Giles et al. v. Westminster Savings Credit Union et al.

• Jurisdiction: British Columbia
• Court: Court of Appeal (British Columbia)
• Judge: Finch, C.J.B.C., Donald and Levine, JJ.A.
• Citation: (2007), 245 B.C.A.C. 213 (CA),2007 BCCA 411
• Date: 10 August 2007

Giles v. Westminster Savings Credit (2007), 245 B.C.A.C. 213 (CA);

    405 W.A.C. 213

MLB headnote and full text

Temp. Cite: [2007] B.C.A.C. TBEd. AU.021

Laurie Giles and others (appellants/plaintiffs) v. Westminster Savings Credit Union, Gary J. Thomas, Taylor Ventures Ltd., Ralph Dennis Taylor, Joanne Taylor, Floyd Taylor, Vince Taylor, Michael G. Oliver, Raymond E. Drabik, Ewen C. Carruthers and William R. Chalcraft, carrying on business under the firm name and style of Oliver, Drabik, Carruthers & Chalcraft, a Partnership, Kenneth Rogers Appraisals Ltd. and Kenneth N. Rogers (respondents/defendants)

(CA33783; 2007 BCCA 411)

Indexed As: Giles et al. v. Westminster Savings Credit Union et al.

British Columbia Court of Appeal

Finch, C.J.B.C., Donald and Levine, JJ.A.

August 10, 2007.

Summary:

The plaintiffs invested monies with Taylor Ventures Ltd. (TVL), a real estate development company. TVL "guaranteed" each investor a 20% return plus a further share of profits if the investment remained in the project until completion. Without the investors' knowledge or consent, TVL sold or granted mortgages over certain properties to the defendant credit union. When TVL went bankrupt, the plaintiffs lost their investments. Claiming breach of duties, including fiduciary duties, they brought an action for damages against the defendants. A trial proceeded against the credit union and Thomas, its manager of commercial loans.

The British Columbia Supreme Court, in a decision reported at [2006] B.C.T.C. 141, dismissed the action. The plaintiffs appealed.

The British Columbia Court of Appeal dismissed the appeal.

Editor's note: for related decisions, see [2006] B.C.T.C. Uned. C26 and [2002] B.C.T.C. 1583.

Equity - Topic 3607

Fiduciary or confidential relationships - General principles - Relationships which are not fiduciary - The plaintiffs invested monies with Taylor Ventures Ltd. (TVL), a real estate development company - TVL "guaranteed" a 20% return plus a further share of profits if the investment remained in the project until completion - Without the investors' knowledge or consent, TVL sold or granted mortgages over certain properties to the defendant credit union - When TVL went bankrupt, the plaintiffs lost their investments - Claiming breach of duties, including fiduciary duties, they brought an action for damages against the defendants - A trial proceeded against the credit union and Thomas, its manager of commercial loans - The trial court dismissed the action, finding, inter alia, that although TVL owed, and was in breach of, fiduciary duties to the plaintiffs, the credit union and Thomas were not liable as accessories - The plaintiffs appealed - The British Columbia Court of Appeal dismissed the appeal - The court disagreed with the trial judge's conclusion that TVL owed a fiduciary duty to the plaintiffs - The relationship between TVL and the plaintiffs did not include a critical component of a fiduciary relationship, the duty of loyalty - TVL pursued its own profit interests and had authority to determine what share of profit it took - This right, well understood by the plaintiffs, placed TVL in an inherent conflict of interest with them and was wholly inconsistent with a duty to subject its own interests to those of the plaintiffs - As there was no fiduciary duty, it was not necessary to discuss the credit union's and Thomas's liability as accessories - See paragraphs 34 to 48.

Trusts - Topic 345

Creation of trust - Requirements of - Certainty of subject matter of trust - The plaintiffs invested monies with Taylor Ventures Ltd. (TVL), a real estate development company - TVL "guaranteed" a 20% return plus a further share of profits if the investment remained in the project until completion - Without the investors' knowledge or consent, TVL sold or granted mortgages over certain properties to the defendant credit union - When TVL went bankrupt, the plaintiffs lost their investments - Claiming breach of duties, including fiduciary duties, they brought an action for damages against the defendants - A trial proceeded against the credit union and Thomas, its manager of commercial loans - The trial court dismissed the action, finding, inter alia, that while TVL was liable to the plaintiffs in debt, TVL was not a trustee and the credit union and Thomas were not liable for knowing assistance in a breach of trust or for knowing receipt of trust property - The plaintiffs appealed - The British Columbia Court of Appeal dismissed the appeal - The trial judge's findings were unassailable - There was no certainty as to the trust's subject matter - No one could say what property was held in trust for the plaintiffs - Further, there was no Quistclose or purpose trust - The evidence did not establish a mutual intention that the monies could not be used for other purposes - The plaintiffs' subjective intentions were not a foundation for finding such a purpose - See paragraphs 27 to 33.

Trusts - Topic 361

Creation of trust - Intention - Trust v. creditor and debtor relationship - [See Trusts - Topic 345 ].

Trusts - Topic 375

Creation of trust - Purpose or object - "Quistclose" trust - [See Trusts - Topic 345 ].

Cases Noticed:

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84, refd to. [para. 37].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1, refd to. [para. 40].

Gladstone v. Canada (Attorney General), [2005] 1 S.C.R. 325; 332 N.R. 182; 210 B.C.A.C. 1; 348 W.A.C. 1, refd to. [para. 41].

Blackwater et al. v. Plint et al., [2005] 3 S.C.R. 3; 339 N.R. 355; 216 B.C.A.C. 24; 356 W.A.C. 24; 2005 SCC 58, refd to. [para. 41].

K.L.B. et al. v. British Columbia et al., [2003] 2 S.C.R. 403; 309 N.R. 306; 187 B.C.A.C. 42; 307 W.A.C. 42; 2003 SCC 51, refd to. [para. 41].

3464920 Canada Inc. v. Strother et al. (2007), 363 N.R. 123; 241 B.C.A.C. 108; 399 W.A.C. 108; 2007 SCC 24, refd to. [para. 41].

Authors and Works Noticed:

Finn, Paul D., Contract and the Fiduciary Principle (1989), 12 U.N.S.W.L.J. 76, p. 94 [para. 39].

Johnson, R., et al., Gerald V. La Forest at the Supreme Court of Canada, 1985-1997 (2000), p. 83 [para. 38].

Waters, Donovan, W.M., The Development of Fiduciary Obligations, in Johnson, R., et al., Gerald V. La Forest at the Supreme Court of Canada, 1985-1997 (2000), p. 83 [para. 38].

Counsel:

J.N. Laxton, Q.C., and C.M. Weiler, for the appellants;

E.J. Milton, D.A. Goult and R.D.W. Dalziel, for the respondent, Westminster Savings Credit Union;

D.R. McGowan, for the respondent, Gary J. Thomas;

J.M. Webster, Q.C., for the respondents, Michael G. Oliver and Raymond E. Drabik.

This appeal was heard at Vancouver, British Columbia, on May 7-10, 2007, by Finch, C.J.B.C., Donald and Levine, JJ.A., of the British Columbia Court of Appeal. Finch, C.J.B.C., delivered the following reasons for judgment for the court on August 10, 2007.