376599 Alberta Inc. v. Tanshaw Products Inc. et al., 2005 ABQB 300

• Judge: Phillips, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: June 03, 2005
• Citations: 2005 ABQB 300;(2005), 379 A.R. 1 (QB)

376599 Alta. Inc. v. Tanshaw Products (2005), 379 A.R. 1 (QB)

MLB headnote and full text

Temp. Cite: [2005] A.R. TBEd. JN.046

376599 Alberta Inc. (plaintiff) v. Tanshaw Products Inc., Jay Johnson and Jay Johnson operating as Foam Frenzy Productions, 1434381 Ontario Inc., Premetalco Inc. operating as Debro Chemicals and Pharmaceuticals, 1198810 Ontario Inc. operating as Foam Frenzy Productions, John Does 1 - 6 and ABC Corps 1 - 6 (defendants) and Tanshaw Products Inc., Jay Johnson and Jay Johnson operating as Foam Frenzy Productions, 1434381 Ontario Inc., 1198810 Ontario Inc. operating as Foam Frenzy Productions and Jim Johnson (third parties)

(0301 05693)

Vincent Matthews and Her Majesty the Queen in Right of Alberta (plaintiffs) v. Landex Investments Ltd., 376599 Alberta Inc. operating as the Back Alley, John Does" 1 - 5, Tanshaw Products Inc., Tanshaw Manufacturing Inc., O.T.W.E. Co. operating as Off the Wall Entertainment, Jay Johnson, Richard Roe, Premetalco Inc. operating as Debro Chemicals and Pharmaceuticals and 1198810 Ontario Inc. operating as Foam Frenzy Productions (defendants) and Tanshaw Products Inc., Tanshaw Manufacturing Inc., O.T.W.E. Co., O.T.W.E. Co. operating as Off the Wall Entertainment, Jay Johnson, Jay Johnson operating as Foam Frenzy Productions, Jay Johnson operating as Lakeside, 1434381 Ontario Inc., Premetalco Inc. carrying on business as Debro Chemicals and Pharmaceuticals and 1198810 Ontario Inc. operating as Foam Frenzy Productions and Jim Johnson (third parties) and Landex Investments Ltd., 376599 Alberta Inc. operating as the Back Alley, Jay Johnson, Jay Johnson operating as Foam Frenzy Productions, Jay Johnson operating as Lakeside, 1434381 Ontario Inc., 1198810 Ontario Inc. operating as Foam Frenzy Productions, Jim Johnson, Tanshaw Products Inc. and Premetalco Inc. carrying on business as Debro Chemicals and Pharmaceuticals (fourth parties)

(0301 05693; 0101 10806; 2005 ABQB 300)

Indexed As: 376599 Alberta Inc. v. Tanshaw Products Inc. et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Phillips, J.

June 3, 2005.

Summary:

Johnson promoted events where a machine sprayed foam generated from a chemical solution over nightclub patrons. The machine used a chemical solution that Johnson bought from a Texas supplier. Seeking a Canadian supplier, Johnson contacted Tanshaw, a chemical manufacturer. Tanshaw contacted Debro, a distributor. Debro recommended and supplied a product that Tanshaw used to make a solution. The Debro product contained a known irritant. A nightclub expressed interest in an event. Johnson held a trial run party at the nightclub on a quiet night. He used the Texas solution for that event which was a success. A larger event was planned. For the second event, unknown to the nightclub, Johnson switched to the Tanshaw/Debro solution. Many patrons suffered significant skin and eye irritations. The nightclub and Tanshaw settled the personal injury claims that arose out of the incident for $481,808.52. The nightclub and Tanshaw sought contribution and indemnity from Johnson and Debro. The nightclub also sought damages due to economic loss suffered after the event.

The Alberta Court of Queen's Bench found that the nightclub did not bear any liability for losses arising out of the event. Fault was divided equally between Johnson, Tanshaw and Debro. Under s. 2(2) of the Contributory Negligence Act, Johnson, Tanshaw and Debro were each liable for one-third of the amount settled on the personal injury claims. Johnson, Tanshaw and Debro were found to be jointly and severally liable for the nightclub's economic losses. Damages were assessed at $88,224 for loss of profit on unit sales, $112,292 for loss of profit on price adjustments and $70,379 for additional gift certificate expenses. Special damages for legal fees and prejudgment interest were to be determined later.

Company Law - Topic 311

Nature of corporations - Lifting the corporate veil - One person company - Johnson was the sole shareholder of two numbered Ontario corporations - He promoted events at nightclubs where a machine sprayed foam over patrons - Johnson purchased the equipment through one numbered company but was paid for his services personally and never compensated the company - His business card did not refer to a corporate entity - One event resulted in a number of personal injury claims - The nightclub settled the claims and sought contribution and indemnity and damages for economic loss - At issue was Johnson's personal liability - The Alberta Court of Queen's Bench held that to the extent that Johnson's negligence contributed to the losses arising out of the event, the liability was to be borne by him personally - At all times the parties believed that they were conducting business with Johnson personally and Johnson had done nothing to suggest otherwise - See paragraphs 117 to 120.

Contracts - Topic 2122

Terms - Express terms - Exclusionary clauses - Bars - Johnson promoted events where a machine sprayed foam generated from a chemical solution over nightclub patrons - A number of patrons at a Calgary nightclub suffered skin and eye irritation after one of the events - Personal injury claims were brought against the nightclub, Johnson, the supplier of the chemical solution, Tanshaw, and Tanshaw's supplier, Debro - Debro sought to rely on an exclusionary clause printed on the back of its invoice - The Alberta Court of Queen's Bench concluded that the clause did not relieve Debro of liability to the nightclub or its patrons - First, neither the nightclub nor the claimants were parties to that contract - Debro had an independent duty to the nightclub and its patrons to provide a safe product - The clause referred to "the buyer" which was Tanshaw and "its customer" which was Johnson - The contra proferentum rule applied - Further, there was no evidence that the clause had been brought to the attention of Tanshaw - See paragraphs 203 to 209.

Contracts - Topic 2123

Terms - Express terms - Exclusionary clauses - Notice of - [See Contracts - Topic 2122 ].

Contracts - Topic 7433

Interpretation - Ambiguity - Contra proferentem rule - [See Contracts - Topic 2122 ].

Damage Awards - Topic 695

Torts - Injury to economic or business relations - General - [See Torts - Topic 4340 ].

Damages - Topic 1022

Mitigation - In tort - What constitutes reasonable remedial measures - Johnson promoted events where a machine sprayed foam over nightclub patrons - A nightclub expressed interest and arranged for a trial run - The event was a success - A larger event was planned - Unknown to the nightclub, Johnson switched suppliers for the chemical solution that generated the foam - The solution had not been tested - After the second event, many patrons suffered significant skin and eye irritation - The injuries attracted national media attention - The nightclub sought damages approaching $3 million for loss of profits and expenses - One of the defendants asserted a failure to mitigate, submitting that the nightclub should have made more public efforts to express concern and reassure potential patrons - The nightclub responded that it had avoided public comment in an effort to minimize the negative publicity - The Alberta Court of Queen's Bench found that the defendant had not established a failure to mitigate - Though the nightclub could have been more actively engaged with victims and the media, the silent approach was reasonable and had been an effective strategy in the wake of a hepatitis outbreak at a prominent restaurant - See paragraphs 329 to 333.

Damages - Topic 3903

Interference with economic relations - General - Negligence - Recovery for economic loss - [See Torts - Topic 4340 ].

Interest - Topic 5008

Interest as damages (prejudgment interest) - General principles - Prejudgment interest - Entitlement - A number of patrons suffered injuries after an event at a nightclub - The nightclub and the defendant Tanshaw settled the personal injury claims - They filed a notice to admit facts which stated that the sum paid was a fair and appropriate settlement - The nightclub and Tanshaw sought contribution and indemnity from the other defendants for the sum paid plus prejudgment interest - The defendant Debro objected to the claim for prejudgment interest - Debro submitted that it had never agreed to a further sum and that the notice to admit facts entitled it to assume that if liability were assessed against it, it would only be liable for its proportionate share of the settlement - The Alberta Court of Queen's Bench concluded that it was appropriate to fix Debro with liability for its share of prejudgment interest - The initiative taken to settle the claims had benefited the parties and the court by reducing the potential cost and complexity of a long trial - Further, the notice to admit facts was silent regarding prejudgment interest - See paragraphs 220 to 224.

Torts - Topic 77

Negligence - Duty of care - Relationship required to raise duty of care - Johnson promoted events where a machine sprayed foam over nightclub patrons - After an event at which Johnson used an untested chemical solution to generate foam, many patrons of the nightclub suffered significant skin and eye irritation - Personal injury claims were brought against the nightclub, Johnson, Tanshaw as the supplier of the chemical solution, and Tanshaw's supplier, Debro - Regarding the liability of Johnson, Tanshaw and Debro for the patrons' damages and the nightclub's economic loss, the Alberta Court of Queen's Bench held that Johnson, Tanshaw and Debro were in sufficient proximity to the nightclub and its patrons to ground a duty of care - This was a conventional commercial arrangement where the chemical distributors and suppliers made recommendations and sold an unsuitable product that was used to ill effect - Policy considerations weighed in favour of confirming the duty of distributors and suppliers to their product's users to ensure its suitability and fitness and to provide adequate warning of any hazards - See paragraphs 141 to 154.

Torts - Topic 86

Negligence - Duty of care - Duty to warn - [See Torts - Topic 4335 ].

Torts - Topic 3504

Occupiers' liability or negligence for dangerous premises - General principles - Duty of occupier - Foreseeability - [See Torts - Topic 3508 ].

Torts - Topic 3508

Occupiers' liability or negligence for dangerous premises - General principles - Liability of occupier for acts of third party - Johnson promoted events where a machine sprayed foam over nightclub patrons - A nightclub expressed interest - Johnson assured the management that the events were safe - The nightclub arranged for a trial run - The event was a success - A larger event was planned - Unknown to the nightclub, Johnson switched suppliers for the chemical solution that generated the foam - The solution had not been tested - After the second event, many patrons suffered significant skin and eye irritation - The nightclub and one supplier settled the personal injury claims that arose - They sought contribution and indemnity from Johnson and the other supplier - At issue was the nightclub's own liability as occupier - The Alberta Court of Queen's Bench held that the nightclub had exercised reasonable care and was not liable in negligence to the personal injury plaintiffs - The nightclub could not have reasonably foreseen that Johnson would change the chemical solution - The nightclub was entitled to rely on Johnson's record and on its own experience with the trial run - See paragraphs 121 to 136.

Torts - Topic 4326

Suppliers of goods - Negligence - Manufacturers - Standard of care - Johnson promoted events where a machine sprayed foam over nightclub patrons - The machine used a chemical solution that Johnson bought from a Texas supplier - Seeking a Canadian supplier, Johnson contacted Tanshaw, a chemical manufacturer - Tanshaw contacted Debro, a distributor - Debro recommended and supplied a product that Tanshaw used to make a solution - The Debro product contained a known irritant - Johnson used the untested solution at an event - A number of patrons suffered significant skin and eye irritation resulting in personal injury actions against the nightclub, Johnson, Tanshaw and Debro - Regarding Tanshaw's and Debro's liability, the Alberta Court of Queen's Bench indicated that the standard of care imposed on manufacturers extended beyond the reasonable person test - Tanshaw had a duty not to market a product that would come into contact with human skin and eyes without adequate testing - Debro had a duty to provide a product that was safe for the proposed application and, to the extent that there were dangers associated with the product, to provide a clear and adequate warning - See paragraphs 167 to 189.

Torts - Topic 4334

Suppliers of goods - Negligence - Manufacturers - Causation - Johnson promoted events where a machine sprayed foam over nightclub patrons - The machine used a chemical solution from a Texas supplier - Seeking a Canadian supplier, Johnson contacted Tanshaw, a chemical manufacturer - Tanshaw contacted Debro, a distributor - Debro recommended and supplied a product that Tanshaw used to make a solution - The Debro product contained a known irritant - Debro cautioned Tanshaw that it should obtain a waiver from Johnson - Johnson used the untested solution at an event - A number of patrons suffered significant skin and eye irritation resulting in personal injury actions against the nightclub, Johnson, Tanshaw and Debro and an action by the nightclub for economic loss - Debro contended that it had not caused the loss, submitting that Tanshaw's negligence was an intervening act and that Johnson was the root cause - The Alberta Court of Queen's Bench held that Johnson, Tanshaw and Debro were equally at fault - Debro recommended the product to Tanshaw but gave no specific warning regarding its risks - Tanshaw and Johnson were equally careless but they were careless in the context of Debro's recommendation - See paragraphs 190 to 202.

Torts - Topic 4335

Suppliers of goods - Negligence - Manufacturers - Duty to warn users respecting dangers - Johnson promoted events where a machine sprayed foam over nightclub patrons - The machine used a chemical solution from a Texas supplier - Seeking a Canadian supplier, Johnson contacted Tanshaw, a chemical manufacturer - Tanshaw contacted Debro, a distributor - Debro recommended and supplied a product that Tanshaw used to make a solution - The Debro product contained a known irritant - Debro cautioned Tanshaw that it should obtain a waiver from Johnson - Johnson used the solution at an event - A number of patrons suffered significant skin and eye irritation resulting in personal injury actions against the nightclub, Johnson, Tanshaw and Debro - At issue was whether Debro's warning to Tanshaw absolved Debro or reduced the scope of its liability - The Alberta Court of Queen's Bench found that Debro failed to provide a clear and adequate warning - Debro was held to the same standard as a manufacturer as it held itself out as having chemical expertise - In simply suggesting a waiver, Debro did nothing to advise Tanshaw of the specific skin and eye irritation concerns - Moreover, the recommendation appeared to have been directed at avoiding legal liability, not injury - See paragraphs 184 to 187.

Torts - Topic 4340

Suppliers of goods - Negligence - Manufacturers - Damages - Measure of - Johnson promoted events where a machine sprayed foam over nightclub patrons - A nightclub expressed interest and arranged for a trial run - The event was a success - A larger event was planned for April 2001- Unknown to the nightclub, Johnson switched suppliers for the chemical solution that generated the foam - The solution had not been tested - After the April event, many patrons suffered significant skin and eye irritation - The nightclub sought damages approaching $3 million from Johnson and the chemical solution suppliers for loss of profits suffered for four years after the event and for expenses - The Alberta Court of Queen's Bench held that the defendants were jointly and severally liable for the nightclub's economic loss - The period of loss extended from the April party to September 2001 - Damages were assessed at $270,895 - Special damages and prejudgment interest were to be determined later - See paragraph 336.

Torts - Topic 4364

Suppliers of goods - Negligence - Retailers and wholesalers - Duty of warning respecting dangers - [See Torts - Topic 4335 ].

Torts - Topic 4426

Suppliers of goods - Inherently dangerous chattels - Warning - Duty of - [See Torts - Topic 4335 ].

Torts - Topic 4468

Suppliers of goods - Defences - Products liability - Learned intermediary defence or intermediate inspection - Johnson promoted events where a machine sprayed foam over nightclub patrons - The machine used a chemical solution that Johnson bought from a Texas supplier - Seeking a Canadian supplier, Johnson contacted Tanshaw, a chemical manufacturer - Tanshaw contacted Debro, a distributor - Debro recommended and supplied a product that contained a known irritant - Johnson used the untested product at an event - A number of patrons suffered significant skin and eye irritation resulting in personal injury actions against the nightclub, Johnson, Tanshaw and Debro - Debro raised the defence of intermediate inspection, submitting that it was reasonably foreseeable that Tanshaw would test a sample to find the appropriate levels of dilution and neutralization - The Alberta Court of Queen's Bench rejected the argument, holding that Debro had a duty of care to the nightclub and its patrons - Both Debro and Tanshaw understood that Debro had expertise and that its recommendations would be relied on - It was not reasonable for Debro to expect Tanshaw to determine if Debro's recommendations had been made in error - See paragraphs 155 to 166.

Torts - Topic 6601

Defences - Contributory negligence - General - What constitutes contributory negligence - Johnson promoted events where a machine sprayed foam over nightclub patrons - A nightclub expressed interest - Johnson assured the management that the parties were safe - The nightclub arranged for a trial run - The event was a success - A larger event was planned - Unknown to the nightclub, Johnson switched suppliers for the chemical solution that generated the foam - The solution had not been tested - After the second event, many patrons suffered significant skin and eye irritation - The nightclub sought damages from Johnson and the chemical solution suppliers for economic loss suffered after the event - The defendant Debro submitted that the nightclub was contributorily negligent in failing to investigate the event's concept, Johnson, and the chemical solution - The Alberta Court of Queen's Bench held that the nightclub had exercised reasonable care and was not contributorily negligent - The nightclub could not have reasonably anticipated that Johnson would change the chemical solution - Any additional enquiries would not have been likely to yield results that would have made the nightclub aware of potential danger - See paragraphs 137 to 140.

Torts - Topic 7381

Joint and concurrent tortfeasors - Contribution between tortfeasors - Indemnity between tortfeasors - A number of patrons were injured due to an event at a nightclub - They brought actions for damages against the nightclub and three others, Johnson, Tanshaw and Debro - The nightclub and Tanshaw settled and paid the claims - Johnson, Tanshaw and Debro were found to be equally at fault - The nightclub was not at fault - Anticipating that Johnson would declare bankruptcy, the nightclub and Tanshaw sought to have Johnson's one-third share of liability distributed equally between Tanshaw and Debro - The Alberta Court of Queen's Bench found that there was no authority for such an order - Under s. 2(2) of the Contributory Negligence Act, defendants were liable to one another only to the degree to which they had been at fault - Neither the court's inherent jurisdiction nor the discretion extended by s. 8 of the Judicature Act allowed the court to ignore the Contributory Negligence Act - See paragraphs 214 to 219.

Torts - Topic 7382

Joint and concurrent tortfeasors - Contribution between tortfeasors - Apportionment of fault - Johnson promoted parties where a machine sprayed foam over nightclub patrons - A nightclub expressed interest and arranged for a trial run - The event was a success - A larger event was planned - Unknown to the nightclub, Johnson switched suppliers for the chemical solution that generated the foam - The solution had not been tested - After the second event, many patrons suffered significant skin and eye irritation - The nightclub and one supplier settled the personal injury claims that arose - At issue was the apportionment of fault - The Alberta Court of Queen's Bench held that fault was divided equally between Johnson and each of the chemical suppliers - Each bore a responsibility to ensure that the product had been tested - Each was aware of the use of the product and should have made the necessary inquiries before selling and using it - The nightclub was not at fault - See paragraphs 210 to 213.

Torts - Topic 7411

Joint and concurrent tortfeasors - Contribution between tortfeasors - Contribution orders - Occupiers' liability cases - [See Torts - Topic 3508 ].

Cases Noticed:

Tri-Con Concrete Finishing Co. v. Caravaggio et al., [2002] O.T.C. 470; 21 C.L.R.(3d) 178 (Sup. Ct.), refd to. [para. 119].

Barnfield v. Westfair Foods Ltd. et al. (2000), 258 A.R. 183 (Q.B.), refd to. [para. 132].

Plas-Tex Canada Ltd. et al. v. Dow Chemical of Canada Ltd. et al. (2004), 357 A.R. 139; 334 W.A.C. 139; 2004 ABCA 309, refd to. [para. 144].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), refd to. [para. 144].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, refd to. [para. 144].

Cooper v. Hobart - see Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Cooper v. Registrar of Mortgage Brokers (B.C.) et al., [2001] 3 S.C.R. 537; 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268, refd to. [para. 144].

Edwards et al. v. Law Society of Upper Canada et al., [2001] 3 S.C.R. 562; 277 N.R. 145; 153 O.A.C. 388, refd to. [para. 144].

Hasket v. Equifax Canada - see Haskett v. Trans Union of Canada Inc. et al.

Haskett v. Trans Union of Canada Inc. et al. (2003), 169 O.A.C. 201; 63 O.R.(3d) 577 (C.A.), refd to. [para. 146].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241, refd to. [para. 147].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201, refd to. [para. 147].

Donoghue v. Stevenson, [1932] A.C. 562 (H.L.), refd to. [para. 148].

Viridian Inc. v. Dresser Canada Inc. et al. (2002), 312 A.R. 93; 281 W.A.C. 93; 2002 ABCA 173, refd to. [para. 157].

Alie et al. v. Bertrand & Frère Construction Co. et al. (2002), 30 C.C.L.I.(3d) 166 (Sup. Ct.), affd. (2002), 30 C.C.L.I.(3d) 159 (C.A.), revd. in part (2002), 167 O.A.C. 20; 1 C.C.L.I.(4th) 166 (C.A.), refd to. [para. 169].

Hollis v. Dow Corning Corp. et al., [1995] 4 S.C.R. 634; 190 N.R. 241; 67 B.C.A.C. 1; 111 W.A.C. 1, refd to. [para. 173].

Lem v. Barotto Sports Ltd. and Ponsness-Warren Inc., [1976] 6 W.W.R. 430; 1 A.R. 556 (C.A.), refd to. [para. 174].

Lambert v. Lastoplex Chemicals Co., [1972] S.C.R. 569, refd to. [para. 186].

Murphy and Murphy Estate v. D & B Holdings Ltd., Pash Bros. Const. Ltd., Ralph and Good-Wear Treaders Ltd. (1979), 31 N.S.R.(2d) 380; 52 A.P.R. 380; 98 D.L.R.(3d) 59 (C.A.), refd to. [para. 189].

Winnipeg Condominium Corp. No. 36 v. Bird Construction Co. et al., [1995] 1 S.C.R. 85; 176 N.R. 321; 100 Man.R.(2d) 241; 91 W.A.C. 241, refd to. [para. 204].

Eggen Seed Farms Ltd. v. Alberta Wheat Pool (1997), 205 A.R. 77 (Q.B.), refd to. [para. 207].

Campbell Estate v. Calgary Power Ltd. et al. (1988), 89 A.R. 293 (C.A.), refd to. [para. 218].

Michaels et al. v. Red Deer College, [1976] 2 S.C.R. 324; 5 N.R. 99, refd to. [para. 332].

Janiak v. Ippolito, [1985] 1 S.C.R. 146; 57 N.R. 241; 9 O.A.C. 1, refd to. [para. 332].

Statutes Noticed:

Contributory Negligence Act, R.S.A. 2000, c. C-27, sect. 2 [para. 217].

Judicature Act, R.S.A. 2000, c. J-2, sect. 8 [para. 216].

Occupiers' Liability Act, R.S.A. 2000, c. O-4, sect. 11(1) [para. 121].

Authors and Works Noticed:

Chaloupa, Frank J., Grossman, Michael, and Saffer, Henry, The Effects of Price on Alcohol Consumption and Alcohol Related Problems (2002), Alcohol Research and Health, vol. 26, No. 1, generally [para. 283].

Edgell, D.F., Product Liability in Canada, p. 13 [para. 167].

Johnson, James A., Oksanen, Ernest H., Veall, Michael R., and Fretz, Deborah, Short-Run and Long-Run Elasticities for Canadian Consumption of Alcoholic Beverages: an Error-Correction Mechanism/Cointegration Approach (1992), The Review of Economics and Statistics, vol. 74, No. 1, generally [para. 283].

Klar, Lewis N., Linden, Allan M., Cherniak, Earl A., and Kryworuk, Peter W., Remedies in Tort, vol. 4, p. 27-162.91 [para. 332].

Theall, Product Liability: Canadian Law and Practice, p. L7-19 [paras. 155, 156].

Counsel:

David M. Pick (Brownlee Fryett LLP), for the defendant, 376599 Alberta Inc. ("Back Alley");

Nancy M. Carruthers (Parlee McLaws LLP), for the third party, Tanshaw Products Inc. ("Tanshaw");

Donald J. Chernichen, Q.C., and Melissa Moulton Tennison (Burnet Duckworth & Palmer LLP), for the fourth party, Premetalco Inc. operating as Debro Chemicals and Pharmaceuticals ("Debro");

James G. Hanley, for the plaintiff, 376599 Alberta Inc. ("Back Alley").

This action was heard by Phillips, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on June 3, 2005.