Moulton Contracting Ltd. v. British Columbia et al., (2015) 368 B.C.A.C. 127 (CA)

• Judge: Levine, Chiasson and Frankel, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: February 26, 2015
• Jurisdiction: British Columbia
• Citations: (2015), 368 B.C.A.C. 127 (CA);2015 BCCA 89

Moulton Contracting Ltd. v. B.C. (2015), 368 B.C.A.C. 127 (CA);

    633 W.A.C. 127

MLB headnote and full text

Temp. Cite: [2015] B.C.A.C. TBEd. MR.011

Moulton Contracting Ltd. (respondent/plaintiff) v. Her Majesty the Queen in Right of the Province of British Columbia (appellant/defendant) and Sally Behn, Susan Behn, George Behn, Richard Behn, Greg Behn, Rupert Behn, Lovey Behn, Mary Behn, Chief Liz Logan on behalf of herself and all other members of the Fort Nelson First Nation, and the said Fort Nelson First Nation (respondents/defendants)

(CA041524; 2015 BCCA 89)

Indexed As: Moulton Contracting Ltd. v. British Columbia et al.

British Columbia Court of Appeal

Levine, Chiasson and Frankel, JJ.A.

February 26, 2015.

Summary:

The plaintiff logging contractor obtained the right to log certain areas through the purchase of two Timber Sales Licenses (TSLs) from the defendant, the Province of British Columbia. The plaintiff claimed for economic losses that it allegedly sustained when it was prevented from gaining access to the areas by the defendants, members of the Behn family, all but one whom were members of the Fort Nelson First Nation (FNFN)), another defendant. The impugned actions of the Behns consisted of erecting a camp across the Canfor Road, which it was necessary to traverse in order to travel from the nearest resource road into the TSL blocks. The camp was erected on October 2, 2006. At that point, a small amount of timber had already been harvested by the plaintiff, though the logs had not been removed from the area. No further logging took place after that date. After a time, the plaintiff was permitted to remove the logs that had been harvested. The plaintiff alleged that FNFN took part in the blockade and it also sued the Chief of FNFN (Logan). The plaintiff also alleged that the Province was in breach of contract.

The British Columbia Supreme Court, in a decision reported at [2013] B.C.T.C. Uned. 2348, held that the Behns, Chief Logan and FNFN did not commit intentional interference with economic relations or conspiracy, and dismissed the action as against them. The court held that the Province breached its duty to consult with FNFN and breached an implied term of the TSLs that it had taken all necessary steps to discharge its duty to consult with FNFN before issuing the TSLs. The court held that the Province would have been liable to the plaintiff in damages for loss flowing from that breach; however, given the lack of evidence as to a clear causal connection between the Province's breach and the blockade, and the wording of an exemption clause in the TSLs, the damages claimed for the loss flowing from the blockading of the Canfor Road were not recoverable. The court also held that the Province was in breach of an implied contractual term, and, concurrently liable in tort for breach of a continuing representation, in failing to have warned the plaintiff of the defendant George Behn's intent to deprive the plaintiff of access to the TSL blocks, soon after George Behn advised the Province of his intention to do so on July 31, 2006. Therefore, the Province was liable to the plaintiff for the loss of its opportunity to secure other contracts for the 2006-2007 winter logging season. The court held that the Province was liable to the plaintiff for $1,750,000 in damages.

The British Columbia Supreme Court, in a decision reported at [2014] B.C.T.C. Uned. 993, awarded costs. The Province appealed the decisions on the merits and costs.

The British Columbia Court of Appeal allowed the appeal. The law did not support the trial judge's conclusion that it was an implied term of the TSLs that the Province was not aware of any First Nations expressing dissatisfaction with the consultation undertaken by the Province, save as disclosed to the plaintiff. Nor did it support liability for negligent misrepresentation for an implied continuing representation in the same terms. Further, the exemption clause in the TSLs exempted the Province from liability. The court set aside the orders requiring the Province to pay damages and costs to the plaintiff, and costs to FNFN. The court ordered that the plaintiff, not the Province, pay the trial costs of FNFN, calculated in accordance with the trial judge's reasons for judgment. The court ordered that the Province was entitled to costs of the appeal, payable by the plaintiff. The court ordered FNFN to bear its own costs of the appeal.

Editor's Note: Prior decisions in this proceeding are reported at [2010] B.C.T.C. Uned. 506 (Sup. Ct.); (2010), 296 B.C.A.C. 103; 503 W.A.C. 103 (C.A.); (2011), 309 B.C.A.C. 15; 523 W.A.C. 15 (C.A.); (2011), 310 B.C.A.C. 165; 526 W.A.C. 165 (C.A.) and (2013), 443 N.R. 303; 333 B.C.A.C. 34; 571 W.A.C. 34 (S.C.C.).

Contracts - Topic 2065

Terms - Implied terms - To achieve business efficacy - See paragraphs 53 to 79.

Contracts - Topic 2113

Terms - Express terms - Exemption clauses - General (incl. interpretation) - See paragraphs 100 to 105.

Contracts - Topic 3502

Performance or breach - Obligation to perform - Good faith - Exercise of - See paragraphs 61 to 76.

Contracts - Topic 7415.1

Interpretation - General principles - Good faith - See paragraphs 61 to 76.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - General principles - Negligent misrepresentation - See paragraphs 80 to 99.

Cases Noticed:

M.J.B. Enterprises Ltd. v. Defence Construction (1951) Co. et al., [1999] 1 S.C.R. 619; 237 N.R. 334; 232 A.R. 360; 195 W.A.C. 360, refd to. [para. 53].

Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711; 77 N.R. 161; 21 O.A.C. 321, refd to. [para. 53].

Olympic Industries Inc. v. McNeill (1993), 38 B.C.A.C. 254; 62 W.A.C. 254; 86 B.C.L.R.(2d) 273 (C.A.), refd to. [para. 56].

Perrin v. Shortreed Joint Venture Ltd. (2009), 277 B.C.A.C. 244; 469 W.A.C. 244; 2009 BCCA 478, refd to. [para. 57].

Zeitler v. Zeitler Estate (2010), 286 B.C.A.C. 231; 484 W.A.C. 231; 319 D.L.R.(4th) 106; 2010 BCCA 216, refd to. [para. 57].

Bhasin v. Hrynew et al. (2014), 464 N.R. 254; 584 A.R. 6; 623 W.A.C. 6 (S.C.C.), refd to. [para. 61].

High Tower Homes Corp. v. Stevens (2014), 328 O.A.C. 265; 2014 ONCA 911, agreed with [para. 68].

CivicLife.com Inc. v. Canada (Attorney General) (2006), 215 O.A.C. 43 (C.A.), refd to. [para. 68].

Sattva Capital Corp. v. Creston Moly Corp. - see Creston Moly Corp. v. Sattva Capital Corp.

Creston Moly Corp. v. Sattva Capital Corp. (2014), 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 77].

Housen v. Nikolaisen 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. 77].

With v. O'Flanagan, [1936] Ch. 575 (C.A.), dist. [para. 88].

De Groot v. St. Boniface General Hospital, [1994] 6 W.W.R. 541 (Man. C.A.), rev'g on other grounds [1993] 6 W.W.R. 707; 87 Man.R.(2d) 57 (Q.B.), dist. [para. 90].

Tercon Contractors Ltd. v. British Columbia (Minister of Transportation and Highways), [2010] 1 S.C.R. 69; 397 N.R. 331; 281 B.C.A.C. 245; 457 W.A.C. 245; 2010 SCC 4, refd to. [para. 102].

Authors and Works Noticed:

Spencer Bower, George, The Law of Actionable Misrepresentation (4th Ed. 2000), para. 76 [para. 87]; para. 76, footnote 26 [para. 89].

Counsel:

K. Horsman, Q.C., and J. Oliphant, for the appellant;

C. Willms and B. Gilbride, for the respondent, Moulton Contracting Ltd.;

A. Rana, for the respondent, Chief Liz Logan and Fort Nelson First Nation.

This appeal was heard at Vancouver, B.C., on September 3 and 4, 2014, by Levine, Chiasson and Frankel, JJ.A., of the British Columbia Court of Appeal. Levine, J.A., delivered the following decision for the court on February 26, 2015.