Friday, March 30, 2018

Response to Westsea's Application for Leave to Cross-Appeal, and my "long-paper"


This is a short update:

I've filed a Response to Westsea's Application for Leave to Cross-Appeal.

Basically, I wanted to focus the court's attention on the test for prudent and reasonable discretion under the lease.  It is both parties' aim (Westsea's and mine) for the court to reconsider whether litigation costs are payable by the leaseholders as an operating expense under the lease. This by itself is not likely to be an issue the court would find to be of public and national importance, but it's possible that a number of other issues are. Regardless, the parties respective applications for leave to appeal to the Supreme Court of Canada are long-shots.

I have also prepared what I call my "long paper on private 99-year leases".  Basically the idea is to lay the groundwork for why new legislation regulating these 99-year leases is necessary in BC. I've sent this to the BC Law Institute https://www.bcli.org/ and have received a positive response.  They have indicated they will table the matter at an upcoming meeting to discuss whether the issues warrant a report by the BCLI.  I feel cautiously optimistic my paper makes a sufficient case for a further review by the BCLI, but we won't know for a while.  If the BCLI decides to report on the issues, it would go a long way to persuading our legislators that some kind of legislation is needed.

I have also sent the paper to Jacquie Dawes, Deputy Minister of Municipal Affairs and Housing. It is my understanding that staff have been assigned to review these 99-year leases, which I expect is largely a response to the numerous emails and correspondences from leaseholders who have raised concerns about these leases, both at Orchard House and other 99-leaseholds in BC. However, this paper should assist policy staff to understand the problems with these leases and where there is a legislative gap.

Note I may make ongoing updates to the long-paper.

Wednesday, March 7, 2018

Westsea's Application to the SCC to Cross-Appeal


Background
This is an update on the status of my Supreme Court of Canada (SCC) Application for Leave to Appeal the decision of the Court of Appeal in October 2017. Recall that the Court of Appeal (CA) concluded that Mr. Justice MacKenzie's decision that Westsea could not recover its litigation costs as an operating expense under the lease, was premature and that Westsea, in effect, had to go back and charge leaseholders its litigation costs, and then to sue those who refused to pay.

For many reasons, as I have set out in my Application for Leave, I felt this decision was unjust, and so I applied for leave to appeal.  Statistically there is a 10-15% chance that leave will be granted, so leaseholders must recognize this reality and accept that the chances of actually obtaining leave to appeal are quite small.

SCC opens file
The SCC registry finally opened its file on February 8, 2018, almost three months after the registry received my material in mid-November.  This sort of delay, though at the high end, is still within the range of normal, I understand.

From February 8, Westsea had 30 days from then to file a Response and/or to file an Application for Leave to Cross Appeal.  Yesterday Westsea served me with its Application for Leave to Cross-Appeal. and I have learned that Westsea has also mailed copies to other leaseholders.

This is to address some questions that I have received.

Some commonality of issues raised
First, leaseholders have known from correspondence from Westsea's lawyers, that Westsea has planned to cross-appeal. This means that Westsea also believes that the Court of Appeal erred.  Our respective reasons as to why the Court of Appeal was wrong are not all the same, but they are partially the same (see Issue 1, page 10, of my Application for Leave to Appeal, and Issue 1 of Westsea's Application for Leave to Cross-Appeal). It's somewhat technical, so I won't delve into the details of the commonality between our respective applications, but anyone interested can review these links.

From my perspective, even if the SCC were to grant leave strictly on the basis of Westsea's cross-appeal leave application, and not on my initial leave application, this would be fine since the cross-appeal application covers one of the main issues I was raising, and then raises a second issue that I primarily agree with. In either case, if leave is granted, it's likely the SCC would review the actual decision of Mr. Justice MacKenzie, but it would do so in the context of other issues of public/national importance. Both parties want this.

What this means, I believe, is that there is now an increased chance that the SCC will grant leave. It is not at all guaranteed, however, but if both parties agree the CA was wrong, the SCC will surely scrutinize the issues very closely before deciding whether to grant or dismiss our applications.

A brief response
I do plan to submit a short Response (as I am entitled now to do), primarily in respect of the issues related to prudent and reasonable discretion (see Issue 7 of my Application for Leave to Appeal) which Westsea appears to recognize as an issue related to the ones they have raised, albeit very obliquely. I also plan to provide a short Response to Westsea's position on costs.  I will update leaseholders when that is done.

A unique collaboration?
I draw attention to Westsea's paragraph 9 (p. 21) of its Application for Leave to Cross-Appeal:

"Instead, the practical consequences of the Appeal Decision are to require new litigation and force Orchard House leaseholders and Westsea to risk breaching their contractual obligations, either by refusing to pay the legal costs demanded or by demanding legal costs that are not recoverable under the Lease. The Appeal Decision imposes this requirement, oddly, in an attempt to protect the interests of interested parties who declined to participate in the Petition, being the other leaseholders at Orchard House who were served with the Petition.  It is unsurprising then that both Westsea and Mr. Trenchard seek leave of this Honourable Court to appeal the Appeal Decision."

This paragraph summarizes very nicely the reasons why both parties feel that the CA was wrong. There is certainly a sense of a unique circumstance here in which the CA has caused both parties to in effect, join forces, to seek a resolution to these issues. It may very well be that the Court of Appeal quite intentionally set matters up this way.  Of course we will never really know and, even if it did, we will not know for some time whether this makes the Court of Appeal brilliant in its foresight, or on the contrary, highly absent in foresight, or something inbetween.

Nonetheless, the circumstances are interesting, and if indeed this goes to the SCC, there may be cause for legal practitioners to study what the heck happened in this case. Of course this doesn't help the leaseholders or, for that matter, Westsea, in any practical way at present.

Other questions that have arisen:

SCC agents
On the cover is the name of an agent (lawyer) Marie-France Major.  That person is simply an agent for Westsea in Ottawa.  Parties are allowed to use SCC agents (who are lawyers) to assist them with procedural and other issues before the SCC. They are expensive though, which is why I have not hired one.  If we are fortunate enough to be granted leave to appeal, I will in fact be obligated to retain an agent in Ottawa to assist with procedural issues.

Service
Leaseholders appear to be receiving a copy of Westsea's cover letter to me that refers to "service on you" -- this is simply Westsea's service of its material on me, with a copy to leaseholders. This does not mean leaseholders are somehow being made parties to these matters. They are simply being provided copies of the material.

However, it is a significant issue as to whether or not parties should have been given notice of Westsea's original appeal, and how one party may effectively represent a large number of others -- that is a big issue here.