and some extracts of
questions and answers on various topics transcribed by counsel or Mr. Taher
for Ms. Aliperti from the recording of the proceedings.  Mr. Dhalla
says in his affidavit that his cross-examination was protracted, took days and
days (in fact, it appears to have taken just over 5 hours of court time), and
involved extensive liberties on collateral facts, compound questions, splitting
hairs on semantics, asking the same question repeatedly and badgering.  Mr. Dhalla
says that the chambers judge did not control the process and, he believes, had
prejudged the issues adversely to him.

[16]

Mr. Dhalla
has not, in my view, identified any legal error justifying review by a division
of this Court.  Mr. Dhallas perception, standing alone, that the cross-examination
was procedurally unfair or that the chambers judge was not impartial is not a
sufficient basis to warrant leave being granted.  There must be some objective
basis on which to evaluate those claims and none has been provided.  Decisions
about whether to adjourn a hearing in order to permit cross-examination fall
within the discretion of the chambers judge.  The applicant has not been able
to point to any error in principle in the decision to permit cross-examination
on the evidentiary point that concerned the chambers judge.  Moreover, without
the transcript of the cross-examination of Mr. Dhalla, I cannot reach any
conclusions about whether the chambers judge permitted the cross-examination to
be conducted in a manner that was fundamentally unfair, and more particularly,
in a manner that gave rise to an issue of principle.  In the absence of some
demonstrated error in principle, controlling the conduct of cross-examinations
is a matter falling within the discretion of the chambers judge.

[17]

No error
warranting the granting of leave has been demonstrated in respect of this
ground of appeal.

[18]

Mr. Dhalla
argues that there is sufficient evidence in the record to demonstrate that
there is a meritorious appeal on the question whether the chambers judge made
palpable and overriding errors in finding the facts that underlay his exercise
of discretion.  In particular, he says that the errors are illustrated in
paragraph 6 of the reasons, particularly when those findings are viewed in
the context of admissions made by the process server in his cross-examination. Paragraph 6
reads as follows:

[6]        I
found that Mr. Dhalla was evasive when giving his evidence. He gave
inconsistent evidence and was, in some instances, deliberately untruthful when
being cross-examined on his affidavit in order to distract the cross-examiner
and to advance his claim for costs. His attempt to evade service nearly caused
him to contact Mr. Zainescu with his vehicle. As a result, I have
determined that Mr. Dhalla should be chastised for his misconduct. He
should be denied his costs and Ms. Aliperti should be awarded special
costs in respect of the costs hearing.

[19]

Mr. Dhalla
submits that the basis of a meritorious appeal exists because these findings
were made in the face of an affidavit from the process server that contained
false evidence about seeing Mr. Dhalla fleeing to his car to avoid service.
 Further, there was evidence from the process server that was in fact
consistent with Mr. Dhallas, particularly in relation to the
circumstances of Mr. Dhalla driving away and the reasons why the manner in
which the process server approached Mr. Dhallas vehicle would reasonably have
been frightening.  Further there was, he argues, no evidence that connected the
process server to serving documents related to this proceeding.

[20]

Mr. Dhalla
submitted that he was not, for the purposes of the leave application at least,
challenging the chambers judges assessment of his evidence standing alone. 
His primary focus was on the findings of fact that were based on that evidence
in the context of the evidence from the process server.  The process server,
for example, admitted that the evidence about Mr. Dhalla fleeing out of
his building to his car was not based on his own observations, but were those
of his wife.  Nonetheless, the chambers judge referred to them in his analysis,
commenting at paragraph 13 of his reasons, that it is noteworthy that Mr. Zainescus
evidence concerning the substance of his wifes observations of Mr. Dhalla
was not challenged.  Mr. Dhalla points out, rightly, that the evidence
was inadmissible hearsay, at best, and, accordingly, there was no need to
challenge it.

[21]

I have concluded,
nevertheless, that Mr. Dhalla has not demonstrated a meritorious argument
that the chambers judge committed errors of principle in reaching his
conclusions of fact.  As I read his reasons, his findings are based directly on
his rejection of Mr. Dhallas evidence (see paras. 16-32).  The
chambers judge explains in detail why he found Mr. Dhalla not to be a
credible witness.  Those reasons are based almost entirely on the deficiencies
the chambers judge identified in that evidence, particularly inconsistencies in
his evidence.

[22]

Most importantly,
the chambers judges findings do not depend on his preferring the evidence of
the process server to Mr. Dhallas evidence where they conflict, although
he does accept the process server endeavoured to be truthful on points other
than the observations made by his wife.  So, for example, although the chambers
judge did point out that the substance of the process servers wifes observations
were not challenged, that appears to have been commentary only.  The critical
point was that Mr. Dhalla admitted to those observations.  The chambers
judge also rejected Mr. Dhallas evidence that he did not take evasive
action as he drove from the parking garage because he was frightened.  That
finding was based on inconsistencies in Mr. Dhallas evidence.  The
chambers judge was entitled to make that finding, even though the process
server admitted that he behaved in a way that could have been frightening to
someone in Mr. Dhallas position.

[23]

In brief, Mr. Dhalla
has not made out a case worthy of review that the chambers judge may have made
legal errors in reaching his findings of fact.  In my opinion, the proposed
appeal goes no further than inviting a division of the court to revisit the findings
of fact of the chambers judge.  That is not a task for this Court.

[24]

Finally, I do not
think Mr. Dhalla has identified any error of principle in how the chambers
judge exercised his discretion given the findings of fact he made.  First, the
chambers judge correctly articulated the legal principles governing both the
circumstances in which a successful party may be denied costs and the
circumstances in which a party may be required to pay special costs.  It cannot
be said that the chambers judge proceeded on the basis of an incorrect
understanding of the legal principles governing the exercise of his discretion.

[25]

The real complaint
here is that the costs orders are disproportionate to the conduct giving rise
to them and that the conduct is not adequately connected to the litigation.

[26]

I will deal with
the second point, that is whether the misconduct was adequately connected to
this litigation, first.  The chambers judge based his orders on two grounds. 
The first was the conduct associated with the incident in 2005.    The chambers
judge made a finding of fact that Mr. Dhalla knew that an attempt was
being made to serve him with legal documents that he knew or suspected were
connected to this litigation.  That finding is one for the judge to make.  No
legal error underlying it has been identified.  In my view, moreover, what
matters is that the attempted service was in fact connected to this
litigation.  I do not think the relevant question is one of subjective
knowledge that the service relates to this rather than some other legal
proceeding.  The second was the manner in which Mr. Dhalla gave evidence. 
This second ground is obviously connected to this litigation.

[27]

Finally, I do not
think any error of principle has been identified based on the disproportionate
effect of the orders.  How to weigh and balance the significance of misconduct
and to craft appropriate remedies is a discretionary matter, the exercise of
which falls to the trial court.  In the absence of legal error in weighing the
relevant discretionary factors, it does not matter that a division of this Court
might have reached a different result on these particular facts.  After a
comprehensive review of cases dealing with denying successful litigants their
costs and awarding special costs arising from misconduct in respect of specific
parts of a proceeding, the chambers judge summarized the reasons for exercising
his discretion as he did at paragraphs 43 and 50 of his reasons, set out
above.  No error in those reasons has been identified, nor can it be said that
his decision is so clearly wrong as to amount to a miscarriage of justice.

[28]

In
College of
New Caledonia v. Kraft Construction Company Ltd.
, 2011 BCCA 172, 305
B.C.A.C. 48, per Chiasson J.A. (in Chambers), leave to appeal special costs
was not granted because the case did not raise issues of general significance
to the practice and the analytical framework for awarding special costs had
already been established by the court in
Garcia v. Crestbrook Forest
Industries Ltd.
(1994)
,
119 D.L.R. (4th) 740
.
In
New Caledonia,
Chiasson J.A. in said
this:


[30]      I
agree with the submissions of the respondents that this case presents no point
of general significance to the practice because the analytical framework was
established by this Court in
Garcia
. It is left to trial judges to
determine whether conduct is worthy of rebuke. Whether this is so, is case
specific. In part, that is illustrated by the Colleges position in this case.
It contends the judge erred by awarding special costs because the College
pursued a hopeless claim. In deciding whether the judge did so, this Court
would not be providing guidance as to what constitutes conduct worthy of
rebuke. It merely would be considering whether the alleged factual matrix is
based on nothing more than the weakness of the Colleges claim, a question of
fact.

[29]

I find those statements
to be applicable to this case.

[30]

I order short
leave be granted, time be extended for filing an application for leave to
appeal, the Notice of Appeal be converted to an application for leave to appeal
nunc pro tunc
, but leave to appeal is denied.  The application for a
declaration that the appeal be dismissed as a nullity is dismissed.

The Honourable Mr. Justice Harris


