Degelder Construction Co. v. Dancorp Developments Ltd. et al., (2002) 172 B.C.A.C. 133 (CA)

• Judge: Rowles, Levine and Smith, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: November 13, 2001
• Jurisdiction: British Columbia
• Citations: (2002), 172 B.C.A.C. 133 (CA);2002 BCCA 479

Degelder Constr. v. Dancorp Dev. (2002), 172 B.C.A.C. 133 (CA);

    282 W.A.C. 133

MLB headnote and full text

Temp. Cite: [2002] B.C.A.C. TBEd. SE.018

Degelder Construction Co. Ltd. (plaintiff) v. Dancorp Developments Ltd. (appellant/defendant) and HSBC Trust Company (Canada) (formerly Metropolitan Trust Company of Canada), Seaboard Life Insurance Company and Dunwoody Limited (respondents/defendants) and Mike Degelder and William Little (defendants by counterclaim) and Owen Bird (a firm), HSBC Trust Company (Canada) (formerly Metropolitan Trust Company of Canada), Seaboard Life Insurance Company, Co-operators Life Insurance Company, Confederation Life Insurance Company and Dunwoody Limited (third parties)

HSBC Trust Company (Canada) and Seaboard Life Insurance Company (respondents/petitioners) v. Dancorp Devel­opments Ltd. and Edward Patrick McDaniel (appellants/respondents) and Cascade Windows Ltd., Realtech Realty Corporation, Cascade Glass Inc., Nine Star Construction Ltd. and Degelder Construction Co. Ltd. et al. (respondents)

(CA027565; 2002 BCCA 479)

Indexed As: Degelder Construction Co. v. Dancorp Developments Ltd. et al.

British Columbia Court of Appeal

Rowles, Levine and Smith, JJ.A.

August 28, 2002.

Summary:

Metropolitan Trust (mortgagee) financed the development of two condominium build­ings owned and developed by Dancorp Developments. Problems developed and extensive litigation ensued over the project. Degelder (the general contractor) sued for various breaches of the construction contract. Dancorp counterclaimed against Metropoli­tan and Dunwoody (the project's receiver), alleging inter alia, that Metropolitan induced Degelder to breach its con­tract with Dan­corp, wrongly made payments to the hold­back claimants and Degelder and breached of fiduciary duty to Dancorp. Degelder obtained judgment for part of its claim. Dancorp's counterclaim against Met­ropolitan was dis­missed. All other issues in this action were referred to trial, but Metro­politan settled Degelder's claim prior to trial. Dan­corp appealed the dismissal of its coun­ter­claim.

The British Columbia Court of Appeal, in a decision reported at 73 B.C.A.C. 45; 120 W.A.C. 45, dismissed the appeal, but ruled that certain issues remained outstanding and remitted those claims to the trial court. Dancorp appealed on an issue of criminal interest.

The Supreme Court of Canada, in a deci­sion reported at 231 N.R. 122; 113 B.C.A.C. 1; 184 W.A.C. 1, dismissed Dancorp's appeal.

Meanwhile, Metropolitan commenced fore­closure proceedings and sued Dancorp and its principal, McDaniel, for a deficiency. Included in the calculation of the deficiency were amounts Metropolitan paid to the builder as construction disbursements, to the project's receiver for fees and disbursements and to the builder to settle the Degelder lawsuit. The main issue in the case involved the nature of the duty owed to a mortgagor by a mortgagee who paid claims against the property as did Metropolitan, added the cost to the mortgage debt and sought to recover from the mortgagor in foreclosure proceed­ings.

The British Columbia Supreme Court, in a decision reported at [2000] B.C.T.C. 508, following a summary trial under rule 18A, allowed Metropolitan's claim. The court held that the duty on Metropolitan (a mortgagee not in possession) was the duty to act in good faith, which it did in this case. Dan­corp and McDaniel appealed.

The British Columbia Court of Appeal dismissed the appeal.

Practice - Topic 5255.4

Trials - General - Summary trials - Availability of - Outstanding in foreclos­ure proceedings was calculation of the defi­ciency, and the owner's counterclaim against the mortgagee - At issue was the nature of the duty owed by a mortgagee who paid claims against the property, added these to the mortgage debt, and sought recovery from the mortgagor - A quantity surveyor's report tendered by the mortgagor was ruled inadmissible - The mortgagor alleged that without the report, the judge did not have a proper evidentiary foundation upon which to find the facts necessary to decide the issues at a sum­mary trial under rule 18A - The British Columbia Court of Appeal held that the judge could conclude that the issues were suitable for determina­tion under rule 18A - The report's contents were largely irrele­vant to determination of these issues - See paragraphs 37 to 93.

Cases Noticed:

Sengbusch v. Priest (1987), 14 B.C.L.R.(2d) 26 (S.C.), refd to. [para. 40].

Anderson (Emil) Construction Co. v. Brit­ish Columbia Railway Co. (1987), 17 B.C.L.R.(2d) 357 (S.C.), refd to. [para. 40].

Quintette Coal Ltd. v. Bow Valley Resource Services Ltd. (1988), 29 B.C.L.R.(2d) 109 (S.C.), refd to. [para. 40].

Blackwater et al. v. Plint et al., [1998] B.C.T.C. Uned. E76; 56 B.C.L.R.(3d) 214 (S.C.), refd to. [para. 40].

Inspiration Management Inc. v. McDermid St. Lawrence Ltd. (1989), 36 B.C.L.R.(2d) 202 (C.A.), refd to. [para. 53].

Foreman v. Foster (2001), 147 B.C.A.C. 254; 241 W.A.C. 254; 84 B.C.L.R.(3d) 184 (C.A.), refd to. [para. 56].

Statutes Noticed:

Rules of Court (B.C.), Supreme Court Rules, rule 18A(11) [para. 46].

Counsel:

W.S. Berardino, Q.C., and M.B. Blok, for the appellants;

W.C. Kaplan, Q.C., and S.A. Turner, for the respondent, HSBC Trust Co. (Canada);

D.R. Bennett, for the respondent, Dun­woody Ltd.

This appeal was heard at Vancouver, British Columbia, on November 13, 2001, before Rowles, Levine and Smith, JJ.A., of the British Columbia Court of Appeal. On August 28, 2002, Rowles, J.A., delivered the following judgment for the Court of Appeal.