



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



The Owners, Strata Plan LMS3259 v. Sze
  Hang Holding Inc.
,









2010 BCCA 80




Date: 20100125

Docket:
CA037092

Between:

The
Owners, Strata Plan LMS3259

Respondent

(Plaintiff)

And

Sze
Hang Holding Inc. and Leon Lam

Appellants

(Defendants)




Before:



The Honourable Mr. Justice K. Smith





(In Chambers)




On
appeal from: Supreme Court of British Columbia, April 27, 2009
(
The Owners, Strata Plan LMS3259 v. Sze Hang Holding Inc.
, 2009 BCSC
473,
Vancouver Registry L050030/L052756)

Oral Reasons for Judgment




Counsel for the Appellant:



R.P.
  Hamilton





Counsel for the Respondent:



P.G.
  Mendes





Place and Date of Hearing:



Vancouver,
  British Columbia

January
  25, 2010





Place and Date of Judgment:



Vancouver,
  British Columbia

January
  25, 2010






[1]

K. SMITH J.A.
: The
respondent applies for three things. First, they ask me to order, as a
condition of the appellants being able to pursue this appeal, that the
appellants first pay judgments extant against them in other proceedings in the
trial court and in another appeal on the basis that those judgments are related
to the matters in issue in this appeal. The relationship is said to arise out
of the facts that they involve, at least to some extent, the same parties, the
appellants being the same parties all proceedings, the respondent being either
a party or represented by parties in the other proceedings, and that they all
arise out of a dispute that has been ongoing between the appellants and the
Strata corporation in which the appellants own two units. Remarkably, the
dispute between these parties has been going on for many years and has
generated, if I am not mistaken, seven lawsuits, at least one of which has gone
to appeal other than this one.

[2]

Counsel cited no authority for the proposition
that as a single justice in chambers I could make the order sought but refers
to s. 10 of the
Court of Appeal Act
, which allows a single justice in
chambers to make any order required by the interests of justice. In my view,
there is nothing in the
Court of Appeal Act
that would confer authority
on me sitting here today to order as a condition of continuing with this appeal
that judgments in favour of the respondents in other matters be paid.

[3]

The second order the respondent seeks is an
order for security for costs of this appeal. It is not contested that there are
orders for costs outstanding on both sides in other proceedings between these
two parties. It appears that the total owing to the respondent in costs by far exceeds
what might be claimed by the appellants in costs in the proceedings in which
they have been successful. Nevertheless, there are judgments against the appellants
for costs and on substantive matters that have been outstanding and that have
not been paid despite, in one case, an order made by the Registrar that
judgment be paid in instalments. Nothing has been paid on that order.

[4]

The burden on the application for security for
costs of the appeal rests on the appellants to show why security should not be
required.  The relevant considerations are the financial means of the appellants,
the merits of the appeal, the timeliness of the application, and whether costs
will be readily recoverable. No objection has been made to the timeliness of
the application here. The appeal has been extant since June of 2009. The appeal
record was filed in July and it appears the matter has not progressed beyond
that stage. So timeliness in the sense that the appellants would be unduly
prejudiced by an order for security is not a factor.

[5]

Counsel have spent a lot of time on the merits
of the appeal. The order under appeal was made in chambers under Rule 19(24) of
the
Supreme Court Rules
, and it ordered that the appellants statements
of defence and counterclaims be struck out in their entirety on the ground that
they were an abuse of process. They were described as prolix and confusing and
that description is accepted by both counsel on this application.

[6]

However, counsel for the appellants says that
the chambers judge erred in that, while she quite justifiably should have
struck out the greatest portion of the statements of defence and the
counterclaims, she failed to examine those documents to see if any parts of
them could stand as valid defences and claims. He identifies certain
paragraphs, particularly in the statement of defence, that meet the allegations
in the statement of claim directly. For purposes of this application, the
merits showing only has to meet a low threshold and I am satisfied that has
been established here.

[7]

The next question is the appellants financial
means and, together with that, whether the costs will be readily recoverable.
The submissions on this point have turned around the fact that the appellants
own these two units and that together they have an assessed value in the order
of some $200,000. It is common ground that they are encumbered by mortgages
that in total amount to about $10,000. So there is, at least on the face of it,
some $190,000 in equity available.

[8]

The respondents have registered certificates of
judgment in the Land Title Office against the titles to these two properties
and they have pending, at the moment, an application in the Supreme Court for
leave to sell those properties and that they have conduct of sale. The
properties are listed for sale by the appellants at prices that appear to be
substantially above their assessed values. The respondents position is that
although there is equity in the properties that may ultimately be sufficient to
cover at least the bulk of the costs and the judgments outstanding, that they
will not be readily recoverable.

[9]

After considering the submissions in the context
of the overarching principle that the order must be one made in the interests of
justice, I am satisfied that an order for security for costs of the appeal
should be made. Counsel for the respondents has not submitted a draft bill of
costs suggesting any amount. In the circumstances, I am going to set the amount
at $5,000. It will be a term that there be no further proceedings in the appeal
until the security for costs is posted.  The respondents also ask for liberty
to apply to dismiss the appeal as abandoned if the security is not posted by a
stipulated date. I would not make that order. If the appellants do not post the
security and proceed with the appeal then it will be open to the respondent to
take that step if and when it considers it appropriate to do so.

[10]

The final order sought is one for security for
the costs of the judgment below. The costs below are special costs and are in
the amount of some $43,000. The judgment below is in respect of fines levied by
the corporation against the appellants which total some $157,000. These amounts
are hotly in dispute on this appeal. The burden on this application is on the
respondent to satisfy me that the interests of justice require the posting of
security for the trial judgment costs and prejudice if the order is not made,
and I am required to consider the merits of the appeal, which I have already
discussed.

[11]

The prejudice, if such an order is not made, is
that respondent may be delayed in recovering the judgments, but I do not
understand there to be any serious dispute over the proposition that the
judgments are secured by the equity in the two properties in question.

[12]

In all of the circumstances, I am not satisfied
that the applicant respondent has made out a case for security for the costs of
the trial judgment and the trial costs. I would not grant that application.
There has been mixed success here and, in view of that fact, I would not make
any order for costs on this application.

The Honourable Mr. Justice K. Smith


