



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Woo v. Onni Ioco Road Five Development Limited
  Partnership,









2013 BCCA 18




Date: 20130111

Docket: CA040002

Between:

Ju Hee Woo, Susan-Lynn
Siwasch, Marcel Rainville, Mahmood Amin also known as Mahmood Amin Darolzarbi,
Bahareh Bahman-Zadeh, Madjid Razi, Parham Razi, Mohammad Bagher Dasht-Kian also
known as Mohammad Bagher Dashtakian, Tahereh Bozorgi, and Behrooz Dasht-Kian
also known as Behrooz Dashtakian

Respondent

(Plaintiffs)

And

Onni Ioco Road
Five Development Limited Partnership, ONNI Development (Ioco Road Five) Corp.
and Rossano De Cotiis

Appellants

(Defendants)




Before:



The Honourable Chief Justice Finch





The Honourable Madam Justice Saunders





The Honourable Mr. Justice Groberman




On appeal from Supreme
Court of British Columbia, May 23, 2012
(
Woo v. ONNI Ioco Road Five Development Limited Partnership,
2012 BCSC
764,
Vancouver Registry No. S103493)

Oral Reasons for Judgment




Counsel for the Appellant:



S.H. Stephens





Counsel for the Respondents (except M.& P. Razi):



B.G. Baynham, Q.C.
J.E. Shragge





Place and Date of Hearing:



Vancouver, British
  Columbia

January 11, 2013





Place and Date of Judgment:



Vancouver, British
  Columbia

January 11, 2013








[1]

FINCH C.J.B.C.
: On 4 October 2012, A. MacKenzie J.A., in
chambers, granted orders,
inter alia
, that the appellants Onni post
security for the costs of the appeal and that the appeal be stayed pending the
posting of that security. Madam Justice MacKenzie further ordered that the
respondents application for security for the judgments awarded in their favour
in the court below be dismissed.

[2]

On this application to review, the respondents seek to discharge or vary
the order dismissing their application for security for the judgments.

[3]

The appellants appeal is from the judgment of the Supreme Court of
British Columbia pronounced 23 May 2012. In the action giving rise to that
judgment, the respondents as purchasers claimed rescission of contracts made
with the appellant developers for the purchase and sale of five strata title
lots.

[4]

The appellants counterclaimed for an order that the respondents account
to them for occupational rent for the period of time from when the contracts of
purchase and sale closed to the date they give up possession of their units in
the event that the Court granted an order for rescission.

[5]

The Court granted orders that the respondents were entitled to rescind
their respective purchase agreements, according to the
Real Estate
Development Marketing Act
, S.B.C. 2004, c. 41, s. 21(3) (
REDMA
).
It also ordered repayment of certain sums to the respondents in exchange for
the transfer of individual titles to the appellants.

[6]

In chambers, MacKenzie J.A. outlined the security for judgment sought by
the respondents as follows:

[55]      The Respondents also seek security for the
judgments awarded in favour of the Respondents in the court below. They seek
amounts of the difference between the judgment at summary trial and the present
appraised market value of each unit plus a ten percent amount of present market
value to account for potential decline in the real estate market, costs of
sale, and pre-judgment interest. That would amount to:

·

$271,974.69 in favour of Ju Hee Woo;

·

$147,978.50 in favour of Susan-Lynn Siwasch and Marcel Rainville;

·

$173,439.17 in favour of Mahmood Amin and Bahereh Bahman-Zadeh;

·

$213,072.44 in favour of Mohammad Dasht-kian and Tahereh Bozorgi;
and

·

$168,399.96 in favour of Madjid Razi and Parham Razi.

[7]

In dismissing the respondents application for security for the
judgments MacKenzie J.A. held that the respondents had failed to meet the onus
of showing that it was in the interests of justice to so order, because the
respondents had failed to show that they cannot recover on at least most of the
judgment. She said:

[75]      I agree with the Appellants that the Respondents
will suffer no additional prejudice if this Court does not order the posting of
the security for the amount sought of the trial judgment. There is nothing
precluding them from executing on their judgments. Indeed, the Razis have
sought and obtained the order for sale from Pearlman J. and the other
Respondents are free to do so. The Appellants will not seek a stay of execution
of the judgment, nor will they oppose other applications for sale.

[76]      I agree the Respondents have substantial security
for the judgment already; they remain the registered owners of the strata lots
and are free to return or dispose of the strata lots as they see fit.

[77]      It is true there may be a shortfall between the
amount of the judgment and the sale proceeds from the units and the additional
costs, some of which I find somewhat speculative. That is not additional
prejudice arising from the appeal itself. Instead, that situation would exist
even without an appeal. I am also advised the Razis have registered their
judgment against other properties besides the one they own.

[78]      I agree the interests of justice would not be
served by ordering security for the portion sought of the trial judgment. Such
an order would stifle a meritorious and important appeal as the Respondents
accept the Appellants have no assets. It cannot be said that the appeal has no
merit.

[79]      The Respondents application for security for costs
of the appeal is granted to the extent stated, $10,000. The application for
security for the trial judgment, trial costs and pre-judgment interest is
dismissed.

[80]      The appeal will be
stayed until the security ordered is deposited with the Registrar in a form
acceptable to the Registry. It is to be deposited within fourteen days.

[8]

On this application to vary, the respondents say that MacKenzie J.A.
erred in holding that they were free to return or to dispose of [their strata
lots] as they saw fit, and in holding that as a result the respondents had
failed to show they could not recover on most of their judgments. As expressed
by their Memorandum of Argument, the respondents say:

[28]      From monetary
perspective, all that Mr. Justice Pearlmans judgment provides the respondents
is the difference between the purchase price and present market value of their
respective units. Because the respondents were free to list their respective
units and retain the proceeds of sale prior to rescinding, the fruits of the
litigation (the judgment debt as it were) must necessarily exclude the
present market value.

[9]

The respondents say they will suffer real prejudice in absence of
security, because the appellants have no money with which to satisfy the
monetary components of their judgments. Hence, if the appeal fails, the
appellants are effectively judgment-proof. If the appeal succeeds, the notices
of rescission would be vacated and the respondents would be in the same
position as they are today.

[10]

In response, the appellants say the order for security for the judgment
was discretionary. The judge considered all the relevant factors including
prejudice to the respondents if the order were not made, the merits of the
appeal, the effects on the ability of the appellants to continue the appeal if
security were ordered, and the interests of justice.

[11]

The appellants point out that the chambers judge held that an order for
security would stifle a meritorious appeal, that there is no additional
prejudice to the respondents from a denial of security, and that the order
sought would not prevent prejudice.

[12]

The appellants say that the respondents holding of title to their
strata lots constitutes security for a significant portion of the monetary
judgments. The appellants argue that the premise of the respondents position
is that they only sought the difference between the value of the strata lots
and the purchase price paid. In their Memorandum of Argument, the appellants
put it this way:

28.       ... The respondents
could have but did not sue for damages for misrepresentation at common law or
pursuant to s. 22 of
REDMA
, the measure of which would have been the
difference between the value of the units at the time of trial and the purchase
prices paid. The respondents sought and obtained monetary judgments for the
whole of the purchase prices paid. The strata lots constitute, at least,
substantial security for those judgments.

Discussion

[13]

A discretionary decision of a Court of Appeal judge in chambers is not
to be interfered with unless the chambers judge was wrong in law, principle, or
based her decision upon misconstrued facts; it is insufficient to show that she
exercised her discretion incorrectly. As stated in
Haldorson v. Coquitlam
(City)
, 2000 BCCA 672, para. 7:

It comes to this: that the review
hearing is not a hearing of the original application as if it were a new
application brought to a division of the court rather than to a chambers judge,
but is instead a review of what the chambers judge did against the test
encompassed by asking:  was the chambers judge wrong in law, or wrong in
principle, or did the chambers judge misconceive the facts. If the chambers
judge did not commit any of those errors, then the division of the court in
review should not change the order of the chambers judge.

[14]

So, the question here is whether or not the decision of MacKenzie J.A.
was wrong in law, principle, or based upon misconceived facts. The respondents
argue that the chambers judge committed an error by interpreting the judgment
as including the current fair market value of the strata lots. On their view,
as they were always entitled to sell their respective strata lots and retain
the proceeds, the judgment should be interpreted to be only the difference
between the current market value and the purchase price. Accordingly, MacKenzie
J.A. erred by considering that the respondents could sell their strata lots in
order to collect on most of the judgment.

[15]

Respectfully, this interpretation of judgment cannot be supported on a
reading of the decision of Pearlman J. In that decision, the order sought by
the respondents was summarized, at para. 1, as one seeking the return of
monies paid under the contracts of purchase and sale, together with interest,
and the costs of this action. Indeed, in seeking a rescission of the purchase
agreement under s. 21(3) of
REDMA
, the respondents cannot be said to be
seeking a payment of the difference in current market value and their purchase
price; rescission means that the agreement was to be undone, with the respondents
returning the title to the strata lots, and the appellants returning the
purchase price. This is exactly what Pearlman J. granted to the
respondents, as summarized at para. 134:

The plaintiffs will provide the defendants with vacant
possession of their respective Strata Lots by no later than 12 noon on July 16,
2012. If for any reason the parties anticipate that they will not be able to
fulfill their respective obligations
to repay the purchase monies and
transfer title
to the Strata Lots by July 16, 2012, they are at liberty to
apply for further directions or orders.

[Emphasis added.]

[16]

In this case, the respondents always had the option to sell their strata
lot and retain the proceeds. The respondents submit that this means the fruits
of the litigation, or the real effect of the judgment of Pearlman J., was to
grant them the difference between this market value and the purchase price.
While that may be the case, it does not change the character of the judgment
as being for the entire purchase price. Indeed, their submissions would have
greater weight if the respondents had sued the appellants for that difference,
as opposed to seeking a rescission of the purchase agreements. With the
respondents having chosen to pursue a judgment for the entirety of the purchase
price via a rescission, MacKenzie J.A. cannot be faulted for using that
amount as a basis for determining whether or not the respondents could collect
most of the judgment by selling their strata lots. Her decision was entirely within
her discretion. It was not wrong in law, principle, or based upon any
misconstrued facts.

Conclusion

[17]

Accordingly, I would dismiss the application to vary.

[18]

SAUNDERS J.A.
: I agree

[19]

GROBERMAN J.A.
: I agree.

[20]

FINCH C.J.B.C.
: The application is dismissed.

The
Honourable Chief Justice Finch


