Banville & Jones Wine Co. et al. v. Liquor Control Commission (Man.),

• Jurisdiction: Manitoba
• Judge: Joyal
• Neutral Citation: 2010 MBQB 23
• Citation: (2010), 250 Man.R.(2d) 1 (QB),2010 MBQB 23,250 ManR(2d) 1,(2010), 250 ManR(2d) 1 (QB),250 Man.R.(2d) 1
• Date: 03 February 2010
• Court: Court of Queen's Bench of Manitoba (Canada)

Banville & Jones Wine v. Liquor Control (2010), 250 Man.R.(2d) 1 (QB)

MLB headnote and full text

Temp. Cite: [2010] Man.R.(2d) TBEd. FE.034

Banville & Jones Wine Co. Inc., Pembina Fine Wines Inc., Fenton's Wine Merchants Ltd., Kenaston Wine Market Inc. and Mondo Foods Company Ltd. (applicants) v. The Manitoba Liquor Control Commission (respondent)

(CI 08-01-59369)

Liquor Control Commission (applicant) v. Banville & Jones Wine Co. Inc., Fenton's Wine Merchants Ltd., Kenaston Wine Market Inc., Mondo Foods Company Ltd. and Pembina Fine Wines Inc. (respondents)

(CI 08-01-59429)

(2010 MBQB 23)

Indexed As: Banville & Jones Wine Co. et al. v. Liquor Control Commission (Man.)

Manitoba Court of Queen's Bench

Winnipeg Centre

Joyal, A.C.J.Q.B.

February 3, 2010.

Summary:

Certain stand-alone wine stores and the Manitoba Liquor Control Commission (MLCC) appealed from an arbitration panel's decision. The present appeals were made pursuant to jurisdiction rooted in a clause contained in a settlement agreement that arose from a previous arbitration between the parties.

The Manitoba Court of Queen's Bench dismissed the appeals.

Arbitration - Topic 8300.1

Judicial review (incl. appeals) - Grounds - General - Grounds not raised before arbitrator - Certain stand-alone wine stores (SWS) and the Manitoba Liquor Control Commission (MLCC) appealed from an arbitration panel's decision - The SWS contended that the panel erred by not finding that the acts of Crawford, a senior official with MLCC, constituted the tort of unlawful interference with economic interest - The Manitoba Court of Queen's Bench noted that s. 17(c)(iii) of the dispute resolution provision of the operating agreements provided that this arbitration was governed by the rules of procedure and evidence applicable in the Court of Queen's Bench: "Section 21 of the Arbitration Act shall not apply and the arbitral proceedings shall be conducted in accordance with, and the Panel shall be bound by, the rules of evidence and procedure that govern actions before the Manitoba Court of Queen's Bench." - The court held that the tort of unlawful interference with economic interest was neither pled nor argued at the hearing - Raised as it was on the appeal, it represented a new argument and a new cause of action - Neither the evidence nor the cross-examination would have been the same at the arbitration hearing had the tort of unlawful interference with economic interest been squarely placed before the arbitration panel - The jurisprudence established that permission to raise new issues on appeal should not be granted lightly and such permission would only be given in rare and extraordinary cases - In a case like this, where a cause of action could have been raised at the original proceedings, and the appeal court might be deprived of the additional and necessary evidence to rule on the issue, permission to raise a new cause of action should not be granted - See paragraphs 77 to 98.

Arbitration - Topic 8704

Judicial review (incl. appeals) - Practice - Appeals - Jurisdiction - Certain stand-alone wine stores and the Manitoba Liquor Control Commission (MLCC) appealed from an arbitration panel's decision - The appeals were made pursuant to a clause contained in a settlement agreement that arose from a previous arbitration between the parties - The Manitoba Court of Queen's Bench stated that, as an appellate court, its jurisdiction was rooted in the aforementioned clause, which was very unique and particular - By permitting appeals on questions of law, fact and mixed fact and law, it delineated both the nature and the limitation of the court's reviewing function in the proceedings - It was imperative that in examining the issues, the court remain mindful that rather than acting as a first-instance tribunal, it was instead sitting as a Court of Appeal - The applicable standard of review to be applied respecting questions of law was correctness - For questions of mixed fact and law, or of fact alone, the standard was palpable and overriding error, unless the question was one of mixed fact and law relating to an extricable principle of law, in which case the standard of correctness applied to that extricable legal question - See paragraphs 69 to 74.

Arbitration - Topic 8705

Judicial review (incl. appeals) - Practice - Appeals - Standard of review - [See Arbitration - Topic 8704 ].

Damages - Topic 531

Limits of compensatory damages - Remoteness - Torts - Recoverable damages - Purely economic loss - Certain stand-alone wine stores (SWS) and the Manitoba Liquor Control Commission (MLCC) appealed from an arbitration panel's decision - The SWS contended that the panel erred by not finding that the acts of Crawford, a senior official with MLCC, constituted the tort of unlawful interference with economic interest - The Manitoba Court of Queen's Bench stated that "In cases involving pure economic loss, damages are recoverable only in exceptional circumstances. For a party to succeed in a claim for pure economic loss, either the claim must fall within one of five pre-existing categories in which a duty of care has been recognized or the claim must be such that a new category is created using what has been characterized as the Anns test. See Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L. (E.))." - See paragraph 116.

Damages - Topic 803

Assessment - Where amount of loss difficult to estimate or determine - The Manitoba Liquor Control Commission (MLCC) and stand-alone wine stores entered into operating agreements - Certain stand-alone wine stores (SWS) and the MLCC appealed from an arbitration panel's decision - In that decision, the panel found in favour of the SWS in respect of only one ground, being ground 6 - The issue before the arbitration panel arising from ground 6 was whether in October 2006, Crawford, a senior official with MLCC, precluded the listing of J. Lohr products as MLCC listed products in an effort to assist Mr. Wozny to sell J. Lohr products at prices he desired - Wozny owned one of two specialty food and wine stores that also had operating agreements with the MLCC - In respect of that ground, the SWS were awarded damages of $100,000 - The Manitoba Court of Queen's Bench dismissed the appeals - Respecting damages, the court noted that the panel candidly, but not unfairly, acknowledged that in light of its finding that it was "satisfied that some damages were sustained", it was awarding damages "arbitrarily" set at $20,000 per store - It was logical and reasonable to conclude that based on its determination respecting the allegation contained in ground 6, the panel's decision to award the damages it did, took into account the impugned conduct of the MLCC encompassed in the allegation found in ground 6 - The arbitration panel acted well within its jurisdiction and discretion, and on the basis of the admittedly limited evidence - See paragraphs 164 to 179.

Damages - Topic 1305

Exemplary or punitive damages - Breach of contract (incl. breach of duty of good faith) - The Manitoba Liquor Control Commission (MLCC) and stand-alone wine stores entered into operating agreements - Certain stand-alone wine stores (SWS) and MLCC appealed from an arbitration panel's decision - SWS contended, inter alia, that the panel erred by not finding that the acts of Crawford, a senior official with MLCC, constituted the tort of unlawful interference with economic interest - MLCC contended that the arbitration panel erred in finding in favour of SWS respecting ground 6 in the notice to arbitrate on the issue of liability and in its award of damages - The issue before the arbitration panel arising from ground 6 was whether Crawford, in October 2006, precluded the listing of J. Lohr products as MLCC listed products in an effort to assist Mr. Wozny to sell J. Lohr products at prices he desired - Wozny owned one of two specialty food and wine stores which also had operating agreements with MLCC - SWS also contended that the panel erred in not awarding punitive damages in addition to $100,000 damages that it awarded respecting ground 6 - The Manitoba Court of Queen's Bench dismissed the appeals - The court held, inter alia, that the panel did not err in finding that MLCC was not liable for punitive damages respecting ground 6 - In their reasons, the majority did not find that Crawford acted so as to intentionally breach any duty of good faith, fairness or impartiality that she owed to SWS - Neither did they find Crawford to have been dishonest, disingenuous or deliberately evasive - They also did not find a deliberate pattern of past conduct on Crawford's or MLCC's part - Such determinations were open to the panel based on the evidence before it - See paragraphs 143 to 158.

Fraud and Misrepresentation - Topic 2512

Misrepresentation - General principles - Action for economic loss arising from misstatement - Certain stand-alone wine stores (SWS) and the Manitoba Liquor Control Commission (MLCC) appealed from an arbitration panel's decision - On appeal, SWS contended for the first time that Crawford, a senior official with MLCC, made a statement to Howard, a representative of a licensee (the Keg) with whom a SWS store (Kenaston) had an account - SWS argued that this statement caused Kenaston to lose the account and suffer economic loss - The Manitoba Court of Queen's Bench held that this was a new cause of action which SWS could have raised at the original proceedings and it refused to grant permission to raise it on appeal - See paragraphs 110 to 114 - Alternatively, the court rejected the argument based on an application of the two-part Anns test - First, the fact that Crawford was aware that the Keg account was a Kenaston account was insufficient in itself to establish the required proximity - The fact that a particular licensee made a general inquiry about the ability of one SWS to set the price of unlisted products did not result in an obligation to be mindful of the particular wine store's legitimate interest in keeping a particular client - Further, the evidence supported the view that Howard was only making a general inquiry about SWS's ability to set the price of unlisted wines - That inquiry could have related to any pricing of unlisted products by any SWS, including Kenaston, or the two specialty food and wine stores - Respecting the second part of the Anns test, as part of the policy considerations that might limit or negate a duty of care in negligent misrepresentation actions, the court had to examine the reasonableness of a plaintiff's "reliance" - Here, Jaworski of Kenaston did not rely upon what Crawford of MLCC said to Howard of Keg - Even though Jaworski was advised that a better offer should be forthcoming and even though Jaworski was aware that Spier, Director of Licensing for MLCC, was of the opinion that the pricing of products below cost was an "inducement" (which was prohibited), Jaworski chose not to advise Howard of what he knew - Significantly, Jaworski did not complain to MLCC about what was happening until much after the Keg account was no longer his - Facts such as these reflected the kinds of indeterminate liability issues that would negate any duty of care - The evidence adduced at the arbitration hearing (along with the relevant findings of fact already made by the panel) did not support the development of a new or analogous duty of care based on either part of the Anns test, whether as an extension of the tort of negligent misrepresentation or as a new negligence claim based on a new duty of care - See paragraphs 115 to 131.

Practice - Topic 5878

Judgments and orders - Satisfaction of judgments - Notice of satisfaction - Effect of - The Manitoba Court of Queen's Bench stated that "the governing law in Manitoba is clear. A notice of satisfaction is to be seen as a specialized form of receipt and the filing of a notice of satisfaction will not extinguish a right of appeal nor will it constitute a form of release." - See paragraph 162.

Practice - Topic 7021

Costs - Party and party costs - Entitlement to party and party costs - Successful party - Exceptions - Conduct (incl. counsel) - Certain stand-alone wine stores (SWS) and the Manitoba Liquor Control Commission (MLCC) appealed from an arbitration panel's decision - The Manitoba Court of Queen's Bench dismissed the appeals - The court noted that the record was rife with the undercurrent of animosity and examples of contentiousness - Although it had dismissed the SWS appeal, largely on the basis of a rigorous application of the appropriate standards of review, its determinations in that regard ought not to be seen as a judicial benediction of MLCC's conduct - Although the panel members (unanimously or as a majority) variously made findings of fact and drew inferences to which the court had deferred, there was, in the case of some of the allegations in the notice to arbitrate, evidence adduced that could have equally resulted in findings and inferences less favourable to MLCC - The court said this to underscore MLCC's own conclusion that the time had come to revisit the relationship between it and the private wine stores - The court held that although MLCC had enjoyed comparative success on the appeal, in the very particular circumstances of this case, it was exercising its discretion to not award costs of any kind - See paragraphs 181 to 183.

Torts - Topic 77

Negligence - Duty of care - Relationship required to raise duty of care - [See Damages - Topic 531 and Fraud and Misrepresentation - Topic 2512 ].

Cases Noticed:

Housen v. Nickolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 72].

Homestead Properties (Canada) Ltd. v. Sekhri et al. (2007), 214 Man.R.(2d) 148; 395 W.A.C. 148; 2007 MBCA 61, refd to. [para. 72].

Knock v. Dumontier et al. (2006), 208 Man.R.(2d) 121; 383 W.A.C. 121; 2006 MBCA 99, refd to. [para. 73].

Gerrard et al. v. Manitoba and Muirhead (1992), 81 Man.R.(2d) 295; 30 W.A.C. 295 (C.A.), refd to. [para. 77].

Lineal Group Inc. v. Atlantis Canadian Distributors Inc., [1998] O.A.C. Uned. 450; 42 O.R.(3d) 157 (C.A.), refd to. [para. 77].

Duke et al. v. Puts, [2004] 6 W.W.R. 208; 241 Sask.R. 187; 313 W.A.C. 187; 2004 SKCA 12, refd to. [para. 77].

Manitoba Government Employees' Union v. Manitoba (1998), 126 Man.R.(2d) 262; 167 W.A.C. 262 (C.A.), refd to. [para. 80].

Blouin Drywall Contractors Ltd. v. United Brotherhood of Carpenters and Joiners of America, Local 2486 (1975), 57 D.L.R.(3d) 199 (Ont. C.A.), refd to. [para. 80].

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, refd to. [para. 88].

Yates v. Yates (1992), 76 Man.R.(2d) 224; 10 W.A.C. 224 (C.A.), refd to. [para. 93].

R. v. Booker (T.W.), [2007] B.C.T.C. Uned. C32; 47 M.V.R.(5th) 133; 2007 BCSC 456, refd to. [para. 96].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), appld. [para. 116].

Canadian National Railway Co. et al. v. Norsk Pacific Steamship Co. and Tug Jervis Crown et al., [1992] 1 S.C.R. 1021; 137 N.R. 241, refd to. [para. 119].

North American Life Assurance Co. v. Pitblado & Hoskin et al. (2009), 245 Man.R.(2d) 111; 466 W.A.C. 111; 77 C.C.L.I.(4th) 1; 2009 MBCA 83, refd to. [para. 119].

Design Services Ltd. et al. v. Canada, [2008] 1 S.C.R. 737; 374 N.R. 77; 2008 SCC 22, refd to. [para. 120].

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; 2001 SCC 79, refd to. [para. 122].

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

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. 125].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201; 2002 SCC 18, appld. [para. 147].

Bank of Nova Scotia v. Kostuchuk (2003), 173 Man.R.(2d) 262; 293 W.A.C. 262; 2003 MBCA 66, refd to. [para. 162].

Heitman Financial Services Ltd. v. Towncliffe Property Ltd. (1981), 35 O.R.(2d) 189 (H.C.), refd to. [para. 162].

Triple D Land & Cattle Inc. v. Dyrda et al. (2010), 251 Man.R.(2d) 77; 478 W.A.C. 77; 2010 MBCA 5, refd to. [para. 173].

Métis National Council Secretariat Inc. et al. v. Dumont (2008), 236 Man.R.(2d) 17; 448 W.A.C. 17; 2008 MBCA 142, refd to. [para. 175].

Farrell v. Canadian Broadcasting Corp. (1987), 66 Nfld. & P.E.I.R. 145; 204 A.P.R. 145; 43 D.L.R.(4th) 667 (Nfld. C.A.), refd to. [para. 177].

Counsel:

Robert L. Tapper, Q.C., and Alfred Thiessen, for the Banville & Jones Wine Co. et al.;

W. Glenn McFetridge, for the Manitoba Liquor Control Commission.

These appeals were heard by Joyal, A.C.J.Q.B., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following decision on February 3, 2010.