Cam-Net Communications v. Vancouver Telephone Co., 1999 BCCA 751

• Judge: Hinds, Rowles and Finch, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: December 15, 1999
• Jurisdiction: British Columbia
• Citations: 1999 BCCA 751;(1999), 132 B.C.A.C. 52 (CA)

Cam-Net Com. v. Vancouver Tel. (1999), 132 B.C.A.C. 52 (CA);

    215 W.A.C. 52

MLB headnote and full text

Temp. Cite: [2000] B.C.A.C. TBEd. JA.014

Cam-Net Communications, now known as Wintel CNC Communications Inc. (plaintiff/respondent) v. Vancouver Telephone Company Limited (defendant/appellant)

(CA024566; 1999 BCCA 751)

Indexed As: Cam-Net Communications v. Vancouver Telephone Co.

British Columbia Court of Appeal

Hinds, Rowles and Finch, JJ.A.

December 15, 1999.

Summary:

After commencing an action for monies due and owing, the plaintiff company applied for protection under the Company Creditors Arrangement Act. A judge issued an ex parte order staying any present or future action against the company and pro­hibiting any creditor of the company from exercising any right of set-off against the company or its assets. The defendant in the action filed a statement of defence and counterclaim, claiming an equitable set-off. The plaintiff company applied for an order that the counterclaim and claim of equitable set-off be struck.

The British Columbia Supreme Court granted an order staying the counterclaim but declined to deal with the set-off. The plain­tiff company applied for a declaration that the claim for equitable set-off be stayed. The British Columbia Supreme Court granted the declaration. The defendant appealed the order staying the claim for equitable set-off.

The British Columbia Court of Appeal allowed the appeal.

Creditors and Debtors - Topic 8594

Debtors' relief legislation - Companies' creditors arrangement legislation - Ar­rangement - Set-off - After commencing a debt action, the plaintiff company sought pro­tection under the Companies Creditors Arrangement Act - The court ordered, inter alia, that any creditor of the company was prohibited from exercising any right of set-off against the company - The defendant filed a defence, with a claim for equitable set-off, and a counterclaim - The court stayed the claim for equitable set-off - The plaintiff company's and the defendant's claims arose from the same contract and appeared to arise from inter­related obliga­tions - It would be unfair to the defendant if the set-off were disal­lowed - The British Columbia Court of Appeal affirmed that the counterclaim be dismissed but that the equitable set-off should continue.

Practice - Topic 1850

Pleadings - Counterclaim and set-off - Set-off - Equitable set-off - The British Col­umbia Court of Appeal distinguished between abatement and equitable set-off - See paragraph 33.

Cases Noticed:

Lindsay v. Transtec Canada Ltd. (1994), 28 C.B.R.(3d) 110 (B.C.S.C.), refd to. [para. 21].

Re/Max Metro-City Realty Ltd. v. Baker (Trustee of) (1993), 16 C.B.R.(3d) 308 (Ont. Gen. Div. Bktcy.), refd to. [para. 22].

Ontario Development Corp. v. Bourgault (F.P.) Industries Cultivator Division Ltd. et al. (1995), 133 Sask.R. 311; 35 C.B.R.(3d) 255 (Q.B.), refd to. [para. 26].

Newfoundland v. New­foundland Railway Co. (1887), 13 App. Cas. 199 (P.C.), consd. [para. 27].

Telford v. Holt, [1987] 2 S.C.R. 193; 78 N.R. 321; 81 A.R. 385; [1987] 6 W.W.R. 383; 54 Alta. L.R.(2d) 193; 21 C.P.C.(2d) 1; 46 R.P.R. 234; 41 D.L.R.(4th) 385; 37 B.L.R. 241, refd to. [para. 27].

Henriksens Rederi A/S v. Rolimpex (T.H.Z.); Ship Brede, Re, [1974] 1 Q.B. 233 (C.A.), refd to. [para. 35].

Aries Tanker Corp. v. Total Transport; Ship Aries, Re, [1977] 1 W.L.R. 185 (H.L.), refd to. [para. 37].

British Anzani (Felixstowe) Ltd. v. Inter­national Marine Management (U.K.) Ltd., [1980] 1 Q.B. 637; [1979] 2 All E.R. 1063, refd to. [para. 38].

Coba Industries Ltd. v. Millie's Holdings (Canada) Ltd. and Tsang, [1985] 6 W.W.R. 14; 65 B.C.L.R. 31 (C.A.), refd to. [para. 39].

Authors and Works Noticed:

Houlden, Lloyd W., and Morawetz, Carl H., Bankruptcy and Insolvency Law of Canada (3rd Ed.) (1998 Looseleaf Supp.), vol. 2, p. F§109 [paras. 23, 25].

Counsel:

R.P. Hamilton, for the appellant;

D.W. Buchanan, Q.C., and J.C.S. Fiddick, for the respondent.

This appeal was heard at Vancouver, British Columbia, on June 21, 1999, before Hinds, Rowles and Finch, JJ.A., of the British Columbia Court of Appeal.

On December 15, 1999, Rowles, J.A., delivered the following judgment for the Court of Appeal.